Citizens & Northern : First Quarter 2025 Unaudited Financial Information

About this update from Citizens & Northern Corp

Exhibit 99.1 Contact: Charity Frantz April 23, 2025 570-724-0225 [email protected] C&N DECLARES DIVIDEND AND ANNOUNCES FIRST QUARTER 2025 UNAUDITED FINANCIAL RESULTS FOR IMMEDIATE RELEASE: Wellsboro, PA - Citizens & Northern Corporation ("C&N") (NASDAQ: CZNC) announced its most recent dividend declaration and its unaudited, consolidated financial results for the three-month period ended March 31, 2025. C&N's principal activity is community banking, and its largest subsidiary is Citizens & Northern Bank (the "Bank"). Highlights: Net income was $6,293,000, or $0.41 diluted earnings per share for the first quarter 2025, down from $8,174,000, or $0.53 diluted earnings per share for the fourth quarter 2024, and up from $5,306,000, or $0.35 diluted earnings per share for the first quarter 2024. Net interest income was $498,000 lower than in the fourth quarter 2024 and $934,000 higher than in the first quarter 2024. The net interest margin was 3.38% in the first quarter 2025 as compared to 3.30% in the fourth quarter 2024 and 3.29% in the first quarter 2024. A provision for credit losses of $236,000 was recorded in the first quarter 2025 compared to a credit for credit losses (reduction in expense) of $531,000 in the fourth quarter 2024 and a provision for credit losses of $954,000 in the first quarter 2024. The allowance for credit losses ("ACL") on loans was 1.06% of gross loans receivable at both March 31, 2025 and December 31, 2024 and 1.07% at March 31, 2024. Total loans receivable were $2,584,000 higher at March 31, 2025 compared to December 31, 2024. Average loans receivable increased 0.3% during the first quarter 2025 from the fourth quarter 2024. Average loans receivable were higher by 2.2% for the first quarter 2025 as compared to the first quarter 2024. Nonperforming loans totaled $24.1 million, or 1.27% of total loans, at March 31, 2025, up from $24.0 million, or 1.26% of total loans, at December 31, 2024 and $19.3 million or 1.03% of total loans at March 31, 2024. Total nonperforming assets were 0.93% of total assets at March 31, 2025, up from 0.92% at December 31, 2024 and 0.78% at March 31, 2024. Deposits totaled $2,102,141,000 at March 31, 2025, up $8,232,000 (0.4%) from $2,093,909,000 at December 31, 2024. Average total deposits decreased 3.1% during the first quarter 2025 from the fourth quarter 2024, mainly due to a seasonal reduction in balances held by municipal customers. Average total deposits were 3.0% higher for the first quarter 2025, as compared to the first quarter 2024. At March 31, 2025, estimated uninsured and uncollateralized deposits totaled 22.8% of the Bank's total deposits. C&N maintains highly liquid sources of available funds, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia and available federal funds lines with other banks, as well as available-for-sale debt securities with a fair value in excess of collateral obligations. At March 31, 2025, available funding from these sources totaled 182.7% of uninsured deposits and 234.9% of uninsured and uncollateralized deposits. Dividend Declared and Unaudited Financial Information On April 23, 2025, C&N's Board of Directors declared a regular quarterly cash dividend of $0.28 per share. The dividend is payable on May 15, 2025 to shareholders of record as of May 4, 2025. Highlights related to C&N's first quarter unaudited U.S. GAAP earnings results as compared to results for the fourth quarter 2024 and first quarter 2024 are presented below. 1 First Quarter 2025 as Compared to Fourth Quarter 2024 Net income was $6,293,000, or $0.41 per diluted share, for the first quarter 2025 as compared to $8,174,000, or $0.53 per diluted share, for the fourth quarter 2024. Significant variances were as follows: Net interest income of $19,975,000 in the first quarter 2025 decreased $498,000 from the fourth quarter 2024 result. While the net interest margin improved in the first quarter 2025 as compared to the fourth quarter 2024, the reduction in net interest income included the impact of two fewer days and a reduction in volume in the first quarter 2025. Average total earning assets decreased $71,578,000 from the prior quarter, as average interest-bearing due from banks decreased $82,107,000. Average total deposits decreased $65,587,000, mainly due to a seasonal reduction in average balances held by municipal customers, and average total borrowed funds decreased $9,360,000. The net interest margin was 3.38% in the first quarter 2025, up 0.08% from 3.30% in the fourth quarter 2024. The net interest spread increased 0.10%, as the average rate on interest-bearing liabilities decreased 0.11% and the average yield on earning assets decreased 0.01%. A provision for credit losses of $236,000 was recorded during the first quarter 2025 compared to a credit for credit losses (a reduction in expense) of $531,000 in the fourth quarter 2024. The provision for the first quarter 2025 included a provision related to loans receivable of $228,000 and a provision related to off-balance sheet exposures of $8,000. The provision in the first quarter of 2025 included the impact of an increase in the ACL related to changes in qualitative factors partially offset by a decrease in the ACL from a decrease in C&N's average net charge-off experience. Net charge-offs totaled $91,000 in the first quarter of 2025 and $14,000 in the fourth quarter of 2024. The ACL on loans was 1.06% of gross loans receivable at both March 31, 2025 and December 31, 2024. Noninterest income of $7,008,000 in the first quarter 2025 decreased $539,000 from the fourth quarter 2024 result. Significant variances included the following: Brokerage and insurance revenue of $498,000 decreased $184,000 due to a decrease in sales volume. Net gains from sale of loans of $205,000 decreased $167,000 reflecting a decrease in volume of residential mortgage loans sold. Service charges on deposit accounts of $1,440,000 decreased $91,000 reflecting a decrease in volume of fees. Loan servicing fees, net, of $138,000 decreased $77,000, as the fair value of servicing rights decreased $69,000 in first quarter 2025 as compared to an increase of $9,000 in fourth quarter 2024. Noninterest expense of $19,043,000 in the first quarter 2025 increased $613,000 from the fourth quarter 2024 result. Significant variances included the following: Salaries and employee benefits expense of $11,759,000 increased $289,000 including an increase in payroll tax expenses reflecting the normal pattern of such costs being highest in the beginning of the calendar year. Data processing and telecommunication expenses of $2,071,000 increased $180,000 including increases in technology infrastructure expenses and costs of utilizing software for various applications. Net occupancy and equipment expense of $1,459,000 increased $146,000 including increases in rent expense, property maintenance, building maintenance and repairs. The income tax provision of $1,411,000, or 18.3% of pre-tax income for the first quarter 2025 decreased $536,000 from $1,947,000, or 19.2% of pre-tax income, for the fourth quarter 2024, consistent with the decrease in pre-tax income for the quarter. First Quarter 2025 as Compared to First Quarter 2024 First quarter 2025 net income was $6,293,000, or $0.41 per diluted share, as compared to $5,306,000, or $0.35 per diluted share, in the first quarter 2024. Significant variances were as follows: Net interest income of $19,975,000 in the first quarter 2025 was $934,000 higher than in the first quarter 2024. The net interest margin increased to 3.38% in the first quarter 2025 from 3.29% in the first quarter 2024. The interest rate spread increased 0.07%, as the average yield on earning assets increased 0.13% while the average rate on interest-bearing liabilities increased 0.06%. Average total loans receivable increased $40,187,000, or 2.2%, and average total deposits increased $59,904,000, or 3.0%. The provision for credit losses was $236,000 for the first quarter 2025, as discussed in more detail above, compared to a provision for credit losses of $954,000 in the first quarter 2024. Net charge-offs totaled $91,000 in the first quarter of 2025 as compared to $145,000 in the first quarter 2024. The ACL as a percentage of gross loans receivable was 1.06% at March 31, 2025 and 1.07% at March 31, 2024. Noninterest income of $7,008,000 in the first quarter 2025 increased $333,000 from the first quarter 2024 result. Significant variances included the following: Trust revenue of $2,102,000 increased $205,000 consistent with appreciation in the trading prices of many U.S. equity securities in the first quarter 2025 as compared to the first quarter 2024. Service charges on deposit accounts of $1,440,000 increased $122,000 reflecting an increase in volume of fees. Other noninterest income of $1,132,000 increased $115,000, including an increase of $31,000 in dividends on Federal Home Loan Bank of Pittsburgh stock, an increase of $30,000 in letter of credit fees, $27,000 of fees from origination of loans under a Federal Housing Administration program with no comparable amount in 2024 and $22,000 from an increase in the fair value of a marketable equity security. Loan servicing fees, net of $138,000 decreased $92,000, including a decrease in the fair value of servicing rights of $69,000 in the first quarter 2025 as compared to an increase of $25,000 in first quarter 2024. Noninterest expense of $19,043,000 in the first quarter 2025 increased $739,000 from the first quarter 2024 result. Significant variances included the following: Other noninterest expense of $2,354,000 increased $492,000. Included in this category in the first quarter 2024, there was a reduction in expense of $483,000 related to the defined benefit postretirement medical benefit plan, including a curtailment of $469,000 related to plan adjustments compared to a reduction in expense associated with the postretirement plan of $16,000 in first quarter 2025. Salaries and employee benefits expense of $11,759,000 increased $197,000, including increases of $242,000 in cash and stock-based incentive compensation, $87,000 in payroll taxes, $48,000 in Savings and Retirement Plan expenses and $31,000 in expenses related to the Employee Stock Ownership Plan while expenses related to base salaries decreased $165,000 or 2.1% and health insurance costs decreased $102,000 from first quarter 2024. The income tax provision of $1,411,000, or 18.3% of pre-tax income for the first quarter 2025 increased $259,000 from $1,152,000, or 17.8% of pre-tax income for the first quarter 2024. The increase in income tax provision was consistent with the increase in pre-tax income of $1,246,000. Other Information: Changes in other unaudited financial information are as follows: Total assets amounted to $2,609,228,000 at March 31, 2025, down from $2,610,653,000 at December 31, 2024 and up from $2,521,537,000 at March 31, 2024. Cash and due from banks totaled $114,738,000 at March 31, 2025, down from $126,174,000 at December 31, 2024 and up from $46,448,000 at March 31, 2024. The fair value of available-for-sale debt securities at March 31, 2025 was lower than the amortized cost basis by $42,373,000 or 9.4%. In comparison, the aggregate unrealized loss position was $47,543,000 or 10.6% at December 31, 2024 and $51,987,000, or 11.4% at March 31, 2024. The unrealized loss position of the portfolio has resulted from an increase in interest rates as compared to rates when most of the securities were purchased. 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 March 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 March 31, 2025. Gross loans receivable totaled $1,898,432,000 at March 31, 2025, an increase of $2,584,000 from total loans at December 31, 2024 and an increase of $25,983,000 (1.4%) from total loans at March 31, 2024. In comparing outstanding balances at March 31, 2025 and 2024, total commercial loans were up $27,352,000 (1.9%), reflecting growth in owner occupied commercial real estate loans of $10,103,000 and other commercial loans of $23,374,000 partially offset by a decrease in non-owner occupied commercial real estate loans of $6,125,000. Within non-owner occupied commercial real estate loans, multi-family residential loans increased $36,195,000 reflecting the completion of several C&N financed construction projects offset by decreases of $35,872,000 in non-owner occupied and $6,448,000 in 1-4 family-commercial purpose loans. Total outstanding residential mortgage loans were down $7,415,000 (1.8%), and total consumer loans increased $6,046,000 (10.1%). The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $329.8 million at March 31, 2025, up $7.4 million or 2.3% from March 31, 2024. At March 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 $108,625,000, or 5.7% of gross loans receivable. Within this segment there were two loans with a total recorded investment of $2,954,000 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 March 31, 2025. Total nonperforming assets as a percentage of total assets was 0.93% at March 31, 2025, up from 0.92% at December 31, 2024 and 0.78% at March 31, 2024. Total nonperforming assets were $24.3 million at March 31, 2025, up from $24.1 million at December 31, 2024 and $19.8 million at March 31, 2024. Included in nonperforming loans at March 31, 2025 were loans to two borrowers with a total amortized cost basis of $945,000 with individual allowances totaling $189,000. In comparison, at December 31, 2024, there were loans to one borrower with a total amortized cost basis of $258,000 with a individual allowance of $122,000, while at March 31, 2024 there were loans to seven borrowers with a total amortized cost basis of $10,062,000 with individual allowances totaling $1,403,000. Deposits totaled $2,102,141,000 at March 31, 2025, up $8,232,000 or 0.4% from $2,093,909,000 at December 31, 2024, despite a decrease in brokered deposits of $1,999,000. Total deposits were up $106,238,000 or 5.3% at March 31, 2025 as compared to March 31, 2024, despite a decrease in brokered deposits of $47,369,000. At March 31, 2025, C&N's estimated uninsured deposits totaled $621.5 million, or 29.3% of the Bank's total deposits, as compared to $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 $138.2 million, or 6.5% of the Bank's total deposits, at March 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 $1.1 billion at March 31, 2025, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $772.4 million, unused availability on the Federal Reserve Bank of Philadelphia's discount window of $17.4 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 $270.5 million. At March 31, 2025, available funding from these sources totaled 182.7% of uninsured deposits, and 234.9% 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 $194,771,000 at March 31, 2025, down $12,898,000 from December 31, 2024, and $42,477,000 from March 31, 2024. Total stockholders' equity was $281,831,000 at March 31, 2025, up from $275,284,000 at December 31, 2024 and $261,656,000 at March 31, 2024. Within stockholders' equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $33,050,000 at March 31, 2025, $37,084,000 at December 31, 2024 and $41,071,000 at March 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, the Corporation announced a new treasury stock repurchase program. Under this program, C&N is authorized to repurchase up to 750,000 shares of its common stock. There were no shares repurchased during the three-month period ended March 31, 2025. At March 31, 2025, there were 723,966 shares available to be repurchased under the program. Citizens & Northern Bank is subject to various regulatory capital requirements. At March 31, 2025, Citizens & Northern Bank maintains regulatory capital ratios that exceed all capital adequacy requirements and is classified as well-capitalized. Trust assets under management by C&N's Wealth Management Group amounted to $1,336,737,000 at March 31, 2025, down 0.8% from $1,347,853,000 at December 31, 2024, and up 9.2% from $1,224,573,000 at March 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 are reported at their nominal amounts, with the tax benefit accounted for as a reduction in the income tax provision. C&N presents certain analyses and ratios with net interest income determined on a fully taxable-equivalent basis, which are non-GAAP financial measures as presented. C&N believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing the returns on tax-exempt securities and loans with returns on taxable securities and loans. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP was $211,000, $217,000 and $195,000 for the first quarter 2025, fourth quarter 2024 and first quarter 2024, respectively. Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania which operates 28 banking offices located in Bradford, Bucks, Cameron, Chester, Lycoming, Potter, Sullivan, Tioga, York and Lancaster Counties in Pennsylvania and Steuben County in New York, as well as a loan production office in Elmira, New York. Citizens & Northern Corporation trades on NASDAQ under the symbol "CZNC." For more information about Citizens & Northern Bank and Citizens & Northern Corporation, visit https://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 different 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 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. EXHIBIT 99.2 - Supplemental, Unaudited Financial Information CONDENSED, CONSOLIDATED EARNINGS INFORMATION (Dollars In Thousands, Except Per Share Data) (Unaudited) 1ST QUARTER 2025 1ST QUARTER 2024 $ Incr. (Decr.) % Incr. (Decr.) Interest and Dividend Income $ 31,709 $ 30,336 $ 1,373 4.53 % Interest Expense 11,734 11,295 439 3.89 % Net Interest Income 19,975 19,041 934 4.91 % Provision for Credit Losses 236 954 (718) (75.26) % Net Interest Income After Provision for Credit Losses 19,739 18,087 1,652 9.13 % Noninterest Income 7,008 6,675 333 4.99 % Noninterest Expense 19,043 18,304 739 4.04 % Income Before Income Tax Provision 7,704 6,458 1,246 19.29 % Income Tax Provision 1,411 1,152 259 22.48 % Net Income $ 6,293 $ 5,306 $ 987 18.60 % Net Income Attributable to Common Shares (1) $ 6,242 $ 5,267 $ 975 18.51 % PER COMMON SHARE DATA: Net Income - Basic and Diluted $ 0.41 $ 0.35 $ 0.06 17.14 % Dividends Per Share $ 0.28 $ 0.28 $ 0.00 0.00 % Number of Shares Used in Computation - Basic and Diluted 15,338,532 15,230,580 (1) Basic and diluted net income per common share are determined based on net income less earnings allocated to nonvested restricted shares with nonforfeitable dividends. CONDENSED, CONSOLIDATED BALANCE SHEET DATA (Dollars In Thousands) (Unaudited) March 31, 2025 March 31, 2024 $ Incr. (Decr.) % Incr. (Decr.) ASSETS Cash & Due from Banks $ 114,738 $ 46,448 $ 68,290 147.02 % Available-for-sale Debt Securities 408,463 405,094 3,369 0.83 % Loans, Net 1,878,260 1,852,426 25,834 1.39 % Bank-Owned Life Insurance 51,671 49,857 1,814 3.64 % Bank Premises and Equipment, Net 21,304 21,852 (548) (2.51)% Deferred Tax Asset, Net 17,194 17,703 (509) (2.88)% Intangible Assets 54,479 54,877 (398) (0.73)% Other Assets 63,119 73,280 (10,161) (13.87)% TOTAL ASSETS $ 2,609,228 $ 2,521,537 $ 87,691 3.48 % LIABILITIES Deposits $ 2,102,141 $ 1,995,903 $ 106,238 5.32 % Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements 154,994 197,655 (42,661) (21.58)% Senior Notes, Net 14,917 14,848 69 0.46 % Subordinated Debt, Net 24,860 24,745 115 0.46 % Other Liabilities 30,485 26,730 3,755 14.05 % TOTAL LIABILITIES 2,327,397 2,259,881 67,516 2.99 % STOCKHOLDERS' EQUITY Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss 314,521 302,362 12,159 4.02 % Accumulated Other Comprehensive Loss: Net Unrealized Losses on Available-for-sale Debt Securities (33,050) (41,071) 8,021 (19.53)% Defined Benefit Plans 360 365 (5) (1.37)% TOTAL STOCKHOLDERS' EQUITY 281,831 261,656 20,175 7.71 % TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 2,609,228 $ 2,521,537 $ 87,691 3.48 % CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars In Thousands, Except Per Share Data) (Unaudited) FOR THE THREE MONTHS ENDED % March 31, INCREASE 2025 2024 (DECREASE) EARNINGS PERFORMANCE Net Income $ 6,293 $ 5,306 18.60 % Return on Average Assets (Annualized) Return on Average Equity (Annualized) 0.98 % 9.05 % 0.84 % 8.13 % 16.67 % 11.32 % PRE-TAX, PRE-PROVISION NET REVENUE ("PPNR") - NON-GAAP (a) PPNR $ 8,151 $ 7,607 7.15 % PPNR (Annualized) as a % of Average Assets 1.27 % 1.21 % 4.96 % PPNR (Annualized) as a % of Average Equity 11.72 % 11.65 % 0.60 % BALANCE SHEET HIGHLIGHTS Total Assets $ 2,609,228 $ 2,521,537 3.48 % Available-for-Sale Debt Securities 408,463 405,094 0.83 % Loans, Net 1,878,260 1,852,426 1.39 % Allowance for Credit Losses: Allowance for Credit Losses on Loans 20,172 20,023 0.74 % Allowance for Credit Losses on Off-Balance Sheet Exposures 463 684 (32.31)% Deposits 2,102,141 1,995,903 5.32 % OFF-BALANCE SHEET Outstanding Balance of Mortgage Loans Sold with Servicing Retained $ 329,761 $ 322,319 2.31 % Trust Assets Under Management 1,336,737 1,224,573 9.16 % STOCKHOLDERS' VALUE (PER COMMON SHARE) Net Income - Basic and Diluted $ 0.41 $ 0.35 17.14 % Dividends $ 0.28 $ 0.28 0.00 % Common Book Value $ 18.20 $ 17.01 7.00 % Tangible Common Book Value - NON-GAAP (b) $ 14.68 $ 13.45 9.14 % Market Value (Last Trade) $ 20.12 $ 18.78 7.14 % Market Value / Common Book Value 110.55 % 110.41 % 0.13 % Market Value / Tangible Common Book Value - NON-GAAP (b) 137.06 % 139.63 % (1.84)% Price Earnings Multiple 12.27 13.41 (8.50)% Dividend Yield (Annualized) 5.57 % 5.96 % (6.54)% Common Shares Outstanding, End of Period 15,482,848 15,378,065 0.68 % CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued) (Dollars In Thousands, Except Per Share Data) (Unaudited) AS OF OR FOR THE THREE MONTHS ENDED % March 31, INCREASE 2025 2024 (DECREASE) SAFETY AND SOUNDNESS Tangible Common Equity / Tangible Assets (b) 8.90 % 8.38 % 6.21 % Nonperforming Assets / Total Assets 0.93 % 0.78 % 19.23 % Allowance for Credit Losses / Total Loans 1.06 % 1.07 % (0.93)% Total Risk Based Capital Ratio (c) 16.00 % 15.54 % 2.96 % Tier 1 Risk Based Capital Ratio (c) 13.61 % 13.13 % 3.66 % Common Equity Tier 1 Risk Based Capital Ratio (c) 13.61 % 13.13 % 3.66 % Leverage Ratio (c) 10.18 % 9.88 % 3.04 % AVERAGE BALANCES Average Assets $ 2,575,150 $ 2,518,776 2.24 % Average Equity $ 278,143 $ 261,146 6.51 % EFFICIENCY RATIO - NON-GAAP (d) Net Interest Income on a Fully Taxable-Equivalent Basis (d) $ 20,186 $ 19,236 4.94 % Noninterest Income, Excluding Net Realized Losses on Available-for-sale Debt Securities 7,008 6,675 4.99 % Total (1) $ 27,194 $ 25,911 4.95 % Noninterest Expense (2) $ 19,043 $ 18,304 4.04 % Efficiency Ratio = (2)/(1) 70.03 % 70.64 % (0.86)% PPNR includes net interest income plus noninterest income minus total noninterest expense but excludes provision (credit) for credit losses, realized gains or losses on securities, the income tax provision and nonrecurring items included in earnings. Management believes disclosure of PPNR provides useful information for evaluating C&N's financial performance without the impact of 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." Tangible common book value per share, tangible common equity as a percentage of tangible assets and market value as a percentage of tangible common book value are non-GAAP ratios. Management believes this non-GAAP information is helpful in evaluating the strength of the C&N's capital and in providing an alternative, conservative valuation of C&N's net worth. The ratios shown above are based on the following calculations of tangible assets and tangible common equity: Total Assets $ 2,609,228 $ 2,521,537 Less: Intangible Assets, Primarily Goodwill (54,479) (54,877) Tangible Assets $ 2,554,749 $ 2,466,660 Total Stockholders' Equity $ 281,831 $ 261,656 Less: Intangible Assets, Primarily Goodwill (54,479) (54,877) Tangible Common Equity (3) $ 227,352 $ 206,779 Common Shares Outstanding, End of Period (4) 15,482,848 15,378,065 Tangible Common Book Value per Share = (3)/(4) $ 14.68 $ 13.45 Capital ratios for the most recent period are estimated. 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." QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION (Dollars In Thousands, Except Per Share Data) (Unaudited) For the Three Months Ended: March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Interest and dividend income $ 31,709 $ 33,329 $ 33,087 $ 31,326 $ 30,336 Interest expense 11,734 12,856 12,931 11,881 11,295 Net interest income 19,975 20,473 20,156 19,445 19,041 Provision (credit) for credit losses 236 (531) 1,207 565 954 Net interest income after provision (credit) for credit losses 19,739 21,004 18,949 18,880 18,087 Noninterest income 7,008 7,547 7,133 7,854 6,675 Noninterest expense 19,043 18,430 18,269 19,255 18,304 Income before income tax provision 7,704 10,121 7,813 7,479 6,458 Income tax provision 1,411 1,947 1,448 1,366 1,152 Net income $ 6,293 $ 8,174 $ 6,365 $ 6,113 $ 5,306 Net income attributable to common shares $ 6,242 $ 8,103 $ 6,311 $ 6,066 $ 5,267 Basic and diluted earnings per common share $ 0.41 $ 0.53 $ 0.41 $ 0.40 $ 0.35 QUARTERLY CONDENSED, CONSOLIDATED BALANCE SHEET INFORMATION (In Thousands) (Unaudited) As of: March 31, Dec. 31, Sept. 30, June 30, March 31, 2025 2024 2024 2024 2024 ASSETS Cash & Due from Banks $ 114,738 $ 126,174 $ 184,213 $ 100,412 $ 46,448 Available-for-Sale Debt Securities 408,463 402,380 408,422 401,145 405,094 Loans, Net 1,878,260 1,875,813 1,872,322 1,872,825 1,852,426 Bank-Owned Life Insurance 51,671 51,214 50,757 50,301 49,857 Bank Premises and Equipment, Net 21,304 21,338 21,537 21,966 21,852 Deferred Tax Asset, Net 17,194 19,098 17,047 18,375 17,703 Intangible Assets 54,479 54,585 54,682 54,779 54,877 Other Assets 63,119 60,051 61,842 73,319 73,280 TOTAL ASSETS $ 2,609,228 $ 2,610,653 $ 2,670,822 $ 2,593,122 $ 2,521,537 LIABILITIES Deposits (1) $ 2,102,141 $ 2,093,909 $ 2,135,879 $ 2,059,309 $ 1,995,903 Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements 154,994 167,939 186,043 202,523 197,655 Senior Notes, Net 14,917 14,899 14,882 14,865 14,848 Subordinated Debt, Net 24,860 24,831 24,802 24,773 24,745 Other Liabilities 30,485 33,791 31,911 28,431 26,730 TOTAL LIABILITIES 2,327,397 2,335,369 2,393,517 2,329,901 2,259,881 STOCKHOLDERS' EQUITY Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss 314,521 312,045 307,369 304,582 302,362 Accumulated Other Comprehensive Loss: Net Unrealized Losses on Available-for-sale Debt Securities (33,050) (37,084) (30,396) (41,710) (41,071) Defined Benefit Plans 360 323 332 349 365 TOTAL STOCKHOLDERS' EQUITY 281,831 275,284 277,305 263,221 261,656 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 2,609,228 $ 2,610,653 $ 2,670,822 $ 2,593,122 $ 2,521,537 (1) Brokered Deposits (Included in Total Deposits) $ 22,022 $ 24,021 $ 45,051 $ 59,501 $ 69,391 AVAILABLE-FOR-SALE DEBT SECURITIES (In Thousands) March 31, 2025 December 31, 2024 March 31, 2024 Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Obligations of the U.S. Treasury $ 8,062 $ 7,284 $ 8,067 $ 7,118 $ 11,324 $ 10,231 Obligations of U.S. Government agencies 9,819 8,923 10,154 9,025 10,637 9,376 Bank holding company debt securities 28,959 25,944 28,958 25,246 28,953 23,469 Obligations of states and political subdivisions: Tax-exempt 110,721 99,148 111,995 101,302 113,181 102,826 Taxable 51,075 43,587 51,147 42,506 57,960 49,255 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 105,642 97,477 104,378 94,414 102,048 91,116 Residential collateralized mortgage obligations 54,923 52,148 53,389 49,894 48,477 44,501 Commercial mortgage-backed securities 73,232 65,553 73,470 64,501 76,249 66,121 Private label commercial mortgage-backed securities 8,404 8,399 8,365 8,374 8,252 8,199 Total Available-for-Sale Debt Securities $ 450,837 $ 408,463 $ 449,923 $ 402,380 $ 457,081 $ 405,094 SUMMARY OF LOANS BY TYPE (Excludes Loans Held for Sale) (In Thousands) March 31, 2025 December 31, 2024 March 31, 2024 Commercial real estate - non-owner occupied: Non-owner occupied $ 471,351 $ 471,171 $ 507,223 Multi-family (5 or more) residential 101,061 105,174 64,866 1-4 Family - commercial purpose 161,292 163,220 167,740 Total commercial real estate - non-owner occupied 733,704 739,565 739,829 Commercial real estate - owner occupied 260,248 261,071 250,145 All other commercial loans: Commercial and industrial 96,233 96,665 80,136 Commercial lines of credit 128,290 120,078 121,791 Political subdivisions 94,046 94,009 84,652 Commercial construction and land 96,176 92,741 106,255 Other commercial loans 21,434 19,784 19,971 Total all other commercial loans 436,179 423,277 412,805 Residential mortgage loans: 1-4 Family - residential 378,841 383,797 387,542 1-4 Family residential construction 23,407 24,212 22,121 Total residential mortgage 402,248 408,009 409,663 Consumer loans: Consumer lines of credit (including HELCs) 49,782 47,196 41,204 All other consumer 16,271 16,730 18,803 Total consumer 66,053 63,926 60,007 Total 1,898,432 1,895,848 1,872,449 Less: allowance for credit losses on loans (20,172) (20,035) (20,023) Loans, net $ 1,878,260 $ 1,875,813 $ 1,852,426 NON-OWNER OCCUPIED COMMERCIAL REAL ESTATE (In Thousands) Loan Type March 31, % of Non-owner % of 2025 Occupied CRE Total Loans Office $ 108,625 23.0 % 5.7 % Retail 90,247 19.1 % 4.8 % Industrial 81,892 17.4 % 4.3 % Hotels 69,687 14.8 % 3.7 % Mixed Use 60,610 12.9 % 3.2 % Other 60,290 12.8 % 3.2 % Total Non-owner Occupied CRE Loans $ 471,351 Total Gross Loans $ 1,898,432 PAST DUE LOANS AND NONPERFORMING ASSETS (Dollars In Thousands) March 31, 2025 December 31, 2024 March 31, 2024 Collateral dependent loans with a valuation allowance $ 945 $ 258 $ 10,062 Collateral dependent loans without a valuation allowance 29,854 29,867 4,743 Total collateral dependent loans $ 30,799 $ 30,125 $ 14,805 Total loans past due 30-89 days and still accruing $ 8,452 $ 5,658 $ 6,560 Nonperforming assets: Total nonaccrual loans $ 24,106 $ 23,842 $ 19,069 Total loans past due 90 days or more and still accruing 24 119 227 Total nonperforming loans 24,130 23,961 19,296 Foreclosed assets held for sale (real estate) 199 181 456 Total nonperforming assets $ 24,329 $ 24,142 $ 19,752 Total nonperforming loans as a % of total loans 1.27 % 1.26 % 1.03 % Total nonperforming assets as a % of assets 0.93 % 0.92 % 0.78 % Allowance for credit losses as a % of total loans 1.06 % 1.06 % 1.07 % ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS (In Thousands) 3 Months 3 Months 3 Months Year Ended Ended Ended Ended March 31, December 31, March 31, December 31, 2025 2024 2024 2024 Balance, beginning of period $ 20,035 $ 20,442 $ 19,208 $ 19,208 Charge-offs (117) (32) (180) (1,716) Recoveries 26 18 35 113 Net charge-offs (91) (14) (145) (1,603) Provision (credit) for credit losses on loans 228 (393) 960 2,430 Balance, end of period $ 20,172 $ 20,035 $ 20,023 $ 20,035 Net charge-offs as a % of average gross loans (annualized) 0.02 % 0.00 % 0.03 % 0.09 % ANALYSIS OF THE PROVISION (CREDIT) FOR CREDIT LOSSES (In Thousands) 3 Months 3 Months 3 Months Ended Ended Ended March 31, December 31, March 31, 2025 2024 2024 Provision (credit) for credit losses: Loans receivable $ 228 $ (393) $ 960 Off-balance sheet exposures 8 (138) (6) Total provision (credit) for credit losses $ 236 $ (531) $ 954 PPNR NON- GAAP RECONCILIATION (In Thousands) Three Months Ended Calculation of PPNR: March 31, 2025 December 31, 2024 March 31, 2024 Net Income (GAAP) $ 6,293 $ 8,174 $ 5,306 Add: Provision for income taxes 1,411 1,947 1,152 Add: Provision (credit) for credit losses 236 (531) 954 Add: Adjustments to reflect net interest income on a fully taxable-equivalent basis 211 217 195 PPNR (non-GAAP) $ 8,151 $ 9,807 $ 7,607 COMPARISON OF INTEREST INCOME AND EXPENSE (In Thousands) March 31, Three Months Ended December 31, March 31, 2025 2024 2024 INTEREST INCOME Interest-bearing due from banks $ 721 $ 1,786 $ 383 Available-for-sale debt securities: Taxable 2,302 2,184 2,136 Tax-exempt 648 644 623 Total available-for-sale debt securities 2,950 2,828 2,759 Loans receivable: Taxable 27,503 28,104 26,703 Tax-exempt 728 795 670 Total loans receivable 28,231 28,899 27,373 Other earning assets 18 33 16 Total Interest Income 31,920 33,546 30,531 INTEREST EXPENSE Interest-bearing deposits: Interest checking 2,727 3,269 2,806 Money market 1,981 2,333 2,180 Savings 49 50 55 Time deposits 4,835 4,931 3,850 Total interest-bearing deposits 9,592 10,583 8,891 Borrowed funds: Short-term 0 27 597 Long-term - FHLB advances 1,789 1,894 1,456 Senior notes, net 121 121 120 Subordinated debt, net 232 231 231 Total borrowed funds 2,142 2,273 2,404 Total Interest Expense 11,734 12,856 11,295 Net Interest Income $ 20,186 $ 20,690 $ 19,236 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 March 31, December 31, March 31, 2025 2024 2024 Net Interest Income Under U.S. GAAP $ 19,975 $ 20,473 $ 19,041 Add: fully taxable-equivalent interest income adjustment from tax-exempt securities 75 69 69 Add: fully taxable-equivalent interest income adjustment from tax-exempt loans 136 148 126 Net Interest Income as adjusted to a fully taxable-equivalent basis $ 20,186 $ 20,690 $ 19,236 ANALYSIS OF AVERAGE DAILY BALANCES AND RATES (Dollars in Thousands) 3 Months Ended Rate of 3 Months Ended Rate of 3 Months Ended Rate of 3/31/2025 Return/ 12/31/2024 Return/ 3/31/2024 Return/ Average Cost of Average Cost of Average Cost of Balance Funds % Balance Funds % Balance Funds % EARNING ASSETS Interest-bearing due from banks $ 67,896 4.31 % $ 150,003 4.74 % $ 32,725 4.71 % Available-for-sale debt securities, at amortized cost: Taxable 339,557 2.75 % 333,376 2.61 % 347,885 2.47 % Tax-exempt 111,143 2.36 % 112,686 2.27 % 113,363 2.21 % Total available-for-sale debt securities 450,700 2.65 % 446,062 2.52 % 461,248 2.41 % Loans receivable: Taxable 1,809,045 6.17 % 1,800,732 6.21 % 1,774,064 6.05 % Tax-exempt 90,388 3.27 % 92,440 3.42 % 85,182 3.16 % Total loans receivable 1,899,433 6.03 % 1,893,172 6.07 % 1,859,246 5.92 % Other earning assets 1,777 4.11 % 2,147 6.11 % 1,384 4.65 % Total Earning Assets 2,419,806 5.35 % 2,491,384 5.36 % 2,354,603 5.22 % Cash 20,920 20,988 20,448 Unrealized loss on securities (44,405) (42,753) (50,849) Allowance for credit losses (20,341) (20,750) (19,484) Bank-owned life insurance 51,383 50,923 54,466 Bank premises and equipment 21,329 21,488 21,788 Intangible assets 54,530 54,632 54,925 Other assets 71,928 70,976 82,879 Total Assets $ 2,575,150 $ 2,646,888 $ 2,518,776 INTEREST-BEARING LIABILITIES Interest-bearing deposits: Interest checking $ 539,244 2.05 % $ 573,133 2.27 % $ 514,905 2.19 % Money market 355,144 2.26 % 373,558 2.48 % 362,864 2.42 % Savings 195,971 0.10 % 193,554 0.10 % 213,278 0.10 % Time deposits 494,219 3.97 % 490,363 4.00 % 429,085 3.61 % Total interest-bearing deposits 1,584,578 2.45 % 1,630,608 2.58 % 1,520,132 2.35 % Borrowed funds: Short-term 1,400 0.00 % 3,852 2.79 % 44,642 5.38 % Long-term - FHLB advances 162,392 4.47 % 169,346 4.45 % 142,753 4.10 % Senior notes, net 14,908 3.29 % 14,889 3.23 % 14,840 3.25 % Subordinated debt, net 24,846 3.79 % 24,819 3.70 % 24,731 3.76 % Total borrowed funds 203,546 4.27 % 212,906 4.25 % 226,966 4.26 % Total Interest-bearing Liabilities 1,788,124 2.66 % 1,843,514 2.77 % 1,747,098 2.60 % Demand deposits 476,604 496,161 481,146 Other liabilities 32,279 31,763 29,386 Total Liabilities 2,297,007 2,371,438 2,257,630 Stockholders' equity, excluding accumulated other comprehensive loss 312,427 308,472 301,032 Accumulated other comprehensive loss (34,284) (33,022) (39,886) Total Stockholders' Equity 278,143 275,450 261,146 Total Liabilities and Stockholders' Equity $ 2,575,150 $ 2,646,888 $ 2,518,776 Interest Rate Spread 2.69 % 2.59 % 2.62 % Net Interest Income/Earning Assets 3.38 % 3.30 % 3.29 % Total Deposits (Interest-bearing and Demand) $ 2,061,182 $ 2,126,769 $ 2,001,278 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%. Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings. 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 March 31, 2025 December 31, 2024 March 31, 2024 Trust revenue $ 2,102 $ 2,071 $ 1,897 Brokerage and insurance revenue 498 682 539 Service charges on deposit accounts 1,440 1,531 1,318 Interchange revenue from debit card transactions 1,036 1,071 1,013 Net gains from sales of loans 205 372 191 Loan servicing fees, net 138 215 230 Increase in cash surrender value of life insurance 457 458 470 Other noninterest income 1,132 1,147 1,017 Total noninterest income $ 7,008 $ 7,547 $ 6,675 COMPARISON OF NONINTEREST EXPENSE (In Thousands) Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 Salaries and employee benefits $ 11,759 $ 11,470 $ 11,562 Net occupancy and equipment expense 1,459 1,313 1,450 Data processing and telecommunications expenses 2,071 1,891 1,992 Automated teller machine and interchange expense 387 348 487 Pennsylvania shares tax 496 433 433 Professional fees 517 550 518 Other noninterest expense 2,354 2,425 1,862 Total noninterest expense $ 19,043 $ 18,430 $ 18,304 LIQUIDITY INFORMATION (In Thousands) Available Credit Facilities Outstanding Available Total Credit March 31, Dec. 31, March 31, March 31, Dec. 31, March 31, March 31, Dec. 31, March 31, 2025 2024 2024 2025 2024 2024 2025 2024 2024 Federal Home Loan Bank of Pittsburgh $ 176,540 $ 188,692 $ 215,018 $ 772,430 $ 749,999 $ 712,932 $ 948,970 $ 938,691 $ 927,950 Federal Reserve Bank Discount Window 0 0 0 17,431 18,093 19,063 17,431 18,093 19,063 Other correspondent banks 0 0 0 75,000 75,000 75,000 75,000 75,000 75,000 Total credit facilities $ 176,540 $ 188,692 $ 215,018 $ 864,861 $ 843,092 $ 806,995 $ 1,041,401 $ 1,031,784 $ 1,022,013 Uninsured Deposits Information March 31, December 31, March 31, 2025 2024 2024 Total Deposits - C&N Bank $ 2,120,521 $ 2,111,547 $ 2,012,167 Estimated Total Uninsured Deposits $ 621,542 $ 632,804 $ 568,085 Portion of Uninsured Deposits that are Collateralized 138,178 161,958 140,063 Uninsured and Uncollateralized Deposits $ 483,364 $ 470,846 $ 428,022 Uninsured and Uncollateralized Deposits as a % of Total Deposits 22.8 % 22.3 % 21.3 % Available Funding from Credit Facilities $ 864,861 $ 843,092 $ 806,995 Fair Value of Available-for-sale Debt Securities in Excess of Pledging Obligations 270,496 236,945 259,489 Highly Liquid Available Funding $ 1,135,357 $ 1,080,037 $ 1,066,484 Highly Liquid Available Funding as a % of Uninsured Deposits 182.7 % 170.7 % 187.7 % Highly Liquid Available Funding as a % of Uninsured and Uncollateralized Deposits 234.9 % 229.4 % 249.2 %

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