CITIZENS & NORTHERN CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, (In Thousands, Except Share and Per Share Data) ​ 2025 ​ 2024 ASSETS ​ ​ Cash and due from banks: ​ ​ ​ Noninterest-bearing ​ $ 27,430 ​ $ 21,110 Interest-bearing ​ 95,660 ​ 105,064 Total cash and due from banks ​ 123,090 ​ 126,174 Available-for-sale debt securities, at fair value ​ 415,313 ​ 402,380 ​ ​ ​ ​ ​ ​ ​ Loans receivable ​ 1,945,107 ​ 1,895,848 Allowance for credit losses ​ ( 23,474 ) ​ ( 20,035 ) Loans, net ​ 1,921,633 ​ 1,875,813 ​ ​ ​ ​ ​ ​ ​ Bank-owned life insurance ​ 52,614 ​ 51,214 Accrued interest receivable ​ 9,656 ​ 8,735 Bank premises and equipment, net ​ 21,055 ​ 21,338 Foreclosed assets held for sale ​ 402 ​ 181 Deferred tax asset, net ​ 16,759 ​ 19,098 Goodwill ​ 52,505 ​ 52,505 Core deposit intangibles, net ​ 1,762 ​ 2,080 Other assets ​ 49,244 ​ 51,135 TOTAL ASSETS ​ $ 2,664,033 ​ $ 2,610,653 ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ Deposits: ​ ​ ​ ​ Noninterest-bearing ​ $ 508,475 ​ $ 486,566 Interest-bearing ​ 1,657,260 ​ 1,607,343 Total deposits ​ 2,165,735 ​ 2,093,909 Short-term borrowings ​ 1,489 ​ 2,488 Long-term borrowings - FHLB advances ​ 132,894 ​ 165,451 Senior notes, net ​ ​ 14,952 ​ ​ 14,899 Subordinated debt, net ​ 24,919 ​ 24,831 Accrued interest and other liabilities ​ 30,085 ​ 33,791 TOTAL LIABILITIES ​ 2,370,074 ​ 2,335,369 ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENT LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STOCKHOLDERS' EQUITY ​ ​ ​ ​ Preferred stock, $ 1,000 par value; authorized 30,000 shares; $ 1,000 liquidation ​ ​ ​ ​ preference per share; no shares issued ​ 0 ​ 0 Common stock, par value $ 1.00 per share; authorized 30,000,000 shares; ​ ​ ​ ​ issued 16,030,172 and outstanding 15,531,700 at September 30, 2025; ​ ​ ​ ​ issued 16,030,172 and outstanding 15,433,494 at December 31, 2024 ​ 16,030 ​ 16,030 Paid-in capital ​ 143,352 ​ 143,565 Retained earnings ​ 171,733 ​ 165,778 Treasury stock, at cost; 498,472 shares at September 30, 2025 and 596,678 ​ ​ ​ ​ shares at December 31, 2024 ​ ( 11,130 ) ​ ( 13,328 ) Accumulated other comprehensive loss ​ ( 26,026 ) ​ ( 36,761 ) TOTAL STOCKHOLDERS' EQUITY ​ 293,959 ​ 275,284 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ​ $ 2,664,033 ​ $ 2,610,653 ​ The accompanying notes are an integral part of these unaudited consolidated financial statements. ​ 3 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q Consolidated Statements of Income (In Thousands Except Per Share Data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ (In Thousands, Except Per Share Data) ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ INTEREST INCOME ​ ​ ​ ​ ​ ​ Interest and fees on loans: ​ ​ ​ ​ ​ ​ ​ Taxable ​ $ 29,085 ​ $ 28,099 ​ $ 84,639 ​ $ 82,292 ​ Tax-exempt ​ 590 ​ 610 ​ 1,784 ​ 1,749 ​ Income from available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 2,390 ​ 2,136 ​ 7,021 ​ 6,409 ​ Tax-exempt ​ 568 ​ 572 ​ 1,720 ​ 1,685 ​ Other interest and dividend income ​ 1,017 ​ 1,670 ​ 2,649 ​ 2,614 ​ Total interest and dividend income ​ 33,650 ​ 33,087 ​ 97,813 ​ 94,749 ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Interest on deposits ​ 9,456 ​ 10,412 ​ 28,332 ​ 28,617 ​ Interest on short-term borrowings ​ 0 ​ 184 ​ 1 ​ 1,141 ​ Interest on long-term borrowings - FHLB advances ​ 1,577 ​ 1,983 ​ 5,040 ​ 5,294 ​ Interest on senior notes, net ​ 121 ​ ​ 120 ​ ​ 362 ​ ​ 360 ​ Interest on subordinated debt, net ​ 233 ​ 232 ​ 698 ​ 695 ​ Total interest expense ​ 11,387 ​ 12,931 ​ 34,433 ​ 36,107 ​ Net interest income ​ 22,263 ​ 20,156 ​ 63,380 ​ 58,642 ​ Provision for credit losses ​ 2,163 ​ 1,207 ​ 4,753 ​ 2,726 ​ Net interest income after provision for credit losses ​ 20,100 ​ 18,949 ​ 58,627 ​ 55,916 ​ NONINTEREST INCOME ​ ​ ​ ​ ​ Trust revenue ​ 2,056 ​ 1,946 ​ 6,125 ​ 5,857 ​ Brokerage and insurance revenue ​ 490 ​ 523 ​ 1,542 ​ 1,589 ​ Service charges on deposit accounts ​ 1,471 ​ 1,546 ​ 4,333 ​ 4,336 ​ Interchange revenue from debit card transactions ​ 1,137 ​ 1,103 ​ 3,391 ​ 3,205 ​ Net gains from sale of loans ​ 408 ​ 360 ​ 925 ​ 786 ​ Loan servicing fees, net ​ 107 ​ 74 ​ 418 ​ 434 ​ Increase in cash surrender value of life insurance ​ 477 ​ 458 ​ 1,400 ​ 1,372 ​ Other noninterest income ​ 1,158 ​ 1,123 ​ 4,320 ​ 4,083 ​ Total noninterest income ​ 7,304 ​ 7,133 ​ 22,454 ​ 21,662 ​ NONINTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 11,293 ​ ​ 10,875 ​ ​ 34,119 ​ ​ 33,460 ​ Net occupancy and equipment expense ​ ​ 1,336 ​ ​ 1,377 ​ ​ 4,198 ​ ​ 4,160 ​ Data processing and telecommunications expense ​ ​ 1,939 ​ ​ 1,882 ​ ​ 5,991 ​ ​ 5,877 ​ Automated teller machine and interchange expense ​ 529 ​ 510 ​ 1,319 ​ 1,470 ​ Pennsylvania shares tax ​ 469 ​ 433 ​ 1,435 ​ 1,300 ​ Professional fees ​ 445 ​ 555 ​ 1,468 ​ 1,625 ​ Merger-related expenses ​ ​ 882 ​ ​ 0 ​ ​ 1,049 ​ ​ 0 ​ Other noninterest expense ​ 2,496 ​ 2,637 ​ 8,251 ​ 7,936 ​ Total noninterest expense ​ 19,389 ​ 18,269 ​ 57,830 ​ 55,828 ​ Income before income tax provision ​ 8,015 ​ 7,813 ​ 23,251 ​ 21,750 ​ Income tax provision ​ 1,464 ​ 1,448 ​ 4,290 ​ 3,966 ​ NET INCOME ​ $ 6,551 ​ $ 6,365 ​ $ 18,961 ​ $ 17,784 ​ EARNINGS PER COMMON SHARE - BASIC AND DILUTED ​ $ 0.42 ​ $ 0.41 ​ $ 1.22 ​ $ 1.16 ​ ​ The accompanying notes are an integral part of these unaudited consolidated financial statements. 4 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ Consolidated Statements of Comprehensive Income (In Thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ (In Thousands) ​ 2025 2024 ​ 2025 2024 ​ Net income ​ $ 6,551 ​ $ 6,365 ​ $ 18,961 ​ $ 17,784 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ ​ 5,979 ​ ​ 13,829 ​ ​ 13,757 ​ ​ 10,243 ​ Reclassification adjustment for losses (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ Other comprehensive income on available-for-sale debt securities ​ ​ 5,979 ​ ​ 13,829 ​ ​ 13,757 ​ ​ 10,243 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unfunded pension and postretirement obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ 0 ​ 0 ​ 69 ​ 394 ​ Amortization of prior service cost, net actuarial loss and curtailment gain included in net periodic benefit cost ​ ( 21 ) ​ ( 22 ) ​ ( 65 ) ​ ( 532 ) ​ Other comprehensive (loss) income on pension and postretirement obligations ​ ( 21 ) ​ ( 22 ) ​ 4 ​ ( 138 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income before income tax ​ 5,958 ​ 13,807 ​ 13,761 ​ 10,105 ​ Income tax related to other comprehensive income ​ ( 1,310 ) ​ ( 2,510 ) ​ ( 3,026 ) ​ ( 1,732 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income, net ​ 4,648 ​ 11,297 ​ 10,735 ​ 8,373 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ $ 11,199 ​ $ 17,662 ​ $ 29,696 ​ $ 26,157 ​ ​ The accompanying notes are an integral part of these unaudited consolidated financial statements. ​ 5 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ September 30, (In Thousands) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ ​ Net income ​ $ 18,961 ​ $ 17,784 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ Provision for credit losses ​ 4,753 ​ 2,726 ​ Net amortization of securities ​ ​ 1,056 ​ ​ 1,269 ​ Increase in cash surrender value of life insurance ​ ( 1,400 ) ​ ( 1,372 ) ​ Depreciation and amortization of bank premises and equipment ​ 1,676 ​ 1,632 ​ Net accretion of acquisition accounting adjustment ​ ( 66 ) ​ ( 197 ) ​ Stock-based compensation ​ 993 ​ 1,099 ​ Deferred income taxes ​ ( 687 ) ​ ( 1,338 ) ​ Decrease in fair value of servicing rights ​ 200 ​ 172 ​ Net gains from sale of loans ​ ( 925 ) ​ ( 786 ) ​ Origination of loans held for sale ​ ( 31,334 ) ​ ( 27,070 ) ​ Proceeds from sales of loans held for sale ​ 32,689 ​ 24,773 ​ Decrease (increase) in accrued interest receivable and other assets ​ 852 ​ ( 3,196 ) ​ (Decrease) increase in accrued interest payable and other liabilities ​ ( 5,456 ) ​ 5,340 ​ Other ​ 112 ​ 124 ​ Net Cash Provided by Operating Activities ​ 21,424 ​ 20,960 ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ Proceeds from maturities of certificates of deposit ​ 1,000 ​ 1,250 ​ Proceeds from calls and maturities of available-for-sale debt securities ​ 35,499 ​ 28,734 ​ Purchase of available-for-sale debt securities ​ ( 35,731 ) ​ ( 11,516 ) ​ Redemption of Federal Home Loan Bank of Pittsburgh stock ​ 1,596 ​ 5,991 ​ Purchase of Federal Home Loan Bank of Pittsburgh stock ​ ( 924 ) ​ ( 6,748 ) ​ Purchase of Federal Reserve Bank stock ​ ​ ( 32 ) ​ ​ ( 36 ) ​ Net increase in loans ​ ( 49,839 ) ​ ( 45,752 ) ​ Proceeds from bank-owned life insurance ​ 0 ​ 14,289 ​ Purchase of premises and equipment ​ ( 1,453 ) ​ ( 1,554 ) ​ Proceeds from sale of foreclosed assets ​ 58 ​ 293 ​ Other ​ 2 ​ 33 ​ Net Cash Used in Investing Activities ​ ( 49,824 ) ​ ( 15,016 ) ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ Net increase in deposits ​ 71,826 ​ 121,077 ​ Net decrease in short-term borrowings ​ ( 999 ) ​ ( 22,448 ) ​ Proceeds from long-term borrowings - FHLB advances ​ ​ 0 ​ ​ 59,386 ​ Repayments of long-term borrowings - FHLB advances ​ ( 32,557 ) ​ ( 23,083 ) ​ Purchases of treasury stock ​ ( 208 ) ​ ( 655 ) ​ Common dividends paid ​ ( 11,746 ) ​ ( 11,636 ) ​ Net Cash Provided by Financing Activities ​ 26,316 ​ 122,641 ​ (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ​ ( 2,084 ) ​ 128,585 ​ CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ​ 123,574 ​ 52,778 ​ CASH AND CASH EQUIVALENTS, END OF PERIOD ​ $ 121,490 ​ $ 181,363 ​ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: ​ ​ ​ ​ ​ Increase in accrued purchase of available-for-sale debt securities ​ $ 0 ​ $ 911 ​ Assets acquired through foreclosure of real estate loans ​ $ 231 ​ $ 0 ​ Leased assets obtained in exchange for new operating lease liabilities ​ $ 1,126 ​ $ 187 ​ Interest paid ​ $ 34,753 ​ $ 35,134 ​ Income taxes paid ​ $ 6,548 ​ $ 4,839 ​ ​ The accompanying notes are an integral part of these unaudited consolidated financial statements. ​ ​ 6 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q Consolidated Statements of Changes in Stockholders’ Equity (In Thousands, Except Share and Per Share Data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Common Treasury Common Paid-in Retained Comprehensive Treasury ​ ​ ​ Three Months Ended September 30, 2025 Shares Shares Stock Capital Earnings Loss Stock Total Balance, June 30, 2025 16,030,172 515,229 ​ $ 16,030 ​ $ 142,982 ​ $ 169,521 ​ $ ( 30,674 ) ​ $ ( 11,502 ) ​ $ 286,357 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,551 ​ ​ ​ ​ ​ ​ ​ 6,551 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,648 ​ ​ ​ ​ 4,648 Cash dividends declared on common stock, $ .28 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 4,339 ) ​ ​ ​ ​ ​ ​ ​ ( 4,339 ) Shares issued for dividend reinvestment plan ​ ( 20,886 ) ​ ​ ​ ​ ​ ( 61 ) ​ ​ ​ ​ ​ ​ ​ ​ 466 ​ 405 Forfeiture of restricted stock ​ 4,129 ​ ​ ​ ​ ​ 94 ​ ​ ​ ​ ​ ​ ​ ​ ( 94 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ ​ ​ 337 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 337 Balance, September 30, 2025 16,030,172 498,472 ​ $ 16,030 ​ $ 143,352 ​ $ 171,733 ​ $ ( 26,026 ) ​ $ ( 11,130 ) ​ $ 293,959 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ ​ ​ ​ ​ ​ Balance, June 30, 2024 16,030,172 654,190 ​ $ 16,030 ​ $ 143,352 ​ $ 159,859 ​ $ ( 41,361 ) ​ $ ( 14,659 ) ​ $ 263,221 Net income ​ ​ ​ ​ ​ ​ ​ 6,365 ​ ​ ​ ​ ​ 6,365 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ 11,297 ​ ​ ​ 11,297 Cash dividends declared on common stock, $ .28 per share ​ ​ ​ ​ ​ ​ ​ ( 4,304 ) ​ ​ ​ ​ ​ ( 4,304 ) Shares issued for dividend reinvestment plan ​ ( 21,688 ) ​ ​ ​ ( 81 ) ​ ​ ​ ​ ​ 484 ​ 403 Restricted stock granted ​ ( 20,000 ) ​ ​ ​ ( 448 ) ​ ​ ​ ​ ​ 448 ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ 383 ​ ​ ​ ​ ​ ​ ​ 383 Treasury stock purchases ​ ​ ​ 3,538 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 60 ) ​ ​ ( 60 ) Balance, September 30, 2024 16,030,172 616,040 ​ $ 16,030 ​ $ 143,206 ​ $ 161,920 ​ $ ( 30,064 ) ​ $ ( 13,787 ) ​ $ 277,305 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Treasury ​ Common ​ Paid-in ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ Nine Months Ended September 30, 2025 ​ Shares ​ Shares ​ Stock ​ Capital ​ Earnings ​ Loss ​ Stock ​ Total Balance, December 31, 2024 16,030,172 596,678 ​ $ 16,030 ​ $ 143,565 ​ $ 165,778 ​ $ ( 36,761 ) ​ $ ( 13,328 ) ​ $ 275,284 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 18,961 ​ ​ ​ ​ ​ ​ ​ ​ 18,961 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,735 ​ ​ ​ ​ ​ 10,735 Cash dividends declared on common stock, $ .84 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 13,006 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 13,006 ) Shares issued for dividend reinvestment plan ​ ( 59,629 ) ​ ​ ​ ​ ​ ( 130 ) ​ ​ ​ ​ ​ ​ ​ ​ 1,330 ​ ​ 1,200 Restricted stock granted ​ ( 55,661 ) ​ ​ ​ ​ ​ ( 1,243 ) ​ ​ ​ ​ ​ ​ ​ ​ 1,243 ​ ​ 0 Forfeiture of restricted stock ​ 7,351 ​ ​ ​ ​ ​ 167 ​ ​ ​ ​ ​ ​ ​ ​ ( 167 ) ​ ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ ​ ​ 993 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 993 Purchase of restricted stock for tax withholding ​ 9,733 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 208 ) ​ ​ ( 208 ) Balance, September 30, 2025 16,030,172 498,472 ​ $ 16,030 ​ $ 143,352 ​ $ 171,733 ​ $ ( 26,026 ) ​ $ ( 11,130 ) ​ $ 293,959 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2024 ​ ​ ​ ​ ​ ​ Balance, December 31, 2023 16,030,172 735,037 ​ $ 16,030 ​ $ 144,388 ​ $ 157,028 ​ $ ( 38,437 ) ​ $ ( 16,628 ) ​ $ 262,381 Net income ​ ​ ​ ​ ​ 17,784 ​ ​ ​ 17,784 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ 8,373 ​ ​ 8,373 Cash dividends declared on common stock, $ .84 per share ​ ​ ​ ​ ​ ( 12,892 ) ​ ​ ​ ( 12,892 ) Shares issued for dividend reinvestment plan ​ ( 64,476 ) ​ ​ ​ ( 237 ) ​ ​ ​ 1,452 ​ 1,215 Restricted stock granted ​ ( 92,860 ) ​ ​ ​ ( 2,094 ) ​ ​ ​ 2,094 ​ 0 Forfeiture of restricted stock ​ 2,076 ​ ​ ​ 50 ​ ​ ​ ( 50 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ 1,099 ​ ​ ​ ​ 1,099 Purchase of restricted stock for tax withholding ​ 10,229 ​ ​ ​ ​ ​ ​ ( 212 ) ​ ( 212 ) Treasury stock purchases ​ ​ 26,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 443 ) ​ ( 443 ) Balance, September 30, 2024 16,030,172 616,040 ​ $ 16,030 ​ $ 143,206 ​ $ 161,920 ​ $ ( 30,064 ) ​ $ ( 13,787 ) ​ $ 277,305 ​ The accompanying notes are an integral part of these unaudited consolidated financial statements. ​ ​ 7 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q Notes to Unaudited Consolidated Financial Statements 1. BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS The consolidated financial statements include the accounts of Citizens & Northern Corporation and its subsidiaries, Citizens & Northern Bank (“C&N Bank”), Bucktail Life Insurance Company and Citizens & Northern Investment Corporation (collectively, “Corporation”). The consolidated financial statements also include C&N Bank’s wholly-owned subsidiaries, C&N Financial Services, LLC and Northern Tier Holding LLC. C&N Bank is the sole member of C&N Financial Services, LLC and Northern Tier Holding LLC. All material intercompany balances and transactions have been eliminated in consolidation. The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2024, is unaudited. Such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity for the interim periods; however, the information does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for a complete set of financial statements. Operating results reported for the nine-month period ended September 30, 2025 might not be indicative of the results for the year ending December 31, 2025. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission. RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) issues Accounting Standard Updates (ASUs) to communicate changes to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on consolidated financial statements issued in the foreseeable future. Recently Issued but Not Yet Effective Accounting Pronouncements In December 2023 , the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. The ASU may be adopted on a prospective or retrospective basis and early adoption is permitted. The Corporation is currently evaluating the impact the new guidance will have on disclosures related to income taxes; however, management does not expect it will have a significant impact on its consolidated financial statements. In December 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of certain costs and expenses in the notes to the consolidated financial statements. The amendments in this ASU will become effective for fiscal years beginning after December 15, 2026, and will be effective for interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments will be applied prospectively with the option for retrospective application . The Corporation is currently evaluating the impact of the standard to our consolidated financial statement disclosures. ​ 2. PER SHARE DATA Earnings per common share are calculated using the two-class method to determine income attributable to common shareholders. Unvested restricted stock awards that contain nonforfeitable rights to dividends are considered participating securities under the two-class method. Distributed dividends and an allocation of undistributed net income to participating securities reduce the amount of income attributable to common shareholders. Income attributable to common shareholders is then divided by weighted-average common shares outstanding for the period to determine basic earnings per common share. The Corporation’s basic and diluted earnings per share are the same because there are no potential dilutive shares of common stock outstanding. ​ 8 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands, Except Share and Per Share Data) ​ Three Months Ended Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ ​ 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ Net income ​ $ 6,551 ​ $ 6,365 ​ $ 18,961 ​ $ 17,784 ​ Less: Dividends and undistributed earnings allocated to participating securities ​ ( 53 ) ​ ( 54 ) ​ ( 153 ) ​ ( 140 ) ​ Net income attributable to common shares ​ $ 6,498 ​ $ 6,311 ​ $ 18,808 ​ $ 17,644 ​ Weighted-average common shares outstanding ​ 15,398,262 ​ 15,267,120 ​ 15,371,733 ​ 15,254,124 ​ Earnings per common share - Basic and Diluted ​ $ 0.42 ​ $ 0.41 ​ $ 1.22 ​ $ 1.16 ​ Weighted-average nonvested restricted shares outstanding ​ 126,451 ​ 131,302 ​ 125,204 ​ 121,035 ​ ​ ​ 3. COMPREHENSIVE INCOME Comprehensive income is the total of (1) net income, and (2) all other changes in equity from non-stockholder sources, which are referred to as other comprehensive income (loss). The components of other comprehensive income (loss), and the related tax effects, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Before-Tax Income Tax Net-of-Tax ​ ​ Amount ​ Effect ​ Amount Three Months Ended September 30, 2025 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 5,979 ​ $ ( 1,314 ) ​ $ 4,665 Reclassification adjustment for (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 5,979 ​ ​ ( 1,314 ) ​ ​ 4,665 Unfunded pension and postretirement obligations: ​ ​ ​ Amortization of prior service cost and net actuarial loss included in net periodic benefit cost ​ ( 21 ) ​ 4 ​ ( 17 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 21 ) ​ ​ 4 ​ ​ ( 17 ) Total other comprehensive income ​ $ 5,958 ​ $ ( 1,310 ) ​ $ 4,648 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Before-Tax Income Tax Net-of-Tax ​ ​ Amount ​ Effect ​ Amount Three Months Ended September 30, 2024 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 13,829 ​ $ ( 2,515 ) ​ $ 11,314 Reclassification adjustment for (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 13,829 ​ ​ ( 2,515 ) ​ ​ 11,314 Unfunded pension and postretirement obligations: ​ ​ ​ Amortization of prior service cost and net actuarial loss included in net periodic benefit cost ​ ( 22 ) ​ 5 ​ ( 17 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 22 ) ​ ​ 5 ​ ​ ( 17 ) Total other comprehensive income ​ $ 13,807 ​ $ ( 2,510 ) ​ $ 11,297 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Before-Tax Income Tax Net-of-Tax ​ ​ Amount ​ Effect ​ Amount Nine Months Ended September 30, 2025 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 13,757 ​ ​ ( 3,025 ) ​ $ 10,732 Reclassification adjustment for (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 13,757 ​ ​ ( 3,025 ) ​ ​ 10,732 Unfunded pension and postretirement obligations: ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ​ 69 ​ ​ ( 15 ) ​ ​ 54 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost ​ ( 65 ) ​ ​ 14 ​ ( 51 ) Other comprehensive income on unfunded retirement obligations ​ ​ 4 ​ ​ ( 1 ) ​ ​ 3 Total other comprehensive income ​ $ 13,761 ​ $ ( 3,026 ) ​ $ 10,735 9 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Before-Tax Income Tax Net-of-Tax ​ ​ Amount ​ Effect ​ Amount Nine Months Ended September 30, 2024 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 10,243 ​ $ ( 1,761 ) ​ $ 8,482 Reclassification adjustment for (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 10,243 ​ ​ ( 1,761 ) ​ ​ 8,482 Unfunded pension and postretirement obligations: ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ​ 394 ​ ​ ( 83 ) ​ ​ 311 Amortization of prior service cost and net actuarial loss and curtailment gain included in net periodic benefit cost ​ ( 532 ) ​ 112 ​ ( 420 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 138 ) ​ ​ 29 ​ ​ ( 109 ) Total other comprehensive income ​ $ 10,105 ​ $ ( 1,732 ) ​ $ 8,373 ​ The amounts shown in the table immediately above are included in the following line items in the consolidated statements of income: ​ ​ ​ ​ ​ ​ Affected Line Item in the Description Consolidated Statements of Income Amortization of prior service cost and net actuarial gain and curtailment gain included in net periodic benefit cost (before-tax) Other noninterest expense Income tax effect ​ Income tax provision ​ Changes in the components of accumulated other comprehensive (loss) income are as follows and are presented net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Unrealized ​ Accumulated ​ ​ (Losses) ​ Unfunded ​ Other ​ Gains Retirement Comprehensive ​ on Securities Obligations (Loss) Income Three Months Ended September 30, 2025 ​ ​ ​ Balance, beginning of period ​ $ ( 31,017 ) ​ $ 343 ​ $ ( 30,674 ) Other comprehensive income (loss) during three months ended September 30, 2025 ​ 4,665 ​ ​ ( 17 ) ​ 4,648 Balance, end of period ​ $ ( 26,352 ) ​ $ 326 ​ $ ( 26,026 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ ​ ​ Balance, beginning of period ​ $ ( 41,710 ) ​ $ 349 ​ $ ( 41,361 ) Other comprehensive income (loss) during three months ended September 30, 2024 ​ 11,314 ​ ( 17 ) ​ 11,297 Balance, end of period ​ $ ( 30,396 ) ​ $ 332 ​ $ ( 30,064 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Unrealized ​ Accumulated ​ ​ (Losses) ​ Unfunded ​ Other ​ Gains Retirement Comprehensive ​ on Securities Obligations (Loss) Income Nine Months Ended September 30, 2025 ​ ​ ​ Balance, beginning of period ​ $ ( 37,084 ) ​ $ 323 ​ $ ( 36,761 ) Other comprehensive income during nine months ended September 30, 2025 ​ 10,732 ​ 3 ​ 10,735 Balance, end of period ​ $ ( 26,352 ) ​ $ 326 ​ $ ( 26,026 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2024 ​ ​ ​ Balance, beginning of period ​ $ ( 38,878 ) ​ $ 441 ​ $ ( 38,437 ) Other comprehensive income (loss) during nine months ended September 30, 2024 ​ 8,482 ​ ( 109 ) ​ 8,373 10 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q Balance, end of period ​ $ ( 30,396 ) ​ $ 332 ​ $ ( 30,064 ) ​ ​ ​ ​ ​ 4. CASH AND DUE FROM BANKS Cash and due from banks at September 30, 2025 and December 31, 2024 include the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 ​ Cash and cash equivalents ​ $ 121,490 ​ $ 123,574 ​ Certificates of deposit ​ 1,600 ​ 2,600 ​ Total cash and due from banks ​ $ 123,090 ​ $ 126,174 ​ ​ Certificates of deposit are issues by U.S. banks with original maturities greater than three months. Each certificate of deposit is fully FDIC-insured. The Corporation maintains cash and cash equivalents with certain financial institutions in excess of the FDIC insurance limit. ​ ​ 5. SECURITIES Amortized cost and fair value of available-for-sale debt securities at September 30, 2025 and December 31, 2024 are summarized as follows. No allowance for credit losses was recorded at September 30, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, 2025 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ Cost Gains Losses Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 8,052 ​ $ 0 ​ $ ( 623 ) ​ $ 7,429 Obligations of U.S. Government agencies ​ ​ 9,436 ​ ​ 0 ​ ​ ( 766 ) ​ ​ 8,670 Bank holding company debt securities ​ ​ 28,963 ​ ​ 0 ​ ​ ( 2,672 ) ​ ​ 26,291 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 105,922 ​ ​ 275 ​ ( 8,669 ) ​ 97,528 Taxable ​ 50,373 ​ 1 ​ ( 6,512 ) ​ 43,862 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 107,771 ​ 451 ​ ( 6,287 ) ​ 101,935 Residential collateralized mortgage obligations ​ 54,678 ​ 52 ​ ( 2,310 ) ​ 52,420 Commercial mortgage-backed securities ​ 72,433 ​ 13 ​ ( 6,749 ) ​ 65,697 Private label commercial mortgage-backed securities ​ ​ 3,471 ​ ​ 0 ​ ​ 0 ​ ​ 3,471 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ 11 ​ ( 1 ) ​ 8,010 Total available-for-sale debt securities ​ $ 449,099 ​ $ 803 ​ $ ( 34,589 ) ​ $ 415,313 ​ 11 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, 2024 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ Cost Gains Losses Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 8,067 ​ $ 0 ​ $ ( 949 ) ​ $ 7,118 Obligations of U.S. Government agencies ​ ​ 10,154 ​ ​ 0 ​ ​ ( 1,129 ) ​ ​ 9,025 Bank holding company debt securities ​ ​ 28,958 ​ ​ 0 ​ ​ ( 3,712 ) ​ ​ 25,246 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 111,995 ​ ​ 238 ​ ( 10,931 ) ​ 101,302 Taxable ​ 51,147 ​ 0 ​ ( 8,641 ) ​ 42,506 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 104,378 ​ 6 ​ ( 9,970 ) ​ 94,414 Residential collateralized mortgage obligations ​ 53,389 ​ 10 ​ ( 3,505 ) ​ 49,894 Commercial mortgage-backed securities ​ 73,470 ​ 0 ​ ( 8,969 ) ​ 64,501 Private label commercial mortgage-backed securities ​ ​ 8,365 ​ 9 ​ 0 ​ 8,374 Total available-for-sale debt securities ​ $ 449,923 ​ $ 263 ​ $ ( 47,806 ) ​ $ 402,380 ​ The following table presents gross unrealized losses and fair value of available-for-sale debt securities with unrealized loss positions aggregated by length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 and December 31, 2024 for which an allowance for credit losses has not been recorded: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 Less Than 12 Months 12 Months or More Total (In Thousands) ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Value Losses Value Losses Value Losses Obligations of the U.S. Treasury ​ $ 0 ​ $ 0 ​ $ 7,429 ​ $ ( 623 ) ​ $ 7,429 ​ $ ( 623 ) Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 0 ​ ​ 8,670 ​ ​ ( 766 ) ​ ​ 8,670 ​ ​ ( 766 ) Bank holding company debt securities ​ ​ 0 ​ ​ 0 ​ ​ 26,291 ​ ​ ( 2,672 ) ​ ​ 26,291 ​ ​ ( 2,672 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 554 ​ ​ ( 11 ) ​ ​ 86,573 ​ ​ ( 8,658 ) ​ ​ 87,127 ​ ​ ( 8,669 ) Taxable ​ 0 ​ ​ 0 ​ ​ 43,289 ​ ​ ( 6,512 ) ​ ​ 43,289 ​ ​ ( 6,512 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 6,631 ​ ​ ( 32 ) ​ ​ 59,944 ​ ​ ( 6,255 ) ​ ​ 66,575 ​ ​ ( 6,287 ) Residential collateralized mortgage obligations ​ 15,224 ​ ​ ( 28 ) ​ ​ 21,952 ​ ​ ( 2,282 ) ​ ​ 37,176 ​ ​ ( 2,310 ) Commercial mortgage-backed securities ​ 861 ​ ​ ( 10 ) ​ ​ 62,464 ​ ​ ( 6,739 ) ​ ​ 63,325 ​ ​ ( 6,749 ) Private label commercial mortgage-backed securities ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 2,999 ​ ​ ( 1 ) ​ ​ 0 ​ ​ 0 ​ ​ 2,999 ​ ​ ( 1 ) Total ​ $ 26,269 ​ $ ( 82 ) ​ $ 316,612 ​ $ ( 34,507 ) ​ $ 342,881 ​ $ ( 34,589 ) ​ 12 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 Less Than 12 Months 12 Months or More Total (In Thousands) ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Value Losses Value Losses Value Losses Obligations of the U.S. Treasury ​ $ 0 ​ $ 0 ​ $ 7,118 ​ ​ ( 949 ) ​ $ 7,118 ​ $ ( 949 ) Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 0 ​ ​ 9,025 ​ ​ ( 1,129 ) ​ ​ 9,025 ​ ​ ( 1,129 ) Bank holding company debt securities ​ ​ 0 ​ ​ 0 ​ ​ 25,246 ​ ​ ( 3,712 ) ​ ​ 25,246 ​ ​ ( 3,712 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 6,581 ​ ​ ( 58 ) ​ ​ 91,316 ​ ​ ( 10,873 ) ​ ​ 97,897 ​ ​ ( 10,931 ) Taxable ​ 0 ​ ​ 0 ​ ​ 42,506 ​ ​ ( 8,641 ) ​ ​ 42,506 ​ ​ ( 8,641 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 22,777 ​ ​ ( 375 ) ​ ​ 69,282 ​ ​ ( 9,595 ) ​ ​ 92,059 ​ ​ ( 9,970 ) Residential collateralized mortgage obligations ​ 19,586 ​ ​ ( 156 ) ​ ​ 27,157 ​ ​ ( 3,349 ) ​ ​ 46,743 ​ ​ ( 3,505 ) Commercial mortgage-backed securities ​ 2,314 ​ ​ ( 38 ) ​ ​ 62,187 ​ ​ ( 8,931 ) ​ ​ 64,501 ​ ​ ( 8,969 ) Total ​ $ 51,258 ​ $ ( 627 ) ​ $ 333,837 ​ $ ( 47,179 ) ​ $ 385,095 ​ $ ( 47,806 ) ​ As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $ 34,589,000 at September 30, 2025 and $ 47,806,000 at December 31, 2024. At September 30, 2025, the Corporation did not have the intent to sell, nor is it more likely than not it will be required to sell, these securities before it is able to recover the amortized cost basis. The unrealized holding losses were consistent with increases in market interest rates that have occurred subsequent to the purchase of most of the securities. At September 30, 2025 and December 31, 2024, management performed an assessment for possible credit losses of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. At September 30, 2025 and December 31, 2024, all of the Corporation’s holdings of bank holding company debt securities, obligations of states and political subdivisions, private label commercial mortgage-backed securities and collateralized loan obligations were investment grade and there have been no payment defaults. Based on the results of the assessment, there was no ACL required on available-for-sale debt securities in an unrealized loss position at September 30, 2025 and December 31, 2024. There were no gross realized gains and losses from the sale of available-for-sale debt securities for the three and nine months ended September 30, 2025 and 2024. The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of September 30, 2025. Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties. ​ 13 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ September 30, 2025 ​ ​ Amortized ​ Fair ​ Cost Value Due in one year or less ​ $ 2,691 ​ $ 2,679 Due from one year through five years ​ 36,667 ​ 35,024 Due from five years through ten years ​ 78,966 ​ 73,179 Due after ten years ​ 84,422 ​ 72,898 Sub-total ​ 202,746 ​ 183,780 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ Residential pass-through securities ​ 107,771 ​ 101,935 Residential collateralized mortgage obligations ​ 54,678 ​ 52,420 Commercial mortgage-backed securities ​ 72,433 ​ 65,697 Private label commercial mortgage-backed securities ​ ​ 3,471 ​ ​ 3,471 Asset-backed securities, ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ ​ 8,010 Total ​ $ 449,099 ​ $ 415,313 ​ The Corporation’s mortgage-backed securities, collateralized mortgage obligations and asset-backed securities have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities, collateralized mortgage obligations and asset-backed securities are shown in one period. Investment securities carried at $ 205,194,000 at September 30, 2025 and $ 190,949,000 at December 31, 2024 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law. See Note 8 for information concerning securities pledged to secure borrowing arrangements. Equity Securities C&N Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, C&N Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. C&N Bank’s investment in FHLB-Pittsburgh stock, included in other assets in the consolidated balance sheets, was $ 14,346,000 at September 30, 2025 and $ 15,018,000 at December 31, 2024. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at September 30, 2025 and December 31, 2024. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available. C&N Bank is a member of the Federal Reserve System. As a member, C&N Bank is required to purchase and maintain stock in the Federal Reserve Bank of Philadelphia. There is no active market for Federal Reserve Bank stock, and it must ordinarily be redeemed by the Federal Reserve Bank of Philadelphia in order to be liquidated. C&N Bank’s investment in Federal Reserve Bank stock, included in other assets in the consolidated balance sheets, was $ 6,331,000 at September 30, 2025 and $ 6,299,000 at December 31, 2024. The Corporation has a marketable equity security included in other assets in the consolidated balance sheets with a carrying value of $ 887,000 at September 30, 2025 and $ 863,000 at December 31, 2024, consisting exclusively of one mutual fund. There was an unrealized loss on the mutual fund of $ 113,000 at September 30, 2025 and $ 137,000 at December 31, 2024. Changes in the unrealized gains or losses on this security, which are included in other noninterest income in the consolidated statements of income, were a gain of $ 9,000 in the third quarter of 2025 and a gain of $ 31,000 in the third quarter of 2024, a gain of $ 24,000 in the nine-month period ended September 30, 2025 and a gain of $ 18,000 in the nine-month period ended September 30, 2024. 14 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 6. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans receivable at September 30, 2025 and December 31, 2024 are summarized as follows: Summary of Loans by Type (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2025 ​ 2024 Commercial real estate - non-owner occupied ​ $ 765,366 ​ $ 739,565 ​ Commercial real estate - owner occupied ​ ​ 260,365 ​ ​ 261,071 ​ All other commercial loans ​ ​ 449,175 ​ ​ 423,277 ​ Residential mortgage loans ​ ​ 396,810 ​ ​ 408,009 ​ Consumer loans ​ ​ 73,391 ​ ​ 63,926 ​ Total ​ ​ 1,945,107 ​ ​ 1,895,848 ​ Less: allowance for credit losses on loans ​ ​ ( 23,474 ) ​ ​ ( 20,035 ) ​ Loans, net ​ $ 1,921,633 ​ $ 1,875,813 ​ ​ In the table above, outstanding loan balances are presented net of deferred loan origination fees of $ 4,021,000 at September 30, 2025 and $ 4,136,000 at December 31, 2024. The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in Northcentral Pennsylvania, the Southern tier of New York State, Southeastern Pennsylvania and Southcentral Pennsylvania. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. The following tables present an analysis of past due loans as of September 30, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of September 30, 2025 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 31 ​ $ 0 ​ $ 6,845 ​ $ 758,490 ​ $ 765,366 Commercial real estate - owner occupied ​ 717 ​ 0 ​ 4,791 ​ 254,857 ​ 260,365 All other commercial loans ​ ​ 272 ​ ​ 995 ​ ​ 9,801 ​ ​ 438,107 ​ ​ 449,175 Residential mortgage loans ​ ​ 1,278 ​ ​ 0 ​ ​ 4,055 ​ ​ 391,477 ​ ​ 396,810 Consumer loans ​ 211 ​ 30 ​ 270 ​ 72,880 ​ 73,391 Total ​ $ 2,509 ​ $ 1,025 ​ $ 25,762 ​ $ 1,915,811 ​ $ 1,945,107 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, 2024 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 266 ​ $ 0 ​ $ 7,370 ​ $ 731,929 ​ $ 739,565 Commercial real estate - owner occupied ​ 0 ​ 62 ​ 1,725 ​ 259,284 ​ 261,071 All other commercial loans ​ ​ 296 ​ ​ 0 ​ ​ 10,006 ​ ​ 412,975 ​ ​ 423,277 Residential mortgage loans ​ ​ 4,934 ​ ​ 0 ​ ​ 4,310 ​ ​ 398,765 ​ ​ 408,009 Consumer loans ​ ​ 162 ​ 57 ​ 431 ​ 63,276 ​ 63,926 Total ​ $ 5,658 ​ $ 119 ​ $ 23,842 ​ $ 1,866,229 ​ $ 1,895,848 ​ The Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” rows in the table that follows. 15 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The following table presents the amortized cost of loans by credit quality indicators by year of origination as of September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 53,250 ​ $ 65,536 ​ $ 107,900 ​ $ 149,368 ​ $ 76,627 ​ $ 268,253 ​ $ 0 ​ $ 720,934 Special Mention ​ 78 ​ 31 ​ 582 ​ 15,998 ​ 804 ​ 4,738 ​ 0 ​ 22,231 Substandard ​ ​ 0 ​ ​ 106 ​ ​ 840 ​ ​ 9,782 ​ ​ 0 ​ ​ 11,473 ​ ​ 0 ​ ​ 22,201 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - non-owner occupied ​ $ 53,328 ​ $ 65,673 ​ $ 109,322 ​ $ 175,148 ​ $ 77,431 ​ $ 284,464 ​ $ 0 ​ $ 765,366 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 9 ​ $ 0 ​ $ 9 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 19,593 ​ $ 24,980 ​ $ 31,686 ​ $ 49,970 ​ $ 46,419 ​ $ 71,348 ​ $ 0 ​ $ 243,996 Special Mention ​ ​ 0 ​ 360 ​ 378 ​ 829 ​ 814 ​ 5,563 ​ 0 ​ 7,944 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 2,217 ​ ​ 6,208 ​ ​ 0 ​ ​ 8,425 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - owner occupied ​ $ 19,593 ​ $ 25,340 ​ $ 32,064 ​ $ 50,799 ​ $ 49,450 ​ $ 83,119 ​ $ 0 ​ $ 260,365 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 65,748 ​ $ 42,675 ​ $ 66,799 ​ $ 37,466 ​ $ 35,968 ​ $ 43,265 ​ $ 123,303 ​ $ 415,224 Special Mention ​ 19 ​ 501 ​ 36 ​ 80 ​ 28 ​ 2,509 ​ 8,359 ​ 11,532 Substandard ​ ​ 0 ​ ​ 10,749 ​ ​ 0 ​ ​ 3,610 ​ ​ 4,892 ​ ​ 1,119 ​ ​ 2,049 ​ ​ 22,419 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total all other commercial loans ​ $ 65,767 ​ $ 53,925 ​ $ 66,835 ​ $ 41,156 ​ $ 40,888 ​ $ 46,893 ​ $ 133,711 ​ $ 449,175 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 333 ​ $ 0 ​ $ 253 ​ $ 586 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 26,375 ​ $ 39,628 ​ $ 43,545 ​ $ 73,911 ​ $ 46,258 ​ $ 162,643 ​ $ 0 ​ $ 392,360 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 407 ​ ​ 333 ​ ​ 129 ​ ​ 3,581 ​ ​ 0 ​ ​ 4,450 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total residential mortgage loans ​ $ 26,375 ​ $ 39,628 ​ $ 43,952 ​ $ 74,244 ​ $ 46,387 ​ $ 166,224 ​ $ 0 ​ $ 396,810 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 5 ​ $ 0 ​ $ 5 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 2,331 ​ $ 2,340 ​ $ 2,031 ​ $ 1,978 ​ $ 557 ​ $ 733 ​ $ 62,870 ​ $ 72,840 Special Mention ​ 0 ​ 0 ​ 0 ​ 5 ​ 0 ​ 0 ​ 0 ​ 5 Substandard ​ ​ 2 ​ ​ 4 ​ ​ 2 ​ ​ 0 ​ ​ 0 ​ ​ 65 ​ ​ 473 ​ ​ 546 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total consumer loans ​ $ 2,333 ​ $ 2,344 ​ $ 2,033 ​ $ 1,983 ​ $ 557 ​ $ 798 ​ $ 63,343 ​ $ 73,391 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 33 ​ $ 40 ​ $ 0 ​ $ 0 ​ $ 148 ​ $ 221 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 167,297 ​ $ 175,159 ​ $ 251,961 ​ $ 312,693 ​ $ 205,829 ​ $ 546,242 ​ $ 186,173 ​ $ 1,845,354 Special Mention ​ 97 ​ 892 ​ 996 ​ 16,912 ​ 1,646 ​ 12,810 ​ 8,359 ​ 41,712 Substandard ​ ​ 2 ​ ​ 10,859 ​ ​ 1,249 ​ ​ 13,725 ​ ​ 7,238 ​ ​ 22,446 ​ ​ 2,522 ​ ​ 58,041 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 167,396 ​ $ 186,910 ​ $ 254,206 ​ $ 343,330 ​ $ 214,713 ​ $ 581,498 ​ $ 197,054 ​ $ 1,945,107 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 33 ​ $ 40 ​ $ 333 ​ $ 14 ​ $ 401 ​ $ 821 ​ ​ 16 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The following table presents the amortized cost of loans by credit quality indicators by year of origination as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ (In Thousands) ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 59,708 ​ $ 99,900 ​ $ 161,497 ​ $ 78,884 ​ $ 51,851 ​ $ 243,578 ​ $ 0 ​ $ 695,418 Special Mention ​ ​ 0 ​ 0 ​ 16,233 ​ 1,371 ​ 0 ​ 8,188 ​ 0 ​ 25,792 Substandard ​ ​ 116 ​ ​ 0 ​ ​ 9,928 ​ ​ 0 ​ ​ 0 ​ ​ 8,311 ​ ​ 0 ​ ​ 18,355 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - non-owner occupied ​ $ 59,824 ​ $ 99,900 ​ $ 187,658 ​ $ 80,255 ​ $ 51,851 ​ $ 260,077 ​ $ 0 ​ $ 739,565 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 757 ​ $ 0 ​ $ 757 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 25,552 ​ $ 33,533 ​ $ 52,207 ​ $ 49,410 ​ $ 11,444 ​ $ 76,558 ​ $ 0 ​ $ 248,704 Special Mention ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 961 ​ 0 ​ 961 Substandard ​ 0 ​ ​ 5,125 ​ ​ 729 ​ ​ 2,367 ​ ​ 0 ​ ​ 3,185 ​ ​ 0 ​ ​ 11,406 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - owner occupied ​ $ 25,552 ​ $ 38,658 ​ $ 52,936 ​ $ 51,777 ​ $ 11,444 ​ $ 80,704 ​ $ 0 ​ $ 261,071 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 73,812 ​ $ 74,301 ​ $ 44,245 ​ $ 44,367 ​ $ 23,084 ​ $ 30,656 ​ $ 109,121 ​ $ 399,586 Special Mention ​ ​ 533 ​ 0 ​ 2,306 ​ 2 ​ 0 ​ 0 ​ 2,147 ​ 4,988 Substandard ​ ​ 44 ​ ​ 0 ​ ​ 3,478 ​ ​ 5,229 ​ ​ 109 ​ ​ 1,078 ​ ​ 8,765 ​ ​ 18,703 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total all other commercial loans ​ $ 74,389 ​ $ 74,301 ​ $ 50,029 ​ $ 49,598 ​ $ 23,193 ​ $ 31,734 ​ $ 120,033 ​ $ 423,277 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 427 ​ $ 60 ​ $ 21 ​ $ 122 ​ $ 0 ​ $ 630 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 41,450 ​ $ 48,937 ​ $ 80,789 ​ $ 50,108 ​ $ 35,601 ​ $ 146,231 ​ $ 0 ​ $ 403,116 Special Mention ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 380 ​ ​ 0 ​ ​ 85 ​ ​ 82 ​ ​ 4,346 ​ ​ 0 ​ ​ 4,893 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total residential mortgage loans ​ $ 41,450 ​ $ 49,317 ​ $ 80,789 ​ $ 50,193 ​ $ 35,683 ​ $ 150,577 ​ $ 0 ​ $ 408,009 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 3,859 ​ $ 3,441 ​ $ 2,848 ​ $ 1,013 ​ $ 599 ​ $ 679 ​ $ 50,860 ​ $ 63,299 Special Mention ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 8 ​ ​ 4 ​ ​ 0 ​ ​ 0 ​ ​ 71 ​ ​ 544 ​ ​ 627 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total consumer loans ​ $ 3,859 ​ $ 3,449 ​ $ 2,852 ​ $ 1,013 ​ $ 599 ​ $ 750 ​ $ 51,404 ​ $ 63,926 Year-to-date gross charge-offs ​ $ 0 ​ $ 69 ​ $ 130 ​ $ 7 ​ $ 8 ​ $ 1 ​ $ 114 ​ $ 329 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 204,381 ​ $ 260,112 ​ $ 341,586 ​ $ 223,782 ​ $ 122,579 ​ $ 497,702 ​ $ 159,981 ​ $ 1,810,123 Special Mention ​ 533 ​ 0 ​ 18,539 ​ 1,373 ​ 0 ​ 9,149 ​ 2,147 ​ 31,741 Substandard ​ ​ 160 ​ ​ 5,513 ​ ​ 14,139 ​ ​ 7,681 ​ ​ 191 ​ ​ 16,991 ​ ​ 9,309 ​ ​ 53,984 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 205,074 ​ $ 265,625 ​ $ 374,264 ​ $ 232,836 ​ $ 122,770 ​ $ 523,842 ​ $ 171,437 ​ $ 1,895,848 Year-to-date gross charge-offs ​ $ 0 ​ $ 69 ​ $ 557 ​ $ 67 ​ $ 29 ​ $ 880 ​ $ 114 ​ $ 1,716 ​ 17 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The following tables are a summary of the Corporation’s nonaccrual loans by major categories for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual (In Thousands) ​ No Allowance ​ with an Allowance ​ Loans Commercial real estate - non-owner occupied ​ $ 6,582 ​ $ 263 ​ $ 6,845 Commercial real estate - owner occupied ​ 4,791 ​ 0 ​ 4,791 All other commercial loans ​ ​ 9,801 ​ ​ 0 ​ ​ 9,801 Residential mortgage loans ​ ​ 4,055 ​ ​ 0 ​ ​ 4,055 Consumer loans ​ 270 ​ 0 ​ 270 Total ​ $ 25,499 ​ $ 263 ​ $ 25,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual (In Thousands) No Allowance ​ with an Allowance ​ Loans Commercial real estate - non-owner occupied ​ $ 7,370 ​ $ 0 ​ $ 7,370 Commercial real estate - owner occupied ​ 1,467 ​ 258 ​ 1,725 All other commercial loans ​ ​ 10,006 ​ ​ 0 ​ ​ 10,006 Residential mortgage loans ​ ​ 4,310 ​ ​ 0 ​ ​ 4,310 Consumer loans ​ 431 ​ 0 ​ 431 Total ​ $ 23,584 ​ $ 258 ​ $ 23,842 ​ The Corporation recognized interest income on nonaccrual loans of $ 203,000 and $ 660,000 in the three and nine months ended September 30, 2025, respectively and $ 234,000 and $ 750,000 in the three and nine months ended September 30, 2024, respectively. The following table represents the accrued interest receivable written off by reversing interest income during the three-month and nine-month periods ended September 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Three Months Ended ​ Nine Months Ended ​ Nine Months Ended (In Thousands) ​ September 30, 2025 ​ September 30, 2024 ​ September 30, 2025 ​ September 30, 2024 Commercial real estate - non-owner occupied ​ $ 2 ​ $ 0 ​ $ 2 ​ $ 19 Commercial real estate - owner occupied ​ 0 ​ 0 ​ 51 ​ 10 All other commercial loans ​ ​ 6 ​ ​ 79 ​ ​ 6 ​ ​ 197 Residential mortgage loans ​ ​ 5 ​ ​ 6 ​ ​ 13 ​ ​ 24 Consumer loans ​ 0 ​ 4 ​ 0 ​ 8 Total ​ $ 13 ​ $ 89 ​ $ 72 ​ $ 258 ​ The Corporation has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following discussion provides more detail about the types of collateral that secure collateral dependent loans: ● Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate. ● All other commercial loans include loans typically secured by business assets, including inventory, equipment and receivables. This category also included commercial construction and land loans and some commercial lines of credit that are secured by real estate. ● Residential mortgage loans are typically secured by first mortgages, and, in some cases, could be secured by a second mortgage. 18 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ● Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral. The following table details the amortized cost of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ December 31, 2024 ​ ​ Amortized ​ ​ ​ Amortized ​ ​ (In Thousands) ​ Cost ​ Allowance ​ Cost ​ Allowance Commercial real estate - non-owner occupied ​ $ 6,845 ​ $ 51 ​ $ 7,370 ​ $ 0 Commercial real estate - owner occupied ​ 4,791 ​ ​ 0 ​ 6,749 ​ 122 All other commercial loans ​ ​ 9,801 ​ ​ 0 ​ ​ 16,006 ​ ​ 0 Total ​ $ 21,437 ​ $ 51 ​ $ 30,125 ​ $ 122 ​ Allowance for Credit Losses The allowance for credit losses (“ACL”) on loans represents management’s estimate of lifetime credit losses inherent in loans as of the consolidated balance sheet date. The ACL on loans includes two primary components: (i) an allowance established on loans which share similar risk characteristics which are collectively evaluated for credit losses, and (ii) an allowance established on loans which do not share similar risk characteristics with any loan segment and which are individually evaluated for credit losses. Management determines the ACL on loans that are collectively evaluated by considering the following: (a) the weighted-average remaining maturity (WARM) method is used to estimate credit losses, based on the Corporation’s historical loss experience, for pools of loans with similar risk and cash flow characteristics; (b) subjective adjustments are made, generally increasing the ACL, for qualitative risk factors that are deemed likely to cause estimated credit losses to differ from historical experience; and (c) an additional adjustment to expected credit losses is made, based on an economic forecast, and applied for the first 2 years of the weighted-average remaining life of the portfolio. The following table summarizes the activity related to the allowance for credit losses for the three and nine months ended September 30, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Total Balance, June 30, 2025 $ 13,093 ​ $ 3,055 ​ $ 3,891 ​ $ 1,314 ​ $ 346 ​ $ 21,699 Charge-offs ​ 0 ​ ​ 0 ​ ​ ( 45 ) ​ ​ 0 ​ ​ ( 77 ) ​ ​ ( 122 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 1 ​ ​ 27 ​ ​ 28 Provision for credit losses on loans 730 ​ 176 ​ 530 ​ 394 ​ 39 ​ 1,869 Balance, September 30, 2025 $ 13,823 ​ $ 3,231 ​ $ 4,376 ​ $ 1,709 ​ $ 335 ​ $ 23,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Total Balance, December 31, 2024 $ 11,964 ​ $ 2,844 ​ $ 3,361 ​ $ 1,356 ​ $ 510 ​ $ 20,035 Charge-offs ​ ( 9 ) ​ ​ 0 ​ ​ ( 586 ) ​ ​ ( 5 ) ​ ​ ( 221 ) ​ ​ ( 821 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 2 ​ ​ 3 ​ ​ 83 ​ ​ 88 Provision (credit) for credit losses on loans 1,868 ​ 387 ​ 1,599 ​ 355 ​ ( 37 ) ​ 4,172 Balance, September 30, 2025 $ 13,823 ​ $ 3,231 ​ $ 4,376 ​ $ 1,709 ​ $ 335 ​ $ 23,474 ​ ​ 19 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Total Balance, June 30, 2024 $ 12,177 ​ $ 2,901 ​ $ 3,678 ​ $ 1,112 ​ $ 514 ​ $ 20,382 Charge-offs ​ ( 640 ) ​ ​ 0 ​ ​ ( 570 ) ​ ​ 0 ​ ​ ( 58 ) ​ ​ ( 1,268 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 5 ​ ​ 1 ​ ​ 25 ​ ​ 31 Provision (credit) for credit losses on loans 381 ​ ( 28 ) ​ 311 ​ 647 ​ ( 14 ) ​ 1,297 Balance, September 30, 2024 $ 11,918 ​ $ 2,873 ​ $ 3,424 ​ $ 1,760 ​ $ 467 ​ $ 20,442 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Total Balance, December 31, 2023 $ 12,010 ​ $ 2,116 ​ $ 2,918 ​ $ 1,764 ​ $ 400 ​ $ 19,208 Charge-offs ​ ( 757 ) ​ ​ 0 ​ ​ ( 630 ) ​ ​ 0 ​ ​ ( 297 ) ​ ​ ( 1,684 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 40 ​ ​ 4 ​ ​ 51 ​ ​ 95 Provision (credit) for credit losses on loans 665 ​ ​ 757 ​ ​ 1,096 ​ ​ ( 8 ) ​ ​ 313 ​ 2,823 Balance, September 30, 2024 $ 11,918 ​ $ 2,873 ​ $ 3,424 ​ $ 1,760 ​ $ 467 ​ $ 20,442 ​ The ACL on loans individually evaluated decreased to $ 51,000 at September 30, 2025 from $ 122,000 at December 31, 2024. At September 30, 2025, there was a loan to one borrower with a amortized cost basis of $ 263,000 for which an individual ACL was recorded. At December 31, 2024, there were loans to one borrower with a total amortized cost basis of $ 258,000 for which an individual ACL was recorded. ​ The ACL on loans collectively evaluated was $ 23,423,000 at September 30, 2025, up from $ 19,913,000 at December 31, 2024. The increase in the collectively evaluated portion of the ACL at September 30, 2025 as compared to December 31, 2024 included a net increase related to changes in qualitative adjustments, partially offset by a decrease in the portion of the ACL based on the WARM method estimated losses resulting partially from a reduction in the estimated average life of the portfolio. The increase in the ACL at September 30, 2025 from December 31, 2024 related to changes in qualitative adjustments included increases in estimates based on: the volume and severity of past due, nonaccrual and criticized or adversely classified loans; regional and local economic conditions; and regional values of residential housing. ​ Modifications Made to Borrowers Experiencing Financial Difficulty ​ The Corporation closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. During the three and nine months ended September 30, 2025 and September 30, 2024, the Corporation made no modifications of loans to borrowers experiencing financial difficulty. ​ The following table presents the performance of such loans that have been modified in the twelve-month period preceding September 30, 2025 and the twelve-month period preceding September 30, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Payment Status (Amortized Cost Basis) September 30, 2025 Current or Past Due Less than 30 Days 90+ Days Past Due Total Commercial real estate - non-owner occupied ​ $ 2,572 ​ $ 0 ​ $ 2,572 Commercial real estate - owner occupied ​ ​ 217 ​ ​ 0 ​ ​ 217 Total ​ $ 2,789 ​ $ 0 ​ $ 2,789 ​ ​ 20 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Payment Status (Amortized Cost Basis) September 30, 2024 Current or Past Due Less than 30 Days 90+ Days Past Due Total Commercial real estate - non-owner occupied ​ $ 1,846 ​ $ 1,357 ​ $ 3,203 ​ Included in performance of loans modified in the twelve-month period preceding September 30, 2025 table above, was one loan secured by non-owner occupied commercial real estate with an amortized cost basis of $ 1,781,000 that was in nonaccrual status at September 30, 2025. The Corporation had extended the maturity of that loan for 12 months in the fourth quarter 2023. In 2024, the borrower continued to experience financial difficulty, and the Corporation provided another six-month extension of the maturity. The Corporation recorded a partial charge-off of $ 640,000 on this loan in 2024. There was no specific ACL on this loan at September 30, 2025 and December 31, 2024. The loan that was past due more than 90 days at September 30, 2024 in the table above was in default with its modified terms at September 30, 2024. The Corporation received payments totaling $ 264,000 in the twelve-month period ended September 30, 2025, all of which were applied to principal. The amortized cost basis of the loan was $ 1,093,000 at September 30, 2025. ​ The Corporation had no commitments to lend any additional funds on modified loans during the three and nine months ended September 30, 2025 and 2024, and the Corporation had no loans that defaulted during the three and nine months ended September 30, 2025 and 2024 that had been modified preceding the payment default when the borrower was experiencing financial difficulty at the time of modification. The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in foreclosed assets held for sale in the unaudited consolidated balance sheets) is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 Foreclosed residential real estate ​ $ 246 ​ $ 25 ​ The amortized cost of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 Residential real estate in process of foreclosure ​ $ 433 ​ $ 717 ​ The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. The contract amounts of these financial instruments at September 30, 2025 and December 31, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (In Thousands) 2025 2024 Commitments to extend credit ​ $ 426,396 ​ $ 380,003 Standby letters of credit ​ 58,653 ​ 64,586 ​ The Corporation maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, commercial letters of credit and credit enhancement obligations related to residential mortgage loans sold with recourse, when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e. commitment cannot be canceled at any time). The allowance for off-balance sheet credit exposures is adjusted through the provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives. The allowance for credit losses for off-balance sheet exposures of $ 1,036,000 at September 30, 2025 and $ 455,000 at December 31, 2024, is included in accrued interest and other liabilities on the unaudited consolidated balance sheets. ​ 21 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the three and nine months ended September 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Nine Months Ended (In Thousands) ​ September 30, 2025 ​ September 30, 2024 ​ September 30, 2025 ​ September 30, 2024 Beginning Balance ​ $ 742 ​ $ 683 ​ $ 455 ​ $ 690 Provision (credit) for unfunded commitments ​ ​ 294 ​ ​ ( 90 ) ​ ​ 581 ​ ​ ( 97 ) Ending Balance, September 30 ​ $ 1,036 ​ $ 593 ​ $ 1,036 ​ $ 593 ​ ​ ​ ​ 7. GOODWILL AND CORE DEPOSIT INTANGIBLES, NET Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired. At September 30, 2025 and December 31, 2024, the net carrying value of goodwill was $ 52,505,000 . ​ Information related to core deposit intangibles is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 Gross amount ​ $ 6,639 ​ $ 6,639 ​ Accumulated amortization ​ ( 4,877 ) ​ ( 4,559 ) ​ Net ​ $ 1,762 ​ $ 2,080 ​ ​ Amortization expense related to core deposit intangibles is included in other noninterest expense in the consolidated statements of income, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ 2025 2024 2025 2024 Amortization expense ​ $ 106 $ 97 $ 318 $ 292 ​ ​ ​ 8. BORROWED FUNDS ​ SHORT-TERM BORROWINGS Short-term borrowings (initial maturity within one year) include the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ ​ 2025 ​ 2024 ​ FHLB-Pittsburgh borrowings ​ $ 0 ​ $ 0 ​ Customer repurchase agreements ​ 1,489 ​ 2,488 ​ Total short-term borrowings ​ $ 1,489 ​ $ 2,488 ​ ​ The Corporation engages in repurchase agreements with certain commercial customers. These agreements provide that the Corporation sells specified investment securities to the customers on an overnight basis and repurchases them on the following business day. The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10 % at both September 30, 2025 and December 31, 2024. The carrying value of the underlying securities was $ 1,490,000 at September 30, 2025 and $ 2,500,000 at December 31, 2024. The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $ 1,386,299,000 at September 30, 2025 and $ 1,351,770,000 at December 31, 2024. Also, the FHLB-Pittsburgh loan facility requires the Corporation to invest in established amounts of FHLB-Pittsburgh stock. The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock 22 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q (included in other assets in the consolidated balance sheets) were $ 14,346,000 at September 30, 2025 and $ 15,018,000 at December 31, 2024. The Corporation’s total credit facility with FHLB-Pittsburgh was $ 973,060,000 at September 30, 2025, including an unused (available) amount of $ 802,213,000 . At December 31, 2024, the Corporation’s total credit facility with FHLB-Pittsburgh was $ 938,691,000 , including an unused (available) amount of $ 749,999,000 . At September 30, 2025 and December 31, 2024, the Corporation’s use of the FHLB-Pittsburgh facility included borrowed funds (detailed below) and letters of credit totaling $ 27,987,000 at September 30, 2025 and $ 23,241,000 at December 31, 2024. Availability on the facility is also reduced by accrued interest payable on the borrowings and by the total of the Corporation’s credit enhancement obligations on residential mortgage loans sold under the MPF Original Program. The Corporation had available credit with other correspondent banks totaling $ 75,000,000 at September 30, 2025 and December 31, 2024. These lines of credit are primarily unsecured. No amounts were outstanding at September 30, 2025 or December 31, 2024. The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. At September 30, 2025, the Corporation had available credit in the amount of $ 25,228,000 on this line with no outstanding advances. At December 31, 2024, the Corporation had available credit in the amount of $ 18,093,000 on this line with no outstanding advances. As collateral for this line, the Corporation has pledged available-for-sale securities with a carrying value of $ 26,732,000 at September 30, 2025 and $ 18,881,000 at December 31, 2024. LONG-TERM BORROWINGS – FHLB ADVANCES Long-term borrowings from FHLB-Pittsburgh are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ ​ 2025 ​ 2024 ​ Loans maturing in 2025 with a weighted-average rate of 4.66 % ​ ​ 11,959 ​ ​ 44,516 ​ Loans maturing in 2026 with a weighted-average rate of 4.61 % ​ ​ 48,018 ​ ​ 48,018 ​ Loans maturing in 2027 with a weighted-average rate of 4.24 % ​ ​ 34,571 ​ ​ 34,571 ​ Loans maturing in 2028 with a weighted-average rate of 4.30 % ​ ​ 26,027 ​ ​ 26,027 ​ Loans maturing in 2029 with a weighted-average rate of 4.42 % ​ ​ 12,319 ​ ​ 12,319 ​ Total long-term FHLB-Pittsburgh borrowings ​ $ 132,894 ​ $ 165,451 ​ ​ Note: Weighted-average rates are presented as of September 30, 2025. SENIOR NOTES In 2021, the Corporation issued and sold $ 15.0 million in aggregate principal amount of 2.75 % Fixed Rate Senior Unsecured Notes due 2026 (the "Senior Notes"). The Senior Notes mature on June 1, 2026 and bear interest at a fixed annual rate of 2.75 %. The Corporation is not entitled to redeem the Senior Notes, in whole or in part, at any time prior to maturity and the Senior Notes are not subject to redemption by the holders. The Senior Notes are unsecured and unsubordinated obligations of the Corporation only and are not obligations of, and are not guaranteed by, any subsidiary of the Corporation. The Senior Notes were recorded, net of debt issuance costs of $ 337,000 , at an initial carrying amount of $ 14,663,000 . Debt issuance costs are amortized over the term of the Senior Notes as an adjustment of the effective interest rate. Amortization of debt issuance costs associated with the Senior Notes totaling $ 18,000 in the third quarter 2025 and $ 53,000 for the nine-month period ended September 30, 2025 and $ 17,000 in the third quarter 2024 and $ 51,000 for the nine-month period ended September 30, 2024 was included in interest expense on senior notes, net in the unaudited consolidated statements of income. 23 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q At September 30, 2025 and December 31, 2024, outstanding Senior Notes are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 Senior Notes with an aggregate par value of $ 15,000,000 ; bearing interest at 2.75 % with an effective interest rate of 3.23 %; maturing in June 2026 ​ $ 14,952 ​ $ 14,899 Total carrying value ​ $ 14,952 ​ $ 14,899 ​ SUBORDINATED DEBT In 2021, the Corporation issued and sold $ 25.0 million in aggregate principal amount of 3.25 % Fixed-to-Floating Rate Subordinated Notes due 2031 (the "Subordinated Notes"). The Subordinated Notes mature on June 1, 2031 and bear interest at a fixed annual rate of 3.25 %, to June 1, 2026 . From June 1, 2026 to maturity or early redemption, the interest rate will reset quarterly to an interest rate per annum equal to the three-month Secured Overnight Financing Rate provided by the Federal Reserve Bank of New York plus 259 basis points. The Corporation is entitled to redeem the Subordinated Notes, in whole or in part, at any time on or after June 1, 2026, and to redeem the Subordinated Notes at any time in whole upon certain other events. Any redemption of the Subordinated Notes will be subject to prior regulatory approval to the extent required. The Subordinated Notes are not subject to redemption at the option of the holders. The Subordinated Notes are unsecured, subordinated obligations of the Corporation only and are not obligations of, and are not guaranteed by, any subsidiary of the Corporation. The Subordinated Notes rank junior in right to payment to the Corporation's current and future senior indebtedness, including the Senior Notes (described above). The Subordinated Notes are intended to qualify as Tier 2 capital for regulatory capital purposes. The Subordinated Notes were recorded, net of debt issuance costs of $ 563,000 , at an initial carrying amount of $ 24,437,000 . Debt issuance costs are amortized through June 1, 2026 as an adjustment of the effective interest rate. Amortization of debt issuance costs associated with the Subordinated Notes totaling $ 30,000 in the third quarter 2025 and $ 88,000 for the nine-month period ended September 30, 2025 and $ 29,000 in the third quarter 2024 and $ 85,000 for the nine-month period ended September 30, 2024, was included in interest expense on subordinated debt, net in the unaudited consolidated statements of income. At September 30, 2025 and December 31, 2024, the carrying amounts of subordinated debt agreements are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) September 30, December 31, ​ ​ 2025 ​ 2024 Agreements with a par value of $ 25,000,000 ; bearing interest at 3.25 % with an effective interest rate of 3.74 % ; maturing in June 2031 and redeemable at par in June 2026 ​ $ 24,919 ​ $ 24,831 Total carrying value ​ $ 24,919 ​ $ 24,831 ​ ​ 9. STOCK-BASED COMPENSATION PLANS The Corporation has a stock incentive plan for selected officers and the independent directors. The first quarter 2025 restricted stock awards to employees vest ratably over three years , and the second quarter 2025 restricted stock awards to the independent directors vest over one year . Following is a summary of restricted stock awards granted in the nine-month period ended September 30, 2025: ​ 24 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Aggregate ​ ​ ​ ​ Grant ​ ​ ​ ​ Date ​ ​ Number of ​ Fair ​ ​ Shares ​ Value Nine Months Ended September 30, 2025 awards: ​ ​ ​ ​ ​ Time-based awards to independent directors ​ 12,700 ​ $ 250 Time-based awards to employees ​ 31,113 ​ ​ 684 Performance-based awards to employees ​ 11,848 ​ ​ 261 Total ​ 55,661 ​ $ 1,195 ​ Compensation cost related to restricted stock is recognized based on the fair value of the stock at the grant date over the vesting period, adjusted for estimated and actual forfeitures. Total stock-based compensation expense attributable to restricted stock awards amounted to $ 337,000 in the third quarter 2025 and $ 383,000 in the third quarter 2024. Total stock-based compensation expense attributable to restricted stock awards amounted to $ 993,000 in the nine-month period ended September 30, 2025 and $ 1,099,000 in the nine-month period ended September 30, 2024. 10. CONTINGENCIES Class Action Litigation On March 27, 2024, a putative class action lawsuit was filed in the US District Court for the Western District of Texas by investors in a purported Ponzi scheme operated by two individuals, one of whom maintained accounts at C&N Bank. The plaintiffs have sued C&N Bank, along with another bank, and additional law firm and accounting firm defendants. The case is styled Goldovsky, et al. v. Rauld, et al. Plaintiffs asserted claims against C&N Bank and the other bank for aiding and abetting alleged violations of the Texas Securities Act, and additional claims against the legal and accounting professionals for statutory fraud, common law fraud, negligent misrepresentation, and knowing participation in breach of fiduciary duty. ​ C&N Bank filed motions to dismiss the Texas case for wont of personal jurisdiction and failure to state a claim. The Plaintiffs responded to those motions. By order of the District Court judge dated March 27, 2025, C&N Bank’s motion to dismiss for wont of personal jurisdiction was granted. ​ Plaintiffs filed an application for certification of the Texas suit as a class action. On October 16, 2025, the District Court in Texas issued an order denying the plaintiffs’ motion for class certification. ​ On May 23, 2025, C&N Bank was served with a complaint filed by Goldovsky, et al in the US District Court for the Middle District of Pennsylvania. The complaint is predicated upon Texas securities law, alleging substantially the same facts and asserting the same legal arguments as in the Texas case. C&N Bank filed motions to dismiss the Pennsylvania case. Plaintiffs filed a motion to certify the case as class action. C&N Bank filed its response brief in opposition to class certification in the Pennsylvania case on October 22, 2025. ​ C&N Bank believes that it has substantial defenses against the action, and it intends to defend itself against the plaintiffs’ allegations. Based on the information available to the Corporation, the Corporation does not believe at this time that a loss is probable in this matter, nor can a range of possible losses be determined. Accordingly, no liability has been recorded for this litigation matter in the accompanying consolidated financial statements. The Corporation’s estimate may change from time to time, and actual losses could vary. Other Matters In the normal course of business, the Corporation is subject to pending and threatened litigation in which claims for monetary damages are asserted. In management’s opinion, the Corporation’s financial position and results of operations would not be materially affected by the outcome of these legal proceedings. 25 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 11. DERIVATIVE FINANCIAL INSTRUMENTS The Corporation is a party to derivative financial instruments. These financial instruments consist of interest rate swap agreements and risk participation agreements (RPAs) which contain master netting and collateral provisions designed to protect the party at risk. Interest rate swaps with commercial loan banking customers were executed to facilitate their respective risk management strategies. Under the terms of these arrangements, the commercial banking customers effectively exchanged their floating interest rate exposures on loans into fixed interest rate exposures. Those interest rate swaps have been simultaneously economically hedged by offsetting interest rate swaps with a third party, such that the Corporation has effectively exchanged its fixed interest rate exposures for floating rate exposures. These derivatives are not designated as hedges and are not speculative. Rather, these derivatives result from a service provided to certain customers. As the interest rate swaps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The aggregate notional amount of interest rate swaps was $ 137,920,000 at September 30, 2025 and $ 141,940,000 at December 31, 2024. The Corporation originated one interest rate swap in the nine-month period ended September 30, 2025. The notional amount of the swap was $ 1,791,000 at September 30, 2025. Fee income on the interest swap originated in the nine-month period ended September 30, 2025 of $ 24,000 was included in other noninterest income in the consolidated statements of income. There were no interest rate swaps originated in the nine-month period ended September 30, 2024. There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at September 30, 2025 and December 31, 2024. The Corporation has entered into an RPA with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed. This type of derivative is referred to as an “RPA In.” In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Corporation has provided a loan structured with a derivative, the Corporation purchased an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as an “RPA Out.” There was an increase of $ 1,000 included in other noninterest income from RPAs in the third quarter 2025 and $ 10,000 in the nine-month period ended September 30, 2025 as compared to a decrease of $ 1,000 , included in other noninterest income, in the third quarter 2024 and an increase of $ 1,000 in the nine-month period ended September 30, 2024. The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the consolidated balance sheets at September 30, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) At September 30, 2025 ​ At December 31, 2024 ​ Asset Derivatives ​ Liability Derivatives ​ Asset Derivatives ​ Liability Derivatives ​ Notional ​ Fair ​ Notional ​ Fair ​ Notional ​ Fair ​ Notional ​ Fair ​ Amount ​ Value (1) ​ Amount ​ Value (2) ​ Amount ​ Value (1) ​ Amount ​ Value (2) Interest rate swap agreements $ 68,960 ​ $ 1,483 ​ $ 68,960 ​ $ 1,483 ​ $ 70,970 ​ $ 2,385 ​ $ 70,970 ​ $ 2,385 RPA Out ​ 6,856 ​ ​ 3 ​ ​ 0 ​ ​ 0 ​ ​ 6,957 ​ ​ 2 ​ ​ 0 ​ ​ 0 RPA In ​ 0 ​ ​ 0 ​ ​ 13,831 ​ ​ 7 ​ ​ 0 ​ ​ 0 ​ ​ 9,916 ​ ​ 2 ​ (1) Included in other assets in the consolidated balance sheets. (2) Included in accrued interest and other liabilities in the consolidated balance sheets. 26 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The Corporation’s agreements with its derivative counterparties provide that, if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations. Further, if the Corporation were to fail to maintain its status as a well or adequately capitalized institution, then the counterparties could terminate the derivative positions, and the Corporation would be required to settle its obligations under the agreements. There was interest-bearing cash pledged as collateral against the Corporation’s liability related to the interest rate swaps of $ 1,400,000 at September 30, 2025 and $ 1,090,000 at December 31, 2024. 12. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS The Corporation measures certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB Topic 820, “Fair Value Measurements and Disclosures” establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Corporation for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Level 2 – Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities and other observable inputs. Level 3 – Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows and other similar techniques. The Corporation monitors and evaluates available data relating to fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date of an event or change in circumstances that affects the valuation method chosen. Examples of such changes may include the market for a particular asset or liability becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data. 27 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q At September 30, 2025 and December 31, 2024, assets and liabilities measured at fair value and the valuation methods used are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ ​ Quoted Prices ​ Other Observable ​ Unobservable ​ ​ ​ ​ in Active Markets ​ Inputs ​ Inputs ​ Total (In Thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Fair Value Recurring fair value measurements, assets: ​ ​ ​ ​ AVAILABLE-FOR-SALE DEBT SECURITIES: ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 7,429 ​ $ 0 ​ $ 0 ​ $ 7,429 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 8,670 ​ ​ 0 ​ ​ 8,670 Bank holding company debt securities ​ ​ 0 ​ ​ 26,291 ​ ​ 0 ​ ​ 26,291 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 97,528 ​ 0 ​ 97,528 Taxable ​ 0 ​ 43,862 ​ 0 ​ 43,862 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 101,935 ​ 0 ​ 101,935 Residential collateralized mortgage obligations ​ 0 ​ 52,420 ​ 0 ​ 52,420 Commercial mortgage-backed securities ​ 0 ​ 65,697 ​ 0 ​ 65,697 Private label commercial mortgage-backed securities ​ 0 ​ 3,471 ​ 0 ​ 3,471 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ 0 ​ 8,010 ​ 0 ​ 8,010 Total available-for-sale debt securities ​ 7,429 ​ 407,884 ​ 0 ​ 415,313 Marketable equity security ​ 887 ​ 0 ​ 0 ​ 887 Servicing rights ​ 0 ​ 0 ​ 2,839 ​ 2,839 RPA Out ​ ​ 0 ​ ​ 3 ​ ​ 0 ​ ​ 3 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 1,483 ​ ​ 0 ​ ​ 1,483 Total recurring fair value measurements, assets ​ $ 8,316 ​ $ 409,370 ​ $ 2,839 ​ $ 420,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 7 ​ $ 0 ​ $ 7 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 1,483 ​ ​ 0 ​ ​ 1,483 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 1,490 ​ $ 0 ​ $ 1,490 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 212 ​ $ 212 Foreclosed assets held for sale ​ 0 ​ 0 ​ 402 ​ 402 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 614 ​ $ 614 ​ 28 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Quoted Prices ​ Other Observable ​ Unobservable ​ ​ ​ ​ in Active Markets ​ Inputs ​ Inputs ​ Total (In Thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Fair Value Recurring fair value measurements, assets: ​ ​ ​ ​ AVAILABLE-FOR-SALE DEBT SECURITIES: ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 7,118 ​ $ 0 ​ $ 0 ​ $ 7,118 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 9,025 ​ ​ 0 ​ ​ 9,025 Bank holding company debt securities ​ ​ 0 ​ ​ 25,246 ​ ​ 0 ​ ​ 25,246 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 101,302 ​ 0 ​ 101,302 Taxable ​ 0 ​ 42,506 ​ 0 ​ 42,506 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 94,414 ​ 0 ​ 94,414 Residential collateralized mortgage obligations ​ 0 ​ 49,894 ​ 0 ​ 49,894 Commercial mortgage-backed securities ​ 0 ​ 64,501 ​ 0 ​ 64,501 Private label commercial mortgage-backed securities ​ 0 ​ 8,374 ​ 0 ​ 8,374 Total available-for-sale debt securities ​ 7,118 ​ 395,262 ​ 0 ​ 402,380 Marketable equity security ​ 863 ​ 0 ​ 0 ​ 863 Servicing rights ​ 0 ​ 0 ​ 2,782 ​ 2,782 RPA Out ​ ​ 0 ​ ​ 2 ​ ​ 0 ​ ​ 2 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 2,385 ​ ​ 0 ​ ​ 2,385 Total recurring fair value measurements, assets ​ $ 7,981 ​ $ 397,649 ​ $ 2,782 ​ $ 408,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 2 ​ $ 0 ​ $ 2 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 2,385 ​ ​ 0 ​ ​ 2,385 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 2,387 ​ $ 0 ​ $ 2,387 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 136 ​ $ 136 Foreclosed assets held for sale ​ 0 ​ 0 ​ 181 ​ 181 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 317 ​ $ 317 ​ Level 2 valuation techniques used to measure fair value for the financial instruments in the preceding tables are as follows: ​ Available-for-sale debt securities - Level 2 debt securities are valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics. Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing. ​ Derivative instruments - Interest rate SWAP agreements, RPA Out and RPA In - The fair value of derivatives are based on valuation models using observable market data as of the measurement date, valued by a third-party pricing service using quantitative models that utilize multiple market inputs. The inputs include prices and indices to generate continuous yield or pricing curves, estimates of current and potential future credit exposure and calculated discounted cash flow factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. Management’s evaluation and selection of valuation techniques and the unobservable inputs used in determining the fair values of assets valued using Level 3 methodologies include sensitive assumptions. Other market participants might use substantially different assumptions, which could result in calculations of fair values that would be substantially different than the amount calculated by management. 29 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q At September 30, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at ​ ​ ​ 9/30/2025 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 9/30/2025 Servicing rights ​ $ 2,839 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 123.00 % Weighted-average PSA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at ​ ​ ​ 12/31/2024 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 12/31/2024 Servicing rights ​ $ 2,782 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 116.00 % Weighted-average PSA ​ The fair value of servicing rights is affected by expected future interest rates. Increases (decreases) in future expected interest rates tend to increase (decrease) the fair value of the Corporation’s servicing rights because of changes in expected prepayment behavior by the borrowers on the underlying loans. Following is a reconciliation of activity for Level 3 assets measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Servicing rights balance, beginning of period ​ $ 2,819 ​ $ 2,720 ​ $ 2,782 ​ $ 2,659 ​ Originations of servicing rights ​ 119 ​ ​ 91 ​ 257 ​ 195 ​ Unrealized loss included in earnings ​ ( 99 ) ​ ​ ( 129 ) ​ ( 200 ) ​ ( 172 ) ​ Servicing rights balance, end of period ​ $ 2,839 ​ $ 2,682 ​ $ 2,839 ​ $ 2,682 ​ ​ Loans are individually evaluated for credit loss when they do not share similar risk characteristics as similar loans within its loan pool. Foreclosed assets held for sale consist of real estate acquired by foreclosure. For individually evaluated loans secured by real estate and foreclosed assets held for sale, estimated fair values are determined primarily using values from third-party appraisals. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. The estimated fair value determined for individually evaluated loans secured by real estate and foreclosed assets held for sale used unobservable inputs (Level 3 methodologies). 30 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q At September 30, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for nonrecurring fair value measurements using Level 3 methodologies are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ Range (Weighted ​ ​ ​ ​ ​ Valuation ​ ​ ​ ​ ​ Average) ​ ​ Balance at ​ Allowance at ​ Fair Value at ​ Valuation ​ Unobservable ​ Discount at Asset ​ 9/30/2025 ​ 9/30/2025 ​ 9/30/2025 ​ Technique ​ Inputs ​ 9/30/2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ Commercial real estate - nonowner occupied ​ $ 263 ​ $ 51 ​ $ 212 ​ Sales comparison ​ Discount to appraised value ​ 45 % ( 45 ) % Total loans individually evaluated for credit loss ​ $ 263 ​ $ 51 ​ $ 212 ​ ​ ​ Foreclosed assets held for sale - real estate: ​ ​ ​ ​ ​ ​ ​ Residential (1-4 family) ​ $ 246 ​ $ 0 ​ $ 246 Sales comparison Discount to appraised value ​ 1 %- 84 % ( 25 ) % Commercial real estate ​ ​ 156 ​ ​ 0 ​ ​ 156 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 34 ) % Total foreclosed assets held for sale ​ $ 402 ​ $ 0 ​ $ 402 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ Range (Weighted ​ ​ ​ ​ ​ Valuation ​ ​ ​ ​ ​ Average) ​ ​ Balance at ​ Allowance at ​ Fair Value at ​ Valuation ​ Unobservable ​ Discount at Asset ​ 12/31/2024 ​ 12/31/2024 ​ 12/31/2024 ​ Technique ​ Inputs ​ 12/31/2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ Commercial real estate - owner occupied ​ $ 258 ​ $ 122 ​ $ 136 ​ Sales comparison & SBA guaranty ​ Discount to appraised value ​ 95 % ( 95 ) % Total loans individually evaluated for credit loss ​ $ 258 ​ $ 122 ​ $ 136 ​ ​ Foreclosed assets held for sale - real estate: ​ ​ ​ ​ ​ ​ Residential (1-4 family) ​ $ 25 ​ $ 0 ​ $ 25 Sales comparison Discount to appraised value ​ 62 % ( 62 ) % Commercial real estate ​ ​ 156 ​ ​ 0 ​ ​ 156 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 34 ) % Total foreclosed assets held for sale ​ $ 181 ​ $ 0 ​ $ 181 ​ ​ ​ ​ Certain of the Corporation’s financial instruments are not measured at fair value in the consolidated financial statements. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Therefore, the aggregate fair value amounts presented may not represent the underlying fair value of the Corporation. 31 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments that are not recorded at fair value are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Fair Value ​ September 30, 2025 ​ December 31, 2024 ​ ​ Hierarchy ​ Carrying ​ Fair ​ Carrying ​ Fair ​ Level Amount Value Amount Value Financial assets: ​ ​ ​ ​ Cash and cash equivalents Level 1 ​ $ 121,490 ​ $ 121,490 ​ $ 123,574 ​ $ 123,574 Certificates of deposit Level 2 ​ 1,600 ​ 1,571 ​ 2,600 ​ 2,513 Restricted equity securities (included in other assets) N/A ​ 20,927 ​ 20,927 ​ 21,567 ​ N/A Loans, net Level 3 ​ 1,921,633 ​ 1,856,861 ​ 1,875,813 ​ 1,789,044 Accrued interest receivable Level 2 ​ 9,656 ​ 9,656 ​ 8,735 ​ 8,735 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Deposits with no stated maturity Level 2 ​ 1,661,238 ​ ​ 1,661,238 ​ 1,609,552 ​ 1,609,552 Time deposits Level 2 ​ 504,497 ​ ​ 502,416 ​ 484,357 ​ ​ 484,900 Short-term borrowings Level 2 ​ 1,489 ​ ​ 1,489 ​ 2,488 ​ ​ 2,488 Long-term borrowings - FHLB advances Level 2 ​ 132,894 ​ ​ 134,251 ​ 165,451 ​ ​ 165,616 Senior notes, net ​ Level 2 ​ ​ 14,952 ​ ​ 14,538 ​ ​ 14,899 ​ ​ 13,579 Subordinated debt, net ​ Level 2 ​ ​ 24,919 ​ ​ 22,986 ​ ​ 24,831 ​ ​ 21,051 Accrued interest payable Level 2 ​ 1,309 ​ ​ 1,309 ​ 1,771 ​ 1,771 ​ ​ 13. SEGMENT REPORTING The Corporation’s one reportable segment is determined by the President and Chief Executive Officer, who is the designated chief operating decision maker, based upon information provided about the Corporation’s products and services offered, primarily community banking operations. The chief operating decision maker uses consolidated net income to assess performance by comparing it to and monitoring it against budget and prior year results. In addition, the chief operating decision maker uses the consolidated net income to benchmark the Corporation against its competitors. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Corporation's ability to return capital to shareholders. Loans, investments, deposits and assets held in a fiduciary or custodial capacity provide the revenues in the banking operation. Interest expense, provisions for credit losses, and payroll provide the significant expenses in the banking operation. All operations are domestic. Segment performance is evaluated using consolidated net income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended (In Thousands) ​ September 30, 2025 ​ September 30, 2024 ​ September 30, 2025 ​ September 30, 2024 ​ Interest income ​ $ 33,650 ​ $ 33,087 ​ $ 97,813 ​ $ 94,749 ​ Interest expense ​ 11,387 ​ 12,931 ​ 34,433 ​ 36,107 ​ Net interest income ​ 22,263 ​ ​ 20,156 ​ 63,380 ​ ​ 58,642 ​ Provision for credit losses ​ 2,163 ​ ​ 1,207 ​ 4,753 ​ ​ 2,726 ​ Net interest income after provision for credit losses ​ 20,100 ​ ​ 18,949 ​ 58,627 ​ ​ 55,916 ​ Other income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other noninterest income ​ ​ 7,304 ​ ​ 7,133 ​ ​ 22,454 ​ ​ 21,662 ​ Total other income ​ 7,304 ​ ​ 7,133 ​ 22,454 ​ ​ 21,662 ​ Other Noninterest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 11,293 ​ ​ 10,875 ​ 34,119 ​ ​ 33,460 ​ Merger-related expenses ​ 882 ​ ​ 0 ​ 1,049 ​ ​ 0 ​ Other segment expenses (1) ​ 7,214 ​ ​ 7,394 ​ 22,662 ​ ​ 22,368 ​ Total noninterest expense ​ ​ 19,389 ​ ​ 18,269 ​ ​ 57,830 ​ ​ 55,828 ​ Income before income tax provision ​ ​ 8,015 ​ ​ 7,813 ​ ​ 23,251 ​ ​ 21,750 ​ Income tax provision ​ 1,464 ​ ​ 1,448 ​ 4,290 ​ ​ 3,966 ​ NET INCOME ​ $ 6,551 ​ $ 6,365 ​ $ 18,961 ​ $ 17,784 ​ ​ 32 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q (1 ) Other segment expenses included expenses for professional fees, data processing and telecommunications, net occupancy and equipment, automated teller machine and interchange, Pennsylvania shares tax and other noninterest expenses. ​ The Corporation’s segment assets represent the total assets as presented in the consolidated balance sheets at September 30, 2025 and December 31, 2024. ​ ​ ​ 14. SUBSEQUENT EVENT- COMPLETED MERGER On October 1, 2025, the Corporation completed its previously announced merger with Susquehanna Community Financial, Inc. (“Susquehanna”). Susquehanna was the parent company of Susquehanna Community Bank, with seven banking offices located in Lycoming, Northumberland, Synder and Union counties in Pennsylvania. Pursuant to the Agreement and Plan of Merger dated April 23, 2025 between the Corporation and Susquehanna, Susquehanna merged with and into the Corporation, with the Corporation as the surviving corporation in the Merger. Immediately following the completion of the Merger, Susquehanna Community Bank, the wholly owned subsidiary of Susquehanna, merged with and into the C&N Bank, with C&N Bank surviving. Upon completion of the merger, shareholders of Susquehanna became entitled to exchange each share of Susquehanna common stock owned for 0.80 shares of the Corporation’s common stock. ​ Based on the average of the high and low trading price of the Corporation’s common stock of $ 19.64 per share on October 1, 2025, the total purchase consideration is valued at approximately $ 44.6 million. As of September 30, 2025, Susquehanna reported total assets of $ 587 million, including gross loans of $ 400 million, total deposits of $ 501 million and total stockholders’ equity of $ 36 million. As of the date the Corporation’s September 30, 2025 financial statements are issued, some of the information required to be disclosed under U.S. GAAP was not available since, given the short period between the October 1, 2025 merger date and the financial statement issuance, the calculation of the fair value of all material Susquehanna assets acquired and liabilities assumed had not yet been completed. ​ In the first nine months of 2025, the Corporation incurred pre-tax merger-related expenses related to the Susquehanna transaction of $ 1,049,000 , including expenses totaling $ 882,000 in the third quarter of 2025. Merger-related expenses recorded through September 30, 2025 included initial expenses related to conversion of Susquehanna’s core customer system data into the Corporation’s core system and legal and other professional expenses. ​ 33 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q