What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-08 compared with 2025-11-07 · 218 added, 328 removed, 787 unchanged (41% of the section changed)

2 unchanged sentences

(In Thousands, Except Share and Per Share Data) (Unaudited)

September 30,

(In Thousands, Except Share and Per Share Data)

30 unchanged sentences

authorized 30,000,000 shares;

issued 16,030,172 and outstanding 15,531,700 at September 30, 2025;

issued 18,303,120 and outstanding 17,909,958 at March 31, 2026;

issued 18,303,120 and outstanding 17,823,444 at December 31, 2025

2 unchanged sentences

Treasury stock, at cost;

498,472 shares at September 30, 2025 and 596,678

393,162 shares at March 31, 2026 and 479,676

shares at December 31, 2025

7 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In Thousands, Except Per Share Data)

23 unchanged sentences

Other noninterest income

Realized gains on available-for-sale debt securities, net

Total noninterest income

6 unchanged sentences

Professional fees

Merger-related expenses

Other noninterest expense

5 unchanged sentences

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive (Loss) Income

(In Thousands) (Unaudited)

Three Months Ended

Nine Months Ended

September 30,

(In Thousands)

Available-for-sale debt securities:

Unrealized holding gains on available-for-sale debt securities

Reclassification adjustment for losses (gains) realized in income

Other comprehensive income on available-for-sale debt securities

Unrealized holding (losses) gains on available-for-sale debt securities

Reclassification adjustment for gains realized in income

Other comprehensive (loss) income on available-for-sale debt securities

Unfunded pension and postretirement obligations:

Changes from plan amendments and actuarial gains and losses

Amortization of prior service cost, net actuarial loss and curtailment gain included in net periodic benefit cost

Amortization of prior service cost and net actuarial gain included in net periodic benefit cost

Other comprehensive (loss) income on pension and postretirement obligations

Other comprehensive income before income tax

Income tax related to other comprehensive income

Other comprehensive income, net

Comprehensive income

Other comprehensive (loss) income before income tax

Income tax related to other comprehensive loss (income)

Other comprehensive (loss) income, net

Comprehensive (loss) income

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(In Thousands) (Unaudited)

Nine Months Ended

September 30,

Three Months Ended

(In Thousands)

2 unchanged sentences

Provision for credit losses

Realized gains on available-for-sale debt securities, net

Net amortization of securities

1 unchanged sentence

Depreciation and amortization of bank premises and equipment

Net accretion of acquisition accounting adjustment

Net amortization (accretion) of acquisition accounting adjustments

Stock-based compensation

4 unchanged sentences

Proceeds from sales of loans held for sale

Decrease (increase) in accrued interest receivable and other assets

(Decrease) increase in accrued interest payable and other liabilities

Increase in accrued interest receivable and other assets

Decrease in accrued interest payable and other liabilities

Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of certificates of deposit

Proceeds from calls and maturities of available-for-sale debt securities

4 unchanged sentences

Net increase in loans

Proceeds from bank-owned life insurance

Purchase of premises and equipment

Proceeds from sale of foreclosed assets

Net Cash Used in Investing Activities

6 unchanged sentences

Common dividends paid

Net Cash Provided by Financing Activities

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

Net Cash Provided by (Used in) Financing Activities

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

11 unchanged sentences

Comprehensive

Three Months Ended September 30, 2025

Balance, June 30, 2025

Other comprehensive income, net

Cash dividends declared on common stock, $ .28 per share

Shares issued for dividend reinvestment plan

Forfeiture of restricted stock

Stock-based compensation expense

Balance, September 30, 2025

Three Months Ended September 30, 2024

Balance, June 30, 2024

Other comprehensive income, net

Cash dividends declared on common stock, $ .28 per share

Shares issued for dividend reinvestment plan

Restricted stock granted

Stock-based compensation expense

Treasury stock purchases

Balance, September 30, 2024

Comprehensive

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Balance, December 31, 2025

Other comprehensive income, net

Other comprehensive loss, net

Cash dividends declared on common stock, $ .28 per share

4 unchanged sentences

Purchase of restricted stock for tax withholding

Balance, September 30, 2025

Nine Months Ended September 30, 2024

Balance, March 31, 2026

Three Months Ended March 31, 2025

Balance, December 31, 2024

Other comprehensive loss, net

Other comprehensive income, net

Cash dividends declared on common stock, $ .28 per share

4 unchanged sentences

Purchase of restricted stock for tax withholding

Treasury stock purchases

Balance, September 30, 2024

Balance, March 31, 2025

The accompanying notes are an integral part of these unaudited consolidated financial statements.

10 unchanged sentences

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.

Operating results reported for the three-month period ended March 31, 2026 might not be indicative of the results for the year ending December 31, 2026.

The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission.

3 unchanged sentences

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.

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.

In December of 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.

We are currently evaluating the impact of the standard to our consolidated financial statement disclosures .

BUSINESS COMBINATION

On October 1, 2025, the Corporation completed its acquisition of Susquehanna Community Financial, Inc.

(“Susquehanna”).

Susquehanna was the parent company of Susquehanna Community Bank, with seven banking offices located in Lycoming, Northumberland, Snyder and Union Counties in Pennsylvania.

The Susquehanna acquisition has contributed significantly to growth in the size of the Corporation’s balance sheet and in net interest income, noninterest income and noninterest expenses.

In connection with the acquisition, the Corporation issued approximately 2.3 million shares of common stock to the former Susquehanna shareholders, resulting in merger consideration valued at $ 44.6 million and an increase in stockholders’ equity of $ 44.4 million, net of issuance costs.

Intangible assets recorded included goodwill of $ 10.8 million and a core deposit intangible asset of $ 10.7 million.

Assets acquired included loans valued at $ 393.6 million, securities valued at $ 147.6 million, bank-owned life insurance valued at $ 8.0 million and cash and due from banks of $ 6.1 million.

Liabilities assumed included deposits valued at $ 501.5 million and short-term borrowings valued at $ 45.8 million.

The assets purchased and liabilities assumed were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

There were no adjustments to the fair value measurements of assets acquired or liabilities assumed in the first quarter of 2026.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

PER SHARE DATA

4 unchanged sentences

The Corporation’s basic and diluted earnings per share are the same because there are no potential dilutive shares of common stock outstanding.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands, Except Share and Per Share Data)

Three Months Ended

Nine Months Ended

September 30,

Dividends and undistributed earnings allocated to participating securities

3 unchanged sentences

Weighted-average nonvested restricted shares outstanding

COMPREHENSIVE INCOME

COMPREHENSIVE (LOSS) 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).

1 unchanged sentence

(In Thousands)

Three Months Ended September 30, 2025

Available-for-sale debt securities:

Unrealized holding gains on available-for-sale debt securities

Reclassification adjustment for (gains) realized in income

Other comprehensive income from available-for-sale debt securities

Unfunded pension and postretirement obligations:

Amortization of prior service cost and net actuarial loss included in net periodic benefit cost

Other comprehensive loss on unfunded retirement obligations

Total other comprehensive income

(In Thousands)

Three Months Ended September 30, 2024

Three Months Ended March 31, 2026

Available-for-sale debt securities:

Unrealized holding gains on available-for-sale debt securities

Unrealized holding loss on available-for-sale debt securities

Reclassification adjustment for (gains) realized in income

Other comprehensive income from available-for-sale debt securities

Other comprehensive loss from available-for-sale debt securities

Unfunded pension and postretirement obligations:

Amortization of prior service cost and net actuarial loss included in net periodic benefit cost

Changes from plan amendments and actuarial gains and losses

Amortization of prior service cost and net actuarial gains included in net periodic benefit cost

Other comprehensive loss on unfunded retirement obligations

1 unchanged sentence

(In Thousands)

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2025

Available-for-sale debt securities:

4 unchanged sentences

Changes from plan amendments and actuarial gains and losses

Amortization of prior service cost and net actuarial loss included in net periodic benefit cost

Amortization of prior service cost and net actuarial gain included in net periodic benefit cost

Other comprehensive income on unfunded retirement obligations

1 unchanged sentence

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

Nine Months Ended September 30, 2024

Available-for-sale debt securities:

Unrealized holding gains on available-for-sale debt securities

Reclassification adjustment for (gains) realized in income

Other comprehensive income from available-for-sale debt securities

Unfunded pension and postretirement obligations:

Changes from plan amendments and actuarial gains and losses

Amortization of prior service cost and net actuarial loss and curtailment gain included in net periodic benefit cost

Other comprehensive loss on unfunded retirement obligations

Total other comprehensive income

The amounts shown in the table immediately above are included in the following line items in the consolidated statements of income:

1 unchanged sentence

Consolidated Statements of Income

Amortization of prior service cost and net actuarial gain and curtailment gain included in net periodic benefit cost (before-tax)

Reclassification adjustment for (gains) realized in income (before-tax)

Realized gains on available-for-sale debt securities, net

Amortization of prior service cost and net actuarial gain included in net periodic benefit cost (before-tax)

Other noninterest expense

6 unchanged sentences

(Loss) Income

Three Months Ended September 30, 2025

Balance, beginning of period

Other comprehensive income (loss) during three months ended September 30, 2025

Balance, end of period

Three Months Ended September 30, 2024

Balance, beginning of period

Other comprehensive income (loss) during three months ended September 30, 2024

Balance, end of period

(In Thousands)

Comprehensive

on Securities

(Loss) Income

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Balance, beginning of period

Other comprehensive income during nine months ended September 30, 2025

Other comprehensive loss during three months ended March 31, 2026

Balance, end of period

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Balance, beginning of period

Other comprehensive income (loss) during nine months ended September 30, 2024

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Other comprehensive income during three months ended March 31, 2025

Balance, end of period

CASH AND DUE FROM BANKS

Cash and due from banks at September 30, 2025 and December 31, 2024 include the following:

Cash and due from banks at March 31, 2026 and December 31, 2025 include the following:

(In Thousands)

September 30,

Cash and cash equivalents

5 unchanged sentences

The Corporation maintains cash and cash equivalents with certain financial institutions in excess of the FDIC insurance limit.

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Amortized cost and fair value of available-for-sale debt securities at March 31, 2026 and December 31, 2025 are summarized as follows.

(In Thousands)

September 30, 2025

March 31, 2026

Obligations of the U.S.

8 unchanged sentences

Commercial mortgage-backed securities

Private label commercial mortgage-backed securities

Asset-backed securities,

1 unchanged sentence

Total available-for-sale debt securities

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

11 unchanged sentences

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

Total available-for-sale debt securities

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

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 March 31, 2026 and December 31, 2025 for which an allowance for credit losses has not been recorded:

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

March 31, 2026

Less Than 12 Months

11 unchanged sentences

Commercial mortgage-backed securities

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

December 31, 2025

12 unchanged sentences

Commercial mortgage-backed securities

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.

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $ 32,873,000 at March 31, 2026 and $ 30,835,000 at December 31, 2025.

At March 31, 2026, 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.

At March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Gross realized gains and losses from the sale of available-for-sale debt securities for the three months ended March 31, 2026 and 2025 were as follows:

(In Thousands)

September 30, 2025

Three Months Ended

Gross realized gains from sales

Gross realized losses from sales

Net realized gains (losses)

Income tax provision related to net realized gains (losses)

The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of March 31, 2026.

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.

(In Thousands)

March 31, 2026

Due in one year or less

7 unchanged sentences

Commercial mortgage-backed securities

Private label commercial mortgage-backed securities

Asset-backed securities,

3 unchanged sentences

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.

Investment securities carried at $ 203,602,000 at March 31, 2026 and $ 215,252,000 at December 31, 2025 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law.

See Note 9 for information concerning securities pledged to secure borrowing arrangements.

3 unchanged sentences

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.

C&N Bank’s investment in FHLB-Pittsburgh stock, included in other assets in the consolidated balance sheets, was $ 20,057,000 at March 31, 2026 and $ 18,724,000 at December 31, 2025.

The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at March 31, 2026 and December 31, 2025.

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

C&N Bank is a member of the Federal Reserve System.

1 unchanged sentence

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

C&N Bank’s investment in Federal Reserve Bank stock, included in other assets in the consolidated balance sheets, was $ 7,685,000 at March 31, 2026 and $ 7,637,000 at December 31, 2025.

The Corporation has a marketable equity security included in other assets in the consolidated balance sheets with a carrying value of $ 885,000 at March 31, 2026 and $ 890,000 at December 31, 2025, consisting exclusively of one mutual fund.

There was an unrealized loss on the mutual fund of $ 115,000 at March 31, 2026 and $ 110,000 at December 31, 2025.

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 loss of $ 5,000 in the first quarter of 2026 and a gain of $ 13,000 in the first quarter of 2025.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans receivable at September 30, 2025 and December 31, 2024 are summarized as follows:

Loans receivable at March 31, 2026 and December 31, 2025 are summarized as follows:

Summary of Loans by Type

(In Thousands)

September 30,

Commercial real estate - non-owner occupied

4 unchanged sentences

allowance for credit losses on loans

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.

In the table above, outstanding loan balances are presented net of deferred loan origination fees of $ 4,021,000 at March 31, 2026 and $ 4,074,000 at December 31, 2025.

The Corporation grants loans to individuals as well as commercial and tax-exempt entities.

1 unchanged sentence

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:

The following tables present an analysis of past due loans as of March 31, 2026 and December 31, 2025:

(In Thousands)

As of September 30, 2025

As of March 31, 2026

Still Accruing

4 unchanged sentences

Consumer loans

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

14 unchanged sentences

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:

The following table presents the amortized cost of loans by credit quality indicators by year of origination as of March 31, 2026:

(In Thousands)

50 unchanged sentences

The following tables are a summary of the Corporation’s nonaccrual loans by major categories for the periods indicated.

September 30, 2025

March 31, 2026

Nonaccrual Loans with

19 unchanged sentences

Consumer loans

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:

The Corporation recognized interest income on nonaccrual loans of $ 299,000 and $ 230,000 in the three-month periods ended March 31, 2026 and 2025, respectively.

The following table represents the accrued interest receivable written off by reversing interest income during the three-month periods ended March 31, 2026 and 2025:

Three Months Ended

Nine Months Ended

(In Thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Commercial real estate - non-owner occupied

12 unchanged sentences

● Residential mortgage loans are typically secured by first mortgages, and, in some cases, could be secured by a second mortgage.

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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

March 31, 2026

December 31, 2025

3 unchanged sentences

All other commercial loans

Residential mortgage loans

Consumer loans

Allowance for Credit Losses

6 unchanged sentences

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.

real estate -

(In Thousands)

Balance, June 30, 2025

Provision for credit losses on loans

Balance, September 30, 2025

The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2026 and 2025.

real estate -

3 unchanged sentences

Provision (credit) for credit losses on loans

Balance, September 30, 2025

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

real estate -

(In Thousands)

Balance, June 30, 2024

Provision (credit) for credit losses on loans

Balance, September 30, 2024

Balance, March 31, 2026

real estate -

3 unchanged sentences

Provision (credit) for credit losses on loans

Balance, September 30, 2024

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.

Balance, March 31, 2025

The provision for credit losses on loans was $ 13,592,000 in the first quarter 2026 as compared to $ 228,000 in the first quarter 2025.

The increase in the first quarter 2026 provision was primarily driven by the impact on the ACL of an increase in net charge-offs to $ 10,808,000 as compared to $ 91,000 in the first quarter 2025.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The significant increase in charge-offs in the first quarter of 2026 is due to a non-owner occupied, commercial real estate loan originated in 2022 in the amount of $ 24 million of which $ 7,200,000 was participated with another financial institution.

The loan is secured by a first lien on the leasehold interests of an approximately 190,000 square foot Class A office property with multiple buildings and tenants, located in Bucks County, PA.

The loss of a large tenant as well as cash flow requirements of the borrower’s other properties (which the Corporation has not financed) caused the loan to be downgraded to substandard and placed in nonaccrual status as of March 31, 2026.

The Corporation obtained an updated appraisal in April 2026 which was significantly lower than the original appraisal when the loan was originated, resulting in a charge-off of $ 10,056,000 .

At March 31, 2026, the amortized cost basis of the loan, net of the partial charge-off, is $ 5,836,000 .

On April 30, 2026, the Corporation entered into a forbearance agreement related to the Class A office property loan referred to in the preceding paragraph with the borrower and the surety (collectively, the “Obligors”).

Unless extended, the forbearance period will end no later than July 10, 2026.

The forbearance agreement provides that during the forbearance period, the Corporation will forego receipt of principal payments and will advance up to $ 750,000 to fund tenant improvements on the property and leasing commissions on new tenants, subject to the Corporation’s approval.

The forbearance agreement also provides, in addition to other terms and conditions, that the Obligors will make all past due and current interest payments and will deliver $ 3 million to the Corporation which the Corporation will hold in escrow and apply as reimbursements for any tenant improvements funded by the Corporation with any remaining funds to be used for further improvements to the property or for loan payments should the borrower default.

The ACL on loans individually evaluated decreased to $ 2,655,000 at March 31, 2026 from $ 2,772,000 at December 31, 2025, including an ACL of $ 2,433,000 at March 31, 2026 on acquired PCD loans as part of the Susquehanna acquisition.

The ACL on loans collectively evaluated was $ 31,177,000 at March 31, 2026, up from $ 28,276,000 at December 31, 2025.

The increase in the collectively evaluated portion of the ACL at March 31, 2026 as compared to December 31, 2025, included an increase in the WARM method estimate based on the Corporation’s net charge-off experience , partially offset by a net decrease related to changes in qualitative adjustments and a decrease related to the economic forecast.

Modifications Made to Borrowers Experiencing Financial Difficulty

1 unchanged sentence

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):

During the three months ended March 31, 2026 and March 31, 2025, 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 March 31, 2026 and the twelve-month period preceding March 31, 2025:

(In Thousands)

Payment Status (Amortized Cost Basis)

September 30, 2025

March 31, 2026

Current or Past Due Less than 30 Days

30-89 Days Past Due

90+ Days Past Due

Commercial real estate - non-owner occupied

Commercial real estate - owner occupied

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

Payment Status (Amortized Cost Basis)

September 30, 2024

March 31, 2025

Current or Past Due Less than 30 Days

30-89 Days Past Due

90+ Days Past Due

Commercial real estate - non-owner occupied

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.

Commercial real estate - owner occupied

The loan secured by non-owner occupied real estate with an amortized cost basis of $ 1,717,000 at March 31, 2026 was past its contractual maturity date, The Corporation had provided several maturity extensions of this loan, and had recorded partial charge-offs of $ 640,000 in 2024 and $ 35,000 in the fourth quarter 2025.

At March 31, 2026, the borrower reported they are in process of refinancing the loan

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

with a third-party lender.

Based on the most recent appraised value of the property collateralizing the loan, there was no specific allowance on this loan at March 31, 2026.

At March 31, 2025, this non-owner occupied real estate loan was included in the table above with an amortized cost basis of $ 1,801,000 .

The loan was in nonaccrual status at March 31, 2026 and 2025.

The Corporation had no commitments to lend any additional funds on modified loans at March 31, 2026 and 2025.

Except for the non-owner occupied real estate loan described above, the Corporation had no loans that defaulted during the three months ended March 31, 2026 and 2025 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,

Foreclosed residential real estate

1 unchanged sentence

(In Thousands)

September 30,

Residential real estate in process of foreclosure

1 unchanged sentence

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,

The contract amounts of these financial instruments at March 31, 2026 and December 31, 2025 are as follows:

(In Thousands)

5 unchanged sentences

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.

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:

The allowance for credit losses for off-balance sheet exposures of $ 1,039,000 at March 31, 2026 and $ 1,029,000 at December 31, 2025, is included in accrued interest and other liabilities in the unaudited consolidated balance sheets.

The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the three months ended March 31, 2026 and 2025:

Three Months Ended

Nine Months Ended

(In Thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Beginning Balance

Provision (credit) for unfunded commitments

Ending Balance, September 30

Provision for unfunded commitments

Ending Balance, March 31

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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 .

At March 31, 2026 and December 31, 2025, the net carrying value of goodwill was $ 63,311,000 .

There were no changes in the carrying value of goodwill in the three-month periods ended March 31, 2026 and 2025.

During the fourth quarter of 2025, $ 10.8 million of goodwill was added through the merger with Susquehanna.

Information related to core deposit intangibles is as follows:

(In Thousands)

September 30,

Accumulated amortization

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Amortization expense

In the three months ended March 31, 2026, amortization expense included $ 716,000 related to the Susquehanna acquisition as described in Note 2 and $ 99,000 related to previous acquisitions.

In the three months ended March 31, 2025, amortization expense was related to previous acquisitions.

BORROWED FUNDS

2 unchanged sentences

(In Thousands)

September 30,

FHLB-Pittsburgh borrowings

1 unchanged sentence

Total short-term borrowings

At March 31, 2026, the short-term borrowing from FHLB-Pittsburgh was an overnight borrowing of $ 13,113,000 , at an interest rate of 3.97 %.

At December 31, 2025, the short-term borrowing from FHLB-Pittsburgh was an overnight borrowing of $ 27,000,000 , at an interest rate of 3.93 %.

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.

The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10 % at both March 31, 2026 and December 31, 2025.

The carrying value of the underlying securities was $ 490,000 at March 31, 2026 and $ 1,630,000 at December 31, 2025.

The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $ 1,646,418,000 at March 31, 2026 and $ 1,624,412,000 at December 31, 2025.

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

The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in other assets in the consolidated balance sheets) were $ 20,057,000 at March 31, 2026 and $ 18,724,000 at December 31, 2025.

The Corporation’s total credit facility with FHLB-Pittsburgh was $ 1,137,639,000 at March 31, 2026, including an unused

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 .

(available) amount of $ 948,272,000 .

At December 31, 2025, the Corporation’s total credit facility with FHLB-Pittsburgh was $ 971,946,000 , including an unused (available) amount of $ 785,822,000 .

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.

The Corporation had available credit with other correspondent banks totaling $ 75,000,000 at March 31, 2026 and December 31, 2025.

These lines of credit are primarily unsecured.

No amounts were outstanding at September 30, 2025 or December 31, 2024.

No amounts were outstanding at March 31, 2026 or December 31, 2025.

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 March 31, 2026, the Corporation had available credit in the amount of $ 24,632,000 on this line with no outstanding advances.

At December 31, 2025, the Corporation had available credit in the amount of $ 25,484,000 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.

As collateral for this line, the Corporation has pledged available-for-sale securities with a carrying value of $ 26,151,000 at March 31, 2026 and $ 26,947,000 at December 31, 2025.

LONG-TERM BORROWINGS – FHLB ADVANCES

1 unchanged sentence

(In Thousands)

September 30,

Loans maturing in 2026 with a weighted-average rate of 4.70 %

2 unchanged sentences

Loans maturing in 2029 with a weighted-average rate of 4.42 %

Total long-term FHLB-Pittsburgh borrowings

Weighted-average rates are presented as of September 30, 2025.

Weighted-average rates are presented as of March 31, 2026.

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").

4 unchanged sentences

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At September 30, 2025 and December 31, 2024, outstanding Senior Notes are as follows:

Amortization of debt issuance costs associated with the Senior Notes totaling $ 18,000 in the first quarter 2026 and $ 18,000 in the first quarter 2025 was included in interest expense on senior notes, net in the unaudited consolidated statements of income.

At March 31, 2026 and December 31, 2025, outstanding Senior Notes are as follows:

(In Thousands)

September 30,

Senior Notes with an aggregate par value of $ 15,000,000 ;

6 unchanged sentences

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.

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

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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.

5 unchanged sentences

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:

Amortization of debt issuance costs associated with the Subordinated Notes totaling $ 30,000 in the first quarter 2026 and $ 29,000 in the first quarter 2025, was included in interest expense on subordinated debt, net in the unaudited consolidated statements of income.

At March 31, 2026 and December 31, 2025, the carrying amounts of subordinated debt agreements are as follows:

(In Thousands)

September 30,

Agreements with a par value of $ 25,000,000 ;

4 unchanged sentences

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:

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The first quarter 2026 restricted stock awards to employees vest ratably over three years .

Following is a summary of restricted stock awards granted in the quarter ended March 31, 2026:

(Dollars in Thousands)

Nine Months Ended September 30, 2025 awards:

Time-based awards to independent directors

Three Months Ended March 31, 2026 awards:

Time-based awards to employees

1 unchanged sentence

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.

Total stock-based compensation expense attributable to restricted stock awards amounted to $ 313,000 in the first quarter 2026 and $ 325,000 in the first quarter 2025.

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.

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

DERIVATIVE FINANCIAL INSTRUMENTS

1 unchanged sentence

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Interest rate swaps with commercial loan banking customers were executed to facilitate their respective risk management strategies.

4 unchanged sentences

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 aggregate notional amount of interest rate swaps was $ 135,598,000 at March 31, 2026 and $ 136,776,000 at December 31, 2025.

There were no interest rate swaps originated in the three-month periods ended March 31, 2026, and 2025.

There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at March 31, 2026 and December 31, 2025.

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:

This type of derivative is referred to as an “RPA Out.” There was no net impact to the consolidated statement of income from RPAs in the first quarter of 2026 and the first quarter of 2025.

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 March 31, 2026 and December 31, 2025:

(In Thousands)

At September 30, 2025

At March 31, 2026

At December 31, 2025

6 unchanged sentences

(2) Included in accrued interest and other liabilities in the consolidated balance sheets.

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.

There was interest-bearing cash pledged as collateral against the Corporation’s liability related to the interest rate swaps of $ 1,400,000 at March 31, 2026 and December 31, 2025.

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

3 unchanged sentences

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 level in the

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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:

7 unchanged sentences

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.

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

At March 31, 2026 and December 31, 2025, assets and liabilities measured at fair value and the valuation methods used are as follows:

March 31, 2026

Quoted Prices

14 unchanged sentences

Commercial mortgage-backed securities

Private label commercial mortgage-backed securities

Asset-backed securities,

31 unchanged sentences

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

Total available-for-sale debt securities

20 unchanged sentences

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:

At March 31, 2026 and December 31, 2025, 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

21 unchanged sentences

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Servicing rights balance, beginning of period

9 unchanged sentences

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:

At March 31, 2026 and December 31, 2025, 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)

5 unchanged sentences

Discount to appraised value

18 %- 77 % ( 66 )

Commercial real estate - owner occupied

Sales comparison

Discount to appraised value

All other commercial Loans

Sales comparison

Discount to appraised value

0 %- 100 % ( 82 )

Total loans individually evaluated for credit loss

3 unchanged sentences

Discount to appraised value

1 %- 84 % ( 25 )

Commercial real estate

1 unchanged sentence

Discount to appraised value

18 %- 77 % ( 34 )

Total foreclosed assets held for sale

3 unchanged sentences

Loans individually evaluated for credit loss:

Commercial real estate - nonowner occupied

Sales comparison

Discount to appraised value

18 %- 77 % ( 66 )

Commercial real estate - owner occupied

Sales comparison & SBA guaranty

Sales comparison

Discount to appraised value

All other commercial Loans

Sales comparison

Discount to appraised value

0 %- 100 % ( 82 )

Total loans individually evaluated for credit loss

3 unchanged sentences

Discount to appraised value

62 %- 84 % ( 72 )

Commercial real estate

12 unchanged sentences

(In Thousands)

September 30, 2025

March 31, 2026

December 31, 2025

22 unchanged sentences

Three Months Ended

Nine Months Ended

(In Thousands)

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Interest income

5 unchanged sentences

Other noninterest income

Realized gains on available-for-sale debt securities, net

Total other income

1 unchanged sentence

Salaries and employee benefits

Merger-related expenses

Other segment expenses (1)

4 unchanged sentences

(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.

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation’s segment assets represent the total assets as presented in the consolidated balance sheets at March 31, 2026 and December 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements