Citizens & Northern Raises Dividend After Record Quarter

The Tip Desk · November 8, 2026 · 3 min read

Net income reached $16.3 million, or $0.92 a share, as net interest income rose and the credit-loss credit widened.

Citizens & Northern Corporation (CZNC), a Pennsylvania community bank holding company, reported record third-quarter 2026 net income of $16.3 million, or $0.92 a share, up from $14.1 million, or $0.79 a share, in the second quarter.

The Wellsboro-based company said the increase followed a $587,000 rise in net interest income to $30.2 million and a larger credit for credit losses. Pre-tax, pre-provision net revenue, which excludes the credit-loss credit, rose $1.6 million from the second quarter to $17.5 million.

Net interest margin expanded 6 basis points to 4.13% from 4.07% in the second quarter. The average yield on earning assets rose 0.06% and the average rate on interest-bearing liabilities rose 0.02%, lifting the net interest spread 0.04%. Accretion of purchase-accounting valuation adjustments from the October 1, 2025 Susquehanna Community Financial acquisition added $552,000 to net interest income, versus $416,000 in the second quarter.

Average loans receivable fell $43.5 million, or 7.3% annualized, from the second quarter. Period-end loans receivable dropped $17.5 million to $2.33 billion at September 30, 2026, mainly from pay-downs and pay-offs of larger commercial-purpose loans, including a $16.3 million reduction in non-owner occupied commercial real estate and a $13.9 million reduction in commercial construction and land loans. Chief executive Brad Scovill said origination levels have been reasonably strong and that the company remains optimistic about loan growth.

Average total deposits increased $8.3 million, or 1.3% annualized, from the second quarter. Period-end deposits rose $4.8 million to $2.61 billion.

C&N recorded a credit for credit losses of $3.2 million in the third quarter, larger than the $1.9 million credit in the second quarter. The company said the credit reflected qualitative-factor reductions in the allowance and a reduction in loans receivable. Net charge-offs were $403,000, or 0.07% annualized of average loans, versus net recoveries of $403,000, or 0.07% annualized, in the second quarter.

Total nonperforming assets declined to $36.5 million, or 1.16% of total assets, from $40.3 million, or 1.28% of total assets, at June 30. The decrease included moving a $3.3 million non-owner occupied commercial real estate loan from nonaccrual to accrual. The allowance for credit losses was 1.24% of gross loans receivable at September 30, down from 1.39% at June 30.

Noninterest income decreased $448,000 to $9.4 million. Other noninterest income fell $512,000 after $840,000 of tax-credit income in the second quarter with no corresponding third-quarter amount. Net gains from sales of loans increased $120,000 to $728,000. Noninterest expense decreased $1.5 million to $22.3 million, with other noninterest expense down $1.1 million after $933,000 of Pennsylvania Educational Improvement Tax Credit donations in the second quarter and salaries and employee benefits down $380,000. The efficiency ratio dropped to 56.11% from 60%.

Tangible common book value per share decreased to $15.20 from $15.33 at June 30, and the tangible common equity ratio was 8.86%, as accumulated other comprehensive loss on available-for-sale securities widened to $39.1 million from $24.3 million. Management said there were no credit-related declines in fair value in the available-for-sale portfolio.

On October 22, the board declared a regular quarterly cash dividend of $0.30 a share, payable November 13, up $0.02 from the $0.28 declared in July. Scovill said the increase reflects the board’s confidence in continued strong earnings performance.