Citizens & Northern(CZNC) - 2024 Q3 - Quarterly Report

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].