CITIZENS & NORTHERN CORP 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, (In Thousands, Except Share and Per Share Data) ​ 2024 ​ 2023 ASSETS ​ ​ Cash and due from banks: ​ ​ Noninterest-bearing ​ $ 21,110 ​ $ 24,855 Interest-bearing ​ 105,064 ​ 32,023 Total cash and due from banks ​ 126,174 ​ 56,878 Available-for-sale debt securities, at fair value ​ 402,380 ​ 415,755 ​ ​ ​ ​ ​ ​ ​ Loans receivable ​ 1,895,848 ​ 1,848,139 Allowance for credit losses ​ ( 20,035 ) ​ ( 19,208 ) Loans, net ​ 1,875,813 ​ 1,828,931 ​ ​ ​ ​ ​ ​ ​ Bank-owned life insurance ​ 51,214 ​ 63,674 Accrued interest receivable ​ 8,735 ​ 9,140 Bank premises and equipment, net ​ 21,338 ​ 21,632 Foreclosed assets held for sale ​ 181 ​ 478 Deferred tax asset, net ​ 19,098 ​ 17,441 Goodwill ​ 52,505 ​ 52,505 Core deposit intangibles, net ​ 2,080 ​ 2,469 Other assets ​ 51,135 ​ 46,681 TOTAL ASSETS ​ $ 2,610,653 ​ $ 2,515,584 ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ Deposits: ​ ​ ​ ​ Noninterest-bearing ​ $ 486,566 ​ $ 490,554 Interest-bearing ​ 1,607,343 ​ 1,524,252 Total deposits ​ 2,093,909 ​ 2,014,806 Short-term borrowings ​ 2,488 ​ 33,874 Long-term borrowings - FHLB advances ​ 165,451 ​ 138,337 Senior notes, net ​ ​ 14,899 ​ ​ 14,831 Subordinated debt, net ​ 24,831 ​ 24,717 Accrued interest and other liabilities ​ 33,791 ​ 26,638 TOTAL LIABILITIES ​ 2,335,369 ​ 2,253,203 ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENT LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STOCKHOLDERS' EQUITY ​ ​ ​ ​ Preferred stock, $ 1,000 par value; authorized 30,000 shares; $ 1,000 liquidation ​ ​ ​ ​ preference per share; no shares issued ​ 0 ​ 0 Common stock, par value $ 1.00 per share; authorized 30,000,000 shares; ​ ​ ​ ​ issued 16,030,172 and outstanding 15,433,494 at December 31, 2024; ​ ​ ​ ​ issued 16,030,172 and outstanding 15,295,135 at December 31, 2023 ​ 16,030 ​ 16,030 Paid-in capital ​ 143,565 ​ 144,388 Retained earnings ​ 165,778 ​ 157,028 Treasury stock, at cost; 596,678 shares at December 31, 2024 and 735,037 ​ ​ ​ ​ shares at December 31, 2023 ​ ( 13,328 ) ​ ( 16,628 ) Accumulated other comprehensive loss ​ ( 36,761 ) ​ ( 38,437 ) TOTAL STOCKHOLDERS' EQUITY ​ 275,284 ​ 262,381 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ​ $ 2,610,653 ​ $ 2,515,584 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 40 Table of Contents Consolidated Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands, Except Per Share Data) ​ 2024 ​ 2023 ​ 2022 INTEREST INCOME ​ ​ ​ ​ ​ Interest and fees on loans: ​ ​ ​ ​ ​ Taxable ​ $ 110,396 ​ $ 98,854 ​ $ 78,599 Tax-exempt ​ 2,396 ​ 2,225 ​ 1,965 Income from available-for-sale debt securities: ​ ​ ​ ​ ​ ​ Taxable ​ 8,593 ​ 8,555 ​ 8,360 Tax-exempt ​ 2,260 ​ 2,427 ​ 3,001 Other interest and dividend income ​ 4,433 ​ 1,443 ​ 722 Total interest and dividend income ​ 128,078 ​ 113,504 ​ 92,647 INTEREST EXPENSE ​ ​ ​ Interest on deposits ​ 39,200 ​ 24,233 ​ 6,638 Interest on short-term borrowings ​ 1,168 ​ 3,240 ​ 429 Interest on long-term borrowings - FHLB advances ​ 7,188 ​ 4,230 ​ 896 Interest on senior notes, net ​ ​ 481 ​ ​ 479 ​ ​ 477 Interest on subordinated debt, net ​ ​ 926 ​ ​ 922 ​ ​ 1,079 Total interest expense ​ 48,963 ​ 33,104 ​ 9,519 Net interest income ​ 79,115 ​ 80,400 ​ 83,128 Provision for credit losses ​ 2,195 ​ 186 ​ 7,255 Net interest income after provision for credit losses ​ 76,920 ​ 80,214 ​ 75,873 NONINTEREST INCOME ​ ​ ​ Trust revenue ​ 7,928 ​ 7,413 ​ 6,994 Brokerage and insurance revenue ​ 2,271 ​ 1,675 ​ 2,291 Service charges on deposit accounts ​ 5,867 ​ 5,567 ​ 5,019 Interchange revenue from debit card transactions ​ 4,276 ​ 4,160 ​ 4,148 Net gains from sale of loans ​ 1,158 ​ 723 ​ 757 Loan servicing fees, net ​ 649 ​ 602 ​ 960 Increase in cash surrender value of life insurance ​ 1,830 ​ 2,703 ​ 545 Other noninterest income ​ 5,230 ​ 4,610 ​ 3,698 Realized (losses) gains on available-for-sale debt securities, net ​ ​ 0 ​ ​ ( 3,036 ) ​ ​ 20 Total noninterest income ​ 29,209 ​ 24,417 ​ 24,432 NONINTEREST EXPENSE ​ ​ ​ Salaries and employee benefits ​ ​ 44,930 ​ ​ 44,195 ​ ​ 41,833 Net occupancy and equipment expense ​ ​ 5,473 ​ ​ 5,357 ​ ​ 5,533 Data processing and telecommunications expense ​ ​ 7,768 ​ ​ 7,582 ​ ​ 6,806 Automated teller machine and interchange expense ​ 1,818 ​ 1,682 ​ 1,601 Pennsylvania shares tax ​ 1,733 ​ 1,602 ​ 1,956 Professional fees ​ 2,175 ​ 2,497 ​ 2,005 Other noninterest expense ​ 10,361 ​ 11,233 ​ 8,221 Total noninterest expense ​ 74,258 ​ 74,148 ​ 67,955 Income before income tax provision ​ 31,871 ​ 30,483 ​ 32,350 Income tax provision ​ 5,913 ​ 6,335 ​ 5,732 NET INCOME ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 EARNINGS PER COMMON SHARE - BASIC ​ $ 1.69 ​ $ 1.57 ​ $ 1.71 EARNINGS PER COMMON SHARE - DILUTED ​ $ 1.69 ​ $ 1.57 ​ $ 1.71 ​ The accompanying notes are an integral part of consolidated financial statements. ​ 41 Table of Contents Consolidated Statements of Comprehensive Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ (In Thousands) ​ 2024 ​ 2023 2022 Net income ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ Unrealized holding gains (losses) on available-for-sale debt securities ​ ​ 1,670 ​ ​ 11,512 ​ ​ ( 69,828 ) Reclassification adjustment for losses (gains) realized in income ​ ​ 0 ​ ​ 3,036 ​ ​ ( 20 ) Other comprehensive income (loss) on available-for-sale debt securities ​ ​ 1,670 ​ ​ 14,548 ​ ​ ( 69,848 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unfunded pension and postretirement obligations: ​ ​ ​ ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ 405 ​ ( 9 ) ​ 389 Amortization of prior service cost and net actuarial loss and curtailment gain included in net periodic benefit cost ​ ( 552 ) ​ ( 56 ) ​ ( 42 ) Other comprehensive (loss) income on pension and postretirement obligations ​ ( 147 ) ​ ( 65 ) ​ 347 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before income tax ​ 1,523 ​ 14,483 ​ ( 69,501 ) Income tax related to other comprehensive (income) loss ​ 153 ​ ( 3,042 ) ​ 14,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net other comprehensive income (loss) ​ 1,676 ​ 11,441 ​ ( 54,904 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income (loss) ​ $ 27,634 ​ $ 35,589 ​ $ ( 28,286 ) ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 42 Table of Contents Consolidated Statements of Changes in Stockholders’ Equity (In Thousands Except Share and Per Share Data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Treasury ​ Common ​ Paid-in ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ ​ ​ Shares ​ Shares ​ Stock ​ Capital ​ Earnings ​ Income (Loss) ​ Stock ​ Total Balance, January 1, 2022 16,030,172 271,082 ​ $ 16,030 ​ $ 144,453 ​ $ 142,612 ​ $ 5,026 ​ $ ( 6,716 ) ​ $ 301,405 Net income ​ ​ ​ ​ ​ 26,618 ​ ​ ​ 26,618 Other comprehensive loss, net ​ ​ ​ ​ ​ ​ ( 54,904 ) ​ ​ ( 54,904 ) Cash dividends declared on common stock, $ 1.12 per share ​ ​ ​ ​ ​ ( 17,487 ) ​ ​ ​ ( 17,487 ) Shares issued for dividend reinvestment plan ​ ( 65,470 ) ​ ​ ​ 8 ​ ​ ​ 1,614 ​ 1,622 Shares issued from treasury and redeemed related to exercise of stock options ​ ( 9,178 ) ​ ​ ​ ( 67 ) ​ ​ ​ 227 ​ 160 Restricted stock granted ​ ( 78,243 ) ​ ​ ​ ( 1,932 ) ​ ​ ​ 1,932 ​ 0 Forfeiture of restricted stock ​ 10,782 ​ ​ ​ 228 ​ ​ ​ ( 228 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ 1,260 ​ ​ ​ ​ ​ 1,260 Purchase of restricted stock for tax withholding ​ 6,964 ​ ​ ​ ​ ​ ​ ( 175 ) ​ ( 175 ) Treasury stock purchases ​ 375,416 ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 9,174 ) ​ ( 9,174 ) Balance, December 31, 2022 16,030,172 511,353 ​ ​ 16,030 ​ ​ 143,950 ​ ​ 151,743 ​ ​ ( 49,878 ) ​ ​ ( 12,520 ) ​ ​ 249,325 Adoption of ASU 2016-13 (CECL) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,652 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 1,652 ) Net income ​ ​ ​ ​ ​ 24,148 ​ ​ ​ 24,148 Other comprehensive income, net ​ ​ ​ ​ ​ ​ 11,441 ​ ​ 11,441 Cash dividends declared on common stock, $ 1.12 per share ​ ​ ​ ​ ​ ( 17,211 ) ​ ​ ​ ( 17,211 ) Shares issued for dividend reinvestment plan ​ ( 81,930 ) ​ ​ ​ ( 246 ) ​ ​ ​ 1,888 ​ 1,642 Shares issued from treasury and redeemed related to exercise of stock options ​ ( 612 ) ​ ​ ​ ( 30 ) ​ ​ ​ 30 ​ 0 Restricted stock granted ​ ( 53,788 ) ​ ​ ​ ( 1,314 ) ​ ​ ​ 1,314 ​ 0 Forfeiture of restricted stock ​ 25,261 ​ ​ ​ 556 ​ ​ ​ ( 556 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ 1,472 ​ ​ ​ ​ ​ 1,472 Purchase of restricted stock for tax withholding ​ 9,453 ​ ​ ​ ​ ​ ​ ( 219 ) ​ ( 219 ) Treasury stock purchases ​ 325,300 ​ ​ ​ ​ ​ ​ ​ ​ ( 6,565 ) ​ ( 6,565 ) Balance, December 31, 2023 16,030,172 735,037 ​ ​ 16,030 ​ ​ 144,388 ​ ​ 157,028 ​ ​ ( 38,437 ) ​ ​ ( 16,628 ) ​ ​ 262,381 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 25,958 ​ ​ ​ ​ ​ ​ ​ 25,958 Other comprehensive income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,676 ​ ​ ​ ​ 1,676 Cash dividends declared on common stock, $ 1.12 per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 17,208 ) ​ ​ ​ ​ ​ ​ ​ ( 17,208 ) Shares issued for dividend reinvestment plan ​ ( 83,838 ) ​ ​ ​ ​ ​ ( 273 ) ​ ​ ​ ​ ​ ​ ​ ​ 1,885 ​ 1,612 Restricted stock granted ​ ( 92,860 ) ​ ​ ​ ​ ​ ( 2,094 ) ​ ​ ​ ​ ​ ​ ​ ​ 2,094 ​ 0 Forfeiture of restricted stock ​ 2,076 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ ​ ​ ​ ( 50 ) ​ 0 Stock-based compensation expense ​ ​ ​ ​ ​ ​ ​ 1,494 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,494 Purchase of restricted stock for tax withholding ​ 10,229 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 212 ) ​ ( 212 ) Treasury stock purchases ​ 26,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 417 ) ​ ( 417 ) Balance, December 31, 2024 16,030,172 596,678 ​ $ 16,030 ​ $ 143,565 ​ $ 165,778 ​ $ ( 36,761 ) ​ $ ( 13,328 ) ​ $ 275,284 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 43 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ ​ ​ ​ Net income ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Provision for credit losses ​ 2,195 ​ 186 ​ 7,255 Realized losses (gains) on available-for-sale debt securities, net ​ 0 ​ 3,036 ​ ( 20 ) Net amortization of securities ​ ​ 1,645 ​ ​ 2,062 ​ ​ 2,760 Increase in cash surrender value of life insurance ​ ( 1,830 ) ​ ( 2,703 ) ​ ( 545 ) Depreciation and amortization of bank premises and equipment ​ 2,183 ​ 2,151 ​ 2,389 Net accretion of purchase accounting adjustments ​ ( 253 ) ​ ( 288 ) ​ ( 1,181 ) Stock-based compensation ​ 1,494 ​ 1,472 ​ 1,260 Deferred income taxes ​ ( 1,504 ) ​ 836 ​ ( 400 ) Decrease (increase) in fair value of servicing rights ​ 164 ​ 200 ​ ( 126 ) Net gains from sale of loans ​ ( 1,158 ) ​ ( 723 ) ​ ( 757 ) Origination of loans held for sale ​ ( 37,841 ) ​ ( 24,630 ) ​ ( 26,231 ) Proceeds from sales of loans held for sale ​ 36,810 ​ 25,106 ​ 27,636 Increase in accrued interest receivable and other assets ​ ( 3,014 ) ​ ( 1,400 ) ​ ( 3,532 ) Increase (decrease) in accrued interest payable and other liabilities ​ 7,992 ​ 4,161 ​ ( 589 ) Other ​ 194 ​ ( 66 ) ​ 62 Net Cash Provided by Operating Activities ​ 33,035 ​ 33,548 ​ 34,599 CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ ​ ​ Purchase of certificates of deposit ​ ​ 0 ​ ​ 0 ​ ​ ( 250 ) Proceeds from maturities of certificates of deposit ​ 1,500 ​ 3,250 ​ 2,000 Proceeds from sales of available-for-sale debt securities ​ 0 ​ 60,819 ​ 4,100 Proceeds from calls and maturities of available-for-sale debt securities ​ 39,188 ​ 52,323 ​ 58,673 Purchase of available-for-sale debt securities ​ ( 25,788 ) ​ ( 23,414 ) ​ ( 113,715 ) Redemption of Federal Home Loan Bank of Pittsburgh stock ​ 7,006 ​ 22,634 ​ 11,604 Purchase of Federal Home Loan Bank of Pittsburgh stock ​ ( 6,810 ) ​ ( 23,680 ) ​ ( 16,459 ) Purchase of Federal Reserve Bank stock ​ ​ ( 47 ) ​ ​ ( 6,252 ) ​ ​ 0 Net increase in loans ​ ( 48,697 ) ​ ( 107,356 ) ​ ( 178,203 ) Purchase of bank-owned life insurance ​ 0 ​ ( 30,000 ) ​ 0 Proceeds from bank-owned life insurance ​ 14,290 ​ 363 ​ 0 Purchase of premises and equipment ​ ( 1,906 ) ​ ( 2,265 ) ​ ( 3,288 ) Proceeds from sale of foreclosed assets ​ 293 ​ 267 ​ 647 Other ​ 33 ​ 109 ​ 203 Net Cash Used in Investing Activities ​ ( 20,938 ) ​ ( 53,202 ) ​ ( 234,688 ) CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ ​ ​ Net increase in deposits ​ 79,107 ​ 17,234 ​ 72,689 Net (decrease) increase in short-term borrowings ​ ( 31,386 ) ​ ( 46,188 ) ​ 78,259 Proceeds from long-term borrowings - FHLB advances ​ ​ 59,386 ​ ​ 85,436 ​ ​ 50,000 Repayments of long-term borrowings - FHLB advances ​ ( 32,249 ) ​ ( 9,395 ) ​ ( 15,455 ) Redemption of subordinated debt ​ ​ 0 ​ ​ 0 ​ ​ ( 8,500 ) Sale of treasury stock ​ ​ 0 ​ ​ 0 ​ ​ 160 Purchases of treasury stock ​ ( 629 ) ​ ( 6,784 ) ​ ( 9,349 ) Common dividends paid ​ ( 15,530 ) ​ ( 15,569 ) ​ ( 15,865 ) Net Cash Provided by Financing Activities ​ 58,699 ​ 24,734 ​ 151,939 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ​ 70,796 ​ 5,080 ​ ( 48,150 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ​ 52,778 ​ 47,698 ​ 95,848 CASH AND CASH EQUIVALENTS, END OF PERIOD ​ $ 123,574 ​ $ 52,778 ​ $ 47,698 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: ​ ​ ​ (Decrease) increase in accrued purchase of available-for-sale debt securities ​ $ 0 ​ $ ( 2,000 ) ​ $ 2,000 Assets acquired through foreclosure of real estate loans ​ $ 0 ​ $ 423 ​ $ 51 Leased assets obtained in exchange for new operating lease liabilities ​ $ 187 ​ $ 0 ​ $ 904 Interest paid ​ $ 48,563 ​ $ 31,936 ​ $ 9,497 Income taxes paid ​ $ 4,839 ​ $ 6,383 ​ $ 5,561 ​ The accompanying notes are an integral part of the consolidated financial statements. ​ 44 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION – 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”), as well as 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. NATURE OF OPERATIONS – The Corporation’s principal office is located in Wellsboro, Pennsylvania. The Corporation’s operations are conducted in the Northern tier/Northcentral region of Pennsylvania and Southern tier of New York, Southeastern Pennsylvania (offices in Bucks and Chester Counties) and Southcentral Pennsylvania (offices in York and Lancaster counties). The Corporation provides banking and related services to individual and corporate customers. Lending products include commercial, mortgage and consumer loans, as well as specialized instruments such as commercial letters-of-credit. Deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, Individual Retirement Accounts and certificates of deposit. The Corporation provides wealth management services through its trust department, including administration of trusts and estates, retirement plans, and other employee benefit plans, and investment management services. The Corporation offers a variety of personal and commercial insurance products through C&N Financial Services, LLC. C&N Financial Services, LLC also offers mutual funds, annuities, educational savings accounts and other investment products through registered agents. The Corporation conducts its operations through one reportable segment. All of the Corporation’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Corporation supports the others. See Note 21 Segment Reporting for additional information. The Corporation is subject to competition from other financial institutions. It is also subject to regulation by certain federal and state agencies and undergoes periodic examination by those regulatory authorities. USE OF ESTIMATES – The financial information is presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In preparing consolidated financial statements, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as of the date of the consolidated financial statements. In addition, these estimates and assumptions affect revenues and expenses in the consolidated financial statements and as such, actual results could differ from those estimates. Material estimates that are particularly susceptible to change include the allowance for credit losses. INVESTMENT SECURITIES – Investment securities are accounted for as follows: Available-for-sale debt securities – Available-for-sale debt securities include debt securities not classified as held-to-maturity or trading. Such securities are reported at fair value, with unrealized gains and losses excluded from earnings and reported separately through accumulated other comprehensive loss, net of tax. Premiums on non-amortizing available-for-sale debt securities are amortized using the level yield method to the earliest call date, while discounts on non-amortizing securities are amortized to the maturity date. Premiums and discounts on amortizing securities (mortgage-backed securities) are amortized using the level yield method over the remaining contractual life of the securities, adjusted for actual prepayments. Realized gains and losses on sales of available-for-sale securities are computed on the basis of specific identification of the adjusted cost of each security. Securities within the available-for-sale portfolio may be used as part of the Corporation’s asset and liability management strategy and may be sold in response to changes in interest rate risk, prepayment risk or other factors. A debt security is placed on nonaccrual status at the time any principal or interest payments become over 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. 45 Table of Contents Allowance for Credit Losses- Available-for-Sale Debt Securities – For available-for-sale debt securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Corporation has the intent to sell the security or it is more likely than not that the Corporation will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Corporation evaluates whether the decline in fair value is the result of credit losses or other factors. The Corporation has elected the practical expedient of zero credit loss estimates for securities issued or guaranteed by U.S. Government entities or agencies. In making the credit loss assessment of securities not issued or guaranteed by U.S. Government entities or agencies, the Corporation may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income (loss). Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit losses when management believes an available-for-sale debt security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At December 31, 2024 and 2023, there was no allowance for credit losses related to the available-for-sale portfolio. Accrued interest receivable on available-for-sale debt securities totaled $ 1,964,000 and $ 2,018,000 at December 31, 2024 and 2023 and was excluded from the estimate of credit losses. Marketable equity security – The marketable equity security is carried at fair value with unrealized gains and losses included in other noninterest income in the consolidated statements of income. Restricted equity securities – Restricted equity securities consist primarily of Federal Home Loan Bank of Pittsburgh and Federal Reserve Bank of Philadelphia stock, and are carried at cost and evaluated for impairment. Holdings of restricted equity securities are included in other assets in the consolidated balance sheets, and dividends received on restricted securities are included in other income in the consolidated statements of income. DERIVATIVES – The Corporation is a party to derivative financial instruments. These financial instruments consist of interest rate swap agreements and risk participation agreements (RPAs) which contain master netting and collateral provisions designed to protect the party at risk. Interest rate swaps with commercial banking customers were executed to enable the commercial banking customers to effectively exchange 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. Changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. Interest differentials paid or received under the swap agreements are reflected as adjustments to interest and fees on loans in the consolidated statements of income. The fair value of interest rate derivatives is included in the balance of other assets and other liabilities in the consolidated balance sheets. 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.” The fair value of the RPA In is included in accrued interest and other liabilities in the consolidated balance sheets. 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.” The fair value of the RPA Out is included in other assets in the consolidated balance sheets. 46 Table of Contents Fees paid and received associated with RPAs, as well as changes in fair value of the related derivatives, are included in other noninterest income in the consolidated statements of income. LOANS HELD FOR SALE – Mortgage loans held for sale which are included in other assets in the consolidated balance sheets, are reported at the lower of cost or fair value, determined in the aggregate. LOANS RECEIVABLE – Loans originated by the Corporation which management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at unpaid principal balances, less the allowance for credit losses and net deferred loan fees. Interest income is accrued on the unpaid principal balance. Loan origination and commitment fees, as well as certain direct origination costs, are deferred and amortized as a yield adjustment over the lives of the related loans using the interest method. Loans are placed on nonaccrual status for all classes of loans when, in the opinion of management, collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest payments received on loans for which the risk of loss is greater than remote are applied as a reduction of the loan principal balance. Interest income on other nonaccrual loans is recognized only to the extent of interest payments received. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months ) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of loans receivable is determined based on contractual due dates for loan payments. Also, the amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status. Loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. PURCHASED LOANS – The Corporation purchased loans in business combinations, some of which had, at the acquisition dates, shown evidence of credit deterioration since origination. The purchased loans that showed evidence of credit impairment were designated as the purchased credit impaired (“PCI”) loans and were recorded at fair value, with no carryover of the allowance for loan losses. On January 1, 2023, the Corporation adopted Accounting Standard Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326) which replaced the prior accounting for PCI loans and required purchase credit deteriorated (“PCD”) loans receive an initial allowance at the acquisition date that represents an adjustment to the amortized cost basis of the loan, with no impact to earnings. In accordance with ASC 326, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2023, the amortized cost basis of PCD assets was adjusted to establish the allowance for credit losses. Essentially all of the PCD loans were reported as nonaccrual loans at December 31, 2024 and 2023. ALLOWANCE FOR CREDIT LOSSES ON LOANS – As mentioned above, on January 1, 2023, the Corporation adopted ASC 326. This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. Effective January 1, 2023, the Corporation adopted ASC 326 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the consolidated balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. ​ Accrued interest receivable on loans totaled $ 6,680,000 and $ 7,099,000 at December 31, 2024 and 2023 and was excluded from the estimate of credit losses. ​ The allowance for credit losses (“ACL”) includes two primary components: (i) an allowance established on loans which share similar risk characteristics collectively evaluated for credit losses (collective basis), 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 (individual basis). ​ 47 Table of Contents Evaluation of Expected Losses on Individual Loans ​ Loans evaluated on an individual basis are identified based on a detailed assessment of certain larger loan relationships, and their related credit risk ratings, by a management committee referred to as the Watch List Committee. The scope of loans discussed by the Watch List Committee each quarter includes all commercial loan relationships greater than $ 200,000 and any residential mortgage or consumer loans of $ 400,000 or more for which there is at least one extension of credit graded Special Mention, Substandard or Doubtful. ​ Based on the results of the Watch List analysis, certain loans are evaluated individually for credit loss . The allowance is determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Corporation will create a specific allocation in the allowance for credit losses for the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan. Additionally, all PCD loans are evaluated individually for credit loss. ​ Collective Evaluation of Expected Losses – Pool Basis ​ The Corporation measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Corporation has identified the following portfolio segments and calculates the allowance for credit losses for each using the weighted-average remaining maturity (“WARM”) method: ​ ​ Commercial real estate - nonowner occupied, further broken down into the following classes: Non-owner occupied Multi-family (5 or more) residential 1-4 Family - commercial purpose Commercial real estate - owner occupied All other commercial loans, further broken down into the following classes: Commercial and industrial Commercial lines of credit Political subdivisions Commercial construction and land Other commercial loans Residential mortgage loans, further broken down into the following classes: 1-4 Family – residential 1-4 Family residential construction Consumer loans, further broken down into the following classes: Consumer lines of credit (including HELOCs) All other consumer ​ In determining the pools for collective evaluation, management uses a combination of loan purpose, collateral and payment type (for example, lines of credit vs. amortizing). The pools identified are similar to the loan classes that were used in the Corporation’s financial reporting for several years prior to CECL adoption, with several exceptions including the following which are of the most significant: ​ ● Commercial real estate secured loans are broken out between non-owner occupied and owner-occupied ● Loans secured by 1-4 family residential mortgages are broken out between consumer-purpose and commercial-purpose ● Commercial lines of credit are broken out as an individual category ​ Each of these changes was made to better sort loans into pools with similar risk and cash flow characteristics. ​ 48 Table of Contents A summary of risk characteristics by portfolio segment is as follows: Commercial real estate - non-owner occupied- Commercial real estate properties primarily include retail buildings/shopping centers, hotels, office buildings and mixed use properties. Increases in vacancy rates, interest rates or other changes in general economic conditions can have an impact on the borrower’s ability to repay the loan. Commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions. This segment also includes commercial purpose loans collateralized by multi-family (5 or more) and 1-4 Family residential properties. Multi-family loans and commercial loans collateralized by 1-4 Family residences are expected to be repaid from the cash flows of the underlying properties so the collective amount of rents must be sufficient to cover all operating expenses, property management and maintenance, taxes and debt service. Increases in vacancy rates, interest rates or other changes in general economic conditions can have an impact on the borrower’s ability to repay the loan. Commercial real estate - owner-occupied - Owner-occupied loans are typically repaid first by the cash flows generated by the borrower’s business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and positive cash flow. Factors that may influence a borrower's ability to repay the loan include demand for the business’ products or services, the quality and depth of management, the degree of competition, regulatory changes, and general economic conditions. All other commercial loans- All other commercial loans include commercial and industrial loans, commercial lines of credit, loans to political subdivisions, commercial construction and land loans and other commercial loans. The primary risk characteristics for commercial and industrial loans are specific to the underlying business and its ability to generate sustainable profitability and positive cash flow. Factors that may influence a borrower's ability to repay the loan include demand for the business’ products or services, the quality and depth of management, the degree of competition, regulatory changes, and general economic conditions. The Corporation’s ability to foreclose and realize sufficient value from business assets securing these loans is often uncertain. To mitigate the risk characteristics of commercial and industrial loans, commercial real estate may be included as a secondary source of collateral. The Corporation will often require more frequent reporting requirements from the borrower in order to better monitor its business performance. The Corporation also originates various types of loans made directly to political subdivisions. These loans are repaid through general cash flows or through specific revenue streams. The primary risk characteristics associated with political subdivisions are the municipalities’ ability to manage cash flow and balance the fiscal budget, fixed asset and infrastructure requirements. Additional risks include changes in demographics, as well as social and political conditions. The primary risk characteristics for commercial construction and land loans are specific to the uncertainty on whether the construction will be completed according to the specifications and schedules. Factors that may influence the completion of construction may be customer specific, such as the quality and depth of property management, or related to changes in general economic conditions. Residential mortgage loans - Residential mortgage loans include 1-4 Family residential mortgage loans and 1-4 Family construction mortgage loans. These loans are secured by first or second liens on a primary residence or investment property. The primary risk characteristics associated with residential mortgage loans typically involve major changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as medical expenses, catastrophic events, divorce or death. Residential mortgage loans that have adjustable rates could expose the borrower to higher payments in a rising rate environment. Real estate values could decrease and cause the value of the underlying property to fall below the loan amount, creating additional potential loss exposure for the Corporation. Residential construction loans are exposed to uncertainty on whether the construction will be completed according to the specifications and schedules. Factors that may influence the completion of construction may be customer specific or related to changes in general economic conditions. Consumer loans - Consumer loans include consumer lines of credit (including HELOCs) and all other consumer loans. Risks associated with HELOCs are similar to those of other residential mortgage loans. Other consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. The primary risk characteristics associated with HELOCs and other consumer loans typically involve major changes to the borrower, including unemployment or other loss of income, unexpected significant expenses, such as for major medical expenses, catastrophic events, divorce or death. ​ 49 Table of Contents Estimation Method - WARM (Weighted-Average Remaining Maturity Method) ​ In applying the WARM method, for each pool identified above, the Corporation determines the annual net charge-offs as a percentage of average total loan balances (net charge-off percentage). For each loan pool, the average annualized net charge-off percentage is multiplied by the estimated weighted-average remaining average life of the loans to calculate the loss rate. ​ The calculation of the estimated weighted-average remaining life of each loan pool is based on instrument-level data, with contractual principal payments adjusted for the estimated impact of prepayments. Commercial lines of credit and other revolving credit facilities are generally assumed to be repaid after 1 year . The estimated weighted-average remaining life of the entire portfolio was calculated to be 4.04 years at December 31, 2024, 4.48 years at December 31, 2023 and 4.36 years at January 1, 2023. ​ Qualitative Factors ​ The allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are deemed likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments generally increase allowance levels and include adjustments for factors deemed relevant, including: the nature and volume of portfolio changes, including loan portfolio growth; concentrations of credit based on loan type (such as non-owner occupied commercial real estate) or industry; the volume and severity of past due, nonaccrual or adversely classified loans; trends in real estate or other collateral values; lending policies and procedures, including changes in underwriting and collections practices; credit review function; lending, credit and other relevant management experience and risk tolerance; external factors and economic conditions not already captured. ​ Economic Forecast ​ ASC 326 requires management to consider forward-looking information that is both reasonable and supportable and relevant to the collectability of cash flows. Reasonable and supportable forecasts may extend over the entire contractual term of a financial asset or a period shorter than the contractual term. In that regard, management has selected a forecast period of 2 years , which is shorter than the estimated weighted-average remaining life of the loan portfolio. ​ The Corporation calculates an additional expected credit loss based the high correlation between past loss experience and the U.S national unemployment rate. This additional credit loss is added to the allowance calculation, conceptually for the first 2 years of the weighted-average remaining life of the portfolio after which time the credit loss for each pool is determined based on the WARM historical loss rate as adjusted for qualitative factors. ​ ALLOWANCE FOR CREDIT LOSSES ON OFF-BALANCE SHEET EXPOSURES Financial instruments include off-balance sheet credit instruments, such as commitments to make loans, commercial letters of credit and credit enhancement obligations related to residential mortgage loans sold with recourse. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Corporation records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Corporation’s consolidated statements of income. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each consolidated balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for off-balance sheet exposures is included in accrued interest and other liabilities in the Corporation’s consolidated balance sheets and the related credit expense is recorded in the provision for credit losses in the consolidated statements of income. BANK PREMISES AND EQUIPMENT – Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Repair and maintenance expenditures which extend the useful lives of assets are capitalized, and other repair and maintenance expenditures are expensed as incurred. Depreciation and amortization expense is computed using the straight-line method with useful lives ranging from 3 to 40 years for building and improvements and 3 to 7 years for furniture and equipment. 50 Table of Contents IMPAIRMENT OF LONG-LIVED ASSETS – The Corporation reviews long-lived assets, such as premises and equipment and intangibles, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. These changes in circumstances may include a significant decrease in the market value of an asset or the manner in which an asset is used. If there is an indication the carrying value of an asset may not be recoverable, future undiscounted cash flows expected to result from use of the asset are estimated. If the sum of the expected cash flows is less than the carrying value of the asset, a loss is recognized for the difference between the carrying value and fair market value of the asset. FORECLOSED ASSETS HELD FOR SALE – Foreclosed assets held for sale consist of real estate acquired by foreclosure and are initially recorded at fair value, less estimated selling costs, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. GOODWILL – Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired. Goodwill is tested at least annually at December 31 for impairment, or more often if events or circumstances indicate there may be impairment. The Corporation has performed a qualitative assessment for impairment at December 31, 2024 and 2023. CORE DEPOSIT INTANGIBLES – Amortization of core deposit intangibles is calculated using an accelerated method. In determining amortization using the accelerated method for any given period, the amount of expected cash flows for that period that were used in determining the acquisition-date fair value is divided by the total amount of expected cash flows over the life of the asset. That percentage is multiplied by the initial carrying amount of the asset to arrive at amortization expense for that period. If the Corporation’s cash flow patterns differ significantly from the initial estimates, the amortization schedule would be adjusted prospectively. SERVICING RIGHTS – When mortgage loans are sold with servicing retained by the Corporation, the servicing rights are initially recorded at fair value as an asset with the consolidated statement of income effect recorded in net gains on sales of loans. Under the fair value method, the valuation of servicing rights is adjusted quarterly, with changes in fair value included in loan servicing fees, net, in the consolidated statements of income. Significant inputs to the valuation include expected net servicing income to be received, the expected life of the underlying loans and the discount rate. The servicing rights asset is included in other assets in the consolidated balance sheets. INCOME TAXES – Income tax provision is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases given the provisions of the enacted tax laws. Deferred tax assets are reduced, if necessary, by the amount of such benefits that are not expected to be realized based upon available evidence. Tax benefits from investments in limited partnerships that have qualified for federal low-income tax credits are recognized as a reduction in the provision for income tax over the term of the investment using the effective yield method. The Corporation includes income tax penalties in the provision for income tax. The Corporation has no accrued interest related to unrecognized tax benefits. STOCK-BASED COMPENSATION –Stock-based compensation is accounted for under the fair value method as required by U.S. GAAP. The fair value of restricted stock is based on the current market price on the date of grant. The expense associated with stock-based compensation is recognized over the vesting period of each individual arrangement. TREASURY STOCK – Common stock held in treasury is accounted for using the cost method, which treats stock held in treasury as a reduction to total stockholders’ equity. The shares may be purchased in the open market or in privately negotiated transactions from time to time depending upon market conditions and other factors . OFF-BALANCE SHEET FINANCIAL INSTRUMENTS – In the ordinary course of business, the Corporation has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. CASH FLOWS – The Corporation utilizes the net reporting of cash receipts and cash payments for certain deposit and lending activities. Cash equivalents include federal funds sold and all cash and amounts due from depository institutions and interest-bearing deposits in other banks with original maturities of three months or less. 51 Table of Contents REVENUE RECOGNITION – The Corporation generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in the determination of the amount and timing of revenue from contracts with customers. Additional disclosures related to the Corporation’s largest sources of noninterest income within the consolidated statements of income from contracts with customers that are subject to ASC Topic 606 are as follows: Trust revenue – C&N Bank’s trust department provides a wide range of financial services, including wealth management services for individuals, businesses and retirement funds, administration of 401(k) and other retirement plans, retirement planning, estate planning and estate settlement services. Trust clients are located primarily within the Corporation’s geographic markets. Assets held in a fiduciary capacity by C&N Bank are not the Corporation’s assets and are therefore not included in the consolidated balance sheets. The fair value of trust assets under administration was approximately $ 1,347,853,000 at December 31, 2024 and $ 1,188,082,000 at December 31, 2023. Trust revenue is included within noninterest income in the consolidated statements of income. The majority (approximately 81 %, based on annual 2024 results) of trust revenue is earned and collected monthly, with the amount determined based on a percentage of the fair value of the trust assets under administration. Wealth management fees are contractually agreed with each customer, and fee levels vary based mainly on the size of assets under administration. The services provided under such a contract represent a single performance obligation under ASC 606 because it embodies a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. None of the contracts with trust customers provide for incentive-based fees. In addition to wealth management fees, trust revenue includes fees for provision of services, including employee benefit plan administration, tax return preparation and estate planning and settlement. Fees for such services are billed based on contractual arrangements or established fee schedules and are typically billed upon completion of providing such services. The costs of acquiring trust customers are incremental and recognized within noninterest expense in the consolidated statements of income. Brokerage and insurance revenue- Investment commissions are earned through the sales of non-deposit investment products to customers of the Corporation. The sales are conducted through a third-party broker-dealer. When the commissions are received and recorded into income on the Corporation’s consolidated income statement, there is no contingent portion that may need to be refunded back to the broker-dealer. Service charges on deposit accounts – Deposits are included as liabilities in the consolidated balance sheets. Service charges on deposit accounts include: overdraft fees, which are charged when customers overdraw their accounts beyond available funds; automated teller machine (ATM) fees charged for withdrawals by deposit customers from other financial institutions’ ATMs; and a variety of other monthly or transactional fees for services provided to retail and business customers, mainly associated with checking accounts. All deposit liabilities are considered to have one-day terms and therefore related fees are recognized in income at the time when the services are provided to the customers. Incremental costs of obtaining deposit contracts are not significant and are recognized as expense when incurred within noninterest expense in the consolidated statements of income. Interchange revenue from debit card transactions – The Corporation issues debit cards to consumer and business customers with checking, savings or money market deposit accounts. Debit card and ATM transactions are processed via electronic systems that involve several parties. The Corporation’s debit card and ATM transaction processing is executed via contractual arrangements with payment processing networks, a processor and a settlement bank. As described above, all deposit liabilities are considered to have one-day terms and therefore interchange revenue from customers’ use of their debit cards to initiate transactions are recognized in income at the time when the services are provided and related fees received in the Corporation’s deposit account with the settlement bank. Incremental costs associated with ATM and interchange processing are recognized as expense when incurred within noninterest expense in the consolidated statements of income. Bank-Owned Life Insurance- The Corporation has purchased bank-owned life insurance policies (“BOLI”) and is the beneficiary of these policies that insure the lives of certain of its current and former officers. The Corporation recognizes the cash surrender value under the insurance policies as an asset in the consolidated balance sheet. Changes in the cash surrender value are recorded in non-interest income in the consolidated statements of income. Transfer of Financial Assets - Transfers of financials assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets. ​ 52 Table of Contents 2. RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) issues Accounting Standard Updates (ASUs) to communicate changes to the FASB Accounting Standard 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 financial statements issued in the foreseeable future. On January 1, 2023, the Corporation adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The Corporation adopted ASC 326 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The following table illustrates the impact on the allowance for credit losses from the adoption of ASC 326: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Reported ​ ​ ​ ​ Under ​ Pre-ASC 326 ​ Impact of ​ ​ ASC 326 ​ Adoption ​ ASC 326 (In Thousands) ​ January 1, 2023 ​ December 31, 2022 ​ Adoption Loans receivable ​ $ 1,740,846 ​ $ 1,740,040 ​ $ 806 Allowance for credit losses on loans ​ ​ 18,719 ​ ​ 16,615 ​ ​ 2,104 Allowance for credit losses on off-balance sheet exposures (included in accrued interest and other liabilities) ​ ​ 1,218 ​ ​ 425 ​ ​ 793 Deferred tax asset, net ​ ​ 21,323 ​ ​ 20,884 ​ ​ 439 Retained earnings ​ ​ 150,091 ​ ​ 151,743 ​ ​ ( 1,652 ) ​ In November of 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires annual and interim disclosure of significant segment expenses and other segment items. The amendments in this ASU became effective for the Corporation beginning with this Annual Report on Form 10-K for the year ended December 31, 2024, and we have adopted using the retrospective transition method. See Note 21 for additional information on the adoption of ASU 2023-07. Recently Issued but Not Yet Effective Accounting Pronouncements In December 2023 , the FASB issued ASU 2023 - 09 , Income Taxes (Topic 740): Improvements to Income Tax Disclosures which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. T he ASU may be adopted on a prospective or retrospective basis and early adoption is permitted. The Corporation is currently evaluating the impact the new guidance will have on disclosures related to income taxes. ​ 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. ​ 53 Table of Contents 3. PER SHARE DATA Basic 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. Diluted earnings per common share are calculated under the more dilutive of either the treasury method or the two-class method. Diluted earnings per common share is computed using weighted-average common shares outstanding, plus weighted-average common shares available from the exercise of all dilutive stock options, less the number of shares that could be repurchased with the proceeds of stock option exercises based on the average share price of the Corporation’s common stock during the period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands, Except Share and Per Share Data) Years Ended ​ ​ December 31, ​ December 31, ​ December 31, ​ 2024 ​ 2023 2022 Basic ​ ​ ​ ​ Net income ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 Less: Dividends and undistributed earnings allocated to participating securities ​ ( 211 ) ​ ( 186 ) ​ ( 237 ) Net income attributable to common shares ​ $ 25,747 ​ $ 23,962 ​ $ 26,381 Basic weighted-average common shares outstanding ​ 15,262,504 ​ 15,241,859 ​ 15,455,432 Basic earnings per common share (a) ​ $ 1.69 ​ $ 1.57 ​ $ 1.71 Diluted ​ ​ ​ Net income attributable to common shares ​ $ 25,747 ​ $ 23,962 ​ $ 26,381 Basic weighted-average common shares outstanding ​ 15,262,504 ​ 15,241,859 ​ 15,455,432 Dilutive effect of potential common stock arising from stock options ​ 0 ​ 0 ​ 3,099 Diluted weighted-average common shares outstanding ​ 15,262,504 ​ 15,241,859 ​ 15,458,531 Diluted earnings per common share (a) ​ $ 1.69 ​ $ 1.57 ​ $ 1.71 Weighted-average nonvested restricted shares outstanding ​ 125,254 ​ 118,122 ​ 138,617 (a) Basic and diluted earnings per share under the two-class method are determined on net income reported on the consolidated income statement less earnings allocated to nonvested restricted shares with nonforfeitable dividends (participating securities). Anti-dilutive stock options are excluded from net income per share calculations. There were no anti-dilutive instruments in 2024 or 2022. Weighted-average common shares available from anti-dilutive instruments totaled 8,963 shares in 2023. ​ 54 Table of Contents 4. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss) 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 2024 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 1,670 ​ $ 124 ​ $ 1,794 Reclassification adjustment for losses realized in income ​ ​ 0 ​ ​ 0 ​ ​ 0 Other comprehensive income from available-for-sale debt securities ​ ​ 1,670 ​ ​ 124 ​ ​ 1,794 Unfunded pension and postretirement obligations: ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ​ 405 ​ ​ ( 87 ) ​ ​ 318 Amortization of prior service cost and net actuarial loss and curtailment gain included in net periodic benefit cost ​ ( 552 ) ​ 116 ​ ( 436 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 147 ) ​ ​ 29 ​ ​ ( 118 ) Total other comprehensive income ​ $ 1,523 ​ $ 153 ​ $ 1,676 2023 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains on available-for-sale debt securities ​ $ 11,512 ​ $ ( 2,418 ) ​ $ 9,094 Reclassification adjustment for losses realized in income ​ ​ 3,036 ​ ​ ( 638 ) ​ ​ 2,398 Other comprehensive income from available-for-sale debt securities ​ ​ 14,548 ​ ​ ( 3,056 ) ​ ​ 11,492 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 loss included in net periodic benefit cost ​ ( 56 ) ​ 12 ​ ( 44 ) Other comprehensive loss on unfunded retirement obligations ​ ​ ( 65 ) ​ ​ 14 ​ ​ ( 51 ) Total other comprehensive income ​ $ 14,483 ​ $ ( 3,042 ) ​ $ 11,441 2022 ​ ​ ​ Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding losses on available-for-sale debt securities ​ $ ( 69,828 ) ​ $ 14,665 ​ $ ( 55,163 ) Reclassification adjustment for (gains) realized in income ​ ​ ( 20 ) ​ ​ 4 ​ ​ ( 16 ) Other comprehensive loss from available-for-sale debt securities ​ ​ ( 69,848 ) ​ ​ 14,669 ​ ​ ( 55,179 ) Unfunded pension and postretirement obligations: ​ ​ ​ Changes from plan amendments and actuarial gains and losses ​ ​ 389 ​ ​ ( 81 ) ​ ​ 308 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost ​ ( 42 ) ​ 9 ​ ( 33 ) Other comprehensive income on unfunded retirement obligations ​ ​ 347 ​ ​ ( 72 ) ​ ​ 275 Total other comprehensive loss ​ $ ( 69,501 ) ​ $ 14,597 ​ $ ( 54,904 ) ​ Items reclassified out of each component of accumulated other comprehensive loss are as follows: ​ ​ ​ ​ ​ ​ Affected Line Item in the Description Consolidated Statements of Income Reclassification adjustment for losses (gains) realized in income (before-tax) ​ Realized (losses) gains on available-for-sale debt securities, net Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (before-tax) Other noninterest expense Income tax effect ​ Income tax provision ​ 55 Table of Contents Changes in the components of accumulated other comprehensive loss, included in stockholders’ equity, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ ​ Accumulated ​ ​ Unrealized ​ Unfunded ​ Other ​ (Losses) Gains Retirement Comprehensive ​ on Securities Obligations Loss 2024 ​ ​ ​ Balance, beginning of period ​ $ ( 38,878 ) ​ $ 441 ​ $ ( 38,437 ) Other comprehensive income (loss) during year ended December 31, 2024 ​ 1,794 ​ ​ ( 118 ) ​ 1,676 Balance, end of period ​ $ ( 37,084 ) ​ $ 323 ​ $ ( 36,761 ) 2023 ​ ​ ​ Balance, beginning of period ​ $ ( 50,370 ) ​ $ 492 ​ $ ( 49,878 ) Other comprehensive income (loss) during year ended December 31, 2023 ​ 11,492 ​ ( 51 ) ​ 11,441 Balance, end of period ​ $ ( 38,878 ) ​ $ 441 ​ $ ( 38,437 ) 2022 ​ ​ ​ Balance, beginning of period ​ $ 4,809 ​ $ 217 ​ $ 5,026 Other comprehensive (loss) income during year ended December 31, 2022 ​ ( 55,179 ) ​ 275 ​ ( 54,904 ) Balance, end of period ​ $ ( 50,370 ) ​ $ 492 ​ $ ( 49,878 ) ​ ​ ​ 5. CASH AND DUE FROM BANKS Cash and due from banks at December 31, 2024 and 2023 include the following: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, December 31, ​ ​ 2024 ​ 2023 Cash and cash equivalents ​ $ 123,574 ​ $ 52,778 Certificates of deposit ​ 2,600 ​ 4,100 Total cash and due from banks ​ $ 126,174 ​ $ 56,878 ​ 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. ​ ​ 56 Table of Contents 6. SECURITIES Amortized cost and fair value of available-for-sale debt securities at December 31, 2024 and 2023 are summarized as follows. No allowance for credit losses was recorded at December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, 2024 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ Cost Gains Losses Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 8,067 ​ $ 0 ​ $ ( 949 ) ​ $ 7,118 Obligations of U.S. Government agencies ​ ​ 10,154 ​ ​ 0 ​ ​ ( 1,129 ) ​ ​ 9,025 Bank holding company debt securities ​ ​ 28,958 ​ ​ 0 ​ ​ ( 3,712 ) ​ ​ 25,246 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 111,995 ​ ​ 238 ​ ( 10,931 ) ​ 101,302 Taxable ​ 51,147 ​ 0 ​ ( 8,641 ) ​ 42,506 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 104,378 ​ 6 ​ ( 9,970 ) ​ 94,414 Residential collateralized mortgage obligations ​ 53,389 ​ 10 ​ ( 3,505 ) ​ 49,894 Commercial mortgage-backed securities ​ 73,470 ​ 0 ​ ( 8,969 ) ​ 64,501 Private label commercial mortgage-backed securities ​ ​ 8,365 ​ 9 ​ 0 ​ 8,374 Total available-for-sale debt securities ​ $ 449,923 ​ $ 263 ​ $ ( 47,806 ) ​ $ 402,380 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, 2023 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ ​ ​ ​ Amortized Holding Holding Fair ​ Cost Gains Losses Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 12,325 ​ $ 0 ​ $ ( 1,035 ) ​ $ 11,290 Obligations of U.S. Government agencies ​ ​ 11,119 ​ ​ 0 ​ ​ ( 1,173 ) ​ ​ 9,946 Bank holding company debt securities ​ ​ 28,952 ​ ​ 0 ​ ​ ( 5,452 ) ​ ​ 23,500 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 113,464 ​ ​ 311 ​ ( 9,576 ) ​ 104,199 Taxable ​ 58,720 ​ 0 ​ ( 8,609 ) ​ 50,111 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 105,549 ​ 40 ​ ( 10,184 ) ​ 95,405 Residential collateralized mortgage obligations ​ 50,212 ​ 0 ​ ( 3,750 ) ​ 46,462 Commercial mortgage-backed securities ​ 76,412 ​ 0 ​ ( 9,730 ) ​ 66,682 Private label commercial mortgage-backed securities ​ ​ 8,215 ​ 0 ​ ( 55 ) ​ 8,160 Total available-for-sale debt securities ​ $ 464,968 ​ $ 351 ​ $ ( 49,564 ) ​ $ 415,755 ​ 57 Table of Contents The following table presents gross unrealized losses and fair value of available-for-sale debt securities aggregated by length of time that individual securities have been in a continuous unrealized loss position at December 31, 2024 and 2023 for which an allowance for credit losses has not been recorded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 Less Than 12 Months 12 Months or More Total (In Thousands) ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Value Losses Value Losses Value Losses Obligations of the U.S. Treasury ​ $ 0 ​ $ 0 ​ $ 7,118 ​ ​ ( 949 ) ​ $ 7,118 ​ $ ( 949 ) Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 0 ​ ​ 9,025 ​ ​ ( 1,129 ) ​ ​ 9,025 ​ ​ ( 1,129 ) Bank holding company debt securities ​ ​ 0 ​ ​ 0 ​ ​ 25,246 ​ ​ ( 3,712 ) ​ ​ 25,246 ​ ​ ( 3,712 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 6,581 ​ ​ ( 58 ) ​ ​ 91,316 ​ ​ ( 10,873 ) ​ ​ 97,897 ​ ​ ( 10,931 ) Taxable ​ 0 ​ ​ 0 ​ ​ 42,506 ​ ​ ( 8,641 ) ​ ​ 42,506 ​ ​ ( 8,641 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 22,777 ​ ​ ( 375 ) ​ ​ 69,282 ​ ​ ( 9,595 ) ​ ​ 92,059 ​ ​ ( 9,970 ) Residential collateralized mortgage obligations ​ 19,586 ​ ​ ( 156 ) ​ ​ 27,157 ​ ​ ( 3,349 ) ​ ​ 46,743 ​ ​ ( 3,505 ) Commercial mortgage-backed securities ​ 2,314 ​ ​ ( 38 ) ​ ​ 62,187 ​ ​ ( 8,931 ) ​ ​ 64,501 ​ ​ ( 8,969 ) Total ​ $ 51,258 ​ $ ( 627 ) ​ $ 333,837 ​ $ ( 47,179 ) ​ $ 385,095 ​ $ ( 47,806 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 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 ​ $ 11,290 ​ $ ( 1,035 ) ​ $ 11,290 ​ $ ( 1,035 ) Obligations of U.S. Government agencies ​ ​ 1,595 ​ ​ ( 9 ) ​ ​ 8,351 ​ ​ ( 1,164 ) ​ ​ 9,946 ​ ​ ( 1,173 ) Bank holding company debt securities ​ ​ 0 ​ ​ 0 ​ ​ 23,500 ​ ​ ( 5,452 ) ​ ​ 23,500 ​ ​ ( 5,452 ) Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ ​ 3,257 ​ ​ ( 24 ) ​ ​ 96,758 ​ ​ ( 9,552 ) ​ ​ 100,015 ​ ​ ( 9,576 ) Taxable ​ 0 ​ ​ 0 ​ 49,961 ​ ​ ( 8,609 ) ​ 49,961 ​ ( 8,609 ) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ 3,334 ​ ​ ( 27 ) ​ ​ 84,297 ​ ​ ( 10,157 ) ​ ​ 87,631 ​ ​ ( 10,184 ) Residential collateralized mortgage obligations ​ 3,588 ​ ​ ( 2 ) ​ 32,808 ​ ​ ( 3,748 ) ​ 36,396 ​ ( 3,750 ) Commercial mortgage-backed securities ​ 2,327 ​ ​ ( 16 ) ​ 64,355 ​ ​ ( 9,714 ) ​ 66,682 ​ ( 9,730 ) Private label commercial mortgage-backed securities ​ ​ 8,160 ​ ​ ( 55 ) ​ ​ 0 ​ ​ 0 ​ ​ 8,160 ​ ​ ( 55 ) Total ​ $ 22,261 ​ $ ( 133 ) ​ $ 371,320 ​ $ ( 49,431 ) ​ $ 393,581 ​ $ ( 49,564 ) ​ As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $ 47,806,000 at December 31, 2024 and $ 49,564,000 at December 31, 2023. At December 31, 2024, the Corporation does 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 significant increases in market interest rates that occurred subsequent to the purchase of most of the securities. At December 31, 2024 and December 31, 2023, management performed an assessment for 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 December 31, 2024 and 2023, all of the Corporation’s holdings of bank holding company debt securities, obligations of states and political subdivisions and private label commercial mortgage-backed securities 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 December 31, 2024 and 2023. 58 Table of Contents Gross realized gains and losses from available-for-sale securities and the related income tax provision were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ 2024 ​ 2023 ​ 2022 Gross realized gains from sales ​ $ 0 ​ $ 89 ​ $ 48 Gross realized losses from sales ​ 0 ​ ( 3,125 ) ​ ( 28 ) Net realized (losses) gains ​ $ 0 ​ $ ( 3,036 ) ​ $ 20 Income tax provision related to net realized (losses) gains ​ $ 0 ​ $ ( 638 ) ​ $ 4 ​ The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of December 31, 2024. 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) ​ December 31, 2024 ​ ​ Amortized ​ Fair ​ Cost Value Due in one year or less ​ $ 5,296 ​ $ 5,252 Due from one year through five years ​ 33,440 ​ 31,113 Due from five years through ten years ​ 78,665 ​ 70,174 Due after ten years ​ 92,920 ​ 78,658 Sub-total ​ 210,321 ​ 185,197 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ Residential pass-through securities ​ 104,378 ​ 94,414 Residential collateralized mortgage obligations ​ 53,389 ​ 49,894 Commercial mortgage-backed securities ​ 73,470 ​ 64,501 Private label commercial mortgage-backed securities ​ ​ 8,365 ​ ​ 8,374 Total ​ $ 449,923 ​ $ 402,380 ​ The Corporation’s mortgage-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 and collateralized mortgage obligations are shown in one period. Investment securities carried at $ 190,949,000 at December 31, 2024 and $ 232,437,000 at December 31, 2023 were pledged as collateral for public deposits, trusts and certain other deposits, as provided by law, to secure uninsured deposits totaling $ 144,066,000 at December 31, 2024 and $ 136,494,000 at December 31, 2023. See Note 11 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 $ 15,018,000 at December 31, 2024 and $ 15,214,000 at December 31, 2023. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at December 31, 2024 and 2023. 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. In July 2023, C&N Bank became a member of the Federal Reserve System. As a member, C&N Bank is required to purchase and maintain stock in the Federal Reserve Bank of Philadelphia. There is no active market for Federal Reserve Bank stock, and it must ordinarily be redeemed by the Federal Reserve Bank of Philadelphia in order to be liquidated. C&N Bank’s investment in Federal Reserve Bank stock, included in other assets in the consolidated balance sheets, was $ 6,299,000 at December 31, 2024 and $ 6,252,000 at December 31, 2023. 59 Table of Contents The Corporation’s marketable equity security, with a carrying value of $ 863,000 at December 31, 2024 and $ 871,000 at December 31, 2023 consisted exclusively of one mutual fund. There was an unrealized loss of $ 137,000 on the mutual fund at December 31, 2024 and $ 129,000 at December 31, 2023. 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 $ 8,000 in 2024, a gain of $ 12,000 in 2023 and a loss of $ 112,000 in 2022. There were no sales of equity securities in 2024, 2023 and 2022. ​ ​ 7. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans receivable at December 31, 2024 and 2023 are summarized as follows: ​ Summary of Loans by Type (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ 2024 ​ 2023 Commercial real estate - non-owner occupied ​ $ 739,565 ​ $ 737,342 Commercial real estate - owner occupied ​ ​ 261,071 ​ ​ 237,246 All other commercial loans ​ ​ 423,277 ​ ​ 399,693 Residential mortgage loans ​ ​ 408,009 ​ ​ 413,714 Consumer loans ​ ​ 63,926 ​ ​ 60,144 Total ​ ​ 1,895,848 ​ ​ 1,848,139 Less: allowance for credit losses on loans ​ ​ ( 20,035 ) ​ ​ ( 19,208 ) Loans, net ​ $ 1,875,813 ​ $ 1,828,931 ​ In the table above, outstanding loan balances are presented net of deferred loan origination fees of $ 4,136,000 at December 31, 2024 and $ 4,459,000 at December 31, 2023. 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 table presents an analysis of past due loans as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, 2024 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 266 ​ $ 0 ​ $ 7,370 ​ $ 731,929 ​ $ 739,565 Commercial real estate - owner occupied ​ 0 ​ 62 ​ 1,725 ​ 259,284 ​ 261,071 All other commercial loans ​ ​ 296 ​ ​ 0 ​ ​ 10,006 ​ ​ 412,975 ​ ​ 423,277 Residential mortgage loans ​ ​ 4,934 ​ ​ 0 ​ ​ 4,310 ​ ​ 398,765 ​ ​ 408,009 Consumer loans ​ 162 ​ 57 ​ 431 ​ 63,276 ​ 63,926 Total ​ $ 5,658 ​ $ 119 ​ $ 23,842 ​ $ 1,866,229 ​ $ 1,895,848 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, 2023 ​ ​ Past Due ​ Past Due ​ ​ ​ ​ ​ ​ ​ ​ ​ 30-89 ​ 90+ Days ​ Nonaccrual ​ Current ​ Total ​ ​ Days ​ Still Accruing ​ Loans ​ Loans ​ Loans Commercial real estate - non-owner occupied ​ $ 2,215 ​ $ 126 ​ $ 8,412 ​ $ 726,589 ​ $ 737,342 Commercial real estate - owner occupied ​ 849 ​ 0 ​ 1,575 ​ 234,822 ​ 237,246 All other commercial loans ​ ​ 229 ​ ​ 2,593 ​ ​ 1,323 ​ ​ 395,548 ​ ​ 399,693 Residential mortgage loans ​ ​ 5,365 ​ ​ 326 ​ ​ 3,627 ​ ​ 404,396 ​ ​ 413,714 Consumer loans ​ ​ 617 ​ 145 ​ 240 ​ 59,142 ​ 60,144 Total ​ $ 9,275 ​ $ 3,190 ​ $ 15,177 ​ $ 1,820,497 ​ $ 1,848,139 ​ 60 Table of Contents 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. ​ Residential mortgage and consumer loans are classified as Pass unless they become 90 days delinquent at which time their classification is changed to Substandard. Such loans are classified as Substandard until six consecutive on-time payments are made at which time their classification is changes back to Pass. 61 Table of Contents The following table presents the amortized cost in loans by credit quality indicators by year of origination as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 59,708 ​ $ 99,900 ​ $ 161,497 ​ $ 78,884 ​ $ 51,851 ​ $ 243,578 ​ $ 0 ​ $ 695,418 Special Mention ​ 0 ​ 0 ​ 16,233 ​ 1,371 ​ 0 ​ 8,188 ​ 0 ​ 25,792 Substandard ​ ​ 116 ​ ​ 0 ​ ​ 9,928 ​ ​ 0 ​ ​ 0 ​ ​ 8,311 ​ ​ 0 ​ ​ 18,355 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - non-owner occupied ​ $ 59,824 ​ $ 99,900 ​ $ 187,658 ​ $ 80,255 ​ $ 51,851 ​ $ 260,077 ​ $ 0 ​ $ 739,565 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 757 ​ $ 0 ​ $ 757 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 25,552 ​ $ 33,533 ​ $ 52,207 ​ $ 49,410 ​ $ 11,444 ​ $ 76,558 ​ $ 0 ​ $ 248,704 Special Mention ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 961 ​ 0 ​ 961 Substandard ​ ​ 0 ​ ​ 5,125 ​ ​ 729 ​ ​ 2,367 ​ ​ 0 ​ ​ 3,185 ​ ​ 0 ​ ​ 11,406 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total commercial real estate - owner occupied ​ $ 25,552 ​ $ 38,658 ​ $ 52,936 ​ $ 51,777 ​ $ 11,444 ​ $ 80,704 ​ $ 0 ​ $ 261,071 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 73,812 ​ $ 74,301 ​ $ 44,245 ​ $ 44,367 ​ $ 23,084 ​ $ 30,656 ​ $ 109,121 ​ $ 399,586 Special Mention ​ 533 ​ 0 ​ 2,306 ​ 2 ​ 0 ​ 0 ​ 2,147 ​ 4,988 Substandard ​ ​ 44 ​ ​ 0 ​ ​ 3,478 ​ ​ 5,229 ​ ​ 109 ​ ​ 1,078 ​ ​ 8,765 ​ ​ 18,703 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total all other commercial loans ​ $ 74,389 ​ $ 74,301 ​ $ 50,029 ​ $ 49,598 ​ $ 23,193 ​ $ 31,734 ​ $ 120,033 ​ $ 423,277 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 427 ​ $ 60 ​ $ 21 ​ $ 122 ​ $ 0 ​ $ 630 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 41,450 ​ $ 48,937 ​ $ 80,789 ​ $ 50,108 ​ $ 35,601 ​ $ 146,231 ​ $ 0 ​ $ 403,116 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 380 ​ ​ 0 ​ ​ 85 ​ ​ 82 ​ ​ 4,346 ​ ​ 0 ​ ​ 4,893 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total residential mortgage loans ​ $ 41,450 ​ $ 49,317 ​ $ 80,789 ​ $ 50,193 ​ $ 35,683 ​ $ 150,577 ​ $ 0 ​ $ 408,009 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 3,859 ​ $ 3,441 ​ $ 2,848 ​ $ 1,013 ​ $ 599 ​ $ 679 ​ $ 50,860 ​ $ 63,299 Special Mention ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Substandard ​ ​ 0 ​ ​ 8 ​ ​ 4 ​ ​ 0 ​ ​ 0 ​ ​ 71 ​ ​ 544 ​ ​ 627 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total consumer loans ​ $ 3,859 ​ $ 3,449 ​ $ 2,852 ​ $ 1,013 ​ $ 599 ​ $ 750 ​ $ 51,404 ​ $ 63,926 Year-to-date gross charge-offs ​ $ 0 ​ $ 69 ​ $ 130 ​ $ 7 ​ $ 8 ​ $ 1 ​ $ 114 ​ $ 329 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 204,381 ​ $ 260,112 ​ $ 341,586 ​ $ 223,782 ​ $ 122,579 ​ $ 497,702 ​ $ 159,981 ​ $ 1,810,123 Special Mention ​ 533 ​ 0 ​ 18,539 ​ 1,373 ​ 0 ​ 9,149 ​ 2,147 ​ 31,741 Substandard ​ ​ 160 ​ ​ 5,513 ​ ​ 14,139 ​ ​ 7,681 ​ ​ 191 ​ ​ 16,991 ​ ​ 9,309 ​ ​ 53,984 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 205,074 ​ $ 265,625 ​ $ 374,264 ​ $ 232,836 ​ $ 122,770 ​ $ 523,842 ​ $ 171,437 ​ $ 1,895,848 Year-to-date gross charge-offs ​ $ 0 ​ $ 69 ​ $ 557 ​ $ 67 ​ $ 29 ​ $ 880 ​ ​ 114 ​ $ 1,716 62 Table of Contents ​ The following table presents the amortized cost in loans by credit quality indicators by year of origination as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Year of Origination ​ ​ ​ ​ ​ ​ (In Thousands) ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ Prior ​ Revolving ​ Total Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 96,615 ​ $ 167,484 ​ $ 89,582 ​ $ 55,390 ​ $ 80,020 ​ $ 207,017 ​ 0 ​ 696,108 Special Mention ​ ​ 0 ​ ​ 20,072 ​ ​ 2,446 ​ ​ 0 ​ ​ 116 ​ ​ 6,188 ​ ​ 0 ​ ​ 28,822 Substandard ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 18 ​ ​ 566 ​ ​ 11,828 ​ ​ 0 ​ ​ 12,412 Doubtful ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Total commercial real estate - non-owner occupied ​ $ 96,615 ​ $ 187,556 ​ $ 92,028 ​ $ 55,408 ​ $ 80,702 ​ $ 225,033 ​ $ 0 ​ $ 737,342 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 33,761 ​ $ 37,429 ​ $ 52,090 ​ $ 12,858 ​ $ 17,505 ​ $ 71,775 ​ $ 0 ​ $ 225,418 Special Mention ​ ​ 104 ​ ​ 746 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 166 ​ ​ 0 ​ ​ 1,016 Substandard ​ 5,200 ​ 0 ​ 2,567 ​ 0 ​ 0 ​ 3,045 ​ 0 ​ 10,812 Doubtful ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Total commercial real estate - owner occupied ​ $ 39,065 ​ $ 38,175 ​ $ 54,657 ​ $ 12,858 ​ $ 17,505 ​ $ 74,986 ​ $ 0 ​ $ 237,246 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 All other commercial loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 58,393 ​ $ 90,560 ​ $ 51,813 ​ $ 27,718 ​ $ 16,421 ​ $ 24,326 ​ $ 107,234 ​ $ 376,465 Special Mention ​ ​ 0 ​ ​ 2,690 ​ ​ 5,043 ​ ​ 8 ​ ​ 0 ​ ​ 794 ​ ​ 301 ​ ​ 8,836 Substandard ​ ​ 0 ​ 1,267 ​ 1,250 ​ 453 ​ 679 ​ 1,085 ​ 9,658 ​ 14,392 Doubtful ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Total all other commercial loans ​ $ 58,393 ​ $ 94,517 ​ $ 58,106 ​ $ 28,179 ​ $ 17,100 ​ $ 26,205 ​ $ 117,193 ​ $ 399,693 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 12 ​ $ 12 Residential mortgage loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 57,300 ​ $ 87,519 ​ $ 56,183 ​ $ 39,411 ​ $ 32,401 ​ $ 135,546 ​ $ 0 ​ $ 408,360 Special Mention ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Substandard ​ ​ 0 ​ 0 ​ 0 ​ 285 ​ 369 ​ 4,700 ​ 0 ​ 5,354 Doubtful ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Total residential mortgage loans ​ $ 57,300 ​ $ 87,519 ​ $ 56,183 ​ $ 39,696 ​ $ 32,770 ​ $ 140,246 ​ $ 0 ​ $ 413,714 Year-to-date gross charge-offs ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 33 ​ $ 0 ​ $ 33 Consumer loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 6,020 ​ $ 4,664 ​ $ 1,944 ​ $ 1,205 ​ $ 175 ​ $ 913 ​ $ 44,312 ​ $ 59,233 Special Mention ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Substandard ​ ​ 0 ​ 0 ​ 5 ​ 11 ​ 1 ​ 58 ​ 836 ​ 911 Doubtful ​ ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 ​ 0 Total consumer loans ​ $ 6,020 ​ $ 4,664 ​ $ 1,949 ​ $ 1,216 ​ $ 176 ​ $ 971 ​ $ 45,148 ​ $ 60,144 Year-to-date gross charge-offs ​ $ 0 ​ $ 149 ​ $ 0 ​ $ 18 ​ $ 3 ​ $ 3 ​ $ 138 ​ $ 311 Total Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 252,089 ​ $ 387,656 ​ $ 251,612 ​ $ 136,582 ​ $ 146,522 ​ $ 439,577 ​ $ 151,546 ​ $ 1,765,584 Special Mention ​ 104 ​ 23,508 ​ 7,489 ​ 8 ​ 116 ​ 7,148 ​ 301 ​ 38,674 Substandard ​ ​ 5,200 ​ ​ 1,267 ​ ​ 3,822 ​ ​ 767 ​ ​ 1,615 ​ ​ 20,716 ​ ​ 10,494 ​ ​ 43,881 Doubtful ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 257,393 ​ $ 412,431 ​ $ 262,923 ​ $ 137,357 ​ $ 148,253 ​ $ 467,441 ​ $ 162,341 ​ $ 1,848,139 Year-to-date gross charge-offs ​ $ 0 ​ $ 149 ​ $ 0 ​ $ 18 ​ $ 3 ​ $ 36 ​ ​ 150 ​ $ 356 ​ 63 Table of Contents The following table is a summary of the Corporation’s nonaccrual loans by major categories for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual ​ (In Thousands) ​ No Allowance ​ with an Allowance ​ Loans ​ Commercial real estate - non-owner occupied ​ $ 7,370 ​ $ 0 ​ $ 7,370 ​ Commercial real estate - owner occupied ​ 1,467 ​ 258 ​ 1,725 ​ All other commercial loans ​ ​ 10,006 ​ ​ 0 ​ ​ 10,006 ​ Residential mortgage loans ​ ​ 4,310 ​ ​ 0 ​ ​ 4,310 ​ Consumer loans ​ 431 ​ 0 ​ 431 ​ Total ​ $ 23,584 ​ $ 258 ​ $ 23,842 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ Nonaccrual Loans with ​ Nonaccrual Loans ​ Total Nonaccrual (In Thousands) No Allowance ​ with an Allowance ​ Loans ​ Commercial real estate - non-owner occupied ​ $ 1,111 ​ $ 7,301 ​ $ 8,412 ​ Commercial real estate - owner occupied ​ 1,281 ​ 294 ​ 1,575 ​ All other commercial loans ​ ​ 1,132 ​ ​ 191 ​ ​ 1,323 ​ Residential mortgage loans ​ ​ 3,627 ​ ​ 0 ​ ​ 3,627 ​ Consumer loans ​ 240 ​ 0 ​ 240 ​ Total ​ $ 7,391 ​ $ 7,786 ​ $ 15,177 ​ ​ The Corporation recognized $ 1,042,000 and $ 932,000 of interest income on nonaccrual loans during the years ended December 31, 2024 and 2023. The following table presents the accrued interest receivable written off by reversing interest income during the year ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended (In Thousands) ​ December 31, 2024 ​ December 31, 2023 Commercial real estate - non-owner occupied ​ $ 22 ​ $ 48 Commercial real estate - owner occupied ​ 10 ​ 0 All other commercial loans ​ ​ 198 ​ ​ 0 Residential mortgage loans ​ ​ 29 ​ ​ 28 Consumer loans ​ 10 ​ 3 Total ​ $ 269 ​ $ 79 ​ 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 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. Also within this category, commercial construction and land loans and some commercial lines of credit 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. 64 Table of Contents 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 on these loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ Amortized ​ ​ ​ Amortized ​ ​ (In Thousands) ​ Cost ​ Allowance ​ Cost ​ Allowance Commercial real estate - non-owner occupied ​ $ 7,370 ​ $ 0 ​ $ 8,412 ​ $ 648 Commercial real estate - owner occupied ​ 6,749 ​ 122 ​ 1,575 ​ 5 All other commercial loans ​ ​ 16,006 ​ ​ 0 ​ ​ 1,277 ​ ​ 90 Total ​ $ 30,125 ​ $ 122 ​ $ 11,264 ​ $ 743 ​ The following tables summarize the activity related to the ACL on loans for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Total Balance, December 31, 2023 $ 12,010 ​ $ 2,116 ​ $ 2,918 ​ $ 1,764 ​ $ 400 ​ $ 19,208 Charge-offs ​ ( 757 ) ​ ​ 0 ​ ​ ( 630 ) ​ ​ 0 ​ ​ ( 329 ) ​ ​ ( 1,716 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 40 ​ ​ 6 ​ ​ 67 ​ ​ 113 Provision (credit) for credit losses on loans 711 ​ ​ 728 ​ ​ 1,033 ​ ​ ( 414 ) ​ ​ 372 ​ 2,430 Balance, December 31, 2024 $ 11,964 ​ $ 2,844 ​ $ 3,361 ​ $ 1,356 ​ $ 510 ​ $ 20,035 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ Commercial ​ All ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ real estate - ​ real estate - ​ other ​ Residential ​ ​ ​ ​ ​ ​ ​ ​ nonowner ​ owner ​ commercial ​ mortgage ​ Consumer ​ ​ ​ ​ ​ (In Thousands) occupied ​ occupied ​ loans ​ loans ​ loans ​ Unallocated ​ Total Balance, December 31, 2022 $ 6,305 ​ $ 1,942 ​ $ 4,142 ​ $ 2,751 ​ $ 475 ​ $ 1,000 ​ $ 16,615 Adoption of ASU 2016-13 (CECL) ​ 3,763 ​ ​ 7 ​ ​ ( 88 ) ​ ​ ( 344 ) ​ ​ ( 234 ) ​ ​ ( 1,000 ) ​ ​ 2,104 Charge-offs ​ 0 ​ ​ 0 ​ ​ ( 12 ) ​ ​ ( 33 ) ​ ​ ( 311 ) ​ ​ 0 ​ ​ ( 356 ) Recoveries ​ 0 ​ ​ 0 ​ ​ 44 ​ ​ 11 ​ ​ 37 ​ ​ 0 ​ ​ 92 Provision (credit) for credit losses on loans 1,942 ​ ​ 167 ​ ​ ( 1,168 ) ​ ​ ( 621 ) ​ ​ 433 ​ ​ 0 ​ 753 Balance, December 31, 2023 $ 12,010 ​ $ 2,116 ​ $ 2,918 ​ $ 1,764 ​ $ 400 ​ $ 0 ​ $ 19,208 The ACL on loans individually evaluated decreased to $ 122,000 at December 31, 2024 from $ 743,000 at December 31, 2023, primarily from partial charge-offs including two loans with individual ACLs at December 31, 2023. ​ The ACL on loans collectively evaluated was $ 19,913,000 at December 31, 2024 and $ 18,465,000 at December 31, 2023. The increase in the ACL at December 31, 2024 as compared to December 31, 2023 included a net increase related to changes in qualitative adjustments and the net impact of an increase in loans receivable, partially offset by a decrease in the WARM method estimate and a decrease related to the economic forecast. ​ The ACL on loans individually evaluated was $ 743,000 at December 31, 2023 compared to $ 751,000 at January 1, 2023, upon the initial adoption of CECL. The decrease in the ACL at December 31, 2023 from January 1, 2023 included a net increase related to changes in qualitative adjustments, an increase related to the economic forecast and the net impact of an increase in loans receivable, partially offset by a decrease in the WARM method estimate. ​ Prior to the adoption of ASC 326 on January 1, 2023, the Corporation calculated the allowance for loan losses under the incurred loss methodology. The following tables are disclosed related to the allowance for loan losses in prior period of 2022. ​ ​ ​ 65 Table of Contents Transactions within the allowance for loan losses, summarized by segment and class were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ December 31, Year Ended December 31, 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ Provision ​ 2022 (In Thousands) ​ Balance ​ Charge-offs ​ Recoveries ​ (Credit) ​ Balance Allowance for Loan Losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial loans secured by real estate ​ $ 4,405 ​ $ ( 3,942 ) ​ $ 0 ​ $ 6,611 ​ $ 7,074 Commercial and industrial ​ 2,723 ​ ( 150 ) ​ 0 ​ 336 ​ 2,909 Commercial construction and land ​ 637 ​ 0 ​ 0 ​ 10 ​ 647 Loans secured by farmland ​ 115 ​ 0 ​ 0 ​ ( 3 ) ​ 112 Multi-family (5 or more) residential ​ 215 ​ 0 ​ 0 ​ 196 ​ 411 Agricultural loans ​ 25 ​ 0 ​ 0 ​ ( 4 ) ​ 21 Other commercial loans ​ 173 ​ 0 ​ 0 ​ ( 49 ) ​ 124 Total commercial ​ 8,293 ​ ( 4,092 ) ​ 0 ​ 7,097 ​ 11,298 Residential mortgage: ​ ​ ​ ​ ​ ​ Residential mortgage loans - first liens ​ ​ 3,650 ​ ​ 0 ​ ​ 4 ​ ​ ( 241 ) ​ ​ 3,413 Residential mortgage loans - junior liens ​ 184 ​ 0 ​ 0 ​ ( 17 ) ​ 167 Home equity lines of credit ​ 302 ​ 0 ​ 15 ​ ( 35 ) ​ 282 1-4 Family residential construction ​ 202 ​ 0 ​ 0 ​ 9 ​ 211 Total residential mortgage ​ 4,338 ​ 0 ​ 19 ​ ( 284 ) ​ 4,073 Consumer ​ 235 ​ ( 153 ) ​ 49 ​ 113 ​ 244 Unallocated ​ 671 ​ 0 ​ 0 ​ 329 ​ 1,000 Total Allowance for Loan Losses ​ $ 13,537 ​ $ ( 4,245 ) ​ $ 68 ​ $ 7,255 ​ $ 16,615 ​ The average balance of impaired loans and interest income recognized on impaired loans is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ Average Investment in ​ ​ Interest Income Recognized on ​ ​ Impaired Loans ​ ​ Impaired Loans on a Cash Basis ​ ​ Year Ended December 31, ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2022 Commercial: ​ ​ ​ ​ ​ Commercial loans secured by real estate ​ $ 9,757 ​ $ 657 Commercial and industrial ​ ​ 2,078 ​ 210 Commercial construction and land ​ ​ 72 ​ 3 Loans secured by farmland ​ ​ 80 ​ 0 Multi-family (5 or more) residential ​ ​ 197 ​ ​ 1,156 Agricultural loans ​ ​ 60 ​ 4 Total commercial ​ ​ 12,244 ​ 2,030 Residential mortgage: ​ ​ ​ ​ ​ Residential mortgage loans - first lien ​ ​ 575 ​ ​ 24 Residential mortgage loans - junior lien ​ ​ 33 ​ 7 Home equity lines of credit ​ ​ 43 ​ 4 Total residential mortgage ​ ​ 651 ​ 35 Total ​ $ 12,895 ​ $ 2,065 ​ The increase in interest income recognized on a cash basis on impaired loans in 2022 resulted mainly from repayments received on loans that had been classified as purchased credit impaired at December 31, 2021. ​ ​ Modifications Made to Borrowers Experiencing Financial Difficulty ​ The Corporation may occasionally make modifications to loans where the borrower is experiencing financial difficulty. The following tables summarize the amortized cost basis of loans modified during the years ended December 31, 2024 and 2023: 66 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 (Dollars in Thousands) ​ Term Extension ​ ​ Amortized Cost ​ % of Total ​ ​ ​ Basis ​ Loan Type Financial Effect Commercial Real Estate - Non-owner Occupied $ 2,625 ​ ​ 0.35 % Extended the maturity of one loan for 6 months and one loan for 5 years Commercial Real Estate - Owner Occupied ​ 218 ​ ​ 0.08 % Extended the maturity of one loan for 12 months Total $ 2,843 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 (Dollars in Thousands) ​ Term Extension ​ ​ Amortized Cost ​ % of Total ​ ​ ​ Basis ​ Loan Type Financial Effect Commercial Real Estate - Non-owner Occupied $ 3,907 ​ ​ 0.53 % Extended the maturity of one loan for 6 months and another loan for 12 months ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. ​ The following tables present the performance of such loans that have been modified in the twelve-month period preceding December 31, 2024 and the twelve-month period preceding December 31, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Payment Status (Amortized Cost Basis) December 31, 2024 Current or Past Due Less than 30 Days 90+ Days Past Due Total Commercial real estate - non-owner occupied ​ $ 2,625 ​ $ 0 ​ $ 2,625 Commercial real estate - owner occupied ​ ​ 218 ​ ​ 0 ​ ​ 218 Total ​ $ 2,843 ​ $ 0 ​ $ 2,843 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Payment Status (Amortized Cost Basis) December 31, 2023 Current or Past Due Less than 30 Days 90+ Days Past Due Total Commercial real estate - non-owner occupied ​ $ 2,526 ​ $ 1,381 ​ $ 3,907 ​ In the table immediately above, at December 31, 2024 the loan secured by owner occupied commercial real estate of $ 218,000 and one of the loans secured by non-owner occupied commercial real estate with an amortized cost basis of $ 1,814,000 were in nonaccrual status. Both of the loans included in the table at December 31, 2023 were in nonaccrual status. ​ For the loan secured by non-owner occupied real estate with an amortized cost basis of $ 1,814,000 at December 31, 2024, the Corporation had extended the maturity for 12 months in the fourth quarter 2023. In 2024, the borrower continued to experience financial difficulty, and the Corporation provided another six-month extension of the maturity. The Corporation recorded a partial charge-off of $ 640,000 on this loan in 2024. There was no specific allowance on this loan at December 31, 2024, while the specific allowance was $ 486,000 at December 31, 2023. The loan that was past due more than 90 days at December 31, 2023 in the table above was in default with its modified terms in 2024. The Corporation received payments totaling $ 48,000 in 2024, all of which were applied to principal. The amortized cost basis of the loan was $ 1,333,000 at December 31, 2024. ​ 67 Table of Contents Except as described above, the Corporation had no commitments to lend any additional funds on modified loans during the year ended December 31, 2024 and 2023, the Corporation had no loans that defaulted during the year ended December 31, 2024 and 2023 and 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 consolidated balance sheets) is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, December 31, ​ ​ 2024 ​ 2023 Foreclosed residential real estate ​ $ 25 ​ $ 47 ​ 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) ​ December 31, December 31, ​ ​ 2024 ​ 2023 Residential real estate in process of foreclosure ​ $ 717 ​ $ 1,227 ​ 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). Additional information related to commitments to extend credit and standby letter of credits is provided in Note 15. The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. 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 $ 455,000 at December 31, 2024 and $ 690,000 at December 31, 2023, is included in accrued interest and other liabilities on the consolidated balance sheets. The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended (In Thousands) ​ December 31, 2024 ​ December 31, 2023 Balance, Beginning of Period ​ $ 690 ​ $ 425 Adjustment to allowance for off-balance sheet exposures for adoption of ASU 2016-13 ​ ​ 0 ​ ​ 793 Recoveries ​ ​ 0 ​ ​ 39 Credit for unfunded commitments ​ ​ ( 235 ) ​ ​ ( 567 ) Balance, End of Period ​ $ 455 ​ $ 690 ​ ​ 8. BANK PREMISES AND EQUIPMENT ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ ​ 2024 ​ 2023 Land ​ $ 3,573 ​ $ 3,573 Buildings and improvements ​ ​ 33,623 ​ ​ 32,582 Furniture and equipment ​ ​ 14,266 ​ ​ 14,618 Construction in progress ​ ​ 186 ​ ​ 614 Total ​ ​ 51,648 ​ ​ 51,387 Less: accumulated depreciation ​ ​ ( 30,310 ) ​ ​ ( 29,755 ) Net ​ $ 21,338 ​ $ 21,632 ​ 68 Table of Contents Depreciation and amortization expense is included in the following line items of the consolidated statements of income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ 2024 ​ 2023 ​ 2022 Net occupancy and equipment expense ​ $ 2,122 ​ $ 1,915 ​ $ 2,049 Data processing and telecommunications expense ​ ​ 61 ​ ​ 236 ​ ​ 340 Total ​ $ 2,183 ​ $ 2,151 ​ $ 2,389 ​ ​ 9. GOODWILL AND CORE DEPOSIT INTANGIBLES, NET Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired. There were no changes in the carrying amount of goodwill in 2024 and 2023. The balance in goodwill was $ 52,505,000 at December 31, 2024 and 2023. The Corporation did not complete any acquisitions in 2024 or 2023. In testing goodwill for impairment at December 31, 2024, the Corporation performed a qualitative assessment based on comparison of the Corporation’s market capitalization to its stockholders’ equity, resulting in the determination that the fair value of its reporting unit, its community banking operation, exceeded its carrying amount. Accordingly, there was no goodwill impairment at December 31, 2024. There were no goodwill impairment charges recorded in the years ended December 31, 2024, 2023 and 2022. Information related to the core deposit intangibles is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ 2024 ​ ​ 2023 Gross amount ​ $ 6,639 ​ $ 6,639 Accumulated amortization ​ ( 4,559 ) ​ ​ ( 4,170 ) Net ​ $ 2,080 ​ $ 2,469 ​ Amortization expense related to core deposit intangibles is included in other noninterest expense in the consolidated statements of income, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ 2022 Amortization expense ​ $ 389 ​ $ 408 ​ $ 439 ​ The amount of amortization expense to be recognized in each of the ensuing five years is as follows: ​ ​ ​ ​ ​ (In Thousands) ​ 2025 ​ $ 424 2026 ​ 396 2027 ​ 361 2028 ​ 304 2029 ​ 250 ​ ​ 69 Table of Contents 10. DEPOSITS At December 31, 2024 the scheduled maturities of time deposits are as follows: ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ 2025 ​ $ 347,705 2026 ​ ​ 110,938 2027 ​ ​ 14,523 2028 ​ ​ 7,190 2029 ​ ​ 4,001 Total ​ $ 484,357 ​ Time deposits of more than $250,000 totaled $ 175,447,000 at December 31, 2024 and $ 134,085,000 at December 31, 2023. As of December 31, 2024, the remaining maturities or time to next re-pricing of time deposits more than $250,000 was as follows: ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ Three months or less ​ $ 38,392 Over 3 months through 12 months ​ ​ 83,209 Over 1 year through 3 years ​ ​ 53,446 Over 3 years ​ ​ 400 Total ​ $ 175,447 ​ ​ 11. BORROWED FUNDS SHORT-TERM BORROWINGS Short-term borrowings (initial maturity within one year) include the following: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, December 31, ​ ​ 2024 ​ 2023 FHLB-Pittsburgh borrowings ​ $ 0 ​ $ 31,500 Customer repurchase agreements ​ 2,488 ​ 2,374 Total short-term borrowings ​ $ 2,488 ​ $ 33,874 ​ The weighted average interest rate on total short-term borrowings outstanding was 0.10 % at December 31, 2024 and 5.23 % at December 31, 2023. The maximum amount of total short-term borrowings outstanding at any month-end was $ 61,936,000 in 2024, $ 120,290,000 in 2023 and $ 90,042,000 in 2022. The Corporation had available credit with other correspondent banks totaling $ 75,000,000 at December 31, 2024 and at December 31, 2023. These lines of credit are primarily unsecured. No amounts were outstanding at December 31, 2024 or 2023. The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. At December 31, 2024, the Corporation had available credit in the amount of $ 18,093,000 on this line with no outstanding advances. At December 31, 2023, the Corporation had available credit in the amount of $ 19,982,000 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 $ 18,881,000 at December 31, 2024 and $ 20,829,000 at December 31, 2023. 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 December 31, 2024 and 2023. The carrying value of the underlying securities was $ 2,500,000 at December 31, 2024 and $ 2,400,000 at December 31, 2023. 70 Table of Contents The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $ 1,351,770,000 at December 31, 2024 and $ 1,323,008,000 at December 31, 2023. 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) were $ 15,018,000 at December 31, 2024 and $ 15,214,000 at December 31, 2023. The Corporation’s total credit facility with FHLB-Pittsburgh was $ 938,691,000 at December 31, 2024, including an unused (available) amount of $ 749,999,000 . At December 31, 2023, the Corporation’s total credit facility with FHLB-Pittsburgh was $ 926,845,000 , including an unused (available) amount of $ 737,824,000 . At December 31, 2024, there were no outstanding short-term borrowings from FHLB-Pittsburgh. At December 31, 2023, the overnight borrowing from FHLB-Pittsburgh was $ 6,500,000 at an interest rate of 5.68 % with short-term advances that matured in the first quarter 2024 totaling $ 25,000,000 with a weighted average interest rate of 5.60 %. LONG-TERM BORROWINGS – FHLB ADVANCES Long-term borrowings from FHLB-Pittsburgh are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, December 31, ​ ​ 2024 ​ 2023 Loans matured in 2024 with a weighted-average rate of 3.09 % ​ ​ 0 ​ ​ 32,161 Loans maturing in 2025 with a weighted-average rate of 4.30 % ​ ​ 44,516 ​ ​ 44,627 Loans maturing in 2026 with a weighted-average rate of 4.61 % ​ ​ 48,018 ​ ​ 35,518 Loans maturing in 2027 with a weighted-average rate of 4.24 % ​ ​ 34,571 ​ ​ 24,031 Loans maturing in 2028 with a weighted-average rate of 4.30 % ​ ​ 26,027 ​ ​ 2,000 Loans maturing in 2029 with a weighted-average rate of 4.42 % ​ ​ 12,319 ​ ​ 0 Total long-term FHLB-Pittsburgh borrowings ​ $ 165,451 ​ $ 138,337 ​ Note: For loans maturing after 2024, weighted-average rates are presented as of December 31, 2024. 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 $ 68,000 in 2024, $ 66,000 in 2023 and $ 64,000 in 2022 was included in interest expense in the consolidated statements of income. At December 31, 2024 and December 31, 2023, outstanding Senior Notes are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, December 31, ​ ​ 2024 ​ 2023 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 ​ $ 14,899 ​ $ 14,831 Total carrying value ​ $ 14,899 ​ $ 14,831 ​ 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 71 Table of Contents 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 $ 114,000 in 2024, $ 110,000 in 2023, and $ 106,000 in 2022 was included in interest expense in the consolidated statements of income. At December 31, 2024 and 2023, outstanding subordinated debt agreements are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, December 31, ​ ​ 2024 ​ 2023 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 ​ $ 24,831 ​ $ 24,717 Total carrying value ​ $ 24,831 ​ $ 24,717 ​ ​ 12. EMPLOYEE AND POSTRETIREMENT BENEFIT PLANS DEFINED BENEFIT PLANS The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits and life insurance to employees who meet certain age and length of service requirements. Full-time employees no longer accrue service time toward the Corporation-subsidized portion of the medical benefits. The plan contains a cost-sharing feature which causes participants to pay for all future increases in costs related to benefit coverage. Accordingly, actuarial assumptions related to health care cost trend rates do not significantly affect the liability balance at December 31, 2024 and 2023 and are not expected to significantly affect the Corporation’s future expenses. The Corporation uses a December 31 measurement date for the postretirement plan. In an acquisition in 2007, the Corporation assumed the Citizens Trust Company Retirement Plan, a defined benefit pension plan. This plan covers certain employees who were employed by Citizens Trust Company on December 31, 2002, when the plan was amended to discontinue admittance of any future participant and to freeze benefit accruals. Information related to the Citizens Trust Company Retirement Plan has been included in the tables that follow. The Corporation uses a December 31 measurement date for this plan. 72 Table of Contents The following table shows the funded status of the defined benefit plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Postretirement (In Thousands) 2024 ​ 2023 2024 ​ 2023 CHANGE IN BENEFIT OBLIGATION: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at beginning of year ​ $ 896 ​ $ 946 ​ $ 1,013 ​ $ 935 Service cost ​ 0 ​ 0 ​ 6 ​ 54 Interest cost ​ 29 ​ 31 ​ 31 ​ 48 Plan participants' contributions ​ 0 ​ 0 ​ 118 ​ 129 Actuarial loss ​ 18 ​ 63 ​ 10 ​ 37 Gain from plan amendments ​ ​ 0 ​ ​ 0 ​ ​ ( 413 ) ​ ​ 0 Benefits paid ​ ​ ( 5 ) ​ ​ ( 5 ) ​ ​ ( 179 ) ​ ​ ( 190 ) Settlement of plan obligation ​ 0 ​ ( 139 ) ​ 0 ​ 0 Benefit obligation at end of year ​ $ 938 ​ $ 896 ​ $ 586 ​ $ 1,013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CHANGE IN PLAN ASSETS: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at beginning of year ​ $ 946 ​ $ 1,001 ​ $ 0 ​ $ 0 Actual return on plan assets ​ 36 ​ 89 ​ 0 ​ 0 Employer contribution ​ 0 ​ 0 ​ 61 ​ 61 Plan participants' contributions ​ 0 ​ 0 ​ 118 ​ 129 Benefits paid ​ ​ ( 5 ) ​ ​ ( 5 ) ​ ​ ( 179 ) ​ ​ ( 190 ) Settlement of plan obligation ​ 0 ​ ( 139 ) ​ 0 ​ 0 Fair value of plan assets at end of year ​ $ 977 ​ $ 946 ​ $ 0 ​ $ 0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year ​ $ 39 ​ $ 50 ​ $ ( 586 ) ​ $ ( 1,013 ) ​ At December 31, 2024 and 2023, the following pension plan and postretirement plan liability amounts were recognized in the consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension ​ Postretirement (In Thousands) 2024 2023 2024 2023 Accrued interest and other liabilities ​ ​ 39 ​ $ 50 ​ $ 586 ​ ​ 1,013 ​ At December 31, 2024 and 2023, the following items included in accumulated other comprehensive loss had not been recognized as components of expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension ​ Postretirement (In Thousands) 2024 ​ 2023 2024 ​ 2023 Prior service cost ​ $ 0 ​ $ 0 ​ $ ( 56 ) ​ $ ( 124 ) Net actuarial loss (gain) ​ 131 ​ ​ 139 ​ ( 486 ) ​ ​ ( 573 ) Total ​ $ 131 ​ $ 139 ​ $ ( 542 ) ​ $ ( 697 ) ​ For the defined benefit pension plan, amortization of the net actuarial loss is expected to be $ 5,000 in 2025. For the postretirement plan, effective in 2024, amendments to the plan resulted in a decrease of $ 413,000 in unrecognized prior service cost and a related reduction in net periodic benefit costs from curtailment of $ 469,000 . In 2025, the net actuarial gain to be amortized as a reduction in expense is $ 83,000 and the estimated reduction in expense related to prior service cost is $ 8,000 . The accumulated benefit obligation for the defined benefit pension plan was $ 938,000 at December 31, 2024 and $ 896,000 at December 31, 2023. 73 Table of Contents The components of net periodic benefit costs from defined benefit plans are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension ​ Postretirement (In Thousands) 2024 ​ 2023 2022 2024 ​ 2023 2022 Service cost ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 6 ​ $ 54 ​ $ 63 Interest cost ​ 29 ​ ​ 31 ​ ​ 22 ​ 31 ​ ​ 48 ​ ​ 34 Expected return on plan assets ​ ( 16 ) ​ ​ ( 18 ) ​ ​ ( 35 ) ​ 0 ​ ​ 0 ​ ​ 0 Amortization of prior service cost ​ 0 ​ ​ 0 ​ ​ 0 ​ ( 12 ) ​ ​ ( 31 ) ​ ​ ( 31 ) Recognized net actuarial loss (gain) ​ 6 ​ ​ 11 ​ ​ 8 ​ ( 77 ) ​ ​ ( 36 ) ​ ​ ( 19 ) Effect of curtailment ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ ( 469 ) ​ ​ 0 ​ ​ 0 Settlement of plan obligation ​ ​ 0 ​ ​ 21 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 Total net periodic benefit cost ​ $ 19 ​ $ 45 ​ $ ( 5 ) ​ $ ( 521 ) ​ $ 35 ​ $ 47 ​ The weighted-average assumptions used to determine net periodic benefit cost are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension ​ Postretirement ​ 2024 2023 2022 2024 2023 2022 Discount rate 4.80 % 5.05 % 2.60 % 5.00 % 5.25 % 3.00 % Expected return on plan assets 5.00 % 4.22 % 5.00 % N/A N/A N/A ​ Rate of compensation increase N/A N/A N/A N/A N/A N/A ​ ​ The weighted-average assumptions used to determine benefit obligations as of December 31, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Postretirement ​ ​ 2024 2023 2024 2023 ​ Discount rate 5.35 % 4.80 % 5.29 % 5.00 % Rate of compensation increase N/A N/A N/A N/A ​ ​ Estimated future benefit payments, including only estimated employer contributions for the postretirement plan, which reflect expected future service, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Pension Postretirement 2025 ​ $ 620 ​ $ 68 2026 ​ 14 ​ 67 2027 ​ 9 ​ 59 2028 ​ 250 ​ 59 2029 ​ 8 ​ 54 2030-2034 ​ 38 ​ 233 ​ No estimated minimum contribution to the defined benefit pension plan is required in 2025, though the Corporation may make discretionary contributions. The expected return on pension plan assets is a significant assumption used in the calculation of net periodic benefit cost. This assumption reflects the average long-term rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The fair values of pension plan assets at December 31, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Mutual funds invested principally in: ​ ​ ​ ​ Cash and cash equivalents 100 % 54 % Debt securities 0 % 18 % Equity securities 0 % 24 % Alternative funds 0 % 4 % Total 100 % 100 % ​ 74 Table of Contents C&N Bank’s Wealth Management Department manages the investment of the pension plan assets. The Plan’s securities include mutual funds invested principally in cash and cash equivalents. The fair values of plan assets are determined based on Level 1 inputs (as described in Note 20). The Plan’s assets do not include any shares of the Corporation’s common stock. PROFIT SHARING AND DEFERRED COMPENSATION PLANS The Corporation has a profit sharing plan that incorporates the deferred salary savings provisions of Section 401(k) of the Internal Revenue Code. The Corporation’s matching contributions to the Plan depend upon the tax deferred contributions of employees. The Corporation’s total basic and matching contributions were $ 1,468,000 in 2024, $ 1,419,000 in 2023 and $ 1,415,000 in 2022. The Corporation has an Employee Stock Ownership Plan (ESOP). Contributions to the ESOP are discretionary, and the ESOP uses funds contributed to purchase Corporation stock for the accounts of ESOP participants. These purchases are made in the market (not directly from the Corporation), and employees are not permitted to purchase Corporation stock under the ESOP. The ESOP includes a diversification feature, which allows participants, upon reaching age 55 and 10 years of service (as defined), to sell up to 50 % of their Corporation shares over a period of 6 years . As of December 31, 2024 and 2023, there were no shares allocated for repurchase by the ESOP. Dividends paid on shares held by the ESOP are charged to retained earnings. All Corporation shares owned through the ESOP are included in the calculation of weighted-average shares outstanding for purposes of calculating earnings per share – basic and diluted. The ESOP held 618,148 shares of Corporation stock at December 31, 2024, 579,567 shares at December 31, 2023 and 564,353 shares at December 31, 2022, all of which had been allocated to Plan participants. The Corporation’s contributions to the ESOP totaled $ 665,000 in 2024, $ 1,244,000 in 2023 and $ 1,170,000 in 2022. The Corporation has a nonqualified supplemental deferred compensation arrangement with its key officers. Charges to operating expense for officers’ supplemental deferred compensation were $ 223,000 in 2024, $ 489,000 in 2023 and $ 391,000 in 2022. The balance of the liability, which is included in accrued interest and other liabilities in the consolidated balance sheets, is $ 3,164,000 at December 31, 2024 and $ 3,025,000 at December 31, 2023. In connection with an acquisition, the Corporation assumed an obligation to provide a supplemental retirement benefit to a former executive. Under the terms of the agreement, the executive or his heirs will receive monthly payments totaling $ 1 million over a 10-year period starting in October 2025. The Corporation recorded expense of $ 14,000 in 2024, $ 13,000 in 2023 and $ 14,000 in 2022, which is included in salaries and employee benefits in the consolidated statements of income, representing the effective interest cost on the obligation. The discount rate used to measure the liability is 1.5 %. The balance of the liability, which is included in accrued interest and other liabilities in the consolidated balance sheets, is $ 919,000 at December 31, 2024 and $ 905,000 at December 31, 2023. The Corporation also has a nonqualified deferred compensation plan that allows selected officers the option to defer receipt of cash compensation, including base salary and any cash bonuses or other cash incentives. This nonqualified deferred compensation plan does not provide for Corporation contributions. STOCK-BASED COMPENSATION PLANS At the Annual Meeting of Shareholders on April 20, 2023, the Citizens & Northern Corporation 2023 Equity Incentive Plan (“2023 Equity Incentive Plan”) was approved. A total of 500,000 shares of common stock may be issued under the 2023 Equity Incentive Plan. Awards may be made to participating employees and independent directors under the 2023 Equity Incentive Plan in the form of qualified options (“Incentive Stock Options,” as defined in the Internal Revenue Code), nonqualified options, restricted stock units or restricted stock, any or all of which can be granted with performance-based vesting conditions. As of December 31, 2024, 92,860 awards had been granted under this plan. Outstanding restricted stock awards granted prior to adoption of the 2023 Equity Incentive Plan, including awards made in 2023, are governed under the 1995 Stock Incentive Plan and the Independent Directors Stock Incentive Plan. The restricted stock awards in 2023 under the 1995 Stock Incentive Plan and the Independent Directors Stock Incentive Plan were the final awards under these plans. 75 Table of Contents Total stock-based compensation expense is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 Restricted stock ​ $ 1,494 ​ $ 1,472 ​ $ 1,260 Stock options ​ 0 ​ ​ 0 ​ ​ 0 Total ​ $ 1,494 ​ $ 1,472 ​ $ 1,260 ​ The following summarizes non-vested restricted stock activity for the year ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ Number ​ Grant Date ​ of Shares Fair Value Outstanding, December 31, 2023 110,009 ​ $ 23.44 Granted 92,860 ​ $ 20.69 Vested ( 62,969 ) ​ $ 22.97 Forfeited ( 2,076 ) ​ $ 23.37 Outstanding, December 31, 2024 137,824 ​ $ 21.80 ​ Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period, adjusted for estimated and actual forfeitures. As of December 31, 2024, there was $ 1,639,000 total unrecognized compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.5 years. In 2024 and 2023, the Corporation awarded shares of restricted stock under the Stock Incentive Plan, as follows: ​ ​ ​ ​ ​ ​ ​ 2024 2023 Time-based awards to independent directors ​ 10,000 ​ 11,000 Time-based awards to employees 63,514 31,684 Performance-based awards to employees 19,346 11,104 Total 92,860 53,788 ​ Time-based restricted stock awards granted to independent (non-employee) directors in 2024 and 2023 vest over one-year terms. Time-based restricted stock awards granted to employees in 2024 and 2023 vest ratably over three-year terms, subject to continued employment and satisfactory job performance. Performance-based restricted stock awards granted in 2024 and 2023 vest ratably over three-year terms, with vesting contingent upon meeting conditions based on the Corporation’s earnings as specified in the agreements. There were no stock options granted in 2024, 2023, or 2022. A summary of stock option activity is presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ 2022 ​ ​ ​ ​ Weighted ​ ​ ​ Weighted ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Exercise ​ ​ ​ Exercise ​ ​ ​ Exercise ​ Shares Price Shares Price ​ Shares Price Outstanding, beginning of year 646 ​ $ 20.45 10,564 ​ $ 20.45 24,218 ​ $ 20.01 Granted 0 ​ 0 0 ​ 0 0 ​ 0 Exercised 0 ​ ​ 0 ( 8,288 ) ​ $ 20.45 ( 13,654 ) ​ $ 19.67 Forfeited 0 ​ ​ 0 ( 1,630 ) ​ $ 20.45 0 ​ ​ 0 Expired ( 646 ) ​ $ 20.45 0 ​ ​ 0 0 ​ ​ 0 Outstanding, end of year 0 ​ $ 0 646 ​ $ 20.45 10,564 ​ $ 20.45 Options exercisable at year-end 0 ​ $ 0 646 ​ $ 20.45 10,564 ​ $ 20.45 Weighted-average fair value of options forfeited ​ ​ $ N/A ​ ​ $ 5.50 ​ ​ ​ N/A ​ There were no shares of outstanding stock options at December 31, 2024. The total intrinsic value of options exercised was $ 14,000 in 2023 and $ 76,000 in 2022. 76 Table of Contents In January 2025, the Corporation granted 31,113 shares of time-based restricted stock awards and 11,848 shares of performance-based restricted stock awards under the 2023 Equity Incentive Plan. The time-based shares vest ratably over three years while the performance-based restricted stock awards vest ratably over three years , with vesting contingent upon meeting earnings-related conditions specified in agreements. The restricted stock awards made in January 2025 are not included in the tables above. ​ 13. INCOME TAXES The net deferred tax asset at December 31, 2024 and 2023 represents the following temporary difference components: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In Thousands) 2024 2023 Deferred tax assets: ​ ​ ​ ​ ​ ​ Unrealized holding losses on securities ​ $ 10,459 ​ $ 10,335 Allowance for credit losses on loans ​ ​ 4,400 ​ ​ 4,230 Purchase accounting adjustments on loans ​ ​ 333 ​ ​ 470 Deferred compensation ​ 1,465 ​ 1,352 Deferred loan origination fees ​ 697 ​ 731 Operating leases liability ​ 692 ​ 787 Accrued incentive compensation ​ ​ 678 ​ ​ 463 Net operating loss carryforward ​ ​ 423 ​ ​ 541 Other deferred tax assets ​ 1,520 ​ 1,316 Total deferred tax assets ​ 20,667 ​ 20,225 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ Right-of-use assets from operating leases ​ ​ 692 ​ ​ 787 Core deposit intangibles ​ 456 ​ 544 Bank premises and equipment ​ 290 ​ 291 Defined benefit plans - ASC 835 ​ 90 ​ 119 BOLI surrender ​ ​ 0 ​ ​ 950 Other deferred tax liabilities ​ ​ 41 ​ ​ 93 Total deferred tax liabilities ​ 1,569 ​ 2,784 Deferred tax asset, net ​ $ 19,098 ​ $ 17,441 ​ The provision for income taxes includes the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 Currently payable ​ $ 7,417 ​ $ 5,499 ​ $ 5,998 Tax expense resulting from allocations of certain tax benefits to equity or as a reduction in other assets ​ 0 ​ ​ 0 ​ ​ 134 Deferred ​ ( 1,504 ) ​ ​ 836 ​ ​ ( 400 ) Total provision ​ $ 5,913 ​ $ 6,335 ​ $ 5,732 ​ 77 Table of Contents A reconciliation of income tax at the statutory rate to the Corporation’s effective rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 (Dollars In Thousands) Amount % ​ Amount % Amount % Expected provision ​ $ 6,693 21.0 ​ $ 6,401 21.0 ​ $ 6,794 21.0 Tax-exempt interest income ​ ( 964 ) ( 3.0 ) ​ ( 964 ) ( 3.2 ) ​ ( 1,029 ) ( 3.2 ) Increase in cash surrender value and other income from life insurance, net ​ ( 369 ) ( 1.2 ) ​ ( 586 ) ( 1.9 ) ​ ( 103 ) ( 0.3 ) ESOP dividends ​ ( 144 ) ( 0.5 ) ​ ( 143 ) ( 0.5 ) ​ ( 130 ) ( 0.4 ) Surrender of bank-owned life insurance ​ ​ 0 ​ 0.0 ​ ​ 950 ​ 3.1 ​ ​ 0 ​ 0.0 State income tax, net of federal benefit ​ 297 0.9 ​ 329 1.1 ​ 296 0.9 Nondeductible interest expense ​ 368 1.3 ​ 283 0.9 ​ ​ 87 ​ 0.3 Other, net ​ 32 0.1 ​ 65 0.3 ​ ( 183 ) ( 0.6 ) Effective income tax provision ​ $ 5,913 18.6 ​ $ 6,335 20.8 ​ $ 5,732 17.7 ​ The Corporation has a net operating loss (“NOL”) available to be carried forward against future federal taxable income. Availability of the NOL does not expire; however, the amount that may be offset against taxable income is limited to approximately $ 563,000 per year and further limited annually to no more than 80 % of taxable income without regard to the NOL. At December 31, 2024, the unused amount of the NOL is $ 2.0 million. The Corporation has no unrecognized tax benefits, nor pending examination issues related to tax positions taken in preparation of its income tax returns. The Corporation is generally no longer subject to examination for returns prior to 2021. ​ ​ 14. RELATED PARTY TRANSACTIONS Loans to executive officers, directors of the Corporation and its subsidiaries and any associates of the foregoing persons are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning New ​ Other Ending (In Thousands) Balance Loans Repayments Changes Balance 11 directors, 11 executive officers 2024 ​ $ 13,975 ​ $ 1,579 ​ ​ ( 2,212 ) ​ ​ 106 ​ $ 13,448 11 directors, 11 executive officers 2023 ​ $ 14,504 ​ $ 549 ​ $ ( 823 ) ​ $ ( 255 ) ​ $ 13,975 13 directors, 10 executive officers 2022 ​ $ 13,911 ​ $ 1,949 ​ $ ( 1,886 ) ​ $ 530 ​ $ 14,504 ​ In the table above, other changes represent net changes in the balance of existing lines of credit and transfers in and out of the related party category. Deposits from related parties held by the Corporation amounted to $ 12,259,000 at December 31, 2024 and $ 9,014,000 at December 31, 2023. ​ 15. OFF-BALANCE SHEET RISK 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. These instruments involve, to varying degrees, elements of credit, interest rate or liquidity risk in excess of the amount recognized in the consolidated balance sheets. The contract amounts of these instruments express the extent of involvement the Corporation has in particular classes of financial instruments. The Corporation’s exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. 78 Table of Contents Financial instruments whose contract amounts represent credit risk at December 31, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In Thousands) 2024 2023 Commitments to extend credit ​ $ 380,003 ​ $ 395,997 Standby letters of credit ​ 64,586 ​ 19,158 ​ Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. The Corporation evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation, for extensions of credit is based on management’s credit assessment of the counterparty. Standby letters of credit are conditional commitments issued by the Corporation guaranteeing performance by a customer to a third party. Those guarantees are issued primarily to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Some of the standby letters of credit are collateralized by real estate or other assets, and others are unsecured. The extent to which proceeds from liquidation of collateral would be expected to cover the maximum potential amount of future payments related to standby letters of credit is not estimable. Standby letters of credit as of December 31, 2024 expire as follows: ​ ​ ​ ​ ​ Year of Expiration (In Thousands) 2025 ​ $ 64,485 2026 ​ 25 2027 ​ ​ 48 2028 ​ ​ 28 2029 ​ ​ 0 Total ​ $ 64,586 ​ Information related to the allowance for credit losses on off-balance sheet exposures is provided in Note 7. ​ ​ 16. OPERATING LEASE COMMITMENTS AND CONTINGENCIES Operating Lease Commitments Operating leases in which the Corporation is the lessee are recorded as operating lease Right of Use ("ROU") assets and operating lease liabilities, included in other assets and other liabilities, respectively, on the consolidated balance sheets. The Corporation does not currently have any finance leases. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. The Corporation leases certain branch locations, office space and equipment. All leases are classified as operating leases. Operating lease expense, which is comprised of amortization of the ROU assets and the implicit interest accreted on the operating lease liability, is recognized on a straight line basis over the remaining lease term of the operating lease. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Certain leases include options to renew, with renewal terms that can extend the lease term from one to eight years that are reasonably certain of being exercised. The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption of ASU 2017-02 and as of the lease commencement date for leases subsequently entered into after January 1, 2019. At December 31, 2024, discount rates ranged from 1.27 % to 4.16 % with a weighted-average discount rate of 1.96 %. At December 31, 2024, the weighted-average remaining lease term was 4.1 years. At December 31, 2023, the weighted-average discount rate was 1.96 % and the weighted-average remaining lease term was 4.6 years. 79 Table of Contents At December 31, 2024, right-of-use assets of $ 3,151,000 were included in other assets, and the related lease liabilities totaling the same amount were included in accrued interest and other liabilities, in the consolidated balance sheets. At December 31, 2023, right of use assets and the related liabilities totaled $ 3,570,000 . In 2024, 2023 and 2022, operating lease expenses are included in the following line item of the consolidated statements of income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 Net occupancy and equipment expense ​ $ 666 ​ $ 644 ​ $ 599 Total ​ $ 666 ​ $ 644 ​ $ 599 ​ A maturity analysis of the Corporation’s lease liabilities at December 31, 2024 is as follows: ​ (In Thousands) Lease Payments Due ​ ​ ​ ​ ​ 2025 $ 671 2026 ​ 595 2027 ​ 518 2028 ​ 419 2029 ​ 373 Thereafter ​ 774 Total lease payments ​ 3,350 Discount on cash flows ​ ( 199 ) Total lease liabilities ​ $ 3,151 ​ Litigation Matters ​ Class Action Litigation On March 27, 2024, a putative class action lawsuit was filed in the US District Court for the Western District of Texas by investors in a purported Ponzi scheme operated by two individuals, one of whom maintained accounts at C&N Bank. The plaintiffs have sued C&N Bank, along with another bank, and additional law firm and accounting firm defendants. The case is styled Goldovsky, et al. v. Rauld, et al. Plaintiffs have asserted claims against C&N Bank and the other bank for aiding and abetting alleged violations of the Texas Securities Act, and additional claims against the legal and accounting professionals for statutory fraud, common law fraud, negligent misrepresentation, and knowing participation in breach of fiduciary duty. C&N Bank has filed motions to dismiss the case for wont of personal jurisdiction and failure to state a claim. The Plaintiffs have responded to those motions. Plaintiffs have filed an application for certification of the suit as a class action. The court has stayed the motions to dismiss pending consideration of the class action certification application. Following depositions of the four plaintiffs on issues germane to class action certification, C&N Bank and each of the other defendants have filed briefs in opposition to the plaintiff’s class certification motion. A hearing on the motion for class certification took place on February 18, 2025. A ruling on class certification is pending. Based on the information available to the Corporation, the Corporation does not believe at this time that a loss is probable in this matter, nor can a range of possible losses be determined. Accordingly, no liability has been recorded for this litigation matter in the accompanying consolidated financial statements. The Corporation’s estimate may change from time to time, and actual losses could vary. ​ 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 proceeding. ​ ​ 80 Table of Contents 17. REGULATORY MATTERS In August 2018, the Federal Reserve Board issued an interim final rule that expanded applicability of the Board’s small bank holding company policy statement. The interim final rule raised the policy statement’s asset threshold from $1 billion to $3 billion in total consolidated assets for a bank holding company or savings and loan holding company that: (1) is not engaged in significant nonbanking activities; (2) does not conduct significant off-balance sheet activities; and (3) does not have a material amount of debt or equity securities, other than trust-preferred securities, outstanding. The interim final rule provides that, if warranted for supervisory purposes, the Federal Reserve may exclude a company from the threshold increase. Management believes the Corporation meets the conditions of the Federal Reserve’s small bank holding company policy statement and is therefore excluded from consolidated capital requirements at December 31, 2024; however, C&N Bank remains subject to regulatory capital requirements administered by the federal banking agencies. Details concerning capital ratios at December 31, 2024 and 2023 are presented below. Management believes, as of December 31, 2024, that C&N Bank meets all capital adequacy requirements to which it is subject and maintains a capital conservation buffer (described in more detail below) that allows the Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. The net unrealized loss on available-for-sale debt securities is not included in computing regulatory capital. For comparison purposes, the Corporation’s capital ratios are presented along with those of C&N Bank in the table below. Further, as reflected in the table below, the Corporation’s and C&N Bank’s capital ratios at December 31, 2024 and 2023 exceed the Corporation’s Board policy threshold levels. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum To Be Well ​ ​ ​ ​ ​ ​ ​ Minimum ​ Minimum To Maintain ​ Capitalized Under ​ Minimum To Meet ​ ​ ​ ​ ​ Capital ​ Capital Conservation ​ Prompt Corrective ​ the Corporation's ​ ​ Actual ​ Requirement Buffer at Reporting Date ​ Action Provisions ​ Policy Thresholds ​ (Dollars In Thousands) ​ Amount Ratio Amount Ratio Amount Ratio Amount Ratio Amount Ratio ​ December 31, 2024: ​ ​ ​ Total capital to risk-weighted assets: ​ ​ ​ Consolidated ​ $ 302,783 15.95 % N/A N/A N/A N/A N/A N/A ​ $ 208,779 ³11 % C&N Bank ​ 287,721 15.19 % 151,567 ³8 % 198,832 ³10.5 % 189,459 ³10 % 208,405 ³11 % Tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 257,462 13.56 % N/A N/A N/A N/A N/A N/A ​ 170,819 ³9 % C&N Bank ​ 267,231 14.10 % 113,675 ³6 % 161,040 ³8.5 % 151,567 ³8 % 170,513 ³9 % Common equity tier 1 capital to risk-weighted assets: ​ ​ ​ Consolidated ​ 257,462 13.56 % N/A N/A N/A N/A N/A N/A ​ 142,349 ³7.5 % C&N Bank ​ 267,231 14.10 % 85,256 ³4.5 % 132,621 ³7.0 % 123,148 ³6.5 % 142,094 ³7.5 % Tier 1 capital to average assets: ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 257,462 9.80 % N/A N/A N/A N/A N/A N/A ​ 210,160 ³8 % C&N Bank ​ 267,231 10.23 % 104,514 ³4 % N/A N/A 130,642 ³5 % 209,027 ³8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023: ​ ​ ​ Total capital to risk-weighted assets: ​ ​ ​ Consolidated ​ $ 290,425 15.67 % N/A N/A N/A N/A N/A N/A ​ $ 203,809 ³11 % C&N Bank ​ 275,307 14.89 % 147,925 ³8 % 194,151 ³10.5 % 184,906 ³10 % 203,396 ³11 % Tier 1 capital to risk-weighted assets: ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 245,810 13.27 % N/A N/A N/A N/A N/A N/A ​ 166,753 ³9 % C&N Bank ​ 255,409 13.81 % 110,943 ³6 % 157,170 ³8.5 % 147,925 ³8 % 166,415 ³9 % Common equity tier 1 capital to risk-weighted assets: ​ ​ ​ Consolidated ​ 245,810 13.27 % N/A N/A N/A N/A N/A N/A ​ 138,961 ³7.5 % C&N Bank ​ 255,409 13.81 % 83,208 ³4.5 % 129,434 ³7.0 % 120,189 ³6.5 % 138,679 ³7.5 % Tier 1 capital to average assets: ​ ​ ​ ​ ​ ​ ​ Consolidated ​ 245,810 9.87 % N/A N/A N/A N/A N/A N/A ​ 199,151 ³8 % C&N Bank ​ 255,409 10.32 % 99,010 ³4 % N/A N/A 123,762 ³5 % 198,020 ³8 % ​ Federal regulatory authorities impose a capital rule providing that, to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization subject to the rule must hold a capital conservation buffer composed of common equity tier 1 capital above its minimum risk-based capital requirements. The buffer is measured relative to risk-weighted assets. At December 31, 2024, the minimum risk-based capital ratios, and the capital ratios including the capital conservation buffer, are as follows: ​ 81 Table of Contents ​ ​ ​ Minimum common equity tier 1 capital ratio 4.5 % Minimum common equity tier 1 capital ratio plus capital conservation buffer 7.0 % Minimum tier 1 capital ratio 6.0 % Minimum tier 1 capital ratio plus capital conservation buffer 8.5 % Minimum total capital ratio 8.0 % Minimum total capital ratio plus capital conservation buffer 10.5 % ​ A banking organization with a buffer greater than 2.5 % over the minimum risk-based capital ratios would not be subject to additional limits on dividend payments or discretionary bonus payments; however, a banking organization with a buffer less than 2.5 % would be subject to increasingly stringent limitations as the buffer approaches zero. Also, a banking organization is prohibited from making dividend payments or discretionary bonus payments if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 % as of the beginning of that quarter. Eligible net income is defined as net income for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income. A summary of payout restrictions based on the capital conservation buffer is as follows: ​ ​ ​ ​ ​ Capital Conservation Buffer Maximum Payout (as a % of risk-weighted assets) ​ (as a % of eligible retained income) Greater than 2.5 % No payout limitation applies ≤ 2.5 % and > 1.875 % ​ 60 % ≤ 1.875 % and > 1.25 % ​ 40 % ≤ 1.25 % and > 0.625 % ​ 20 % ≤ 0.625 % ​ 0 % ​ At December 31, 2024, C&N Bank’s Capital Conservation Buffer, determined based on the minimum total capital ratio, was 7.19 %. Banking regulators limit the amount of dividends that may be paid by C&N Bank to the Corporation. Retained earnings against which dividends may be paid without prior approval of the banking regulators amounted to approximately $ 111,443,000 at December 31, 2024, subject to the minimum capital ratio requirements noted above. Restrictions imposed by federal law prohibit the Corporation from borrowing from C&N Bank unless the loans are secured in specific amounts. Such secured loans to the Corporation are generally limited to 10 % of C&N Bank’s tangible stockholder’s equity (excluding accumulated other comprehensive loss) or $ 26,443,000 at December 31, 2024. ​ 82 Table of Contents 18. PARENT COMPANY ONLY The following is condensed financial information for Citizens & Northern Corporation: ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED BALANCE SHEET Dec. 31, Dec. 31, (In Thousands) ​ 2024 ​ 2023 ASSETS ​ ​ Cash ​ $ 16,013 ​ $ 14,822 Investment in subsidiaries: ​ ​ ​ Citizens & Northern Bank ​ 285,465 ​ 272,286 Citizens & Northern Investment Corporation ​ 9,768 ​ 11,087 Bucktail Life Insurance Company ​ 3,804 ​ 3,733 Other assets ​ 136 ​ 200 TOTAL ASSETS ​ $ 315,186 ​ $ 302,128 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ Senior notes, net ​ $ 14,899 ​ $ 14,831 Subordinated debt, net ​ 24,831 ​ 24,717 Other liabilities ​ 172 ​ 199 Stockholders' equity ​ 275,284 ​ 262,381 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ​ $ 315,186 ​ $ 302,128 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED INCOME STATEMENT AND COMPREHENSIVE INCOME (LOSS) ​ ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 Dividends from Citizens & Northern Bank ​ $ 17,341 ​ $ 19,405 ​ $ 19,483 Dividends from Citizens & Northern Investment Corporation ​ ​ 1,500 ​ ​ 1,800 ​ ​ 0 Expenses ​ ( 1,644 ) ​ ( 2,003 ) ​ ( 1,695 ) Income before equity in undistributed income of subsidiaries ​ 17,197 ​ 19,202 ​ 17,788 Equity in undistributed income of subsidiaries ​ 8,761 ​ 4,946 ​ 8,830 NET INCOME ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 COMPREHENSIVE INCOME (LOSS) ​ $ 27,634 ​ $ 35,589 ​ $ ( 28,286 ) ​ ​ 83 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED STATEMENT OF CASH FLOWS ​ ​ ​ ​ ​ (In Thousands) 2024 ​ 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Accretion of purchase accounting adjustment ​ ​ 0 ​ ​ 0 ​ ​ ( 14 ) Amortization of debt issuance costs ​ 182 ​ 176 ​ 170 Equity in undistributed income of subsidiaries ​ ( 8,761 ) ​ ( 4,946 ) ​ ( 8,830 ) Decrease (increase) in other assets ​ 64 ​ ( 167 ) ​ 0 (Decrease) increase in other liabilities ​ ( 93 ) ​ 97 ​ ( 41 ) Net Cash Provided by Operating Activities ​ 17,350 ​ 19,308 ​ 17,903 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ Repayment of subordinated debt ​ 0 ​ 0 ​ ( 8,500 ) Proceeds from sale of treasury stock ​ 0 ​ 0 ​ 160 Purchase of treasury stock ​ ( 629 ) ​ ( 6,784 ) ​ ( 9,349 ) Dividends paid ​ ( 15,530 ) ​ ( 15,569 ) ​ ( 15,865 ) Net Cash Used in Financing Activities ​ ( 16,159 ) ​ ( 22,353 ) ​ ( 33,554 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ​ 1,191 ​ ( 3,045 ) ​ ( 15,651 ) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ​ 14,822 ​ 17,867 ​ 33,518 CASH AND CASH EQUIVALENTS, END OF YEAR ​ $ 16,013 ​ $ 14,822 ​ $ 17,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION, ​ ​ ​ Interest paid ​ $ 1,305 ​ $ 1,234 ​ $ 1,433 ​ ​ ​ ​ ​ ​ ​ ​ 84 Table of Contents 19. DERIVATIVE FINANCIAL INSTRUMENTS ​ The Corporation is a party to derivative financial instruments. These financial instruments consist of interest rate swap agreements and risk participation agreements (RPAs) which contain master netting and collateral provisions designed to protect the party at risk. Interest rate swaps with commercial loan banking customers were executed to facilitate their respective risk management strategies. Under the terms of these arrangements, the commercial banking customers effectively exchanged their floating interest rate exposures on loans into fixed interest rate exposures. Those interest rate swaps have been simultaneously economically hedged by offsetting interest rate swaps with a third party, such that the Corporation has effectively exchanged its fixed interest rate exposures for floating rate exposures. These derivatives are not designated as hedges and are not speculative. Rather, these derivatives result from a service provided to certain customers. As the interest rate swaps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The aggregate notional amount of interest rate swaps was $ 141,940,000 at December 31, 2024 and $ 150,028,000 at December 31, 2023. There were no interest rate swaps originated in 2024 and 2023. There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at December 31, 2024 and 2023. In 2022, there was fee income on the interest swap originated of $ 290,000 included in other noninterest income in the consolidated statements of income. 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.” The net impact on the consolidated statements of income from RPAs was an increase in other noninterest income of $ 2,000 in 2024, an increase in other noninterest income of $ 18,000 in 2023 and a decrease in other noninterest income of $ 14,000 in 2022. The Corporation did not enter into any RPAs prior to 2022. 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 December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) At December 31, 2024 ​ At December 31, 2023 ​ 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 $ 70,970 ​ $ 2,385 ​ $ 70,970 ​ $ 2,385 ​ $ 75,014 ​ $ 2,783 ​ $ 75,014 ​ $ 2,783 RPA Out ​ 6,957 ​ ​ 2 ​ ​ 0 ​ ​ 0 ​ ​ 7,082 ​ ​ 11 ​ ​ 0 ​ ​ 0 RPA In ​ 0 ​ ​ 0 ​ ​ 9,916 ​ ​ 2 ​ ​ 0 ​ ​ 0 ​ ​ 10,000 ​ ​ 13 ​ (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 $ 1,090,000 at December 31, 2024 and $ 1,360,000 at December 31, 2023. ​ 20. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS The Corporation measures certain assets at fair value. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820, “Fair Value Measurements and 85 Table of Contents Disclosures” establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Corporation for identical assets. 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 through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets 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 becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data. At December 31, 2024 and 2023, assets measured at fair value and the valuation methods used are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Quoted Prices ​ Other Observable ​ Unobservable ​ ​ ​ ​ in Active Markets ​ Inputs ​ Inputs ​ Total (In Thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Fair Value Recurring fair value measurements, assets: ​ ​ ​ ​ AVAILABLE-FOR-SALE DEBT SECURITIES: ​ ​ ​ ​ Obligations of the U.S. Treasury ​ $ 7,118 ​ $ 0 ​ $ 0 ​ $ 7,118 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 9,025 ​ ​ 0 ​ ​ 9,025 Bank holding company debt securities ​ ​ 0 ​ ​ 25,246 ​ ​ 0 ​ ​ 25,246 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 101,302 ​ 0 ​ 101,302 Taxable ​ 0 ​ 42,506 ​ 0 ​ 42,506 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 94,414 ​ 0 ​ 94,414 Residential collateralized mortgage obligations ​ 0 ​ 49,894 ​ 0 ​ 49,894 Commercial mortgage-backed securities ​ 0 ​ 64,501 ​ 0 ​ 64,501 Private label commercial mortgage-backed securities ​ 0 ​ 8,374 ​ 0 ​ 8,374 Total available-for-sale debt securities ​ 7,118 ​ 395,262 ​ 0 ​ 402,380 Marketable equity security ​ 863 ​ 0 ​ 0 ​ 863 Servicing rights ​ 0 ​ 0 ​ 2,782 ​ 2,782 RPA Out ​ ​ 0 ​ ​ 2 ​ ​ 0 ​ ​ 2 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 2,385 ​ ​ 0 ​ ​ 2,385 Total recurring fair value measurements, assets ​ $ 7,981 ​ $ 397,649 ​ $ 2,782 ​ $ 408,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 2 ​ $ 0 ​ $ 2 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 2,385 ​ ​ 0 ​ ​ 2,385 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 2,387 ​ $ 0 ​ $ 2,387 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 136 ​ $ 136 Foreclosed assets held for sale ​ 0 ​ 0 ​ 181 ​ 181 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 317 ​ $ 317 ​ 86 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ 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 ​ $ 11,290 ​ $ 0 ​ $ 0 ​ $ 11,290 Obligations of U.S. Government agencies ​ ​ 0 ​ ​ 9,946 ​ ​ 0 ​ ​ 9,946 Bank holding company debt securities ​ ​ 0 ​ ​ 23,500 ​ ​ 0 ​ ​ 23,500 Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ Tax-exempt ​ 0 ​ 104,199 ​ 0 ​ 104,199 Taxable ​ 0 ​ 50,111 ​ 0 ​ 50,111 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: ​ ​ ​ ​ ​ Residential pass-through securities ​ 0 ​ 95,405 ​ 0 ​ 95,405 Residential collateralized mortgage obligations ​ 0 ​ 46,462 ​ 0 ​ 46,462 Commercial mortgage-backed securities ​ 0 ​ 66,682 ​ 0 ​ 66,682 Private label commercial mortgage-backed securities ​ 0 ​ 8,160 ​ 0 ​ 8,160 Total available-for-sale debt securities ​ 11,290 ​ 404,465 ​ 0 ​ 415,755 Marketable equity security ​ 871 ​ 0 ​ 0 ​ 871 Servicing rights ​ 0 ​ 0 ​ 2,659 ​ 2,659 RPA Out ​ ​ 0 ​ ​ 11 ​ ​ 0 ​ ​ 11 Interest rate swap agreements, assets ​ ​ 0 ​ ​ 2,783 ​ ​ 0 ​ ​ 2,783 Total recurring fair value measurements, assets ​ $ 12,161 ​ $ 407,259 ​ $ 2,659 ​ $ 422,079 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recurring fair value measurements, liabilities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RPA In ​ $ 0 ​ $ 13 ​ $ 0 ​ $ 13 Interest rate swap agreements, liabilities ​ ​ 0 ​ ​ 2,783 ​ ​ 0 ​ ​ 2,783 Total recurring fair value measurements, liabilities ​ $ 0 ​ $ 2,796 ​ $ 0 ​ $ 2,796 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonrecurring fair value measurements, assets: ​ ​ ​ ​ Loans individually evaluated for credit loss, net ​ $ 0 ​ $ 0 ​ $ 7,043 ​ $ 7,043 Foreclosed assets held for sale ​ 0 ​ 0 ​ 478 ​ 478 Total nonrecurring fair value measurements, assets ​ $ 0 ​ $ 0 ​ $ 7,521 ​ $ 7,521 ​ 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. 87 Table of Contents The following table shows quantitative information regarding significant techniques and inputs used at December 31, 2024 and 2023 for servicing rights assets measured using unobservable inputs (Level 3 methodologies) on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at ​ ​ ​ 12/31/2024 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 12/31/2024 Servicing rights ​ $ 2,782 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 116.00 % Weighted-average PSA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at ​ ​ ​ 12/31/2023 ​ Valuation ​ Unobservable ​ ​ ​ ​ Method or Value As of Asset ​ (In Thousands) ​ Technique ​ Input(s) ​ ​ ​ ​ 12/31/2023 Servicing rights ​ $ 2,659 Discounted cash flow Discount rate ​ 13.00 % Rate used through modeling period ​ ​ ​ ​ ​ Loan prepayment speeds ​ ​ 131.00 % 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 (servicing rights) measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Years Ended December 31, ​ 2024 ​ 2023 2022 Servicing rights balance, beginning of period ​ $ 2,659 ​ $ 2,653 ​ $ 2,329 Originations of servicing rights ​ 287 ​ 206 ​ 198 Unrealized (loss) gain included in earnings ​ ( 164 ) ​ ( 200 ) ​ 126 Servicing rights balance, end of period ​ $ 2,782 ​ $ 2,659 ​ $ 2,653 ​ 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). At December 31, 2024 and 2023, quantitative information regarding significant techniques and inputs used for nonrecurring fair value measurements using unobservable inputs (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 ​ 12/31/2024 ​ 12/31/2024 ​ 12/31/2024 ​ Technique ​ Inputs ​ 12/31/2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ Commercial real estate - owner occupied ​ $ 258 ​ $ 122 ​ $ 136 ​ Sales comparison & SBA guaranty ​ Discount to appraised value ​ 95 % ( 95 ) % Total loans individually evaluated for credit loss ​ $ 258 ​ $ 122 ​ $ 136 ​ ​ ​ Foreclosed assets held for sale - real estate: ​ ​ ​ ​ ​ ​ ​ Residential (1-4 family) ​ $ 25 ​ $ 0 ​ $ 25 Sales comparison Discount to appraised value ​ 62 % ( 62 ) % Commercial real estate ​ ​ 156 ​ ​ 0 ​ ​ 156 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 77 % ( 34 ) % Total foreclosed assets held for sale ​ $ 181 ​ $ 0 ​ $ 181 ​ ​ ​ ​ 88 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ Range (Weighted ​ ​ ​ ​ ​ Valuation ​ ​ ​ ​ ​ Average) ​ ​ Balance at ​ Allowance at ​ Fair Value at ​ Valuation ​ Unobservable ​ Discount at Asset ​ 12/31/2023 ​ 12/31/2023 ​ 12/31/2023 ​ Technique ​ Inputs ​ 12/31/2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans individually evaluated for credit loss: ​ ​ ​ ​ ​ Commercial real estate - non-owner occupied ​ $ 7,301 ​ $ 648 ​ $ 6,653 Sales comparison Discount to appraised value ​ 22 %- 30 % ( 25 ) % Commercial real estate - owner occupied ​ ​ 294 ​ ​ 5 ​ ​ 289 ​ Sales comparison & SBA guaranty ​ Discount to appraised value ​ 93 % ( 93 ) % All other commercial loans ​ ​ 191 ​ ​ 90 ​ ​ 101 ​ Liquidation & SBA guaranty ​ Discount to appraised value ​ 0 %- 76 % ( 17 ) % Total loans individually evaluated for credit loss ​ $ 7,786 ​ $ 743 ​ $ 7,043 ​ ​ Foreclosed assets held for sale - real estate: ​ ​ ​ ​ ​ ​ Residential (1-4 family) ​ $ 47 ​ $ 0 ​ $ 47 Sales comparison Discount to appraised value ​ 20 %- 62 % ( 50 ) % Commercial real estate ​ ​ 431 ​ ​ 0 ​ ​ 431 ​ Sales comparison ​ Discount to appraised value ​ 18 %- 50 % ( 45 ) % Total foreclosed assets held for sale ​ $ 478 ​ $ 0 ​ $ 478 ​ ​ ​ ​ 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. 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 ​ December 31, 2024 ​ December 31, 2023 ​ ​ Hierarchy ​ Carrying ​ Fair ​ Carrying ​ Fair ​ Level Amount Value Amount Value Financial assets: ​ ​ ​ ​ Cash and cash equivalents Level 1 ​ $ 123,574 ​ $ 123,574 ​ $ 52,778 ​ $ 52,778 Certificates of deposit Level 2 ​ 2,600 ​ 2,513 ​ 4,100 ​ 3,859 Restricted equity securities (included in other assets) Level 2 ​ 21,567 ​ N/A ​ 21,716 ​ N/A Loans, net Level 3 ​ 1,875,813 ​ 1,789,044 ​ 1,828,931 ​ 1,750,336 Accrued interest receivable Level 2 ​ 8,735 ​ 8,735 ​ 9,140 ​ 9,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Deposits with no stated maturity Level 2 ​ 1,609,552 ​ 1,609,552 ​ 1,590,357 ​ 1,590,357 Time deposits Level 2 ​ 484,357 ​ ​ 484,900 ​ 424,449 ​ ​ 423,643 Short-term borrowings Level 2 ​ 2,488 ​ ​ 2,488 ​ 33,874 ​ ​ 33,874 Long-term borrowings - FHLB advances Level 2 ​ 165,451 ​ ​ 165,616 ​ 138,337 ​ ​ 137,775 Senior notes, net ​ Level 2 ​ ​ 14,899 ​ ​ 13,579 ​ ​ 14,831 ​ ​ 12,706 Subordinated debt, net ​ Level 2 ​ ​ 24,831 ​ ​ 21,051 ​ ​ 24,717 ​ ​ 22,750 Accrued interest payable Level 2 ​ 1,771 ​ 1,771 ​ 1,525 ​ 1,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 89 Table of Contents ​ 21. 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 to and monitoring 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. Accounting policies for segments are the same as those described in Note 1. Segment performance is evaluated using consolidated net income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (In Thousands) ​ 2024 ​ 2023 ​ 2022 Interest income ​ $ 128,078 ​ $ 113,504 ​ $ 92,647 Interest expense ​ 48,963 ​ 33,104 ​ 9,519 Net interest income ​ 79,115 ​ ​ 80,400 ​ ​ 83,128 Provision for credit losses ​ 2,195 ​ ​ 186 ​ ​ 7,255 Net interest income after provision for credit losses ​ 76,920 ​ ​ 80,214 ​ ​ 75,873 Other income: ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ ​ 29,209 ​ ​ 27,453 ​ ​ 24,412 Realized (losses) gains on available-for-sale debt securities, net ​ 0 ​ ​ ( 3,036 ) ​ ​ 20 Total other income ​ 29,209 ​ ​ 24,417 ​ ​ 24,432 Other Expense: ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 44,930 ​ ​ 44,195 ​ ​ 41,833 Other segment expenses (1) ​ 29,328 ​ ​ 29,953 ​ ​ 26,122 Total noninterest expense ​ ​ 74,258 ​ ​ 74,148 ​ ​ 67,955 Income before income tax provision ​ ​ 31,871 ​ ​ 30,483 ​ ​ 32,350 Income tax provision ​ 5,913 ​ ​ 6,335 ​ ​ 5,732 NET INCOME ​ $ 25,958 ​ $ 24,148 ​ $ 26,618 (1) Other segment expenses included expenses for professional fees, data processing and telecommunicates, occupancy and Pennsylvania shares tax. The Corporation’s segment assets represent the total assets as presented on the Consolidated Balance Sheets at December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 Table of Contents ​ Report of Independent R egistered Public Accounting Firm Shareholders and Board of Directors of Citizens & Northern Corporation Wellsboro, Pennsylvania ​ Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of Citizens & Northern Corporation (the "Corporation") as of December 31, 2024, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). We also have audited the Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ​ In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. ​ Basis for Opinions ​ The Corporation’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Corporation’s financial statements and an opinion on the Corporation’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. ​ Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. ​ Definition and Limitations of Internal Control Over Financial Reporting ​ A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 91 Table of Contents ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 or procedures may deteriorate. ​ Critical Audit Matter ​ The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Allowance for Credit Losses on Loans – Qualitative Factors ​ The allowance for credit losses (the “ACL”) as described in Notes 1 and 7 is an accounting estimate of expected credit losses over the estimated life of loans. The Corporation’s loan portfolio, measured at amortized cost, is presented at the net amount expected to be collected. Estimates of expected credit losses for loans are based on historical experience, current conditions and reasonable and supportable forecasts over the life of the loans. ​ The Corporation measures expected credit losses on pooled loans when similar risk characteristics exist using the weighted-average remaining maturity model, which includes an additional expected credit loss based on reasonable and supportable forecast. The Corporation adjusts its quantitative model for certain qualitative factors that are deemed likely to cause estimated credit losses to differ from the conditions that existed for the period over which historical information was evaluated. ​ Auditing the qualitative factors included in the allowance for credit losses on loans was identified by us as a critical audit matter because of the extent of auditor judgment and significant audit effort to evaluate the significant subjective and complex judgments made by management related to the determination of the qualitative factors used in the calculation. ​ The primary procedures performed to address the critical audit matter included: ​ o Testing the effectiveness of management's controls addressing the evaluation and reasonableness of the qualitative framework and its inclusion in the appropriateness of the overall calculation. o Testing of the effectiveness of management’s controls addressing the evaluation of the appropriateness of significant assumptions and judgements used in the determination of qualitative factors and the relevance and reliability of data used in the qualitative factors. o Substantive testing of the appropriateness of the qualitative framework, including evaluation of the reasonableness of the significant assumptions and judgments applied in developing the qualitative factors as well as the relevance and reliability of data used in the qualitative factors. o Substantive testing of the appropriateness of the calculation of qualitative factors. ​ ​ /s/ Crowe LLP ​ We have served as the Corporation’s auditor since 2024. Columbus, Ohio March 6, 2025 ​ ​ ​ 92 Table of Contents Report of Independe nt Registered Public Accounting Firm To Stockholders and Board of Directors of Citizens & Northern Corporation Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheet of Citizens & Northern Corporation and subsidiaries (the "Corporation") as of December 31, 2023, and the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on the Corporation's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ ​ /s/ Baker Tilly US, LLP We have served as the Corporation’s auditor from 1979 to 2024. ​ Pittsburgh, Pennsylvania March 11, 2024, ​ Except for Note 21, as to which the date is March 6, 2025 ​ ​ ​ 93 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ​