CITIZENS & NORTHERN CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, (In Thousands, Except Share and Per Share Data) ​ 2026 ​ 2025 ASSETS ​ ​ ​ ​ Cash and due from banks: ​ ​ ​ ​ Noninterest-bearing ​ $ 30,736 ​ $ 22,289 Interest-bearing ​ 24,062 ​ 23,767 Total cash and due from banks ​ 54,798 ​ 46,056 Available-for-sale debt securities, at fair value ​ 497,367 ​ 506,575 ​ ​ ​ ​ ​ ​ ​ Loans receivable ​ 2,384,850 ​ 2,354,365 Allowance for credit losses ​ ( 33,832 ) ​ ( 31,048 ) Loans, net ​ 2,351,018 ​ 2,323,317 ​ ​ ​ ​ ​ ​ ​ Bank-owned life insurance ​ 61,609 ​ 61,094 Accrued interest receivable ​ 11,901 ​ 11,594 Bank premises and equipment, net ​ 27,256 ​ 27,755 Foreclosed assets held for sale ​ 181 ​ 189 Deferred tax asset, net ​ 18,827 ​ 17,615 Goodwill ​ 63,311 ​ 63,311 Core deposit intangibles, net ​ 10,758 ​ 11,573 Other assets ​ 67,314 ​ 63,390 TOTAL ASSETS ​ $ 3,164,340 ​ $ 3,132,469 ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ Deposits: ​ ​ ​ ​ Noninterest-bearing ​ $ 568,478 ​ $ 531,442 Interest-bearing ​ 2,031,575 ​ 2,033,274 Total deposits ​ 2,600,053 ​ 2,564,716 Short-term borrowings ​ 13,590 ​ 28,618 Long-term borrowings - FHLB advances ​ 139,489 ​ 120,935 Senior notes, net ​ ​ 14,988 ​ ​ 14,970 Subordinated debt, net ​ 24,979 ​ 24,949 Accrued interest and other liabilities ​ 35,677 ​ 36,567 TOTAL LIABILITIES ​ 2,828,776 ​ 2,790,755 ​ ​ ​ ​ ​ ​ ​ 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 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 ​ 18,303 ​ 18,303 Paid-in capital ​ 184,325 ​ 185,696 Retained earnings ​ 166,476 ​ 171,214 Treasury stock, at cost; 393,162 shares at March 31, 2026 and 479,676 ​ ​ ​ ​ shares at December 31, 2025 ​ ( 8,778 ) ​ ( 10,704 ) Accumulated other comprehensive loss ​ ( 24,762 ) ​ ( 22,795 ) TOTAL STOCKHOLDERS' EQUITY ​ 335,564 ​ 341,714 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ​ $ 3,164,340 ​ $ 3,132,469 ​ 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 ​ ​ ​ March 31, ​ March 31, ​ (In Thousands, Except Per Share Data) ​ 2026 ​ 2025 ​ INTEREST INCOME ​ ​ ​ ​ ​ ​ Interest and fees on loans: ​ ​ ​ ​ ​ ​ Taxable ​ $ 35,641 ​ $ 27,503 ​ Tax-exempt ​ 619 ​ 592 ​ Income from available-for-sale debt securities: ​ ​ ​ ​ ​ Taxable ​ 3,518 ​ 2,302 ​ Tax-exempt ​ 562 ​ 573 ​ Other interest and dividend income ​ 248 ​ 739 ​ Total interest and dividend income ​ 40,588 ​ 31,709 ​ INTEREST EXPENSE ​ ​ ​ ​ ​ Interest on deposits ​ 10,058 ​ 9,592 ​ Interest on short-term borrowings ​ 276 ​ 0 ​ Interest on long-term borrowings - FHLB advances ​ 1,446 ​ 1,789 ​ Interest on senior notes, net ​ ​ 121 ​ ​ 121 ​ Interest on subordinated debt, net ​ 233 ​ 232 ​ Total interest expense ​ 12,134 ​ 11,734 ​ Net interest income ​ 28,454 ​ 19,975 ​ Provision for credit losses ​ 13,602 ​ 236 ​ Net interest income after provision for credit losses ​ 14,852 ​ 19,739 ​ NONINTEREST INCOME ​ ​ ​ ​ ​ Trust revenue ​ 2,085 ​ 2,102 ​ Brokerage and insurance revenue ​ 588 ​ 498 ​ Service charges on deposit accounts ​ 1,650 ​ 1,440 ​ Interchange revenue from debit card transactions ​ 1,267 ​ 1,036 ​ Net gains from sale of loans ​ 370 ​ 205 ​ Loan servicing fees, net ​ 108 ​ 138 ​ Increase in cash surrender value of life insurance ​ 515 ​ 457 ​ Other noninterest income ​ 1,586 ​ 1,132 ​ Realized gains on available-for-sale debt securities, net ​ ​ 26 ​ ​ 0 ​ Total noninterest income ​ 8,195 ​ 7,008 ​ NONINTEREST EXPENSE ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 13,201 ​ ​ 11,759 ​ Net occupancy and equipment expense ​ ​ 1,891 ​ ​ 1,459 ​ Data processing and telecommunications expense ​ ​ 2,449 ​ ​ 2,071 ​ Automated teller machine and interchange expense ​ 583 ​ 387 ​ Pennsylvania shares tax ​ 585 ​ 496 ​ Professional fees ​ 639 ​ 517 ​ Other noninterest expense ​ 3,364 ​ 2,354 ​ Total noninterest expense ​ 22,712 ​ 19,043 ​ Income before income tax provision ​ 335 ​ 7,704 ​ Income tax provision ​ 62 ​ 1,411 ​ NET INCOME ​ $ 273 ​ $ 6,293 ​ EARNINGS PER COMMON SHARE - BASIC AND DILUTED ​ $ 0.02 ​ $ 0.41 ​ ​ 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 (Loss) Income (In Thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ March 31, ​ (In Thousands) ​ 2026 ​ ​ ​ 2025 ​ Net income ​ $ 273 ​ $ 6,293 ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ Unrealized holding (losses) gains on available-for-sale debt securities ​ ​ ( 2,464 ) ​ ​ 5,169 ​ Reclassification adjustment for gains realized in income ​ ​ ( 26 ) ​ ​ 0 ​ Other comprehensive (loss) income on available-for-sale debt securities ​ ​ ( 2,490 ) ​ ​ 5,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ Unfunded pension and postretirement obligations: ​ ​ ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ( 9 ) ​ 69 ​ Amortization of prior service cost and net actuarial gain included in net periodic benefit cost ​ ( 22 ) ​ ( 22 ) ​ Other comprehensive (loss) income on pension and postretirement obligations ​ ( 31 ) ​ 47 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income before income tax ​ ( 2,521 ) ​ 5,216 ​ Income tax related to other comprehensive loss (income) ​ 554 ​ ( 1,145 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income, net ​ ( 1,967 ) ​ 4,071 ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive (loss) income ​ $ ( 1,694 ) ​ $ 10,364 ​ ​ 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ March 31, (In Thousands) 2026 ​ ​ ​ 2025 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ ​ ​ ​ Net income ​ $ 273 ​ $ 6,293 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ Provision for credit losses ​ 13,602 ​ 236 ​ Realized gains on available-for-sale debt securities, net ​ ( 26 ) ​ 0 ​ Net amortization of securities ​ ​ 331 ​ ​ 360 ​ Increase in cash surrender value of life insurance ​ ( 515 ) ​ ( 457 ) ​ Depreciation and amortization of bank premises and equipment ​ 687 ​ 553 ​ Net amortization (accretion) of acquisition accounting adjustments ​ 50 ​ ( 24 ) ​ Stock-based compensation ​ 313 ​ 325 ​ Deferred income taxes ​ ( 658 ) ​ 759 ​ Decrease in fair value of servicing rights ​ 172 ​ 69 ​ Net gains from sale of loans ​ ( 370 ) ​ ( 205 ) ​ Origination of loans held for sale ​ ( 14,962 ) ​ ( 5,499 ) ​ Proceeds from sales of loans held for sale ​ 13,170 ​ 6,665 ​ Increase in accrued interest receivable and other assets ​ ( 1,073 ) ​ ( 2,871 ) ​ Decrease in accrued interest payable and other liabilities ​ ( 2,363 ) ​ ( 4,648 ) ​ Other ​ 23 ​ 27 ​ Net Cash Provided by Operating Activities ​ 8,654 ​ 1,583 ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ ​ Proceeds from calls and maturities of available-for-sale debt securities ​ 15,943 ​ 7,306 ​ Purchase of available-for-sale debt securities ​ ( 7,877 ) ​ ( 8,580 ) ​ Redemption of Federal Home Loan Bank of Pittsburgh stock ​ 3,854 ​ 344 ​ Purchase of Federal Home Loan Bank of Pittsburgh stock ​ ( 5,187 ) ​ ( 160 ) ​ Purchase of Federal Reserve Bank stock ​ ​ ( 48 ) ​ ​ ( 12 ) ​ Net increase in loans ​ ( 40,565 ) ​ ( 2,563 ) ​ Purchase of premises and equipment ​ ( 188 ) ​ ( 542 ) ​ Other ​ 32 ​ 41 ​ Net Cash Used in Investing Activities ​ ( 34,036 ) ​ ( 4,166 ) ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ ​ Net increase in deposits ​ 35,374 ​ 8,232 ​ Net decrease in short-term borrowings ​ ( 15,028 ) ​ ( 1,917 ) ​ Proceeds from long-term borrowings - FHLB advances ​ ​ 27,054 ​ ​ 0 ​ Repayments of long-term borrowings - FHLB advances ​ ( 8,500 ) ​ ( 11,028 ) ​ Purchases of treasury stock ​ ( 180 ) ​ ( 208 ) ​ Common dividends paid ​ ( 4,596 ) ​ ( 3,932 ) ​ Net Cash Provided by (Used in) Financing Activities ​ 34,124 ​ ( 8,853 ) ​ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ​ 8,742 ​ ( 11,436 ) ​ CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ​ 44,706 ​ 123,574 ​ CASH AND CASH EQUIVALENTS, END OF PERIOD ​ $ 53,448 ​ $ 112,138 ​ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: ​ ​ ​ ​ ​ Increase in accrued purchase of available-for-sale debt securities ​ $ 1,653 ​ $ 0 ​ Assets acquired through foreclosure of real estate loans ​ $ 0 ​ $ 18 ​ Leased assets obtained in exchange for new operating lease liabilities ​ $ 0 ​ $ 1,126 ​ Interest paid ​ $ 12,076 ​ $ 11,282 ​ Income taxes paid ​ $ 51 ​ $ 4,262 ​ ​ 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 March 31, 2026 Shares Shares Stock Capital Earnings Loss Stock Total Balance, December 31, 2025 18,303,120 479,676 ​ $ 18,303 ​ $ 185,696 ​ $ 171,214 ​ $ ( 22,795 ) ​ $ ( 10,704 ) ​ $ 341,714 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 273 ​ ​ ​ ​ ​ ​ ​ 273 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,967 ) ​ ​ ​ ​ ( 1,967 ) Cash dividends declared on common stock, $ .28 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 5,011 ) ​ ​ ​ ​ ​ ​ ​ ( 5,011 ) Shares issued for dividend reinvestment plan ​ ( 17,886 ) ​ ​ ​ ​ ​ 23 ​ ​ ​ ​ ​ ​ ​ ​ 399 ​ 422 Restricted stock granted ​ ( 78,864 ) ​ ​ ​ ​ ​ ( 1,761 ) ​ ​ ​ ​ ​ ​ ​ ​ 1,761 ​ 0 Forfeiture of restricted stock ​ 2,278 ​ ​ ​ ​ ​ 54 ​ ​ ​ ​ ​ ​ ​ ​ ( 54 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ 313 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 313 Purchase of restricted stock for tax withholding ​ ​ ​ 7,958 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 180 ) ​ ​ ( 180 ) Balance, March 31, 2026 18,303,120 393,162 ​ $ 18,303 ​ $ 184,325 ​ $ 166,476 ​ $ ( 24,762 ) ​ $ ( 8,778 ) ​ $ 335,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2024 16,030,172 596,678 ​ $ 16,030 ​ $ 143,565 ​ $ 165,778 ​ $ ( 36,761 ) ​ $ ( 13,328 ) ​ $ 275,284 Net income ​ ​ ​ ​ ​ ​ ​ 6,293 ​ ​ ​ ​ ​ 6,293 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,071 ​ ​ ​ 4,071 Cash dividends declared on common stock, $ .28 per share ​ ​ ​ ​ ​ ​ ​ ( 4,330 ) ​ ​ ​ ​ ​ ( 4,330 ) Shares issued for dividend reinvestment plan ​ ( 18,391 ) ​ ​ ​ ( 15 ) ​ ​ ​ ​ ​ 411 ​ 396 Restricted stock granted ​ ( 42,961 ) ​ ​ ​ ( 959 ) ​ ​ ​ ​ ​ 959 ​ 0 Forfeiture of restricted stock ​ 2,265 ​ ​ ​ 52 ​ ​ ​ ​ ​ ( 52 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ ​ ​ 325 Purchase of restricted stock for tax withholding ​ ​ ​ 9,733 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 208 ) ​ ​ ( 208 ) Balance, March 31, 2025 16,030,172 547,324 ​ $ 16,030 ​ $ 142,968 ​ $ 167,741 ​ $ ( 32,690 ) ​ $ ( 12,218 ) ​ $ 281,831 ​ 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, 2025, 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 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. 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 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 . We are currently evaluating the impact of the standard to our consolidated financial statement disclosures . ​ 2. 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. 8 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 3. 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands, Except Share and Per Share Data) ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ March 31, ​ March 31, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 273 ​ $ 6,293 ​ Less: Dividends and undistributed earnings allocated to participating securities ​ 0 ​ ( 51 ) ​ Net income attributable to common shares ​ $ 273 ​ $ 6,242 ​ Weighted-average common shares outstanding ​ 17,732,537 ​ 15,338,532 ​ Earnings per common share - Basic and Diluted ​ $ 0.02 ​ $ 0.41 ​ Weighted-average nonvested restricted shares outstanding ​ 146,089 ​ 125,303 ​ ​ 4. 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). 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 March 31, 2026 ​ ​ ​ ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding loss on available-for-sale debt securities ​ $ ( 2,464 ) ​ $ 542 ​ $ ( 1,922 ) Reclassification adjustment for (gains) realized in income ​ ​ ( 26 ) ​ ​ 6 ​ ​ ( 20 ) Other comprehensive loss from available-for-sale debt securities ​ ​ ( 2,490 ) ​ ​ 548 ​ ​ ( 1,942 ) Unfunded pension and postretirement obligations: ​ ​ ​ ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ​ ( 9 ) ​ ​ 2 ​ ​ ( 7 ) Amortization of prior service cost and net actuarial gains included in net periodic benefit cost ​ ( 22 ) ​ 4 ​ ( 18 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 31 ) ​ ​ 6 ​ ​ ( 25 ) Total other comprehensive income ​ $ ( 2,521 ) ​ $ 554 ​ $ ( 1,967 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ Before-Tax ​ ​ ​ Income Tax ​ ​ ​ Net-of-Tax ​ ​ Amount ​ Effect ​ Amount Three Months Ended March 31, 2025 ​ ​ ​ ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 5,169 ​ $ ( 1,135 ) ​ $ 4,034 Reclassification adjustment for (gains) realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 5,169 ​ ​ ( 1,135 ) ​ ​ 4,034 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 gain included in net periodic benefit cost ​ ( 22 ) ​ 5 ​ ( 17 ) Other comprehensive income on unfunded retirement obligations ​ ​ 47 ​ ​ ( 10 ) ​ ​ 37 Total other comprehensive income ​ $ 5,216 ​ $ ( 1,145 ) ​ $ 4,071 ​ 9 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 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 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 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 March 31, 2026 ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ $ ( 23,154 ) ​ $ 359 ​ $ ( 22,795 ) Other comprehensive loss during three months ended March 31, 2026 ​ ( 1,942 ) ​ ​ ( 25 ) ​ ( 1,967 ) Balance, end of period ​ $ ( 25,096 ) ​ $ 334 ​ $ ( 24,762 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ $ ( 37,084 ) ​ $ 323 ​ $ ( 36,761 ) Other comprehensive income during three months ended March 31, 2025 ​ 4,034 ​ 37 ​ 4,071 Balance, end of period ​ $ ( 33,050 ) ​ $ 360 ​ $ ( 32,690 ) ​ ​ ​ ​ ​ ​ ​ 5. CASH AND DUE FROM BANKS Cash and due from banks at March 31, 2026 and December 31, 2025 include the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2026 ​ 2025 ​ Cash and cash equivalents ​ $ 53,448 ​ $ 44,706 ​ Certificates of deposit ​ 1,350 ​ 1,350 ​ Total cash and due from banks ​ $ 54,798 ​ $ 46,056 ​ ​ 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. ​ 10 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 6. SECURITIES 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) ​ ​ ​ March 31, 2026 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ ​ ​ ​ Cost ​ ​ ​ Gains ​ ​ ​ Losses ​ ​ ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 8,042 ​ $ 0 ​ $ ( 586 ) ​ $ 7,456 Obligations of U.S. Government agencies ​ ​ 10,936 ​ ​ 3 ​ ​ ( 727 ) ​ ​ 10,212 Bank holding company debt securities ​ ​ 37,631 ​ ​ 11 ​ ​ ( 1,897 ) ​ ​ 35,745 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 104,941 ​ ​ 243 ​ ( 8,426 ) ​ 96,758 Taxable ​ 50,239 ​ 0 ​ ( 6,284 ) ​ 43,955 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 148,471 ​ 396 ​ ( 6,003 ) ​ 142,864 Residential collateralized mortgage obligations ​ 62,511 ​ 33 ​ ( 2,450 ) ​ 60,094 Commercial mortgage-backed securities ​ 98,771 ​ 12 ​ ( 6,487 ) ​ 92,296 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ 0 ​ ( 13 ) ​ 7,987 Total available-for-sale debt securities ​ $ 529,542 ​ $ 698 ​ $ ( 32,873 ) ​ $ 497,367 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ ​ ​ ​ Cost ​ ​ ​ Gains ​ ​ ​ Losses ​ ​ ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 8,047 ​ $ 0 ​ $ ( 565 ) ​ $ 7,482 Obligations of U.S. Government agencies ​ ​ 11,423 ​ ​ 3 ​ ​ ( 677 ) ​ ​ 10,749 Bank holding company debt securities ​ ​ 36,103 ​ ​ 8 ​ ​ ( 2,035 ) ​ ​ 34,076 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 105,149 ​ ​ 317 ​ ( 7,107 ) ​ 98,359 Taxable ​ 50,306 ​ 4 ​ ( 6,158 ) ​ 44,152 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 148,865 ​ 679 ​ ( 5,623 ) ​ 143,921 Residential collateralized mortgage obligations ​ 65,782 ​ 107 ​ ( 2,182 ) ​ 63,707 Commercial mortgage-backed securities ​ 99,095 ​ 23 ​ ( 6,487 ) ​ 92,631 Private label commercial mortgage-backed securities ​ ​ 3,490 ​ 0 ​ ( 1 ) ​ 3,489 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ ​ 9 ​ ​ 0 ​ ​ 8,009 Total available-for-sale debt securities ​ $ 536,260 ​ $ 1,150 ​ $ ( 30,835 ) ​ $ 506,575 ​ 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: ​ ​ 11 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ 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 ​ $ 7,456 ​ $ ( 586 ) ​ $ 7,456 ​ $ ( 586 ) Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 0 ​ ​ 8,150 ​ ​ ( 727 ) ​ ​ 8,150 ​ ​ ( 727 ) Bank holding company debt securities ​ ​ 7,338 ​ ​ ( 60 ) ​ ​ 23,163 ​ ​ ( 1,837 ) ​ ​ 30,501 ​ ​ ( 1,897 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 7,954 ​ ​ ( 121 ) ​ ​ 78,402 ​ ​ ( 8,305 ) ​ ​ 86,356 ​ ​ ( 8,426 ) Taxable ​ 2,283 ​ ​ ( 232 ) ​ ​ 41,602 ​ ​ ( 6,052 ) ​ ​ 43,885 ​ ​ ( 6,284 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 54,011 ​ ​ ( 413 ) ​ ​ 54,799 ​ ​ ( 5,590 ) ​ ​ 108,810 ​ ​ ( 6,003 ) Residential collateralized mortgage obligations ​ 30,706 ​ ​ ( 195 ) ​ ​ 19,522 ​ ​ ( 2,255 ) ​ ​ 50,228 ​ ​ ( 2,450 ) Commercial mortgage-backed securities ​ 27,518 ​ ​ ( 289 ) ​ ​ 62,404 ​ ​ ( 6,198 ) ​ ​ 89,922 ​ ​ ( 6,487 ) Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 7,987 ​ ​ ( 13 ) ​ ​ 0 ​ ​ 0 ​ ​ 7,987 ​ ​ ( 13 ) Total ​ $ 137,797 ​ $ ( 1,323 ) ​ $ 295,498 ​ $ ( 31,550 ) ​ $ 433,295 ​ $ ( 32,873 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 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 ​ $ 7,482 ​ $ ( 565 ) ​ $ 7,482 ​ $ ( 565 ) Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 0 ​ ​ 8,570 ​ ​ ( 677 ) ​ ​ 8,570 ​ ​ ( 677 ) Bank holding company debt securities ​ ​ 2,188 ​ ​ ( 44 ) ​ ​ 23,008 ​ ​ ( 1,991 ) ​ ​ 25,196 ​ ​ ( 2,035 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 0 ​ ​ 0 ​ ​ 86,724 ​ ​ ( 7,107 ) ​ ​ 86,724 ​ ​ ( 7,107 ) Taxable ​ 1,324 ​ ​ ( 218 ) ​ ​ 42,027 ​ ​ ( 5,940 ) ​ ​ 43,351 ​ ​ ( 6,158 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 20,235 ​ ​ ( 51 ) ​ ​ 57,647 ​ ​ ( 5,572 ) ​ ​ 77,882 ​ ​ ( 5,623 ) Residential collateralized mortgage obligations ​ 0 ​ ​ 0 ​ ​ 23,194 ​ ​ ( 2,182 ) ​ ​ 23,194 ​ ​ ( 2,182 ) Commercial mortgage-backed securities ​ 27,643 ​ ​ ( 183 ) ​ ​ 62,605 ​ ​ ( 6,304 ) ​ ​ 90,248 ​ ​ ( 6,487 ) Private label commercial mortgage-backed securities ​ ​ 3,489 ​ ​ ( 1 ) ​ ​ 0 ​ ​ 0 ​ ​ 3,489 ​ ​ ( 1 ) Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 54,879 ​ $ ( 497 ) ​ $ 311,257 ​ $ ( 30,338 ) ​ $ 366,136 ​ $ ( 30,835 ) ​ 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 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. 12 Table of Contents 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) ​ Three Months Ended ​ ​ ​ March 31, ​ March 31, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Gross realized gains from sales ​ $ 26 ​ $ 0 ​ Gross realized losses from sales ​ 0 ​ 0 ​ Net realized gains (losses) ​ $ 26 ​ $ 0 ​ Income tax provision related to net realized gains (losses) ​ $ 6 ​ $ 0 ​ ​ 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 ​ ​ Amortized ​ Fair ​ ​ ​ ​ Cost ​ ​ ​ Value Due in one year or less ​ $ 5,569 ​ $ 5,534 Due from one year through five years ​ 41,003 ​ 38,909 Due from five years through ten years ​ 84,657 ​ 79,610 Due after ten years ​ 80,560 ​ 70,073 Sub-total ​ 211,789 ​ 194,126 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ Residential pass-through securities ​ 148,471 ​ 142,864 Residential collateralized mortgage obligations ​ 62,511 ​ 60,094 Commercial mortgage-backed securities ​ 98,771 ​ 92,296 Asset-backed securities, ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ ​ 7,987 Total ​ $ 529,542 ​ $ 497,367 ​ 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 $ 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. 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 $ 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. 13 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 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 $ 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. 7. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans receivable at March 31, 2026 and December 31, 2025 are summarized as follows: Summary of Loans by Type (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Commercial real estate - non-owner occupied ​ $ 925,881 ​ $ 927,738 ​ Commercial real estate - owner occupied ​ ​ 326,210 ​ ​ 311,792 ​ All other commercial loans ​ ​ 571,916 ​ ​ 560,537 ​ Residential mortgage loans ​ ​ 445,911 ​ ​ 443,950 ​ Consumer loans ​ ​ 114,932 ​ ​ 110,348 ​ Total ​ ​ 2,384,850 ​ ​ 2,354,365 ​ Less: allowance for credit losses on loans ​ ​ ( 33,832 ) ​ ​ ( 31,048 ) ​ Loans, net ​ $ 2,351,018 ​ $ 2,323,317 ​ ​ 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. 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 March 31, 2026 and December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of March 31, 2026 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 757 ​ $ 0 ​ $ 18,376 ​ $ 906,748 ​ $ 925,881 Commercial real estate - owner occupied ​ 357 ​ 0 ​ 6,652 ​ 319,201 ​ 326,210 All other commercial loans ​ ​ 4,120 ​ ​ 54 ​ ​ 11,203 ​ ​ 556,539 ​ ​ 571,916 Residential mortgage loans ​ ​ 4,597 ​ ​ 0 ​ ​ 4,830 ​ ​ 436,484 ​ ​ 445,911 Consumer loans ​ 386 ​ 15 ​ 802 ​ 113,729 ​ 114,932 Total ​ $ 10,217 ​ $ 69 ​ $ 41,863 ​ $ 2,332,701 ​ $ 2,384,850 ​ ​ 14 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, 2025 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 2,619 ​ $ 0 ​ $ 10,766 ​ $ 914,353 ​ $ 927,738 Commercial real estate - owner occupied ​ 2,453 ​ 54 ​ 5,955 ​ 303,330 ​ 311,792 All other commercial loans ​ ​ 6,287 ​ ​ 0 ​ ​ 11,102 ​ ​ 543,148 ​ ​ 560,537 Residential mortgage loans ​ ​ 6,365 ​ ​ 0 ​ ​ 4,324 ​ ​ 433,261 ​ ​ 443,950 Consumer loans ​ ​ 585 ​ 34 ​ 689 ​ 109,040 ​ 110,348 Total ​ $ 18,309 ​ $ 88 ​ $ 32,836 ​ $ 2,303,132 ​ $ 2,354,365 ​ 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 March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ 2025 ​ 2024 ​ 2023 ​ 2022 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 31,510 ​ $ 75,489 ​ $ 83,651 ​ $ 153,039 ​ $ 169,174 ​ $ 369,499 ​ $ 0 ​ $ 882,362 Special Mention ​ 0 ​ 325 ​ 30 ​ 1,388 ​ 0 ​ 12,717 ​ 0 ​ 14,460 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 99 ​ ​ 812 ​ ​ 16,112 ​ ​ 12,036 ​ ​ 0 ​ ​ 29,059 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - non-owner occupied ​ $ 31,510 ​ $ 75,814 ​ $ 83,780 ​ $ 155,239 ​ $ 185,286 ​ $ 394,252 ​ $ 0 ​ $ 925,881 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 10,196 ​ $ 256 ​ $ 0 ​ $ 10,452 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 21,451 ​ $ 34,336 ​ $ 36,397 ​ $ 36,727 ​ $ 52,569 ​ $ 127,719 ​ $ 0 ​ $ 309,199 Special Mention ​ ​ 0 ​ 0 ​ 354 ​ 272 ​ 110 ​ 5,877 ​ 0 ​ 6,613 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 455 ​ ​ 840 ​ ​ 9,103 ​ ​ 0 ​ ​ 10,398 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - owner occupied ​ $ 21,451 ​ $ 34,336 ​ $ 36,751 ​ $ 37,454 ​ $ 53,519 ​ $ 142,699 ​ $ 0 ​ $ 326,210 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 28,396 ​ $ 116,460 ​ $ 42,706 ​ $ 51,018 ​ $ 45,422 ​ $ 104,821 ​ $ 140,232 ​ $ 529,055 Special Mention ​ 0 ​ 3,089 ​ 443 ​ 30 ​ 84 ​ 6,001 ​ 4,020 ​ 13,667 Substandard ​ ​ 0 ​ ​ 470 ​ ​ 13,075 ​ ​ 0 ​ ​ 1,379 ​ ​ 10,400 ​ ​ 3,870 ​ ​ 29,194 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total all other commercial loans ​ $ 28,396 ​ $ 120,019 ​ $ 56,224 ​ $ 51,048 ​ $ 46,885 ​ $ 121,222 ​ $ 148,122 ​ $ 571,916 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 52 ​ $ 215 ​ $ 0 ​ $ 267 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 11,604 ​ $ 48,057 ​ $ 44,482 ​ $ 51,680 ​ $ 82,776 ​ $ 201,925 ​ $ 0 ​ $ 440,524 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 36 ​ ​ 923 ​ ​ 394 ​ ​ 4,034 ​ ​ 0 ​ ​ 5,387 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total residential mortgage loans ​ $ 11,604 ​ $ 48,057 ​ $ 44,518 ​ $ 52,603 ​ $ 83,170 ​ $ 205,959 ​ $ 0 ​ $ 445,911 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,091 ​ $ 2,332 ​ $ 1,747 ​ $ 1,474 ​ $ 1,662 ​ $ 2,703 ​ $ 102,909 ​ $ 113,918 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 3 ​ ​ 3 ​ ​ 23 ​ ​ 0 ​ ​ 151 ​ ​ 834 ​ ​ 1,014 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total consumer loans ​ $ 1,091 ​ $ 2,335 ​ $ 1,750 ​ $ 1,497 ​ $ 1,662 ​ $ 2,854 ​ $ 103,743 ​ $ 114,932 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 6 ​ $ 3 ​ $ 0 ​ $ 0 ​ $ 105 ​ $ 114 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 94,052 ​ $ 276,674 ​ $ 208,983 ​ $ 293,938 ​ $ 351,603 ​ $ 806,667 ​ $ 243,141 ​ $ 2,275,058 Special Mention ​ 0 ​ 3,414 ​ 827 ​ 1,690 ​ 194 ​ 24,595 ​ 4,020 ​ 34,740 Substandard ​ ​ 0 ​ ​ 473 ​ ​ 13,213 ​ ​ 2,213 ​ ​ 18,725 ​ ​ 35,724 ​ ​ 4,704 ​ ​ 75,052 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 94,052 ​ $ 280,561 ​ $ 223,023 ​ $ 297,841 ​ $ 370,522 ​ $ 866,986 ​ $ 251,865 ​ $ 2,384,850 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 6 ​ $ 3 ​ $ 10,248 ​ $ 471 ​ $ 105 ​ $ 10,833 ​ ​ 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, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ (In Thousands) ​ 2025 ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 82,832 ​ $ 84,330 ​ $ 149,720 ​ $ 171,419 ​ $ 90,420 ​ $ 295,369 ​ $ 0 ​ $ 874,090 Special Mention ​ 77 ​ 30 ​ 1,942 ​ 15,920 ​ 2,073 ​ 8,045 ​ 0 ​ 28,087 Substandard ​ ​ 0 ​ ​ 102 ​ ​ 838 ​ ​ 10,459 ​ ​ 1,980 ​ ​ 12,182 ​ ​ 0 ​ ​ 25,561 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - non-owner occupied ​ $ 82,909 ​ $ 84,462 ​ $ 152,500 ​ $ 197,798 ​ $ 94,473 ​ $ 315,596 ​ $ 0 ​ $ 927,738 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 807 ​ $ 0 ​ $ 807 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 34,602 ​ $ 36,786 ​ $ 35,411 ​ $ 53,260 ​ $ 51,396 ​ $ 80,809 ​ $ 0 ​ $ 292,264 Special Mention ​ ​ 0 ​ 357 ​ 2,406 ​ 1,159 ​ 805 ​ 5,127 ​ 0 ​ 9,854 Substandard ​ 0 ​ ​ 0 ​ ​ 354 ​ ​ 131 ​ ​ 2,167 ​ ​ 7,022 ​ ​ 0 ​ ​ 9,674 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - owner occupied ​ $ 34,602 ​ $ 37,143 ​ $ 38,171 ​ $ 54,550 ​ $ 54,368 ​ $ 92,958 ​ $ 0 ​ $ 311,792 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 123,534 ​ $ 45,148 ​ $ 64,103 ​ $ 46,670 ​ $ 44,056 ​ $ 64,539 ​ $ 134,404 ​ $ 522,454 Special Mention ​ 1,380 ​ 522 ​ 32 ​ 100 ​ 4,443 ​ 732 ​ 2,028 ​ 9,237 Substandard ​ ​ 470 ​ ​ 12,932 ​ ​ 0 ​ ​ 1,471 ​ ​ 6,933 ​ ​ 3,748 ​ ​ 3,292 ​ ​ 28,846 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total all other commercial loans ​ $ 125,384 ​ $ 58,602 ​ $ 64,135 ​ $ 48,241 ​ $ 55,432 ​ $ 69,019 ​ $ 139,724 ​ $ 560,537 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 333 ​ $ 0 ​ $ 263 ​ $ 596 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 46,534 ​ $ 45,988 ​ $ 53,163 ​ $ 83,848 ​ $ 45,494 ​ $ 164,033 ​ $ 0 ​ $ 439,060 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 22 ​ ​ 901 ​ ​ 424 ​ ​ 200 ​ ​ 3,343 ​ ​ 0 ​ ​ 4,890 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total residential mortgage loans ​ $ 46,534 ​ $ 46,010 ​ $ 54,064 ​ $ 84,272 ​ $ 45,694 ​ $ 167,376 ​ $ 0 ​ $ 443,950 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 5 ​ $ 0 ​ $ 5 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 2,751 ​ $ 2,062 ​ $ 1,780 ​ $ 1,850 ​ $ 506 ​ $ 2,460 ​ $ 97,976 ​ $ 109,385 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 1 ​ ​ 7 ​ ​ 6 ​ ​ 0 ​ ​ 2 ​ ​ 170 ​ ​ 777 ​ ​ 963 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total consumer loans ​ $ 2,752 ​ $ 2,069 ​ $ 1,786 ​ $ 1,850 ​ $ 508 ​ $ 2,630 ​ $ 98,753 ​ $ 110,348 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 33 ​ $ 40 ​ $ 3 ​ $ 0 ​ $ 242 ​ $ 318 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 290,253 ​ $ 214,314 ​ $ 304,177 ​ $ 357,047 ​ $ 231,872 ​ $ 607,210 ​ $ 232,380 ​ $ 2,237,253 Special Mention ​ 1,457 ​ 909 ​ 4,380 ​ 17,179 ​ 7,321 ​ 13,904 ​ 2,028 ​ 47,178 Substandard ​ ​ 471 ​ ​ 13,063 ​ ​ 2,099 ​ ​ 12,485 ​ ​ 11,282 ​ ​ 26,465 ​ ​ 4,069 ​ ​ 69,934 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 292,181 ​ $ 228,286 ​ $ 310,656 ​ $ 386,711 ​ $ 250,475 ​ $ 647,579 ​ $ 238,477 ​ $ 2,354,365 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 33 ​ $ 40 ​ $ 336 ​ $ 812 ​ $ 505 ​ $ 1,726 ​ 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual (In Thousands) ​ No Allowance ​ with an Allowance ​ Loans Commercial real estate - non-owner occupied ​ $ 16,967 ​ $ 1,409 ​ $ 18,376 Commercial real estate - owner occupied ​ 6,165 ​ 487 ​ 6,652 All other commercial loans ​ ​ 7,497 ​ ​ 3,706 ​ ​ 11,203 Residential mortgage loans ​ ​ 4,830 ​ ​ 0 ​ ​ 4,830 Consumer loans ​ 802 ​ 0 ​ 802 Total ​ $ 36,261 ​ $ 5,602 ​ $ 41,863 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual (In Thousands) No Allowance ​ with an Allowance ​ Loans Commercial real estate - non-owner occupied ​ $ 9,343 ​ $ 1,423 ​ $ 10,766 Commercial real estate - owner occupied ​ 5,470 ​ 485 ​ 5,955 All other commercial loans ​ ​ 7,609 ​ ​ 3,493 ​ ​ 11,102 Residential mortgage loans ​ ​ 4,324 ​ ​ 0 ​ ​ 4,324 Consumer loans ​ 689 ​ 0 ​ 689 Total ​ $ 27,435 ​ $ 5,401 ​ $ 32,836 ​ 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 ​ Three Months Ended (In Thousands) ​ March 31, 2026 ​ March 31, 2025 Commercial real estate - non-owner occupied ​ $ 99 ​ $ 0 Commercial real estate - owner occupied ​ 5 ​ 0 All other commercial loans ​ ​ 8 ​ ​ 0 Residential mortgage loans ​ ​ 5 ​ ​ 5 Consumer loans ​ 1 ​ 0 Total ​ $ 118 ​ $ 5 ​ 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. ● Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral. 18 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ December 31, 2025 ​ ​ Amortized ​ ​ ​ Amortized ​ ​ (In Thousands) ​ Cost ​ Allowance ​ Cost ​ Allowance Commercial real estate - non-owner occupied ​ $ 18,485 ​ $ 140 ​ $ 10,876 ​ $ 140 Commercial real estate - owner occupied ​ 7,010 ​ ​ 263 ​ 6,325 ​ ​ 266 All other commercial loans ​ ​ 14,657 ​ ​ 2,252 ​ ​ 14,551 ​ ​ 2,366 Residential mortgage loans ​ ​ 361 ​ ​ 0 ​ ​ 350 ​ ​ 0 Consumer loans ​ 319 ​ 0 ​ 326 ​ 0 Total ​ $ 40,832 ​ $ 2,655 ​ $ 32,428 ​ $ 2,772 ​ 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 months ended March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2025 $ 19,462 ​ $ 4,086 ​ $ 5,505 ​ $ 1,629 ​ $ 366 ​ $ 31,048 Charge-offs ​ ( 10,452 ) ​ ​ 0 ​ ​ ( 267 ) ​ ​ 0 ​ ​ ( 114 ) ​ ​ ( 10,833 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 1 ​ ​ 0 ​ ​ 24 ​ ​ 25 Provision (credit) for credit losses on loans 11,759 ​ ( 487 ) ​ 1,177 ​ 1,028 ​ 115 ​ 13,592 Balance, March 31, 2026 $ 20,769 ​ $ 3,599 ​ $ 6,416 ​ $ 2,657 ​ $ 391 ​ $ 33,832 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ ( 117 ) ​ ​ ( 117 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 1 ​ ​ 1 ​ ​ 24 ​ ​ 26 Provision (credit) for credit losses on loans 96 ​ ​ ( 75 ) ​ ​ 232 ​ ​ ( 76 ) ​ ​ 51 ​ 228 Balance, March 31, 2025 $ 12,060 ​ $ 2,769 ​ $ 3,594 ​ $ 1,281 ​ $ 468 ​ $ 20,172 ​ 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. 19 Table of Contents 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 ​ 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 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) March 31, 2026 ​ ​ ​ Current or Past Due Less than 30 Days ​ ​ ​ 30-89 Days Past Due ​ 90+ Days Past Due ​ ​ ​ Total Commercial real estate - non-owner occupied ​ $ 0 ​ $ 0 ​ $ 1,717 ​ $ 1,717 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Payment Status (Amortized Cost Basis) March 31, 2025 ​ ​ ​ Current or Past Due Less than 30 Days ​ 30-89 Days Past Due ​ ​ ​ 90+ Days Past Due ​ ​ ​ Total Commercial real estate - non-owner occupied ​ $ 2,601 ​ $ 0 ​ $ 0 ​ $ 2,601 Commercial real estate - owner occupied ​ ​ 217 ​ ​ 0 ​ ​ 0 ​ ​ 217 Total ​ $ 2,818 ​ $ 0 ​ $ 0 ​ $ 2,818 ​ 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 20 Table of Contents 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) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ 2026 ​ 2025 ​ Foreclosed residential real estate ​ $ 25 ​ $ 33 ​ ​ 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) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ 2026 ​ 2025 ​ Residential real estate in process of foreclosure ​ $ 555 ​ $ 433 ​ ​ 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 March 31, 2026 and December 31, 2025 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (In Thousands) ​ ​ ​ 2026 ​ ​ ​ 2025 Commitments to extend credit ​ $ 489,887 ​ $ 506,996 Standby letters of credit ​ 59,161 ​ 58,914 ​ 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 $ 1,039,000 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 (In Thousands) ​ March 31, 2026 ​ March 31, 2025 Beginning Balance ​ $ 1,029 ​ $ 455 Provision for unfunded commitments ​ ​ 10 ​ ​ 8 Ending Balance, March 31 ​ $ 1,039 ​ $ 463 ​ ​ 21 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ 8. 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 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) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Gross amount ​ $ 17,329 ​ ​ 17,329 ​ Accumulated amortization ​ ( 6,571 ) ​ ( 5,756 ) ​ Net ​ $ 10,758 ​ $ 11,573 ​ ​ 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 ​ ​ March 31, ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Amortization expense ​ $ 815 ​ ​ ​ $ 106 ​ 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. ​ 9. BORROWED FUNDS ​ SHORT-TERM BORROWINGS Short-term borrowings (initial maturity within one year) include the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ 2026 ​ 2025 ​ FHLB-Pittsburgh borrowings ​ $ 13,113 ​ $ 27,000 ​ Customer repurchase agreements ​ 477 ​ 1,618 ​ Total short-term borrowings ​ $ 13,590 ​ $ 28,618 ​ ​ 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 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 (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 22 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q (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 . 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 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 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 $ 26,151,000 at March 31, 2026 and $ 26,947,000 at December 31, 2025. LONG-TERM BORROWINGS – FHLB ADVANCES Long-term borrowings from FHLB-Pittsburgh are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Loans maturing in 2026 with a weighted-average rate of 4.70 % ​ ​ 39,518 ​ ​ 48,018 Loans maturing in 2027 with a weighted-average rate of 3.98 % ​ ​ 55,583 ​ ​ 34,571 Loans maturing in 2028 with a weighted-average rate of 4.15 % ​ ​ 32,069 ​ ​ 26,027 Loans maturing in 2029 with a weighted-average rate of 4.42 % ​ ​ 12,319 ​ ​ 12,319 Total long-term FHLB-Pittsburgh borrowings ​ $ 139,489 ​ $ 120,935 ​ Note: Weighted-average rates are presented as of March 31, 2026. 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 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) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 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 ​ $ 14,988 ​ $ 14,970 Total carrying value ​ $ 14,988 ​ $ 14,970 ​ 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 23 Table of Contents 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. 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 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) ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 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 ​ $ 24,979 ​ $ 24,949 Total carrying value ​ $ 24,979 ​ $ 24,949 ​ ​ 10. STOCK-BASED COMPENSATION PLANS The Corporation has a stock incentive plan for selected officers and the independent directors. 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) ​ ​ ​ ​ ​ ​ ​ Aggregate ​ ​ ​ ​ Grant ​ ​ ​ ​ Date ​ ​ Number of ​ Fair ​ ​ Shares ​ Value Three Months Ended March 31, 2026 awards: ​ ​ ​ ​ ​ Time-based awards to employees ​ 57,618 ​ $ 1,260 Performance-based awards to employees ​ 21,246 ​ ​ 464 Total ​ 78,864 ​ $ 1,724 ​ 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 $ 313,000 in the first quarter 2026 and $ 325,000 in the first quarter 2025. 11. CONTINGENCIES 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. 12. 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. 24 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 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 $ 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 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 March 31, 2026 ​ At December 31, 2025 ​ 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 $ 67,799 ​ $ 1,178 ​ $ 67,799 ​ $ 1,178 ​ $ 68,388 ​ $ 1,318 ​ $ 68,388 ​ $ 1,318 RPA Out ​ 6,787 ​ ​ 1 ​ ​ 0 ​ ​ 0 ​ ​ 6,823 ​ ​ 2 ​ ​ 0 ​ ​ 0 RPA In ​ 0 ​ ​ 0 ​ ​ 13,489 ​ ​ 4 ​ ​ 0 ​ ​ 0 ​ ​ 13,660 ​ ​ 5 ​ (1) Included in other assets in the consolidated balance sheets. (2) Included in accrued interest and other liabilities in the consolidated balance sheets. 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 March 31, 2026 and December 31, 2025. 13. 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 25 Table of Contents 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: 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. 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 ​ 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 ​ $ 7,456 ​ $ 0 ​ $ 0 ​ $ 7,456 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 10,212 ​ ​ 0 ​ ​ 10,212 Bank holding company debt securities ​ ​ 0 ​ ​ 35,745 ​ ​ 0 ​ ​ 35,745 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 96,758 ​ 0 ​ 96,758 Taxable ​ 0 ​ 43,955 ​ 0 ​ 43,955 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 142,864 ​ 0 ​ 142,864 Residential collateralized mortgage obligations ​ 0 ​ 60,094 ​ 0 ​ 60,094 Commercial mortgage-backed securities ​ 0 ​ 92,296 ​ 0 ​ 92,296 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ 0 ​ 7,987 ​ 0 ​ 7,987 Total available-for-sale debt securities ​ 7,456 ​ 489,911 ​ 0 ​ 497,367 Marketable equity security ​ 885 ​ 0 ​ 0 ​ 885 Servicing rights ​ 0 ​ 0 ​ 3,813 ​ 3,813 RPA Out ​ ​ 0 ​ ​ 1 ​ ​ 0 ​ ​ 1 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 1,178 ​ ​ 0 ​ ​ 1,178 Total recurring fair value measurements, assets ​ $ 8,341 ​ $ 491,090 ​ $ 3,813 ​ $ 503,244 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 4 ​ $ 0 ​ $ 4 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 1,178 ​ ​ 0 ​ ​ 1,178 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 1,182 ​ $ 0 ​ $ 1,182 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 2,947 ​ $ 2,947 Foreclosed assets held for sale ​ 0 ​ 0 ​ 181 ​ 181 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 3,128 ​ $ 3,128 ​ 26 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 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 ​ $ 7,482 ​ $ 0 ​ $ 0 ​ $ 7,482 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 10,749 ​ ​ 0 ​ ​ 10,749 Bank holding company debt securities ​ ​ 0 ​ ​ 34,076 ​ ​ 0 ​ ​ 34,076 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 98,359 ​ 0 ​ 98,359 Taxable ​ 0 ​ 44,152 ​ 0 ​ 44,152 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 143,921 ​ 0 ​ 143,921 Residential collateralized mortgage obligations ​ 0 ​ 63,707 ​ 0 ​ 63,707 Commercial mortgage-backed securities ​ 0 ​ 92,631 ​ 0 ​ 92,631 Private label commercial mortgage-backed securities ​ 0 ​ 3,489 ​ 0 ​ 3,489 Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ 0 ​ 8,009 ​ 0 ​ 8,009 Total available-for-sale debt securities ​ 7,482 ​ 499,093 ​ 0 ​ 506,575 Marketable equity security ​ 890 ​ 0 ​ 0 ​ 890 Servicing rights ​ 0 ​ 0 ​ 3,893 ​ 3,893 RPA Out ​ ​ 0 ​ ​ 2 ​ ​ 0 ​ ​ 2 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 1,318 ​ ​ 0 ​ ​ 1,318 Total recurring fair value measurements, assets ​ $ 8,372 ​ $ 500,413 ​ $ 3,893 ​ $ 512,678 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 5 ​ $ 0 ​ $ 5 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 1,318 ​ ​ 0 ​ ​ 1,318 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 1,323 ​ $ 0 ​ $ 1,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 2,629 ​ $ 2,629 Foreclosed assets held for sale ​ 0 ​ 0 ​ 189 ​ 189 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 2,818 ​ $ 2,818 ​ 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. 27 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3/31/2026 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 3/31/2026 Servicing rights ​ $ 3,813 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 133.00 % Weighted-average PSA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2025 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 12/31/2025 Servicing rights ​ $ 3,893 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 124.00 % 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 ​ ​ ​ ​ March 31, 2026 ​ ​ ​ March 31, 2025 Servicing rights balance, beginning of period ​ $ 3,893 ​ $ 2,782 Originations of servicing rights ​ 92 ​ ​ 54 Unrealized loss included in earnings ​ ( 172 ) ​ ​ ( 69 ) Servicing rights balance, end of period ​ $ 3,813 ​ $ 2,767 ​ 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). 28 Table of Contents CITIZENS & NORTHERN CORPORATION – FORM 10-Q 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range (Weighted ​ ​ ​ ​ ​ Valuation ​ ​ ​ ​ ​ ​ ​ ​ Average) ​ ​ Balance at ​ Allowance at ​ Fair Value at ​ Valuation ​ Unobservable ​ Discount at Asset ​ 3/31/2026 ​ 3/31/2026 ​ 3/31/2026 ​ Technique ​ Inputs ​ 3/31/2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - nonowner occupied ​ $ 1,409 ​ $ 140 ​ $ 1,269 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 66 ) % Commercial real estate - owner occupied ​ ​ 487 ​ ​ 263 ​ ​ 224 ​ Sales comparison ​ Discount to appraised value ​ 32 % ( 32 ) % All other commercial Loans ​ ​ 3,706 ​ ​ 2,252 ​ ​ 1,454 ​ Sales comparison ​ Discount to appraised value ​ 0 %- 100 % ( 82 ) % Total loans individually evaluated for credit loss ​ $ 5,602 ​ $ 2,655 ​ $ 2,947 ​ ​ ​ ​ ​ 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 ​ 34 % ( 34 ) % Total foreclosed assets held for sale ​ $ 181 ​ $ 0 ​ $ 181 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range (Weighted ​ ​ ​ ​ ​ Valuation ​ ​ ​ ​ ​ ​ ​ ​ Average) ​ ​ Balance at ​ Allowance at ​ Fair Value at ​ Valuation ​ Unobservable ​ Discount at Asset ​ 12/31/2025 ​ 12/31/2025 ​ 12/31/2025 ​ Technique ​ Inputs ​ 12/31/2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - nonowner occupied ​ $ 1,423 ​ $ 140 ​ $ 1,283 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 66 ) % Commercial real estate - owner occupied ​ ​ 485 ​ ​ 266 ​ ​ 219 ​ Sales comparison ​ Discount to appraised value ​ 34 % ( 34 ) % All other commercial Loans ​ ​ 3,493 ​ ​ 2,366 ​ ​ 1,127 ​ Sales comparison ​ Discount to appraised value ​ 0 %- 100 % ( 82 ) % Total loans individually evaluated for credit loss ​ $ 5,401 ​ $ 2,772 ​ $ 2,629 ​ ​ ​ ​ ​ Foreclosed assets held for sale - real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential (1-4 family) ​ $ 33 ​ $ 0 ​ $ 33 Sales comparison Discount to appraised value ​ 62 %- 84 % ( 72 ) % Commercial real estate ​ ​ 156 ​ ​ 0 ​ ​ 156 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 34 ) % Total foreclosed assets held for sale ​ $ 189 ​ $ 0 ​ $ 189 ​ ​ ​ ​ ​ ​ 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. 29 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 ​ March 31, 2026 ​ December 31, 2025 ​ ​ Hierarchy ​ Carrying ​ Fair ​ Carrying ​ Fair ​ ​ ​ ​ Level ​ ​ ​ Amount ​ ​ ​ Value ​ ​ ​ Amount ​ ​ ​ Value Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents Level 1 ​ $ 53,448 ​ $ 53,448 ​ $ 44,706 ​ $ 44,706 Certificates of deposit Level 2 ​ 1,350 ​ 1,338 ​ 1,350 ​ 1,331 Restricted equity securities (included in other assets) N/A ​ 28,004 ​ 28,004 ​ 26,623 ​ 26,623 Loans, net Level 3 ​ 2,351,018 ​ 2,291,402 ​ 2,323,317 ​ 2,261,934 Accrued interest receivable Level 2 ​ 11,901 ​ 11,901 ​ 11,594 ​ 11,594 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits with no stated maturity Level 2 ​ 2,008,209 ​ ​ 2,008,209 ​ 1,958,011 ​ ​ 1,958,011 Time deposits Level 2 ​ 591,142 ​ ​ 588,668 ​ 606,705 ​ ​ 603,494 Short-term borrowings Level 2 ​ 13,590 ​ ​ 13,590 ​ 28,618 ​ ​ 28,618 Long-term borrowings - FHLB advances Level 2 ​ 139,489 ​ ​ 139,970 ​ 120,935 ​ ​ 122,211 Senior notes, net ​ Level 2 ​ ​ 14,988 ​ ​ 14,913 ​ ​ 14,970 ​ ​ 14,751 Subordinated debt, net ​ Level 2 ​ ​ 24,979 ​ ​ 22,880 ​ ​ 24,949 ​ ​ 23,361 Accrued interest payable Level 2 ​ 1,791 ​ ​ 1,791 ​ 1,744 ​ ​ 1,744 ​ ​ 14. 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 (In Thousands) ​ ​ ​ ​ March 31, 2026 ​ ​ ​ ​ March 31, 2025 Interest income ​ $ 40,588 ​ $ 31,709 Interest expense ​ 12,134 ​ 11,734 Net interest income ​ 28,454 ​ ​ 19,975 Provision for credit losses ​ 13,602 ​ ​ 236 Net interest income after provision for credit losses ​ 14,852 ​ ​ 19,739 Other income: ​ ​ ​ ​ ​ Other noninterest income ​ ​ 8,169 ​ ​ 7,008 Realized gains on available-for-sale debt securities, net ​ 26 ​ ​ 0 Total other income ​ 8,195 ​ ​ 7,008 Other noninterest expense: ​ ​ ​ ​ ​ Salaries and employee benefits ​ 13,201 ​ ​ 11,759 Other segment expenses (1) ​ 9,511 ​ ​ 7,284 Total noninterest expense ​ ​ 22,712 ​ ​ 19,043 Income before income tax provision ​ ​ 335 ​ ​ 7,704 Income tax provision ​ 62 ​ ​ 1,411 NET INCOME ​ $ 273 ​ $ 6,293 ​ 30 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 March 31, 2026 and December 31, 2025. ​ ​ ​ ​