What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 244 added, 148 removed, 830 unchanged (32% of the section changed)

34 unchanged sentences

authorized 30,000,000 shares;

issued 16,030,172 and outstanding 15,482,848 at March 31, 2025;

issued 16,030,172 and outstanding 15,514,943 at June 30, 2025;

issued 16,030,172 and outstanding 15,433,494 at December 31, 2024

2 unchanged sentences

Treasury stock, at cost;

547,324 shares at March 31, 2025 and 596,678

515,229 shares at June 30, 2025 and 596,678

shares at December 31, 2024

7 unchanged sentences

Three Months Ended

Six Months Ended

(In Thousands, Except Per Share Data)

31 unchanged sentences

Professional fees

Merger-related expenses

Other noninterest expense

8 unchanged sentences

Three Months Ended

Six Months Ended

(In Thousands)

6 unchanged sentences

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

Other comprehensive income (loss) on pension and postretirement obligations

Other comprehensive (loss) income on pension and postretirement obligations

Other comprehensive income (loss) before income tax

Income tax related to other comprehensive (income) loss

Net other comprehensive income (loss)

Other comprehensive income (loss), net

Comprehensive income

3 unchanged sentences

(In Thousands) (Unaudited)

Three Months Ended

Six Months Ended

(In Thousands)

8 unchanged sentences

Deferred income taxes

Decrease (increase) in fair value of servicing rights

Decrease in fair value of servicing rights

Net gains from sale of loans

2 unchanged sentences

Increase in accrued interest receivable and other assets

Decrease in accrued interest payable and other liabilities

(Decrease) increase in accrued interest and other liabilities

Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of certificates of deposit

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

8 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase (decrease) in deposits

Net (decrease) increase in short-term borrowings

Net increase in deposits

Net decrease in short-term borrowings

Proceeds from long-term borrowings - FHLB advances

3 unchanged sentences

Net Cash (Used in) Provided by Financing Activities

DECREASE IN CASH AND CASH EQUIVALENTS

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

11 unchanged sentences

Comprehensive

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Balance, March 31, 2025

Other comprehensive income, net

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

Shares issued for dividend reinvestment plan

Restricted stock granted

Forfeiture of restricted stock

Stock-based compensation expense

Balance, June 30, 2025

Three Months Ended June 30, 2024

Balance, March 31, 2024

Other comprehensive loss, net

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

Shares issued for dividend reinvestment plan

Forfeiture of restricted stock

Stock-based compensation expense

Purchase of restricted stock for tax withholding

Balance, June 30, 2024

Comprehensive

Six Months Ended June 30, 2025

Balance, December 31, 2024

6 unchanged sentences

Purchase of restricted stock for tax withholding

Balance, March 31, 2025

Three Months Ended March 31, 2024

Balance, June 30, 2025

Six Months Ended June 30, 2024

Balance, December 31, 2023

6 unchanged sentences

Purchase of restricted stock for tax withholding

Balance, March 31, 2024

Treasury stock purchases

Balance, June 30, 2024

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

10 unchanged sentences

GAAP”) for a complete set of financial statements.

Operating results reported for the three-month period ended March 31, 2025 might not be indicative of the results for the year ending December 31, 2025.

Operating results reported for the six-month period ended June 30, 2025 might not be indicative of the results for the year ending December 31, 2025.

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

8 unchanged sentences

The Corporation is currently evaluating the impact the new guidance will have on disclosures related to income taxes;

however, management does not expect it will have a significant impact on its consolidated financial statements.

In December 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of certain costs and expenses in the notes to the consolidated financial statements.

11 unchanged sentences

Three Months Ended

Six Months Ended

Dividends and undistributed earnings allocated to participating securities

7 unchanged sentences

(In Thousands)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Available-for-sale debt securities:

3 unchanged sentences

Unfunded pension and postretirement obligations:

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

Other comprehensive loss on unfunded retirement obligations

Total other comprehensive income

(In Thousands)

Three Months Ended June 30, 2024

Available-for-sale debt securities:

Unrealized holding losses on available-for-sale debt securities

Reclassification adjustment for (gains) realized in income

Other comprehensive loss from available-for-sale debt securities

Unfunded pension and postretirement obligations:

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

Other comprehensive loss on unfunded retirement obligations

Total other comprehensive loss

(In Thousands)

Six Months Ended June 30, 2025

Available-for-sale debt securities:

Unrealized holding gains on available-for-sale debt securities

Reclassification adjustment for (gains) realized in income

Other comprehensive income from available-for-sale debt securities

Unfunded pension and postretirement obligations:

Changes from plan amendments and actuarial gains and losses

2 unchanged sentences

Total other comprehensive income

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Available-for-sale debt securities:

4 unchanged sentences

Changes from plan amendments and actuarial gains and losses

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

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

Other comprehensive loss on unfunded retirement obligations

7 unchanged sentences

Income tax provision

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Changes in the components of accumulated other comprehensive (loss) income are as follows and are presented net of tax:

3 unchanged sentences

(Loss) Income

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Balance, beginning of period

Other comprehensive income during three months ended March 31, 2025

Other comprehensive income during three months ended June 30, 2025

Balance, end of period

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Balance, beginning of period

Other comprehensive loss during three months ended March 31, 2024

Other comprehensive loss during three months ended June 30, 2024

Balance, end of period

(In Thousands)

Comprehensive

on Securities

(Loss) Income

Six Months Ended June 30, 2025

Balance, beginning of period

Other comprehensive income during six months ended June 30, 2025

Balance, end of period

Six Months Ended June 30, 2024

Balance, beginning of period

Other comprehensive loss during six months ended June 30, 2024

Balance, end of period

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

CASH AND DUE FROM BANKS

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

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

(In Thousands)

6 unchanged sentences

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

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Amortized cost and fair value of available-for-sale debt securities at March 31, 2025 and December 31, 2024 are summarized as follows.

No allowance for credit losses was recorded at March 31, 2025 and December 31, 2024.

Amortized cost and fair value of available-for-sale debt securities at June 30, 2025 and December 31, 2024 are summarized as follows.

No allowance for credit losses was recorded at June 30, 2025 and December 31, 2024.

(In Thousands)

March 31, 2025

June 30, 2025

Obligations of the U.S.

9 unchanged sentences

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

Total available-for-sale debt securities

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

12 unchanged sentences

Total available-for-sale debt securities

The following table presents gross unrealized losses and fair value of available-for-sale debt securities with unrealized loss positions aggregated by length of time that individual securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024 for which an allowance for credit losses has not been recorded:

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

March 31, 2025

The following table presents gross unrealized losses and fair value of available-for-sale debt securities with unrealized loss positions aggregated by length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025 and December 31, 2024 for which an allowance for credit losses has not been recorded:

June 30, 2025

Less Than 12 Months

12 unchanged sentences

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

December 31, 2024

12 unchanged sentences

Commercial mortgage-backed securities

As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $ 42,819,000 at March 31, 2025 and $ 47,806,000 at December 31, 2024.

At March 31, 2025, the Corporation did not have the intent to sell, nor is it more likely than not it will be required to sell, these securities before it is able to recover the amortized cost basis.

As reflected in the table above, gross unrealized holding losses on available-for-sale debt securities totaled $ 40,423,000 at June 30, 2025 and $ 47,806,000 at December 31, 2024.

At June 30, 2025, the Corporation did not have the intent to sell, nor is it more likely than not it will be required to sell, these securities before it is able to recover the amortized cost basis.

The unrealized holding losses were consistent with increases in market interest rates that have occurred subsequent to the purchase of most of the securities.

At March 31, 2025 and December 31, 2024, management performed an assessment for possible credit losses of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources.

At March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

There were no gross realized gains and losses from the sale of available-for-sale debt securities for the three months ended March 31, 2025 and 2024.

The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of March 31, 2025.

At June 30, 2025 and December 31, 2024, management performed an assessment for possible credit losses of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources.

At June 30, 2025 and December 31, 2024, all of the Corporation’s holdings of bank holding company debt securities, obligations of states and political subdivisions, private label commercial mortgage-backed securities and collateralized loan obligations were investment grade and there have been no payment defaults.

Based on the results of the assessment, there was no ACL required on available-for-sale debt securities in an unrealized loss position at June 30, 2025 and December 31, 2024.

There were no gross realized gains and losses from the sale of available-for-sale debt securities for the three and six months ended June 30, 2025 and 2024.

The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of June 30, 2025.

Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)

March 31, 2025

June 30, 2025

Due in one year or less

8 unchanged sentences

Private label commercial mortgage-backed securities

The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations.

Asset-backed securities,

Collateralized loan obligations

The Corporation’s mortgage-backed securities, collateralized mortgage obligations and asset-backed securities have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations.

Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates.

In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.

Investment securities carried at $ 168,981,000 at March 31, 2025 and $ 190,949,000 at December 31, 2024 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law.

In the table above, mortgage-backed securities, collateralized mortgage obligations and asset-backed securities are shown in one period.

Investment securities carried at $ 162,406,000 at June 30, 2025 and $ 190,949,000 at December 31, 2024 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law.

See Note 8 for information concerning securities pledged to secure borrowing arrangements.

3 unchanged sentences

There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated.

C&N Bank’s investment in FHLB-Pittsburgh stock, included in other assets in the consolidated balance sheets, was $ 14,834,000 at March 31, 2025 and $ 15,018,000 at December 31, 2024.

The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at March 31, 2025 and December 31, 2024.

C&N Bank’s investment in FHLB-Pittsburgh stock, included in other assets in the consolidated balance sheets, was $ 14,392,000 at June 30, 2025 and $ 15,018,000 at December 31, 2024.

The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at June 30, 2025 and December 31, 2024.

In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected.

The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available.

In July 2023, C&N Bank became a member of the Federal Reserve System.

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

As a member, C&N Bank is required to purchase and maintain stock in the Federal Reserve Bank of Philadelphia.

There is no active market for Federal Reserve Bank stock, and it must ordinarily be redeemed by the Federal Reserve Bank of Philadelphia in order to be liquidated.

C&N Bank’s investment in Federal Reserve Bank stock, included in other assets in the consolidated balance sheets, was $ 6,311,000 at March 31, 2025 and $ 6,299,000 at December 31, 2024.

The Corporation has a marketable equity security included in other assets in the consolidated balance sheets with a carrying value of $ 876,000 at March 31, 2025 and $ 863,000 December 31, 2024, consisting exclusively of one mutual fund.

There was an unrealized loss on the mutual fund of $ 124,000 at March 31, 2025 and $ 137,000 at December 31, 2024.

Changes in the unrealized gains or losses on

C&N Bank’s investment in Federal Reserve Bank stock, included in other assets in the consolidated balance sheets, was $ 6,321,000 at June 30, 2025 and $ 6,299,000 at December 31, 2024.

The Corporation has a marketable equity security included in other assets in the consolidated balance sheets with a carrying value of $ 878,000 at June 30, 2025 and $ 863,000 December 31, 2024, consisting exclusively of one mutual fund.

There was an unrealized loss on the mutual fund of $ 122,000 at June 30, 2025 and $ 137,000 at December 31, 2024.

Changes in the unrealized gains or losses on this security, which are included in other noninterest income in the consolidated statements of income, were a gain of $ 2,000 in the second quarter of 2025 and a loss of $ 9,000 in the second quarter of 2024, a gain of $ 15,000 in the six-month period ended June 30, 2025 and a loss of $ 13,000 in the six-month period ended June 30, 2024.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

this security, which are included in other noninterest income in the consolidated statements of income, were a gain of $ 13,000 in the first quarter 2025 and a loss of $ 9,000 in the first quarter 2024.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

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

Summary of Loans by Type

6 unchanged sentences

allowance for credit losses on loans

In the table above, outstanding loan balances are presented net of deferred loan origination fees, net, of $ 4,005,000 at March 31, 2025 and $ 4,136,000 at December 31, 2024.

In the table above, outstanding loan balances are presented net of deferred loan origination fees, net, of $ 3,963,000 at June 30, 2025 and $ 4,136,000 at December 31, 2024.

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

1 unchanged sentence

Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region.

The following tables presents an analysis of past due loans as of March 31, 2025 and December 31, 2024:

The following tables present an analysis of past due loans as of June 30, 2025 and December 31, 2024:

(In Thousands)

As of March 31, 2025

As of June 30, 2025

Still Accruing

12 unchanged sentences

Consumer loans

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation uses an internal risk rating system.

6 unchanged sentences

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following table presents the amortized cost of loans by credit quality indicators by year of origination as of March 31, 2025:

The following table presents the amortized cost of loans by credit quality indicators by year of origination as of June 30, 2025:

(In Thousands)

50 unchanged sentences

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

March 31, 2025

June 30, 2025

Nonaccrual Loans with

19 unchanged sentences

Consumer loans

The Corporation recognized interest income on nonaccrual loans of $ 230,000 in the three months ended March 31, 2025 and $ 231,000 in the three months ended March 31, 2024.

The following table represents the accrued interest receivable written off by reversing interest income during the three-month periods ended March 31, 2025 and 2024:

The Corporation recognized interest income on nonaccrual loans of $ 227,000 and $ 457,000 in the three and six months ended June 30, 2025, respectively and $ 285,000 and $ 516,000 in the three and six months ended June 30, 2024, respectively.

The following table represents the accrued interest receivable written off by reversing interest income during the three-month and six-month periods ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(In Thousands)

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Commercial real estate - non-owner occupied

Commercial real estate - owner occupied

All other commercial loans

10 unchanged sentences

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

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

● Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property.

Some consumer loans are unsecured and have no underlying collateral.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following table details the amortized cost of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:

March 31, 2025

June 30, 2025

December 31, 2024

3 unchanged sentences

All other commercial loans

Consumer loans

Allowance for Credit Losses

6 unchanged sentences

and (c) an additional adjustment to expected credit losses is made, based on an economic forecast, and applied for the first 2 years of the weighted-average remaining life of the portfolio.

The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2025 and 2024.

The following table summarizes the activity related to the allowance for credit losses for the three and six months ended June 30, 2025 and 2024.

real estate -

1 unchanged sentence

(In Thousands)

Balance, March 31, 2025

Provision (credit) for credit losses on loans

Balance, June 30, 2025

real estate -

(In Thousands)

Balance, December 31, 2024

Provision (credit) for credit losses on loans

Balance, March 31, 2025

Balance, June 30, 2025

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

2 unchanged sentences

(In Thousands)

Balance, March 31, 2024

Provision (credit) for credit losses on loans

Balance, June 30, 2024

real estate -

(In Thousands)

Balance, December 31, 2023

Provision (credit) for credit losses on loans

Balance, March 31, 2024

The ACL on loans individually evaluated increased to $ 189,000 at March 31, 2025 from $ 122,000 at December 31, 2024.

At March 31,2025, there were loans to two borrowers with a total amortized cost basis of $ 945,000 for which individual ACLs were recorded.

Balance, June 30, 2024

The ACL on loans individually evaluated decreased to $ 9,000 at June 30, 2025 from $ 122,000 at December 31, 2024.

At June 30, 2025, there were loans to one borrower with a total amortized cost basis of $ 239,000 for which an individual ACL was recorded.

At December 31, 2024, there were loans to one borrower with a total amortized cost basis of $ 258,000 for which an individual ACL was recorded.

The ACL on loans collectively evaluated was $ 19,983,000 at March 31, 2025, up from $ 19,913,000 at December 31, 2024.

The increase in the collectively evaluated portion of the ACL at March 31, 2025 as compared to December 31, 2024 included a net increase related to changes in qualitative adjustments partially offset by decreases in the WARM method estimate based on the Corporation’s net charge-off experience and in the economic forecast.

The ACL on loans collectively evaluated was $ 21,690,000 at June 30, 2025, up from $ 19,913,000 at December 31, 2024.

The increase in the collectively evaluated portion of the ACL at June 30, 2025 as compared to December 31, 2024 included a net increase related to changes in qualitative adjustments and in an economic forecast, partially offset by a decrease in the portion of the ACL based on the WARM method estimated losses resulting partially from a reduction in the estimated average life of the portfolio.

Modifications Made to Borrowers Experiencing Financial Difficulty

1 unchanged sentence

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification.

During the three months ended March 31, 2025 and March 31, 2024, the Corporation made no modifications of loans to borrowers experiencing financial difficulty.

The following table presents the performance of such loans that have been modified in the twelve-month period preceding March 31, 2025 and the twelve-month period preceding March 31, 2024 (in thousands):

During the three and six months ended June 30, 2025 and June 30, 2024, the Corporation made no modifications of loans to borrowers experiencing financial difficulty.

The following table presents the performance of such loans that have been modified in the twelve-month period preceding June 30, 2025 and the twelve-month period preceding June 30, 2024 (in thousands):

(In Thousands)

Payment Status (Amortized Cost Basis)

March 31, 2025

June 30, 2025

Current or Past Due Less than 30 Days

4 unchanged sentences

Payment Status (Amortized Cost Basis)

March 31, 2024

June 30, 2024

Current or Past Due Less than 30 Days

1 unchanged sentence

Commercial real estate - non-owner occupied

As shown, in the table immediately above, at March 31, 2025 one loan secured by owner occupied commercial real estate with an amortized cost of $ 217,000 and one of the loans secured by non-owner occupied commercial real estate with an amortized cost basis of $ 1,801,000 were in nonaccrual status.

For the loan secured by non-owner occupied real estate with an amortized cost basis of $ 1,801,000 at March 31, 2025, the Corporation had extended the maturity for 12 months in the fourth quarter 2023.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Included in performance of loans modified in the twelve-month period preceding June 30, 2025 table above, was one loan secured by non-owner occupied commercial real estate with an amortized cost basis of $ 1,790,000 that was in nonaccrual status at June 30, 2025.

For the loan secured by non-owner occupied real estate with an amortized cost basis of $ 1,790,000 at June 30, 2025, 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 ACL on this loan at March 31, 2025 and December 31, 2024.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The loan that was past due more than 90 days at March 31, 2024 in the table above was in default with its modified terms at March 31, 2025 and March 31, 2024.

The Corporation received payments totaling $ 228,000 in the twelve-month period ended March 31, 2025, all of which were applied to principal.

The amortized cost basis of the loan was $ 1,153,000 at March 31, 2025.

Except as described above, the Corporation had no commitments to lend any additional funds on modified loans during the three months ended March 31, 2025 and 2024, and the Corporation had no loans that defaulted during the three months ended March 31, 2025 and 2024 that had been modified preceding the payment default when the borrower was experiencing financial difficulty at the time of modification.

There was no specific ACL on this loan at June 30, 2025 and December 31, 2024.

The loan that was past due more than 90 days at June 30, 2024 in the table above was in default with its modified terms at June 30, 2024.

The Corporation received payments totaling $ 258,000 in the twelve-month period ended June 30, 2025, all of which were applied to principal.

The amortized cost basis of the loan was $ 1,123,000 at June 30, 2025.

The Corporation had no commitments to lend any additional funds on modified loans during the three and six months ended June 30, 2025 and 2024, and the Corporation had no loans that defaulted during the three and six months ended June 30, 2025 and 2024 that had been modified preceding the payment default when the borrower was experiencing financial difficulty at the time of modification.

The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in foreclosed assets held for sale in the unaudited consolidated balance sheets) is as follows:

6 unchanged sentences

These financial instruments include commitments to extend credit and standby letters of credit.

The contract amounts of these financial instruments at March 31, 2025 and December 31, 2024 are as follows:

The contract amounts of these financial instruments at June 30, 2025 and December 31, 2024 are as follows:

(In Thousands)

3 unchanged sentences

commitment cannot be canceled at any time).

The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense.

The allowance for off-balance sheet credit exposures is adjusted through the provision for credit losses.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated lives.

The allowance for credit losses for off-balance sheet exposures of $ 463,000 at March 31, 2025 and $ 455,000 at December 31, 2024, is included in accrued interest and other liabilities on the unaudited consolidated balance sheets.

The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the three months ended March 31, 2025 and 2024:

The allowance for credit losses for off-balance sheet exposures of $ 742,000 at June 30, 2025 and $ 455,000 at December 31, 2024, is included in accrued interest and other liabilities on the unaudited consolidated balance sheets.

The following table presents the balance and activity in the allowance for credit losses for off-balance sheet exposures for the three and six months ended June 30, 2025 and 2024:

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Three Months Ended

Six Months Ended

(In Thousands)

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Beginning Balance

Provision (credit) for unfunded commitments

Ending Balance, March 31

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Ending Balance, June 30

GOODWILL AND CORE DEPOSIT INTANGIBLES, NET

Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired.

At March 31, 2025 and December 31, 2024, the net carrying value of goodwill was $ 52,505,000 .

At June 30, 2025 and December 31, 2024, the net carrying value of goodwill was $ 52,505,000 .

Information related to core deposit intangibles is as follows:

4 unchanged sentences

Three Months Ended

Six Months Ended

Amortization expense

6 unchanged sentences

Total short-term borrowings

The weighted average interest rate on total short-term borrowings outstanding was 0.10 % at March 31, 2025 and December 31, 2024.

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 March 31, 2025 and December 31, 2024.

The carrying value of the underlying securities was $ 580,000 at March 31, 2025 and $ 2,500,000 at December 31, 2024.

The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $ 1,347,840,000 at March 31, 2025 and $ 1,351,770,000 at December 31, 2024.

The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10 % at both June 30, 2025 and December 31, 2024.

The carrying value of the underlying securities was $ 540,000 at June 30, 2025 and $ 2,500,000 at December 31, 2024.

The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $ 1,387,317,000 at June 30, 2025 and $ 1,351,770,000 at December 31, 2024.

Also, the FHLB-Pittsburgh loan facility requires the Corporation to invest in established amounts of FHLB-Pittsburgh stock.

The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in other assets in the consolidated balance sheets) were $ 14,834,000 at March 31, 2025 and $ 15,018,000 at December 31, 2024.

The Corporation’s total credit facility with FHLB-Pittsburgh was $ 948,970,000 at March 31, 2025, including an unused (available) amount of $ 772,430,000 .

At December 31, 2024, the Corporation’s total credit facility with FHLB-Pittsburgh was $ 938,691,000 , including an unused (available) amount of $ 749,999,000 .

The Corporation had available credit with other correspondent banks totaling $ 75,000,000 at March 31, 2025 and December 31, 2024.

These lines of credit are primarily unsecured.

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

The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in other assets in the consolidated balance sheets) were $ 14,392,000 at June 30, 2025 and $ 15,018,000 at December 31, 2024.

The Corporation’s total credit facility with FHLB-Pittsburgh was $ 945,619,000 at June 30, 2025, including an unused (available) amount of $ 780,008,000 and outstanding credit facilities of $ 165,611,000 which included long-term borrowings with par values totaling $ 143,894,000 and letters of credit totaling $ 21,717,000 .

At December 31, 2024, the Corporation’s total credit facility with FHLB-

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Pittsburgh was $ 938,691,000 , including an unused (available) amount of $ 749,999,000 and outstanding credit facilities of $ 188,692,000 which included long-term borrowings with par values totaling $ 165,451,000 and letters of credit totaling $ 23,241,000 .

The Corporation had available credit with other correspondent banks totaling $ 75,000,000 at June 30, 2025 and December 31, 2024.

These lines of credit are primarily unsecured.

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

The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window.

At March 31, 2025, the Corporation had available credit in the amount of $ 17,431,000 on this line with no outstanding advances.

At June 30, 2025, the Corporation had available credit in the amount of $ 17,545,000 on this line with no outstanding advances.

At December 31, 2024, the Corporation had available credit in the amount of $ 18,093,000 on this line with no outstanding advances.

As collateral for this line, the Corporation has pledged available-for-sale securities with a carrying value of $ 18,236,000 at March 31, 2025 and $ 18,881,000 at December 31, 2024.

As collateral for this line, the Corporation has pledged available-for-sale securities with a carrying value of $ 18,305,000 at June 30, 2025 and $ 18,881,000 at December 31, 2024.

LONG-TERM BORROWINGS – FHLB ADVANCES

7 unchanged sentences

Total long-term FHLB-Pittsburgh borrowings

Weighted-average rates are presented as of March 31, 2025.

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

In 2021, the Corporation issued and sold $ 15.0 million in aggregate principal amount of 2.75 % Fixed Rate Senior Unsecured Notes due 2026 (the "Senior Notes").

4 unchanged sentences

Debt issuance costs are amortized over the term of the Senior Notes as an adjustment of the effective interest rate.

Amortization of debt issuance costs associated with the Senior Notes totaling $ 18,000 in the first quarter 2025 and $ 17,000 in the first quarter 2024 was included in interest expense in the unaudited consolidated statements of income.

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

Amortization of debt issuance costs associated with the Senior Notes totaling $ 17,000 in the second quarter 2025 and $ 35,000 for the six-month ended June 30, 2025 and $ 17,000 in the second quarter 2024 and $ 34,000 for the six-month ended June 30, 2024 was included in interest expense on senior notes, net in the unaudited consolidated statements of income.

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

(In Thousands)

6 unchanged sentences

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.

From June 1, 2026 to maturity or early redemption, the interest rate will reset quarterly to an interest rate per

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

annum equal to the three-month Secured Overnight Financing Rate provided by the Federal Reserve Bank of New York plus 259 basis points.

The Corporation is entitled to redeem the Subordinated Notes, in whole or in part, at any time on or after June 1, 2026, and to redeem the Subordinated Notes at any time in whole upon certain other events.

2 unchanged sentences

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.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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 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.

1 unchanged sentence

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 $ 29,000 in the first quarter 2025 and $ 28,000 in the first quarter 2024, was included in interest expense in the unaudited consolidated statements of income.

At March 31, 2025 and December 31, 2024, the carrying amounts of subordinated debt agreements are as follows:

Amortization of debt issuance costs associated with the Subordinated Notes totaling $ 29,000 in the second quarter 2025 and $ 58,000 for the six-month period ended June 30, 2025 and $ 28,000 in the second quarter 2024 and $ 56,000 for the six-month period ended June 30, 2024, was included in interest expense on subordinated debt, net in the unaudited consolidated statements of income.

At June 30, 2025 and December 31, 2024, the carrying amounts of subordinated debt agreements are as follows:

(In Thousands)

5 unchanged sentences

The Corporation has a stock incentive plan for selected officers and the independent directors.

The Corporation made first quarter 2025 restricted stock awards to employees that vest ratably over three years .

Following is a summary of restricted stock awards granted in the three-month period ended March 31, 2025:

The Corporation made second quarter 2025 restricted stock awards to independent directors that vest ratably over one year and made restricted stock awards to employees that vest ratably over three years in the six-month period ended June 30, 2025.

Following is a summary of restricted stock awards granted in the six-month period ended June 30, 2025:

(Dollars in Thousands)

Three Months Ended March 31, 2025 awards:

Six Months Ended June 30, 2025 awards:

Time-based awards to independent directors

Time-based awards to employees

1 unchanged sentence

Compensation cost related to restricted stock is recognized based on the fair value of the stock at the grant date over the vesting period, adjusted for estimated and actual forfeitures.

Total stock-based compensation expense attributable to restricted stock awards amounted to $ 325,000 in the first quarter 2025 and $ 326,000 in the first quarter 2024.

Total stock-based compensation expense attributable to restricted stock awards amounted to $ 331,000 in the second quarter 2025 and $ 390,000 in the second quarter 2024.

Total stock-based compensation expense attributable to restricted stock awards amounted to $ 656,000 in the six-month period ended June 30, 2025 and $ 716,000 in the six-month period ended June 30, 2024.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

13 unchanged sentences

By order of the District Court judge dated March 27, 2025, C&N Bank’s motion to dismiss for wont of personal jurisdiction was granted.

To date, the plaintiffs have not petitioned the Court of Appeals for leave to appeal the order to dismiss.

The Plaintiffs have no appeal of the District Court’s decision as a matter of right.

On May 23, 2025, C&N Bank was served with a complaint filed by Goldovsky, et al in the US District Court for the Middle District of Pennsylvania.

The complaint is predicated upon Texas Securities law alleging substantially the same facts and asserting the same legal arguments.

C&N Bank believes that it has substantial defenses against the action, and it intends to defend itself against the plaintiffs’ allegations.

14 unchanged sentences

As the interest rate swaps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

The aggregate notional amount of interest rate swaps was $ 140,772,000 at March 31, 2025 and $ 141,940,000 at December 31, 2024.

There were no interest rate swaps originated in the three-month periods ended March 31, 2025, and 2024.

There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at March 31, 2025 and December 31, 2024.

The Corporation has entered into an RPA with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed.

This type of derivative is referred to as an “RPA In.” In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Corporation has provided a loan structured with a derivative, the Corporation purchased an RPA from an

The aggregate notional amount of interest rate swaps was $ 143,208,000 at June 30, 2025 and $ 141,940,000 at December 31, 2024.

The Corporation originated one interest rate swap with a notional amount of $ 1,800,000 in the six-month period ended June 30, 2025.

Fee income on the interest swap originated in the six-month period ended June 30, 2025 of $ 24,000 was included in other noninterest income in the consolidated statements of income.

There were no interest rate swaps originated in the six-month period ended June 30, 2024.

There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at June 30, 2025 and December 31, 2024.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

institution participating in the facility in exchange for a fee commensurate with the risk shared.

This type of derivative is referred to as an “RPA Out.” There was no net impact on the consolidated statements of income from RPAs in the first quarter 2025 as compared to an increase of $ 1,000 , included in other noninterest income, in the first quarter 2024.

The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the consolidated balance sheets at March 31, 2025 and December 31, 2024:

This type of derivative is referred to as an “RPA Out.” There was an increase of $ 9,000 included in other noninterest income from RPAs in the second quarter 2025 and in the six-month period ended June 30, 2025 as compared to an increase of $ 1,000 , included in other noninterest income, in the second quarter 2024 and $ 2,000 in the six-month period ended June 30, 2024.

The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the consolidated balance sheets at June 30, 2025 and December 31, 2024:

(In Thousands)

At March 31, 2025

At June 30, 2025

At December 31, 2024

8 unchanged sentences

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 March 31, 2025 and at December 31, 2024.

There was interest-bearing cash pledged as collateral against the Corporation’s liability related to the interest rate swaps of $ 1,120,000 at June 30, 2025 and $ 1,090,000 at December 31, 2024.

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

11 unchanged sentences

Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows and other similar techniques.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation monitors and evaluates available data relating to fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date of an event or change in circumstances that affects the valuation method chosen.

Examples of such changes may include the market for a particular asset or liability becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2025 and December 31, 2024, assets and liabilities measured at fair value and the valuation methods used are as follows:

March 31, 2025

At June 30, 2025 and December 31, 2024, assets and liabilities measured at fair value and the valuation methods used are as follows:

June 30, 2025

Quoted Prices

15 unchanged sentences

Private label commercial mortgage-backed securities

Asset-backed securities,

Collateralized loan obligations

Total available-for-sale debt securities

51 unchanged sentences

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows:

At June 30, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows:

Fair Value at

21 unchanged sentences

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Servicing rights balance, beginning of period

Originations of servicing rights

Unrealized (loss) gain included in earnings

Unrealized loss included in earnings

Servicing rights balance, end of period

6 unchanged sentences

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for nonrecurring fair value measurements using Level 3 methodologies are as follows:

At June 30, 2025 and December 31, 2024, quantitative information regarding valuation techniques and the significant unobservable inputs used for nonrecurring fair value measurements using Level 3 methodologies are as follows:

(Dollars In Thousands)

5 unchanged sentences

Discount to appraised value

All other commercial Loans

Liquidation of accounts receivable

Discount to borrower's financial statement value

Total loans individually evaluated for credit loss

35 unchanged sentences

(In Thousands)

March 31, 2025

June 30, 2025

December 31, 2024

22 unchanged sentences

Three Months Ended

Six Months Ended

(In Thousands)

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Interest income

4 unchanged sentences

Other income:

Other noninterest income

Total other income

Other Expense:

Other Noninterest Expense:

Salaries and employee benefits

3 unchanged sentences

Income tax provision

(1 ) Other segment expenses included expenses for professional fees, data processing and telecommunications, occupancy and Pennsylvania shares tax.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation’s segment assets represent the total assets as presented in the consolidated balance sheets at March 31, 2025 and December 31, 2024.

SUBSEQUENT EVENTS

(1 ) Other segment expenses included expenses for professional fees, data processing and telecommunications, net occupancy and equipment, merger related expenses, automated teller machine and interchange, Pennsylvania shares tax and other noninterest expenses.

The Corporation’s segment assets represent the total assets as presented in the consolidated balance sheets at June 30, 2025 and December 31, 2024.

PENDING MERGER

On April 23, 2025, the Corporation announced that it had entered into an Agreement and Plan of Merger with Susquehanna Community Financial, Inc.

(“SQCF”) pursuant to which it will acquire SQCF.

(“SQCF”) pursuant to which agreed to acquire SQCF.

SQCF is the financial holding company for Susquehanna Community Bank (“Susquehanna”), which operates 7 banking offices in Central Pennsylvania.

SQCF had assets of $ 598 million as of March 31, 2025.

SQCF had assets of $ 593 million as of June 30, 2025.

Under the terms of the definitive agreement, each share of SQCF’s common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.80 shares of the Corporation’s common stock.

1 unchanged sentence

The merger, which is expected to close in the fourth quarter of 2025, is subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by SQCF’s shareholders.

In the second quarter 2025, the Corporation incurred merger-related expenses of $ 167,000 which primarily consisted of professional and legal fees.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

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

What changed 10-Q

Item 1. Financial Statements