CITIZENS & NORTHERN CORP has recently released its 10-Q report. Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, offering deposit accounts, loans, letters of credit, wealth management, insurance and investment products to individual and corporate customers. Its operations are concentrated in northcentral and southcentral Pennsylvania, the Southern Tier of New York, and southeastern Pennsylvania, and it is headquartered in Wellsboro, Pennsylvania.
In Item 2, Management’s Discussion and Analysis, the company said its second-quarter 2026 net income rose to $14.1 million, or $0.79 per diluted share, from $6.1 million, or $0.40 per share, a year earlier. Net interest income increased to $29.6 million from $21.1 million, while the net interest margin widened to 4.07% from 3.52%; average total earning assets climbed $508.5 million, driven by higher average loans receivable and available-for-sale debt securities. Average total deposits increased $487.7 million, including deposits assumed from Susquehanna.
The company recorded a credit for credit losses of $1.8 million in the quarter, compared with a $2.4 million provision a year earlier. Net recoveries were $403,000, versus net charge-offs of $548,000 in the second quarter of 2025, and the allowance for credit losses stood at 1.39% of gross loans receivable at June 30, 2026, up from 1.13% a year earlier.
Noninterest income increased to $9.8 million from $8.1 million, led by service charges on deposit accounts of $1.8 million, trust revenue of $2.2 million, brokerage and insurance revenue of $816,000, and net gains from sale of loans of $608,000. Noninterest expense rose to $23.8 million from $19.4 million, with salaries and employee benefits at $13.2 million, other noninterest expense at $4.8 million, net occupancy and equipment expense at $1.7 million, and data processing and telecommunications expense at $2.2 million.
For the first six months of 2026, net income was $14.3 million, or $0.81 per diluted share, compared with $12.4 million, or $0.80 per share, in the same period of 2025. Net interest income increased to $58.1 million from $41.1 million, and the net interest margin improved to 4.02% from 3.45%. The company’s provision for credit losses rose to $11.8 million from $2.6 million, and net charge-offs reached $10.4 million, or 0.88% of average loans receivable, versus $639,000, or 0.07%, a year earlier.
The company said the increase in charge-offs was driven by a non-owner occupied commercial real estate loan originated in 2022 with an original amount of $24 million, of which $7.2 million was participated with another institution. After an updated appraisal in April 2026, the company recorded a $10.1 million charge-off in the first quarter, and at June 30, 2026, the loan’s amortized cost basis, net of the partial charge-off, was $5.7 million.
Noninterest income for the first six months rose to $18.0 million from $15.2 million, with service charges on deposit accounts at $3.4 million, trust revenue at $4.3 million, brokerage and insurance revenues at $1.4 million, debit card interchange revenue at $2.6 million, and net gains from sale of loans at $978,000. Noninterest expense increased to $46.6 million from $38.4 million, reflecting higher salaries and employee benefits, core deposit intangible amortization, FDIC insurance expense, occupancy costs, and data processing and telecommunications expense. The market has reacted to these announcements by moving the company's shares 0.16% to a price of $25.31. For more information, read the company's full 10-Q submission here.
