EX-99 2 cznc-20260128xex99.htm EX-99

Exhibit 99


		Contact: Charity Frantz
January 28, 2026		570-724-0225
		[email protected]

C&N ANNOUNCES FOURTH QUARTER and YEAR END 2025 UNAUDITED FINANCIAL RESULTS

For Immediate Release:

Wellsboro, PA – Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC) announced its unaudited, consolidated financial results for the three-month and twelve-month periods ended December 31, 2025. C&N’s principal activity is community banking, and its largest subsidiary is Citizens & Northern Bank (“C&N Bank”).

Highlights:

●

On October 1, 2025, C&N completed its previously announced merger with Susquehanna Community Financial, Inc., (“Susquehanna”). Susquehanna contributed, after fair value purchase accounting adjustments, approximately $596.2 million in total assets, $393.6 million in total loans, and $501.5 million in deposits at October 1, 2025. Earnings for the fourth quarter and year ended December 31, 2025 were significantly impacted by the Susquehanna acquisition, including the effects of merger-related expenses, net of tax, totaling $5,500,000 in the fourth quarter and $6,350,000 in the year ended December 31, 2025. Further, the addition of Susquehanna contributed to the growth in net interest income, noninterest income and noninterest expenses.

●

Net income was $4,466,000, or $0.25 diluted earnings per share for the fourth quarter 2025 as compared to $6,551,000, or $0.42 per diluted share in the third quarter 2025 and $8,174,000, or $0.53 per diluted share in the fourth quarter 2024. Net income for the year ended December 31, 2025 was $23,427,000, or $1.46 diluted earnings per share, as compared to $25,958,000, or $1.69 diluted earnings per share for the year ended December 31, 2024.

●

Excluding merger-related expenses, net of taxes, adjusted earnings (non-GAAP) totaled $9,966,000 or $0.56 per diluted share for the fourth quarter of 2025 as compared to $7,248,000 or $0.47 per diluted share for the third quarter 2025. For the year ended December 31, 2025, excluding merger-related expenses, net of taxes, adjusted earnings (non-GAAP) totaled $29,777,000 or $1.85 per diluted share. Management believes disclosure of unaudited earnings results, adjusted to exclude the impact of merger-related expenses, provides useful information to investors for comparative purposes. See table titled “Adjusted Ratios for Merger-Related Expenses- Non-GAAP Reconciliation” for additional information.

●

Net interest income for the fourth quarter 2025 increased $6,210,000 over the total for the third quarter 2025 and $8,000,000 over the total for fourth quarter 2024. The net interest margin was 3.84% in the fourth quarter 2025, up from 3.62% in the third quarter 2025 and 3.30% in the fourth quarter 2024. For the year ended December 31, 2025, net interest income was $12,738,000 higher than in 2024. The net interest margin was 3.61% for the year ended December 31, 2025, up from 3.30% in 2024. Net interest income included the impact of accretion of purchase accounting valuation adjustments related to the Susquehanna acquisition of $789,000 in the fourth quarter and year ended December 31, 2025, including $486,000 of accretion on loans and $303,000 of accretion on time deposits.

●

The provision for credit losses was $1,320,000 in the fourth quarter 2025 as compared to $2,354,000 in the third quarter 2025 and a credit for credit losses (reduction in expense) of $531,000 in the fourth quarter 2024. For the year ended December 31, 2025, the provision for credit losses was $6,073,000 as compared to $2,195,000 for the year ended December 31, 2024. The allowance for credit losses on loans (“ACL”) was 1.32% of gross loans receivable at December 31, 2025, up from 1.21% at September 30, 2025 and 1.06% at December 31, 2024. The increase in the ACL includes an additional allowance of $7,074,000 recorded effective October 1, 2025 for loans recorded as part of the Susquehanna acquisition.

●

Total loans receivable were $409,258,000 higher at December 31, 2025 compared to September 30, 2025. Total loans receivable acquired in the Susquehanna acquisition amounted to $393,587,000 at October 1, 2025. Average loans receivable increased $419,273,000 during the fourth quarter from the third quarter 2025 and increased $137,995,000 or 7.3% for the year ended December 31, 2025 as compared to 2024.

●

Nonperforming assets totaled $33,113,000, or 1.06% of total assets, at December 31, 2025, up from $27,189,000, or 1.02% of total assets, at September 30, 2025 and $24,142,000, or 0.92% of total assets at December 31, 2024. Included in nonperforming assets were $6,762,000 of purchase credit deteriorated (“PCD”) loans acquired as part of the merger.

●

Deposits totaled $2,564,716,000 at December 31, 2025, up $398,918,000 from September 30, 2025. Deposits of $501,488,00 were assumed in the merger. Average total deposits increased $502,674,000 during the fourth quarter 2025 from the third quarter 2025 and were $170,214,000 or 8.3% higher for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Average brokered deposits decreased $50,415,000 to $11,123,000 for the year ended December 31, 2025 from $61,538,000 for the year ended December 31, 2024.

Completion of Merger with Susquehanna Community Financial, Inc.

On October 1, 2025, C&N completed its previously announced merger with Susquehanna. Susquehanna was the parent company of Susquehanna Community Bank, a community bank offering a full range of banking services to the central Pennsylvania market through its seven banking offices located in Lycoming, Northumberland, Snyder and Union counties in Pennsylvania. Pursuant to the Agreement and Plan of Merger dated April 23, 2025 between C&N and Susquehanna, Susquehanna merged with and into C&N, with C&N as the surviving corporation in the Merger. Immediately following the completion of the Merger, Susquehanna Community Bank, the wholly owned subsidiary of Susquehanna, merged with and into C&N Bank, with C&N Bank surviving. Upon completion of the merger, shareholders of Susquehanna became entitled to exchange each share of Susquehanna common stock owned for 0.80 shares of C&N common stock. Cash was issued in lieu of fractional shares resulting from the conversion of Susquehanna’s stock. In total, C&N issued approximately 2.3 million shares of common stock to the former Susquehanna stockholders, resulting in total merger consideration valued at $44.6 million and an increase in C&N’s stockholders’ equity of $44.4 million, net of equity issuance costs.

In connection with the acquisition, tangible common book value per share (a non-GAAP ratio) was diluted by $0.56, or 3.6%, as C&N recorded goodwill of $10.8 million and a core deposit intangible asset of $10.7 million. Assets acquired included loans valued at $393.6 million, cash and due from banks of $6.1 million, bank-owned life insurance valued at $8.0 million and securities valued at $147.6 million. Liabilities assumed included deposits valued at $501.5 million and short-term borrowings valued at $45.8 million. The accretable discount on acquired loans at origination was $7.2 million, or approximately 1.8% of Susquehanna’s amortized cost basis. The estimated average life of the acquired loans at origination was 4.6 years.

The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

In November 2025, the Financial Accounting Standards Board issued Accounting Standards Update 2025-08, Financial Instruments – Credit Losses (ASU 2025-08). C&N adopted ASU 2025-08 in accounting for the Susquehanna acquisition. Consistent with ASU 2025-08, C&N recorded loans receivable at fair value plus an allowance for credit losses of $7.1 million, including allowances totaling $2.6 million on loans with more than insignificant deterioration in credit quality subsequent to origination (“PCD”) loans and an allowance of $4.5 million on non-PCD loans. At origination, the recorded value of loans receivable included PCD loans totaling $23.7 million.

C&N incurred pre-tax merger-related expenses related to the Susquehanna transaction of $7,940,000 for the year ended December 31, 2025, including expenses totaling $6,891,000 in the fourth quarter of 2025. Merger-related expenses include expenses related to conversion of Susquehanna’s core customer system data into C&N’s core system, severance and legal and other professional expenses.

Fourth Quarter 2025 as Compared to Third Quarter 2025

Net income was $4,466,000, or $0.25 per diluted share, for the fourth quarter 2025 as compared to $6,551,000, or $0.42 per diluted share, for the third quarter 2025. As described above, excluding the effects of merger-related expenses, adjusted earnings (non-GAAP) per share were $0.56 for the fourth quarter and $0.47 per diluted share for the third quarter 2025. Other significant variances were as follows:

◾

Net interest income of $28,473,000 in the fourth quarter 2025 increased $6,210,000 from the third quarter 2025 result. The addition of Susquehanna contributed significantly to increases of $6,919,000 in interest income from loans receivable and $1,014,000 in interest income on available-for-sale securities as average loans receivable increased $419,273,000, and average available-for-sale debt securities increased $86,117,000. The Susquehanna merger resulted in an initial increase in total available-for-sale debt securities of $147,617,000. The majority of Susquehanna’s debt securities were subsequently sold, and a significant portion of the proceeds were used to purchase available-for-sale debt securities resulting in an increase in the average yield on the portfolio to 3.03%

from 2.71%. Interest expense on interest-bearing deposits increased $1,687,000 from the third quarter as average total deposits increased $502,674,000 reflecting the impact of the merger while average total borrowed funds decreased $10,852,000 in the fourth quarter 2025 from the total for the prior quarter. The net interest margin was 3.84% in the fourth quarter 2025, up 0.22% from 3.62% in the third quarter 2025. Accretion of purchase accounting valuation adjustments related to the Susquehanna merger had a net positive impact on net interest income of $789,000 in the fourth quarter 2025, including accretion of $486,000 on loans and $303,000 on time deposits. The net interest spread increased 0.37%, as the average yield on earning assets increased 0.12% and the average rate on interest-bearing liabilities decreased 0.25%.

◾

The provision for credit losses was $1,320,000 in the fourth quarter 2025, a decrease of $843,000 compared to $2,163,000 in the third quarter 2025. The provision for the fourth quarter 2025 included a provision related to loans receivable of $1,384,000 and a credit related to off-balance sheet exposures of $64,000. The provision in the fourth quarter of 2025 resulted mainly from an increase in estimated future net charge-offs related to C&N’s loss experience, partially offset by a decrease resulting from changes in an economic forecast. In the fourth quarter 2025, net charge-offs totaled $884,000 or 0.15% (annualized) of average loans receivable compared to net charge-offs of $94,000 or 0.02% (annualized) of average loans receivable in the third quarter 2025. During the fourth quarter 2025, there was a partial charge-off of $763,000 on a non-owner occupied commercial real estate loan with no individual allowance at September 30, 2025. After the impact of the partial charge-off, the amortized cost basis of the loan was $1,441,000 at December 31, 2025. The ACL on loans was 1.32% of gross loans receivable at December 31, 2025, up from 1.21% at September 30, 2025. As discussed above, the increase in the ACL included the addition of $7,074,000 for loans recorded as a result of the merger.

◾

Noninterest income, excluding realized gains on available-for-sale securities, of $8,360,000 in the fourth quarter 2025 increased $1,056,000 from the third quarter 2025 result including $665,000 from the former Susquehanna operations. Brokerage and insurance revenue increased $281,000, service charges on deposit accounts increased $172,000, other noninterest income increased $159,000, net gains from sale of loans increased $150,000, and loan servicing fees, net increased $118,000 from the third quarter 2025.

◾

Noninterest expense, excluding merger-related expenses of $6,891,000, totaled $23,268,000 in the fourth quarter of 2025, an increase of $4,761,000 from the similarly adjusted total for the third quarter of 2025. The increase in noninterest expense resulted mainly from the Susquehanna acquisition. Other significant variances included the following:

Salaries and employee benefits expense of $13,267,000 increased $1,974,000, including the impact of the Susquehanna acquisition offset by a decrease of $256,000 in cash and stock-based compensation expense.

Professional fees of $1,291,000 increased $846,000 from third quarter 2025 including consulting fees totaling $757,000 related to contract renegotiations with technology core system and operations providers.

Other noninterest expense of $3,284,000 increased $788,000 from the third quarter 2025 as core deposit intangible amortization expense increased $773,000 related to core deposits assumed from Susquehanna.

◾

The income tax provision of $926,000, or 17.2% of pre-tax income for the fourth quarter 2025 decreased $538,000 from $1,464,000, or 18.3% of pre-tax income, for the third quarter 2025 reflecting a decrease in pre-tax income for the quarter.

Fourth Quarter 2025 as Compared to Fourth Quarter 2024

Fourth quarter 2025 net income was $4,466,000, or $0.25 per diluted share, as compared to $8,174,000, or $0.53 per diluted share, in the fourth quarter 2024. As described above, excluding the effects of merger-related expenses, adjusted earnings (non-GAAP) per share were $0.56 per diluted share for the fourth quarter 2025. Significant variances were as follows:

◾

Net interest income of $28,473,000 in the fourth quarter 2025 was $8,000,000 higher than in the fourth quarter 2024, including the benefit of income from growth in net earning assets resulting from the Susquehanna merger.

The net interest margin increased to 3.84% in the fourth quarter 2025 from 3.30% in the fourth quarter 2024. The interest rate spread increased 0.72%, as the average yield on earning assets increased 0.22% while the average rate on interest-bearing liabilities decreased 0.50%. Average total earning assets increased $471,115,000 from the fourth quarter 2024, as average total loans receivable increased $452,332,000, including the impact of loans acquired from Susquehanna, and average available-for-sale debt securities increased $85,134,000 while average interest-bearing due from banks decreased $67,232,000. As discussed above, the majority of Susquehanna’s debt securities were subsequently sold after the completion of the acquisition, and a significant portion of the proceeds were used to purchase available-for-sale debt securities, contributing to an increase in the average yield to 3.03% from 2.52%. Average total deposits increased $502,113,000, including the impact of deposits assumed from Susquehanna, while average brokered deposits decreased $30,357,000. Average total borrowed funds decreased $44,502,000.

◾

As discussed in more detail above, the provision for credit losses was $2,163,000 for the fourth quarter 2025, compared to a credit for credit losses of $531,000 in the fourth quarter 2024. In the fourth quarter 2025, net charge-offs totaled $884,000 or 0.15% (annualized) of average loans receivable compared to net charge-offs of $14,000 or 0.00% (annualized) of average loans receivable in the fourth quarter 2024. The ACL as a percentage of gross loans receivable was 1.32% at December 31, 2025, an increase from 1.06% at December 31, 2024. The increase in the ACL included an additional allowance of $7,074,000 for loans recorded as part of the Susquehanna acquisition.

◾

Noninterest income, excluding gains on available-for-sale debt securities, of $8,360,000 in the fourth quarter 2025 increased $813,000 from the fourth quarter 2024 result, including $665,000 of noninterest income resulting from the Susquehanna acquisition. Net gains from sale of loans increased $186,000, other noninterest income increased $170,000, interchange revenue from debit card transactions increased $161,000 and service charges on deposit accounts increased $112,000 from the fourth quarter 2024.

◾

Noninterest expense, excluding merger-related expenses of $6,891,000, totaled $23,268,000 in the fourth quarter of 2025, an increase of $4,838,000 from the fourth quarter of 2024. The increase in noninterest expense resulted mainly from the Susquehanna acquisition. Other significant variances included the following:

Other noninterest expense of $3,284,000 increased $859,000 from the fourth quarter 2025 as core deposit intangible amortization expense increased $773,000 related to core deposits assumed from Susquehanna.

Professional fees of $1,291,000 increased $741,000 from third quarter 2025, including consulting fees totaling $757,000 related to contract renegotiations with technology core system and operations providers.

◾

The income tax provision of $926,000, or 17.2% of pre-tax income for the fourth quarter 2025 decreased $1,021,000 from $1,947,000, or 19.2% of pre-tax income, for the fourth quarter reflecting a decrease in pre-tax income for the quarter.

Year Ended December 31, 2025 as Compared to Year Ended December 31, 2024

Net income for the year ended December 31, 2025 was $23,427,000 or $1.46 per diluted share, as compared to $25,958,000, or $1.69 per diluted share, for the year ended December 31, 2024. Excluding the impact of merger-related expenses, net of tax, adjusted earnings (non-GAAP) for the year ended December 31, 2025 were $29,777,000 or $1.85 per diluted share. Significant variances were as follows:

◾

Net interest income totaled $91,853,000 for the year ended December 31, 2025, an increase of $12,738,000 from 2024 including the benefit of three months of income from growth in net earning assets resulting from the Susquehanna merger. Average total loans increased $137,995,000 or 7.3% and average total deposits increased $170,215,000, or 8.3%. Average brokered deposits decreased $50,415,000 to $11,123,000 for the year ended December 31, 2025 from $61,538,000 for the year ended December 31, 2024, while average total borrowed funds decreased $44,254,000. The net interest margin was 3.61% for the year ended December 31, 2025, up from 3.30% in the corresponding period of 2024. The interest rate spread increased 0.38%, as the average rate on interest-bearing liabilities was 0.25% lower while the average yield on earning assets increased 0.13%.

◾

For the year ended December 31, 2025, the provision for credit losses was $6,073,000, up from $2,195,000 in 2024. The provision for the year ended December 31, 2025 included the impact of increases in the ACL related to changes in qualitative factors. The ACL increased $11,013,000, to 1.32% of loans receivable at December 31, 2025 as compared to 1.06% at December 31, 2024, including the impact of an increase in the ACL attributable to the Susquehanna acquisition and an increase related to changes in qualitative factors. For the year ended December 31, 2025, net charge-offs totaled $1,617,000, or 0.08% of average loans receivable as compared to net charge-offs for 2024 of $1,603,000, or 0.09% of average loans receivable.

◾

Noninterest income, excluding realized gains on available-for-sale debt securities, totaled $30,814,000 for the year ended December 31, 2025, up $1,605,000 from the total for the year ended December 31, 2024 including the impact from the Susquehanna acquisition of $665,000 in noninterest income. Significant variances included the following:

Other noninterest income of $5,637,000 increased $407,000 including increases in credit enhancement fees of $117,000, income from merchant services of $66,000, interchange revenue from credit cards of $65,000, income from tax credits related to donations of $51,000 and letter of credit fees of $49,000.

Interchange revenue from debit card transactions of $4,623,000 increased $347,000, including an increase in volume-related incentive income.

Net gains from sale of loans of $1,483,000 increased $325,000, reflecting an increase in volume of residential mortgage loans sold and includes the impact of $146,000 in net gains from sale of loans resulting from the Susquehanna acquisition.

Trust revenue of $8,212,000 increased $284,000, consistent with appreciation in the trading prices of many U.S. equity securities and included an increase in estate fees.

◾

Noninterest expense, excluding merger-related expenses of $7,940,000, totaled $80,049,000 for the year ended December 31, 2025, an increase of $5,791,000 from the total for the year ended December 31, 2024. The increase in noninterest expense included the impact of the Susquehanna acquisition. Other significant variances included the following:

Salaries and employee benefits expense of $47,386,000 increased $2,456,000, including the impact of the Susquehanna acquisition and an increase of $387,000 in cash and stock-based incentive compensation.

Other noninterest expense of $11,535,000 increased $1,174,000. Within this category, other significant variances included the following:

◾

Core deposit intangible amortization expense increased $808,000, including $773,000 related to core deposits assumed from Susquehanna.

◾

In 2025, there was a reduction in expense associated with the defined benefit postretirement medical benefit plan of $65,000. In comparison, in 2024, there was a reduction in expense of $527,000 related to the defined benefit postretirement medical benefit plan, including a curtailment gain of $469,000.

◾

Legal fees unrelated to merger activity totaled $299,000 for the year ended December 31, 2025, a decrease of $305,000 from the total for 2024.

◾

The income tax provision of $5,216,000, or 18.2% of pre-tax income for the year ended December 31 2025 decreased $697,000 from $5,913,000, or 18.6% of pre-tax income for the year ended December 31, 2024. The decrease in income tax provision was consistent with the decrease in pre-tax income of $3,228,000.

Other Information:

Changes in other unaudited financial information were as follows:

◾

Total assets were $3,132,469,000 at December 31, 2025 up from $2,664,033,000 at September 30, 2025 and up from $2,610,653,000 at December 31, 2024.

◾

Cash and due from banks totaled $46,056,000 at December 31, 2025, down from $123,090,000 at September 30, 2025 and $126,174,000 at December 31, 2024.

◾

The fair value of available-for-sale debt securities at December 31, 2025 was lower than the amortized cost basis by $29,685,000 or 5.5%. In comparison, the aggregate unrealized loss position was $33,786,000 or 7.5% lower than the amortized cost basis at September 30, 2025 and $47,543,000 or 10.0% lower than the amortized cost basis at December 31, 2024.. The volatility in the fair value of the portfolio has resulted from changes in interest rates. Management reviewed the available-for-sale debt securities as of December 31, 2025 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 December 31, 2025.

◾

Gross loans receivable totaled $2,354,365,000 at December 31, 2025, an increase of $409,258,000 from total loans at September 30, 2025 and an increase of $458,517,000 from total loans at December 31, 2024 including $393,587,000 of gross loans receivable, net of purchase accounting adjustments, recorded effective October 1, 2025 due to acquisition of Susquehanna. In comparing outstanding balances at December 31, 2025 and 2024, total commercial loans were up $376,154,000 or 26.4%, total outstanding consumer loans increased $46,422,000 or 72.6% and total residential mortgage loans increased $35,941,000 or 8.8%. The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $450,120,000 at December 31, 2025, up $120,354,000 from the total at December 31, 2024, reflecting the impact of servicing obligations assumed on such loans that had been sold by Susquehanna prior to the merger.

◾

At December 31, 2025, 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 $125,175,000, or 5.3% of gross loans receivable. Within this segment there were two loans with a total amortized cost basis of $2,787,000 in nonaccrual status with no individual allowances and 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 individual allowance at December 31, 2025.

◾

Total nonperforming assets as a percentage of total assets was 1.06% at December 31, 2025, up from 1.02% at September 30, 2025 and 0.92% at December 31, 2024. Total nonperforming assets were $33,113,000 at December 31, 2025, up from $27,189,000 at September 30, 2025 and $24,142,000 at December 31, 2024, including the impact of nonaccrual PCD loans a acquired as part of the merger with a total amortized cost basis of $6,762,000 at December 31, 2025.

◾

Deposits totaled $2,564,716,000 at December 31, 2025, up $398,981,000 from September 30, 2025 and $470,807,000 from December 31, 2024. Deposits of $501,488,000 were assumed from Susquehanna, effective October 1, 2025. After the impact of the initial balances of deposits assumed from Susquehanna, total deposits were down $102,507,000 at December 31, 2025, mainly due to seasonal declines in balances maintained by municipal customers. At December 31, 2025, C&N’s estimated uninsured deposits totaled $811.2 million, or 31.4% of the Bank’s total deposits, as compared to $696.5 million, or 31.9% of the Bank’s total deposits at September 30, 2025 and $632.8 million, or 30.0% of the Bank’s total deposits at December 31, 2024. Included in uninsured deposits are deposits collateralized by securities (almost exclusively municipal deposits) totaling $172.6 million, or 6.7% of the Bank’s total deposits, at December 31, 2025 as compared to $162.0 million, or 7.7% of the Bank’s total deposits at December 31, 2024.

◾

C&N maintained highly liquid sources of available funds totaling $1.206 billion at December 31, 2025, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $785.8 million, unused availability on the Federal Reserve Bank of Philadelphia’s discount window of $25.5 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 $319.6 million. At December 31, 2025, available funding from these sources totaled 148.7% of uninsured deposits, and 188.8% 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 $189,742,000 at December 31, 2025, up $15,488,000 from September 30, 2025 and down $17,957,000 from December 31, 2024.

◾

Total stockholders’ equity was $341,714,000 at December 31, 2025, up from $293,959,000 at September 30, 2025 and $275,284,000 at December 31, 2024. Effective October 1, 2025, C&N recorded a net increase in stockholders’ equity of $44,388,0000 from the issuance of common stock to the former Susquehanna stockholders. Within stockholders’ equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $23,154,000 at December 31, 2025, $26,352,000 at September 30, 2025 and $37,084,000 at December 31, 2024. 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.

◾

On September 25, 2023, C&N announced a treasury stock repurchase program with no expiration that can be suspended or terminated by the Board of Directors, in its sole discretion. Under this program, C&N is authorized to repurchase up to 750,000 shares of its common stock. During the three-month period and the year ended December 31, 2025, 501 shares were repurchased for a total cost of $9,534, at an average price of $19.03 per share. At December 31, 2025, there were 723,465 shares available to be repurchased under the program.

◾

Citizens & Northern Corporation and Citizens & Northern Bank are subject to various regulatory capital requirements. At December 31, 2025, Citizens & Northern Corporation and Citizens & Northern Bank maintained regulatory capital ratios that exceeded all capital adequacy requirements and were classified as well-capitalized.

◾

Trust assets under management by C&N’s Wealth Management Group were $1,468,691,000 at December 31, 2025, up from $1,436,257,000 at September 30, 2025, and up 9.0% from $1,347,853,000 at December 31, 2024. 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 is reported at applicable 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 $233,000, $218,000 and $217,000 for the fourth quarter 2025, third quarter 2025 and fourth quarter 2024, respectively. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP was $882,000 for the year ended December 31, 2025 and $819,000 for the year ended December 31, 2024.

Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania, which operates 35 banking offices located in Bradford, Bucks, Cameron, Chester, Lancaster, Lycoming, McKean, Northumberland, Potter, Snyder, Sullivan, Tioga, Union and York 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. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions that are intended to identify forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, and are not guarantees of future performance. Actual results may differ materially from those expressed in forward-looking statements. Factors that may affect future financial results include, 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; the potential for adverse developments in the banking industry that could have a negative impact on customer confidence, sources of liquidity and capital funding, and regulatory responses to such 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; fraud and cyber malfunction risks as usage of artificial intelligence

continues to expand; the integration of Susquehanna’s business and operations with those of C&N may divert the attention of the management teams of C&N and Susquehanna and cause a loss in the momentum of their ongoing businesses or have unanticipated adverse results on C&N’s or Susquehanna existing businesses, may take longer than anticipated and may be more costly than anticipated; the anticipated cost savings, operational efficiencies and other synergies of the Susquehanna merger may take longer to be realized or may not be achieved in their entirety, and attrition in key client, partner and other relationships relating to the Susquehanna merger may be greater than expected; success of C&N in Susquehanna’s geographic market area will require C&N to attract and retain key personnel in the market and to differentiate C&N from its competitors in the market; and Risk Factors identified in C&N’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 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.

Supplemental, Unaudited Financial Information

CONDENSED, CONSOLIDATED EARNINGS INFORMATION

(Dollars In Thousands, Except Per Share Data)

(Unaudited)



		4TH			4TH
		QUARTER			QUARTER
		2025			2024		$ Incr. (Decr.)		% Incr. (Decr.)
Interest and Dividend Income		$	41,404		$	33,329	$	8,075	24.23	%
Interest Expense			12,931			12,856		75	0.58	%
Net Interest Income			28,473			20,473		8,000	39.08	%
Provision (Credit) for Credit Losses			1,320			(531)		1,851	(348.59)	%
Net Interest Income After Provision (Credit) for Credit Losses			27,153			21,004		6,149	29.28	%
Noninterest Income			8,360			7,547		813	10.77	%
Net Realized Gains on Available-for-sale Debt Securities			38			0		38	N/A
Merger-related Expenses			6,891			0		6,891	N/A
Other Noninterest Expenses			23,268			18,430		4,838	26.25	%
Income Before Income Tax Provision			5,392			10,121		(4,729)	(46.72)	%
Income Tax Provision			926			1,947		(1,021)	(52.44)	%
Net Income		$	4,466		$	8,174	$	(3,708)	(45.36)	%
Net Income Attributable to Common Shares (1)		$	4,437		$	8,103	$	(3,666)	(45.24)	%
PER COMMON SHARE DATA:
Net Income - Basic and Diluted		$	0.25		$	0.53	$	(0.28)	(52.83)	%
Dividends Per Share		$	0.28		$	0.28	$	0.00	0.00	%
Number of Shares Used in Computation - Basic and Diluted			17,665,099			15,287,462


	YEAR ENDED
	DECEMBER 31,
	2025		2024		$ Incr. (Decr.)		% Incr. (Decr.)
Interest and Dividend Income	$	139,217	$	128,078	$	11,139	8.70	%
Interest Expense		47,364		48,963		(1,599)	(3.27)	%
Net Interest Income		91,853		79,115		12,738	16.10	%
Provision for Credit Losses		6,073		2,195		3,878	176.67	%
Net Interest Income After Provision for Credit Losses		85,780		76,920		8,860	11.52	%
Noninterest Income		30,814		29,209		1,605	5.49	%
Net Realized Gains on Available-for-sale Debt Securities		38		0		38	N/A
Merger-related Expenses		7,940		0		7,940	N/A
Other Noninterest Expenses		80,049		74,258		5,791	7.80	%
Income Before Income Tax Provision		28,643		31,871		(3,228)	(10.13)	%
Income Tax Provision		5,216		5,913		(697)	(11.79)	%
Net Income	$	23,427	$	25,958	$	(2,531)	(9.75)	%
Net Income Attributable to Common Shares (1)	$	23,245	$	25,747	$	(2,502)	(9.72)	%
PER COMMON SHARE DATA:
Net Income - Basic and Diluted	$	1.46	$	1.69	$	(0.23)	(13.61)	%
Dividends Per Share	$	1.12	$	1.12	$	0.00	0.00	%
Number of Shares Used in Computation - Basic and Diluted		15,949,789		15,262,504

(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.

N/A Not applicable

CONDENSED, CONSOLIDATED BALANCE SHEET DATA

(Dollars In Thousands)

(Unaudited)


	December 31,		December 31,
	2025		2024		$ Incr. (Decr.)		% Incr. (Decr.)
ASSETS
Cash & Due from Banks	$	46,056	$	126,174	$	(80,118)	(63.50)	%
Available-for-sale Debt Securities		506,575		402,380		104,195	25.89	%
Loans, Net		2,323,317		1,875,813		447,504	23.86	%
Bank-Owned Life Insurance		61,094		51,214		9,880	19.29	%
Bank Premises and Equipment, Net		27,755		21,338		6,417	30.07	%
Intangible Assets		74,884		54,585		20,299	37.19	%
Other Assets		92,788		79,149		13,639	17.23	%
TOTAL ASSETS	$	3,132,469	$	2,610,653	$	521,816	19.99	%

LIABILITIES
Deposits	$	2,564,716	$	2,093,909	$	470,807	22.48	%
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements		149,553		167,939		(18,386)	(10.95)	%
Senior Notes, Net		14,970		14,899		71	0.48	%
Subordinated Debt, Net		24,949		24,831		118	0.48	%
Other Liabilities		36,567		33,791		2,776	8.22	%
TOTAL LIABILITIES		2,790,755		2,335,369		455,386	19.50	%

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated
Other Comprehensive Loss		364,509		312,045		52,464	16.81	%
Accumulated Other Comprehensive Loss:
Net Unrealized Losses on Available-for-sale Debt Securities		(23,154)		(37,084)		13,930	(37.56)	%
Defined Benefit Plans		359		323		36	11.15	%
TOTAL STOCKHOLDERS' EQUITY		341,714		275,284		66,430	24.13	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	3,132,469	$	2,610,653	$	521,816	19.99	%

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


		FOR THE
		THREE MONTHS ENDED						%
		December 31,						INCREASE
		2025			2024			(DECREASE)
EARNINGS PERFORMANCE- U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")
Net Income		$	4,466		$	8,174		(45.36)	%
Return on Average Assets (Annualized)			0.56	%		1.24	%	(54.84)	%
Return on Average Equity (Annualized)			5.23	%		11.87	%	(55.94)	%

EARNINGS PERFORMANCE- ADJUSTED FOR MERGER-RELATED EXPENSES- NON-GAAP (a)
Adjusted Net Income		$	9,996		$	8,174		22.29	%
Adjusted Return on Average Assets (Annualized)			1.26	%		1.24	%	1.61	%
Adjusted Return on Average Equity (Annualized)			11.68	%		11.87	%	(1.60)	%

PRE-TAX, PRE-PROVISION NET REVENUE ("PPNR") - NON-GAAP (b)
PPNR		$	14,445		$	9,807		47.29	%
PPNR (Annualized) as a % of Average Assets			1.82	%		1.48	%	22.97	%
PPNR (Annualized) as a % of Average Equity			16.93	%		14.24	%	18.89	%

		AS OF OR FOR THE
		YEAR ENDED						%
		December 31,						INCREASE
		2025			2024			(DECREASE)
EARNINGS PERFORMANCE -GAAP
Net Income		$	23,427		$	25,958		(9.75)	%
Return on Average Assets (Annualized)			0.85	%		1.00	%	(15.00)	%
Return on Average Equity (Annualized)			7.87	%		9.76	%	(19.36)	%

EARNINGS PERFORMANCE- ADJUSTED FOR MERGER-RELATED EXPENSES- NON-GAAP (a)
Adjusted Net Income		$	29,777		$	25,958		14.71	%
Adjusted Return on Average Assets (Annualized)			1.09	%		1.00	%	9.00	%
Adjusted Return on Average Equity (Annualized)			10.00	%		9.76	%	2.46	%

PPNR - NON-GAAP (b)
PPNR		$	44,147		$	34,885		26.55	%
PPNR (Annualized) as a % of Average Assets			1.61	%		1.35	%	19.26	%
PPNR (Annualized) as a % of Average Equity			14.83	%		13.12	%	13.03	%

BALANCE SHEET HIGHLIGHTS
Total Assets		$	3,132,469		$	2,610,653		19.99	%
Available-for-Sale Debt Securities			506,575			402,380		25.89	%
Loans, Net			2,323,317			1,875,813		23.86	%
Allowance for Credit Losses:
Allowance for Credit Losses on Loans			31,048			20,035		54.97	%
Allowance for Credit Losses on Off-Balance Sheet Exposures			1,028			455		125.93	%
Deposits			2,564,716			2,093,909		22.48	%

OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold with Servicing Retained		$	450,120		$	329,766		36.50	%
Trust Assets Under Management			1,468,691			1,347,853		8.97	%

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


		AS OF OR FOR THE
		YEAR ENDED						%
		December 31,						INCREASE
		2025			2024			(DECREASE)
STOCKHOLDERS' VALUE (PER COMMON SHARE)
Net Income - Basic and Diluted		$	1.46		$	1.69		(13.61)	%
Net Income - Basic and Diluted-Adjusted for Merger Related Expenses- NON-GAAP (a)		$	1.85		$	1.69		9.47	%
Dividends		$	1.12		$	1.12		0.00	%
Common Book Value		$	19.17		$	17.84		7.46	%
Tangible Common Book Value - NON-GAAP (c)		$	15.11		$	14.33		5.44	%
Market Value (Last Trade)		$	20.17		$	18.60		8.44	%
Market Value / Common Book Value			105.22	%		104.26	%	0.92	%
Market Value / Tangible Common Book Value - NON-GAAP (c)			133.49	%		129.80	%	2.84	%
Price Earnings Multiple			13.82			11.01		25.52	%
Dividend Yield (Annualized)			5.55	%		6.02	%	(7.81)	%
Common Shares Outstanding, End of Period			17,823,444			15,433,494		15.49	%

SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets (c)			8.80	%		8.65	%	1.73	%
Nonperforming Assets / Total Assets			1.06	%		0.92	%	15.22	%
Allowance for Credit Losses / Total Loans			1.32	%		1.06	%	24.53	%
Total Risk Based Capital Ratio (d)			14.47	%		15.95	%	(9.28)	%
Tier 1 Risk Based Capital Ratio (d)			12.18	%		13.56	%	(10.18)	%
Common Equity Tier 1 Risk Based Capital Ratio (d)			12.18	%		13.56	%	(10.18)	%
Leverage Ratio (d)			9.33	%		9.80	%	(4.80)	%

AVERAGE BALANCES
Average Assets		$	2,743,384		$	2,583,106		6.20	%
Average Equity		$	297,641		$	265,884		11.94	%

EFFICIENCY RATIO - NON-GAAP (e)
Net Interest Income on a Fully Taxable-Equivalent Basis (e)		$	92,735		$	79,934		16.01	%
Noninterest Income, Excluding Net Realized Gain on Available-for-sale Debt Securities			30,814			29,209		5.49	%
Total (1)		$	123,549		$	109,143		13.20	%
Noninterest Expense, Excluding Merger-Related Expenses and Profession Fees- Core System Contract Negotiations (2)		$	79,402		$	74,258		6.93	%
Efficiency Ratio = (2)/(1)			64.27	%		68.04	%	(5.54)	%

(a)

The impact of the merger-related expense, net of tax has been added to the adjusted earnings and used in the calculation of the adjusted average return on assets, adjusted average return on equity and net income per basic and diluted share. Management believes disclosure of unaudited earnings results, adjusted to exclude the impact of the merger-related expense, net of tax, provides useful information for comparative purposes. 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 below under the table “Adjusted Ratios for Merger-Related Expenses - NON- GAAP RECONCILIATION.”

(b)

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 merger-related expenses and other nonrecurring items included in earnings. Management believes disclosure of PPNR provides useful information for evaluating C&N’s financial performance without the impact of realized gains or losses on securities or 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 below under the table “PPNR- NON- GAAP RECONCILIATION.”

(c)

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:


	December 31,
	2025		2024
Total Assets	$	3,132,469	$	2,610,653
Less: Intangible Asset, Goodwill		(63,311)		(52,505)
Less: Intangible Asset, Core Deposit Intangibles, net		(11,573)		(2,080)
Related Tax Effect on Core Deposit Intangibles, net		2,546		458
Tangible Assets	$	3,060,131	$	2,556,526
Total Stockholders' Equity	$	341,714	$	275,284
Less: Intangible Asset, Goodwill		(63,311)		(52,505)
Less: Intangible Asset, Core Deposit Intangibles, net		(11,573)		(2,080)
Related Tax Effect on Core Deposit Intangibles, net		2,546		458
Tangible Common Equity (3)	$	269,376	$	221,157

Common Shares Outstanding, End of Period (4)		17,823,444		15,433,494
Tangible Common Book Value per Share = (3)/(4)	$	15.11	$	14.33

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

(e)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 below under the table “COMPARISON OF INTEREST INCOME AND EXPENSE.” In the calculation above, Management excluded merger-related expenses and professional fees related to core system contract negotiations due to the nonrecurring nature of these expenses.

QUARTERLY CONDENSED, CONSOLIDATED

INCOME STATEMENT INFORMATION

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


			For the Three Months Ended:
		December 31,		September 30,		June 30,		March 31,		December 31,
		2025		2025		2025		2025		2024
Interest and dividend income		$	41,404	$	33,650	$	32,454	$	31,709	$	33,329
Interest expense			12,931		11,387		11,312		11,734		12,856
Net interest income			28,473		22,263		21,142		19,975		20,473
Provision (credit) for credit losses			1,320		2,163		2,354		236		(531)
Net interest income after provision (credit) for credit losses			27,153		20,100		18,788		19,739		21,004
Noninterest income			8,360		7,304		8,142		7,008		7,547
Net realized gains on available-for-sale debt securities			38		0		0		0		0
Merger-related expenses			6,891		882		167		0		0
Other noninterest expenses			23,268		18,507		19,231		19,043		18,430
Income before income tax provision			5,392		8,015		7,532		7,704		10,121
Income tax provision			926		1,464		1,415		1,411		1,947
Net income		$	4,466	$	6,551	$	6,117	$	6,293	$	8,174
Net income attributable to common shares		$	4,437	$	6,498	$	6,068	$	6,242	$	8,103
Basic and diluted earnings per common share		$	0.25	$	0.42	$	0.40	$	0.41	$	0.53

QUARTERLY CONDENSED, CONSOLIDATED

BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)


		As of:
		December 31,		September 30,		June 30,		March 31,		Dec. 31,
		2025		2025		2025		2025		2024
ASSETS
Cash & Due from Banks		$	46,056	$	123,090	$	99,619	$	114,738	$	126,174
Available-for-Sale Debt Securities			506,575		415,313		406,052		408,463		402,380
Loans, Net			2,323,317		1,921,633		1,897,559		1,878,260		1,875,813
Bank-Owned Life Insurance			61,094		52,614		52,138		51,671		51,214
Bank Premises and Equipment, Net			27,755		21,055		21,195		21,304		21,338
Intangible Assets			74,884		54,267		54,373		54,479		54,585
Other Assets			92,788		76,061		79,939		80,313		79,149
TOTAL ASSETS		$	3,132,469	$	2,664,033	$	2,610,875	$	2,609,228	$	2,610,653

LIABILITIES
Deposits (1)		$	2,564,716	$	2,165,735	$	2,109,776	$	2,102,141	$	2,093,909
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements			149,553		134,383		144,427		154,994		167,939
Senior Notes, Net			14,970		14,952		14,934		14,917		14,899
Subordinated Debt, Net			24,949		24,919		24,889		24,860		24,831
Other Liabilities			36,567		30,085		30,492		30,485		33,791
TOTAL LIABILITIES			2,790,755		2,370,074		2,324,518		2,327,397		2,335,369

STOCKHOLDERS' EQUITY
Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss			364,509		319,985		317,031		314,521		312,045
Accumulated Other Comprehensive Loss:
Net Unrealized Losses on Available-for-sale Debt Securities			(23,154)		(26,352)		(31,017)		(33,050)		(37,084)
Defined Benefit Plans			359		326		343		360		323
TOTAL STOCKHOLDERS' EQUITY			341,714		293,959		286,357		281,831		275,284
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	3,132,469	$	2,664,033	$	2,610,875	$	2,609,228	$	2,610,653

(1) Brokered Deposits (Included in Total Deposits)		$	3,850	$	5,004	$	5,005	$	22,022	$	24,021

AVAILABLE-FOR-SALE DEBT SECURITIES

(In Thousands)


		December 31, 2025					September 30, 2025					December 31, 2024
		Amortized		Fair			Amortized		Fair			Amortized		Fair
		Cost		Value			Cost		Value			Cost		Value
Obligations of the U.S. Treasury		$	8,047	$	7,482		$	8,052	$	7,429		$	8,067	$	7,118
Obligations of U.S. Government agencies			11,423		10,749			9,436		8,670			10,154		9,025
Bank holding company debt securities			36,103		34,076			28,963		26,291			28,958		25,246
Obligations of states and political subdivisions:
Tax-exempt			105,149		98,359			105,922		97,528			111,995		101,302
Taxable			50,306		44,152			50,373		43,862			51,147		42,506
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			148,865		143,921			107,771		101,935			104,378		94,414
Residential collateralized mortgage obligations			65,782		63,707			54,678		52,420			53,389		49,894
Commercial mortgage-backed securities			99,095		92,631			72,433		65,697			73,470		64,501
Private label commercial mortgage-backed securities			3,490		3,489			3,471		3,471			8,365		8,374
Asset-backed securities,
Collateralized loan obligations			8,000		8,009			8,000		8,010			0		0
Total Available-for-Sale Debt Securities		$	536,260	$	506,575		$	449,099	$	415,313		$	449,923	$	402,380

SUMMARY OF LOANS BY TYPE

(Excludes Loans Held for Sale)

(In Thousands)


		December 31,			September 30,			December 31,
		2025			2025			2024
Commercial real estate - non-owner occupied:
Non-owner occupied		$	569,974		$	497,295		$	471,171
Multi-family (5 or more) residential			160,284			108,376			105,174
1-4 Family - commercial purpose			197,480			159,695			163,220
Total commercial real estate - non-owner occupied			927,738			765,366			739,565
Commercial real estate - owner occupied			311,792			260,365			261,071
All other commercial loans:
Commercial and industrial			128,679			112,667			96,665
Commercial lines of credit			139,727			133,726			120,078
Political subdivisions			96,349			82,728			94,009
Commercial construction and land			123,887			100,015			92,741
Other commercial loans			71,895			20,039			19,784
Total all other commercial loans			560,537			449,175			423,277
Residential mortgage loans:
1-4 Family - residential			411,827			369,452			383,797
1-4 Family residential construction			32,123			27,358			24,212
Total residential mortgage			443,950			396,810			408,009
Consumer loans:
Consumer lines of credit (including HELCs)			94,060			58,888			47,196
All other consumer			16,288			14,503			16,730
Total consumer			110,348			73,391			63,926
Total			2,354,365			1,945,107			1,895,848
Less: allowance for credit losses on loans			(31,048)			(23,474)			(20,035)
Loans, net		$	2,323,317		$	1,921,633		$	1,875,813

NON-OWNER OCCUPIED COMMERCIAL REAL ESTATE

(In Thousands)


Loan Type	December 31,		% of Non-owner		% of
	2025		Occupied CRE		Total Loans
Office	$	125,175	22.0	%	5.3	%
Retail		104,513	18.3	%	4.4	%
Industrial		99,476	17.5	%	4.2	%
Hotels		82,692	14.5	%	3.5	%
Mixed Use		64,390	11.3	%	2.7	%
Self Storage Facilities		55,434	9.7	%	2.4	%
Other		38,294	6.7	%	1.6	%
Total Non-owner Occupied CRE Loans	$	569,974
Total Gross Loans	$	2,354,365

PAST DUE LOANS AND NONPERFORMING ASSETS

(Dollars In Thousands)


		December 31, 2025								September 30,			June 30,			December 31,
		PCD Loans (1)			Non PCD Loans		Total			2025			2025			2024
Collateral dependent loans with a valuation allowance		$	5,138		$	263	$	5,401		$	263		$	239		$	258
Collateral dependent loans without a valuation allowance			5,553			21,474		27,027			21,174			20,957			29,867
Total collateral dependent loans		$	10,691		$	21,737	$	32,428		$	21,437		$	21,196		$	30,125

Total loans past due 30-89 days and still accruing		$	5,810		$	12,499	$	18,309		$	2,509		$	1,721		$	5,658

Nonperforming assets:
Total nonaccrual loans		$	6,762		$	26,074	$	32,836		$	25,762		$	25,190		$	23,842
Total loans past due 90 days or more and still accruing			0			88		88			1,025			86			119
Total nonperforming loans			6,762			26,162		32,924			26,787			25,276			23,961
Foreclosed assets held for sale (real estate)			0			189		189			402			402			181
Total nonperforming assets		$	6,762		$	26,351	$	33,113		$	27,189		$	25,678		$	24,142

Total nonperforming loans as a % of total loans								1.40	%		1.38	%		1.32	%		1.26	%
Total nonperforming assets as a % of assets								1.06	%		1.02	%		0.98	%		0.92	%
Allowance for credit losses as a % of total loans								1.32	%		1.21	%		1.13	%		1.06	%

(1)

Loans acquired in the Susquehanna merger with more than insignificant deterioration of credit quality since origination are accounted for as purchase financed assets with credit deterioration (“PCD”). Loans in nonaccrual status or risk rated special mention or substandard at October 1, 2025 are considered PCD Loans. The amortized cost basis of PCD loans totaled $23,646,000 at December 31, 2025.

ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS

(In Thousands)


		3 Months			3 Months			3 Months			Year			Year
		Ended			Ended			Ended			Ended			Ended
		December 31,			September 30,			December 31,			December 31,			December 31,
		2025			2025			2024			2025			2024
Balance, beginning of period		$	23,474		$	21,699		$	20,442		$	20,035		$	19,208
Allowance recorded in business combination			7,074			0			0			7,074			0
Charge-offs			(905)			(122)			(32)			(1,726)			(1,716)
Recoveries			21			28			18			109			113
Net charge-offs			(884)			(94)			(14)			(1,617)			(1,603)
Provision for credit losses on loans			1,384			1,869			(393)			5,556			2,430
Balance, end of period		$	31,048		$	23,474		$	20,035		$	31,048		$	20,035

Net charge-offs as a % of average gross loans												0.08	%		0.09	%

ANALYSIS OF THE PROVISION (CREDIT) FOR CREDIT LOSSES

(In Thousands)


	3 Months		3 Months		3 Months		Year		Year
	Ended		Ended		Ended		Ended		Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2025		2025		2024		2025		2024
Provision (credit) for credit losses:
Loans receivable	$	1,384	$	1,869	$	(393)	$	5,556	$	2,430
Off-balance sheet exposures		(64)		294		(138)		517		(235)
Total provision (credit) for credit losses	$	1,320	$	2,163	$	(531)	$	6,073	$	2,195

PPNR NON- GAAP RECONCILIATION

(In Thousands)


	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
Adjusted Ratios for Merger-Related Expense:	2025		2025		2024		2025		2024
Net Income (GAAP)	$	4,466	$	6,551	$	8,174	$	23,427	$	25,958
Add: Provision for income taxes		926		1,464		1,947		5,216		5,913
Add: Provision (credit) for credit losses		1,320		2,163		(531)		6,073		2,195
Less: Realized gains on available-for-sale securities debt securities		(38)		0		0		(38)		0
Add: Merger-related expenses		6,891		882		0		7,940		0
Add: Professional fees expense - core system contract negotiation		647		0		0		647		0
Add: Adjustments to reflect net interest income on a fully taxable-equivalent basis		233		218		217		882		819
PPNR (non-GAAP)	$	14,445	$	11,278	$	9,807	$	44,147	$	34,885

ADJUSTED RATIOS FOR MERGER-RELATED EXPENSES - NON-GAAP RECONCILIATION

(In Thousands)


	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
Calculation of Adjusted Net Income:	2025			2025			2024			2025			2024
Net Income (GAAP) (A)	$	4,466		$	6,551		$	8,174		$	23,427		$	25,958
Add: Merger-related expenses (B)		6,891			882			0			7,940			0
Less: Tax effect of merger-related expenses (C)		(1,391)			(185)			0			(1,590)			0
Adjusted Net Income (D=A+B-C) - Non-GAAP	$	9,966		$	7,248		$	8,174		$	29,777		$	25,958
Adjusted Net Income Attributable to Common Shares - Non-GAAP	$	9,886		$	7,189		$	8,103		$	29,546		$	25,747

Number of Shares Used in Computation-Basic and Diluted - Non-GAAP		17,665,099			15,398,262			15,287,462			15,949,789			15,262,504
Net Income-Basic and Diluted per Common Share - GAAP	$	0.25		$	0.42		$	0.53		$	1.46		$	1.69
Adjusted Net Income-Basic and Diluted Per Common Share - Non-GAAP	$	0.56		$	0.47		$	0.53		$	1.85		$	1.69

Adjusted Ratios for Merger-Related Expenses:

Average Assets (E)		3,175,780			2,625,147			2,646,888			2,743,384			2,583,106
Return on Average Assets (=A/E ) - GAAP(1)		0.56	%		1.00	%		1.24	%		0.85	%		1.00	%
Adjusted Return on Average Assets (=D/E) - Non-GAAP(1)		1.26	%		1.10	%		1.24	%		1.09	%		1.00	%

Average Equity (F)		341,300			287,860			275,450			297,641			265,884
Return on Average Equity (=A/F) - GAAP(1)		5.23	%		9.10	%		11.87	%		7.87	%		9.76	%
Adjusted Return on Average Equity (=D/F) -Non-GAAP(1)		11.68	%		10.07	%		11.87	%		10.00	%		9.76	%

(1)Annualized

COMPARISON OF INTEREST INCOME AND EXPENSE

(In Thousands)


		Three Months Ended						Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,
		2025		2025		2024		2025		2024
INTEREST INCOME
Interest-bearing due from banks		$	801	$	982	$	1,786	$	3,359	$	4,307
Available-for-sale debt securities:
Taxable			3,399		2,390		2,184		10,420		8,593
Tax-exempt			654		649		644		2,609		2,531
Total available-for-sale debt securities			4,053		3,039		2,828		13,029		11,124
Loans receivable:
Taxable			35,958		29,085		28,104		120,597		110,396
Tax-exempt			787		727		795		2,985		2,944
Total loans receivable			36,745		29,812		28,899		123,582		113,340
Other earning assets			38		35		33		129		126
Total Interest Income			41,637		33,868		33,546		140,099		128,897

INTEREST EXPENSE
Interest-bearing deposits:
Interest checking			2,664		2,770		3,269		10,869		12,151
Money market			2,205		2,034		2,333		8,168		8,589
Savings			1,039		50		50		1,187		207
Time deposits			5,235		4,602		4,931		19,251		18,253
Total interest-bearing deposits			11,143		9,456		10,583		39,475		39,200
Borrowed funds:
Short-term			6		0		27		7		1,168
Long-term - FHLB advances			1,428		1,577		1,894		6,468		7,188
Senior notes, net			121		121		121		483		481
Subordinated debt, net			233		233		231		931		926
Total borrowed funds			1,788		1,931		2,273		7,889		9,763
Total Interest Expense			12,931		11,387		12,856		47,364		48,963

Net Interest Income		$	28,706	$	22,481	$	20,690	$	92,735	$	79,934

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						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2025		2025		2024		2025		2024
Net Interest Income Under U.S. GAAP	$	28,473	$	22,263	$	20,473	$	91,853	$	79,115
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities		82		81		69		317		271
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans		151		137		148		565		548
Net Interest Income as adjusted to a fully taxable-equivalent basis	$	28,706	$	22,481	$	20,690	$	92,735	$	79,934

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
		12/31/2025			Return/		9/30/2025		Return/		12/31/2024		Return/
		Average			Cost of		Average		Cost of		Average		Cost of
		Balance			Funds %		Balance		Funds %		Balance		Funds %
EARNING ASSETS
Interest-bearing due from banks		$	82,771		3.84	%	$	88,657	4.39	%	$	150,003	4.74	%
Available-for-sale debt securities, at amortized cost:
Taxable			424,835		3.17	%		337,101	2.81	%		333,376	2.61	%
Tax-exempt			106,361		2.44	%		107,978	2.38	%		112,686	2.27	%
Total available-for-sale debt securities			531,196		3.03	%		445,079	2.71	%		446,062	2.52	%
Loans receivable:
Taxable			2,255,485		6.33	%		1,841,875	6.26	%		1,800,732	6.21	%
Tax-exempt			90,019		3.47	%		84,356	3.42	%		92,440	3.42	%
Total loans receivable			2,345,504		6.22	%		1,926,231	6.14	%		1,893,172	6.07	%
Other earning assets			3,028		4.98	%		2,809	4.94	%		2,147	6.11	%
Total Earning Assets			2,962,499		5.58	%		2,462,776	5.46	%		2,491,384	5.36	%
Cash			23,461					22,592				20,988
Unrealized loss on securities			(31,622)					(39,294)				(42,753)
Allowance for credit losses			(30,888)					(22,040)				(20,750)
Bank-owned life insurance			60,756					52,321				50,923
Bank premises and equipment			27,963					21,263				21,488
Intangible assets			75,534					54,320				54,632
Other assets			88,076					73,209				70,976
Total Assets		$	3,175,779				$	2,625,147			$	2,646,888

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	687,936		1.54	%	$	545,004	2.02	%	$	573,133	2.27	%
Money market			409,970		2.13	%		376,761	2.14	%		373,558	2.48	%
Savings			374,431		1.10	%		194,592	0.10	%		193,554	0.10	%
Time deposits			616,988		3.37	%		499,049	3.66	%		490,363	4.00	%
Total interest-bearing deposits			2,089,325		2.12	%		1,615,406	2.32	%		1,630,608	2.58	%
Borrowed funds:
Short-term			2,438		0.98	%		658	0.00	%		3,852	2.79	%
Long-term - FHLB advances			126,069		4.49	%		138,749	4.51	%		169,346	4.45	%
Senior notes, net			14,962		3.21	%		14,944	3.21	%		14,889	3.23	%
Subordinated debt, net			24,935		3.71	%		24,905	3.71	%		24,819	3.70	%
Total borrowed funds			168,404		4.21	%		179,256	4.27	%		212,906	4.25	%
Total Interest-bearing Liabilities			2,257,729		2.27	%		1,794,662	2.52	%		1,843,514	2.77	%
Demand deposits			539,557					510,802				496,161
Other liabilities			37,193					31,823				31,763
Total Liabilities			2,834,479					2,337,287				2,371,438
Stockholders' equity, excluding accumulated other comprehensive loss			365,646					318,175				308,472
Accumulated other comprehensive loss			(24,346)					(30,315)				(33,022)
Total Stockholders' Equity			341,300					287,860				275,450
Total Liabilities and Stockholders' Equity		$	3,175,779				$	2,625,147			$	2,646,888
Interest Rate Spread					3.31	%			2.94	%			2.59	%
Net Interest Income/Earning Assets					3.84	%			3.62	%			3.30	%

Total Deposits (Interest-bearing and Demand)		$	2,628,882				$	2,126,208			$	2,126,769
Brokered Deposits		$	4,705		4.05	%	$	4,936	4.18	%	$	35,062	4.87	%

(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
		12/31/2025			Return/		12/31/2024		Return/
		Average			Cost of		Average		Cost of
		Balance			Funds %		Balance		Funds%
EARNING ASSETS
Interest-bearing due from banks		$	79,863		4.21	%	$	86,703	4.97	%
Available-for-sale debt securities, at amortized cost:
Taxable			360,179		2.89	%		340,339	2.52	%
Tax-exempt			108,815		2.40	%		113,121	2.24	%
Total available-for-sale debt securities			468,994		2.78	%		453,460	2.45	%
Loans receivable:
Taxable			1,931,125		6.24	%		1,791,187	6.16	%
Tax-exempt			87,992		3.39	%		89,935	3.27	%
Total loans receivable			2,019,117		6.12	%		1,881,122	6.03	%
Other earning assets			2,616		4.93	%		2,198	5.73	%
Total Earning Assets			2,570,590		5.45	%		2,423,483	5.32	%
Cash			22,286					22,209
Unrealized loss on securities			(39,435)					(49,520)
Allowance for credit losses			(23,484)					(20,294)
Bank-owned life insurance			54,097					51,465
Bank premises and equipment			22,987					21,765
Intangible assets			59,745					54,778
Other assets			76,598					79,220
Total Assets		$	2,743,384				$	2,583,106

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	578,994		1.88	%	$	537,233	2.26	%
Money market			376,679		2.17	%		358,274	2.40	%
Savings			241,249		0.49	%		203,129	0.10	%
Time deposits			524,394		3.67	%		465,882	3.92	%
Total interest-bearing deposits			1,721,316		2.29	%		1,564,518	2.51	%
Borrowed funds:
Short-term			1,370		0.51	%		22,743	5.14	%
Long-term - FHLB advances			144,114		4.49	%		167,181	4.30	%
Senior notes, net			14,935		3.23	%		14,865	3.24	%
Subordinated debt, net			24,890		3.74	%		24,774	3.74	%
Total borrowed funds			185,309		4.26	%		229,563	4.25	%
Total Interest-bearing Liabilities			1,906,625		2.48	%		1,794,081	2.73	%
Demand deposits			506,468					493,052
Other liabilities			32,650					30,089
Total Liabilities			2,445,743					2,317,222
Stockholders' equity, excluding accumulated other comprehensive loss			328,061					304,532
Accumulated other comprehensive loss			(30,420)					(38,648)
Total Stockholders' Equity			297,641					265,884
Total Liabilities and Stockholders' Equity		$	2,743,384				$	2,583,106
Interest Rate Spread					2.97	%			2.59	%
Net Interest Income/Earning Assets					3.61	%			3.30	%

Total Deposits (Interest-bearing and Demand)		$	2,227,784				$	2,057,570
Brokered Deposits		$	11,123		4.57	%	$	61,538	5.19	%

(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						Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,
		2025		2025		2024		2025		2024
Trust revenue		$	2,087	$	2,056	$	2,071	$	8,212	$	7,928
Brokerage and insurance revenue			771		490		682		2,313		2,271
Service charges on deposit accounts			1,643		1,471		1,531		5,976		5,867
Interchange revenue from debit card transactions			1,232		1,137		1,071		4,623		4,276
Net gains from sales of loans			558		408		372		1,483		1,158
Loan servicing fees, net			225		107		215		643		649
Increase in cash surrender value of life insurance			527		477		458		1,927		1,830
Other noninterest income			1,317		1,158		1,147		5,637		5,230
Total noninterest income, excluding realized gains on available-for-sale debt securities, net			8,360		7,304		7,547		30,814		29,209
Realized gains on available-for-sale debt securities, net			38		0		0		38		0
Total noninterest income		$	8,398	$	7,304	$	7,547	$	30,852	$	29,209

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)


		Three Months Ended						Year Ended
		December 31,		September 30,		December 31,		December 31,		December 31,
		2025		2025		2024		2025		2024
Salaries and employee benefits		$	13,267	$	11,293	$	11,470	$	47,386	$	44,930
Net occupancy and equipment expense			1,662		1,336		1,313		5,860		5,473
Data processing and telecommunications expenses			2,751		1,939		1,891		8,742		7,768
Automated teller machine and interchange expense			544		529		348		1,863		1,818
Pennsylvania shares tax			469		469		433		1,904		1,733
Professional fees			1,291		445		550		2,759		2,175
Other noninterest expense			3,284		2,496		2,425		11,535		10,361
Total noninterest expense, excluding merger-related expenses			23,268		18,507		18,430		80,049		74,258
Merger-related expenses			6,891		882		0		7,940		0
Total noninterest expense		$	30,159	$	19,389	$	18,430	$	87,989	$	74,258

LIQUIDITY INFORMATION

(In Thousands)


Available Credit Facilities	Outstanding						Available						Total Credit
	Dec. 31,		Sept. 30,		Dec. 31,		Dec. 31,		Sept. 30,		Dec. 31,		Dec. 31,		Sept. 30,		Dec. 31,
	2025		2025		2024		2025		2025		2024		2025		2025		2024
Federal Home Loan Bank of Pittsburgh	$	170,922	$	155,881	$	188,692	$	785,822	$	802,213	$	749,999	$	971,946	$	973,060	$	938,691
Federal Reserve Bank Discount Window		0		0		0		25,484		25,228		18,093		25,484		25,228		18,093
Other correspondent banks		0		0		0		75,000		75,000		75,000		75,000		75,000		75,000
Total credit facilities	$	170,922	$	155,881	$	188,692	$	886,306	$	902,441	$	843,092	$	1,072,430	$	1,073,288	$	1,031,784


Uninsured Deposits Information	December 31,			September 30,			December 31,
	2025			2025			2024
Total Deposits - C&N Bank	$	2,584,952		$	2,184,401		$	2,111,547

Estimated Total Uninsured Deposits	$	811,209		$	696,542		$	632,804
Portion of Uninsured Deposits that are
Collateralized		172,585			158,725			161,958
Uninsured and Uncollateralized Deposits	$	638,624		$	537,817		$	470,846

Uninsured and Uncollateralized Deposits as
a % of Total Deposits		24.7	%		24.6	%		22.3	%

Available Funding from Credit Facilities	$	886,306		$	902,441		$	843,092
Fair Value of Available-for-sale Debt
Securities in Excess of Pledging Obligations		319,624			244,348			236,945
Highly Liquid Available Funding	$	1,205,930		$	1,146,789		$	1,080,037

Highly Liquid Available Funding as a % of
Uninsured Deposits		148.7	%		164.6	%		170.7	%

Highly Liquid Available Funding as a % of
Uninsured and Uncollateralized Deposits		188.8	%		213.2	%		229.4	%