Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC), headquartered in Wellsboro, Pennsylvania, and Susquehanna Community Financial, Inc. (“SQCF”) (OTCPK: SQCF), headquartered in West Milton, Pennsylvania, announced today that both companies’ boards of directors have unanimously approved an agreement and plan of merger (the “Agreement”) pursuant to which SQCF will merge with and into C&N. C&N C&N Wellsboro, PA AND WEST MILTON, PA, May 12, 2025 (GLOBE NEWSWIRE) -- Citizens & Northern Corporation (“C&N” ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _________________________. Commission file number: 000-16084 CITIZENS & NORTHERN CORPORATION (Exact name of Registrant as ...

Group 1 - Citizens & Northern (CZNC) reported quarterly earnings of $0.41 per share, missing the Zacks Consensus Estimate of $0.44 per share, but showing an increase from $0.35 per share a year ago, resulting in an earnings surprise of -6.82% [1] - The company posted revenues of $27.19 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.91%, compared to year-ago revenues of $25.72 million [2] - Citizens & Northern shares have increased approximately 4.7% since the beginning of the year, contrasting with the S&P 500's decline of -10.1% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.48 on revenues of $29 million, and for the current fiscal year, it is $1.91 on revenues of $115.9 million [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Net income for Q1 2025 was $6,293,000, an increase of 18.60% compared to $5,306,000 in Q1 2024[1] - Net income for the quarter ended March 31, 2025, was $6,293,000, a decrease of 22.9% compared to $8,174,000 for the same period in 2024[7] - Noninterest income for Q1 2025 was $7,008,000, up 4.99% from $6,675,000 in Q1 2024[5] - Noninterest income for the quarter was $7,008,000, down from $7,547,000 in the previous quarter, representing a decrease of 7.1%[7] - The company reported a basic and diluted earnings per share of $0.41 for the quarter, down from $0.53 in the same quarter last year[7] Interest Income and Expenses - Net interest income after provision for credit losses rose to $19,739,000, reflecting a 9.13% increase from $18,087,000 in the previous year[1] - Net interest income after provision for credit losses was $19,739,000, down from $21,004,000 in the previous quarter, reflecting a decrease of 6.0%[7] - Total interest income decreased to $31,920 thousand for the three months ended March 31, 2025, down from $33,546 thousand in the previous quarter, reflecting a decline of approximately 4.8%[17] - Total interest expense decreased to $11,734 thousand for the three months ended March 31, 2025, compared to $12,856 thousand in the previous quarter, a reduction of about 8.7%[17] Assets and Liabilities - Total assets increased by 3.48% to $2,609,228,000 from $2,521,537,000 year-over-year[3] - Total assets as of March 31, 2025, were $2,609,228,000, a slight decrease from $2,610,653,000 as of December 31, 2024[8] - Total stockholders' equity increased to $281,831,000 from $275,284,000 in the previous quarter, reflecting a growth of 2.0%[8] - The total assets of the company as of March 31, 2025, were $2,575,150[19] Capital and Equity - Return on average assets (annualized) improved to 0.98% from 0.84%, marking a 16.67% increase[5] - Return on average equity (annualized) increased to 9.05% from 8.13%, representing an 11.32% rise[5] - Common book value per share increased to $18.20, a 7.00% rise from $17.01 in the previous year[5] - The total risk-based capital ratio increased to 16.00% from 15.54%, reflecting a 2.96% improvement in capital strength[6] - The total stockholders' equity, excluding accumulated other comprehensive loss, was $312,427 as of March 31, 2025[19] Credit Quality - The provision for credit losses was $236,000, compared to a credit of $531,000 in the previous quarter, indicating a shift in credit quality assessment[7] - Total nonperforming loans increased to $24,130 thousand as of March 31, 2025, up from $23,961 thousand in December 31, 2024, representing a 0.7% increase[12] - Total nonperforming assets rose to $24,329 thousand, compared to $24,142 thousand in the previous quarter, marking a 0.8% increase[12] - The allowance for credit losses as a percentage of total loans remained stable at 1.06% for both March 31, 2025, and December 31, 2024[12] - Net charge-offs for the three months ended March 31, 2025, were $91 thousand, compared to $14 thousand for the previous quarter, indicating a significant increase in charge-offs[13] - The provision for credit losses on loans was $228 thousand for the three months ended March 31, 2025, compared to a credit of $393 thousand in the previous quarter[14] Operational Efficiency - The efficiency ratio improved to 70.03% from 70.64%, indicating enhanced operational efficiency[6] - Total noninterest expense rose to $19,043 for the three months ended March 31, 2025, compared to $18,430 in the previous quarter[22] Deposits - Deposits grew by 5.32% to $2,102,141,000 compared to $1,995,903,000 in the prior year[3] - Total deposits reached $2,061,182, with uninsured deposits estimated at $621,542, representing 22.8% of total deposits[24] Other Financial Metrics - Total earning assets as of March 31, 2025, amounted to $2,419,806, with a return of 5.35%[19] - Total loans receivable increased to $1,899,433, with a taxable return of 6.03%[19] - The interest rate spread for the three months ended March 31, 2025, was 2.69%[19] - Highly liquid available funding as a percentage of uninsured deposits was 182.7% as of March 31, 2025[24]

Loan Portfolio and Credit Risk - A significant portion of the Corporation's loan portfolio consists of commercial real estate loans, which are generally viewed as having more risk of default compared to residential real estate loans[27]. - The Corporation's loan portfolio is primarily concentrated in the Northern tier/Northcentral regions of Pennsylvania, Southern tier of New York, and Southeastern and Southcentral Pennsylvania, making it vulnerable to local economic conditions[32]. - The Corporation has adopted the current expected credit loss (CECL) methodology for estimating credit losses, which may not prevent unexpected losses[26]. - The total outstanding balance of loans the Corporation has repurchased due to noncompliance was $2,671,000 as of December 31, 2024[141]. - The total provision for credit losses included $2,430,000 related to loans receivable and a credit of $235,000 for off-balance sheet exposures[147]. - The ACL on collectively evaluated commercial loans increased by $1,746,000, reflecting changes in external indexes and an increase in past due loans[149]. - Total nonperforming assets increased to $24.1 million as of December 31, 2024, up from $18.8 million in 2023, representing a rise of 28%[151]. - Nonperforming loans as a percentage of total loans was 1.26% at December 31, 2024, compared to 0.99% in 2023[158]. - The provision for credit losses on loans increased to $2.430 million in 2024 from $0.753 million in 2023, marking a growth of 223%[159]. Financial Performance and Assets - Total loans outstanding at December 31, 2024 were $1,895,848,000, an increase of $47,709,000 (2.6%) from December 31, 2023[136]. - Total gross loans increased to $1,895,848,000 in 2024, up from $1,848,139,000 in 2023, representing a growth of 2.6%[144]. - The Corporation's total commercial loans increased by $49,632,000 (3.6%) year-over-year, driven by growth in owner-occupied commercial real estate loans[137]. - Commercial loans represented 75% of the loan portfolio at year-end 2024, while residential loans accounted for 22%[135]. - Residential mortgage loans amounted to $408,009,000, representing 21.5% of total loans in 2024[144]. - The Corporation's mortgage-backed securities portfolio had a total balance of $449,923,000 with a weighted-average yield of 2.63%[133]. - The fair value of available-for-sale debt securities in excess of pledging obligations was $236,945,000 at December 31, 2024[169]. - As of December 31, 2024, the fair value of the Corporation's available-for-sale debt securities portfolio was $402.4 million, representing a decrease of 10.6% from the amortized cost basis[48]. Regulatory and Economic Environment - The Federal Reserve raised the Federal Funds rate to a range of 5.25% to 5.50% at December 31, 2023, after maintaining a rate of 0% to 0.25% throughout 2021[30]. - Regulatory changes and increased scrutiny on commercial real estate lending could lead to higher costs and restrictions on lending activities[28]. - The Corporation's financial condition could be adversely affected by significant fluctuations in interest rates and the interconnectedness of financial institutions[31][46]. Deposits and Funding - Total deposits reached $2,093,909,000 at December 31, 2024, an increase of $79,103,000 (3.9%) from $2,014,806,000 at December 31, 2023[170]. - Estimated uninsured deposits amounted to $632.8 million, or 30.0% of total deposits, up from $592.2 million, or 29.2% at December 31, 2023[171]. - Highly liquid available funding totaled $1.1 billion at December 31, 2024, representing 170.7% of uninsured deposits and 229.4% of total uninsured and uncollateralized deposits[172]. - The Corporation's total credit facilities amounted to $1,031,784,000 at December 31, 2024, an increase from $1,021,827,000 at December 31, 2023[168]. Personnel and Cybersecurity - The Corporation's ability to attract and retain qualified personnel is critical for its future success, with intense competition for talent in the financial services industry[34]. - Cybersecurity risks are a significant concern, as the Corporation collects and stores sensitive data, making it vulnerable to potential breaches and attacks[35]. Shareholder and Capital Management - During the year ended December 31, 2024, the Corporation repurchased 26,034 shares for a total cost of $443,000, at an average price of $17.02 per share[179]. - C&N Bank's Capital Conservation Buffer was 7.19% at December 31, 2024, exceeding the minimum requirement of 2.5%[177].

Financial Performance - Citizens & Northern (CZNC) reported quarterly earnings of $0.53 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and up from $0.28 per share a year ago, representing an earnings surprise of 17.78% [1] - The company posted revenues of $28.24 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.57%, compared to year-ago revenues of $25.27 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $27.7 million, and for the current fiscal year, it is $1.80 on revenues of $113.6 million [7] - The estimate revisions trend for Citizens & Northern is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Banks - Northeast industry, to which Citizens & Northern belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q4 2024 reached $8,174,000, a 91.83% increase from $4,261,000 in Q4 2023[1] - Net Income for Q4 2024 reached $8,174,000, a 92.5% increase from $4,261,000 in Q4 2023[7] - Basic Earnings per Common Share for Q4 2024 was $0.53, compared to $0.28 in Q4 2023, representing an increase of 89.29%[7] - Noninterest income decreased by 13.45% to $7,547,000 in Q4 2024, down from $8,720,000 in Q4 2023[1] - Noninterest Income for Q4 2024 was $7,547,000, compared to $8,720,000 in Q4 2023, a decrease of 13.41%[7] - Noninterest income for the year ended December 31, 2024, was $29,209,000, up from $27,453,000 in 2023, reflecting a growth of 6.4%[23] Asset and Equity Growth - Total assets increased by 3.78% to $2,610,653,000 as of December 31, 2024, from $2,515,584,000 in 2023[3] - Total Assets as of December 31, 2024, were $2,610,653,000, up from $2,515,584,000 a year earlier[8] - Total stockholders' equity increased to $275,284,000 from $262,381,000, marking a growth of 4.67%[8] - Total stockholders' equity as of December 31, 2024, was $275,450,000, up from $242,488,000 in 2023, indicating a growth of 13.6%[18] - Average Assets grew by 4.88% to $2,583,106 from $2,462,856[6] Loan and Deposit Trends - Loans, net increased by 2.56% to $1,875,813,000 in 2024, compared to $1,828,931,000 in 2023[5] - Total loans reached $1,895,848,000 as of December 31, 2024, up from $1,848,139,000 a year earlier, reflecting an increase of approximately 2.6%[10] - Total deposits rose by 3.93% to $2,093,909,000 in 2024, up from $2,014,806,000 in 2023[5] - Total deposits, including interest-bearing and demand deposits, reached $2,057,570,000 as of December 31, 2024, compared to $1,971,926,000 in 2023[20] Interest Income and Expense - Interest and dividend income increased by 10.23% to $33,329,000 in Q4 2024, compared to $30,236,000 in Q4 2023[1] - Total interest income for the three months ended December 31, 2024, was $33,546,000, an increase from $30,435,000 in the same period of 2023, representing a growth of 6.9%[16] - Net Interest Income for Q4 2024 was $20,473,000, up from $19,594,000 in Q4 2023, reflecting an increase of 4.49%[7] - Interest expense for the three months ended December 31, 2024, was $12,856,000, compared to $10,642,000 in the same period of 2023, indicating a rise of 20.8%[16] Credit Quality and Losses - The provision for credit losses showed a significant decrease of 155.84%, resulting in a credit provision of $(531,000) in Q4 2024, compared to $951,000 in Q4 2023[1] - The provision for credit losses was $(531,000) for the fourth quarter of 2024, indicating a reversal compared to a provision of $2,195,000 for the full year 2023[14] - Nonperforming Assets to Total Assets rose to 0.92%, an increase of 22.67% compared to 0.75%[6] - Total nonperforming assets were $24,142,000 as of December 31, 2024, compared to $18,845,000 a year earlier, reflecting an increase of approximately 28.5%[12] - Nonperforming loans as a percentage of total loans stood at 1.26% as of December 31, 2024, slightly down from 1.29% in the previous quarter and up from 0.99% a year ago[12] Efficiency and Ratios - Return on average assets (annualized) improved to 1.24% in Q4 2024, compared to 0.69% in Q4 2023, reflecting a 79.71% increase[5] - Efficiency Ratio improved to 68.04% from 69.51%, a decrease of 2.11%[6] - The interest rate spread for the three months ended December 31, 2024, was 2.59%, slightly down from 2.65% in the previous year[18] - The interest rate spread decreased to 2.59% for the year ended December 31, 2024, down from 2.91% in 2023[20] Securities and Investments - Total Available-for-Sale Debt Securities amounted to $449,923,000 with a fair value of $402,380,000 as of December 31, 2024, compared to $464,968,000 and $415,755,000 respectively as of December 31, 2023, indicating a decrease in both categories[9] - The company reported a net gain from sales of loans of $1,158,000 for the year ended December 31, 2024, compared to $723,000 in 2023, reflecting a significant increase of 60.1%[23] Liquidity - Estimated total uninsured deposits were $632,804,000 as of December 31, 2024, representing 22.3% of total deposits[25] - Highly liquid available funding as a percentage of uninsured deposits was 170.7% as of December 31, 2024, indicating strong liquidity management[25]

Company Overview - Citizens & Northern Corporation (CZNC) is currently experiencing significant activity in the options market, particularly with the Dec. 20, 2024 $25 Call option showing high implied volatility, indicating potential for a major price movement [1] Analyst Sentiment - The company holds a Zacks Rank of 4 (Sell) within the Banks – Northeast industry, which is positioned in the top 19% of the Zacks Industry Rank [3] - Over the past 30 days, no analysts have increased earnings estimates for the current quarter, while one analyst has lowered the estimates, resulting in a decrease of the Zacks Consensus Estimate from 46 cents per share to 44 cents [3] Options Market Insights - The high implied volatility suggests that options traders are anticipating a significant price movement for Citizens & Northern shares, which could indicate an upcoming event that may lead to a rally or sell-off [2][4] - Seasoned options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected by expiration [4]

Financial Performance - Net income for Q3 2024 was $6,365,000, or $0.41 per diluted share, down from $7,591,000, or $0.50 per diluted share in Q3 2023[81]. - Noninterest income for Q3 2024 was $7,133,000, an increase of $644,000 from Q3 2023, driven by higher earnings from life insurance and brokerage revenue[83]. - Noninterest expense for Q3 2024 was $18,269,000, an increase of $329,000 (1.8%) from Q3 2023[85]. - For the nine months ended September 30, 2024, net income was $17,784,000, or $1.16 per diluted share, down from $19,887,000, or $1.29 per diluted share in the same period of 2023[87]. - Noninterest income for the first nine months of 2024 totaled $21,662,000, up $2,923,000 from the same period in 2023[89]. Interest Income and Expense - Net interest income for Q3 2024 was $20,156,000, an increase of $493,000 compared to Q3 2023[117]. - Interest income increased by $3,962,000 or 13.5% to $33,292,000 in 2024 compared to 2023[105]. - Interest expense increased by $3,476,000 to $12,931,000 in 2024 from $9,455,000 in 2023[107]. - Interest expense on deposits increased by $3,148,000, with the average rate on interest-bearing deposits rising to 2.62% in 2024 from 1.93% in 2023[108]. - Fully taxable equivalent net interest income was $59,244,000 in 2024, which was $2,282,000 (3.7%) lower than in 2023[109]. Credit Losses and Nonperforming Assets - Provision for credit losses in Q3 2024 was $1,207,000, an increase of $2,432,000 compared to a credit of $1,225,000 in Q3 2023[81]. - Total nonperforming assets rose to $24,638,000, representing 0.92% of total assets, up from 0.75% at December 31, 2023[138]. - Net charge-offs for the first nine months of 2024 totaled $1,589,000, or 0.08% of average outstanding loans[138]. - The allowance for credit losses (ACL) as a percentage of gross loans receivable increased to 1.08% at September 30, 2024, up from 1.04% at December 31, 2023[138]. - Nonperforming loans as a percentage of total loans increased to 1.29% as of September 30, 2024, compared to 0.99% as of December 31, 2023[146]. Deposits and Liquidity - Total deposits increased to $2,135,879,000 as of September 30, 2024, up $121,073,000 (6.0%) from $2,014,806,000 at December 31, 2023[149]. - Estimated total uninsured deposits rose to $655,569,000, representing 30.5% of total deposits, compared to $592,206,000 or 29.2% at December 31, 2023[151]. - The Corporation's highly liquid available funding sources totaled $1.1 billion at September 30, 2024, which is 160.8% of uninsured deposits[150]. - Brokered deposits decreased to $45,051,000, down $19,318,000 from December 31, 2023[149]. - The Corporation believes it is well-positioned to meet its short-term and long-term funding obligations based on its liquid funding sources[150]. Capital and Stockholder Equity - Stockholders' equity, excluding accumulated other comprehensive loss, was $305,808,000 as of September 30, 2024, up from $296,577,000 in the same period of 2023[119]. - The Corporation's capital ratio was reported at 15.72% as of September 30, 2024, exceeding the minimum capital buffer requirements[152]. - The Corporation announced a treasury stock repurchase program allowing the repurchase of up to 750,000 shares, representing slightly less than 5% of the outstanding shares as of August 4, 2023[157]. - The accumulated other comprehensive loss related to unrealized losses on available-for-sale debt securities was $30.4 million at September 30, 2024, down from $38.9 million at December 31, 2023[161]. - The maximum payout restrictions based on the capital conservation buffer indicate that a buffer greater than 2.5% allows for no payout limitations[157]. Interest Rate Risk Management - The Corporation's interest rate risk management includes simulations for potential changes in net interest income and EVE based on interest rate fluctuations[160]. - The projected net interest income (NII) for a +400 basis point change in rates is $72.3 million, reflecting a decrease of 15.2%[162]. - The economic value of equity (EVE) at September 30, 2024 is modeled to decrease in all rising and falling rate scenarios except for a slight increase in the up 100 basis points scenario[160]. - Present Value Equity at $330,130 with a 21.2% decrease at +400 basis points change in rates[167]. - Present Value shows a decrease of 13.2% at -400 basis points, valued at $363,763[167].

Core Insights - Citizens & Northern Corporation (C&N) has partnered with Clover®, a leader in point of sale (POS) technology, to provide local businesses with integrated POS solutions aimed at improving operational efficiency and customer service [1][2]. Group 1: Partnership Overview - The collaboration between C&N and Clover is designed to help local businesses streamline operations and enhance customer service [1][2]. - C&N's commitment to supporting local businesses is reinforced through this partnership, which offers flexible and reliable POS systems [2]. Group 2: Clover POS System Features - Clover POS systems provide multi-payment processing capabilities, allowing businesses to accept major credit cards, contactless payments, and mobile wallets [3]. - Real-time inventory management features enable businesses to track stock levels and set reorder alerts [3]. - Employee management tools included in Clover's system help streamline scheduling, track hours, and manage payroll [3]. - Customer engagement features allow businesses to build loyalty programs and gather customer insights [3]. - Data-driven business insights provide access to real-time sales data, helping businesses identify trends and make informed decisions [3]. Group 3: Benefits for Local Businesses - Retailers can improve inventory management and streamline checkout processes while offering personalized customer experiences [4]. - Restaurants can enhance table service and manage orders efficiently, leading to better decision-making based on sales data [4]. - Service providers can simplify invoicing and scheduling, creating a more professional experience for their clients [4]. Group 4: Company Background - Clover is recognized as a leading provider of innovative POS systems, offering customizable solutions that empower businesses to improve operations and customer experiences [5]. - C&N operates as an independent community financial services company with a network of 30 full-service offices across Pennsylvania and New York [5].