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

July 18, 2024

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 and six-months periods ended June 30, 2024. On July 18, 2024, the Company issued a press release titled “C&N Declares Dividend and Announces Second Quarter 2024 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 July 18, 2024, titled “C&N Declares Dividend and Announces Second Quarter 2024 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: July 18, 2024	By:	/s/ Mark A. Hughes
		Mark A. Hughes
		Treasurer and Chief Financial Officer

Exhibit 99.1

	Contact: Charity Frantz
July 18, 2024	570-724-0225
	charityf@cnbankpa.com

C&N DECLARES DIVIDEND AND ANNOUNCES SECOND QUARTER 2024 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 and six month periods ended June 30, 2024. C&N’s principal activity is community banking, and the largest subsidiary is Citizens & Northern Bank (the “Bank”).

Highlights:

●	Net income was $6,113,000, or $0.40 diluted earnings per share for the second quarter 2024, up from $5,306,000, or $0.35 per diluted share in the first quarter 2024, and $6,043,000, or $0.39 per diluted share in the second quarter 2023. Net income for the six months ended June 30, 2024 was $11,419,000, or $0.74 diluted earnings per share, down from $12,296,000, or $0.80 diluted earnings per share for the first six months of 2023.
●	The net interest margin was 3.31% in the second quarter 2024 as compared to 3.29% in the first quarter 2024 and 3.53% in the second quarter 2023. The net interest margin was 3.30% for the first six months of 2024, down from 3.62% in the corresponding period of 2023.
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●	The provision for credit losses was $565,000 in the second quarter 2024, down from $954,000 in the first quarter 2024 and $812,000 in the second quarter 2023. The provision for credit losses was $1,519,000 in the first six months of 2024, up from $460,000 in the first six months of 2023. At June 30, 2024, the allowance for credit losses (“ACL”) was $20,382,000, or 1.08% of gross loans receivable, up from $19,208,000, or 1.04% of gross loans receivable, at December 31, 2023.
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●	Total loans receivable increased $20.8 million, or 1.1%, during the quarter ended June 30 2024. Average loans receivable increased 5.2% (annualized) during the second quarter 2024 from the first quarter 2024. Average loans receivable were higher by 6.5% for the six months ended June 30, 2024, as compared to the first six months of 2023.
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●	Nonperforming loans totaled $19.6 million, or 1.04% of total loans, at June 30, 2024, up from $19.3 million, or 1.03% of total loans, at March 31, 2024 and $18.4 million, or 0.99% of total loans, at December 31, 2023. Total nonperforming assets were 0.76% of total assets at June 30, 2024, down from 0.78% at March 31, 2024 and up from 0.75% at December 31, 2023.
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●	Total deposits increased $63.4 million during the quarter ended June 30, 2024. Average total deposits increased 3.0% (annualized) during the second quarter 2024 from the first quarter 2024 and were 3.6% higher for the six months ended June 30, 2024, as compared to the first six months of 2023. Total deposits, excluding brokered deposits, were $1,999,808 at June 30, 2024, an increase of $73,296,000 or 3.8% from March 31, 2024.
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●	At June 30, 2024, estimated uninsured and uncollateralized deposits totaled 21.6% of the Bank’s total deposits. C&N maintains highly liquid sources of available funds, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia and available federal funds lines with other banks, as well as available-for-sale debt securities with a fair value in excess of collateral obligations. At June 30, 2024, available funding from these sources totaled 173.7% of uninsured deposits and 235.1% of uninsured and uncollateralized deposits.
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Dividend Declared and Unaudited Financial Information

On July 18, 2024, C&N’s Board of Directors declared a regular quarterly cash dividend of $0.28 per share. The dividend is payable on August 9, 2024 to shareholders of record as of July 29, 2024.

Highlights related to C&N’s second quarter and June 30, 2024 year-to-date unaudited U.S. GAAP earnings results as compared to results for the first quarter 2024, second quarter 2023 and six months ended June 30, 2023 are presented below.

Second Quarter 2024 as Compared to First Quarter 2024

Net income was $6,113,000, or $0.40 per diluted share, for the second quarter 2024 as compared to $5,306,000, or $0.35 per diluted share, for the first quarter 2024.

◾	Net interest income of $19,445,000 in the second quarter 2024 increased $404,000 from the first quarter 2024. The net interest margin was 3.31% in the second quarter 2024, up 0.02% from 3.29% in the first quarter 2024. The net interest spread decreased 0.01%, as the average rate on interest-bearing liabilities increased 0.11%, while the average yield on earning assets increased 0.10%.

◾

For the quarter ended June 30, 2024, there was a provision for credit losses of $565,000, a decrease of $389,000 compared to $954,000 in the first quarter 2024. In the second quarter 2024, the ACL on loans increased $359,000 to 1.08% of gross loans receivable at June 30, 2024 from 1.07% at March 31, 2024. In the second quarter 2024, net charge-offs totaled $207,000, or 0.04% (annualized) of average loans receivable.

◾	Noninterest income of $7,854,000 in the second quarter 2024 increased $1,179,000 from the first quarter 2024 amount. Significant variances included the following:

Ø	Other noninterest income of $1,943,000 increased $926,000 from the first quarter 2024, including income of $841,000 recognized in the second quarter from tax credits related to donations with no corresponding amount in the first quarter 2024.

Ø	Service charges on deposit accounts increased $154,000 from the first quarter 2024 consistent with a seasonal increase in volume of overdraft and other fees as compared to the typically slower first quarter amounts.

Ø	Trust revenue of $2,014,000 increased $117,000 from the first quarter 2024, consistent with recent appreciation in the trading prices of many U.S. equity securities and includes revenue from new business.

Ø	Interchange revenue from debit card transactions of $1,089,000 increased $76,000 reflecting an increase in transaction volume.

Ø	Loan servicing fees, net, of $130,000 decreased $100,000, as the fair value of servicing rights decreased $69,000 in the second quarter 2024 as compared to an increase of $25,000 in the first quarter 2024.

◾	Noninterest expense of $19,255,000 in the second quarter 2024 increased $951,000 from the first quarter 2024 amount. Significant variances included the following:

Ø	Other noninterest expense of $3,437,000 increased $1,575,000 from the first quarter 2024. Within this category, significant variances included the following:
◾	Donations expense increased $943,000, reflecting the impact of donations totaling $933,000 made under the Pennsylvania Educational Improvement Tax Credit program in the second quarter which generated the income from tax credits of $841,000 noted above.
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◾	In the first quarter 2024, there was a reduction in expense of $483,000 related to the defined benefit postretirement medical benefit plan, including a curtailment of $469,000 related to plan
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adjustments. In comparison, in the second quarter 2024, there was a reduction in expense associated with the postretirement plan of $15,000.
Ø	Salaries and employee benefits expense of $11,023,000 decreased $539,000 from the first quarter 2024 including decreases in payroll tax and unemployment compensation expenses of $349,000, reflecting the normal pattern of such costs, as well as decreases in health insurance expenses of $125,000 and severance expense of $78,000.
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◾	The income tax provision of $1,366,000, or 18.3% of pre-tax income for the second quarter 2024 increased $214,000 from $1,152,000, or 17.8% of pre-tax income for the first quarter 2024. The increase in income tax provision reflected the increase in pre-tax income of $1,021,000 for the quarter.

Second Quarter 2024 as Compared to Second Quarter 2023

Second quarter 2024 net income was $6,113,000, or $0.40 per diluted share, as compared to $6,043,000, or $0.39 per diluted share, in the second quarter 2023. Significant variances were as follows:

◾	Net interest income of $19,445,000 in the second quarter 2024 was $917,000 lower than the second quarter 2023. The net interest margin was 3.31% in the second quarter 2024, down from 3.53% in the second quarter 2023. The interest rate spread decreased 0.37%, as the average rate on interest-bearing liabilities increased 0.85%, while the average yield on earning assets increased 0.48%.

◾	For the quarter ended June 30, 2024, the provision for credit losses was $565,000, a decrease of $247,000 compared to $812,000 in the second quarter 2023. The ACL as a percentage of gross loans receivable was 1.08% at June 30, 2024 as compared to 1.05% at June 30, 2023.

◾	Noninterest income of $7,854,000 in the second quarter 2024 increased $1,219,000 from the second quarter 2023 amount. Significant variances included the following:

Ø	Other noninterest income of $1,943,000 increased $356,000, including an increase of $145,000 in dividends from FHLB-Pittsburgh and Federal Reserve stock and an increase of $120,000 in income recognized from tax credits related to donations.

Ø	Earnings from the increase in cash surrender value of life insurance of $444,000 increased $292,000 from the second quarter 2023 reflecting the earnings on additional Bank-Owned Life Insurance purchased in December 2023.

Ø	Trust revenue of $2,014,000 increased $210,000, including an increase of $169,000 in revenue from new business.

Ø	Brokerage and insurance revenue of $527,000 increased $162,000 due to an increase in sales volume.

Ø	Net gains from sale of loans of $235,000 increased $96,000 from the second quarter 2023, reflecting an increase in volume of residential mortgage loans sold.

Ø	Service charges on deposit accounts increased $84,000 from the second quarter 2024 reflecting an increase in volume of fees.

◾	Noninterest expense of $19,255,000 in the second quarter 2024 increased $533,000 from the second quarter 2023 amount. Significant variances included the following:

Ø	Salaries and employee benefits expense of $11,023,000 increased $246,000, or 2.3%, including increases in cash and stock-based incentive compensation expense of $378,000 and base salaries expense of $105,000, while ESOP contributions and Supplemental Executive Retirement Plan (SERP) expenses decreased $233,000.

Ø	Data processing and telecommunications of $2,003,000 increased $103,000, including an increase in internet banking costs.

Ø	Other noninterest expense of $3,437,000 increased $78,000 from the second quarter 2023. Within this category, significant variances included the following:
◾	Donations expense increased $165,000 including an increase of $133,000 in PA Educational Improvement Tax Credit program donations made in 2024 compared to 2023.
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◾	Expenses from check fraud, debit card fraud and other operational losses totaled $26,000 in the second quarter 2024 as compared to a net reduction in expense of $110,000 in the second quarter 2023.
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◾	Legal fees totaled $131,000 in 2024 a decrease of $196,000, mainly due to a decrease in fees incurred related to non-litigation-related corporate matters.
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Ø	Automated teller machine and interchange expense of $473,000 increased $78,000 reflecting increased volume of activity.
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Six Months Ended June 30, 2024 as Compared to Six Months Ended June 30, 2023

Net income for the six-month period ended June 30, 2024 was $11,419,000, or $0.74 per diluted share, as compared to $12,296,000, or $0.80 per diluted share, for the first six months of 2023. Significant variances were as follows:

◾

Net interest income totaled $38,486,000 in the six months ended June 30, 2024, a decrease of $2,657,000 from the total for the first six months of 2023. The net interest margin was 3.30% for the first six months of 2024, down from 3.62% in the corresponding period of 2023. The interest rate spread decreased 0.52%, as the average rate on interest-bearing liabilities was higher by 1.04% while the average yield on earning assets increased 0.52%.

◾

For the six months ended June 30, 2024, the provision for credit losses was $1,519,000, an increase of $1,059,000 from the first six months of 2023. In the first six months of 2024, the ACL on loans receivable increased $1,174,000 to 1.08% at June 30, 2024 as compared to 1.04% at December 31, 2023. For the first six months ended June 30, 2024, net charge-offs totaled $352,000, or 0.04% (annualized) of average loans receivable.

◾	Noninterest income totaled $14,529,000 in the first six months of 2024, up $2,285,000 from the total for the first six months of 2023. Significant variances included the following:

Ø	Earnings from the increase in cash surrender value of life insurance of $914,000 increased $624,000 reflecting earnings on additional Bank-Owned Life Insurance purchased in December 2023.

Ø	Other noninterest income of $2,960,000 increased $602,000 as dividends on FHLB-Pittsburgh and Federal Reserve stock totaled $835,000, an increase of $328,000, and income from tax credits related to donations increased $120,000.

Ø	Trust revenue of $3,911,000 increased $330,000, consistent with recent appreciation in the trading prices of many U.S. equity securities and includes revenue from new business.

Ø	Brokerage and insurance revenue of $1,066,000 increased $271,000 due to an increase in sales volume.

Ø	Net gains from sale of loans of $426,000 increased $213,000, reflecting an increase in volume of residential mortgage loans sold.

◾	Noninterest expense totaled $37,559,000 for the first six months of 2024, a decrease of $250,000 from the total for the first six months of 2023. Significant variances included the following:

Ø	Other noninterest expense of $5,299,000 decreased $567,000. Within this category, significant variances included the following:
◾	For the first six months of 2024, there was a reduction in expense of $498,000 related to the defined benefit postretirement medical benefit plan, including a curtailment of $469,000 related to plan adjustments in the first quarter 2024 as noted above. In comparison, in the first six months of 2023, there was a reduction in expense associated with the postretirement plan of $10,000.
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◾	Legal fees totaled $273,000 in the first six months of 2024, a decrease of $240,000, mainly due to lower fees incurred related to non-litigation-related corporate matters.
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◾	Donations expense increased $147,000 including an increase of $133,000 in PA Educational Improvement Tax Credit program donations made in the first six months of 2024 compared to the corresponding period in 2023.
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Ø	Professional fees of $1,070,000 decreased $431,000 as 2023 included $389,000 of conversion costs related to a change in Wealth Management platform for providing brokerage and investment advisory services.
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Ø	Salaries and employee benefits expense of $22,585,000 increased $381,000, including an increase in base salaries expense of $441,000, or 3.0%, an increase of $207,000 in cash and stock-based incentive compensation and an increase of $78,000 in severance expense, while ESOP and SERP expense decreased $433,000.

Ø	Data processing and telecommunications of $3,995,000 increased $159,000, including an increase of $191,000 in internet banking expenses.

Other Information:

Changes in other unaudited financial information are as follows:

◾	Total assets amounted to $2,593,122,000 at June 30, 2024, up from $2,521,537,000 at March 31, 2024 and $2,470,780,000 at June 30, 2023.

◾	Cash and due from banks totaled $100,412,000 at June 30, 2024, up $53,964,000 from March 31, 2024 and $48,650,000 from June 30, 2023. The more elevated cash position at June 30, 2024 includes the impact of strong deposit growth in the second quarter 2024.

◾

The amortized cost of available-for-sale debt securities decreased to $453,944,000 at June 30, 2024 from $457,081,000 at March 31, 2024 and $507,132,000 at June 30, 2023. The fair value of available-for-sale debt securities at June 30, 2024 was lower than the amortized cost basis by $52,799,000, or 11.6%. In comparison, the aggregate unrealized loss position was $51,987,000 (11.4%) at March 31, 2024 and $61,437,000 (12.1%) at June 30, 2023. The unrealized decrease in fair value of the portfolio has resulted from an increase in interest rates as compared to rates when the securities were purchased. Management reviewed the available-for-sale debt securities as of June 30, 2024 and concluded, as of such date, that there were no credit-related declines in fair value and no allowance for credit losses was recorded as of June 30, 2024.

◾

Gross loans receivable totaled $1,893,207,000 at June 30, 2024, an increase of $20,758,000 (1.1%) from total loans at March 31, 2024 and an increase of $78,697,000 (4.3%) from total loans at June 30, 2023. In comparing outstanding balances at June 30, 2024 and 2023, total commercial loans were up $67,971,000 (5.0%), reflecting growth in owner occupied commercial real estate loans of $39,368,000 and other commercial loans of $38,422,000 offset by a decrease of $9,819,000 in non-owner occupied commercial real estate loans. Within other commercial loans, the outstanding balance of commercial construction and land loans increased $33,771,000, commercial lines of credit increased $8,317,000 and political subdivisions increased $5,004,000 offset by decreases in the outstanding balances of commercial and industrial loans and other commercial loans. Total residential mortgage loans were up $5,591,000 (1.4%), and total consumer loans increased $5,135,000 (9.2%). The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $321.1 million at June 30, 2024, up $2.9 million (0.9%) from June 30, 2023.

◾

At June 30, 2024, the recorded investment in non-owner occupied commercial real estate loans for which the primary purpose is utilization of office space by third parties was $96,642,000, or 5.1% of gross loans receivable. At June 30, 2024, within this segment there were two loans with a total recorded investment of $3,885,000 in nonaccrual status with specific allowances totaling $493,000. The remainder of the non-owner occupied commercial real estate loans with a primary purpose of office space utilization were in accrual status with no specific allowance at June 30, 2024.

◾

Total nonperforming assets as a percentage of total assets was 0.76% at June 30, 2024, down from 0.78% at March 31, 2024 and up from 0.58% at June 30, 2023. Total nonperforming assets were $19.8 million at June 30, 2024 and March 31, 2024 and $14.5 million at June 30, 2023. At June 30, 2024, total loans receivable individually evaluated with an allowance were $6,613,000, with specific allowances (included in the total ACL on loans receivable) totaling $1,230,000. In comparison, at March 31, 2024, loans individually evaluated with an allowance totaled $10,062,000 with specific allowances totaling $1,403,000, and, at June 30, 2023, loans individually evaluated with an allowance totaled $5,785,000 with specific allowances totaling $720,000.

◾

Deposits totaled $2,059,309,000 at June 30, 2024, up $63,406,000 (3.2%) from $1,995,903,000 at March 31, 2024, despite a decrease in brokered deposits of $9,890,000. Total deposits, excluding brokered deposits, were up $73,296,000 (3.8%) at June 30, 2024 from March 31, 2024. Total deposits were up $49,191,000 (2.4%) at June 30 2024 as compared to June 30, 2023, despite a decrease in brokered deposits of $11,152,000. At June 30, 2024, C&N’s estimated uninsured deposits totaled $605.8 million, or 29.2% of the Bank’s total deposits, as compared to $592.2 million, or 29.2% of the Bank’s total deposits at December 31, 2023. Included in uninsured deposits are deposits collateralized by securities (almost exclusively municipal deposits) totaling $158.3 million, or 7.6% of the Bank’s total deposits, at June 30, 2024.

◾

C&N maintained highly liquid sources of available funds totaling $1.1 billion at June 30, 2024, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $719.7 million, unused availability on the Federal Reserve Bank of Philadelphia’s discount window of $18.9 million, available federal funds lines with other banks of $75 million and available-for-sale debt securities with a fair value in excess of collateral obligations of $238.4 million. At June 30, 2024, available funding from these sources totaled 173.7% of uninsured deposits, and 235.1% of uninsured and uncollateralized deposits.

◾

The outstanding balance of borrowed funds, including Federal Home Loan Bank advances, repurchase agreements, senior notes and subordinated debt, totaled $242,161,000 at June 30, 2024, up $4,913,000 from March 31, 2024 and $56,008,000 from June 30, 2023.

◾

Total stockholders’ equity was $263,221,000 at June 30, 2024, up from $261,656,000 at March 31, 2024 and from $248,117,000 at June 30, 2023. Within stockholders’ equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $41,710,000 at June 30, 2024, $41,071,000 at March 31, 2024 and $48,536,000 at June 30, 2023. The volatility in stockholders’ equity related to accumulated other comprehensive loss from available-for-sale debt securities has been caused by fluctuations in interest rates including overall 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.

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◾

On September 25, 2023, the Corporation announced a new treasury stock repurchase program. Under this program, C&N is authorized to repurchase up to 750,000 shares of its common stock. During the three-month and six-month periods ended June 30, 2024, 22,496 shares were repurchased for a total cost of $379,000, at an average price of $16.85 per share. At June 30, 2024, there were 727,504 shares available to be repurchased under the program.

◾	Citizens & Northern Bank is subject to various regulatory capital requirements. At June 30, 2024, 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 $1,284,674,000 at June 30, 2024, up 4.9% from $1,224,573,000 at March 31, 2024, and up 11.3% from $1,154,728,000 at June 30, 2023. 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. C&N presents certain analyses and ratios with net interest income determined on a fully taxable-equivalent basis, which are non-GAAP financial measures as presented. C&N 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 was $202,000, $195,000 and $239,000 for the second quarter 2024, first quarter 2024 and second quarter 2023, respectively. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP was $397,000 for the six months ended June 30, 2024 and $508,000 for the six months ended June 30, 2023.

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; recent adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, sources of liquidity and capital funding, and regulatory responses to these developments; C&N’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses; 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; failure to achieve merger-related synergies and difficulties in integrating the business and operations of acquired institutions; and fraud and cyber malfunction risks as usage of artificial intelligence continues to expand. 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)


	****			****
		2nd			2nd
		QUARTER			QUARTER
		2024			2023		Incr. (Decr.)		% Incr. (Decr.)	****
Interest and Dividend Income		$	31,326		$	28,011			11.83	%
Interest Expense			11,881			7,649			55.33	%
Net Interest Income			19,445			20,362			(4.50)	%
Provision for Credit Losses			565			812			(30.42)	%
Net Interest Income After Provision for Credit Losses			18,880			19,550			(3.43)	%
Noninterest Income			7,854			6,635			18.37	%
Net Realized Losses on Available-for-sale Debt Securities			0			(1)			(100.00)	%
Noninterest Expense			19,255			18,722			2.85	%
Income Before Income Tax Provision			7,479			7,462			0.23	%
Income Tax Provision			1,366			1,419			(3.74)	%
Net Income		$	6,113		$	6,043		****	1.16	%
Net Income Attributable to Common Shares (1)		$	6,066		$	5,996		****	1.17	%
PER COMMON SHARE DATA:
Net Income - Basic		$	0.40		$	0.39			2.56	%
Net Income - Diluted		$	0.40		$	0.39			2.56	%
Dividends Per Share		$	0.28		$	0.28			0.00	%
Number of Shares Used in Computation - Basic			15,264,533			15,231,505
Number of Shares Used in Computation - Diluted			15,264,533			15,231,505

All values are in US Dollars.


	SIX MONTHS ENDED
	JUNE 30,

	2024		2023		Incr. (Decr.)		% Incr. (Decr.)
Interest and Dividend Income	$	61,662	$	54,150			13.87	%
Interest Expense		23,176		13,007			78.18	%
Net Interest Income		38,486		41,143			(6.46)	%
Provision for Credit Losses		1,519		460			230.22	%
Net Interest Income After Provision for Credit Losses		36,967		40,683			(9.13)	%
Noninterest Income		14,529		12,244			18.66	%
Net Realized Gains on Available-for-sale Debt Securities		0		6			(100.00)	%
Noninterest Expense		37,559		37,809			(0.66)	%
Income Before Income Tax Provision		13,937		15,124			(7.85)	%
Income Tax Provision		2,518		2,828			(10.96)	%
Net Income	$	11,419	$	12,296		****	(7.13)	%
Net Income Attributable to Common Shares (1)	$	11,333	$	12,197		****	(7.08)	%
PER COMMON SHARE DATA:
Net Income - Basic	$	0.74	$	0.80			(7.50)	%
Net Income - Diluted	$	0.74	$	0.80			(7.50)	%
Dividends Per Share	$	0.56	$	0.56			0.00	%
Number of Shares Used in Computation - Basic		15,247,557		15,320,101
Number of Shares Used in Computation - Diluted		15,247,557		15,320,366

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)


	June 30,		June 30,
	2024		2023		Incr. (Decr.)		% Incr. (Decr.)
ASSETS
Cash & Due from Banks	$	100,412	$	51,762			93.99	%
Available-for-sale Debt Securities		401,145		445,695			(10.00)	%
Loans, Net		1,872,825		1,795,454			4.31	%
Bank-Owned Life Insurance		50,301		31,504			59.67	%
Bank Premises and Equipment, Net		21,966		20,970			4.75	%
Deferred Tax Asset, Net		18,375		20,687			(11.18)	%
Intangible Assets		54,779		55,178			(0.72)	%
Other Assets		73,319		49,530			48.03	%
TOTAL ASSETS	$	2,593,122	$	2,470,780		****	4.95	%

LIABILITIES
Deposits	$	2,059,309	$	2,010,118			2.45	%
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements		202,523		146,694			38.06	%
Senior Notes, Net		14,865		14,798			0.45	%
Subordinated Debt, Net		24,773		24,661			0.45	%
Other Liabilities		28,431		26,392			7.73	%
TOTAL LIABILITIES	****	2,329,901	****	2,222,663		****	4.82	%

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated
Other Comprehensive Loss		304,582		296,190			2.83	%
Accumulated Other Comprehensive Loss:
Net Unrealized Losses on Available-for-sale Debt Securities		(41,710)		(48,536)			(14.06)	%
Defined Benefit Plans		349		463			(24.62)	%
TOTAL STOCKHOLDERS' EQUITY	****	263,221	****	248,117		****	6.09	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	2,593,122	$	2,470,780		****	4.95	%

All values are in US Dollars.

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	FOR THE
		THREE MONTHS ENDED						%
		June 30,						INCREASE
	****	2024		****	2023		****	(DECREASE)	****
EARNINGS PERFORMANCE
Net Income		$	6,113		$	6,043		1.16	%
Return on Average Assets (Annualized)			0.96	%		0.98	%	(2.04)	%
Return on Average Equity (Annualized)			9.46	%		9.60	%	(1.46)	%

PRE-TAX, PRE-PROVISION NET REVENUE ("PPNR") - NON-GAAP (a)
PPNR		$	8,246		$	8,514		(3.15)	%
PPNR (Annualized) as a % of Average Assets			1.29	%		1.38	%	(6.52)	%
PPNR (Annualized) as a % of Average Equity			12.76	%		13.53	%	(5.69)	%

	****	AS OF OR FOR THE
		SIX MONTHS ENDED						%
		June 30,						INCREASE
	****	2024		****	2023		****	(DECREASE)	****
EARNINGS PERFORMANCE - U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")
Net Income		$	11,419		$	12,296		(7.13)	%
Return on Average Assets (Annualized)			0.90	%		1.01	%	(10.89)	%
Return on Average Equity (Annualized)			8.79	%		9.75	%	(9.85)	%

PPNR - NON-GAAP (a)
PPNR		$	15,853		$	16,086		(1.45)	%
PPNR (Annualized) as a % of Average Assets			1.25	%		1.32	%	(5.30)	%
PPNR (Annualized) as a % of Average Equity			12.20	%		12.76	%	(4.39)	%

BALANCE SHEET HIGHLIGHTS
Total Assets		$	2,593,122		$	2,470,780		4.95	%
Available-for-Sale Debt Securities			401,145			445,695		(10.00)	%
Loans, Net			1,872,825			1,795,454		4.31	%
Allowance for Credit Losses:
Allowance for Credit Losses on Loans			20,382			19,056		6.96	%
Allowance for Credit Losses on Off-Balance Sheet Exposures			682			1,154		(40.90)	%
Deposits			2,059,309			2,010,118		2.45	%

OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold with Servicing Retained		$	321,136		$	318,267		0.90	%
Trust Assets Under Management			1,284,674			1,154,728		11.25	%

STOCKHOLDERS' VALUE (PER COMMON SHARE)
Net Income - Basic		$	0.74		$	0.80		(7.50)	%
Net Income - Diluted		$	0.74		$	0.80		(7.50)	%
Dividends		$	0.56		$	0.56		0.00	%
Common Book Value		$	17.12		$	16.25		5.35	%
Tangible Common Book Value (b)		$	13.56		$	12.64		7.28	%
Market Value (Last Trade)		$	17.89		$	19.30		(7.31)	%
Market Value / Common Book Value			104.50	%		118.77	%	(12.01)	%
Market Value / Tangible Common Book Value NON-GAAP (b)			131.93	%		152.69	%	(13.60)	%
Price Earnings Multiple			12.09			12.06		0.25	%
Dividend Yield (Annualized)			6.26	%		5.80	%	7.93	%
Common Shares Outstanding, End of Period			15,375,982			15,268,096		0.71	%

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


		AS OF OR FOR THE
		SIX MONTHS ENDED						%	****
		June 30,						INCREASE	****
	****	2024		****	2023		****	(DECREASE)	****
SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets (b)			8.21	%		7.99	%	2.75	%
Nonperforming Assets / Total Assets			0.76	%		0.58	%	31.03	%
Allowance for Credit Losses / Total Loans			1.08	%		1.05	%	2.86	%
Total Risk Based Capital Ratio (c)			15.49	%		15.86	%	(2.33)	%
Tier 1 Risk Based Capital Ratio (c)			13.09	%		13.37	%	(2.09)	%
Common Equity Tier 1 Risk Based Capital Ratio (c)			13.09	%		13.37	%	(2.09)	%
Leverage Ratio (c)			9.85	%		9.81	%	0.41	%

AVERAGE BALANCES
Average Assets		$	2,533,204		$	2,443,693		3.66	%
Average Equity		$	259,783		$	252,215		3.00	%

EFFICIENCY RATIO NON-GAAP (d)
Net Interest Income on a Fully Taxable-Equivalent Basis (d)		$	38,883		$	41,651		(6.65)	%
Noninterest Income, Excluding Net Realized Gains on Available-for-sale Debt Securities			14,529			12,244		18.66	%
Total (1)		$	53,412		$	53,895		(0.90)	%
Noninterest Expense (2)		$	37,559		$	37,809		(0.66)	%
Efficiency Ratio = (2)/(1)			70.32	%		70.15	%	0.24	%
(a)	PPNR includes net interest income plus noninterest income minus total noninterest expense but excludes provision (credit) for credit losses, realized gains or losses on securities, the income tax provision and nonrecurring items included in earnings. Management believes disclosure of PPNR provides useful information for evaluating C&N’s financial performance without the impact of unusual items or events that may obscure trends in C&N’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. A reconciliation of this non-GAAP measure to the comparable GAAP measure is provided in Exhibit 99.2 under the table “PPNR- NON- GAAP RECONCILIATION.”
---	---

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


Total Assets	$	2,593,122	$	2,470,780
Less: Intangible Assets, Primarily Goodwill		(54,779)		(55,178)
Tangible Assets	$	2,538,343	$	2,415,602
Total Stockholders' Equity	$	263,221	$	248,117
Less: Intangible Assets, Primarily Goodwill		(54,779)		(55,178)
Tangible Common Equity (3)	$	208,442	$	192,939

Common Shares Outstanding, End of Period (4)		15,375,982		15,286,096
Tangible Common Book Value per Share = (3)/(4)	$	13.56	$	12.64

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

(d)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 C&N'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:
		June 30,		March 31,		December 31,		September 30,		June 30,
		2024		2024		2023		2023		2023
Interest income		$	31,326	$	30,336	$	30,236	$	29,118	$	28,011
Interest expense			11,881		11,295		10,642		9,455		7,649
Net interest income			19,445		19,041		19,594		19,663		20,362
Provision (credit) for credit losses			565		954		951		(1,225)		812
Net interest income after provision (credit) for credit losses			18,880		18,087		18,643		20,888		19,550
Noninterest income			7,854		6,675		8,720		6,489		6,635
Net realized losses on securities			0		0		(3,042)		0		(1)
Noninterest expense			19,255		18,304		18,399		17,940		18,722
Income before income tax provision			7,479		6,458		5,922		9,437		7,462
Income tax provision			1,366		1,152		1,661		1,846		1,419
Net income		$	6,113	$	5,306	$	4,261	$	7,591	$	6,043
Net income attributable to common shares		$	6,066	$	5,267	$	4,231	$	7,534	$	5,996
Basic earnings per common share		$	0.40	$	0.35	$	0.28	$	0.50	$	0.39
Diluted earnings per common share		$	0.40	$	0.35	$	0.28	$	0.50	$	0.39

QUARTERLY CONDENSED, CONSOLIDATED

BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)


	****	As of:
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
		2024		2024		2023		2023		2023
ASSETS
Cash & Due from Banks		$	100,412	$	46,448	$	56,878	$	52,658	$	51,762
Available-for-Sale Debt Securities			401,145		405,094		415,755		429,138		445,695
Loans, Net			1,872,825		1,852,426		1,828,931		1,812,585		1,795,454
Bank-Owned Life Insurance			50,301		49,857		63,674		31,557		31,504
Bank Premises and Equipment, Net			21,966		21,852		21,632		21,267		20,970
Deferred Tax Asset, Net			18,375		17,703		17,441		23,731		20,687
Intangible Assets			54,779		54,877		54,974		55,076		55,178
Other Assets			73,319		73,280		56,299		57,937		49,530
TOTAL ASSETS		$	2,593,122	$	2,521,537	$	2,515,584	$	2,483,949	$	2,470,780

LIABILITIES
Deposits (1)		$	2,059,309	$	1,995,903	$	2,014,806	$	2,024,997	$	2,010,118
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements			202,523		197,655		172,211		148,529		146,694
Senior Notes, Net			14,865		14,848		14,831		14,814		14,798
Subordinated Debt, Net			24,773		24,745		24,717		24,689		24,661
Other Liabilities			28,431		26,730		26,638		30,715		26,392
TOTAL LIABILITIES		****	2,329,901	****	2,259,881	****	2,253,203	****	2,243,744	****	2,222,663

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss			304,582		302,362		300,818		300,031		296,190
Accumulated Other Comprehensive Loss:
Net Unrealized Losses on Available-for-sale Debt Securities			(41,710)		(41,071)		(38,878)		(60,278)		(48,536)
Defined Benefit Plans			349		365		441		452		463
TOTAL STOCKHOLDERS' EQUITY		****	263,221	****	261,656	****	262,381	****	240,205	****	248,117
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	2,593,122	$	2,521,537	$	2,515,584	$	2,483,949	$	2,470,780

(1) Brokered Deposits (Included in Total Deposits)		$	59,501	$	69,391	$	64,369	$	62,512	$	70,653

AVAILABLE-FOR-SALE DEBT SECURITIES

(In Thousands)


	****	June 30, 2024				****	March 31, 2024				December 31, 2023				June 30, 2023
		Amortized		Fair			Amortized		Fair		Amortized		Fair		Amortized		Fair
		Cost		Value			Cost		Value		Cost		Value		Cost		Value
Obligations of the U.S. Treasury		$	10,323	$	9,257		$	11,324	$	10,231	$	12,325	$	11,290	$	33,931	$	30,743
Obligations of U.S. Government agencies			10,582		9,350			10,637		9,376		11,119		9,946		22,899		20,552
Bank holding company debt securities			28,955		23,657			28,953		23,469		28,952		23,500		28,948		23,325
Obligations of states and political subdivisions:
Tax-exempt			113,659		102,020			113,181		102,826		113,464		104,199		125,247		113,170
Taxable			56,294		47,481			57,960		49,255		58,720		50,111		65,715		55,702
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			104,708		93,874			102,048		91,116		105,549		95,405		105,027		92,795
Residential collateralized mortgage obligations			46,623		42,565			48,477		44,501		50,212		46,462		40,444		35,897
Commercial mortgage-backed securities			74,510		64,718			76,249		66,121		76,412		66,682		76,780		65,517
Private label commercial mortgage-backed securities			8,290		8,223			8,252		8,199		8,215		8,160		8,141		7,994
Total Available-for-Sale Debt Securities		$	453,944	$	401,145		$	457,081	$	405,094	$	464,968	$	415,755	$	507,132	$	445,695

SUMMARY OF LOANS BY TYPE

(Excludes Loans Held for Sale)

(In Thousands)


	****	June 30,		****	March 31,		****	December 31,		****	June 30,
		2024			2024			2023			2023
Commercial real estate - non-owner occupied
Non-owner occupied		$	489,514		$	507,223		$	499,104		$	505,519
Multi-family (5 or more) residential			67,154			64,866			64,076			61,004
1-4 Family - commercial purpose			167,296			167,740			174,162			167,260
Total commercial real estate - non-owner occupied			723,964			739,829			737,342			733,783
Commercial real estate - owner occupied			267,169			250,145			237,246			227,801
All other commercial loans:
Commercial and industrial			77,339			80,136			78,832			80,270
Commercial lines of credit			130,924			121,791			117,236			122,607
Political subdivisions			89,460			84,652			79,031			84,456
Commercial construction and land			114,162			106,255			104,123			80,391
Other commercial loans			19,221			19,971			20,471			24,960
Total all other commercial loans			431,106			412,805			399,693			392,684
Residential mortgage loans:
1-4 Family - residential			383,494			387,542			389,262			378,698
1-4 Family residential construction			26,330			22,121			24,452			25,535
Total residential mortgage			409,824			409,663			413,714			404,233
Consumer loans:
Consumer lines of credit (including HELCs)			42,325			41,204			41,503			36,608
All other consumer			18,819			18,803			18,641			19,401
Total consumer			61,144			60,007			60,144			56,009
Total			1,893,207			1,872,449			1,848,139			1,814,510
Less: allowance for credit losses on loans			(20,382)			(20,023)			(19,208)			(19,056)
Loans, net		$	1,872,825		$	1,852,426		$	1,828,931		$	1,795,454

NON-OWNER OCCUPIED COMMERCIAL REAL ESTATE

(In Thousands)


Loan Type	June 30,		% of Non-owner		% of
	2024		Occupied CRE		Total Loans
Industrial	$	98,840	20.2	%	5.2	%
Office		96,642	19.7	%	5.1	%
Retail		93,552	19.1	%	4.9	%
Hotels		72,915	14.9	%	3.9	%
Mixed Use		58,891	12.0	%	3.1	%
Other		68,674	14.0	%	3.6	%
Total Non-owner Occupied CRE Loans	$	489,514
Total Gross Loans	$	1,893,207

PAST DUE LOANS AND NONPERFORMING ASSETS

(Dollars In Thousands)


	****	June 30,		****	****	March 31,		****	December 31,		****	June 30,		****
		2024				2024			2023			2023		****
Loans individually evaluated with a valuation allowance		$	6,613			$	10,062		$	7,786		$	5,785
Loans individually evaluated without a valuation allowance			8,567				4,743			3,478			3,314
Total individually evaluated loans		$	15,180			$	14,805		$	11,264		$	9,099

Total loans past due 30-89 days and still accruing		$	3,088			$	6,560		$	9,275		$	4,709

Nonperforming assets:
Total nonaccrual loans		$	19,579			$	19,069		$	15,177		$	12,827
Total loans past due 90 days or more and still accruing			20				227			3,190			1,164
Total nonperforming loans			19,599				19,296			18,367			13,991
Foreclosed assets held for sale (real estate)			181				456			478			459
Total nonperforming assets		$	19,780			$	19,752		$	18,845		$	14,450

Total nonperforming loans as a % of total loans			1.04	%			1.03	%		0.99	%		0.77	%
Total nonperforming assets as a % of assets			0.76	%			0.78	%		0.75	%		0.58	%
Allowance for credit losses as a % of total loans			1.08	%			1.07	%		1.04	%		1.05	%

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS

(In Thousands)


	****	3 Months		****	3 Months		****	3 Months		****	6 Months		****	6 Months
		Ended			Ended			Ended			Ended			Ended
		June 30,			March 31,			June 30,			June 30,			June 30,
		2024			2024			2023			2024			2023
Balance, beginning of period		$	20,023		$	19,208		$	18,346		$	19,208		$	16,615
Adoption of ASU 2016-13 (CECL)			0			0			0			0			2,104
Charge-offs			(236)			(180)			(134)			(416)			(201)
Recoveries			29			35			8			64			14
Net charge-offs			(207)			(145)			(126)			(352)			(187)
Provision for credit losses on loans			566			960			836			1,526			524
Balance, end of period		$	20,382		$	20,023		$	19,056		$	20,382		$	19,056

ANALYSIS OF THE PROVISION (CREDIT) FOR CREDIT LOSSES

(In Thousands)


	3 Months		3 Months		3 Months		6 Months		6 Months
	Ended		Ended		Ended		Ended		Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2024		2024		2023		2024		2023
Provision (credit) for credit losses:
Loans receivable	$	566	$	960	$	836	$	1,526	$	524
Off-balance sheet exposures		(1)		(6)		(24)		(7)		(64)
Total provision for credit losses	$	565	$	954	$	812	$	1,519	$	460

PPNR NON- GAAP RECONCILIATION

(In Thousands)


	Three Months Ended						Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
Calculation of PPNR:	2024		2024		2023		2024		2023
Net Income (GAAP)	$	6,113	$	5,306	$	6,043	$	11,419	$	12,296
Add: Provision for income taxes		1,366		1,152		1,419		2,518		2,828
Add: Provision for credit losses		565		954		812		1,519		460
Add: Realized losses (gains) on available-for-sale securities debt securities		0		0		1		0		(6)
Add: Adjustments to reflect net interest income on a fully taxable-equivalent basis		202		195		239		397		508
PPNR (non-GAAP)	$	8,246	$	7,607	$	8,514	$	15,853	$	16,086

COMPARISON OF INTEREST INCOME AND EXPENSE

(In Thousands)


	****	Three Months Ended						Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2024		2024		2023		2024		2023
INTEREST INCOME
Interest-bearing due from banks		$	516	$	383	$	309	$	899	$	587
Available-for-sale debt securities:
Taxable			2,137		2,136		2,152		4,273		4,363
Tax-exempt			626		623		713		1,249		1,480
Total available-for-sale debt securities			2,763		2,759		2,865		5,522		5,843
Loans receivable:
Taxable			27,490		26,703		24,362		54,193		46,793
Tax-exempt			730		670		700		1,400		1,413
Total loans receivable			28,220		27,373		25,062		55,593		48,206
Other earning assets			29		16		14		45		22
Total Interest Income			31,528		30,531		28,250		62,059		54,658

INTEREST EXPENSE
Interest-bearing deposits:
Interest checking			2,836		2,806		1,512		5,642		2,499
Money market			1,917		2,180		1,112		4,097		1,985
Savings			52		55		63		107		126
Time deposits			4,509		3,850		2,412		8,359		3,719
Total interest-bearing deposits			9,314		8,891		5,099		18,205		8,329
Borrowed funds:
Short-term			360		597		1,144		957		2,241
Long-term - FHLB advances			1,855		1,456		1,056		3,311		1,737
Senior notes, net			120		120		119		240		239
Subordinated debt, net			232		231		231		463		461
Total borrowed funds			2,567		2,404		2,550		4,971		4,678
Total Interest Expense			11,881		11,295		7,649		23,176		13,007

Net Interest Income		$	19,647	$	19,236	$	20,601	$	38,883	$	41,651

Note: Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis, using C&N’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						Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2024		2024		2023		2024		2023
Net Interest Income Under U.S. GAAP	$	19,445	$	19,041	$	20,362	$	38,486	$	41,143
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities		67		69		103		136		230
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans		135		126		136		261		278
Net Interest Income as adjusted to a fully taxable-equivalent basis	$	19,647	$	19,236	$	20,601	$	38,883	$	41,651

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	****
		6/30/2024			Return/		3/31/2024		Return/		6/30/2023		Return/	****
		Average			Cost of		Average		Cost of		Average		Cost of	****
		Balance			Funds %		Balance		Funds %		Balance		Funds %
EARNING ASSETS
Interest-bearing due from banks		$	43,139		4.81	%	$	32,725	4.71	%	$	29,861	4.15	%
Available-for-sale debt securities, at amortized cost:
Taxable			343,971		2.50	%		347,885	2.47	%		395,725	2.18	%
Tax-exempt			112,921		2.23	%		113,363	2.21	%		126,839	2.25	%
Total available-for-sale debt securities			456,892		2.43	%		461,248	2.41	%		522,564	2.20	%
Loans receivable:
Taxable			1,792,556		6.17	%		1,774,064	6.05	%		1,697,740	5.76	%
Tax-exempt			90,830		3.23	%		85,182	3.16	%		90,111	3.12	%
Total loans receivable			1,883,386		6.03	%		1,859,246	5.92	%		1,787,851	5.62	%
Other earning assets			2,176		5.36	%		1,384	4.65	%		1,325	4.24	%
Total Earning Assets			2,385,593		5.32	%		2,354,603	5.22	%		2,341,601	4.84	%
Cash			22,396					20,448				23,084
Unrealized loss on securities			(56,765)					(50,849)				(56,564)
Allowance for credit losses			(20,290)					(19,484)				(18,795)
Bank-owned life insurance			50,018					54,466				31,410
Bank premises and equipment			21,994					21,788				21,140
Intangible assets			54,827					54,925				55,228
Other assets			89,859					82,879				69,213
Total Assets		$	2,547,632				$	2,518,776			$	2,466,317

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	517,145		2.21	%	$	514,905	2.19	%	$	463,300	1.31	%
Money market			340,038		2.27	%		362,864	2.42	%		328,581	1.36	%
Savings			207,530		0.10	%		213,278	0.10	%		247,434	0.10	%
Time deposits			457,885		3.96	%		429,085	3.61	%		375,557	2.58	%
Total interest-bearing deposits			1,522,598		2.46	%		1,520,132	2.35	%		1,414,872	1.45	%
Borrowed funds:
Short-term			27,732		5.22	%		44,642	5.38	%		87,479	5.25	%
Long-term - FHLB advances			175,373		4.25	%		142,753	4.10	%		110,982	3.82	%
Senior notes, net			14,856		3.25	%		14,840	3.25	%		14,789	3.23	%
Subordinated debt, net			24,759		3.77	%		24,731	3.76	%		24,648	3.76	%
Total borrowed funds			242,720		4.25	%		226,966	4.26	%		237,898	4.30	%
Total Interest-bearing Liabilities			1,765,318		2.71	%		1,747,098	2.60	%		1,652,770	1.86	%
Demand deposits			493,922					481,146				533,533
Other liabilities			29,972					29,386				28,217
Total Liabilities			2,289,212					2,257,630				2,214,520
Stockholders' equity, excluding accumulated other comprehensive loss			302,758					301,032				296,015
Accumulated other comprehensive loss			(44,338)					(39,886)				(44,218)
Total Stockholders' Equity			258,420					261,146				251,797
Total Liabilities and Stockholders' Equity		$	2,547,632				$	2,518,776			$	2,466,317
Interest Rate Spread					2.61	%			2.62	%			2.98	%
Net Interest Income/Earning Assets					3.31	%			3.29	%			3.53	%

Total Deposits (Interest-bearing and Demand)		$	2,016,520				$	2,001,278			$	1,948,405

(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using C&N’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.
---	---

ANALYSIS OF AVERAGE DAILY BALANCES AND RATES

(Dollars in Thousands)


	****	Year		****			Year
		Ended			Rate of		Ended		Rate of	****
		6/30/2024			Return/		6/30/2023		Return/	****
		Average			Cost of		Average		Cost of	****
		Balance			Funds %	****	Balance		Funds%	****
EARNING ASSETS
Interest-bearing due from banks		$	37,932		4.77	%	$	30,744	3.85	%
Available-for-sale debt securities, at amortized cost:
Taxable			345,928		2.48	%		402,878	2.18	%
Tax-exempt			113,142		2.22	%		129,103	2.31	%
Total available-for-sale debt securities			459,070		2.42	%		531,981	2.21	%
Loans receivable:
Taxable			1,783,310		6.11	%		1,666,052	5.66	%
Tax-exempt			88,006		3.20	%		90,976	3.13	%
Total loans receivable			1,871,316		5.97	%		1,757,028	5.53	%
Other earning assets			1,780		5.08	%		1,263	3.51	%
Total Earning Assets			2,370,098		5.27	%		2,321,016	4.75	%
Cash			21,422					22,682
Unrealized loss on securities			(53,807)					(58,300)
Allowance for credit losses			(19,887)					(17,929)
Bank-owned life insurance			52,242					31,339
Bank premises and equipment			21,891					21,328
Intangible assets			54,876					55,279
Other assets			86,369					68,278
Total Assets		$	2,533,204				$	2,443,693

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	516,025		2.20	%	$	460,305	1.09	%
Money market			351,451		2.34	%		346,514	1.16	%
Savings			210,404		0.10	%		252,214	0.10	%
Time deposits			443,485		3.79	%		344,201	2.18	%
Total interest-bearing deposits			1,521,365		2.41	%		1,403,234	1.20	%
Borrowed funds:
Short-term			36,187		5.32	%		89,611	5.04	%
Long-term - FHLB advances			159,063		4.19	%		95,899	3.65	%
Senior notes, net			14,848		3.25	%		14,781	3.26	%
Subordinated debt, net			24,745		3.76	%		24,634	3.77	%
Total borrowed funds			234,843		4.26	%		224,925	4.19	%
Total Interest-bearing Liabilities			1,756,208		2.65	%		1,628,159	1.61	%
Demand deposits			487,534					536,579
Other liabilities			29,679					26,740
Total Liabilities			2,273,421					2,191,478
Stockholders' equity, excluding accumulated other comprehensive loss			301,895					297,797
Accumulated other comprehensive loss			(42,112)					(45,582)
Total Stockholders' Equity			259,783					252,215
Total Liabilities and Stockholders' Equity		$	2,533,204				$	2,443,693
Interest Rate Spread					2.62	%			3.14	%
Net Interest Income/Earning Assets					3.30	%			3.62	%

Total Deposits (Interest-bearing and Demand)		$	2,008,899				$	1,939,813

(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using C&N’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.
---	---

COMPARISON OF NONINTEREST INCOME

(In Thousands)


	****	Three Months Ended						Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2024		2024		2023		2024		2023
Trust revenue		$	2,014	$	1,897	$	1,804	$	3,911	$	3,581
Brokerage and insurance revenue			527		539		365		1,066		795
Service charges on deposit accounts			1,472		1,318		1,388		2,790		2,678
Interchange revenue from debit card transactions			1,089		1,013		1,010		2,102		2,017
Net gains from sales of loans			235		191		139		426		213
Loan servicing fees, net			130		230		190		360		312
Increase in cash surrender value of life insurance			444		470		152		914		290
Other noninterest income			1,943		1,017		1,587		2,960		2,358
Total noninterest income, excluding realized gains<br>(losses) on securities, net		$	7,854	$	6,675	$	6,635	$	14,529	$	12,244

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)


	****	Three Months Ended						Six Months Ended
	****	June 30,		March 31,		June 30,		June 30,		June 30,
		2024		2024		2023		2024		2023
Salaries and employee benefits		$	11,023	$	11,562	$	10,777	$	22,585	$	22,204
Net occupancy and equipment expense			1,333		1,450		1,323		2,783		2,725
Data processing and telecommunications expenses			2,003		1,992		1,900		3,995		3,836
Automated teller machine and interchange expense			473		487		395		960		870
Pennsylvania shares tax			434		433		404		867		807
Professional fees			552		518		564		1,070		1,501
Other noninterest expense			3,437		1,862		3,359		5,299		5,866
Total noninterest expense		$	19,255	$	18,304	$	18,722	$	37,559	$	37,809

LIQUIDITY INFORMATION

(In Thousands)


Available Credit Facilities	Outstanding						Available						Total Credit
	June 30,		March 31,		Dec. 31,		June 30,		March 31,		Dec. 31,		June 30,		March 31,		Dec. 31,
	2024		2024		2023		2024		2024		2023		2024		2024		2023
Federal Home Loan Bank of Pittsburgh	$	223,853	$	215,018	$	189,021	$	719,722	$	712,932	$	737,824	$	943,575	$	927,950	$	926,845
Federal Reserve Bank Discount Window		0		0		0		18,884		19,063		19,982		18,884		19,063		19,982
Other correspondent banks		0		0		0		75,000		75,000		75,000		75,000		75,000		75,000
Total credit facilities	$	223,853	$	215,018	$	189,021	$	813,606	$	806,995	$	832,806	$	1,037,459	$	1,022,013	$	1,021,827


Uninsured Deposits Information	June 30,			March 31,			December 31,
	2024			2024			2023
Total Deposits - C&N Bank	$	2,074,806		$	2,012,167		$	2,030,909

Estimated Total Uninsured Deposits	$	605,765		$	568,085		$	592,206
Portion of Uninsured Deposits that are
Collateralized		158,268			140,063			151,031
Uninsured and Uncollateralized Deposits	$	447,497		$	428,022		$	441,175

Uninsured and Uncollateralized Deposits as
a % of Total Deposits		21.6	%		21.3	%		21.7	%

Available Funding from Credit Facilities	$	813,606		$	806,995		$	832,806
Fair Value of Available-for-sale Debt
Securities in Excess of Pledging Obligations		238,375			259,489			256,058
Highly Liquid Available Funding	$	1,051,981		$	1,066,484		$	1,088,864

Highly Liquid Available Funding as a % of
Uninsured Deposits		173.7	%		187.7	%		183.9	%

Highly Liquid Available Funding as a % of
Uninsured and Uncollateralized Deposits		235.1	%		249.2	%		246.8	%