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Item 9A. Controls and Procedures

2022-02-22 compared with 2021-03-05 · 48 added, 44 removed, 191 unchanged (33% of the section changed)

2 unchanged sentences

The Corporation’s management, under the supervision of and with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, has carried out an evaluation of the design and effectiveness of the Corporation’s disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report.

This evaluation did not include an assessment of those disclosure controls and procedures that are involved in, and did not include an assessment of, internal control over financial reporting as it relates to Covenant Financial, Inc.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Corporation’s disclosure controls and procedures are effective to ensure that all material information required to be disclosed in reports the Corporation files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Except as described in the following paragraph, there were no significant changes in the Corporation’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that are reasonably likely to affect, our internal control over financial reporting.

The Covenant Financial, Inc.

acquisition was completed July 1, 2020, and during the last six months of 2020 the Corporation has been engaged in integrating processes and internal control over financial reporting for the former Covenant locations into those of the Corporation.

Through August 24, 2020, information related to former Covenant loans, deposits and other customer data was processed using Covenant’s legacy computer system.

Effective August 24, 2020, the integration of Covenant’s core customer data system into the Corporation’s system was completed.

Though completion of the Covenant core system conversion was a significant milestone, at December 31, 2020, the Corporation’s management had not yet completed changes to processes, information technology systems and other components of internal control over financial reporting as part of integration activities.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

7 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

There were no changes in the Corporation’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

The Corporation’s management assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2021, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013).

Based on that assessment, we concluded that, as of December 31, 2020, the

Corporation’s internal control over financial reporting is effective based on the criteria established in Internal Control – Integrated Framework (2013).

The Corporation acquired Covenant Financial, Inc.

(“Covenant”) effective July 1, 2020.

Management excluded from its assessment of the Corporation’s internal control over financial reporting, as of December 31, 2020, Covenant’s internal control over financial reporting associated with assets of approximately 22.7% of the Corporation’s consolidated total assets, and interest income and noninterest income of approximately 10.7% of the Corporation’s consolidated total interest income and noninterest income, as of and for the year ended December 31, 2020.

Based on that assessment, we concluded that, as of December 31, 2021, the Corporation’s internal control over financial reporting is effective based on the criteria established in Internal Control – Integrated Framework (2013).

Baker Tilly US, LLP, the independent registered public accounting firm that audited the Corporation’s consolidated financial statements, has issued an audit report on the Corporation’s internal control over financial reporting as of December 31, 2021.

That report appears immediately prior to this report.

March 5, 2021

February 22, 2022

Bradley Scovill

President and Chief Executive Officer

March 5, 2021

February 22, 2022

Treasurer and Chief Financial Officer

17 unchanged sentences

The following consolidated financial statements are set forth in Part II, Item 8:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements:

13 unchanged sentences

Incorporated by reference to Exhibit 3.1 of the Corporation’s Form 8-K filed September 21, 2009

Incorporated by reference to Exhibit 3.1(ii) of the Corporation's Form S-4/A filed April 20, 2020

(i) through (v) Instruments defining the rights of securities holders, including indentures

Not applicable

(vi) Description of registrant’s securities

Incorporated by reference to Exhibit 3.1 of the Corporation's Form 8-K filed February 18, 2022

Instruments defining the rights of securities holders, including Indentures

4.1 Indenture, dated May 19, 2021 between Citizens & Northern Corporation and UMB Bank, National Association, as trustee

Incorporated by reference to Exhibit 4.1 of the Corporation’s Form 8-K filed May 19, 2021

4.2 Form of Subordinated Note

Incorporated by reference to Exhibit A-2 to Exhibit 4.1 of the Corporation’s Form 8-K filed May 19, 2021

4.3 Form of Senior Note

Incorporated by reference to Exhibit 4.3 of the Corporation’s Form 8-K filed May 19, 2021

4.4 Description of registrant’s securities

Incorporated by reference to Exhibit 4.(vi) of the Corporation’s Form 10-K filed February 20, 2020

8 unchanged sentences

Filed herewith

10.4 2020 Annual Performance Incentive Award Plan, as Amended

10.4 Form of Time-Based Restricted Stock agreement dated February 17, 2022 between the Corporation and Matthew L.

Bower pursuant to the Citizens & Northern Corporation Stock Incentive Plan

Filed herewith

10.5 Form of Time-Based Restricted Stock agreement dated May 10, 2021 between the Corporation and Alexander Balagour pursuant to the Citizens & Northern Corporation Stock Incentive Plan

Filed herewith

10.6 Form of Time-Based Restricted Stock agreement dated July 1, 2020 between the Corporation and Blair T.

Rush pursuant to the Citizens & Northern Corporation Stock Incentive Plan

Filed herewith

10.7 2022 Annual Performance Incentive Award Plan

2 unchanged sentences

Filed herewith

10.9 First Amendment to Deferred Compensation Agreement dated June 17, 2021

Filed herewith

10.10 Deferred Compensation Agreement dated December 17, 2015

13 unchanged sentences

Incorporated by reference to Exhibit 10.3 filed with Corporation’s Form 8-K on September 19, 2013

10.13 Employment agreement dated September 19, 2013 between the Corporation and Deborah E.

Incorporated by reference to Exhibit 10.4 filed with Corporation’s Form 8-K on September 19, 2013

10.14 Employment agreement dated May 18, 2020 between the Corporation and Janice E.

Incorporated by reference to Exhibit 10.1 filed with Corporation's Form 10-Q on August 6, 2020

10.16 Employment agreement dated December 18, 2019 between the Corporation and Blair T.

Filed herewith

10.16 Form of Indemnification Agreement dated June 27, 2020 between the Corporation and Janice E.

Incorporated by reference to Exhibit 10.15 filed with Corporation’s Form 10-K on March 5, 2021

10.17 Employment agreement dated April 6, 2021 between the Corporation and Alexander Balagour

Incorporated by reference to Exhibit 10.1 filed with Corporation’s Form 10-Q on August 6, 2021

13 unchanged sentences

10.24 Form of Indemnification Agreement dated February 16, 2021 between the Corporation and Blair T.

Filed herewith

Incorporated by reference to Exhibit 10.23 filed with Corporation’s Form 10-K on March 5, 2021

10.25 Change in Control Agreement dated January 9, 2018 between the Corporation and Tracy E.

39 unchanged sentences

Incorporated by reference to Exhibit 10.5 filed with the Corporation's Form 10-Q on August 6, 2020

10.44 Form of Indemnification Agreement dated April 27, 2021 between the Corporation and Helen S.

Incorporated by reference to Exhibit 10.2 filed with the Corporation’s Form 10-Q on August 6, 2021

10.45 Form of Indemnification Agreement dated July 12, 2021 between the Corporation and Kate Shattuck

Incorporated by reference to Exhibit 10.1 filed with the Corporation’s Form 10-Q on November 8, 2021

Statement re:

42 unchanged sentences

Cover page interactive data file

Not applicable

(Formatted as Inline XBRL and contained in Exhibit 101)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.

1 unchanged sentence

President and Chief Executive Officer

March 5, 2021

February 22, 2022

Treasurer and Principal Accounting Officer

March 5, 2021

February 22, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

BOARD OF DIRECTORS

March 5, 2021

February 22, 2022

Bradley Scovill

March 5, 2021

Leonard Simpson

March 5, 2021

February 22, 2022

Kate Shattuck

February 22, 2022

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

What changed 10-K

Item 9A. Controls and Procedures