Citizens & Northern Q3 profit hits record $16.3M
The quarterly cash dividend rises to $0.30 per share, payable November 13 to shareholders of record November 2.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Citizens & Northern Corporation reported unaudited consolidated net income of $16.285 million for the three months ended September 30, 2026, compared with $6.551 million a year earlier; diluted earnings per share were $0.92 versus $0.42. The company said quarterly net income was a record. Net interest income was $30.205 million, and net interest margin expanded 6 basis points. Results included a $3.171 million credit for credit losses, attributed mainly to changes in qualitative factors. Pre-tax, pre-provision net revenue was $17.464 million, up $1.6 million quarter over quarter, excluding the credit for credit losses. For the first nine months, net income was $30.615 million versus $18.961 million in 2025.
The efficiency ratio was 56.11%, compared with 62.14% in the year-earlier quarter. Total loans receivable declined for a second consecutive quarter, which management attributed to payoffs of a few larger loans; it said origination levels remained reasonably strong. The board declared a regular quarterly cash dividend of $0.30 per share, an increase of $0.02, payable November 13, 2026, to shareholders of record November 2, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter net income was $16.285 million, versus $6.551 million a year earlier.
- Minor pointQuarterly cash dividend increased $0.02 per share to $0.30 per share.
Negative
- None.
Filing Explained
As of
8-K Event Classification
Key Figures
Key Terms
Pre-tax, pre-provision net revenue (PPNR) financial
Net interest margin financial
Efficiency ratio financial
Credit for credit losses financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did CZNC earn in the third quarter of 2026?
What is CZNC's latest dividend and when is it payable?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
| | |||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Ident. No.) | ||
(Address of principal executive offices) | (Zip Code) |
(
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:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which | ||
|
|
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 and nine month periods ended September 30, 2026. On October 22, 2026, the Company issued a press release titled “C&N Announces Record Quarterly Earnings and Declares Increase in Dividend,” a copy of which is furnished as Exhibit 99 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.
(c) Not applicable.
(d) Exhibits.
Exhibit 99: Press Release issued by Citizens & Northern Corporation dated October 22, 2026, titled “C&N Announces Record Quarterly Earnings and Declares Increase in Dividend.” | |
Exhibit 104: Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
2
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 | |
|
|
|
Date: October 22, 2026 | By: | /s/ Mark A. Hughes |
Mark A. Hughes | ||
|
| Treasurer and Chief Financial Officer |
3
Exhibit 99
|
| Contact: Charity Frantz |
October 22, 2026 |
| 570-724-0225 |
|
| charityf@cnbankpa.com |
C&N ANNOUNCES RECORD QUARTERLY EARNINGS AND DECLARES INCREASE IN DIVIDEND
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 nine-month periods ended September 30, 2026. C&N’s principal activity is community banking, and its largest subsidiary is Citizens & Northern Bank (the “Bank”).
Brad Scovill, C&N’s President and CEO noted, “I am pleased with our record third quarter 2026 unaudited net income of $16.3 million or $0.92 per share. We experienced net interest income growth, 6 basis points of net interest margin expansion, our efficiency ratio for the quarter dropped to 56.11% and net charge-offs were low at 0.07% of average loans receivable. Results for the quarter included a benefit from a credit for credit losses that was caused mainly by changes in qualitative factors; having said that, we also experienced a reduction in nonperforming loans as we continue to make positive progress on loan workout situations. Pre-tax, pre-provision net revenue, which excludes the impact of the credit for credit losses, increased $1.6 million quarter-over-quarter. Although total loans receivable dropped for the second consecutive quarter due to pay-offs of a few larger loans, our origination levels have been reasonably strong and we remain optimistic about prospects for loan growth going forward. In light of our Board’s confidence in C&N’s prospects for continued strong earnings performance, we are pleased to announce a $0.02 per share increase in our regular quarterly cash dividend, raising the payout to $0.30 per share. This dividend increase reflects our ongoing commitment to creating value for our shareholders.”
Dividend Declared
On October 22, 2026, C&N’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share payable November 13, 2026, to shareholders of record as of November 2, 2026. The amount is increased by $0.02 from the previous dividend that was declared in July 2026 and paid in August 2026.
Highlights:
| ● | Net income was $16,285,000, or $0.92 per diluted share for the third quarter 2026 as compared to $14,057,000, or $0.79 per diluted share for the second quarter 2026 and $6,551,000, or $0.42 per diluted share in the third quarter 2025. Net income for the nine months ended September 30, 2026 was $30,615,000, or $1.72 diluted earnings per share, up from $18,961,000, or $1.22 diluted earnings per share for the first nine months of 2025. |
| ● | Pre-tax, pre-provision net revenue (“PPNR”), a non-GAAP financial measure, was $17,464,000 for the third quarter 2026 as compared to $15,815,000 for the second quarter 2026 and $11,278,000 for the third quarter of 2025. PPNR was $47,421,000 for the nine months ended September 30 2026 as compared to $29,702,000 for the nine months ended September 30, 2025. PPNR measures the strength of C&N’s core earnings from recurring operations independent of credit volatility. The higher PPNR results in the two most recent quarters included the net impact of growth in net interest income, noninterest income and noninterest expense resulting from C&N’s acquisition of Susquehanna Community Financial, Inc. (“Susquehanna”) on October 1, 2025. PPNR includes net interest income and noninterest income, net of noninterest expense, but excludes the (credit) provision for credit losses, realized gains or losses on securities, the income tax provision, merger-related expenses and other nonrecurring items included in earnings. See Table 13 for additional information and Non-GAAP reconciliation. |
| ● | C&N recorded a credit for credit losses (reduction in expense) of $3,171,000 in the third quarter 2026 and $1,846,000 in the second quarter 2026. The credit for credit losses in the third quarter 2026 included the impact on the allowance for credit losses (“ACL”) of changes in qualitative factors and a reduction in loans receivable. The credit for credit losses in the second quarter 2026 included the impact on the allowance for credit losses (“ACL”) of changes in qualitative factors, net recoveries of $403,000 and a reduction in loans receivable. For the nine months ended September 30, 2026, the |
1
| provision for credit losses was $8,585,000, up from $4,753,000 for the first nine months of 2025. The provision for the nine months ended September 30, 2026 included the impact on the ACL of an elevated level of net charge-offs, primarily related to one non-owner occupied, commercial real estate loan offset by net reductions in the ACL related to changes in qualitative factors and a reduction in loans receivable. |
| ● | Net interest income for the third quarter 2026 increased $587,000 over the total for the second quarter 2026 and $7,942,000 over the total for third quarter 2025. For the first nine months of 2026, net interest income was $24,897,000 higher than in the corresponding period of 2025. The net interest margin increased 0.06% to 4.13% for the third quarter 2026 from 4.07% for the second quarter 2026 and increased 0.51% from 3.62% for the third quarter 2025. The net interest margin increased 0.55% to 4.06% for the first nine months of 2026 from 3.51% for the corresponding period of 2025. Accretion of purchase accounting valuation adjustments related to the Susquehanna merger had a net positive impact on net interest income of $1,630,000 in the nine months ended September 30, 2026. |
| ● | Total loans receivable was $17,452,000 lower at September 30, 2026 compared to June 30, 2026, mainly due to higher pay-downs and pay-offs of several larger commercial-purpose loans in the third quarter 2026. Average loans receivable decreased $43,494,000, or 7.3% (annualized), for the third quarter 2026 as compared to the total for the second quarter 2026. Average loans receivable increased $452,728,000, or 23.7%, for the nine months ended September 30, 2026 as compared to the first nine months of 2025, including the impact of loans recorded pursuant to the Susquehanna acquisition, |
| ● | At September 30, 2026, C&N’s highly liquid sources of available funds totaled $1.384 billion, or 170.3% of uninsured deposits and 219.0% of uninsured and uncollateralized deposits. |
Balance Sheet
| ◾ | Total assets were $3,150,204,000 at September 30, 2026 down from $3,151,984,000 at June 30, 2026 and up from $2,664,033,000 at September 30, 2025. |
| ◾ | Cash and due from banks totaled $99,992,000 at September 30, 2026, up from $82,537,000 at June 30, 2026 and down from $123,090,000 at September 30, 2025. |
| ◾ | The fair value of available-for-sale debt securities totaled $490,474,000 at September 30, 2026, down from $496,829,000 at June 30, 2026 and up from $415,313,000 at September 30, 2025. The increase in available-for-sale debt securities from September 30, 2025 included the impact of purchases of available-for-sale debt securities from funding provided by proceeds from the sale of most of the securities acquired from Susquehanna. |
| ◾ | Gross loans receivable totaled $2,331,395,000 at September 30, 2026, down $17,452,000 from total loans at June 30, 2026 and up $386,288,000 from total loans at September 30, 2025. On October 1, 2025, $393,587,000 of loans receivable were recorded pursuant to the acquisition of Susquehanna. The reduction in loans receivable at September 30, 2026 as compared to June 30, 2026 included a reduction in total non-owner occupied commercial real estate loans of $16,288,000 and a reduction in commercial construction and land loans of $13,917,000, resulting mainly from payoffs and paydowns received on several larger loans. |
| ◾ | Deposits totaled $2,608,512,000 at September 30, 2026, up $4,777,000 from June 30, 2026 and $442,777,000 from September 30, 2025. Deposits of $501,488,000 were assumed from Susquehanna, effective October 1, 2025. Average total deposits increased $8,289,000, or 1.3% (annualized) during the third quarter 2026 from the second quarter 2026 and were $481,963,000 or 23.0% higher for the nine months ended September 30, 2026 as compared to the first nine months of 2025. |
| ◾ | The outstanding balance of borrowed funds, including Federal Home Loan Bank advances, repurchase agreements, senior notes and subordinated debt, totaled $163,458,000 at September 30, 2026, down $6,577,000 from June 30, 2026 and $10,796,000 from September 30, 2025. On June 1, 2026, senior notes totaling $15,000,000 matured and were redeemed. Also on June 1, 2026, the interest rate on subordinated notes totaling $25,000,000 adjusted from a fixed rate of 3.25% to a variable rate that will reset quarterly based on the Term Secured Overnight Financing Rate plus 259 basis points. At September 30, 2026, the interest rate on the outstanding subordinated notes was 6.42%. C&N is entitled to redeem the subordinated notes, in whole or in part, at any time, subject to regulatory approval to the extent required. |
| ◾ | Total stockholders’ equity was $343,320,000 at September 30, 2026, down from $346,139,000 at June 30, 2026 and up from $293,959,000 at September 30, 2025. |
2
| ◾ | Within stockholders’ equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $39,072,000 at September 30, 2026, $24,284,000 at June 30, 2026 and $26,352,000 at September 30, 2025. The volatility in the fair value of the portfolio has resulted from changes in interest rates including significant increases in interest rates as of September 30, 2026 as compared to June 30, 2026. Management reviewed the available-for-sale debt securities as of September 30, 2026 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 September 30, 2026. Accumulated other comprehensive losses are excluded from C&N’s regulatory capital ratios. |
Asset Quality
| ◾ | Total nonperforming assets as a percentage of total assets was 1.16% at September 30, 2026, down from 1.28% at June 30, 2026 and up from 1.06% at December 31, 2025 and 1.02% at September 30, 2025. Total nonperforming assets were $36,523,000 at September 30, 2026, down from $40,275,000 at June 30, 2026 and up from $33,113,000 at December 31, 2025 and $27,189,000 at September 30, 2025. The decrease in nonperforming assets in the third quarter 2026 included the impact of moving a non-owner occupied commercial real estate loan with an amortized cost basis of $3,276,000 at September 30, 2026 and June 30, 2026 from nonaccrual to accrual status. Included in nonaccrual loans were loans purchased with credit deterioration (“PCD loans”) that were acquired as part of the Susquehanna merger on October 1, 2025 with a total amortized cost basis of $7,879,000 at September 30, 2026, $8,371,000 at June 30, 2026 and $6,762,000 at December 31, 2025. |
| ◾ | In the third quarter 2026, C&N recorded net charge-offs totaling $403,000 or 0.07% (annualized) of average loans receivable compared to net recoveries totaling $403,000 or 0.07% (annualized) of average loans receivable in the second quarter 2026 and net charge-offs of $94,000 or 0.02% (annualized) of average loans receivable in the third quarter 2025. During the second quarter of 2026, C&N recorded a $675,000 recovery on a loan classified as nonaccrual that was paid off by the borrower through third-party financing. |
| ◾ | For the nine months ended September 30, 2026, net charge-offs totaled $10,808,000, or 0.61% (annualized) of average loans receivable as compared to net charge-offs of $733,000, or 0.05% (annualized) of average loans receivable for the first nine months of 2025. The significant increase in charge-offs in the nine months ended September 30, 2026 was due to a non-owner occupied, commercial real estate loan originated in 2022 in the amount of $24 million of which $7,200,000 was participated with another financial institution. The loss of a large tenant as well as cash flow requirements of the borrower’s other properties (which C&N has not financed) caused the loan to be downgraded to substandard and placed in nonaccrual status at September 30, June 30 and March 31, 2026. C&N obtained an updated appraisal in April 2026 which was significantly lower than the original appraisal when the loan was originated, resulting in a charge-off of $10,056,000 which was recorded in the first quarter 2026. In the third quarter 2026, C&N recorded an additional charge-off of $352,000 related to this loan. The additional charge-off resulted from advances made to cover borrower expenses in order to protect C&N’s interest in the collateral. At September 30, 2026, the amortized cost basis of the loan, net of the partial charge-offs, was $5,836,000. |
| ◾ | The ACL was 1.24% of gross loans receivable at September 30, 2026, down from 1.39% of gross loans receivable at June 30, 2026 and 1.32% at December 31, 2025 and up from 1.21% at September 30, 2025. The reduction in the ACL as a percentage of loans receivable at September 30, 2026 as compared to June 30, 2026 reflected the impact of a reduction in qualitative factors based on external data used to assess trends in regional economic conditions and commercial real estate values. |
Capital
| ◾ | 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. There were no shares repurchased during the first nine months of 2026. At September 30, 2026, there were 723,465 shares available to be repurchased under the program. |
| ◾ | Tangible common book value per share, a non-GAAP financial measure, decreased to $15.20 per share at September 30, 2026 from $15.33 per share at June 30, 2026 and $15.46 at September 30, 2025. C&N’s tangible common equity ratio, a non-GAAP financial measure, was 8.86% at September 30, 2026 compared to 8.93% at June 30, 2026 and 9.20% at September 30, 2025. The reductions in tangible common book value per share and the tangible common equity ratio at September 30, 2026 resulted from the increase in accumulated other comprehensive loss related to available-for-sale debt |
3
| securities, as described in the Balance Sheet section of this press release. See Tables 15 and 16 for more information, including reconciliations. |
| ◾ | C&N and the Bank are subject to various regulatory capital requirements. At September 30, 2026, C&N and C&N Bank maintained regulatory capital ratios that exceeded all capital adequacy requirements and were classified as well-capitalized. |
Liquidity
| ◾ | C&N maintained highly liquid sources of available funds totaling $1.384 billion at September 30, 2026, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $985.9 million, unused availability on the Federal Reserve Bank of Philadelphia’s discount window of $23.5 million, available federal funds lines with other banks of $75 million and unencumbered available-for-sale debt securities with a fair value of $299.9 million. At September 30, 2026, available funding from these sources totaled 170.3% of uninsured deposits and 219.0% of uninsured and uncollateralized deposits. |
| ◾ | At September 30, 2026, C&N’s estimated uninsured deposits totaled $812.8 million, or 31.1% of the Bank’s total deposits, as compared to $820.2 million, or 31.4% of the Bank’s total deposits at June 30, 2026 and $696.5 million, or 31.9% of the Bank’s total deposits at September 30, 2025. Included in uninsured deposits are deposits collateralized by securities (almost exclusively municipal deposits) totaling $180.7 million, or 6.9% of the Bank’s total deposits, at September 30, 2026 as compared to $167.8 million, or 6.4% of the Bank’s total deposits, at June 30, 2026 and $178.5 million, or 8.2% of the Bank’s total deposits at September 30, 2025. |
Income Statement- Third Quarter 2026 as Compared to Second Quarter 2026
Net Interest Income
| ◾ | Net interest income of $30,205,000 in the third quarter 2026 increased $587,000 from the second quarter 2026 result. The net interest margin was 4.13% in the third quarter 2026, up 0.06% from 4.07% in the second quarter 2026. The net interest spread increased 0.04%, as the average yield on earning assets increased 0.06% and the average rate on interest-bearing liabilities increased 0.02%. Average total earning assets decreased $14,722,000 from the prior quarter, as average total loans receivable decreased $43,494,000 while average interest-bearing due from banks increased $23,716,000. Average total deposits increased $8,289,000 in the third quarter 2026 as compared to the total for the prior quarter. |
| ◾ | Accretion of purchase accounting valuation adjustments related to the Susquehanna merger had a net positive impact on net interest income of $552,000 in the third quarter 2026 and $416,000 in the second quarter 2026. |
(Credit) Provision for Credit Losses
| ◾ | C&N recorded a credit for credit losses (reduction in expense) of $3,171,000 in the third quarter 2026 and $1,846,000 in the second quarter 2026. The credit for credit losses in the third quarter 2026 included the impact of a reduction in the ACL resulting from changes in qualitative factors based on external data used to assess trends in regional economic conditions and commercial real estate values and a reduction in loans receivable. The credit for credit losses in the second quarter 2026 included the impact of a reduction in the ACL resulting from changes in qualitative factors, net recoveries of $403,000 and a reduction in loans receivable. |
Noninterest Income
| ◾ | Noninterest income of $9,352,000 in the third quarter 2026 decreased $448,000 from the total for the second quarter 2026. Significant variances included the following: |
| Ø | Other noninterest income of $1,793,000 decreased $512,000 from the second quarter 2026 as there was income of $840,000 recognized in the second quarter 2026 from tax credits related to donations with no corresponding income in the third quarter 2026. Included in the third quarter of 2026 was an annual incentive payment related to volume of checks sold of $226,000 with no corresponding income in the second quarter of 2026. |
| Ø | Net gains from sales of loans of $728,000 increased $120,000 reflecting an increase in the volume of residential mortgage loans sold. |
4
Noninterest Expense
| ◾ | Noninterest expense of $22,326,000 in the third quarter of 2026 decreased $1,513,000 from the second quarter 2026 total. Significant variances included the following: |
| Ø | Other noninterest expense of $3,662,000 decreased $1,137,000 from the second quarter 2026. Within this category, donations decreased $948,000 as donations totaling $933,000 made under the Pennsylvania Educational Improvement Tax Credit program were included in the second quarter which generated income from tax credits of $840,000 with no comparable amounts in the third quarter 2026 as discussed above. |
| Ø | Salaries and employee benefits expense of $12,817,000 decreased $380,000 from the second quarter 2026 including a decrease of $273,000 in cash and stock-based compensation, a decrease of $103,000 or 1.1% in base salaries expense and a decrease in contributions to the Savings and Retirement and Employee Stock Ownership Plans of $105,000, while health insurance expense increased $137,000. |
Income Tax Provision
| ◾ | The income tax provision of $4,117,000, or 20.2% of pre-tax income for the third quarter 2026 increased $749,000 from $3,368,000, or 19.3% of pre-tax income for the second quarter 2026 reflecting an increase in pre-tax income for the quarter. |
Other Information:
| ◾ | Assets under management and advisement by C&N’s Wealth Management Group totaled $2,335,128,000 at September 30, 2026, up from $2,329,362,000 at June 30, 2026, and up 13.9% from $2,050,023,000 at September 30, 2025. Fluctuations in values of assets under administration and advisement reflect the impact of market volatility. |
| ◾ | The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $460,639,000 at September 30, 2026, up $5,997,000 from June 30, 2026 and up $125,309,000 from the total at September 30, 2025, reflecting the impact of servicing obligations assumed on such loans that had been sold by Susquehanna prior to the merger. |
Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania, which operates 34 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 wealth management office in Doylestown, Pennsylvania and 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; military conflicts including the conflict in the Middle East and the possible expansion of such conflict and the potential geopolitical and economic consequences; 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; difficulties in integrating the former Susquehanna (acquired October 1, 2025); 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 breaches 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’s existing businesses, may take longer than anticipated and may be more costly than anticipated; 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.
5
Supplemental, Unaudited Financial Information
TABLE 1 - Consolidated Income Statement Data
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
| | Three Months Ended | | Nine Months Ended | |||||||||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | |||||
| | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | |||||
INTEREST INCOME | | | | | | | | | | | | | | | |
Interest and fees on loans: | | | | | | | | | | |
| | | | |
Taxable | | $ | 36,921 | | $ | 36,583 | | $ | 29,085 | | $ | 109,145 | | $ | 84,639 |
Tax-exempt | |
| 633 | |
| 629 | |
| 590 | |
| 1,881 | |
| 1,784 |
Income from available-for-sale debt securities: | |
| | |
| | |
| | |
| | | | |
Taxable | |
| 3,651 | |
| 3,507 | |
| 2,390 | |
| 10,676 | |
| 7,021 |
Tax-exempt | |
| 556 | |
| 562 | |
| 568 | |
| 1,680 | |
| 1,720 |
Other interest and dividend income | |
| 515 | |
| 285 | |
| 1,017 | |
| 1,048 | |
| 2,649 |
Total interest and dividend income | |
| 42,276 | |
| 41,566 | |
| 33,650 | |
| 124,430 | |
| 97,813 |
INTEREST EXPENSE | |
| | |
| | |
| | |
| | | | |
Interest on deposits | |
| 10,165 | |
| 9,820 | |
| 9,456 | |
| 30,043 | |
| 28,332 |
Interest on short-term borrowings | |
| 123 | |
| 337 | |
| 0 | |
| 736 | | | 1 |
Interest on long-term borrowings - FHLB advances | |
| 1,381 | |
| 1,423 | |
| 1,577 | |
| 4,250 | | | 5,040 |
Interest on senior notes, net | |
| 0 | |
| 81 | |
| 121 | |
| 202 | | | 362 |
Interest on subordinated debt, net | |
| 402 | |
| 287 | |
| 233 | |
| 922 | | | 698 |
Total interest expense | |
| 12,071 | |
| 11,948 | |
| 11,387 | |
| 36,153 | |
| 34,433 |
Net interest income | | | 30,205 | | | 29,618 | | | 22,263 | | | 88,277 | | | 63,380 |
(Credit) provision for credit losses | | | (3,171) | | | (1,846) | | | 2,163 | | | 8,585 | | | 4,753 |
Net interest income after (credit) provision for credit losses | | | 33,376 | | | 31,464 | | | 20,100 | | | 79,692 | | | 58,627 |
NONINTEREST INCOME | | | | | | | | | | | | | | | |
Trust revenue | | | 2,188 | | | 2,242 | | | 2,056 | | | 6,515 | |
| 6,125 |
Brokerage and insurance revenue | | | 755 | | | 816 | | | 490 | | | 2,159 | | | 1,542 |
Service charges on deposit accounts | | | 1,785 | | | 1,761 | | | 1,471 | | | 5,196 | | | 4,333 |
Interchange revenue from debit card transactions | | | 1,348 | | | 1,347 | | | 1,137 | | | 3,962 | | | 3,391 |
Net gains from sale of loans | | | 728 | | | 608 | | | 408 | | | 1,706 | |
| 925 |
Loan servicing fees, net | | | 216 | | | 193 | | | 107 | | | 517 | | | 418 |
Increase in cash surrender value of life insurance | | | 537 | | | 527 | | | 477 | | | 1,579 | | | 1,400 |
Other noninterest income | | | 1,793 | | | 2,305 | | | 1,158 | | | 5,684 | | | 4,320 |
Realized gains on available-for-sale debt securities, net | | | 2 | | | 1 | | | 0 | | | 29 | | | 0 |
Total noninterest income | | | 9,352 | | | 9,800 | | | 7,304 | | | 27,347 | | | 22,454 |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 12,817 | | | 13,197 | | | 11,293 | | | 39,215 | |
| 34,119 |
Net occupancy and equipment expense | | | 1,710 | | | 1,728 | | | 1,336 | | | 5,329 | | | 4,198 |
Data processing and telecommunication expense | | | 2,333 | | | 2,249 | | | 1,939 | | | 7,031 | | | 5,991 |
Automated teller machine and interchange expense | | | 638 | | | 535 | | | 529 | | | 1,756 | | | 1,319 |
Pennsylvania shares tax | | | 586 | | | 587 | | | 469 | | | 1,758 | |
| 1,435 |
Professional fees | | | 580 | | | 744 | | | 445 | | | 1,963 | | | 1,468 |
Merger-related expenses | | | 0 | | | 0 | | | 882 | | | 0 | | | 1,049 |
Other noninterest expense | | | 3,662 | | | 4,799 | | | 2,496 | | | 11,825 | | | 8,251 |
Total noninterest expense | | | 22,326 | | | 23,839 | | | 19,389 | | | 68,877 | | | 57,830 |
Income before income tax provision | | | 20,402 | | | 17,425 | | | 8,015 | | | 38,162 | | | 23,251 |
Income tax provision | | | 4,117 | | | 3,368 | | | 1,464 | | | 7,547 | | | 4,290 |
NET INCOME | | $ | 16,285 | | $ | 14,057 | | $ | 6,551 | | $ | 30,615 | | $ | 18,961 |
EARNINGS PER COMMON SHARE - BASIC and DILUTED | | $ | 0.92 | | $ | 0.79 | | $ | 0.42 | | $ | 1.72 | | $ | 1.22 |
6
TABLE 2 - CONSOLIDATED BALANCE SHEET DATA
(Dollars In Thousands)
(Unaudited)
| | September 30, | | June 30, | | December 31, | | September 30, | ||||
| | 2026 | | 2026 | | 2025 | | 2025 | ||||
ASSETS | | | | | | | | | | | | |
Cash and due from banks: | | | | | | | | | | | | |
Noninterest-bearing | | $ | 24,606 | | $ | 25,947 | | $ | 22,289 | | $ | 27,430 |
Interest-bearing | |
| 75,386 | |
| 56,590 | |
| 23,767 | |
| 95,660 |
Total cash and due from banks | |
| 99,992 | |
| 82,537 | |
| 46,056 | |
| 123,090 |
Available-for-sale securities, at fair value | |
| 490,474 | |
| 496,829 | |
| 506,575 | |
| 415,313 |
| | | | | | | | | | | | |
Loans receivable | |
| 2,331,395 | |
| 2,348,847 | |
| 2,354,365 | |
| 1,945,107 |
Allowance for credit losses | |
| (28,952) | |
| (32,583) | |
| (31,048) | |
| (23,474) |
Loans, net | |
| 2,302,443 | |
| 2,316,264 | |
| 2,323,317 | |
| 1,921,633 |
| | | | | | | | | | | | |
Bank-owned life insurance | |
| 62,673 | |
| 62,136 | |
| 61,094 | |
| 52,614 |
Accrued interest receivable | |
| 11,629 | |
| 10,941 | |
| 11,594 | |
| 9,656 |
Bank premises and equipment, net | |
| 27,113 | |
| 26,712 | |
| 27,755 | |
| 21,055 |
Foreclosed assets held for sale | |
| 336 | |
| 181 | |
| 189 | |
| 402 |
Deferred tax asset, net | |
| 22,186 | |
| 18,617 | |
| 17,615 | |
| 16,759 |
Goodwill | |
| 63,311 | |
| 63,311 | |
| 63,311 | |
| 52,505 |
Core deposit intangibles, net | | | 9,129 | | | 9,944 | | | 11,573 | | | 1,762 |
Other assets | | | 60,918 | | | 64,512 | | | 63,390 | | | 49,244 |
TOTAL ASSETS | | $ | 3,150,204 | | $ | 3,151,984 | | $ | 3,132,469 | | $ | 2,664,033 |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | |
Noninterest-bearing | | $ | 537,857 | | $ | 557,892 | | $ | 531,442 | | $ | 508,475 |
Interest-bearing | | | 2,070,655 | | | 2,045,843 | | | 2,033,274 | | | 1,657,260 |
Total deposits | | | 2,608,512 | | | 2,603,735 | | | 2,564,716 | | | 2,165,735 |
Short-term borrowings | | | 4,796 | | | 14,643 | | | 28,618 | | | 1,489 |
Long-term borrowings - FHLB advances | | | 133,662 | | | 130,392 | | | 120,935 | | | 132,894 |
Senior notes, net | | | 0 | | | 0 | | | 14,970 | | | 14,952 |
Subordinated debt, net | | | 25,000 | | | 25,000 | | | 24,949 | | | 24,919 |
Accrued interest and other liabilities | | | 34,914 | | | 32,075 | | | 36,567 | | | 30,085 |
TOTAL LIABILITIES | | | 2,806,884 | | | 2,805,845 | | | 2,790,755 | | | 2,370,074 |
| | | | | | | | | | | | |
STOCKHOLDERS' EQUITY | | | | | | | | | | | | |
Common stock | | | 18,303 | | | 18,303 | | | 18,303 | | | 16,030 |
Paid-in capital | | | 184,862 | | | 184,340 | | | 185,696 | | | 143,352 |
Retained earnings | | | 186,791 | | | 175,519 | | | 171,214 | | | 171,733 |
Treasury stock, at cost | | | (7,873) | | | (8,062) | | | (10,704) | | | (11,130) |
Accumulated other comprehensive loss | |
| (38,763) | |
| (23,961) | |
| (22,795) | |
| (26,026) |
TOTAL STOCKHOLDERS' EQUITY | | | 343,320 | | | 346,139 | | | 341,714 | | | 293,959 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 3,150,204 | | $ | 3,151,984 | | $ | 3,132,469 | | $ | 2,664,033 |
7
TABLE 3 - CONDENSED, CONSOLIDATED KEY FINANCIAL RATIOS AND DATA HIGHLIGHTS
(Dollars In Thousands, Except Share and Per Share Data)
| | Three Months Ended | | Nine Months Ended | ||||||||||||||||
| | September 30, | | | June 30, | | | September 30, | | | September 30, | | | September 30, | | |||||
| | 2026 | | | 2026 | | | 2025 | | | 2026 | | | 2025 | | |||||
PERFORMANCE MEASURES: |
| | |
| | | |
| | | |
| | | |
| | | |
|
Net Income per Common Share - Basic and Diluted | | $ | 0.92 | | | $ | 0.79 | | | $ | 0.42 | | | $ | 1.72 | | | $ | 1.22 | |
Net Income - Basic and Diluted-Adjusted for Merger Related Expenses (a) | | $ | 0.92 | | | $ | 0.79 | | | $ | 0.47 | | | $ | 1.72 | | | $ | 1.28 | |
Weighted average basic and diluted shares | |
| 17,793,424 | | |
| 17,771,901 | | |
| 15,398,262 | | |
| 17,766,178 | | |
| 15,371,733 | |
Dividends Per Share | | $ | 0.28 | | | $ | 0.28 | | | $ | 0.28 | | | $ | 0.84 | | | $ | 0.84 | |
Pre-tax, pre-provision net revenue ("PPNR") (a) | | $ | 17,464 | | | $ | 15,815 | | | $ | 11,278 | | | $ | 47,421 | | | $ | 29,702 | |
Return on Average Assets (Annualized) | | | 2.08 | % | | | 1.78 | % | | | 1.00 | % | | | 1.30 | % | | | 0.97 | % |
Return on Average Equity (Annualized) | | | 18.77 | % | | | 16.57 | % | | | 9.10 | % | | | 11.86 | % | | | 8.94 | % |
Return on Average Assets (Annualized)- Adjusted for merger-related expenses (a) | |
| 2.08 | % | |
| 1.78 | % | |
| 1.10 | % | |
| 1.30 | % | |
| 1.02 | % |
Return on Average Equity (Annualized)- Adjusted for merger-related expenses (a) | |
| 18.77 | % | |
| 16.57 | % | |
| 10.07 | % | |
| 11.86 | % | |
| 9.34 | % |
PPNR (Annualized) as a % of Average Assets (a) | | | 2.23 | % | | | 2.00 | % | | | 1.72 | % | | | 2.01 | % | | | 1.52 | % |
PPNR (Annualized) as a % of Average Equity (a) | | | 20.13 | % | | | 18.65 | % | | | 15.67 | % | | | 18.37 | % | | | 14.00 | % |
Return on Average Tangible Common Equity (a) | | | 23.59 | % | | | 20.99 | % | | | 11.20 | % | | | 14.97 | % | | | 11.04 | % |
Return on Average Tangible Common Equity- Adjusted for merger-related expenses (a) | | | 23.59 | % | | | 20.99 | % | | | 12.39 | % | | | 14.97 | % | | | 11.54 | % |
Efficiency ratio (a) | | | 56.11 | % | | | 60.12 | % | | | 62.14 | % | | | 59.22 | % | | | 65.66 | % |
| | AS OF: | | ||||||||||||
| | September 30, | | | June 30, | | | December 31, | | September 30, | |||||
| | 2026 | | | 2026 | | | 2025 | | 2025 | |||||
BALANCE SHEET HIGHLIGHTS | | | | | | | | | | | | | | | |
Total Assets | | $ | 3,150,204 | | | $ | 3,151,984 | | | $ | 3,132,469 | | | $ | 2,664,033 |
Available-for-Sale Securities | | $ | 490,474 | | | $ | 496,829 | | | $ | 506,575 | | | $ | 415,313 |
Loans, Net | | $ | 2,302,443 | | | $ | 2,316,264 | | | $ | 2,323,317 | | | $ | 1,921,633 |
Allowance for Credit Losses: | |
| | | |
| | | |
| | | |
| |
Allowance for Credit Losses on Loans | | $ | 28,952 | | | $ | 32,583 | | | $ | 31,048 | | | $ | 23,474 |
Allowance for Credit Losses on Off-Balance Sheet Exposures | | $ | 902 | | | $ | 845 | | | $ | 1,029 | | | $ | 1,036 |
Deposits | | $ | 2,608,512 | | | $ | 2,603,735 | | | $ | 2,564,716 | | | $ | 2,165,735 |
Total Stockholders' Equity | | $ | 343,320 | | | $ | 346,139 | | | $ | 341,714 | | | $ | 293,959 |
Common shares outstanding, end of period | | | 17,950,560 | | | | 17,942,105 | | | | 17,823,444 | | | | 15,531,700 |
Common book value | | $ | 19.13 | | | $ | 19.29 | | | $ | 19.17 | | | $ | 18.93 |
Tangible Common Book Value (a) | | $ | 15.20 | | | $ | 15.33 | | | $ | 15.11 | | | $ | 15.46 |
| | | | | | | | | | | | | | | |
OFF-BALANCE SHEET | |
| | | |
| | | |
| | | |
| |
Outstanding Balance of Mortgage Loans Sold with Servicing Retained | | $ | 460,639 | | | $ | 454,642 | | | $ | 450,120 | | | $ | 335,330 |
| | | | | | | | | | | | | | | |
WEALTH MANAGEMENT INFORMATION | |
| | | |
| | | |
| | | |
| |
Trust Assets Under Administration | | $ | 1,547,227 | | | $ | 1,554,305 | | | $ | 1,468,691 | | | $ | 1,436,257 |
Brokerage Assets Under Advisement | | $ | 787,901 | | | $ | 775,057 | | | $ | 619,200 | | | $ | 613,766 |
Total Assets Under Administration and Advisement | | $ | 2,335,128 | | | $ | 2,329,362 | | | $ | 2,087,891 | | | $ | 2,050,023 |
(a) See “NON-GAAP Reconciliations.”
8
TABLE 3 - CONDENSED, CONSOLIDATED KEY FINANCIAL RATIOS AND DATA HIGHLIGHTS (Continued)
| | | AS OF: | ||||||||||||
| | | September 30, | | | June 30, | | | December 31, | | September 30, | ||||
| | | 2026 | | | 2026 | | | 2025 | | 2025 | ||||
SAFETY AND SOUNDNESS | | | | | | | | | | | | | | | |
Total Risk Based Capital Ratio (b) |
| | 15.01 | % | | | 14.52 | % | | | 14.45 | % | | 16.01 | % |
Tier 1 Risk Based Capital Ratio (b) |
| | 13.02 | % | | | 12.44 | % | | | 12.18 | % | | 13.50 | % |
Common Equity Tier 1 Risk Based Capital Ratio (b) |
| | 13.02 | % | | | 12.44 | % | | | 12.18 | % | | 13.50 | % |
Leverage Ratio (b) |
| | 10.07 | % | | | 9.62 | % | | | 9.32 | % | | 10.21 | % |
Tangible Common Equity / Tangible Assets (a) | | | 8.86 | % | | | 8.93 | % | | | 8.80 | % | | 9.20 | % |
| | | | | | | | | | | | | | | |
ASSET QUALITY RATIOS: | | | | | | | | | | | | | | | |
Non-performing loans as a % of total loans | | | 1.55 | % | | | 1.71 | % | | | 1.40 | % | | 1.38 | % |
Non-performing assets as a % of assets | | | 1.16 | % | | | 1.28 | % | | | 1.06 | % | | 1.02 | % |
Allowance for credit losses as a % of total loans | |
| 1.24 | % | |
| 1.39 | % | |
| 1.32 | % |
| 1.21 | % |
Net (charge-offs) recoveries as a % of average gross loans (annualized): | | | | | | | | | | | | | |||
Three Months Ended | | | (0.07) | % | | | 0.07 | % | | | (0.15) | % | | (0.02) | % |
Year-to-Date | | | (0.61) | % | | | (0.88) | % | | | (0.08) | % | | (0.05) | % |
(a) See NON-GAAP to GAAP Reconciliations.
(b) Consolidated capital ratios for the most recent period are estimated.
9
TABLE 4 - ANALYSIS OF AVERAGE DAILY BALANCES AND RATES
(Dollars In Thousands)
| | 3 Months | | | | | (3) | | | 3 Months | | | | | (3) | | | 3 Months | | | | | (3) |
| |||
| | Ended | | | | | Rate of | | | Ended | | | | | Rate of | | | Ended | | | | | Rate of |
| |||
| | 9/30/2026 | | | | | Return/ | | | 6/30/2026 | | | | | Return/ | | | 9/30/2025 | | | | | Return/ |
| |||
| | Average | | | Income/ | | Cost of | | | Average | | | Income/ | | Cost of | | | Average | | | Income/ | | Cost of |
| |||
| | Balance | | | Expense | | Funds% | | | Balance | | | Expense | | Funds% | | | Balance | | | Expense | | Funds% |
| |||
EARNING ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest-bearing due from banks | | $ | 50,322 | | $ | 468 | | 3.69 | % | | $ | 26,606 | | $ | 232 | | 3.50 | % | | $ | 88,657 | | $ | 982 | | 4.39 | % |
Available-for-sale debt securities, at amortized cost: | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | |
Taxable | |
| 429,859 | | | 3,651 | | 3.37 | % | |
| 424,311 | | | 3,507 | | 3.32 | % | |
| 337,101 | | | 2,390 | | 2.81 | % |
Tax-exempt (1) | |
| 101,954 | | | 640 | | 2.49 | % | |
| 103,807 | | | 649 | | 2.51 | % | |
| 107,978 | | | 649 | | 2.38 | % |
Total available-for-sale debt securities | |
| 531,813 | | | 4,291 | | 3.20 | % | |
| 528,118 | | | 4,156 | | 3.16 | % | |
| 445,079 | | | 3,039 | | 2.71 | % |
Loans receivable: | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | |
Taxable | |
| 2,252,124 | | | 36,921 | | 6.50 | % | |
| 2,293,653 | | | 36,583 | | 6.40 | % | |
| 1,841,875 | | | 29,085 | | 6.26 | % |
Tax-exempt (1) | |
| 86,572 | | | 784 | | 3.59 | % | |
| 88,537 | | | 779 | | 3.53 | % | |
| 84,356 | | | 727 | | 3.42 | % |
Total loans receivable (2) | |
| 2,338,696 | | | 37,705 | | 6.40 | % | |
| 2,382,190 | | | 37,362 | | 6.29 | % | |
| 1,926,231 | | | 29,812 | | 6.14 | % |
Other earning assets | |
| 5,491 | | | 47 | | 3.40 | % | |
| 4,130 | | | 53 | | 5.15 | % | |
| 2,809 | | | 35 | | 4.94 | % |
Total Earning Assets | |
| 2,926,322 | | | 42,511 | | 5.76 | % | |
| 2,941,044 | | | 41,803 | | 5.70 | % | |
| 2,462,776 | | | 33,868 | | 5.46 | % |
Bank-owned life insurance | | | 62,323 | | | | | | | | | 61,796 | | | | | | | | | 52,321 | | | | | | |
Intangible assets | |
| 72,895 | | | | | | | |
| 73,711 | | | | | | | |
| 54,320 | | | | | | |
Other assets | |
| 74,344 | | | | | | | |
| 78,605 | | | | | | | |
| 55,730 | | | | | | |
Total Assets | | $ | 3,135,884 | | | | | | | | $ | 3,155,156 | | | | | | | | $ | 2,625,147 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
INTEREST-BEARING LIABILITIES | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | |
Interest-bearing deposits: | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | |
Interest checking | | $ | 713,363 | | | 2,773 | | 1.54 | % | | $ | 697,007 | | $ | 2,513 | | 1.45 | % | | $ | 545,004 | | $ | 2,770 | | 2.02 | % |
Money market | |
| 415,241 | | | 2,029 | | 1.94 | % | |
| 399,142 | | | 1,914 | | 1.92 | % | |
| 376,761 | | | 2,034 | | 2.14 | % |
Savings | |
| 332,311 | | | 678 | | 0.81 | % | |
| 347,745 | | | 739 | | 0.85 | % | |
| 194,592 | | | 50 | | 0.10 | % |
Time deposits | |
| 574,623 | | | 4,685 | | 3.23 | % | |
| 579,748 | | | 4,654 | | 3.22 | % | |
| 499,049 | | | 4,602 | | 3.66 | % |
Total interest-bearing deposits | |
| 2,035,538 | | | 10,165 | | 1.98 | % | |
| 2,023,642 | | | 9,820 | | 1.95 | % | |
| 1,615,406 | | | 9,456 | | 2.32 | % |
Borrowed funds: | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | |
Short-term | |
| 13,486 | | | 123 | | 3.62 | % | |
| 34,880 | | | 337 | | 3.88 | % | |
| 658 | | | 0 | | 0.00 | % |
Long-term - FHLB advances | |
| 128,187 | | | 1,381 | | 4.27 | % | |
| 133,004 | | | 1,423 | | 4.29 | % | |
| 138,749 | | | 1,577 | | 4.51 | % |
Senior notes, net | |
| 0 | | | 0 | | 0.00 | % | |
| 10,050 | | | 81 | | 3.23 | % | |
| 14,944 | | | 121 | | 3.21 | % |
Subordinated debt, net | |
| 25,000 | | | 402 | | 6.38 | % | |
| 24,993 | | | 287 | | 4.61 | % | |
| 24,905 | | | 233 | | 3.71 | % |
Total borrowed funds | |
| 166,673 | | | 1,906 | | 4.54 | % | |
| 202,927 | | | 2,128 | | 4.21 | % | |
| 179,256 | | | 1,931 | | 4.27 | % |
Total Interest-bearing Liabilities | |
| 2,202,211 | | | 12,071 | | 2.17 | % | |
| 2,226,569 | | | 11,948 | | 2.15 | % | |
| 1,794,662 | | | 11,387 | | 2.52 | % |
Demand deposits (non-interest bearing) | |
| 550,221 | | |
| | | | |
| 553,828 | | |
| | | | |
| 510,802 | | |
| | | |
Other liabilities | |
| 36,475 | | |
| | | | |
| 35,510 | | |
| | | | |
| 31,823 | | |
| | | |
Total Liabilities | |
| 2,788,907 | | |
| | | | |
| 2,815,907 | | |
| | | | |
| 2,337,287 | | |
| | | |
Stockholders' equity, excluding accumulated other comprehensive loss | |
| 374,067 | | |
| | | | |
| 363,636 | | |
| | | | |
| 318,175 | | |
| | | |
Accumulated other comprehensive loss | |
| (27,090) | | |
| | | | |
| (24,387) | | |
| | | | |
| (30,315) | | |
| | | |
Total Stockholders' Equity | |
| 346,977 | | |
| | | | |
| 339,249 | | |
| | | | |
| 287,860 | | |
| | | |
Total Liabilities and Stockholders' Equity | | $ | 3,135,884 | | |
| | | | | $ | 3,155,156 | | |
| | | | | $ | 2,625,147 | | |
| | | |
Interest Rate Spread | | | | | |
| | 3.59 | % | | | | | |
| | 3.55 | % | |
| | | |
| | 2.94 | % |
Net Interest Income | | | | | $ | 30,440 | | | | | | | | $ | 29,855 | | | | | | | | $ | 22,481 | | | |
Net Interest Income/Earning Assets (Net Interest Margin) | | | | | | | | 4.13 | % | | | | | | | | 4.07 | % | |
| | | | | | 3.62 | % |
Total Deposits (Interest-bearing and Demand) | | $ | 2,585,759 | | | | | | | | $ | 2,577,470 | | | | | | | | $ | 2,126,208 | | | | | | |
Brokered Deposits | | $ | 0 | | | 0 | | 0.00 | % | | $ | 132 | | | 1 | | 3.04 | % | | $ | 4,936 | | | 52 | | 4.18 | % |
(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%. See Non-GAAP reconciliation below. |
(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. |
10
TABLE 5 - ANALYSIS OF AVERAGE DAILY BALANCES AND RATES
(Dollars In Thousands)
| | 9 Months | | | | | (3) | | | 9 Months | | | | | (3) |
| ||
| | Ended | | | | | Rate of | | | Ended | | | | | Rate of |
| ||
| | 9/30/2026 | | | | | Return/ | | | 9/30/2025 | | | | | Return/ |
| ||
| | Average | | | Income/ | | Cost of | | | Average | | | Income/ | | Cost of |
| ||
| | Balance | | | Expense | | Funds% | | | Balance | | | Expense | | Funds% |
| ||
EARNING ASSETS | | | | | | | | | | | | | | | | | |
|
Interest-bearing due from banks | | $ | 34,239 | | $ | 918 | | 3.58 | % | | $ | 78,883 | | $ | 2,558 | | 4.34 | % |
Available-for-sale debt securities, at amortized cost: | |
| | | | | | | | |
| | | | | | | |
Taxable | |
| 427,242 | | | 10,676 | | 3.34 | % | |
| 338,390 | | | 7,021 | | 2.77 | % |
Tax-exempt (1) | |
| 103,481 | | | 1,936 | | 3.50 | % | |
| 109,642 | | | 1,955 | | 2.38 | % |
Total available-for-sale debt securities | |
| 530,723 | | | 12,612 | | 3.18 | % | |
| 448,032 | | | 8,976 | | 2.68 | % |
Loans receivable: | |
| | | | | | | | |
| | | | | | | |
Taxable | |
| 2,272,227 | | | 109,145 | | 6.42 | % | |
| 1,821,817 | | | 84,639 | | 6.21 | % |
Tax-exempt (1) | |
| 89,627 | | | 2,328 | | 3.47 | % | |
| 87,309 | | | 2,198 | | 3.37 | % |
Total loans receivable (2) | |
| 2,361,854 | | | 111,473 | | 6.31 | % | |
| 1,909,126 | | | 86,837 | | 6.08 | % |
Other earning assets | |
| 4,181 | | | 130 | | 4.16 | % | |
| 2,477 | | | 91 | | 4.91 | % |
Total Earning Assets | |
| 2,930,997 | | | 125,133 | | 5.71 | % | |
| 2,438,518 | | | 98,462 | | 5.40 | % |
Bank-owned life insurance | | | 61,802 | | | | | | | | | 51,853 | | | | | | |
Intangible assets | |
| 73,706 | | | | | | | |
| 54,424 | | | | | | |
Other assets | |
| 79,365 | | | | | | | |
| 52,873 | | | | | | |
Total Assets | | $ | 3,145,870 | | | | | | | | $ | 2,597,668 | | | | | | |
| | | | | | | | | | | | | | | | | | |
INTEREST-BEARING LIABILITIES | |
| | | | | | | | |
| | | | | | | |
Interest-bearing deposits: | |
| | | | | | | | |
| | | | | | | |
Interest checking | | $ | 693,606 | | $ | 7,614 | | 1.47 | % | | $ | 542,281 | | $ | 8,205 | | 2.02 | % |
Money market | |
| 400,098 | | | 5,793 | | 1.94 | % | |
| 365,460 | | | 5,963 | | 2.18 | % |
Savings | |
| 347,263 | | | 2,265 | | 0.87 | % | |
| 196,367 | | | 148 | | 0.10 | % |
Time deposits | |
| 585,503 | | | 14,371 | | 3.28 | % | |
| 493,190 | | | 14,016 | | 3.80 | % |
Total interest-bearing deposits | |
| 2,026,470 | | | 30,043 | | 1.98 | % | |
| 1,597,298 | | | 28,332 | | 2.37 | % |
Borrowed funds: | |
| | | | | | | | |
| | | | | | | |
Short-term | |
| 25,469 | | | 736 | | 3.87 | % | |
| 1,010 | | | 1 | | 0.13 | % |
Long-term - FHLB advances | |
| 131,720 | | | 4,250 | | 4.31 | % | |
| 150,195 | | | 5,040 | | 4.49 | % |
Senior notes, net | |
| 8,288 | | | 202 | | 3.26 | % | |
| 14,926 | | | 362 | | 3.24 | % |
Subordinated debt, net | |
| 24,986 | | | 922 | | 4.93 | % | |
| 24,875 | | | 698 | | 3.75 | % |
Total borrowed funds | |
| 190,463 | | | 6,110 | | 4.29 | % | |
| 191,006 | | | 6,101 | | 4.27 | % |
Total Interest-bearing Liabilities | |
| 2,216,933 | | | 36,153 | | 2.18 | % | |
| 1,788,304 | | | 34,433 | | 2.57 | % |
Demand deposits (non-interest bearing) | |
| 548,108 | | |
| | | | |
| 495,317 | | |
| | | |
Other liabilities | |
| 36,705 | | |
| | | | |
| 31,119 | | |
| | | |
Total Liabilities | |
| 2,801,746 | | |
| | | | |
| 2,314,740 | | |
| | | |
Stockholders' equity, excluding accumulated other comprehensive loss | |
| 368,210 | | |
| | | | |
| 315,395 | | |
| | | |
Accumulated other comprehensive loss | |
| (24,086) | | |
| | | | |
| (32,467) | | |
| | | |
Total Stockholders' Equity | |
| 344,124 | | |
| | | | |
| 282,928 | | |
| | | |
Total Liabilities and Stockholders' Equity | | $ | 3,145,870 | | |
| | | | | $ | 2,597,668 | | |
| | | |
Interest Rate Spread | | | | | |
| | 3.53 | % | |
| | | |
| | 2.83 | % |
Net Interest Income | | | | | $ | 88,980 | | | | | | | | $ | 64,029 | | | |
Net Interest Income/Earning Assets (Net Interest Margin) | | | | | | | | 4.06 | % | |
| | | | | | 3.51 | % |
Total Deposits (Interest-bearing and Demand) | | $ | 2,574,578 | | | | | | | | $ | 2,092,615 | | | | | | |
Brokered Deposits | | $ | 785 | | | 22 | | 3.75 | % | | $ | 13,287 | | | 460 | | 4.63 | % |
| (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%. See Non-GAAP reconciliation below. |
(3) | Rates of return on earning assets and costs of funds have been presented on an annualized basis. |
11
TABLE 6 - SUMMARY OF LOANS BY TYPE
(Excludes Loans Held for Sale)
(Dollars In Thousands)
| | | | | | | | | | | | | | | | | |
| | September 30, | | June 30, | | December 31, | | September 30, | | September 30, 2026 vs | | ||||||
| | 2026 | | 2026 | | 2025 | | 2025 | | June 30, 2026 | | ||||||
Commercial real estate - non-owner occupied: | |
| | |
| | |
| | |
| | |
| | | |
Non-owner occupied | | $ | 542,651 | | $ | 550,607 | | $ | 569,974 | | $ | 497,295 | | $ | (7,956) | (1.4) | % |
Multi-family (5 or more) residential | | | 170,637 | | | 170,179 | | | 160,284 | | | 108,376 | | | 458 | 0.3 | % |
1-4 Family - commercial purpose | | | 194,303 | | | 203,093 | | | 197,480 | | | 159,695 | | | (8,790) | (4.3) | % |
Total commercial real estate - non-owner occupied | | | 907,591 | | | 923,879 | | | 927,738 | | | 765,366 | | | (16,288) | (1.8) | % |
Commercial real estate - owner occupied | | | 330,255 | | | 325,002 | | | 311,792 | | | 260,365 | | | 5,253 | 1.6 | % |
All other commercial loans: | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 123,289 | | | 127,268 | | | 128,679 | | | 112,667 | | | (3,979) | (3.1) | % |
Commercial lines of credit | | | 156,768 | | | 149,546 | | | 139,727 | | | 133,726 | | | 7,222 | 4.8 | % |
Political subdivisions | | | 88,244 | | | 86,701 | | | 96,349 | | | 82,728 | | | 1,543 | 1.8 | % |
Commercial construction and land | | | 97,545 | | | 111,462 | | | 123,887 | | | 100,015 | | | (13,917) | (12.5) | % |
Other commercial loans | | | 67,553 | | | 69,098 | | | 71,895 | | | 20,039 | | | (1,545) | (2.2) | % |
Total all other commercial loans | | | 533,399 | | | 544,075 | | | 560,537 | | | 449,175 | | | (10,676) | (2.0) | % |
Residential mortgage loans: | | | | | | | | | | | | | | | | | |
1-4 Family - residential | | | 404,186 | | | 405,339 | | | 411,827 | | | 369,452 | | | (1,153) | (0.3) | % |
1-4 Family residential construction | | | 38,702 | | | 37,737 | | | 32,123 | | | 27,358 | | | 965 | 2.6 | % |
Total residential mortgage | | | 442,888 | | | 443,076 | | | 443,950 | | | 396,810 | | | (188) | (0.0) | % |
Consumer loans: | | | | | | | | | | | | | | | | | |
Consumer lines of credit (including HELCs) | | | 102,584 | | | 98,962 | | | 94,060 | | | 58,888 | | | 3,622 | 3.7 | % |
All other consumer | | | 14,678 | | | 13,853 | | | 16,288 | | | 14,503 | | | 825 | 6.0 | % |
Total consumer | | | 117,262 | | | 112,815 | | | 110,348 | | | 73,391 | | | 4,447 | 3.9 | % |
Total | | | 2,331,395 | | | 2,348,847 | | | 2,354,365 | | | 1,945,107 | | | (17,452) | (0.7) | % |
Less: allowance for credit losses on loans | | | (28,952) | | | (32,583) | | | (31,048) | | | (23,474) | | | 3,631 | (11.1) | % |
Loans, net | | $ | 2,302,443 | | $ | 2,316,264 | | $ | 2,323,317 | | $ | 1,921,633 | | $ | (13,821) | (0.6) | % |
TABLE 7 - NON-OWNER OCCUPIED COMMERCIAL REAL ESTATE
(Dollars In Thousands)
Loan Type | | September 30, | | % of | | June 30, | | December 31, | | September 30, | |||||
| | 2026 | | Total Loans | | 2026 | | 2025 | | 2025 | |||||
Office | | $ | 107,245 | | 4.6 | % | | $ | 107,923 | | $ | 125,175 | | $ | 117,046 |
Retail | | | 104,817 | | 4.5 | % | | | 112,665 | | | 104,513 | | | 88,328 |
Industrial | | | 93,665 | | 4.0 | % | | | 96,526 | | | 99,476 | | | 89,953 |
Hotels | | | 75,576 | | 3.2 | % | | | 76,171 | | | 82,692 | | | 72,776 |
Mixed Use | | | 65,438 | | 2.8 | % | | | 58,871 | | | 64,390 | | | 62,872 |
Self Storage Facilities | | | 52,555 | | 2.3 | % | | | 59,772 | | | 55,434 | | | 34,620 |
Other | | | 43,355 | | 1.9 | % | | | 38,679 | | | 38,294 | | | 31,700 |
Total Non-owner Occupied CRE Loans | | $ | 542,651 | | 23.3 | % | | $ | 550,607 | | $ | 569,974 | | $ | 497,295 |
Total Gross Loans | | $ | 2,331,395 | | | | | $ | 2,348,847 | | $ | 2,354,365 | | $ | 1,945,107 |
12
TABLE 8 - PAST DUE LOANS AND NONPERFORMING ASSETS
(Dollars In Thousands)
| | September 30, | | June 30, | | December 31, | | September 30, | | ||||
| | 2026 | | 2026 | | 2025 | | 2025 | | ||||
Collateral dependent loans with a valuation allowance | | $ | 5,283 | | $ | 5,608 | | $ | 5,401 | | $ | 263 | |
Collateral dependent loans without a valuation allowance | | | 29,042 | | | 33,255 | | | 27,027 | | | 21,174 | |
Total collateral dependent loans | | $ | 34,325 | | $ | 38,863 | | $ | 32,428 | | $ | 21,437 | |
| | | | | | | | | | | | | |
Total loans past due 30-89 days and still accruing | | $ | 9,861 | | $ | 7,047 | | $ | 18,309 | | $ | 2,509 | |
| | | | | | | | | | | | | |
Nonperforming assets: | |
| | |
| | |
| | |
| | |
Total nonaccrual loans | | $ | 35,275 | | $ | 39,748 | | $ | 32,836 | | $ | 25,762 | |
Total loans past due 90 days or more and still accruing | |
| 912 | |
| 346 | |
| 88 | |
| 1,025 | |
Total nonperforming loans | |
| 36,187 | |
| 40,094 | |
| 32,924 | |
| 26,787 | |
Foreclosed assets held for sale (real estate) | |
| 336 | |
| 181 | |
| 189 | |
| 402 | |
Total nonperforming assets | | $ | 36,523 | | $ | 40,275 | | $ | 33,113 | | $ | 27,189 | |
| | | | | | | | | | | | | |
Total nonperforming loans as a % of total loans | |
| 1.55 | % | | 1.71 | % | | 1.40 | % |
| 1.38 | % |
Total nonperforming assets as a % of assets | |
| 1.16 | % | | 1.28 | % | | 1.06 | % |
| 1.02 | % |
Allowance for credit losses as a % of total loans | |
| 1.24 | % | | 1.39 | % | | 1.32 | % |
| 1.21 | % |
Included in the table above were loans acquired from Susquehanna with credit deterioration (“PCD loans”) totaled as follows:
(Dollars In Thousands) | | September 30, | | June 30, | | December 31, | | September 30, | ||||
| | 2026 | | 2026 | | 2025 | | 2025 | ||||
| | PCD Loans | | PCD Loans | | PCD Loans | | PCD Loans | ||||
Collateral dependent loans with a valuation allowance | | $ | 4,651 | | $ | 4,975 | | $ | 5,138 | | $ | 0 |
Collateral dependent loans without a valuation allowance | |
| 7,270 | |
| 7,428 | |
| 5,553 | |
| 0 |
Total collateral dependent loans | | $ | 11,921 | | $ | 12,403 | | $ | 10,691 | | $ | 0 |
Total loans past due 30-89 days and still accruing | | $ | 2,928 | | $ | 2,150 | | $ | 5,810 | | $ | 0 |
Nonperforming assets: | |
| | |
| | |
| | |
| |
Total nonaccrual loans | | $ | 7,879 | | $ | 8,371 | | $ | 6,762 | | $ | 0 |
Total loans past due 90 days or more and still accruing | | $ | 458 | | $ | 0 | | $ | 0 | | $ | 0 |
| | | | | | | | | | | | |
TABLE 9 - ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS
(Dollars In Thousands)
| | 3 Months | | 3 Months | | 3 Months | | 9 Months |
| 9 Months |
| |||||
| | Ended | | Ended | | Ended | | Ended |
| Ended |
| |||||
| | September 30, | | June 30, | | September 30, | | September 30, |
| September 30, |
| |||||
| | 2026 | | 2026 | | 2025 | | 2026 |
| 2025 |
| |||||
Balance, beginning of period | | $ | 32,583 | | $ | 33,832 | | $ | 21,699 | | $ | 31,048 | | $ | 20,035 | |
Charge-offs | |
| (451) | |
| (300) | |
| (122) | |
| (11,584) | |
| (821) | |
Recoveries | |
| 48 | |
| 703 | |
| 28 | |
| 776 | |
| 88 | |
Net (charge-offs) recoveries | |
| (403) | |
| 403 | |
| (94) | |
| (10,808) | |
| (733) | |
(Credit) Provision for credit losses on loans | |
| (3,228) | |
| (1,652) | |
| 1,869 | |
| 8,712 | |
| 4,172 | |
Balance, end of period | | $ | 28,952 | | $ | 32,583 | | $ | 23,474 | | $ | 28,952 | | $ | 23,474 | |
| | | | | | | | | | | | | | | | |
Net (charge-offs) recoveries as a % of average gross loans (annualized) | | | (0.07) | % | | 0.07 | % | | (0.02) | % | | (0.61) | % | | (0.05) | % |
| | 3 Months | | 3 Months | | 3 Months | | 9 Months | | 9 Months | |||||
| | Ended | | Ended | | Ended | | Ended | | Ended | |||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | |||||
| | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | |||||
(Credit) provision for credit losses: | | | | | | | | | | | | | | | |
Loans receivable | | $ | (3,228) | | $ | (1,652) | | $ | 1,869 | | $ | 8,712 | | $ | 4,172 |
Off-balance sheet exposures | |
| 57 | |
| (194) | |
| 294 | |
| (127) | |
| 581 |
Total (credit) provision for credit losses | | $ | (3,171) | | $ | (1,846) | | $ | 2,163 | | $ | 8,585 | | $ | 4,753 |
13
TABLE 10 - DEPOSIT COMPOSITION
(Dollars In Thousands)
| | | | | | | | | | | | | | | September 30, 2026 vs | | |
| | September 30, | | June 30, | | December 31, | | September 30, | |
| June 30, 2026 | | |||||
| | 2026 | | 2026 | | 2025 | | 2025 | | $ | % | | |||||
Deposits, excluding brokered: | |
| | |
| | |
| | |
| | | | | | |
Noninterest-bearing demand deposits | | $ | 537,857 | | $ | 557,892 | | $ | 531,442 | | $ | 508,475 | | $ | (20,035) | (3.6) | % |
Interest checking | | | 736,677 | | | 721,072 | | | 665,317 | | | 566,696 | | | 15,605 | 2.2 | % |
Money market | | | 422,230 | | | 409,327 | | | 389,362 | | | 392,394 | | | 12,903 | 3.2 | % |
Savings | | | 320,450 | | | 342,229 | | | 371,039 | | | 191,667 | | | (21,779) | (6.4) | % |
Time deposits | | | 591,298 | | | 573,215 | | | 603,706 | | | 501,499 | | | 18,083 | 3.2 | % |
Sub-total | | $ | 2,608,512 | | $ | 2,603,735 | | $ | 2,560,866 | | $ | 2,160,731 | | $ | 4,777 | 0.2 | % |
Brokered deposits | | | 0 | | | 0 | | | 3,850 | | | 5,004 | | | 0 | 0.0 | % |
Total Deposits and Brokered Deposits | | $ | 2,608,512 | | $ | 2,603,735 | | $ | 2,564,716 | | $ | 2,165,735 | | $ | 4,777 | 0.2 | % |
TABLE 11 - CONTINGENT LIQUIDITY
(Dollars In Thousands)
| | | | | | | | | | | | |
| | September 30, | | June 30, | | December 31, | | September 30, | ||||
| | 2026 | | 2026 | | 2025 | | 2025 | ||||
Highly Liquid Available Funding: | |
| | |
| | |
| | |
| |
Available Credit Facilities: | | | | | | | | | | | | |
Federal Home Loan Bank of Pittsburgh | | $ | 985,860 | | $ | 971,125 | | $ | 785,822 | | $ | 802,213 |
Federal Reserve Bank Discount Window | | | 23,549 | | | 24,882 | | | 25,484 | | | 25,228 |
Other correspondent banks | | | 75,000 | | | 75,000 | | | 75,000 | | | 75,000 |
Unencumbered available-for-sale debt securities | | | 299,890 | | | 316,129 | | | 319,624 | | | 244,348 |
Total Highly Liquid Available Funding | | $ | 1,384,299 | | $ | 1,387,136 | | $ | 1,205,930 | | $ | 1,146,789 |
Uninsured Deposits Information | | September 30, | | June 30, | | December 31, | | September 30, | ||||||||
| | 2026 | | 2026 | | 2025 | | 2025 | ||||||||
Total Deposits - C&N Bank | | $ | 2,617,398 | | | $ | 2,610,552 | | | $ | 2,584,952 | | | $ | 2,184,401 | |
| | | | | | | | | | | | | | | | |
Estimated Total Uninsured Deposits | | $ | 812,808 | | | $ | 820,235 | | | $ | 811,209 | | | $ | 696,542 | |
Portion of Uninsured Deposits that are | | | | | | | | | | | | | | | | |
Collateralized | | | 180,727 | | | | 167,823 | | | | 172,585 | | | | 178,525 | |
Uninsured and Uncollateralized Deposits | | $ | 632,081 | | | $ | 652,412 | | | $ | 638,624 | | | $ | 518,017 | |
| | | | | | | | | | | | | | | | |
Uninsured and Uncollateralized Deposits as | | | | | | | | | | | | | | | | |
a % of Total Deposits | | | 24.1 | % | | | 25.0 | % | | | 24.7 | % | | | 23.7 | % |
| | | | | | | | | | | | | | | | |
Available Funding from Credit Facilities | | $ | 1,084,409 | | | $ | 1,071,007 | | | $ | 886,306 | | | $ | 902,441 | |
Fair Value of Available-for-sale Debt | | | | | | | | | | | | | | | | |
Securities in Excess of Pledging Obligations | | | 299,890 | | | | 316,129 | | | | 319,624 | | | | 244,348 | |
Highly Liquid Available Funding | | $ | 1,384,299 | | | $ | 1,387,136 | | | $ | 1,205,930 | | | $ | 1,146,789 | |
| | | | | | | | | | | | | | | | |
Highly Liquid Available Funding as a % of | | | | | | | | | | | | | | | | |
Uninsured Deposits | | | 170.3 | % | | | 169.1 | % | | | 148.7 | % | | | 164.6 | % |
| | | | | | | | | | | | | | | | |
Highly Liquid Available Funding as a % of | | | | | | | | | | | | | | | | |
Uninsured and Uncollateralized Deposits | | | 219.0 | % | | | 212.6 | % | | | 188.8 | % | | | 221.4 | % |
14
NON-GAAP RECONCILIATIONS
TABLE 12 – ADJUSTED RATIOS FOR MERGER-RELATED EXPENSES
(Dollars In Thousands)
| | Three Months Ended | Nine Months Ended | | ||||||||||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | | |||||
Calculation of Adjusted Net Income: | | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | |||||
Net Income (GAAP) (A) | | $ | 16,285 | | $ | 14,057 | | $ | 6,551 | | $ | 30,615 | | $ | 18,961 | |
Add: Merger-related expenses (B) | | | 0 | | | 0 | | | 882 | | | 0 | | | 1,049 | |
Less: Tax effect of merger-related expenses (C) | | | 0 | | | 0 | | | (185) | | | 0 | | | (199) | |
Adjusted Net Income (Non-GAAP) (D=A+B-C) | | $ | 16,285 | | $ | 14,057 | | $ | 7,248 | | $ | 30,615 | | $ | 19,811 | |
Adjusted Net Income Attributable to Common Shares (Non-GAAP) | | $ | 16,285 | | $ | 14,057 | | $ | 7,189 | | $ | 30,615 | | $ | 19,651 | |
| | | | | | | | | | | | | | | | |
Number of Shares Used in Computation-Basic and Diluted (Non-GAAP) | | | 17,793,424 | | | 17,771,901 | | | 15,398,262 | | | 17,766,178 | | | 15,371,733 | |
Net Income-Basic and Diluted per Common Share (GAAP) | | $ | 0.92 | | $ | 0.79 | | $ | 0.42 | | $ | 1.72 | | $ | 1.22 | |
Adjusted Net Income-Basic and Diluted Per Common Share (Non-GAAP) | | $ | 0.92 | | $ | 0.79 | | $ | 0.47 | | $ | 1.72 | | $ | 1.28 | |
| | | | | | | | | | | | | | | | |
Adjusted Ratios for Merger-Related Expenses: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Average Assets (E) | | | 3,135,884 | | | 3,155,156 | | | 2,625,147 | | | 3,145,870 | | | 2,597,668 | |
Return on Average Assets (GAAP) (=A/E) (1) | | | 2.08 | % | | 1.78 | % | | 1.00 | % | | 1.30 | % | | 0.97 | % |
Adjusted Return on Average Assets (Non-GAAP) (=D/E) (1) | | | 2.08 | % | | 1.78 | % | | 1.10 | % | | 1.30 | % | | 1.02 | % |
| | | | | | | | | | | | | | | | |
Average Equity (F) | | | 346,977 | | | 339,249 | | | 287,860 | | | 344,124 | | | 282,928 | |
Return on Average Equity (GAAP) (=A/F) (1) | | | 18.77 | % | | 16.57 | % | | 9.10 | % | | 11.86 | % | | 8.94 | % |
Adjusted Return on Average Equity (Non-GAAP) (=D/F) (1) | | | 18.77 | % | | 16.57 | % | | 10.07 | % | | 11.86 | % | | 9.34 | % |
(1)Annualized
TABLE 13 - PPNR NON-GAAP RECONCILIATION
(Dollars In Thousands)
| | Three Months Ended | Nine Months Ended | |||||||||||
| | September 30, | | June 30, | | September 30, | September 30, | | September 30, | |||||
Calculation of PPNR: | | 2026 | | 2026 | | 2025 | 2026 | | 2025 | |||||
Net Income (GAAP) | | $ | 16,285 | | $ | 14,057 | | $ | 6,551 | $ | 30,615 | | $ | 18,961 |
Add: Provision for income taxes | | | 4,117 | | | 3,368 | | | 1,464 | | 7,547 | | | 4,290 |
Add: (Credit) provision for credit losses | | | (3,171) | | | (1,846) | | | 2,163 | | 8,585 | | | 4,753 |
Less: Realized gains on available-for-sale debt securities | | | (2) | | | (1) | | | 0 | | (29) | | | 0 |
Add: Merger-related expenses | | | 0 | | | 0 | | | 882 | | 0 | | | 1,049 |
Add: Adjustments to reflect net interest income on a fully taxable-equivalent basis | | | 235 | | | 237 | | | 218 | | 703 | | | 649 |
PPNR (Non-GAAP) | | $ | 17,464 | | $ | 15,815 | | $ | 11,278 | $ | 47,421 | | $ | 29,702 |
Pre-tax, pre-provision net revenue (“PPNR”), a non-GAAP financial measure, includes net interest income on a fully taxable-equivalent basis plus noninterest income minus total noninterest expense but excludes (credit) provision 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 nonrecurring 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.
15
NON-GAAP RECONCILIATIONS, Continued
TABLE 14 - EFFICIENCY RATIO- NON-GAAP
(Dollars In Thousands) | | Three Months Ended | | Nine Months Ended | | |||||||||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | | |||||
| | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | |||||
EFFICIENCY RATIO - NON-GAAP | | | | | | | | | | | | | | | | |
Net Interest Income on a Fully Taxable-Equivalent Basis | | $ | 30,440 | | $ | 29,855 |
| $ | 22,481 | | $ | 88,980 |
| $ | 64,029 |
|
Noninterest Income, Excluding Net Realized Gains on Available-for-sale Debt Securities | | | 9,350 | | | 9,799 | | | 7,304 | | | 27,318 | | | 22,454 | |
Total (1) | | $ | 39,790 | | $ | 39,654 |
| $ | 29,785 | | $ | 116,298 |
| $ | 86,483 |
|
Noninterest Expense, Excluding Merger-Related Expenses (2) | | $ | 22,326 | | $ | 23,839 |
| $ | 18,507 | | $ | 68,877 |
| $ | 56,781 |
|
Efficiency Ratio = (2)/(1) | |
| 56.11 | % |
| 60.12 | % |
| 62.14 | % |
| 59.22 | % |
| 65.66 | % |
The efficiency ratio, a non-GAAP measure, 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. In the calculation above, Management excluded merger-related expenses due to the nonrecurring nature of these expenses.
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.
(Dollars In Thousands) | | Three Months Ended | | Nine Months Ended | |||||||||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | |||||
| | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | |||||
Net Interest Income Under U.S. GAAP | | $ | 30,205 | | $ | 29,618 | | $ | 22,263 | | | 88,277 | | $ | 63,380 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities | | | 84 | | | 87 | | | 81 | | | 256 | | | 235 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans | | | 151 | | | 150 | | | 137 | | | 447 | | | 414 |
Net Interest Income as adjusted to a fully taxable-equivalent basis | | $ | 30,440 | | $ | 29,855 | | $ | 22,481 | | $ | 88,980 | | $ | 64,029 |
TABLE 15 - TANGIBLE COMMON EQUITY AND TANGIBLE COMMON BOOK VALUE PER SHARE - NON-GAAP RECONCILIATION
Tangible common book value per share and tangible common equity as a percentage of tangible assets are non-GAAP financial measures. Management believes this non-GAAP information is helpful in evaluating the strength of C&N's capital and in providing an alternative valuation of C&N's net worth.
(Dollars In Thousands) | | September 30, | | June 30, | | December 31, | | September 30, | | ||||
| | 2026 | | 2026 | | 2025 | | 2025 | | ||||
Total Assets | | $ | 3,150,204 | | $ | 3,151,984 | | $ | 3,132,469 | | $ | 2,664,033 | |
Less: Intangible Asset, Goodwill | |
| (63,311) | |
| (63,311) | |
| (63,311) | |
| (52,505) | |
Less: Intangible Asset, Core Deposit Intangibles, net | | | (9,129) | | | (9,944) | | | (11,573) | | | (1,762) | |
Related Tax Effect on Core Deposit Intangibles, net | |
| 2,008 | |
| 2,188 | |
| 2,546 | |
| 388 | |
Tangible Assets (3) | | $ | 3,079,772 | | $ | 3,080,917 | | $ | 3,060,131 | | $ | 2,610,154 | |
Total Stockholders' Equity | | $ | 343,320 | | $ | 346,139 | | $ | 341,714 | | $ | 293,959 | |
Less: Goodwill | |
| (63,311) | |
| (63,311) | |
| (63,311) | |
| (52,505) | |
Less: Intangible Asset, Core Deposit Intangibles, net | | | (9,129) | | | (9,944) | | | (11,573) | | | (1,762) | |
Related Tax Effect on Core Deposit Intangibles, net | |
| 2,008 | |
| 2,188 | |
| 2,546 | |
| 388 | |
Tangible Common Equity (4) | | $ | 272,888 | | $ | 275,072 | | $ | 269,376 | | $ | 240,080 | |
| | | | | | | | | | | | | |
Common Shares Outstanding, End of Period (5) | |
| 17,950,560 | |
| 17,942,105 | |
| 17,823,444 | |
| 15,531,700 | |
Common Book Value per Share (GAAP) | | $ | 19.13 | | $ | 19.29 | | $ | 19.17 | | $ | 18.93 | |
Tangible Common Book Value per Share = (4)/(5) | | $ | 15.20 | | $ | 15.33 | | $ | 15.11 | | $ | 15.46 | |
Tangible Common Equity (4) / Tangible Assets (3) | | | 8.86 | % | | 8.93 | % | | 8.80 | % | | 9.20 | % |
16
NON-GAAP RECONCILIATIONS, Continued
TABLE 16 – RETURN ON AVERAGE TANGIBLE COMMON EQUITY - NON-GAAP RECONCILIATION
(Dollars In Thousands) | | Three Months Ended | | Nine Months Ended | | |||||||||||
| | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | | |||||
| | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | |||||
Average Tangible Common Equity: | | | | | | | | | | | | | | | | |
Average stockholders' equity (GAAP) | | $ | 346,977 | | $ | 339,249 | | $ | 287,860 | | $ | 344,124 |
| $ | 282,928 |
|
Less: Goodwill | | | (63,311) | | | (63,311) | | | (52,505) | | | (63,311) | | | (52,505) | |
Less: Intangible Asset, Core Deposit Intangibles, net | | | (9,584) | | | (10,400) | | | (1,815) | | | (10,395) | | | (1,919) |
|
Related Tax Effect on Core Deposit Intangibles, net | | | 2,108 | | | 2,288 | | | 399 | | | 2,287 | | | 422 | |
Average Tangible Common Equity (Non-GAAP) (1) | | $ | 276,190 | | $ | 267,826 | | $ | 233,939 | | $ | 272,705 |
| $ | 228,926 |
|
| | | | | | | | | | | | | | | | |
Net Income- (GAAP) | | $ | 16,285 | | $ | 14,057 | | $ | 6,551 | | $ | 30,615 | | $ | 18,961 | |
Annualized Net Income- (GAAP) (2) | | $ | 65,140 | | $ | 56,228 | | $ | 26,204 | | $ | 40,820 | | $ | 25,281 | |
Return on Average Tangible Common Equity = (2)/(1) | | | 23.59 | % | | 20.99 | % | | 11.20 | % | | 14.97 | % | | 11.04 | % |
| | | | | | | | | | | | | | | | |
Net Income- (GAAP) (3) | | $ | 16,285 | | $ | 14,057 | | $ | 6,551 | | $ | 30,615 | | $ | 18,961 | |
Add: Merger-related expenses (4) | | | 0 | | | 0 | | | 882 | | | 0 | | | 1,049 | |
Less: Tax effect of merger-related expenses (5) | | | 0 | | | 0 | | | (185) | | | 0 | | | (199) | |
Adjusted Net Income (Non-GAAP) (6)=(3)+(4)+(5) | | $ | 16,285 | | $ | 14,057 | | $ | 7,248 | | $ | 30,615 | | $ | 19,811 | |
Annualized Adjusted Net Income- (6) | | $ | 65,140 | | $ | 56,228 | | $ | 28,992 | | $ | 40,820 | | $ | 26,415 | |
Return on Average Tangible Common Equity, Adjusted for Merger-Related Expenses = (6)/(1) | | | 23.59 | % | | 20.99 | % | | 12.39 | % | | 14.97 | % | | 11.54 | % |
17