8-K - CZNC - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

April 20, 2023

Date of Report (Date of earliest event reported)

Citizens & Northern Corporation

(Exact name of registrant as specified in its charter)


Pennsylvania	****	0-16084	****	23-2451943
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		Ident. No.)

90-92 Main Street , Wellsboro , Pennsylvania				16901
(Address of principal executive offices)				(Zip Code)

( 570 ) 724-3411

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $1.00 per share	CZNC	Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. Results of Operations and Financial Condition

Citizens & Northern Corporation (the “Company”) announced unaudited, consolidated financial results for the three-month period ended March 31, 2023. On April 20, 2023, the Company issued a press release titled “C&N Declares Dividend and Announces First Quarter 2023 Unaudited Financial Results,” a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Supplemental, unaudited financial information is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(d) Exhibits.


	Exhibit 99.1: Press Release issued by Citizens & Northern Corporation dated April 20, 2023, titled “C&N Declares Dividend and Announces First Quarter 2023 Unaudited Financial Results.”

	Exhibit 99.2: Supplemental, unaudited financial information.

	Exhibit 104: Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CITIZENS & NORTHERN CORPORATION
Dated: April 20, 2023	By:	/s/ Mark A. Hughes
		Mark A. Hughes
		Treasurer and Chief Financial Officer

Exhibit 99.1

	Contact: Charity Frantz
April 20, 2023	570-724-0225
	charityf@cnbankpa.com

C&N DECLARES DIVIDEND AND ANNOUNCES FIRST QUARTER 2023 UNAUDITED FINANCIAL RESULTS

For Immediate Release:

Wellsboro, PA – Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC) announced its most recent dividend declaration and its unaudited, consolidated financial results for the three-month period ended March 31, 2023. C&N’s principal activity is community banking, and the largest subsidiary is Citizens & Northern Bank (the “Bank”).

First Quarter 2023 Highlights:

●	Net income of $6,253,000, or $0.40 diluted earnings per share.
●	Total loans receivable increased $5.1 million, or 1.2% (annualized), at March 31, 2023 from December 31, 2022, and average loans receivable grew 6.3% (annualized) during the first quarter 2023 from the fourth quarter 2022.
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●	Total nonperforming loans of $14.1 million (0.81% of total loans) at March 31, 2023, down from $25.3 million (1.46% of total loans) at December 31, 2022. Total nonperforming assets was 0.60% of total assets at March 31, 2023, down from 1.04% at December 31, 2022.
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●	Total deposits were lower by $81.6 million at March 31, 2023 from December 31, 2022. Total average deposits of $1.9 billion for the first quarter 2023 were down from $2.0 billion for the fourth quarter 2022 and stable with $1.9 billion for the first quarter 2022.
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●	At March 31, 2023, estimated uninsured deposits totaled 31.7% of the Bank’s total deposits, including deposits collateralized by securities of 9.8% of the Bank’s total deposits.
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Dividend Declared and Unaudited Financial Information

On April 20, 2023, C&N’s Board of Directors declared a regular quarterly cash dividend of $0.28 per share. The dividend is payable on May 12, 2023 to shareholders of record as of May 1, 2023.

Highlights related to C&N’s first quarter unaudited U.S. GAAP earnings results as compared to the fourth quarter 2022 and first quarter of 2022 are presented below.

First Quarter 2023 as Compared to Fourth Quarter 2022

Net income was $6,253,000, or $0.40 per diluted share, for the first quarter 2023 as compared to $7,779,000, or $0.50 per diluted share, in the fourth quarter 2022.

●

Net interest income totaled $20,781,000 in the first quarter 2023, down $1,511,000 from the fourth quarter 2022. The net interest margin was 3.71% in the first quarter 2023, down from 3.89% in the fourth quarter 2022. The net interest spread decreased 0.32%, as the average rate on interest-bearing liabilities increased 0.47%, while the average yield on earning assets increased 0.15%. Sources of funds included an increase in average borrowed funds of $95,230,000 and a reduction in average available-for-sale debt securities (at amortized cost) of $20,502,000, while reductions in funds included the net impact of an increase in average loans outstanding of $26,673,000 (1.6% or 6.3% annualized) and a decrease in average deposits of $96,020,000. The reduction in average deposits resulted from several factors, including: the impact of customer funds transferred to higher-yielding investment alternatives; a $23,908,000 reduction in average noninterest-bearing demand deposits, almost exclusively related to business accounts; and seasonal reductions in municipal deposits.

●

Effective January 1, 2023, C&N adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326), as modified by subsequent ASUs, that required change in accounting for credit losses on loans receivable from an incurred loss methodology to an expected credit loss methodology commonly referred to as “CECL.” Effective January 1, 2023, C&N recorded adjustments resulting from adopting CECL which increased the allowance for credit losses on loans $2,104,000, increased the allowance for credit losses on off-balance sheet exposures $793,000, increased loans receivable $806,000, and decreased retained earnings (stockholders’ equity) $1,652,000. The credit for credit losses (reduction in expense) was $352,000 in the first quarter 2023 as compared to the fourth quarter 2022 provision for loan losses of $2,262,000. The credit for credit losses in the first quarter 2023 resulted mainly from a reduction in the allowance related to the commercial segment of the portfolio.

●	Noninterest income of $5,609,000 in the first quarter 2023 decreased $501,000 from the fourth quarter 2022 amount. Significant variances included the following:

Ø	Other noninterest income of $771,000 decreased $262,000 from the fourth quarter 2022, including income from interest rate swap fees on commercial loans decreasing $260,000.

Ø	Interchange revenue from debit card transactions of $1,007,000 decreased $91,000 from the fourth quarter 2022, reflecting decreases in transaction volume.

Ø	Loan servicing fees, net of $122,000 decreased $81,000, as the fair value of servicing rights decreased $83,000 in the first quarter 2023 as compared to a decrease of $2,000 in the fourth quarter 2022.

Ø	Brokerage and insurance revenue of $430,000 decreased $77,000 from the fourth quarter 2022, due to lower volume of new transactions.

Ø	Service charges on deposit accounts of $1,290,000 decreased $67,000 from the fourth quarter 2022 reflecting a customary seasonal reduction in transaction volume in the first quarter of the year.

Ø	Net gains from sale of loans of $74,000 increased $50,000 from the fourth quarter 2022, reflecting growth in volume of residential mortgage loans sold.

●	Noninterest expense of $19,087,000 in the first quarter 2023 increased $2,500,000 from the fourth quarter 2022 amount. Significant variances included the following:

Salaries and employee benefits expense of $11,427,000 increased $1,292,000 from the fourth quarter 2022, including an increase in stock-based and incentive compensation expense of $1,031,000, as the fourth quarter 2022 amount was reduced based on an updated assessment of C&N’s earnings performance to that of a defined peer group. Expenses related to payroll taxes and employee benefit expenses increased $370,000, reflecting the normal pattern of such costs being highest in the beginning of the calendar year. Health care expense decreased $111,000 due to lower claims on C&N’s partially self-insured plan.

Ø	Other noninterest expense of $2,507,000 increased $596,000 from the fourth quarter 2022. Within this category, significant variances included the following:

◾

Other operational losses totaled $206,000 in the first quarter 2023 as compared to a credit of $64,000 (reduction in expense) in the fourth quarter 2022 resulting in an increase in expense of $270,000. In the fourth quarter 2022, there was a reduction in expense of $206,000 resulting from abatement of Trust Department tax compliance penalties for which expense was recorded in 2020 and a favorable outcome on appeal of a Trust Department state tax reporting matter for which expense was also recorded in 2020.

◾	In the fourth quarter 2022 there was a gain of $117,000 on other real estate properties with no comparable amount in the first quarter 2023.
◾	In the fourth quarter 2022 there was a reduction in expense related to credit losses on off balance sheet exposures related to residential mortgage loans sold of $75,000 with no comparable amount reflected in other noninterest expense in the first quarter 2023.
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Ø	Professional fees of $937,000 increased $422,000, including $389,000 of conversion costs related to a change in C&N’s Wealth Management platform for providing brokerage and investment advisory services.

Ø	Data processing and telecommunications of $1,936,000 increased $192,000 from the fourth quarter 2022, including the impact of increases in software licensing and maintenance costs as well as costs related to enhancements of data management capabilities.

●	The income tax provision was $1,409,000, or 18.4% of pre-tax income for the first quarter 2023, down from $1,773,000, or 18.6% of pre-tax income for the fourth quarter 2022. The decrease in income tax provision reflected the decrease in pre-tax income of $1,890,000 for the quarter.

First Quarter 2023 as Compared to First Quarter 2022

First quarter 2023 net income was $6,253,000, or $0.40 per diluted share, as compared to $6,895,000, or $0.44 per diluted share, in the first quarter 2022. Significant variances were as follows:

●

First quarter 2023 net interest income of $20,781,000 was $449,000 higher than the first quarter 2022 total. The increase in net interest income was mainly driven by loan growth, as average earning assets increased $131,608,000, including an increase in average loans of $178,002,000, or 11.5%, while average interest-bearing due from banks decreased $52,478,000. Average total deposits of $1,931,126,000 were flat in the first quarter 2023 as compared to the first quarter 2022 while average borrowed funds increased $136,303,000. The net interest margin was 3.71% in the first quarter 2023, down from 3.86% in the first quarter 2022. The interest rate spread decreased 0.43%, as the average rate on interest-bearing liabilities increased 0.96%, while the average yield on earning assets increased 0.53%. Contributing to the comparatively lower margin and spread, total interest and fees on loans in the first quarter 2022 included $1,398,000 from repayments received on purchased credit impaired loans in excess of previous carrying amounts with no comparable amount in the first quarter 2023.

●

The credit for credit losses (reduction in expense) was $352,000 in the first quarter 2023 as compared to the first quarter 2022 provision for loan losses of $891,000. The credit for credit losses in the first quarter 2023 resulted mainly from a reduction in the allowance related to the commercial segment of the portfolio. Within the net credit for credit losses on loans in the first quarter 2023, the provision related to specific loans was $205,000, including net charge-offs of $61,000 and an increase in specific allowances on loans of $144,000. In comparison, the first quarter 2022 provision included a net charge of $147,000 related to specific loans (net charge-offs of $157,000 offset by a net decrease in specific allowances on loans of $10,000).

●	Noninterest income of $5,609,000 in the first quarter 2023 decreased $212,000 from the first quarter 2022 amount. Significant variances included the following:

Ø	Net gains from sale of loans of $74,000 decreased $308,000 from the first quarter 2022, reflecting a reduction in volume of residential mortgage loans sold.

Ø	Brokerage and insurance revenue of $430,000 decreased $92,000 from the first quarter 2022, due to lower volume of new transactions.

Ø	Loan servicing fees, net of $122,000 decreased $88,000, as the fair value of servicing rights decreased $83,000 in the first quarter 2023 as compared to an increase of $2,000 in the first quarter 2022.

Ø	Other noninterest income of $771,000 increased $183,000 from the first quarter 2022, including dividends on FHLB-Pittsburgh stock totaling $217,000, an increase of $100,000 from the first quarter 2022, and a gain on sale of premises and equipment of $68,000 with no comparable amount in the first quarter 2022.

●	Noninterest expense of $19,087,000 in the first quarter 2023 increased $2,201,000 from the first quarter 2022 amount. Significant variances included the following:

Salaries and employee benefits expense of $11,427,000 increased $820,000 from the first quarter 2022, including an increase in base salaries expense of $597,000. In total, the number of full-time equivalent employees (FTEs) increased by 10 (2.5%) to 412 in the first quarter 2023 as compared to the first quarter 2022. Total cash and stock-based compensation expense increased $167,000 and health care expense increased $102,000 due to higher claims on C&N’s partially self-insured plan.

Ø	Other noninterest expense of $2,507,000 increased $623,000 from the first quarter 2022. Within this category, significant variances included the following:
◾	In the first quarter 2022 the allowance for SBA claim adjustments decreased, reflecting more favorable claim results than previously estimated, resulting in a reduction in expense of $242,000 with no comparable amount in the first quarter 2023.
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◾	Other operational losses totaled $206,000, an increase of $82,000.
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◾	Net collection expense totaled $44,000 in the first quarter 2023, an increase of $85,000 over net recoveries of $41,000 in the first quarter 2022.
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◾	Advertising expense totaled $213,000 in the first quarter 2023, an increase of $77,000 reflecting expenses related to C&N’s social media strategy and brand monitoring analysis.
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Ø	Professional fees of $937,000 increased $448,000, including $389,000 of conversion costs related to a change in C&N’s Wealth Management platform for providing brokerage and investment advisory services.

Ø	Data processing and telecommunications of $1,936,000 increased $313,000 from the first quarter 2022, including the impact of increases in software licensing and maintenance costs as well as costs related to enhancements of data management capabilities.

●	The income tax provision was $1,409,000, or 18.4% of pre-tax income for the first quarter 2023, as compared to $1,483,000, or 17.7% of pre-tax income for the fourth quarter 2022. The decrease in income tax provision reflected the decrease in pre-tax income of $716,000.

Other Information:

Changes in other unaudited financial information are as follows:

●	Total assets amounted to $2,429,872,000 at March 31, 2023, down from $2,454,307,000 at December 31, 2022 and up from $2,330,371,000 at March 31, 2022.

●	Cash & due from banks totaled $52,212,000 at March 31, 2023, down from $55,048,000 at December 31, 2022 and $114,346,000 at March 31, 2022. The decrease in cash reflects the deployment of otherwise excess cash primarily to loans to enhance net interest income.

●

The amortized cost of available-for-sale debt securities decreased to $527,589,000 at March 31, 2023 from $561,794,000 at December 31, 2022 and $558,853,000 at March 31, 2022. The fair value of available-for-sale debt securities at March 31, 2023 was lower than amortized cost basis by $54,775,000, or 10.4%. In comparison, the aggregate unrealized loss position was $63,761,000 (11.3%) at December 31, 2022 and $25,939,000 (4.6%) at March 31, 2022. The unrealized decrease in fair value of the portfolio has resulted from an increase in interest rates. Management reviewed the available-for-sale debt securities as of March 31, 2023 and concluded there were no credit-related declines in fair value and that the unrealized losses on all of the securities in an unrealized loss position are considered temporary.

●

Gross loans receivable totaled $1,745,139,000 at March 31, 2023, an increase of $5,099,000 (0.3%) from total loans at December 31, 2022 and an increase of $206,949,000 (13.5%) from total loans at March 31, 2022. In comparing outstanding balances at March 31, 2023 and 2022, total commercial loans were up $147.1 million (12.9%), reflecting growth in commercial real estate – nonowner occupied loans of $96,080,000, all other commercial loans of $33,453,000 and commercial real estate – owner occupied loans of $17,557,000. Total residential mortgage loans were up $55,828,000 (16.1%) and total consumer loans increased $4,031,000 (8.0%). The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $321.3 million at March 31, 2023, down $17.2 million (5.1%) from March 31, 2022.

●

Total nonperforming assets as a percentage of total assets was 0.60% at March 31, 2023, down from 1.04% at December 31, 2022 and 0.81% at March 31, 2022. Total nonperforming assets were $14.6 million at March 31, 2023, down from $25.6 million at December 31, 2022 and $18.9 million at March 31, 2022. Similarly, total impaired loans decreased to $9.3 million at March 31, 2023 from $19.4 million at December 31, 2022 and $12.0 million at March 31, 2022. The net decrease in impaired loans and nonperforming assets at March 31, 2023 compared to December 31, 2022 included the impact of a $10.0 million payoff in the first quarter 2023 on a commercial loan relationship that was classified as impaired and nonaccrual at December 31, 2022. The reduction also included a paydown of $2,180,000 in the first quarter 2023 on a commercial loan for which partial charge-offs totaling $3,942,000 were recorded in 2022. The remaining carrying value of this loan was $474,000 at March 31, 2023. These reductions were partially offset by the addition to impaired and nonaccrual of a commercial loan relationship totaling $1,931,000 at March 31, 2023. Based on an estimate of the liquidation value of the real estate collateralizing the relationship, an allowance of $182,000 was recorded at March 31, 2023.

●	The allowance for credit losses on loans was $18.3 million at March 31, 2023, or 1.05% of total loans as compared to an allowance for loan losses of $16.6 million or 0.95% of total loans at December 31, 2022 and $14.3 million or 0.93% of total loans at March 31, 2022. The increase in the allowance for credit losses at March 31, 2023 includes the impact of the adoption of CECL on January 1, 2023.

●

Deposits totaled $1,916,040,000 at March 31, 2023, down $81,553,000 (4.1%) from $1,997,593,000 at December 31, 2022 and down 2.3% from $1,960,952,000 at March 31, 2022. The reduction in total deposits included a reduction in the estimated amount of deposits in excess of FDIC insurance levels (uninsured deposit balances) of $75.6 million as compared to December 31, 2022. The net reduction in deposits resulted from several factors, including the impact of customer funds transferred to higher-yielding investment alternatives and seasonal reductions in municipal deposits. At March 31, 2023, C&N’s estimated uninsured deposits totaled $613.9 million, or 31.7% of the Bank’s total deposits, down from $689.4 million or 34.2% of the Bank’s total deposits at December 31, 2022. Included in uninsured deposits are deposits collateralized by securities (almost exclusively municipal deposits) totaling $189.2 million, or 9.8% of the Bank’s total deposits at March 31, 2023.

●

C&N maintained highly liquid sources of available funds totaling $1.043 billion at March 31, 2023, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $655.6 million, unused availability on the Federal Reserve Bank of Philadelphia’s discount window of $22.3 million, available federal funds lines with other banks of $95 million and available-for-sale debt securities with a fair value in excess of collateral obligations of $269.8 million. Available funding from these sources exceeded the amount of uninsured deposits noted above by 69.9% at March 31, 2023.

●

The outstanding balance of borrowed funds, including Federal Home Loan Bank advances, repurchase agreements, senior notes and subordinated debt, totaled $231,512,000 at March 31, 2023, up from $181,781,000 at December 31, 2022 and $70,686,000 at March 31, 2022. Overnight Federal Home Loan Bank borrowings increased to $91,000,000 at March 31, 2023 from $77,000,000 at December 31, 2022 and $0 at March 31, 2022.

●

Total stockholders’ equity was $255,568,000 at March 31, 2023, up from $249,325,000 at December 31, 2022 and down from $276,208,000 at March 31, 2022. Within stockholders’ equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $43,271,000 at March 31, 2023, $50,370,000 at December 31, 2022 and $20,492,000 at March 31, 2022. The volatility in stockholders’ equity related to accumulated other comprehensive loss from available-for-sale debt securities has been caused by significant fluctuations in interest rates including overall significant increases in rates as compared to market rates when most of C&N’s securities were purchased. Accumulated other comprehensive loss is excluded from C&N’s regulatory capital ratios. As noted above, effective January 1, 2023, C&N adopted a required change in accounting for credit losses (CECL). The effect of implementing CECL was recorded through a cumulative-effect adjustment to reduce stockholders’ equity by $1,652,000.

●

In February 2021, C&N amended its existing treasury stock repurchase program. Under the amended program, C&N is authorized to repurchase up to 1,000,000 shares of the Corporation’s common stock, or 6.25% of the Corporation’s issued and outstanding shares at February 18, 2021. For the three months ended March 31, 2023, 77,430 shares were repurchased for a total cost of $1,662,000, at an average price of $21.47 per share. Cumulatively through March 31, 2023, 752,130 shares have been repurchased for a total cost of $18,249,000, at an average price of $24.26 per share.

●	Citizens & Northern Bank is subject to various regulatory capital requirements. At March 31, 2023, Citizens & Northern Bank maintains regulatory capital ratios that exceed all capital adequacy requirements. Management expects the Bank to remain well-capitalized for the foreseeable future.

●	Trust assets under management by C&N’s Wealth Management Group amounted to $1,127,439,000 at March 31, 2023, up 6.0% from $1,063,615,000 at December 31, 2022 and down 5.4% from $1,191,595,000 at March 31, 2022. Fluctuations in values of assets under management reflect the impact of market volatility.

●

Under U.S. GAAP, interest income on tax-exempt securities and loans are reported at their nominal amounts, with the tax benefit accounted for as a reduction in the income tax provision. The Corporation presents certain analyses and ratios with net interest income determined on a fully taxable-equivalent basis, which are non-GAAP financial measures as presented. The Corporation believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing the returns on tax-exempt securities and loans with returns on taxable securities and loans. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP were $269,000, $303,000, and $302,000 for the first quarter 2023, fourth quarter 2022 and first quarter 2022, respectively. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP was $1,226,000 for year ended December 31, 2022 and $1,135,000 for year ended December 31, 2021.

Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania which operates 29 banking offices located in Bradford, Bucks, Cameron, Chester, Lycoming, McKean, Potter, Sullivan, Tioga, York and Lancaster Counties in Pennsylvania and Steuben County in New York, as well as a loan production office in Elmira, New York. Citizens & Northern Corporation trades on NASDAQ under the symbol “CZNC.” For more information about Citizens & Northern Bank and Citizens & Northern Corporation, visit www.cnbankpa.com.

Safe Harbor Statement: Except for historical information contained herein, the matters discussed in this release are forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the following: changes in monetary and fiscal policies of the Federal Reserve Board and the U.S. Government, particularly related to changes in interest rates; changes in general economic conditions; C&N’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses; the effect of the novel coronavirus (COVID-19) and related events; legislative or regulatory changes; downturn in demand for loan, deposit and other financial services in C&N’s market area; increased competition from other banks and non-bank providers of financial services; technological changes and increased technology-related costs; information security breach or other technology difficulties or failures; changes in accounting principles, or the application of generally accepted accounting principles; and failure to achieve merger-related synergies and difficulties in integrating the business and operations of acquired institutions. Citizens & Northern disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 7

EXHIBIT 99.2 – Supplemental, Unaudited Financial Information

CONDENSED, CONSOLIDATED EARNINGS INFORMATION

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	1ST		****	1ST
		QUARTER			QUARTER
		2023			2022
		(Current)			(Prior Year)		Incr. (Decr.)		% Incr. (Decr.)	****
Interest and Dividend Income		$	26,139		$	21,773			20.05	%
Interest Expense			5,358			1,441			271.83	%
Net Interest Income			20,781			20,332			2.21	%
(Credit) Provision for Credit Losses			(352)			891			(139.51)	%
Net Interest Income After (Credit) Provision for Credit Losses			21,133			19,441			8.70	%
Noninterest Income			5,609			5,821			(3.64)	%
Net Gains on Available-for-sale Debt Securities			7			2			250.00	%
Noninterest Expense			19,087			16,886			13.03	%
Income Before Income Tax Provision			7,662			8,378			(8.55)	%
Income Tax Provision			1,409			1,483			(4.99)	%
Net Income		$	6,253		$	6,895		****	(9.31)	%
Net Income Attributable to Common Shares (1)		$	6,201		$	6,835		****	(9.28)	%
PER COMMON SHARE DATA:
Net Income - Basic		$	0.40		$	0.44			(9.09)	%
Net Income - Diluted		$	0.40		$	0.44			(9.09)	%
Dividends Per Share		$	0.28		$	0.28			0.00	%
Number of Shares Used in Computation - Basic			15,409,680			15,645,474
Number of Shares Used in Computation - Diluted			15,410,617			15,649,175

All values are in US Dollars.

(1)	Basic and diluted net income per common share are determined based on net income less earnings allocated to nonvested restricted shares with nonforfeitable dividends.

CONDENSED, CONSOLIDATED BALANCE SHEET DATA

(Dollars In Thousands)

(Unaudited)


	March 31,		March 31,
	2023		2022		Incr. (Decr.)		% Incr. (Decr.)
ASSETS
Cash & Due from Banks	$	52,212	$	114,346			(54.34)	%
Available-for-sale Debt Securities		472,814		532,913			(11.28)	%
Loans, Net		1,726,793		1,523,919			13.31	%
Bank-Owned Life Insurance		31,352		30,805			1.78	%
Bank Premises and Equipment, Net		21,277		21,169			0.51	%
Deferred Tax Asset, Net		18,914		11,818			60.04	%
Intangible Assets		55,280		55,711			(0.77)	%
Other Assets		51,230		39,690			29.08	%
TOTAL ASSETS	$	2,429,872	$	2,330,371		****	4.27	%

LIABILITIES
Deposits	$	1,916,040	$	1,960,952			(2.29)	%
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements		192,097		22,938			737.46	%
Senior Notes, Net		14,781		14,717			0.43	%
Subordinated Debt, Net		24,634		33,031			(25.42)	%
Other Liabilities		26,752		22,525			18.77	%
TOTAL LIABILITIES	****	2,174,304	****	2,054,163		****	5.85	%

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated
Other Comprehensive Loss		298,365		296,386			0.67	%
Accumulated Other Comprehensive (Loss) Income:
Net Unrealized Losses on Available-for-sale Debt Securities		(43,271)		(20,492)			111.16	%
Defined Benefit Plans		474		314			50.96	%
TOTAL STOCKHOLDERS' EQUITY	****	255,568	****	276,208		****	(7.47)	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	2,429,872	$	2,330,371		****	4.27	%

All values are in US Dollars.

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	AS OF OR FOR THE
		THREE MONTHS ENDED						%
		March 31,						INCREASE
	****	2023		****	2022		****	(DECREASE)	****
EARNINGS PERFORMANCE
Net Income		$	6,253		$	6,895		(9.31)	%
Return on Average Assets (Annualized)			1.03	%		1.19	%	(13.45)	%
Return on Average Equity (Annualized)			9.90	%		9.37	%	5.66	%

BALANCE SHEET HIGHLIGHTS
Total Assets		$	2,429,872		$	2,330,371		4.27	%
Available-for-Sale Debt Securities			472,814			532,913		(11.28)	%
Loans, Net			1,726,793			1,523,919		13.31	%
Allowance for Credit Losses:
Allowance for Credit Losses on Loans			18,346			14,271		28.55	%
Allowance for Credit Losses on Off-Balance Sheet Exposures			1,178			660		78.48	%
Deposits			1,916,040			1,960,952		(2.29)	%

OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold with Servicing Retained		$	321,326		$	338,482		(5.07)	%
Trust Assets Under Management			1,127,439			1,191,595		(5.38)	%

STOCKHOLDERS' VALUE (PER COMMON SHARE)
Net Income - Basic		$	0.40		$	0.44		(9.09)	%
Net Income - Diluted		$	0.40		$	0.44		(9.09)	%
Dividends		$	0.28		$	0.28		0.00	%
Common Book Value		$	16.50		$	17.57		(6.09)	%
Tangible Common Book Value (a)		$	12.93		$	14.03		(7.84)	%
Market Value (Last Trade)		$	21.38		$	24.38		(12.31)	%
Market Value / Common Book Value			129.58	%		138.76	%	(6.62)	%
Market Value / Tangible Common Book Value			165.35	%		173.77	%	(4.85)	%
Price Earnings Multiple (Annualized)			13.36			13.85		(3.54)	%
Dividend Yield (Annualized)			5.24	%		4.59	%	14.16	%
Common Shares Outstanding, End of Period			15,485,035			15,718,723		(1.49)	%

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


		AS OF OR FOR THE
		THREE MONTHS ENDED						%	****
		March 31,						INCREASE	****
	****	2023		****	2022		****	(DECREASE)	****
SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets (a)			8.43	%		9.69	%	(13.00)	%
Nonperforming Assets / Total Assets			0.60	%		0.81	%	(25.93)	%
Allowance for Credit Losses / Total Loans			1.05	%		0.93	%	12.90	%
Total Risk Based Capital Ratio (b)			15.93	%		18.23	%	(12.62)	%
Tier 1 Risk Based Capital Ratio (b)			13.48	%		15.20	%	(11.32)	%
Common Equity Tier 1 Risk Based Capital Ratio (b)			13.48	%		15.20	%	(11.32)	%
Leverage Ratio (b)			10.08	%		10.59	%	(4.82)	%

AVERAGE BALANCES
Average Assets		$	2,420,819		$	2,325,486		4.10	%
Average Equity		$	252,638		$	294,254		(14.14)	%

EFFICIENCY RATIO (c)
Net Interest Income on a Fully Taxable-Equivalent
Basis (c)		$	21,050		$	20,634		2.02	%
Noninterest Income			5,609			5,821		(3.64)	%
Total (1)		$	26,659		$	26,455		0.77	%
Noninterest Expense (2)		$	19,087		$	16,886		13.03	%
Efficiency Ratio = (2)/(1)			71.60	%		63.83	%	12.17	%

(a)Tangible common book value per share and tangible common equity as a percentage of tangible assets are non-U.S. GAAP ratios. Management believes this non-GAAP information is helpful in evaluating the strength of the Corporation's capital and in providing an alternative, conservative valuation of the Corporation's net worth. The ratios shown above are based on the following calculations of tangible assets and tangible common equity:


Total Assets	$	2,429,872	$	2,330,371
Less: Intangible Assets, Primarily Goodwill		(55,280)		(55,711)
Tangible Assets	$	2,374,592	$	2,274,660
Total Stockholders' Equity	$	255,568	$	276,208
Less: Intangible Assets, Primarily Goodwill		(55,280)		(55,711)
Tangible Common Equity (3)	$	200,288	$	220,497

Common Shares Outstanding, End of Period (4)		15,485,035		15,718,723
Tangible Common Book Value per Share = (3)/(4)	$	12.93	$	14.03

(b)Capital ratios for the most recent period are estimated.

(c)The efficiency ratio is a non-GAAP ratio that is calculated as shown above. For purposes of calculating the efficiency ratio, net interest income on a fully taxable-equivalent basis includes amounts of interest income on tax-exempt securities and loans that have been increased to a fully taxable-equivalent basis, using the Corporation's marginal federal income tax rate of 21%. A reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis is provided in Exhibit 99.2 under the table “COMPARISON OF INTEREST INCOME AND EXPENSE”.

QUARTERLY CONDENSED, CONSOLIDATED

INCOME STATEMENT INFORMATION

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	For the Three Months Ended :
		March 31,		December 31,		September 30,		June 30,		March 31,
		2023		2022		2022		2022		2022
Interest income		$	26,139	$	25,855	$	23,710	$	21,309	$	21,773
Interest expense			5,358		3,563		2,831		1,684		1,441
Net interest income			20,781		22,292		20,879		19,625		20,332
(Credit) provision for credit losses			(352)		2,262		3,794		308		891
Net interest income after (credit) provision for credit losses			21,133		20,030		17,085		19,317		19,441
Noninterest income			5,609		6,110		5,651		6,830		5,821
Net gains (losses) on securities			7		(1)		20		(1)		2
Noninterest expense			19,087		16,587		17,443		17,039		16,886
Income before income tax provision			7,662		9,552		5,313		9,107		8,378
Income tax provision			1,409		1,773		858		1,618		1,483
Net income		$	6,253	$	7,779	$	4,455	$	7,489	$	6,895
Net income attributable to common shares		$	6,201	$	7,711	$	4,416	$	7,419	$	6,835
Basic earnings per common share		$	0.40	$	0.50	$	0.29	$	0.48	$	0.44
Diluted earnings per common share		$	0.40	$	0.50	$	0.29	$	0.48	$	0.44

QUARTERLY CONDENSED, CONSOLIDATED

BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)


	****	As of:
		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
		2023		2022		2022		2022		2022
ASSETS
Cash & Due from Banks		$	52,212	$	55,048	$	64,044	$	69,187	$	114,346
Available-for-Sale Debt Securities			472,814		498,033		487,980		526,837		532,913
Loans, Net			1,726,793		1,723,425		1,674,076		1,643,057		1,523,919
Bank-Owned Life Insurance			31,352		31,214		31,075		30,941		30,805
Bank Premises and Equipment, Net			21,277		21,574		21,881		21,829		21,169
Deferred Tax Asset, Net			18,914		20,884		22,327		16,331		11,818
Intangible Assets			55,280		55,382		55,492		55,602		55,711
Other Assets			51,230		48,747		43,305		46,934		39,690
TOTAL ASSETS		$	2,429,872	$	2,454,307	$	2,400,180	$	2,410,718	$	2,330,371

LIABILITIES
Deposits		$	1,916,040	$	1,997,593	$	2,039,595	$	1,964,270	$	1,960,952
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements			192,097		142,409		57,920		126,833		22,938
Senior Notes, Net			14,781		14,765		14,749		14,733		14,717
Subordinated Debt, Net			24,634		24,607		24,580		24,553		33,031
Other Liabilities			26,752		25,608		24,547		21,710		22,525
TOTAL LIABILITIES		****	2,174,304	****	2,204,982	****	2,161,391	****	2,152,099	****	2,054,163

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss			298,365		299,203		295,258		294,621		296,386
Accumulated Other Comprehensive Loss:
Net Unrealized (Losses) Gains on Available-for-sale Securities			(43,271)		(50,370)		(56,766)		(36,307)		(20,492)
Defined Benefit Plans			474		492		297		305		314
TOTAL STOCKHOLDERS' EQUITY		****	255,568	****	249,325	****	238,789	****	258,619	****	276,208
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	2,429,872	$	2,454,307	$	2,400,180	$	2,410,718	$	2,330,371

AVAILABLE-FOR-SALE DEBT SECURITIES

(In Thousands)


	****	March 31, 2023				December 31, 2022				March 31, 2022
		Amortized		Fair		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value		Cost		Value
Obligations of the U.S. Treasury		$	33,924	$	31,163	$	35,166	$	31,836	$	38,152	$	36,494
Obligations of U.S. Government agencies			25,479		23,348		25,938		23,430		24,455		23,408
Bank holding company debt securities			28,947		24,723		28,945		25,386		24,942		24,043
Obligations of states and political subdivisions:
Tax-exempt			128,285		117,812		146,149		132,623		149,140		143,633
Taxable			67,076		57,572		68,488		56,812		73,732		69,629
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			109,028		97,807		112,782		99,941		112,122		106,568
Residential collateralized mortgage obligations			42,296		38,117		44,868		40,296		45,628		43,868
Commercial mortgage-backed securities			84,449		74,195		91,388		79,686		90,682		85,270
Private label commercial mortgage-backed securities			8,105		8,077		8,070		8,023		0		0
Total Available-for-Sale Debt Securities		$	527,589	$	472,814	$	561,794	$	498,033	$	558,853	$	532,913

SUMMARY OF LOANS BY TYPE

(Excludes Loans Held for Sale)

(In Thousands)


	****	March 31,		****	December 31,		****	March 31,
		2023			2022			2022
Commercial real estate - nonowner occupied
Nonowner occupied		$	457,814		$	454,386		$	364,491
Multi-family (5 or more) residential			58,111			55,406			52,240
1-4 Family - commercial purpose			166,773			165,805			169,887
Total commercial real estate - nonowner occupied			682,698			675,597			586,618
Commercial real estate - owner occupied			221,766			205,910			204,209
All other commercial loans:
Commercial and industrial			83,420			95,368			109,576
Commercial lines of credit			119,109			141,444			102,458
Political subdivisions			85,555			86,663			75,895
Commercial construction and land			70,612			60,892			36,204
Other commercial loans			26,106			25,710			27,216
Total all other commercial loans			384,802			410,077			351,349
Residential mortgage loans:
1-4 Family - residential			372,241			363,005			328,947
1-4 Family residential construction			29,479			30,577			16,945
Total residential mortgage			401,720			393,582			345,892
Consumer loans:
Consumer lines of credit (including HELCs)			35,245			36,650			33,979
All other consumer			18,908			18,224			16,143
Total consumer			54,153			54,874			50,122
Total			1,745,139			1,740,040			1,538,190
Less: allowance for credit losses on loans			(18,346)			(16,615)			(14,271)
Loans, net		$	1,726,793		$	1,723,425		$	1,523,919

ADJUSTMENTS TO GROSS AMORTIZED COST OF LOANS

(In Thousands)


	Three Months Ended
	March 31,		December 31,		March 31,
	2023		2022		2022
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(916)	$	(861)	$	(637)
Amortization recognized in interest income		(52)		(55)		(248)
Adjustments to gross amortized cost of loans at end of period	$	(968)	$	(916)	$	(885)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(1,840)	$	(2,095)	$	(3,335)
Accretion recognized in interest income		198		255		553
Adjustments to gross amortized cost of loans at end of period	$	(1,642)	$	(1,840)	$	(2,782)

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS

(Dollars In Thousands)


	****	March 31,		****	December 31,		****	March 31,		****
		2023			2022			2022
Impaired loans with a valuation allowance		$	5,802		$	3,460		$	6,528
Impaired loans without a valuation allowance			3,507			14,871			1,494
Purchased credit impaired loans			0			1,027			3,983
Total impaired loans		$	9,309		$	19,358		$	12,005

Total loans past due 30-89 days and still accruing		$	5,493		$	7,079		$	3,868

Nonperforming assets:
Purchased credit impaired loans		$	0		$	1,027		$	3,983
Other nonaccrual loans			12,876			22,058			10,962
Total nonaccrual loans			12,876			23,085			14,945
Total loans past due 90 days or more and still accruing			1,216			2,237			3,429
Total nonperforming loans			14,092			25,322			18,374
Foreclosed assets held for sale (real estate)			459			275			531
Total nonperforming assets		$	14,551		$	25,597		$	18,905

Total nonperforming loans as a % of total loans			0.81	%		1.46	%		1.19	%
Total nonperforming assets as a % of assets			0.60	%		1.04	%		0.81	%
Allowance for credit losses as a % of total loans			1.05	%		0.95	%		0.93	%

IMPACT OF ASU 2016-13 (CECL)

(In Thousands)


	****	As Reported		****			****
		Under			Pre-ASC 326			Impact of
		ASC 326			Adoption			ASC 326
		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			1,218			425			793

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS

(In Thousands)


	****	3 Months		****	3 Months		****	3 Months		****	Year
		Ended			Ended			Ended			Ended
		March 31,			December 31,			March 31,			December 31,
		2023			2022			2022			2022
Balance, beginning of period		$	16,615		$	16,170		$	13,537		$	13,537
Adoption of ASU 2016-13 (CECL)			2,104			0			0			0
Charge-offs			(67)			(1,828)			(180)			(4,245)
Recoveries			6			11			23			68
Net charge-offs			(61)			(1,817)			(157)			(4,177)
(Credit) provision for credit losses			(312)			2,262			891			7,255
Balance, end of period		$	18,346		$	16,615		$	14,271		$	16,615

ANALYSIS OF THE PROVISION FOR CREDIT LOSSES

(In Thousands)


	3 Months
	Ended
	March 31,
	2023
(Credit) provision for credit losses:
Loans receivable	$	(312)
Off-balance sheet exposures (1)		(40)
Total (credit) provision for credit losses	$	(352)

(1) The (credit) provision for credit losses on off-balance sheet exposures prior to January 1, 2023 was included in other noninterest expense in the consolidated statements of income.

COMPARISON OF INTEREST INCOME AND EXPENSE

(In Thousands)


	****	Three Months Ended
		March 31,		December 31,		March 31,
		2023		2022		2022
INTEREST INCOME
Interest-bearing due from banks		$	278	$	310	$	67
Available-for-sale debt securities:
Taxable			2,211		2,217		1,969
Tax-exempt			767		910		905
Total available-for-sale debt securities			2,978		3,127		2,874
Loans receivable:
Taxable			22,428		21,979		17,974
Paycheck Protection Program			3		59		575
Tax-exempt			713		675		573
Total loans receivable			23,144		22,713		19,122
Other earning assets			8		8		12
Total Interest Income			26,408		26,158		22,075

INTEREST EXPENSE
Interest-bearing deposits:
Interest checking			987		844		194
Money market			873		818		262
Savings			63		66		61
Time deposits			1,307		898		393
Total interest-bearing deposits			3,230		2,626		910
Borrowed funds:
Short-term			1,097		127		1
Long-term - FHLB advances			681		460		49
Senior notes, net			120		120		118
Subordinated debt, net			230		230		363
Total borrowed funds			2,128		937		531
Total Interest Expense			5,358		3,563		1,441

Net Interest Income		$	21,050	$	22,595	$	20,634

Note: Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%. The following table is a reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis.


(In Thousands)	Three Months Ended
	March 31,		December 31,		March 31,
	2023		2022		2022
Net Interest Income Under U.S. GAAP	$	20,781	$	22,292	$	20,332
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities		127		167		183
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans		142		136		119
Net Interest Income as adjusted to a fully taxable-equivalent basis	$	21,050	$	22,595	$	20,634

ANALYSIS OF AVERAGE DAILY BALANCES AND RATES

(Dollars in Thousands)


	****	3 Months		****		****	3 Months				3 Months
		Ended			Rate of		Ended		Rate of		Ended		Rate of	****
		3/31/2023			Return/		12/31/2022		Return/		3/31/2022		Return/	****
		Average			Cost of		Average		Cost of		Average		Cost of	****
		Balance			Funds %		Balance		Funds %		Balance		Funds %
EARNING ASSETS
Interest-bearing due from banks		$	31,637		3.56	%	$	40,288	3.05	%	$	84,115	0.32	%
Available-for-sale debt securities, at amortized cost:
Taxable			410,110		2.19	%		415,538	2.12	%		390,301	2.05	%
Tax-exempt			131,392		2.37	%		146,466	2.46	%		144,334	2.54	%
Total available-for-sale debt securities			541,502		2.23	%		562,004	2.21	%		534,635	2.18	%
Loans receivable:
Taxable			1,633,850		5.57	%		1,609,563	5.42	%		1,445,353	5.04	%
Paycheck Protection Program			162		7.51	%		1,044	22.42	%		18,849	12.37	%
Tax-exempt			91,851		3.15	%		88,583	3.02	%		83,659	2.78	%
Total loans receivable			1,725,863		5.44	%		1,699,190	5.30	%		1,547,861	5.01	%
Other earning assets			1,200		2.70	%		1,048	3.03	%		1,983	2.45	%
Total Earning Assets			2,300,202		4.66	%		2,302,530	4.51	%		2,168,594	4.13	%
Cash			22,276					23,154				20,703
Unrealized loss on securities			(60,055)					(70,583)				(2,508)
Allowance for credit losses			(17,053)					(16,612)				(13,783)
Bank-owned life insurance			31,267					31,127				30,720
Bank premises and equipment			21,518					21,752				21,043
Intangible assets			55,331					55,433				55,765
Other assets			67,333					64,341				44,952
Total Assets		$	2,420,819				$	2,411,142			$	2,325,486

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	457,277		0.88	%	$	478,012	0.70	%	$	419,130	0.19	%
Money market			364,646		0.97	%		427,378	0.76	%		456,904	0.23	%
Savings			257,047		0.10	%		262,269	0.10	%		249,165	0.10	%
Time deposits			312,497		1.70	%		295,920	1.20	%		277,405	0.57	%
Total interest-bearing deposits			1,391,467		0.94	%		1,463,579	0.71	%		1,402,604	0.26	%
Borrowed funds:
Short-term			91,767		4.85	%		14,229	3.54	%		1,746	0.23	%
Long-term - FHLB advances			80,648		3.42	%		62,998	2.90	%		26,102	0.76	%
Senior notes, net			14,773		3.29	%		14,757	3.23	%		14,709	3.25	%
Subordinated debt, net			24,620		3.79	%		24,594	3.71	%		32,948	4.47	%
Total borrowed funds			211,808		4.07	%		116,578	3.19	%		75,505	2.85	%
Total Interest-bearing Liabilities			1,603,275		1.36	%		1,580,157	0.89	%		1,478,109	0.40	%
Demand deposits			539,659					563,567				529,077
Other liabilities			25,247					26,171				24,046
Total Liabilities			2,168,181					2,169,895				2,031,232
Stockholders' equity, excluding accumulated other comprehensive loss			299,599					296,717				295,996
Accumulated other comprehensive loss			(46,961)					(55,470)				(1,742)
Total Stockholders' Equity			252,638					241,247				294,254
Total Liabilities and Stockholders' Equity		$	2,420,819				$	2,411,142			$	2,325,486
Interest Rate Spread					3.30	%			3.62	%			3.73	%
Net Interest Income/Earning Assets					3.71	%			3.89	%			3.86	%

Total Deposits (Interest-bearing and Demand)		$	1,931,126				$	2,027,146			$	1,931,681

(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.

(2)	Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.
(3)	Rates of return on earning assets and costs of funds have been presented on an annualized basis.
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COMPARISON OF NONINTEREST INCOME

(In Thousands)


	****	Three Months Ended
		March 31,		December 31,		March 31,
		2023		2022		2022
Trust revenue		$	1,777	$	1,749	$	1,786
Brokerage and insurance revenue			430		507		522
Service charges on deposit accounts			1,290		1,357		1,235
Interchange revenue from debit card transactions			1,007		1,098		963
Net gains from sales of loans			74		24		382
Loan servicing fees, net			122		203		210
Increase in cash surrender value of life insurance			138		140		135
Other noninterest income			771		1,032		588
Total noninterest income, excluding realized gains<br>on securities, net		$	5,609	$	6,110	$	5,821

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)


	****	Three Months Ended
	****	March 31,		December 31,		March 31,
		2023		2022		2022
Salaries and employee benefits		$	11,427	$	10,135	$	10,607
Net occupancy and equipment expense			1,402		1,316		1,411
Data processing and telecommunications expenses			1,936		1,744		1,623
Automated teller machine and interchange expense			475		473		384
Pennsylvania shares tax			403		493		488
Professional fees			937		515		489
Other noninterest expense			2,507		1,911		1,884
Total noninterest expense		$	19,087	$	16,587	$	16,886