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What changed in CITIZENS & NORTHERN CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CITIZENS & NORTHERN CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+243 added−223 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-06)

Top changes in CITIZENS & NORTHERN CORP's 2025 10-K

243 paragraphs added · 223 removed · 172 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCovenant was the parent company of Covenant Bank, a commercial bank which operated a community bank office in Bucks County, Pennsylvania and another in Chester County, Pennsylvania. The Covenant acquisition followed the 2019 acquisition of Monument Bancorp, Inc. (“Monument”), a commercial bank with offices in Bucks County.
Biggest changeSince 2019, the Corporation has expanded into Southeastern Pennsylvania by acquisitions and Southcentral Pennsylvania by opening new branches. The Corporation acquired Covenant Financial, Inc. (“Covenant”), effective July 1, 2020. Covenant was the parent company of Covenant Bank, a commercial bank which operated a community bank office in Bucks County, Pennsylvania and another in Chester County, Pennsylvania.
ITEM 1. BUSINESS Citizens & Northern Corporation (“Corporation”) is a holding company whose principal activity is community banking. The Corporation’s principal office is located in Wellsboro, Pennsylvania. The largest subsidiary is Citizens & Northern Bank (“C&N Bank” or the “Bank”). The Corporation’s other wholly-owned subsidiaries are Citizens & Northern Investment Corporation and Bucktail Life Insurance Company (“Bucktail”).
ITEM 1. BUSINESS Citizens & Northern Corporation (“Corporation”) is a bank holding company whose principal activity is community banking. The Corporation’s principal office is located in Wellsboro, Pennsylvania. The largest subsidiary is Citizens & Northern Bank (“C&N Bank” or the “Bank”). The Corporation’s other wholly-owned subsidiaries are Citizens & Northern Investment Corporation and Bucktail Life Insurance Company (“Bucktail”).
The Corporation is under the direct supervision of the Federal Reserve and must comply with the reporting requirements of the Federal Bank Holding Company Act. ● C&N Bank is a state-chartered, Federal Reserve member bank, supervised by the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking and Securities. ● The Pennsylvania Department of Insurance regulates CNFS’s insurance activities.
The Corporation is under the direct supervision of the Federal Reserve and must comply with the reporting requirements of the Bank Holding Company Act of 1956. ● C&N Bank is a state-chartered, Federal Reserve member bank, supervised by the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking and Securities. ● The Pennsylvania Department of Insurance regulates CNFS’s insurance activities.
Our generous total rewards package includes market-competitive salary, bonuses or sales commissions, short-term and long-term equity incentives, healthcare and retirement benefits, and paid time off. Employees have regular performance reviews and salary raises commensurate with performance.
Our generous total rewards package includes market-competitive salary, bonuses or sales commissions, short-term and long-term equity incentives, healthcare and retirement benefits, and paid time off. Employees have regular performance reviews and receive salary raises commensurate with performance.
The Bank competes with fintech and other online financial institutions, local commercial banks headquartered in our market areas and other commercial banks with branches in our market area. Many of the online financial institutions and some of the banks that have branches in our market areas are larger in overall size.
The Bank competes with fintech and other online financial institutions, local commercial banks headquartered in our market areas and other commercial banks with branches in our market areas. Many of the online financial institutions and some of the banks that have branches in our market areas are larger in overall size.
The primary regulatory relationships are described as follows: ● The Corporation is a bank holding company formed under the provisions of Section 3 of the Federal Reserve Act.
Our primary regulatory relationships are as follows: ● The Corporation is a bank holding company formed under the provisions of Section 3 of the Federal Reserve Act.
At December 31, 2024, the Bank had 28 branch offices, including 21 in the Northern tier/Northcentral region of Pennsylvania, 1 in the Southern tier of New York State, 4 in Southeastern Pennsylvania (3 in Bucks County and 1 in Chester County) and 2 in Southcentral Pennsylvania (York and Lancaster).
At December 31, 2025, the Bank had 35 branch offices, including 28 in the Northern tier/Northcentral region of Pennsylvania, 1 in the Southern tier of New York State, 4 in Southeastern Pennsylvania (3 in Bucks County and 1 in Chester County) and 2 in Southcentral Pennsylvania (York and Lancaster).
With respect to lending activities and attracting deposits, the Bank also competes with savings banks, savings and loan associations, insurance companies, regulated small loan companies and credit unions. Also, the Bank competes with mutual funds, exchange-traded funds and other investment vehicles for deposits.
With respect to lending activities and attracting deposits, the Bank also competes with savings banks, savings and loan associations, insurance companies, regulated small loan companies and credit unions. Also, the Bank competes with mutual funds, exchange-traded funds and other 3 Table of Contents investment vehicles for deposits.
C&N Bank has held its current name since May 6, 1975, at which time C&N Bank changed its charter from a national bank to a Pennsylvania bank.
C&N Bank has operated under its current name since May 6, 1975, at which time C&N Bank changed its charter from a national bank to a Pennsylvania bank.
Our talent strategy focuses on acquiring new employees through branding and outreach programs, developing employees though a robust onboarding program, ongoing training, and performance management, and retaining employees through recognition, engagement, and an attractive total rewards package. At December 31, 2024, the Corporation had 386 full-time equivalent employees.
Our talent strategy focuses on acquiring new employees through branding and outreach programs, developing employees through a robust onboarding program, ongoing training, and performance management, and retaining employees through recognition, engagement, and an attractive total rewards package. At December 31, 2025, the Corporation had 460 full-time equivalent employees. At C&N Bank, we are committed to creating value through relationships.
Diversity and Inclusion At C&N Bank, we are committed to creating value through relationships. At the heart of this mission is a promise of excellence in service to all people, as demonstrated by our commitment to equity of opportunity, inclusion and our fostering of a spirit of belonging.
At the heart of this mission is a promise of excellence in service to all people, as demonstrated by our commitment to equity of opportunity, inclusion and our fostering of a spirit of belonging.
Mainly as a result of the acquisitions and subsequent growth in the newer markets, the Corporation’s consolidated total assets at December 31, 2024 of $2.6 billion were up 58% from the corresponding total at December 31, 2019.
Mainly as a result of the acquisitions and subsequent growth in the newer markets, the Corporation’s consolidated total assets at December 31, 2025 increased to $3.1 billion, up 89% from the corresponding total at December 31, 2019.
The trust department offers a wide range of financial services, such as 401(k) plans, retirement planning, estate planning, estate settlements and asset management.
The Bank also provides wealth management services through its trust department and C&N Financial Services, LLC (“CNFS”). The trust department offers a wide range of financial services, such as 401(k) plans, retirement planning, estate planning, estate settlements and asset management.
In Southcentral Pennsylvania, in 2021, the Corporation converted the lending office in York, Pennsylvania to a full-service branch and established a new branch in Lancaster, Pennsylvania.
The Covenant acquisition followed the 2019 acquisition of Monument Bancorp, Inc. (“Monument”), a commercial bank with offices in Bucks County. In Southcentral Pennsylvania, in 2021, the Corporation converted the lending office in York, Pennsylvania to a full-service branch and established a new branch in Lancaster, Pennsylvania.
Citizens & Northern Investment Corporation was formed in 1999 to engage in investment activities. Bucktail reinsures credit and mortgage life and accident and health insurance on behalf of C&N Bank. Since 2019, the Corporation has expanded into Southeastern Pennsylvania by acquisitions and Southcentral Pennsylvania by opening new branches. The Corporation acquired Covenant Financial, Inc. (“Covenant”), effective July 1, 2020.
Citizens & Northern Investment Corporation was formed in 1999 to engage in investment activities. Bucktail reinsures credit and mortgage life and accident and health insurance on behalf of C&N Bank. C&N Bank is a Pennsylvania banking institution that was formed by the consolidation of Northern National Bank of Wellsboro and Citizens National Bank of Towanda in 1971.
A copy of the Corporation’s annual report on Form 10-K, quarterly reports on Form 10-Q, current events reports on Form 8-K, and amendments to these reports, will be furnished without charge upon written request to the Corporation’s Treasurer at P.O. Box 58, Wellsboro, PA 16901.
A copy of the Corporation’s annual report on Form 10-K, quarterly reports on Form 10-Q, current events reports on Form 8-K, and amendments to these reports, are available, free of charge, through the Corporation’s web site at www.cnbankpa.com.
At December 31, 2024, C&N Bank had total assets of $2,598,537,000, total deposits of $2,111,547,000 and net loans outstanding of $1,875,813,000. 3 Table of Contents Most activities of the Corporation and its subsidiaries are regulated by federal or state agencies.
The Bank serves a diverse customer base and is not economically dependent on any small group of customers or on any individual industry. At December 31, 2025, C&N Bank had total assets of $3,121,869,000, total deposits of $2,584,952,000 and net loans outstanding of $2,323,317,000. Most activities of the Corporation and its subsidiaries are regulated by federal or state agencies.
Removed
Similarly, gross loans of $1.9 billion at December 31, 2024 were up 60% from December 31, 2019 and total deposits of $2.1 billion were up 67% from December 31, 2019. C&N Bank is a Pennsylvania banking institution that was formed by the consolidation of Northern National Bank of Wellsboro and Citizens National Bank of Towanda in 1971.
Added
In addition to its branch locations, the Bank has a lending office in Elmira, New York. On October 1, 2025, the Corporation completed its previously announced merger with Susquehanna Community Financial, Inc. (“Susquehanna”). Susquehanna was the parent company of Susquehanna Community Bank, with seven banking offices located in Lycoming, Northumberland, Snyder and Union counties in Pennsylvania.
Removed
In addition to its branch locations, the Bank has a lending office in Elmira, New York. C&N Bank provides an extensive range of banking services, including deposit and loan products for personal and commercial customers. The Bank also provides wealth management services through its trust department and C&N Financial Services, LLC (“CNFS”).
Added
Pursuant to the Agreement and Plan of Merger dated April 23, 2025 between the Corporation and Susquehanna, Susquehanna merged with and into the Corporation, with the Corporation as the surviving corporation in the Merger. Immediately following the completion of the Merger, Susquehanna Community Bank, the wholly owned subsidiary of Susquehanna, merged with and into C&N Bank, with C&N Bank surviving.
Removed
The Bank serves a diverse customer base and is not economically dependent on any small group of customers or on any individual industry.
Added
The Corporation issued 2,272,948 shares of common stock to the former Susquehanna stockholders resulting in total merger consideration valued at $44.6 million. Management believes the combination creates additional scale in central Pennsylvania and further diversifies its loan portfolio and funding base, thus increasing resiliency and efficiency.
Removed
Copies of these reports will be furnished as soon as reasonably possible after they are filed electronically with the Securities and Exchange Commission. The information is also available through the Corporation’s web site at www.cnbankpa.com.
Added
Similarly, gross loans of $2.4 billion at December 31, 2025 were up 99% from December 31, 2019 and total deposits of $2.6 billion were up 105% from December 31, 2019. C&N Bank provides an extensive range of banking services, including deposit and loan products for personal and commercial customers.
Added
These reports, as well as any amendments thereto, are posted on our website as soon as reasonably practicable after they are electronically filed with the SEC. The information contained on our website or in any websites linked by our website is not a part of this 2025 Annual Report on Form 10-K.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeArtificial Intelligence Risks and Challenges - The Corporation or its third-party vendors, clients or counterparties may develop or incorporate artificial intelligence ("AI") technology in certain business processes, services, or products. The development and use of AI presents a number of risks and challenges to the Corporation's business.
Biggest changeA breach in security could result in legal claims, regulatory penalties, disruption in operations, and damage to the Corporation’s reputation, which could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity. 7 Table of Contents Artificial Intelligence Risks and Challenges - The Corporation or its third-party vendors, clients or counterparties may develop or incorporate artificial intelligence ("AI") technology in certain business processes, services, or products.
CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts. Such risk management and accounting policies and procedures, however, may not prevent unexpected losses that could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity.
CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts. Such risk management and accounting policies and procedures, however, may not prevent unexpected losses that could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity.
Significant new laws or changes in, or repeals of, existing laws could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity. For example, the regulatory authorities may take actions that could result in decreases in service charge revenue from deposit accounts, including overdraft privilege and other fees.
Significant new laws or changes in, or repeals of, existing laws could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity. For example, the regulatory authorities may take actions that could result in decreases in service charge revenue from deposit accounts, including overdraft privilege and other fees.
If the volume of such forced repurchases of loans were to increase significantly, or if the Corporation were to be dropped from the programs, it could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity. ITEM 1B . UNRESOLVED STAFF COMMENTS Not applicable. ​ 9 Table of Contents
If the volume of such forced repurchases of loans were to increase significantly, or if the Corporation were to be dropped from the programs, it could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity. ITEM 1B . UNRESOLVED STAFF COMMENTS Not applicable. ​ 9 Table of Contents
Further, federal monetary policy, particularly as implemented through the Federal Reserve System, significantly affects short-term interest rates and credit conditions, and any unfavorable change in these conditions could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity.
Further, federal monetary policy, particularly as implemented through the Federal Reserve System, significantly affects short-term interest rates and credit conditions, and any unfavorable change in these conditions could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity.
Furthermore, failure to realize the expected revenue projections, cost savings, increases in geographic or product presence, and/or other projected benefits from recent or future acquisitions could have a material adverse effect on the Corporation’s financial condition or results of operations.
Furthermore, failure to realize the expected revenue projections, cost savings, increases in geographic or product presence, and/or other projected benefits from recent or future acquisitions could have a material adverse effect on the Corporation’s business, financial condition or results of operations.
Moreover, costs associated with implementing technology-driven products or other services, or technology-related or other developments increasing the nature or level of competition, could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity.
Moreover, costs associated with implementing technology-driven products or other services, or technology-related or other developments increasing the nature or level of competition, could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity.
Even innocent noncompliance and inconsequential failure to follow the regulations could result in significant fines or other penalties, which could have a material adverse impact on the Corporation’s financial condition, results of operations or liquidity.
Even innocent noncompliance and inconsequential failure to follow the regulations could result in significant fines or other penalties, which could have a material adverse impact on the Corporation’s business, financial condition, results of operations or liquidity.
For example, the failures of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California in 2023 caused an element of panic and uncertainty in the investor community and among bank customers generally, including, specifically, deposit customers.
For example, the failures of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California in 2023 caused an element of uncertainty in the investor community and among bank customers generally, including, specifically, deposit customers.
Although the Corporation seeks to effectively manage risks, and maintains a level of equity that exceeds the banking regulatory agencies’ thresholds for being considered “well capitalized” (see Note 17 to the consolidated financial statements), management cannot predict the future and cannot eliminate the possibility of credit, operational or other losses. Accordingly, actual results may differ materially from management’s expectations.
Although the Corporation seeks to effectively manage risks, and maintains a level of equity that exceeds the banking regulatory agencies’ thresholds for being considered “well capitalized” (see Note 18 to the consolidated financial statements), management cannot predict the future and cannot eliminate the possibility of credit, operational or other losses. Accordingly, actual results may differ materially from management’s expectations.
Further increases in interest rates would cause the fair value of the available-for-sale debt securities portfolio to decrease further. For additional information regarding debt securities, see the “Securities” section of Management’s Discussion and Analysis and Note 6 to the consolidated financial statements. The Corporation’s trust revenue is determined, in part, from the value of the underlying investment portfolios.
Further increases in interest rates would cause the fair value of the available-for-sale debt securities portfolio to decrease further. For additional information regarding debt securities, see the “Securities” section of Management’s Discussion and Analysis and Note 7 to the consolidated financial statements. The Corporation’s trust revenue is determined, in part, from the value of the underlying investment portfolios.
The unrealized decrease in fair value was consistent with the increases in market interest rates that occurred subsequent to the purchases of the securities, and no allowance for credit losses was required on available-for-sale debt securities in an unrealized loss position at December 31, 2024.
The unrealized decrease in fair value was consistent with the increases in market interest rates that occurred subsequent to the purchases of the securities, and no allowance for credit losses was required on available-for-sale debt securities in an unrealized loss position at December 31, 2025.
Accordingly, there is an inherent risk of lower future earnings or decline in fair value of the Corporation’s financial instruments when interest rates change. Moreover, the Federal Reserve lowered the Federal Funds rate in 2020 and maintained a rate of 0% to 0.25% throughout 2021 while injecting massive amounts of liquidity into the nation’s monetary system.
Accordingly, there is an inherent risk of lower future earnings or decline in fair value of the Corporation’s financial instruments when interest rates change. Moreover, the Federal Reserve lowered the Federal Funds rate in 2020 and maintained a rate of 0% to 0.25% throughout 2021 while injecting unusually large amounts of liquidity into the nation’s monetary system.
However, legal agreements with counterparties typically include provisions allowing them to restrict or terminate the Corporation’s access to these credit facilities with or without advance notice and at their sole discretion. 8 Table of Contents Financial institutions are interconnected because of trading, clearing, counterparty, and other relationships.
However, legal agreements with counterparties typically include provisions allowing them to restrict or terminate the Corporation’s access to these credit facilities with or without advance notice and at their sole discretion. Financial institutions are interconnected because of trading, clearing, counterparty, and other relationships.
Deterioration in economic conditions could adversely affect the quality of the Corporation’s loan portfolio and the demand for its products and services, and accordingly, could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity. 6 Table of Contents Competition - All phases of the Corporation’s business are competitive.
Deterioration in economic conditions could adversely affect the quality of the Corporation’s loan portfolio and the demand for its products and services, and accordingly, could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity. Competition - All phases of the Corporation’s business are competitive.
Such risks affecting the FHLB-Pittsburgh could adversely impact the value of the Corporation’s investment in the common stock of the FHLB-Pittsburgh and/or affect its access to credit. Soundness of Other Financial Institutions - In addition to the FHLB-Pittsburgh, the Corporation maintains other credit facilities that provide it with additional liquidity.
Such risks affecting the FHLB-Pittsburgh could adversely impact the value of the Corporation’s investment in the common stock of the FHLB-Pittsburgh and/or affect its access to credit. 8 Table of Contents Soundness of Other Financial Institutions - In addition to the FHLB-Pittsburgh, the Corporation maintains other credit facilities that provide it with additional liquidity.
Collateral values may be adversely affected by changes in economic, environmental and other conditions, including declines in the value of real estate, changes in interest rates, changes in monetary and fiscal policies of the federal government, wide-spread disease, terrorist activity, environmental contamination and other external events.
Collateral values may be adversely affected by changes in economic, environmental and other conditions, including declines in the value of real estate, changes in interest rates, changes in monetary and fiscal policies of the federal 5 Table of Contents government, wide-spread disease, terrorist activity, environmental contamination and other external events.
A decline in local 5 Table of Contents economic conditions may have a greater effect on the Corporation’s earnings and capital than on the earnings and capital of other financial institutions whose real estate loan portfolios are more geographically diverse.
A decline in local economic conditions may have a greater effect on the Corporation’s earnings and capital than on the earnings and capital of other financial institutions whose real estate loan portfolios are more geographically diverse.
In recent years, they have increased due diligence requirements and reporting obligations for financial institutions, created new crimes and penalties, and required the federal banking agencies, in reviewing merger and other acquisition transactions, to consider the effectiveness of the parties to such transactions in combating money laundering activities.
In recent years, these laws and regulations have increased due diligence requirements and reporting obligations for financial institutions, created new crimes and penalties, and required the federal banking agencies, in reviewing merger and other acquisition transactions, to consider the effectiveness of the parties to such transactions in combating money laundering activities.
Limited Geographic Diversification - The Corporation grants commercial, residential and personal loans to customers primarily in the Corporation’s markets of the Northern tier/Northcentral regions of Pennsylvania, Southern tier of New York and Southeastern and Southcentral Pennsylvania.
Limited Geographic Diversification - The Corporation grants commercial, residential and personal loans to customers primarily in the Corporation’s markets of the Northern tier/Northcentral regions of Pennsylvania, Southern tier of New York and Southeastern and 6 Table of Contents Southcentral Pennsylvania.
These evolving laws and regulations could require changes in the Corporation's implementation of AI technology and increase its compliance costs and 7 Table of Contents the risk of non-compliance.
These evolving laws and regulations could require changes in the Corporation's implementation of AI technology and increase its compliance costs and the risk of non-compliance.
As of December 31, 2024, the total outstanding balance of residential mortgage loans the Corporation has repurchased as a result of identified instances of noncompliance amounted to $2,671,000.
As of December 31, 2025, the total outstanding balance of residential mortgage loans the Corporation has repurchased as a result of identified instances of noncompliance amounted to $2,598,000.
Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value. We regularly evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial service companies.
Further, management intends to continue to pursue additional acquisition opportunities. Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value. We regularly evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial service companies.
If the Corporation's banking regulators determine that our commercial real estate lending activities are particularly risky and are subject to such heightened scrutiny, the Corporation may incur significant additional costs or be required to restrict certain of our commercial real estate lending activities.
If the Corporation's banking regulators determine that our commercial real estate lending activities involve more than customary risk and therefore are subject to such heightened scrutiny, the Corporation may incur significant additional costs or be required to restrict certain of our commercial real estate lending activities.
Bank Secrecy Act and Related Laws and Regulations - These laws and regulations have significant implications for all financial institutions.
Bank Secrecy Act and Related Laws and Regulations - Laws and regulations relating to the Bank Secrecy Act have significant implications for all financial institutions.
At December 31, 2024, the fair value of the Corporation’s available-for-sale debt securities portfolio was $402.4 million, or 10.6% less than the amortized cost basis.
At December 31, 2025, the fair value of the Corporation’s available-for-sale debt securities portfolio was $506.6 million, or 5.5% less than the amortized cost basis.
Some of the Corporation’s significant risks and uncertainties are discussed below. Risk Related to Acquisition Activity – As described in Item 1, the Corporation has completed acquisitions of banking companies in 2020 and 2019 (Covenant and Monument) and expanded its geographic footprint to Southeastern and Southcentral Pennsylvania. Further, management intends to continue to pursue additional acquisition opportunities.
We believe that the Corporation’s most significant risks and uncertainties are discussed below. Risk Related to Acquisition Activity – As described in Item 1, the Corporation has completed three acquisitions of banking companies in 2025, 2020 and 2019 (Susquehanna, Covenant and Monument) and expanded its geographic footprint in Northcentral, Southcentral, and Southeastern Pennsylvania.
In the latter portion of 2024, the Federal Reserve lowered the Federal Funds rate twice to a range of 4.25% to 4.50% at December 31, 2024. Significant fluctuations in interest rates, including fluctuations in interest rates triggered by the Federal Reserve’s actions, could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity.
Significant fluctuations in interest rates, including fluctuations in interest rates triggered by the Federal Reserve’s actions, could have a material adverse effect on the Corporation’s business, financial condition, results of operations or liquidity.
Mortgage Banking – Since 2009, the Corporation has originated and sold residential mortgage loans to the secondary market through the MPF Xtra program. Since 2014, the Corporation has also originated and sold residential mortgage loans to the secondary market through the MPF Original program. Both of these programs are administered by the Federal Home Loan Banks of Pittsburgh and Chicago.
Mortgage Banking – The Corporation originates and sells residential mortgage loans to the secondary market through the MPF Xtra and MPF Original programs. Both of these programs are administered by the Federal Home Loan Banks of Pittsburgh and Chicago. At December 31, 2025, the total outstanding balance of residential mortgages sold and serviced through the two programs amounted to $450,120,000.
A breach of any kind could compromise systems and the information stored there could be accessed, damaged, locked up, or disclosed. A breach in security could result in legal claims, regulatory penalties, disruption in operations, and damage to the Corporation’s reputation, which could have a material adverse effect on the Corporation’s financial condition, results of operations or liquidity.
A breach of any kind could compromise systems and the information stored there could be accessed, damaged, locked up, or disclosed.
Removed
At December 31, 2024, the total outstanding balance of residential mortgages sold and serviced through the two programs amounted to $329,766,000.
Added
The Federal Reserve lowered the Federal Funds rate twice to a range of 4.25% to 4.50% at December 31, 2024 and continued to lower the Federal Funds rate three times in 2025 to a range of 3.50% to 3.75% at December 31, 2025.
Added
Holding Company Liquidity Risk - The Corporation relies on dividends from its subsidiaries for substantially all of its revenue and its ability to make dividends, distributions and other payments.
Added
The development and use of AI presents a number of risks and challenges to the Corporation's business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDue to applicable laws and regulations or contractual obligations, the Corporation may be held responsible for cyber incidents attributed to its service providers in relation to any data that the Corporation shares with them. ​ During 2024, the Corporation did not experience a cybersecurity threat or incident that has materially affected or is reasonably likely to materially affect the Corporation, including its business strategy, results of consolidated operations or financial condition.
Biggest changeDue to applicable laws and regulations or contractual obligations, the Corporation may be held responsible for cyber incidents attributed to its service providers in relation to any data that the Corporation shares with them. ​ During 2025, the Corporation did not experience a cybersecurity threat or incident that has materially affected or is reasonably likely to materially affect the Corporation, including its business strategy, results of consolidated operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES A summary of the Corporation’s operating properties is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Number of ​ Number of ​ ​ of ​ Owned ​ Leased ​ ​ Locations ​ Properties ​ Properties Branches ​ 28 ​ 22 ​ 6 Limited Purpose Office-Lending ​ 1 ​ 1 ​ 0 Administrative/Multi-purpose ​ 4 ​ 2 ​ 2 Total ​ 33 ​ 25 ​ 8 ​ ​
Biggest changePROPERTIES A summary of the Corporation’s operating properties is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Number of ​ Number of ​ ​ of ​ Owned ​ Leased ​ ​ Locations ​ Properties ​ Properties Branches ​ 35 ​ 29 ​ 6 Limited Purpose Office-Lending ​ 1 ​ 1 ​ 0 Administrative/Multi-purpose ​ 4 ​ 2 ​ 2 Total ​ 40 ​ 32 ​ 8 ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeC&N Bank has filed motions to dismiss the case for wont of personal jurisdiction and failure to state a claim. The Plaintiffs have responded to those motions. Plaintiffs have filed an application for certification of the suit as a class action. The court has stayed the motions to dismiss pending consideration of the class action certification application.
Biggest changeThe Plaintiffs responded to those motions. By order of the District Court judge dated March 27, 2025, C&N Bank’s motion to dismiss for wont of personal jurisdiction was granted. ​ Plaintiffs filed an application for certification of the Texas suit as a class action.
Management believes the aggregate liability, if any, resulting from such pending and threatened legal proceedings will not have a material adverse effect on the Corporation’s financial condition or results of operations. ​ ITEM 4. MINE SAFETY DISCLOSURE Not applicable. ​ 11 Table of Contents PART II
Management believes the aggregate liability, if any, resulting from such pending and threatened legal proceedings will not have a material adverse effect on the Corporation’s financial condition or results of operations. ​ 11 Table of Contents ITEM 4. MINE SAFETY DISCLOSURE Not applicable. ​ PART II
The plaintiffs have sued C&N Bank, along with another bank, and additional law firm and accounting firm defendants. The case is styled Goldovsky, et al. v. Rauld, et al.
The plaintiffs sued C&N Bank, along with another bank, and additional law firm and accounting firm defendants. The case was styled Goldovsky, et al. v. Rauld, et al.
Plaintiffs have asserted claims against C&N Bank and the other bank for aiding and abetting alleged violations of the Texas Securities Act, and additional claims against the legal and accounting professionals for statutory fraud, common law fraud, negligent misrepresentation, and knowing participation in breach of fiduciary duty.
Plaintiffs asserted claims against C&N Bank and the other bank for aiding and abetting alleged violations of the Texas Securities Act, and additional claims against the legal and accounting professionals for statutory fraud, common law fraud, negligent misrepresentation, and knowing participation in breach of fiduciary duty. ​ C&N Bank filed motions to dismiss the Texas case for wont of personal jurisdiction and failure to state a claim.
Removed
Following depositions of the four plaintiffs on issues germane to class action certification, C&N Bank and each of the other defendants have filed briefs in opposition to the plaintiff’s class certification motion. A hearing on the motion for class certification took place on February 18, 2025. A ruling on class certification is pending.
Added
On October 16, 2025, the District Court in Texas issued an order denying the plaintiffs’ motion for class certification. ​ On May 23, 2025, C&N Bank was served with a complaint filed by Goldovsky, et al in the US District Court for the Middle District of Pennsylvania.
Added
The complaint was predicated upon Texas securities law, alleging substantially the same facts and asserting the same legal arguments as in the Texas case. C&N Bank filed motions to dismiss the Pennsylvania case. Plaintiffs filed a motion to certify the case as class action.
Added
C&N Bank filed its response brief in opposition to class certification in the Pennsylvania case on October 22, 2025. On December 30, 2025, the US District Judge for the Middle District of Pennsylvania issued an order dismissing the case with prejudice on the grounds that the complaint was filed after the statute of limitations had run.
Added
Plaintiffs had until January 29, 2026 to file a timely notice of appeal. No such notice was filed. ​ C&N Bank believes that it has substantial defenses against any additional actions the plaintiffs may initiate and intends to defend itself in the event of any such actions.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis meets Securities & Exchange Commission requirements for showing dividend reinvestment share performance over a five-year period and measures the return to an investor for placing $100.00 into a group of bank stocks and reinvesting any and all dividends into the purchase of more of the same stock for which dividends were paid. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Citizens & Northern Corporation 100.00 74.23 102.47 93.91 97.39 85.52 Russell 2000 Index 100.00 119.93 137.67 109.50 127.98 142.73 Peer Group (NASDAQ Bank Index) 100.00 92.50 132.19 110.67 106.87 128.85 ​ ​ 13 Table of Contents EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information concerning the Citizens & Northern 2023 Equity Stock Incentive Plan which was approved by the Corporation’s shareholders in April 2023.
Biggest changeThis chart meets Securities & Exchange Commission requirements for showing dividend reinvestment share performance over a five-year period and measures the return to an investor for investing $100.00 into a group of bank stocks and reinvesting any and all dividends into the purchase of more of the same stock for which dividends were paid. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index ​ ​ ​ 12/31/20 ​ ​ ​ 12/31/21 ​ ​ ​ 12/31/22 ​ ​ ​ 12/31/23 ​ ​ ​ 12/31/24 ​ ​ ​ 12/31/25 Citizens & Northern Corporation 100.00 138.06 126.52 131.21 115.22 132.52 Russell 2000 Index 100.00 114.78 91.30 106.71 119.00 134.23 Peer Group (NASDAQ Bank Index) 100.00 142.91 119.65 115.54 139.30 149.15 ​ ​ 13 Table of Contents EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information concerning the Citizens & Northern 2023 Equity Stock Incentive Plan which was approved by the Corporation’s shareholders in April 2023.
Also, the Corporation and C&N Bank are subject to restrictions on the amount of dividends that may be paid without approval of banking regulatory authorities. These restrictions are described in Note 17 to the consolidated financial statements. On September 25, 2023, the Corporation announced a new treasury stock repurchase program.
Also, the Corporation and C&N Bank are subject to restrictions on the amount of dividends that may be paid without approval of banking regulatory authorities. These restrictions are described in Note 18 to the consolidated financial statements. On September 25, 2023, the Corporation announced a new treasury stock repurchase program.
As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases may be made from time to time in the open market at prevailing prices, or through privately negotiated transactions. ​ The following table sets forth a summary of purchases by the Corporation, in the open market, of its equity securities during the fourth quarter 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Maximum ​ ​ ​ ​ ​ ​ ​ Shares ​ Number of ​ ​ ​ ​ ​ ​ ​ Purchased ​ Shares that May ​ ​ ​ ​ ​ ​ ​ as Part of ​ Yet ​ ​ ​ ​ ​ ​ ​ Publicly ​ be Purchased ​ ​ Total Number ​ Average ​ Announced ​ Under ​ ​ of Shares ​ Price Paid ​ Plans ​ the Plans or Period ​ Purchased ​ per Share ​ or Programs ​ Programs October 1 - 31, 2024 0 ​ $ 0 0 723,966 November 1 - 30, 2024 0 ​ $ 0 0 723,966 December 1 - 31, 2024 0 ​ $ 0 0 723,966 Total ​ 0 ​ $ 0 ​ 0 ​ ​ ​ ​ 12 Table of Contents PERFORMANCE GRAPH Set forth below is a chart comparing the Corporation’s cumulative return to stockholders against the cumulative return of the Russell 2000 Index and the Corporation’s peer group index (the NASDAQ Bank Index) for the five-year period commencing December 31, 2019 and ended December 31, 2024.
As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases may be made from time to time in the open market at prevailing prices, or through privately negotiated transactions. ​ ​ The following table sets forth a summary of purchases by the Corporation, in the open market, of its equity securities during the fourth quarter 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ Shares ​ Number of ​ ​ ​ ​ ​ ​ ​ Purchased ​ Shares that May ​ ​ ​ ​ ​ ​ ​ as Part of ​ Yet ​ ​ ​ ​ ​ ​ ​ Publicly ​ be Purchased ​ ​ Total Number ​ Average ​ Announced ​ Under ​ ​ of Shares ​ Price Paid ​ Plans ​ the Plans or Period ​ Purchased ​ per Share ​ or Programs ​ Programs October 1 - 31, 2025 0 ​ $ 0 0 723,966 November 1 - 30, 2025 501 ​ $ 19.03 501 723,465 December 1 - 31, 2025 0 ​ $ 0 0 723,465 Total ​ 501 ​ $ 19.03 ​ 501 ​ ​ ​ ​ 12 Table of Contents PERFORMANCE GRAPH Set forth below is a chart comparing the Corporation’s cumulative return to stockholders against the cumulative return of the Russell 2000 Index and the Corporation’s peer group index (the NASDAQ Bank Index) for the five-year period commencing December 31, 2020 and ended December 31, 2025.
All shares of common stock repurchased pursuant to the new program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plans and its equity compensation program.
All shares of common stock repurchased pursuant to the program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase and Sale Plan and its equity compensation program.
The figures shown in the table below are as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ Number of ​ Weighted- ​ Securities ​ ​ Securities to be ​ average ​ Remaining ​ ​ Issued Upon ​ Exercise ​ for Future ​ ​ Exercise of ​ Price of ​ Issuance Under ​ ​ Outstanding ​ Outstanding ​ Equity Compen- ​ Options Options sation Plans Equity compensation plans approved by shareholders 0 ​ $ N/A 407,659 ​ ​ ​ ​ ​ ​ ​ ​ Equity compensation plans not approved by shareholders 0 ​ N/A 0 ​ More details related to the Corporation’s equity compensation plans are provided in Notes 1 and 12 to the consolidated financial statements. ​ ITEM 6.
The figures shown in the table below are as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ Number of ​ Weighted- ​ Securities ​ ​ Securities to be ​ average ​ Remaining ​ ​ Issued Upon ​ Exercise ​ for Future ​ ​ Exercise of ​ Price of ​ Issuance Under ​ ​ Outstanding ​ Outstanding ​ Equity Compen- ​ ​ ​ ​ Options ​ ​ ​ Options ​ ​ ​ sation Plans Equity compensation plans approved by shareholders 0 ​ $ N/A 357,936 ​ ​ ​ ​ ​ ​ ​ ​ Equity compensation plans not approved by shareholders 0 ​ N/A 0 ​ More details related to the Corporation’s equity compensation plans are provided in Notes 1 and 13 to the consolidated financial statements. ​ ITEM 6.
As of December 31, 2024, there were 2,036 shareholders of record of the Corporation’s common stock. While the Corporation has a history of paying cash dividends, future dividend payments will depend upon maintenance of a strong financial condition, future earnings and capital and regulatory requirements.
As of December 31, 2025, there were 2,283 shareholders of record of the Corporation’s common stock. While the Corporation has a history of paying cash dividends, future dividend payments will depend upon the Corporation’s financial condition and future earnings and capital and regulatory requirements.
The index values are market-weighted dividend-reinvestment numbers, which measure the total return for investing $100.00 five years ago.
The index values are market-weighted dividend-reinvestment amounts, which measure the total return on a $100.00 investment made five years ago.
During the year ended December 31, 2024, 26,034 shares were repurchased for a total cost of $443,000, at an average price of $17.02 per share. At December 31, 2024, there were 723,966 shares available to be repurchased under the program.
During the year ended December 31, 2025, 501 shares were repurchased for a total cost of $9,534, at an average price of $19.03 per share. At December 31, 2025, there were 723,465 shares available to be repurchased under the program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTABLE IX - ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 2022 2021 2020 Balance, beginning of year $ 19,208 ​ $ 16,615 ​ $ 13,537 ​ $ 11,385 ​ $ 9,836 ​ Adoption of ASU 2016-13 (CECL) 0 ​ 2,104 ​ 0 ​ 0 ​ 0 ​ Charge-offs (1,716) ​ (356) ​ (4,245) ​ (1,575) ​ (2,465) ​ Recoveries 113 ​ 92 ​ 68 ​ 66 ​ 101 ​ Net charge-offs (1,603) ​ (264) ​ (4,177) ​ (1,509) ​ (2,364) ​ Provision for credit losses on loans 2,430 ​ 753 ​ 7,255 ​ 3,661 ​ 3,913 ​ Balance, end of year $ 20,035 ​ $ 19,208 ​ $ 16,615 ​ $ 13,537 ​ $ 11,385 ​ Net charge-offs as a % of average loans 0.09 % 0.01 % 0.26 % 0.09 % 0.16 % ​ TABLE X - COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES ​ UPON ADOPTION OF CECL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ December 31, ​ January 1, ​ ​ 2024 ​ 2023 ​ 2023 Loans individually evaluated ​ $ 122 ​ $ 743 ​ $ 751 Loans collectively evaluated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - nonowner occupied ​ ​ 11,964 ​ ​ 10,379 ​ ​ 9,641 Commercial real estate - owner occupied ​ ​ 2,722 ​ ​ 2,111 ​ ​ 1,765 All other commercial loans ​ ​ 3,361 ​ ​ 3,811 ​ ​ 3,914 Residential mortgage ​ ​ 1,356 ​ ​ 1,764 ​ ​ 2,407 Consumer ​ ​ 510 ​ ​ 400 ​ ​ 241 Total Allowance ​ $ 20,035 ​ $ 19,208 ​ $ 18,719 PRIOR TO CECL ADOPTION ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, ​ 2022 2021 2020 ASC 310 - Impaired loans - individually evaluated ​ $ 453 ​ $ 740 ​ $ 925 ASC 450 - Collectively evaluated: ​ ​ ​ Commercial ​ 10,845 ​ 7,553 ​ 5,545 Residential mortgage ​ 4,073 ​ 4,338 ​ 4,091 Consumer ​ 244 ​ 235 ​ 239 Unallocated ​ 1,000 ​ 671 ​ 585 Total Allowance ​ $ 16,615 ​ $ 13,537 ​ $ 11,385 ​ ​ 32 Table of Contents TABLE XI - PAST DUE AND NONPERFORMING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ As of December 31, ​ 2024 2023 2022 2021 2020 Loans individually evaluated with a valuation allowance ​ $ 258 ​ $ 7,786 ​ $ 3,460 ​ $ 6,540 ​ $ 8,082 ​ Loans individually evaluated without a valuation allowance ​ 18,843 ​ 3,478 ​ 14,871 ​ 2,636 ​ 2,895 ​ Purchased credit impaired loans ​ ​ 0 ​ ​ 0 ​ ​ 1,027 ​ ​ 6,558 ​ ​ 6,841 ​ Total individually evaluated loans ​ $ 19,101 ​ $ 11,264 ​ $ 19,358 ​ $ 15,734 ​ $ 17,818 ​ Total loans past due 30-89 days and still accruing ​ $ 5,658 ​ $ 9,275 ​ $ 7,079 ​ $ 5,106 ​ $ 5,918 ​ Nonperforming assets: ​ ​ ​ ​ ​ ​ Purchased credit impaired loans ​ $ 0 ​ $ 0 ​ $ 1,027 ​ $ 6,558 ​ $ 6,841 ​ Other nonaccrual loans ​ ​ 23,842 ​ ​ 15,177 ​ ​ 22,058 ​ ​ 12,441 ​ ​ 14,575 ​ Total nonaccrual loans ​ ​ 23,842 ​ ​ 15,177 ​ ​ 23,085 ​ ​ 18,999 ​ ​ 21,416 ​ Total loans past due 90 days or more and still accruing ​ 119 ​ 3,190 ​ 2,237 ​ 2,219 ​ 1,975 ​ Total nonperforming loans ​ 23,961 ​ 18,367 ​ 25,322 ​ 21,218 ​ 23,391 ​ Foreclosed assets held for sale (real estate) ​ 181 ​ 478 ​ 275 ​ 684 ​ 1,338 ​ Total nonperforming assets ​ $ 24,142 ​ $ 18,845 ​ $ 25,597 ​ $ 21,902 ​ $ 24,729 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans as a % of loans ​ 1.26 % 0.99 % 1.46 % 1.36 % 1.42 % Total nonperforming assets as a % of assets ​ 0.92 % 0.75 % 1.04 % 0.94 % 1.10 % Nonaccrual loans as a % of loans ​ ​ 1.26 % ​ 0.82 % ​ 1.33 % ​ 1.21 % ​ 1.30 % Allowance for credit losses as a % of nonaccrual loans ​ ​ 84.03 % ​ 79.01 % ​ 71.97 % ​ 71.25 % ​ 53.16 % Allowance for credit losses as a % of total loans ​ 1.06 % 1.04 % 0.95 % 0.87 % 0.69 % ​ TABLE XII – FIVE-YEAR HISTORY OF LOAN LOSSES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) 2024 2023 2022 2021 2020 Average Average gross loans ​ $ 1,881,122 ​ $ 1,792,149 ​ $ 1,628,094 ​ $ 1,596,756 ​ $ 1,445,098 ​ $ 1,668,644 ​ Year-end gross loans ​ 1,895,848 ​ 1,848,139 ​ 1,740,040 ​ 1,564,849 ​ 1,644,209 ​ $ 1,738,617 ​ Year-end allowance for credit losses on loans ​ 20,035 ​ 19,208 ​ 16,615 ​ 13,537 ​ 11,385 ​ $ 16,156 ​ Year-end nonaccrual loans ​ 23,842 ​ 15,177 ​ 23,085 ​ 18,999 ​ 21,416 ​ $ 20,504 ​ Year-end loans 90 days or more past due and still accruing ​ 119 ​ 3,190 ​ 2,237 ​ 2,219 ​ 1,975 ​ 1,948 ​ Net charge-offs ​ 1,603 ​ 264 ​ 4,177 ​ 1,509 ​ 2,364 ​ 1,983 ​ Provision for credit losses on loans ​ 2,430 ​ 753 ​ 7,255 ​ 3,661 ​ 3,913 ​ 3,602 ​ Earnings coverage of charge-offs ​ 20 x 119 x 8 x 26 x 10 x 16 x Allowance coverage of charge-offs ​ 12 x 73 x 4 x 9 x 5 x 8 x Net charge-offs as a % of provision for credit losses on loans ​ 65.97 % 35.06 % 57.57 % 41.22 % 60.41 % 55.06 % Net charge-offs as a % of average gross loans ​ 0.09 % 0.01 % 0.26 % 0.09 % 0.16 % 0.12 % Income before income taxes on a fully taxable equivalent basis ​ 32,690 ​ 31,402 ​ 33,576 ​ 38,822 ​ 24,192 ​ 32,136 ​ ​ CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS The Corporation’s significant fixed and determinable contractual obligations as of December 31, 2024 include repayment obligations related to time deposits and borrowed funds.
Biggest changeTABLE IX - ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ Balance, beginning of year ​ $ 20,035 ​ $ 19,208 ​ $ 16,615 ​ $ 13,537 ​ $ 11,385 ​ Adoption of ASU 2016-13 (CECL) ​ 0 ​ 0 ​ 2,104 ​ 0 ​ 0 ​ Allowance recorded in business combination- PCD loans ​ ​ 2,637 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ Allowance recorded in business combination- Non PCD loans ​ ​ 4,437 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ Charge-offs ​ (1,726) ​ (1,716) ​ (356) ​ (4,245) ​ (1,575) ​ Recoveries ​ 109 ​ 113 ​ 92 ​ 68 ​ 66 ​ Net charge-offs ​ (1,617) ​ (1,603) ​ (264) ​ (4,177) ​ (1,509) ​ Provision for credit losses on loans ​ 5,556 ​ 2,430 ​ 753 ​ 7,255 ​ 3,661 ​ Balance, end of period ​ $ 31,048 ​ $ 20,035 ​ $ 19,208 ​ $ 16,615 ​ $ 13,537 ​ Net charge-offs as a % of average loans (annualized) ​ 0.08 % 0.09 % 0.01 % 0.26 % 0.09 % ​ TABLE X - COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES ​ UPON ADOPTION OF CECL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ December 31, ​ December 31, ​ January 1, ​ ​ 2025 ​ 2024 ​ 2023 ​ 2023 Loans individually evaluated ​ $ 2,772 ​ $ 122 ​ $ 743 ​ $ 751 Loans collectively evaluated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate - nonowner occupied ​ ​ 17,171 ​ ​ 11,964 ​ ​ 10,379 ​ ​ 9,641 Commercial real estate - owner occupied ​ ​ 3,820 ​ ​ 2,722 ​ ​ 2,111 ​ ​ 1,765 All other commercial loans ​ ​ 5,290 ​ ​ 3,361 ​ ​ 3,811 ​ ​ 3,914 Residential mortgage ​ ​ 1,629 ​ ​ 1,356 ​ ​ 1,764 ​ ​ 2,407 Consumer ​ ​ 366 ​ ​ 510 ​ ​ 400 ​ ​ 241 Total Allowance ​ $ 31,048 ​ $ 20,035 ​ $ 19,208 ​ $ 18,719 PRIOR TO CECL ADOPTION ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ As of December 31, ​ ​ ​ ​ 2022 ​ ​ ​ 2021 ASC 310 - Impaired loans - individually evaluated ​ $ 453 ​ $ 740 ASC 450 - Collectively evaluated: ​ ​ ​ ​ Commercial ​ 10,845 ​ 7,553 Residential mortgage ​ 4,073 ​ 4,338 Consumer ​ 244 ​ 235 Unallocated ​ 1,000 ​ 671 Total Allowance ​ $ 16,615 ​ $ 13,537 ​ ​ 33 Table of Contents TABLE XI - PAST DUE AND NONPERFORMING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ As of December 31, 2025 ​ As of December 31, ​ ​ ​ ​ ​ PCD Loans ​ ​ ​ Non PCD Loans ​ ​ ​ Total Loans ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ Collateral dependent loans with a valuation allowance ​ $ 5,138 ​ $ 263 ​ $ 5,401 ​ $ 258 ​ $ 7,786 ​ $ 3,460 ​ $ 6,540 ​ Collateral dependent loans without a valuation allowance ​ 5,553 ​ 21,474 ​ 27,027 ​ 29,867 ​ 3,478 ​ 14,871 ​ 2,636 ​ Purchased credit impaired loans ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 1,027 ​ ​ 6,558 ​ Total collateral dependent loans ​ $ 10,691 ​ $ 21,737 ​ $ 32,428 ​ $ 30,125 ​ $ 11,264 ​ $ 19,358 ​ $ 15,734 ​ Total loans past due 30-89 days and still accruing ​ $ 5,810 ​ $ 12,499 ​ $ 18,309 ​ $ 5,658 ​ $ 9,275 ​ $ 7,079 ​ $ 5,106 ​ Nonperforming assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchased credit impaired loans ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 0 ​ $ 1,027 ​ $ 6,558 ​ Other nonaccrual loans ​ ​ 6,762 ​ ​ 26,074 ​ ​ 32,836 ​ ​ 23,842 ​ ​ 15,177 ​ ​ 22,058 ​ ​ 12,441 ​ Total nonaccrual loans ​ ​ 6,762 ​ ​ 26,074 ​ ​ 32,836 ​ ​ 23,842 ​ ​ 15,177 ​ ​ 23,085 ​ ​ 18,999 ​ Total loans past due 90 days or more and still accruing ​ ​ 0 ​ 88 ​ 88 ​ 119 ​ 3,190 ​ 2,237 ​ 2,219 ​ Total nonperforming loans ​ 6,762 ​ 26,162 ​ 32,924 ​ 23,961 ​ 18,367 ​ 25,322 ​ 21,218 ​ Foreclosed assets held for sale (real estate) ​ ​ 0 ​ 189 ​ 189 ​ 181 ​ 478 ​ 275 ​ 684 ​ Total nonperforming assets ​ $ 6,762 ​ $ 26,351 ​ $ 33,113 ​ $ 24,142 ​ $ 18,845 ​ $ 25,597 ​ $ 21,902 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans as a % of loans ​ ​ ​ ​ ​ ​ ​ 1.40 % 1.26 % 0.99 % 1.46 % 1.36 % Total nonperforming assets as a % of assets ​ ​ ​ ​ ​ ​ ​ 1.06 % 0.92 % 0.75 % 1.04 % 0.94 % Nonaccrual loans as a % of loans ​ ​ ​ ​ ​ ​ ​ ​ 1.39 % ​ 1.26 % ​ 0.82 % ​ 1.33 % ​ 1.21 % Allowance for credit losses as a % of nonaccrual loans ​ ​ ​ ​ ​ ​ ​ ​ 94.55 % ​ 84.03 % ​ 79.01 % ​ 71.97 % ​ 71.25 % Allowance for credit losses as a % of total loans ​ ​ ​ ​ ​ ​ 1.32 % 1.06 % 1.04 % 0.95 % 0.87 % ​ ​ TABLE XII – FIVE-YEAR HISTORY OF LOAN LOSSES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ Average Average gross loans ​ $ 2,019,117 ​ $ 1,881,122 ​ $ 1,792,149 ​ $ 1,628,094 ​ $ 1,596,756 ​ $ 1,783,448 ​ Year-end gross loans ​ 2,354,365 ​ 1,895,848 ​ 1,848,139 ​ 1,740,040 ​ 1,564,849 ​ ​ 1,880,648 ​ Year-end allowance for credit losses on loans ​ 31,048 ​ 20,035 ​ 19,208 ​ 16,615 ​ 13,537 ​ ​ 20,089 ​ Year-end nonaccrual loans ​ 32,836 ​ 23,842 ​ 15,177 ​ 23,085 ​ 18,999 ​ ​ 22,788 ​ Year-end loans 90 days or more past due and still accruing ​ 88 ​ 119 ​ 3,190 ​ 2,237 ​ 2,219 ​ 1,571 ​ Net charge-offs ​ 1,617 ​ 1,603 ​ 264 ​ 4,177 ​ 1,509 ​ 1,834 ​ Provision for credit losses on loans ​ 5,556 ​ 2,430 ​ 753 ​ 7,255 ​ 3,661 ​ 3,931 ​ Earnings coverage of charge-offs ​ 18 x 20 x 119 x 8 x 26 x 18 x Allowance coverage of charge-offs ​ 19 x 12 x 73 x 4 x 9 x 11 x Net charge-offs as a % of provision for credit losses on loans ​ 29.10 % 65.97 % 35.06 % 57.57 % 41.22 % 46.65 % Net charge-offs as a % of average gross loans ​ 0.08 % 0.09 % 0.01 % 0.26 % 0.09 % 0.10 % Income before income taxes on a fully taxable equivalent basis ​ ​ 29,525 ​ ​ 32,690 ​ 31,402 ​ 33,576 ​ 38,822 ​ 33,203 ​ 34 Table of Contents CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS The Corporation’s significant fixed and determinable contractual obligations as of December 31, 2025 include repayment obligations related to time deposits and borrowed funds.
The Corporation has experienced growth in commercial real estate and other commercial loans in 2023 and in 2024. Income from interest-bearing due from banks totaled $4,307,000 in 2024, an increase of $2,928,000 from 2023. Within this category, the largest asset balance in 2024 and 2023 has been interest-bearing deposits held with the Federal Reserve.
The Corporation experienced growth in commercial real estate and other commercial loans in 2023 and in 2024. Income from interest-bearing due from banks totaled $4,307,000 in 2024, an increase of $2,928,000 from 2023. Within this category, the largest asset balance in 2024 and 2023 has been interest-bearing deposits held with the Federal Reserve.
Citizens & Northern Corporation and its wholly-owned subsidiaries (collectively, the Corporation) intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995.
Citizens & Northern Corporation and its wholly-owned subsidiaries (collectively, the “Corporation”) intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995.
At December 31, 2024, the minimum risk-based capital ratios, and the capital ratios including the capital conservation buffer, are as follows: ​ ​ ​ ​ ​ Minimum common equity tier 1 capital ratio 4.5 % Minimum common equity tier 1 capital ratio plus capital conservation buffer 7.0 % Minimum tier 1 capital ratio 6.0 % Minimum tier 1 capital ratio plus capital conservation buffer 8.5 % Minimum total capital ratio 8.0 % Minimum total capital ratio plus capital conservation buffer 10.5 % ​ A banking organization with a buffer greater than 2.5% over the minimum risk-based capital ratios would not be subject to additional limits on dividend payments or discretionary bonus payments; however, a banking organization with a buffer less than 2.5% would be subject to increasingly stringent limitations as the buffer approaches zero.
At December 31, 2025, the minimum risk-based capital ratios, and the capital ratios including the capital conservation buffer, are as follows: ​ ​ ​ ​ ​ Minimum common equity tier 1 capital ratio ​ ​ ​ 4.5 % Minimum common equity tier 1 capital ratio plus capital conservation buffer 7.0 % Minimum tier 1 capital ratio 6.0 % Minimum tier 1 capital ratio plus capital conservation buffer 8.5 % Minimum total capital ratio 8.0 % Minimum total capital ratio plus capital conservation buffer 10.5 % ​ A banking organization with a buffer greater than 2.5% over the minimum risk-based capital ratios would not be subject to additional limits on dividend payments or discretionary bonus payments; however, a banking organization with a buffer less than 2.5% would be subject to increasingly stringent limitations as the buffer approaches zero.
Additional information related to income taxes is presented in Note 13 to the consolidated financial statements. SECURITIES Management continually evaluates several objectives in determining the size, securities mix and other characteristics of the available-for-sale debt securities (investment) portfolio. Key objectives include supporting liquidity needs and maximizing return on earning assets within reasonable risk parameters.
Additional information related to income taxes is presented in Note 14 to the consolidated financial statements. SECURITIES Management continually evaluates several objectives in determining the size, securities mix and other characteristics of the available-for-sale debt securities (investment) portfolio. Key objectives include supporting liquidity needs and maximizing return on earning assets within reasonable risk parameters.
Further, management reviewed the Corporation’s holdings as of December 31, 2024 and concluded there were no credit-related declines in fair value. Additional information related to the types of securities held at December 31, 2024, other than securities issued or guaranteed by U.S.
Further, management reviewed the Corporation’s holdings as of December 31, 2025 and concluded there were no credit-related declines in fair value. Additional information related to the types of securities held at December 31, 2025, other than securities issued or guaranteed by U.S.
Management believes the recorded net deferred tax asset at December 31, 2024 is fully realizable; however, if management determines the Corporation will be unable to realize all or part of the net deferred tax asset, the Corporation would adjust the deferred tax asset, which would negatively impact earnings.
Management believes the recorded net deferred tax asset at December 31, 2025 is fully realizable; however, if management determines the Corporation will be unable to realize all or part of the net deferred tax asset, the Corporation would adjust the deferred tax asset, which would negatively impact earnings.
As summarized in the table that immediately follows, the Corporation’s highly liquid sources of available funds described above, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh, unused availability on the Federal Reserve Bank of Philadelphia’s discount window, available federal funds lines with other banks and unencumbered available-for-sale debt securities totaled $1.1 billion at December 31, 2024.
As summarized in the table that immediately follows, the Corporation’s highly liquid sources of available funds described above, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh, unused availability on the Federal Reserve Bank of Philadelphia’s discount window, available federal funds lines with other banks and unencumbered available-for-sale debt securities totaled $1.2 billion at December 31, 2025.
Notes 1 and 7 to the consolidated financial statements provide an overview of the process management uses for determining the ACL, and additional discussion of the ACL is provided in a separate section of Management’s Discussion and Analysis.
Notes 1 and 8 to the consolidated financial statements provide an overview of the process management uses for determining the ACL, and additional discussion of the ACL is provided in a separate section of Management’s Discussion and Analysis.
NET INTEREST INCOME The Corporation’s primary source of operating income is net interest income, which is equal to the difference between the amounts of interest income and interest expense. Tables I, II and III include information regarding the Corporation’s net interest income in 2024, 2023 and 2022.
NET INTEREST INCOME The Corporation’s primary source of operating income is net interest income, which is equal to the difference between the amounts of interest income and interest expense. Tables I, II and III include information regarding the Corporation’s net interest income in 2025, 2024 and 2023.
The net losses on available-for-sale debt securities of $3,036,000 for the year ended December 31, 2023 were primarily from sales in the fourth quarter 2023 related to the repositioning of the portfolio. ​ Ø Earnings from the increase in cash surrender value of life insurance of $1,830,000 decreased $873,000 in 2024 from 2023.
The net losses on available-for-sale debt securities of $3,036,000 for the year ended December 31, 2023 were primarily from sales in the fourth quarter 2023 related to the repositioning of the portfolio. ​ 17 Table of Contents Ø Earnings from the increase in cash surrender value of life insurance of $1,830,000 decreased $873,000 in 2024 from 2023.
GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase/(Decrease) ​ ​ 2024 2023 ​ 2022 ​ 2024/2023 2023/2022 Net Interest Income Under U.S.
GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase/(Decrease) ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ 2025/2024 ​ ​ ​ 2024/2023 Net Interest Income Under U.S.
Also, a banking organization is prohibited from making dividend payments or discretionary bonus payments if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% as of the beginning of that quarter.
Also, a banking organization is prohibited from making dividend payments or discretionary bonus payments if its eligible retained income is negative in that quarter and its capital conservation 37 Table of Contents buffer ratio was less than 2.5% as of the beginning of that quarter.
For the year ended December 31, 2024, the provision related to loans receivable included the impact of a net increase in the allowance for credit losses (ACL) related to qualitative factors, partially offset by a decrease in total specific allowances on individual loans and decreases in other components of the ACL.
For the year ended December 31, 2024, the provision related to loans receivable included the impact of a net increase in the ACL related to qualitative factors, partially offset by a decrease in total specific allowances on individual loans and decreases in other components of the ACL.
Also, the Corporation maintains borrowing facilities with the Federal Home Loan Bank of Pittsburgh, secured by various mortgage loans. The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. Management intends to use this line of credit as a contingency funding source.
Also, the Corporation maintains borrowing facilities with the Federal Home Loan Bank of Pittsburgh, secured by various mortgage loans. 35 Table of Contents The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. Management intends to use this line of credit as a contingency funding source.
Further, the Corporation’s and C&N Bank’s capital ratios at December 31, 2024 and December 31, 2023 exceed the Corporation’s Board policy threshold levels. Management expects C&N Bank to maintain capital levels that exceed the regulatory standards for well-capitalized institutions for the next 12 months and for the foreseeable future.
Further, the Corporation’s and C&N Bank’s capital ratios at December 31, 2025 and December 31, 2024 exceed the Corporation’s Board policy threshold levels. Management expects the Corporation and C&N Bank to maintain capital levels that exceed the regulatory standards for well-capitalized institutions for the next 12 months and for the foreseeable future.
As described in Note 6 to the consolidated financial statements, management determined the Corporation does not have the intent to sell, nor is it more likely than not that it will be required to sell, available-for-sale debt securities in an unrealized loss position at December 31, 2024 before it is able to recover the amortized cost basis.
As described in Note 7 to the consolidated financial statements, management determined the Corporation does not have the intent to sell, nor is it more likely than not that it will be required to sell, available-for-sale debt securities in an unrealized loss position at December 31, 2025 before it is able to recover the amortized cost basis.
Tax-exempt interest income and income from BOLI contributed to the effective rate being lower than the federal statutory rate in 2022 through 2024.The higher effective income tax rate in 2023 included the net impact of a tax charge of $950,000 for the initiated surrender of BOLI.
Tax-exempt interest income and income from BOLI contributed to the effective rate being lower than the federal statutory rate in 2023 through 2025.The higher effective income tax rate in 2023 included the net impact of a tax charge of $950,000 for the initiated surrender of BOLI.
Significant variances included the following: Ø Other noninterest expense of $10,361,000 decreased $872,000. Within this category, significant variances included the following: 15 Table of Contents ◾ Other operational losses included a net decrease in expense of $407,000 to $98,000 in other losses in 2024 from expense of $505,000 in 2023.
Significant variances included the following: Ø Other noninterest expense of $10,361,000 decreased $872,000. Within this category, significant variances included the following: ◾ Other operational losses included a net decrease in expense of $407,000 to $98,000 in other losses in 2024 from expense of $505,000 in 2023.
Information related to maturities of time deposits is provided in Note 10 to the consolidated financial statements. Information related to maturities of borrowed funds is provided in Note 11 to the consolidated financial statements. The Corporation’s operating lease commitments with terms of one year or less and other commitments at December 31, 2024 are immaterial.
Information related to maturities of time deposits is provided in Note 11 to the consolidated financial statements. Information related to maturities of borrowed funds is provided in Note 12 to the consolidated financial statements. The Corporation’s operating lease commitments with terms of one year or less and other commitments at December 31, 2025 are immaterial.
(2) Fees on loans are included with interest on loans and amounted to $1,927,000 in 2024, $1,856,000 in 2023 and $2,958,000 in 2022. (3) The table that follows is a reconciliation of net interest income under U.S.
(2) Fees on loans are included with interest on loans and amounted to $1,726,000 in 2025, $1,927,000 in 2024 and $1,856,000 in 2023. (3) The table that follows is a reconciliation of net interest income under U.S.
The securities section of Management’s Discussion and Analysis and Note 6 to the consolidated financial statements provide additional information concerning information management considered in evaluating debt and equity securities for credit losses at December 31, 2024. ​
The securities section of Management’s Discussion and Analysis and Note 7 to the consolidated financial statements provide additional information concerning information management considered in evaluating debt and equity securities for credit losses at December 31, 2025.
There are no significant concerns that have arisen related to the Corporation’s off-balance sheet loan commitments or outstanding letters of credit at December 31, 2024. Table VII shows the composition of the loan portfolio at year-end from 2020 through 2024. Throughout this time period, the portfolio was primarily commercial in nature.
There are no significant concerns that have arisen related to the Corporation’s off-balance sheet loan commitments or outstanding letters of credit at December 31, 2025. 28 Table of Contents Table VII shows the composition of the loan portfolio at year-end from 2021 through 2025. Throughout this time period, the portfolio was primarily commercial in nature.
The Corporation may be required to repurchase a loan and reimburse a portion of fees received or reimburse the investor for a credit loss incurred on a loan, if it is determined that the representations and warranties have not been met. At December 31, 2024, outstanding balances of such loans sold totaled $329,766,000.
The Corporation may be required to repurchase a loan and reimburse a portion of fees received or reimburse the investor for a credit loss incurred on a loan, if it is determined that the representations and warranties have not been met. At December 31, 2025, outstanding balances of such loans sold totaled $450,120,000.
If required to raise cash in an emergency situation, the Corporation could utilize available-for-sale debt securities as collateral for borrowings or sell securities to meet its obligations. At December 31, 2024, the carrying value of available-for-sale debt securities in excess of amounts required to meet pledging or repurchase agreement obligations was $236,945,000.
If required to raise cash in an emergency situation, the Corporation could utilize available-for-sale debt securities as collateral for borrowings or sell securities to meet its obligations. At December 31, 2025, the carrying value of available-for-sale debt securities in excess of amounts required to meet pledging or repurchase agreement obligations was $319,624,000.
The data in Table VII shows the amortized cost in non-owner occupied commercial real estate loans for which the primary purpose is utilization of office space by third parties was $102,831,000, or 5.4% of gross loans receivable.
The data in Table VII shows the amortized cost of non-owner occupied commercial real estate loans for which the primary purpose is utilization of office space by third parties was $125,175,000, or 5.3% of gross loans receivable.
STOCKHOLDERS’ EQUITY AND CAPITAL ADEQUACY Details concerning capital ratios at December 31, 2024 and December 31, 2023 are presented in Note 17 to the consolidated financial statements.
STOCKHOLDERS’ EQUITY AND CAPITAL ADEQUACY Details concerning capital ratios at December 31, 2025 and December 31, 2024 are presented in Note 18 to the consolidated financial statements.
The Corporation recognizes deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities. At December 31, 2024, the net deferred tax asset was $19,098,000, up from the balance at December 31, 2023 of $17,441,000.
The Corporation recognizes deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities. At December 31, 2025, the net deferred tax asset was $17,615,000, down from the balance at December 31, 2024 of $19,098,000.
The balance in accumulated other comprehensive loss related to unrealized losses on available-for-sale debt securities, net of deferred income tax, amounted to $37,084,000 at December 31, 2024 and $38,878,000 at December 31, 2023.
The balance in accumulated other comprehensive loss related to unrealized losses on available-for-sale debt securities, net of deferred income tax, amounted to $23,154,000 at December 31, 2025 and $37,084,000 at December 31, 2024.
CRITICAL ACCOUNTING POLICIES The presentation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect many of the reported amounts and disclosures. Actual results could differ from these estimates.
CRITICAL ACCOUNTING POLICIES The presentation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect many of the reported amounts and disclosures.
The difference between amortized cost and fair value of available-for-sale debt securities, net of deferred income tax, is included in accumulated other comprehensive loss within stockholders’ equity. Accumulated other comprehensive loss is excluded from the Bank’s and Corporation’s regulatory capital ratios.
The difference between amortized cost and fair value of available-for-sale debt securities, net of deferred income tax, is included in accumulated other comprehensive loss within stockholders’ equity. Accumulated other comprehensive loss is excluded from the Bank’s and Corporation’s regulatory capital ratios but is included for the determination of tangible common equity, as discussed in the following paragraph.
A summary of payout restrictions based on the capital conservation buffer is as follows: ​ ​ ​ ​ ​ Capital Conservation Buffer Maximum Payout (as a % of risk-weighted assets) ​ (as a % of eligible retained income) Greater than 2.5% ​ No payout limitation applies ​ ≤2.5% and >1.875% ​ 60 % ≤1.875% and >1.25% ​ 40 % ≤1.25% and >0.625% ​ 20 % ≤0.625% ​ 0 % ​ At December 31, 2024, C&N Bank’s Capital Conservation Buffer (determined based on the minimum total capital ratio) was 7.19%.
A summary of payout restrictions based on the capital conservation buffer is as follows: ​ ​ ​ ​ ​ Capital Conservation Buffer ​ ​ ​ Maximum Payout (as a % of risk-weighted assets) ​ (as a % of eligible retained income) Greater than 2.5% ​ No payout limitation applies ​ ≤2.5% and >1.875% ​ 60 % ≤1.875% and >1.25% ​ 40 % ≤1.25% and >0.625% ​ 20 % ≤0.625% ​ 0 % ​ At December 31, 2025, the Corporation’s Capital Conservation Buffer was 6.18% and C&N Bank’s Capital Conservation Buffer was 5.82%.
Management believes, as of December 31, 2024, that C&N Bank meets all capital adequacy requirements to which it is subject and maintains a capital conservation buffer (described in more detail below) that allows the Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers.
Management believes, as of December 31, 2025, that the Corporation and C&N Bank meet all capital adequacy requirements to which they are subject and maintain a capital conservation buffer (described in more detail below) that allows the Corporation and Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers.
Government sponsored agencies, 16.3%. 25 Table of Contents The composition of the available-for-sale debt securities portfolio at December 31, 2024, December 31, 2023 and December 31, 2022 is as follows: TABLE VI - INVESTMENT SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ Amortized ​ Fair ​ Amortized ​ Fair ​ Amortized ​ Fair (In Thousands) Cost Value ​ Cost Value Cost Value ​ AVAILABLE-FOR-SALE DEBT SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S.
The composition of the available-for-sale debt securities portfolio at December 31, 2025, 2024 and 2023 is as follows: TABLE VI - INVESTMENT SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ Amortized ​ Fair ​ Amortized ​ Fair ​ Amortized ​ Fair (In Thousands) Cost Value ​ Cost Value Cost Value ​ AVAILABLE-FOR-SALE DEBT SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of the U.S.
As collateral for the line, the Corporation has pledged available-for-sale securities with a carrying value of $18,881,000 at December 31, 2024.
As collateral for the line, the Corporation has pledged available-for-sale securities with a carrying value of $26,947,000 at December 31, 2025.
Table X also shows that, at December 31, 2024 as compared to December 31, 2023, the ACL related to collectively evaluated commercial loans increased by a total of $1,746,000 and the ACL on collectively evaluated consumer loans increased $110,000, while the ACL on collectively evaluated residential mortgage loans decreased $408,000.
Table X also shows that, at December 31, 2025 as compared to December 31, 2024, the ACL related to collectively evaluated commercial loans increased by a total of $8,234,000 and the ACL on collectively evaluated residential mortgage increased $273,000, while the ACL on collectively evaluated consumer loans decreased $144,000.
INCOME TAXES The effective income tax rate was 18.6% of pre-tax income in 2024, down from 20.8% in 2023 and up from 17.7% in 2022.
INCOME TAXES The effective income tax rate was 18.2% of pre-tax income in 2025, down from 18.6% in 2024 and 20.8% in 2023.
Participation loans are included in the “Commercial and industrial”, “Commercial loans secured by real estate”, “Political subdivisions” and “Other commercial” classes in the loan tables presented in this Form 10-K. Total participation loans outstanding amounted to $35,129,000 at December 31, 2024, down from $38,652,000 at December 31, 2023.
Participation loans are included in the “Commercial and industrial”, “Commercial loans secured by real estate”, “Political subdivisions” and “Other commercial” classes in the loan tables presented in this Form 10-K. Total participation loans outstanding amounted to $107,351,000 at December 31, 2025, up from $35,129,000 at December 31, 2024. The increase in 2025 resulted from participation loans acquired from Susquehanna.
Information concerning operating lease commitments with terms greater than one year is provided in Note 16 to the consolidated financial statements. 33 Table of Contents The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers.
Information concerning operating lease commitments with terms greater than one year is provided in Note 17 to the consolidated financial statements. The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.
At December 31, 2024, the total outstanding balance of loans the Corporation has repurchased as a result of identified instances of noncompliance amounted to $2,671,000.
At December 31, 2025, the total outstanding balance of loans the Corporation has repurchased as a result of identified instances of noncompliance amounted to $2,598,000 and the corresponding total outstanding balance of repurchased loans at December 31, 2024 was $3,029,000.
Additional information regarding the potential impact of interest rate changes on all of the Corporation’s financial instruments is provided in Item 7A, Quantitative and Qualitative Disclosures about Market Risk.
The volatility in the fair value of the portfolio, including the significant reduction in fair value, resulted from changes in interest rates. Additional information regarding the potential impact of interest rate changes on all of the Corporation’s financial instruments is provided in Item 7A, Quantitative and Qualitative Disclosures about Market Risk.
At December 31, 2024, outstanding balances of loans sold and serviced through the MPF Xtra and Original programs totaled $329, 766,000, including loans sold through the MPF Xtra program of $158,302,000 and loans sold through the Original program of $171,464,000.
At December 31, 2025, outstanding balances of loans sold and serviced through the MPF Xtra and Original programs totaled $450,120,000, including loans sold through the MPF Xtra program of $272,656,000 and loans sold through the Original program of $177,464,000. At December 31, 2024, outstanding balances of loans sold and serviced through the MPF Xtra and Original programs totaled $329,766,000.
During the year ended December 31, 2024, 26,034 shares were repurchased for a total cost of $443,000, at an average price of $17.02 per share. At December 31, 2024, there were 723,966 shares available to be repurchased under the program. The Corporation’s total stockholders’ equity is affected by fluctuations in the fair values of available-for-sale debt securities.
During the year ended December 31, 2025, 501 shares were repurchased for a total cost of $9,534, at an average price of $19.03 per share. At December 31, 2025, there were 723,465 shares available to be repurchased under the program. The Corporation’s total stockholders’ equity is affected by fluctuations in the fair values of available-for-sale debt securities.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements in this section and elsewhere in this Annual Report on Form 10-K are forward-looking statements.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements in this section and elsewhere in this Annual Report on Form 10-K are forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
In each of these tables, the amounts of interest income earned on tax-exempt securities and loans have been adjusted to a fully taxable-equivalent basis. The Corporation believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing returns on tax-exempt securities and loans with returns on taxable securities and loans.
The Corporation believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing returns on tax-exempt securities and loans with returns on taxable securities and loans. Accordingly, the net interest income amounts reflected in these tables exceed the amounts presented in the consolidated financial statements.
GAAP ​ $ 79,115 ​ $ 80,400 ​ $ 83,128 ​ $ (1,285) ​ $ (2,728) Add: fully taxable-equivalent interest income adjustment from tax-exempt securities ​ ​ 271 ​ ​ 388 ​ ​ 720 ​ ​ (117) ​ ​ (332) Add: fully taxable-equivalent interest income adjustment from tax-exempt loans ​ ​ 548 ​ ​ 531 ​ ​ 506 ​ ​ 17 ​ ​ 25 Net Interest Income as adjusted to a fully taxable-equivalent basis ​ $ 79,934 ​ $ 81,319 ​ $ 84,354 ​ $ (1,385) ​ $ (3,035) 21 Table of Contents TABLE II - ANALYSIS OF AVERAGE DAILY BALANCES AND RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) Year ​ ​ ​ ​ Year ​ ​ ​ ​ Year ​ ​ ​ ​ ​ Ended ​ Rate of ​ ​ Ended ​ Rate of ​ ​ Ended ​ Rate of ​ ​ 12/31/2024 ​ Return/ ​ ​ 12/31/2023 ​ Return/ ​ ​ 12/31/2022 ​ Return/ ​ ​ Average ​ Cost of ​ Average ​ Cost of ​ Average ​ Cost of ​ ​ Balance Funds% ​ Balance Funds% ​ Balance Funds% ​ EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks $ 86,703 ​ ​ 4.97 % ​ $ 32,709 ​ ​ 4.22 % ​ $ 51,407 ​ ​ 1.25 % Available-for-sale debt securities, at amortized cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable 340,339 ​ 2.52 % ​ 389,456 ​ 2.20 % ​ 410,033 ​ 2.04 % Tax-exempt 113,121 ​ 2.24 % ​ 125,920 ​ 2.24 % ​ 148,344 ​ 2.51 % Total available-for-sale debt securities 453,460 ​ 2.45 % ​ 515,376 ​ 2.21 % ​ 558,377 ​ 2.16 % Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable 1,791,187 ​ 6.16 % ​ 1,703,839 ​ 5.80 % ​ 1,541,823 ​ 5.04 % Tax-exempt 89,935 ​ 3.27 % ​ 88,310 ​ 3.12 % ​ 86,271 ​ 2.86 % Total loans receivable 1,881,122 ​ 6.03 % ​ 1,792,149 ​ 5.67 % ​ 1,628,094 ​ 4.98 % Other earning assets 2,198 ​ 5.73 % ​ 1,383 ​ 4.63 % ​ 2,321 ​ 3.32 % Total Earning Assets 2,423,483 ​ 5.32 % ​ 2,341,617 ​ 4.89 % ​ 2,240,199 ​ 4.19 % Cash 22,209 ​ ​ ​ 22,108 ​ ​ ​ 22,685 ​ ​ Unrealized loss on securities (49,520) ​ ​ ​ (63,118) ​ ​ ​ (38,784) ​ ​ Allowance for credit losses (20,294) ​ ​ ​ (18,498) ​ ​ ​ (14,962) ​ ​ Bank-owned life insurance ​ 51,465 ​ ​ ​ ​ ​ ​ 31,808 ​ ​ ​ ​ ​ ​ 30,925 ​ ​ ​ ​ Bank premises and equipment 21,765 ​ ​ ​ ​ 21,330 ​ ​ ​ ​ 21,559 ​ ​ ​ Intangible assets 54,778 ​ ​ ​ ​ 55,176 ​ ​ ​ ​ 55,599 ​ ​ ​ Other assets 79,220 ​ ​ ​ ​ 72,433 ​ ​ ​ ​ 55,567 ​ ​ ​ Total Assets $ 2,583,106 ​ ​ ​ ​ ​ $ 2,462,856 ​ ​ ​ ​ ​ $ 2,372,788 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST-BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking $ 537,233 ​ ​ 2.26 % ​ $ 488,761 ​ ​ 1.57 % ​ $ 443,107 ​ ​ 0.41 % Money market ​ 358,274 ​ ​ 2.40 % ​ ​ 347,130 ​ ​ 1.64 % ​ ​ 443,084 ​ ​ 0.47 % Savings ​ 203,129 ​ ​ 0.10 % ​ ​ 238,760 ​ ​ 0.10 % ​ ​ 257,156 ​ ​ 0.10 % Time deposits ​ 465,882 ​ ​ 3.92 % ​ ​ 381,488 ​ ​ 2.79 % ​ ​ 285,264 ​ ​ 0.86 % Total interest-bearing deposits 1,564,518 ​ 2.51 % ​ 1,456,139 ​ 1.66 % ​ 1,428,611 ​ 0.46 % Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term 22,743 ​ 5.14 % ​ 62,926 ​ 5.15 % ​ 21,766 ​ 1.97 % Long-term - FHLB advances 167,181 ​ 4.30 % ​ 110,943 ​ 3.81 % ​ 40,194 ​ 2.23 % Senior notes, net ​ 14,865 ​ 3.24 % ​ ​ 14,798 ​ 3.24 % ​ ​ 14,733 ​ 3.24 % Subordinated debt, net 24,774 ​ 3.74 % ​ 24,662 ​ 3.74 % ​ 27,116 ​ 3.98 % Total borrowed funds 229,563 ​ 4.25 % ​ 213,329 ​ 4.16 % ​ 103,809 ​ 2.78 % Total Interest-bearing Liabilities. 1,794,081 ​ 2.73 % ​ 1,669,468 ​ 1.98 % ​ 1,532,420 ​ 0.62 % Demand deposits ​ 493,052 ​ ​ ​ ​ ​ ​ 515,787 ​ ​ ​ ​ ​ ​ 551,801 ​ ​ ​ ​ Other liabilities ​ 30,089 ​ ​ ​ ​ ​ ​ 29,107 ​ ​ ​ ​ ​ ​ 23,474 ​ ​ ​ ​ Total Liabilities ​ 2,317,222 ​ ​ ​ ​ ​ ​ 2,214,362 ​ ​ ​ ​ ​ ​ 2,107,695 ​ ​ ​ ​ Stockholders' equity, excluding accumulated other comprehensive loss ​ 304,532 ​ ​ ​ ​ ​ ​ 297,894 ​ ​ ​ ​ ​ ​ 295,447 ​ ​ ​ ​ Accumulated other comprehensive loss ​ (38,648) ​ ​ ​ ​ ​ ​ (49,400) ​ ​ ​ ​ ​ ​ (30,354) ​ ​ ​ ​ Total Stockholders' Equity ​ 265,884 ​ ​ ​ ​ ​ ​ 248,494 ​ ​ ​ ​ ​ ​ 265,093 ​ ​ ​ ​ Total Liabilities and Stockholders' Equity $ 2,583,106 ​ ​ ​ ​ ​ $ 2,462,856 ​ ​ ​ ​ ​ $ 2,372,788 ​ ​ ​ ​ Interest Rate Spread ​ ​ ​ ​ 2.59 % ​ ​ ​ ​ ​ 2.91 % ​ ​ ​ ​ ​ 3.57 % Net Interest Income/Earning Assets ​ ​ ​ ​ 3.30 % ​ ​ ​ ​ ​ 3.47 % ​ ​ ​ ​ ​ 3.77 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deposits (Interest-bearing and Demand) $ 2,057,570 ​ ​ ​ ​ ​ $ 1,971,926 ​ ​ ​ ​ ​ $ 1,980,412 ​ ​ ​ ​ (1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.
GAAP ​ $ 91,853 ​ $ 79,115 ​ $ 80,400 ​ $ 12,738 ​ $ (1,285) Add: fully taxable-equivalent interest income adjustment from tax-exempt securities ​ ​ 317 ​ ​ 271 ​ ​ 388 ​ ​ 46 ​ ​ (117) Add: fully taxable-equivalent interest income adjustment from tax-exempt loans ​ ​ 565 ​ ​ 548 ​ ​ 531 ​ ​ 17 ​ ​ 17 Net Interest Income as adjusted to a fully taxable-equivalent basis - Non-GAAP ​ $ 92,735 ​ $ 79,934 ​ $ 81,319 ​ $ 12,801 ​ $ (1,385) 22 Table of Contents TABLE II - ANALYSIS OF AVERAGE DAILY BALANCES AND RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) Year ​ ​ ​ ​ Year ​ ​ ​ ​ Year ​ ​ ​ ​ ​ Ended ​ Rate of ​ ​ Ended ​ Rate of ​ ​ Ended ​ Rate of ​ ​ 12/31/2025 ​ Return/ ​ ​ 12/31/2024 ​ Return/ ​ ​ 12/31/2023 ​ Return/ ​ ​ Average ​ Cost of ​ Average ​ Cost of ​ Average ​ Cost of ​ ​ Balance ​ ​ ​ Funds% ​ Balance ​ ​ ​ Funds% ​ Balance ​ ​ ​ Funds% ​ EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks $ 79,863 ​ ​ 4.21 % ​ $ 86,703 ​ ​ 4.97 % ​ $ 32,709 ​ ​ 4.22 % Available-for-sale debt securities, at amortized cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable 360,179 ​ ​ 2.89 % ​ 340,339 ​ 2.52 % ​ 389,456 ​ 2.20 % Tax-exempt 108,815 ​ ​ 2.40 % ​ 113,121 ​ 2.24 % ​ 125,920 ​ 2.24 % Total available-for-sale debt securities 468,994 ​ ​ 2.78 % ​ 453,460 ​ 2.45 % ​ 515,376 ​ 2.21 % Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable 1,931,125 ​ ​ 6.24 % ​ 1,791,187 ​ 6.16 % ​ 1,703,839 ​ 5.80 % Tax-exempt 87,992 ​ ​ 3.39 % ​ 89,935 ​ 3.27 % ​ 88,310 ​ 3.12 % Total loans receivable 2,019,117 ​ ​ 6.12 % ​ 1,881,122 ​ 6.03 % ​ 1,792,149 ​ 5.67 % Other earning assets 2,616 ​ ​ 4.93 % ​ 2,198 ​ 5.73 % ​ 1,383 ​ 4.63 % Total Earning Assets 2,570,590 ​ ​ 5.45 % ​ 2,423,483 ​ 5.32 % ​ 2,341,617 ​ 4.89 % Cash 22,286 ​ ​ ​ ​ ​ 22,209 ​ ​ ​ ​ 22,108 ​ ​ ​ Unrealized loss on securities (39,435) ​ ​ ​ ​ ​ (49,520) ​ ​ ​ ​ (63,118) ​ ​ ​ Allowance for credit losses (23,484) ​ ​ ​ ​ ​ (20,294) ​ ​ ​ ​ (18,498) ​ ​ ​ Bank-owned life insurance ​ 54,097 ​ ​ ​ ​ ​ ​ 51,465 ​ ​ ​ ​ ​ ​ 31,808 ​ ​ ​ ​ Bank premises and equipment 22,987 ​ ​ ​ ​ ​ 21,765 ​ ​ ​ ​ 21,330 ​ ​ ​ Intangible assets 59,745 ​ ​ ​ ​ ​ 54,778 ​ ​ ​ ​ 55,176 ​ ​ ​ Other assets 76,598 ​ ​ ​ ​ ​ 79,220 ​ ​ ​ ​ 72,433 ​ ​ ​ Total Assets $ 2,743,384 ​ ​ ​ ​ ​ $ 2,583,106 ​ ​ ​ ​ ​ $ 2,462,856 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST-BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking $ 578,994 ​ ​ 1.88 % ​ $ 537,233 ​ ​ 2.26 % ​ $ 488,761 ​ ​ 1.57 % Money market ​ 376,679 ​ ​ 2.17 % ​ ​ 358,274 ​ ​ 2.40 % ​ ​ 347,130 ​ ​ 1.64 % Savings ​ 241,249 ​ ​ 0.49 % ​ ​ 203,129 ​ ​ 0.10 % ​ ​ 238,760 ​ ​ 0.10 % Time deposits ​ 524,394 ​ ​ 3.67 % ​ ​ 465,882 ​ ​ 3.92 % ​ ​ 381,488 ​ ​ 2.79 % Total interest-bearing deposits 1,721,316 ​ ​ 2.29 % ​ 1,564,518 ​ 2.51 % ​ 1,456,139 ​ 1.66 % Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term 1,370 ​ ​ 0.51 % ​ 22,743 ​ 5.14 % ​ 62,926 ​ 5.15 % Long-term - FHLB advances 144,114 ​ ​ 4.49 % ​ 167,181 ​ 4.30 % ​ 110,943 ​ 3.81 % Senior notes, net ​ 14,935 ​ ​ 3.23 % ​ ​ 14,865 ​ 3.24 % ​ ​ 14,798 ​ 3.24 % Subordinated debt, net 24,890 ​ ​ 3.74 % ​ 24,774 ​ 3.74 % ​ 24,662 ​ 3.74 % Total borrowed funds 185,309 ​ ​ 4.26 % ​ 229,563 ​ 4.25 % ​ 213,329 ​ 4.16 % Total Interest-bearing Liabilities. 1,906,625 ​ ​ 2.48 % ​ 1,794,081 ​ 2.73 % ​ 1,669,468 ​ 1.98 % Demand deposits (noninterest bearing) ​ 506,468 ​ ​ ​ ​ ​ ​ 493,052 ​ ​ ​ ​ ​ ​ 515,787 ​ ​ ​ ​ Other liabilities 32,650 ​ ​ ​ ​ ​ 30,089 ​ ​ ​ ​ ​ ​ 29,107 ​ ​ ​ ​ Total Liabilities ​ 2,445,743 ​ ​ ​ ​ ​ ​ 2,317,222 ​ ​ ​ ​ ​ ​ 2,214,362 ​ ​ ​ ​ Stockholders' equity, excluding accumulated other comprehensive loss ​ 328,061 ​ ​ ​ ​ ​ ​ 304,532 ​ ​ ​ ​ ​ ​ 297,894 ​ ​ ​ ​ Accumulated other comprehensive loss ​ (30,420) ​ ​ ​ ​ ​ ​ (38,648) ​ ​ ​ ​ ​ ​ (49,400) ​ ​ ​ ​ Total Stockholders' Equity ​ 297,641 ​ ​ ​ ​ ​ ​ 265,884 ​ ​ ​ ​ ​ ​ 248,494 ​ ​ ​ ​ Total Liabilities and Stockholders' Equity $ 2,743,384 ​ ​ ​ ​ ​ $ 2,583,106 ​ ​ ​ ​ ​ $ 2,462,856 ​ ​ ​ ​ Interest Rate Spread ​ ​ ​ ​ 2.97 % ​ ​ ​ ​ ​ 2.59 % ​ ​ ​ ​ ​ 2.91 % Net Interest Income/Earning Assets ​ ​ ​ ​ 3.61 % ​ ​ ​ ​ ​ 3.30 % ​ ​ ​ ​ ​ 3.47 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deposits (Interest-bearing and Demand) $ 2,227,784 ​ ​ ​ ​ ​ $ 2,057,570 ​ ​ ​ ​ ​ $ 1,971,926 ​ ​ ​ ​ Brokered Deposits $ 11,123 ​ ​ 4.57 % ​ $ 61,538 ​ ​ 5.19 % ​ $ 47,424 ​ ​ 4.78 % (1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.
Summary ratings information at December 31, 2024, based on the amortized cost basis and reflecting the lowest enhanced or underlying rating by Moody’s, Standard & Poors or Fitch, is as follows: AAA or pre-refunded – 20% of the portfolio; AA – 74%; A – 6%. 26 Table of Contents ● Private label commercial mortgage-backed securities (PLCMBS) – There were two PLCMBS securities, both of which were from the most senior payment (subordination) classes of their respective issuances.
Summary ratings information at December 31, 2025, based on the amortized cost basis and reflecting the lowest enhanced or underlying rating by Moody’s, Standard & Poors or Fitch, is as follows: AAA or pre-refunded – 19% of the portfolio; AA – 73%; A – 8%. 27 Table of Contents ● Private label commercial mortgage-backed securities (PLCMBS) – There was one PLCMBS security, which was from the most senior payment (subordination) class.
Government agencies ​ ​ 10,154 ​ ​ 9,025 ​ ​ 11,119 ​ ​ 9,946 ​ ​ 25,938 ​ ​ 23,430 ​ Bank holding company debt securities ​ ​ 28,958 ​ ​ 25,246 ​ ​ 28,952 ​ ​ 23,500 ​ ​ 28,945 ​ ​ 25,386 ​ Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 111,995 ​ 101,302 ​ 113,464 ​ 104,199 ​ 146,149 ​ 132,623 ​ Taxable ​ 51,147 ​ 42,506 ​ 58,720 ​ 50,111 ​ 68,488 ​ 56,812 ​ Mortgage-backed securities issued or guaranteed by U.S.
Government agencies ​ ​ 11,423 ​ ​ 10,749 ​ ​ 10,154 ​ ​ 9,025 ​ ​ 11,119 ​ ​ 9,946 ​ Bank holding company debt securities ​ ​ 36,103 ​ ​ 34,076 ​ ​ 28,958 ​ ​ 25,246 ​ ​ 28,952 ​ ​ 23,500 ​ Obligations of states and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-exempt ​ 105,149 ​ 98,359 ​ 111,995 ​ 101,302 ​ 113,464 ​ 104,199 ​ Taxable ​ 50,306 ​ 44,152 ​ 51,147 ​ 42,506 ​ 58,720 ​ 50,111 ​ Mortgage-backed securities issued or guaranteed by U.S.
To avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, C&N Bank must hold a capital conservation buffer composed of common equity tier 1 capital above its minimum risk-based capital requirements. The buffer is measured relative to risk-weighted assets.
These restrictions are described in Note 18 to the consolidated financial statements. To avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, the Corporation and C&N Bank must hold a capital conservation buffer composed of common equity tier 1 capital above its minimum risk-based capital requirements.
Available funding from these sources totaled 170.7% of uninsured deposits and 229.4% of total uninsured and uncollateralized deposits at December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ Uninsured Deposits Information ​ December 31, December 31, ​ ​ 2024 2023 Total Deposits - C&N Bank ​ $ 2,111,547 ​ $ 2,030,909 ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Total Uninsured Deposits ​ $ 632,804 ​ $ 592,206 ​ Portion of Uninsured Deposits that are ​ ​ ​ ​ ​ ​ ​ Collateralized ​ ​ 161,958 ​ ​ 151,031 ​ Uninsured and Uncollateralized Deposits ​ $ 470,846 ​ $ 441,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ Uninsured and Uncollateralized Deposits as ​ ​ ​ ​ ​ ​ ​ a % of Total Deposits ​ ​ 22.3 % ​ 21.7 % ​ ​ ​ ​ ​ ​ ​ ​ Available Funding from Credit Facilities ​ $ 843,092 ​ $ 832,806 ​ Fair Value of Available-for-sale Debt ​ ​ ​ ​ ​ ​ ​ Securities in Excess of Pledging Obligations ​ ​ 236,945 ​ ​ 256,058 ​ Highly Liquid Available Funding ​ $ 1,080,037 ​ $ 1,088,864 ​ ​ ​ ​ ​ ​ ​ ​ ​ Highly Liquid Available Funding as a % of ​ ​ ​ ​ ​ ​ ​ Uninsured Deposits ​ ​ 170.7 % ​ 183.9 % ​ ​ ​ ​ ​ ​ ​ ​ Highly Liquid Available Funding as a % of ​ ​ ​ ​ ​ ​ ​ Uninsured and Uncollateralized Deposits ​ ​ 229.4 % ​ 246.8 % 35 Table of Contents Based on the ample sources of highly liquid funds as described above, management believes the Corporation is well-positioned to meet its short-term and long-term funding obligations.
Available funding from these sources totaled 148.7% of uninsured deposits and 188.8% of total uninsured and uncollateralized deposits at December 31, 2025. ​ 36 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Uninsured Deposits Information ​ December 31, December 31, ​ ​ 2025 2024 Total Deposits - C&N Bank ​ $ 2,584,952 ​ $ 2,111,547 ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Total Uninsured Deposits ​ $ 811,209 ​ $ 632,804 ​ Portion of Uninsured Deposits that are ​ ​ ​ ​ ​ ​ ​ Collateralized ​ ​ 172,585 ​ ​ 161,958 ​ Uninsured and Uncollateralized Deposits ​ $ 638,624 ​ $ 470,846 ​ ​ ​ ​ ​ ​ ​ ​ ​ Uninsured and Uncollateralized Deposits as ​ ​ ​ ​ ​ ​ ​ a % of Total Deposits ​ ​ 24.7 % ​ 22.3 % ​ ​ ​ ​ ​ ​ ​ ​ Available Funding from Credit Facilities ​ $ 886,306 ​ $ 843,092 ​ Fair Value of Available-for-sale Debt ​ ​ ​ ​ ​ ​ ​ Securities in Excess of Pledging Obligations ​ ​ 319,624 ​ ​ 236,945 ​ Highly Liquid Available Funding ​ $ 1,205,930 ​ $ 1,080,037 ​ ​ ​ ​ ​ ​ ​ ​ ​ Highly Liquid Available Funding as a % of ​ ​ ​ ​ ​ ​ ​ Uninsured Deposits ​ ​ 148.7 % ​ 170.7 % ​ ​ ​ ​ ​ ​ ​ ​ Highly Liquid Available Funding as a % of ​ ​ ​ ​ ​ ​ ​ Uninsured and Uncollateralized Deposits ​ ​ 188.8 % ​ 229.4 % Based on the ample sources of highly liquid funds as described above, management believes the Corporation is well-positioned to meet its short-term and long-term funding obligations.
As presented in Table II, the Net Interest Margin was 3.47% in 2023, as compared to 3.77% in 2022, and the “Interest Rate Spread” (excess of average rate of return on earning assets over average cost of funds on interest-bearing liabilities) decreased to 2.91% in 2023 from 3.57% in 2022.
As presented in Table II, the Net Interest Margin was 3.61% in 2025, as compared to 3.30% in 2024, and the “Interest Rate Spread” (excess of average rate of return on earning assets over average cost of funds on interest-bearing liabilities) increased to 2.97% in 2025 from 2.59% in 2024.
Partially offsetting the higher effective rate in 2023 was the non-taxable income of $2,100,000 from a one-time enhancement on $30 million purchase of new BOLI. More detailed information concerning the Corporation’s earnings results are provided in other sections of Management’s Discussion and Analysis.
The higher effective tax rate in 2023 included the net impact of a tax charge of $950,000 related to the initiated surrender of BOLI, partially offset by the non-taxable income of $2,100,000 from the one-time enhancement on the purchase of BOLI. More detailed information concerning the Corporation’s earnings results are provided in other sections of Management’s Discussion and Analysis.
Treasury ​ $ 8,067 ​ $ 7,118 ​ $ 12,325 ​ $ 11,290 ​ $ 35,166 ​ $ 31,836 ​ Obligations of U.S.
Treasury ​ $ 8,047 ​ $ 7,482 ​ $ 8,067 ​ $ 7,118 ​ $ 12,325 ​ $ 11,290 ​ Obligations of U.S.
(2) The change in interest due to both volume and rates has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. ​ ​ 23 Table of Contents NONINTEREST INCOME TABLE IV - COMPARISON OF NONINTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ $ ​ % ​ 2024 ​ 2023 ​ Change ​ Change Trust revenue ​ $ 7,928 ​ $ 7,413 ​ $ 515 ​ 6.9 % Brokerage and insurance revenue ​ 2,271 ​ ​ 1,675 ​ ​ 596 ​ 35.6 % Service charges on deposit accounts ​ 5,867 ​ ​ 5,567 ​ ​ 300 ​ 5.4 % Interchange revenue from debit card transactions ​ 4,276 ​ ​ 4,160 ​ ​ 116 ​ 2.8 % Net gains from sales of loans ​ 1,158 ​ ​ 723 ​ ​ 435 ​ 60.2 % Loan servicing fees, net ​ 649 ​ ​ 602 ​ ​ 47 ​ 7.8 % Increase in cash surrender value of life insurance ​ 1,830 ​ ​ 2,703 ​ ​ (873) ​ (32.3) % Other noninterest income ​ 5,230 ​ ​ 4,610 ​ ​ 620 ​ 13.4 % Realized (losses) on available-for-sale debt securities, net ​ ​ 0 ​ ​ (3,036) ​ ​ 3,036 ​ N/M % Total noninterest income ​ $ 29,209 ​ $ 24,417 ​ $ 4,792 ​ 19.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ $ ​ % ​ 2023 ​ 2022 ​ Change ​ Change Trust revenue ​ $ 7,413 ​ $ 6,994 ​ $ 419 ​ 6.0 % Brokerage and insurance revenue ​ 1,675 ​ ​ 2,291 ​ ​ (616) ​ (26.9) % Service charges on deposit accounts ​ 5,567 ​ ​ 5,019 ​ ​ 548 ​ 10.9 % Interchange revenue from debit card transactions ​ 4,160 ​ ​ 4,148 ​ ​ 12 ​ 0.3 % Net gains from sales of loans ​ 723 ​ ​ 757 ​ ​ (34) ​ (4.5) % Loan servicing fees, net ​ 602 ​ ​ 960 ​ ​ (358) ​ (37.3) % Increase in cash surrender value of life insurance ​ 2,703 ​ ​ 545 ​ ​ 2,158 ​ 396.0 % Other noninterest income ​ 4,610 ​ ​ 3,698 ​ ​ 912 ​ 24.7 % Realized (losses) gains on available-for-sale debt securities, net ​ ​ (3,036) ​ ​ 20 ​ ​ (3,056) ​ N/M % Total noninterest income ​ $ 24,417 ​ $ 24,432 ​ $ (15) ​ (0.1) % ​ (1) N/M Not Meaningful NONINTEREST EXPENSE TABLE V - COMPARISON OF NONINTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ $ ​ % ​ ​ 2024 ​ 2023 ​ Change ​ Change Salaries and employee benefits $ 44,930 $ 44,195 $ 735 1.7 % Net occupancy and equipment expense ​ 5,473 ​ 5,357 ​ 116 2.2 % Data processing and telecommunications expense ​ 7,768 ​ 7,582 ​ 186 2.5 % Automated teller machine and interchange expense ​ 1,818 ​ 1,682 ​ 136 8.1 % Pennsylvania shares tax ​ 1,733 ​ 1,602 ​ 131 8.2 % Professional fees ​ 2,175 ​ 2,497 ​ (322) (12.9) % Other noninterest expense ​ 10,361 ​ 11,233 ​ (872) (7.8) % Total noninterest expense ​ $ 74,258 ​ $ 74,148 ​ $ 110 0.1 % ​ ​ 24 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ $ ​ % ​ ​ 2023 ​ 2022 ​ Change ​ Change Salaries and employee benefits $ 44,195 $ 41,833 $ 2,362 5.6 % Net occupancy and equipment expense ​ 5,357 ​ 5,533 ​ (176) (3.2) % Data processing and telecommunications expense ​ 7,582 ​ 6,806 ​ 776 11.4 % Automated teller machine and interchange expense ​ 1,682 ​ 1,601 ​ 81 5.1 % Pennsylvania shares tax ​ 1,602 ​ 1,956 ​ (354) (18.1) % Professional fees ​ 2,497 ​ 2,005 ​ 492 24.5 % Other noninterest expense ​ 11,233 ​ 8,221 ​ 3,012 36.6 % Total noninterest expense ​ $ 74,148 ​ $ 67,955 ​ $ 6,193 9.1 % ​ Additional detailed information concerning fluctuations in the Corporation’s earnings results and other financial information are provided in other sections of Management’s Discussion and Analysis.
(2) The change in interest due to both volume and rates has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. ​ ​ 24 Table of Contents NONINTEREST INCOME TABLE IV - COMPARISON OF NONINTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ $ ​ % ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ Change ​ Change Trust revenue ​ $ 8,212 ​ $ 7,928 ​ $ 284 ​ 3.6 % Brokerage and insurance revenue ​ 2,313 ​ ​ 2,271 ​ ​ 42 ​ 1.8 % Service charges on deposit accounts ​ 5,976 ​ ​ 5,867 ​ ​ 109 ​ 1.9 % Interchange revenue from debit card transactions ​ 4,623 ​ ​ 4,276 ​ ​ 347 ​ 8.1 % Net gains from sales of loans ​ 1,483 ​ ​ 1,158 ​ ​ 325 ​ 28.1 % Loan servicing fees, net ​ 643 ​ ​ 649 ​ ​ (6) ​ (0.9) % Increase in cash surrender value of life insurance ​ 1,927 ​ ​ 1,830 ​ ​ 97 ​ 5.3 % Other noninterest income ​ 5,637 ​ ​ 5,230 ​ ​ 407 ​ 7.8 % Realized gains on available-for-sale debt securities, net ​ ​ 38 ​ ​ 0 ​ ​ 38 ​ N/M ​ Total noninterest income ​ $ 30,852 ​ $ 29,209 ​ $ 1,643 ​ 5.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ $ ​ % ​ ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ Change ​ Change Trust revenue ​ $ 7,928 ​ $ 7,413 ​ $ 515 ​ 6.9 % Brokerage and insurance revenue ​ 2,271 ​ ​ 1,675 ​ ​ 596 ​ 35.6 % Service charges on deposit accounts ​ 5,867 ​ ​ 5,567 ​ ​ 300 ​ 5.4 % Interchange revenue from debit card transactions ​ 4,276 ​ ​ 4,160 ​ ​ 116 ​ 2.8 % Net gains from sales of loans ​ 1,158 ​ ​ 723 ​ ​ 435 ​ 60.2 % Loan servicing fees, net ​ 649 ​ ​ 602 ​ ​ 47 ​ 7.8 % Increase in cash surrender value of life insurance ​ 1,830 ​ ​ 2,703 ​ ​ (873) ​ (32.3) % Other noninterest income ​ 5,230 ​ ​ 4,610 ​ ​ 620 ​ 13.4 % Realized losses on available-for-sale debt securities, net ​ ​ 0 ​ ​ (3,036) ​ ​ 3,036 ​ N/M ​ Total noninterest income ​ $ 29,209 ​ $ 24,417 ​ $ 4,792 ​ 19.6 % ​ N/M = Not meaningful NONINTEREST EXPENSE TABLE V - COMPARISON OF NONINTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ $ ​ % ​ ​ 2025 ​ 2024 ​ Change ​ Change Salaries and employee benefits ​ ​ ​ $ 47,386 ​ ​ ​ $ 44,930 ​ ​ ​ $ 2,456 ​ ​ ​ 5.5 % Net occupancy and equipment expense ​ 5,860 ​ 5,473 ​ 387 7.1 % Data processing and telecommunications expense ​ 8,742 ​ 7,768 ​ 974 12.5 % Automated teller machine and interchange expense ​ 1,863 ​ 1,818 ​ 45 2.5 % Pennsylvania shares tax ​ 1,904 ​ 1,733 ​ 171 9.9 % Professional fees ​ 2,759 ​ 2,175 ​ 584 26.9 % Other noninterest expense ​ 11,535 ​ 10,361 ​ 1,174 11.3 % Total noninterest expense, excluding merger-related expenses ​ ​ 80,049 ​ ​ 74,258 ​ ​ 5,791 ​ 7.8 % Merger-related expenses ​ ​ 7,940 ​ ​ 0 ​ ​ 7,940 ​ N/M ​ Total noninterest expense ​ $ 87,989 ​ $ 74,258 ​ $ 13,731 18.5 % ​ 25 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in Thousands) ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ $ ​ % ​ ​ 2024 ​ 2023 ​ Change ​ Change Salaries and employee benefits ​ ​ ​ $ 44,930 ​ ​ ​ $ 44,195 ​ ​ ​ $ 735 ​ ​ ​ 1.7 % Net occupancy and equipment expense ​ 5,473 ​ 5,357 ​ 116 2.2 % Data processing and telecommunications expense ​ 7,768 ​ 7,582 ​ 186 2.5 % Automated teller machine and interchange expense ​ 1,818 ​ 1,682 ​ 136 8.1 % Pennsylvania shares tax ​ 1,733 ​ 1,602 ​ 131 8.2 % Professional fees ​ 2,175 ​ 2,497 ​ (322) (12.9) % Other noninterest expense ​ 10,361 ​ 11,233 ​ (872) (7.8) % Total noninterest expense ​ $ 74,258 ​ $ 74,148 ​ $ 110 0.1 % ​ Additional detailed information concerning fluctuations in the Corporation’s earnings results and other financial information are provided in other sections of Management’s Discussion and Analysis.
Table VI shows the composition of the available-for-sale debt securities portfolio at December 31, 2024, 2023 and 2022. The total amortized cost of available-for-sale debt securities at December 31, 2024 was lower by $15,045,000 from December 31, 2023 and by $111,871,000 from December 31, 2022.
Table VI shows the composition of the available-for-sale debt securities portfolio at December 31, 2025, 2024 and 2023. The total amortized cost of available-for-sale debt securities at December 31, 2025 was higher by $86,377,000 from December 31, 2024 and by $71,292,000 from December 31, 2023.
Participation loans represent portions of larger commercial transactions for which other institutions are the “lead banks”. Although not the lead bank, the Corporation conducts detailed underwriting and monitoring of participation loan opportunities.
While the Corporation’s lending activities are primarily concentrated in its market areas, a portion of the Corporation’s commercial loan segment consists of participation loans. Participation loans represent portions of larger commercial transactions for which other institutions are the “lead banks”. Although not the lead bank, the Corporation conducts detailed underwriting and monitoring of participation loan opportunities.
All of the issuers have publicly traded common stock . At December 31, 2024, the securities have external ratings ranging from BBB-/Baa3 to A-. ● Obligations of states and political subdivisions (municipal bonds) – All of the Corporation’s holdings of municipal bonds were investment grade and there have been no payment defaults.
At December 31, 2025, two of the securities with a total face amount of $900,000 are unrated, and the rest of securities have external ratings ranging from BBB-/Baa3 to A-. ● Obligations of states and political subdivisions (municipal bonds) – All of the Corporation’s holdings of municipal bonds were investment grade and there have been no payment defaults.
As a result, a limited number of relationships may significantly impact the total amount of allowance required on individual loans and may significantly impact the provision for credit losses and the amount of total charge-offs reported in any one period. 31 Table of Contents Management believes it has been prudent in its decisions concerning identification of loans requiring individual evaluation for credit loss, estimates of loss, and nonaccrual status; however, the actual losses realized from these relationships could vary materially from the ACL calculated as of December 31, 2024.
Management believes it has been prudent in its decisions concerning identification of loans requiring individual evaluation for credit loss, estimates of loss, and nonaccrual status; however, the actual losses realized from these relationships could vary materially from the 32 Table of Contents ACL calculated as of December 31, 2025.
The average balance of subordinated debt decreased to $24,662,000 in 2023 from $27,116,000 in 2022 and the average rate on subordinated debt decreased to 3.74% in 2023 from 3.98% in 2022 reflecting the repayment of subordinated debt assumed in an acquisition of $8,500,000 in the second quarter 2022. 20 Table of Contents TABLE I - ANALYSIS OF INTEREST INCOME AND EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase/(Decrease) (In Thousands) 2024 2023 ​ 2022 ​ 2024/2023 2023/2022 INTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks ​ $ 4,307 ​ $ 1,379 ​ $ 645 ​ $ 2,928 ​ $ 734 Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 8,593 ​ 8,555 ​ 8,360 ​ 38 ​ 195 Tax-exempt ​ 2,531 ​ 2,815 ​ 3,721 ​ (284) ​ (906) Total available-for-sale debt securities ​ 11,124 ​ 11,370 ​ 12,081 ​ (246) ​ (711) Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 110,396 ​ 98,854 ​ 78,599 ​ 11,542 ​ 20,255 Tax-exempt ​ 2,944 ​ 2,756 ​ 2,471 ​ 188 ​ 285 Total loans receivable ​ 113,340 ​ 101,610 ​ 81,070 ​ 11,730 ​ 20,540 Other earning assets ​ 126 ​ 64 ​ 77 ​ 62 ​ (13) Total Interest Income ​ 128,897 ​ 114,423 ​ 93,873 ​ 14,474 ​ 20,550 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking ​ 12,151 ​ 7,668 ​ 1,833 ​ 4,483 ​ 5,835 Money market ​ 8,589 ​ 5,686 ​ 2,088 ​ 2,903 ​ 3,598 Savings ​ 207 ​ 243 ​ 257 ​ (36) ​ (14) Time deposits ​ 18,253 ​ 10,636 ​ 2,460 ​ 7,617 ​ 8,176 Total interest-bearing deposits ​ 39,200 ​ 24,233 ​ 6,638 ​ 14,967 ​ 17,595 Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term ​ 1,168 ​ 3,240 ​ 429 ​ (2,072) ​ 2,811 Long-term - FHLB advances ​ 7,188 ​ 4,230 ​ 896 ​ 2,958 ​ 3,334 Senior notes, net ​ ​ 481 ​ ​ 479 ​ ​ 477 ​ ​ 2 ​ ​ 2 Subordinated debt, net ​ 926 ​ 922 ​ 1,079 ​ 4 ​ (157) Total borrowed funds ​ 9,763 ​ 8,871 ​ 2,881 ​ 892 ​ 5,990 Total Interest Expense ​ 48,963 ​ 33,104 ​ 9,519 ​ 15,859 ​ 23,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 79,934 ​ $ 81,319 ​ $ 84,354 ​ $ (1,385) ​ $ (3,035) ​ (1) Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis (a non-GAAP measure), using the Corporation’s marginal federal income tax rate of 21%.
The average rate on long-term borrowings was 4.30% in 2024 compared to 3.81% in 2023. ​ 21 Table of Contents TABLE I - ANALYSIS OF INTEREST INCOME AND EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase/(Decrease) (In Thousands) ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ 2025/2024 ​ ​ ​ 2024/2023 INTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks ​ $ 3,359 ​ $ 4,307 ​ $ 1,379 ​ $ (948) ​ $ 2,928 Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 10,420 ​ 8,593 ​ 8,555 ​ 1,827 ​ 38 Tax-exempt ​ 2,609 ​ 2,531 ​ 2,815 ​ 78 ​ (284) Total available-for-sale debt securities ​ 13,029 ​ 11,124 ​ 11,370 ​ 1,905 ​ (246) Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 120,597 ​ 110,396 ​ 98,854 ​ 10,201 ​ 11,542 Tax-exempt ​ 2,985 ​ 2,944 ​ 2,756 ​ 41 ​ 188 Total loans receivable ​ 123,582 ​ 113,340 ​ 101,610 ​ 10,242 ​ 11,730 Other earning assets ​ 129 ​ 126 ​ 64 ​ 3 ​ 62 Total Interest Income ​ 140,099 ​ 128,897 ​ 114,423 ​ 11,202 ​ 14,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking ​ 10,869 ​ 12,151 ​ 7,668 ​ (1,282) ​ 4,483 Money market ​ 8,168 ​ 8,589 ​ 5,686 ​ (421) ​ 2,903 Savings ​ 1,187 ​ 207 ​ 243 ​ 980 ​ (36) Time deposits ​ 19,251 ​ 18,253 ​ 10,636 ​ 998 ​ 7,617 Total interest-bearing deposits ​ 39,475 ​ 39,200 ​ 24,233 ​ 275 ​ 14,967 Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term ​ 7 ​ 1,168 ​ 3,240 ​ (1,161) ​ (2,072) Long-term - FHLB advances ​ 6,468 ​ 7,188 ​ 4,230 ​ (720) ​ 2,958 Senior notes, net ​ ​ 483 ​ ​ 481 ​ ​ 479 ​ ​ 2 ​ ​ 2 Subordinated debt, net ​ 931 ​ 926 ​ 922 ​ 5 ​ 4 Total borrowed funds ​ 7,889 ​ 9,763 ​ 8,871 ​ (1,874) ​ 892 Total Interest Expense ​ 47,364 ​ 48,963 ​ 33,104 ​ (1,599) ​ 15,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 92,735 ​ $ 79,934 ​ $ 81,319 ​ $ 12,801 ​ $ (1,385) ​ (1) Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis (a non-GAAP measure), using the Corporation’s marginal federal income tax rate of 21%.
Forward-looking statements, which are not historical facts, are based on certain assumptions and describe future plans, business objectives and expectations, and are generally identifiable by the use of words such as, "should", “likely”, "expect", “plan”, "anticipate", “target”, “forecast”, and “goal”.
Forward-looking statements are not historical facts, are based on certain assumptions and describe future plans, business objectives and expectations, and are generally identifiable by the use of words such as, “may”, “would”, “will”, "should", “likely”, “possibly”, "expect", "anticipate", “intend”, “pro forma”, “estimate”, “target”, “potentially”, “probably”, “outlook”, “predict”, “contemplate”, “continue”, “strategic”, “objective”, “plan”, “forecast”, “project”, “believe” and “goal” or other similar words, phrases or concepts.
Included in uninsured deposits are deposits collateralized by securities (almost exclusively municipal deposits) totaling $162.0 million at December 31, 2024. As shown in the table below, total uninsured and uncollateralized deposits amounted to 22.3% of total deposits at December 31, 2024, up from 21.7% at December 31, 2023.
As shown in the table below, total uninsured and uncollateralized deposits amounted to 24.7% of total deposits at December 31, 2025, up from 22.3% at December 31, 2024.
The Corporation’s outstanding, available, and total credit facilities at December 31, 2024 and 2023 are as follows: ​ 34 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ Available ​ Total Credit (In Thousands) December 31, December 31, December 31, December 31, December 31, December 31, ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ 2024 ​ 2023 Federal Home Loan Bank of Pittsburgh ​ $ 188,692 ​ $ 189,021 ​ $ 749,999 ​ $ 737,824 ​ $ 938,691 ​ $ 926,845 Federal Reserve Bank Discount Window ​ 0 ​ 0 ​ 18,093 ​ 19,982 ​ 18,093 ​ 19,982 Other correspondent banks ​ 0 ​ 0 ​ 75,000 ​ 75,000 ​ 75,000 ​ 75,000 Total credit facilities ​ $ 188,692 ​ $ 189,021 ​ $ 843,092 ​ $ 832,806 ​ $ 1,031,784 ​ $ 1,021,827 At December 31, 2024, the Corporation’s outstanding credit facilities with the Federal Home Loan Bank of Pittsburgh consisted of long-term borrowings with par values totaling $165,451,000 and letters of credit totaling $23,241,000.
The Corporation’s outstanding, available, and total credit facilities at December 31, 2025 and 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ Available ​ Total Credit (In Thousands) ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ 2025 ​ 2024 Federal Home Loan Bank of Pittsburgh ​ $ 170,922 ​ $ 188,692 ​ $ 785,822 ​ $ 749,999 ​ $ 971,946 ​ $ 938,691 Federal Reserve Bank Discount Window ​ 0 ​ 0 ​ 25,484 ​ 18,093 ​ 25,484 ​ 18,093 Other correspondent banks ​ 0 ​ 0 ​ 75,000 ​ 75,000 ​ 75,000 ​ 75,000 Total credit facilities ​ $ 170,922 ​ $ 188,692 ​ $ 886,306 ​ $ 843,092 ​ $ 1,072,430 ​ $ 1,031,784 At December 31, 2025, the Corporation’s outstanding credit facilities with the Federal Home Loan Bank of Pittsburgh consisted of overnight and borrowings of $27,000,000, long-term borrowings with par values totaling $120,935,000 and letters of credit totaling $22,987,000.
The increase for commercial loans includes the impact of an increase in qualitative adjustments resulting mainly from changes in external indexes and an increase in past due and nonaccrual loans. In 2024, net charge-offs totaled $1,603,000, or 0.09% of average outstanding loans.
The increase for commercial loans includes the impact of growth in the portfolio, mainly from the Susquehanna acquisition and an increase in qualitative adjustments resulting mainly from changes in external indexes and an increase in past due and nonaccrual loans.
Allowance for Credit Losses on Loans – A material estimate that is particularly susceptible to significant change is the determination of the allowance for credit losses (ACL) on loans. The Corporation maintains an ACL on loans which represents management’s estimate of expected net charge-offs over the life of the loans.
The Corporation maintains an ACL on loans which represents management’s estimate of expected net charge-offs over the life of the loans.
Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ ​ ​ ​ ​ ​ ​ 104,378 2.59 % Residential collateralized mortgage obligations ​ ​ ​ ​ ​ ​ ​ ​ 53,389 3.38 % Commercial mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ 73,470 2.01 % Private label commercial mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ 8,365 5.44 % Total ​ ​ ​ ​ ​ ​ ​ ​ $ 449,923 2.63 % ​ The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations.
Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 148,865 3.54 % Residential collateralized mortgage obligations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 65,782 3.81 % Commercial mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 99,095 2.63 % Private label commercial mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,490 5.45 % Collateralized loan obligations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,000 ​ 5.24 % Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 536,260 3.18 % ​ The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations.
Commitments and standby letters of credit do not necessarily represent future liquidity requirements, as they may expire without being used.
The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments and standby letters of credit do not necessarily represent future liquidity requirements, as they may expire without being used.
Government entities or agencies, is as follows: ● Bank holding company debt securities – All of the Corporation’s holdings of bank holding company debt securities were investment grade and there have been no payment defaults. There were seven securities with face amounts ranging from $3 million to $5 million, including one senior security and six subordinated securities.
Government entities or agencies, was as follows: ● Bank holding company debt securities – The Corporation’s holdings of bank holding company debt securities include twelve subordinated securities with face amounts ranging from $250,000 to $5 million. There have been no payment defaults on the securities . Eleven of the issuers have publicly traded common stock.
The following table presents the Corporation's commitments to extend credit and standby letters of credit as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) December 31, ​ ​ 2024 Commercial real estate loans ​ $ 5,045 Commercial lines of credit ​ ​ 212,927 Commercial construction and land ​ ​ 23,197 Other commercial loan ​ ​ 12,902 1-4 family residential construction ​ ​ 11,650 Consumer lines of credit (including HELOCs) ​ ​ 69,070 All other consumer loans ​ ​ 45,212 Total commitments to extend credit ​ $ 380,003 ​ ​ ​ ​ Financial letters of credit ​ $ 7,197 Performance letters of credit ​ ​ 57,389 Total standby letters of credit ​ $ 64,586 Off-balance sheet arrangements are further described in Note 15 and the allowance for credit losses on off-balance sheet exposures is described in Note 7 to the consolidated financial statements.
The following table presents the Corporation's commitments to extend credit and standby letters of credit as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ December 31, ​ ​ 2025 Commercial real estate loans ​ $ 11,748 Commercial lines of credit ​ ​ 255,869 Commercial construction and land ​ ​ 32,250 Other commercial loans ​ ​ 37,200 1-4 family residential construction ​ ​ 16,085 Consumer lines of credit (including HELOCs) ​ ​ 100,334 All other consumer loans ​ ​ 53,510 Total commitments to extend credit ​ $ 506,996 ​ ​ ​ ​ Financial letters of credit ​ $ 6,276 Performance letters of credit ​ ​ 52,638 Total standby letters of credit ​ $ 58,914 Off-balance sheet arrangements are further described in Note 16 and the allowance for credit losses on off-balance sheet exposures is described in Note 8 to the consolidated financial statements.
Interest expense on long-term borrowings (FHLB advances) increased $3,334,000 to $4,230,000 in 2023 from $896,000 in 2022. The average balance of long-term borrowings was $110,943,000 in 2023, up from an average balance of $40,194,000 in 2022. Borrowings are classified as long-term within the Tables based on their term at origination or assumption in business combinations.
Interest expense on long-term borrowings (FHLB advances) decreased $720,000 to $6,468,000 in 2025 from $7,188,000 in 2024. The average balance of long-term borrowings was $144,114,000 in 2025, down from an average balance of $167,181,000 in 2024. Borrowings are classified as long-term within the Tables based on their term at origination or assumption in business combinations.
Government agencies or sponsored agencies, including pass-through securities and collateralized mortgage obligations, 35.1%; and (3) commercial mortgage-backed securities issued or guaranteed by U.S.
Government agencies or sponsored agencies, including pass-through securities 26 Table of Contents and collateralized mortgage obligations, 40.0%; (2) tax-exempt and taxable municipal bonds, 29.0%; and (3) commercial mortgage-backed securities issued or guaranteed by U.S. Government sponsored agencies, 18.5%.
The average yield on interest-bearing due from banks was 4.22% in 2023 and 1.25% in 2022. The average balance of interest-bearing due from banks was $32,709,000 in 2023 as compared to $51,407,000 in 2022. Within this category, the largest asset balance in 2023 and 2022 was interest-bearing deposits held with the Federal Reserve.
Within this category, the largest asset balance in 2025 and 2024 has been interest-bearing deposits held with the Federal Reserve. The average yield on interest-bearing due from banks decreased to 4.21% in 2025 from 4.97% in 2024. The average balance of interest-bearing due from banks was $79,833,000 in 2025, down from $86,703,000 in 2024.
These securities were investment grade (rated Aaa), and there have been no payment defaults on these securities. Based on the results of management’s assessment, there was no ACL required on available-for-sale debt securities in an unrealized loss position at December 31, 2024.
Based on the results of management’s assessment, there was no ACL required on available-for-sale debt securities in an unrealized loss position at December 31, 2025. The following table presents the contractual maturities and the weighted-average yields (calculated based on amortized cost) of investment securities as of December 31, 2025.
Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 104,378 ​ 94,414 ​ 105,549 ​ 95,405 ​ 112,782 ​ 99,941 ​ Residential collateralized mortgage obligations ​ 53,389 ​ 49,894 ​ 50,212 ​ 46,462 ​ 44,868 ​ 40,296 ​ Commercial mortgage-backed securities ​ 73,470 ​ 64,501 ​ 76,412 ​ 66,682 ​ 91,388 ​ 79,686 ​ Private label commercial mortgage-backed securities ​ 8,365 ​ 8,374 ​ 8,215 ​ 8,160 ​ 8,070 ​ 8,023 ​ Total Available-for-Sale Debt Securities ​ $ 449,923 ​ $ 402,380 ​ $ 464,968 ​ $ 415,755 ​ $ 561,794 ​ $ 498,033 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aggregate Unrealized Loss ​ ​ ​ ​ $ (47,543) ​ ​ ​ ​ $ (49,213) ​ ​ ​ ​ $ (63,761) ​ Aggregate Unrealized Loss as a % of Amortized Cost ​ ​ ​ ​ ​ (10.6) % ​ ​ ​ ​ (10.6) % ​ ​ ​ ​ (11.3) % Market Yield on 5-Year U.S.
Government agencies or sponsored agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential pass-through securities ​ 148,865 ​ 143,921 ​ 104,378 ​ 94,414 ​ 105,549 ​ 95,405 ​ Residential collateralized mortgage obligations ​ 65,782 ​ 63,707 ​ 53,389 ​ 49,894 ​ 50,212 ​ 46,462 ​ Commercial mortgage-backed securities ​ 99,095 ​ 92,631 ​ 73,470 ​ 64,501 ​ 76,412 ​ 66,682 ​ Private label commercial mortgage-backed securities ​ 3,490 ​ 3,489 ​ 8,365 ​ 8,374 ​ 8,215 ​ 8,160 ​ Asset-backed securities, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized loan obligations ​ ​ 8,000 ​ ​ 8,009 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ ​ 0 ​ Total Available-for-Sale Debt Securities ​ $ 536,260 ​ $ 506,575 ​ $ 449,923 ​ $ 402,380 ​ $ 464,968 ​ $ 415,755 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aggregate Unrealized Loss ​ ​ ​ ​ $ (29,685) ​ ​ ​ ​ $ (47,543) ​ ​ ​ ​ $ (49,213) ​ Aggregate Unrealized Loss as a % of Amortized Cost ​ ​ ​ ​ ​ (5.5) % ​ ​ ​ ​ (10.6) % ​ ​ ​ ​ (10.6) % ​ As reflected in the table above, the fair value of available-for-sale securities was lower than the amortized cost basis by $29,685,000, or 5.5% at December 31, 2025, $47,543,000, or 10.6% at December 31, 2024 and $49,213,000 or 10.6% at December 31, 2023.
These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit, interest rate or liquidity risk in excess of the amount recognized in the consolidated balance sheets.
These instruments involve, to varying degrees, elements of credit, interest rate or liquidity risk in excess of the amount recognized in the consolidated balance sheets. Commitments to extend credit are legally binding agreements to lend to customers and generally have fixed expiration dates or other termination clauses and may require payment of fees.
The average rate on long-term borrowings was 4.30% in 2024 compared to 3.81% in 2023. 19 Table of Contents 2023 vs. 2022 Fully taxable equivalent net interest income was $81,319,000 in 2023, $3,035,000 (3.6%) lower than in 2022.
The average rate on long-term borrowings was 4.49% in 2025 compared to 4.30% in 2024. 20 Table of Contents 2024 vs. 2023 Fully taxable equivalent net interest income was $79,934,000 in 2024, $1,385,000 (1.7%) lower than in 2023. The decrease in net interest income reflected an increase in interest expense of $15,859,000 and an increase in interest income of $14,474,000.
The average yield on earning assets of 4.89% was 0.70% higher in 2023 as compared to 2022, while the average rate on interest bearing liabilities of 1.98% was 1.36% higher in 2023 as compared to 2022.
The average yield on earning assets of 5.45% was 0.13% higher in 2025 as compared to 2024, while the average rate on interest bearing liabilities of 2.48% was 0.25% lower in 2025 as compared to 2024.
Year Ended 12/31/2024 vs. 12/31/2023 . ​ Year Ended 12/31/2023 vs. 12/31/2022 ​ Change in ​ Change in ​ Total ​ Change in ​ Change in ​ Total ​ Volume Rate Change ​ Volume Rate Change EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks ​ $ 2,642 ​ $ 286 ​ $ 2,928 ​ ​ $ (309) ​ $ 1,043 ​ $ 734 Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ (1,153) ​ 1,191 ​ 38 ​ ​ (433) ​ 628 ​ 195 Tax-exempt ​ (286) ​ 2 ​ (284) ​ ​ (527) ​ (379) ​ (906) Total available-for-sale debt securities ​ (1,439) ​ 1,193 ​ (246) ​ ​ (960) ​ 249 ​ (711) Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ 5,209 ​ ​ 6,333 ​ 11,542 ​ ​ 8,451 ​ ​ 11,804 ​ 20,255 Tax-exempt ​ 52 ​ 136 ​ 188 ​ ​ 59 ​ 226 ​ 285 Total loans receivable ​ 5,261 ​ 6,469 ​ 11,730 ​ ​ 8,510 ​ 12,030 ​ 20,540 Other earning assets ​ 44 ​ ​ 18 ​ 62 ​ ​ (37) ​ ​ 24 ​ (13) Total Interest Income ​ 6,508 ​ 7,966 ​ 14,474 ​ ​ 7,204 ​ 13,346 ​ 20,550 ​ ​ ​ ​ ​ ​ ​ ​ INTEREST-BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ Interest checking ​ 822 ​ 3,661 ​ 4,483 ​ ​ 208 ​ 5,627 ​ 5,835 Money market ​ 188 ​ 2,715 ​ 2,903 ​ ​ (542) ​ 4,140 ​ 3,598 Savings ​ (36) ​ 0 ​ (36) ​ ​ (14) ​ 0 ​ (14) Time deposits ​ 2,690 ​ 4,927 ​ 7,617 ​ ​ 1,073 ​ 7,103 ​ 8,176 Total interest-bearing deposits ​ 3,664 ​ 11,303 ​ 14,967 ​ ​ 725 ​ 16,870 ​ 17,595 Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term ​ (2,064) ​ (8) ​ (2,072) ​ ​ 1,517 ​ 1,294 ​ 2,811 Long-term - FHLB advances ​ 2,363 ​ 595 ​ 2,958 ​ ​ 2,375 ​ 959 ​ 3,334 Senior notes, net ​ ​ 2 ​ ​ 0 ​ ​ 2 ​ ​ ​ 2 ​ ​ 0 ​ ​ 2 Subordinated debt, net ​ 4 ​ 0 ​ 4 ​ ​ (94) ​ (63) ​ (157) Total borrowed funds ​ 305 ​ 587 ​ 892 ​ ​ 3,800 ​ 2,190 ​ 5,990 Total Interest Expense ​ 3,969 ​ 11,890 ​ 15,859 ​ ​ 4,525 ​ 19,060 ​ 23,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 2,539 ​ $ (3,924) ​ $ (1,385) ​ ​ $ 2,679 ​ $ (5,714) ​ $ (3,035) (1) Changes in income on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.
(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings. ​ 23 Table of Contents TABLE III - ANALYSIS OF VOLUME AND RATE CHANGES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ Year Ended 12/31/2025 vs. 12/31/2024 . ​ Year Ended 12/31/2024 vs. 12/31/2023 ​ ​ ​ Change in ​ Change in ​ Total ​ Change in ​ Change in ​ Total ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ Change ​ Volume ​ ​ ​ Rate ​ ​ ​ Change EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing due from banks ​ ​ ​ $ (322) ​ $ (626) ​ $ (948) ​ ​ $ 2,642 ​ $ 286 ​ $ 2,928 Available-for-sale debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ ​ ​ 522 ​ 1,305 ​ 1,827 ​ ​ (1,153) ​ 1,191 ​ 38 Tax-exempt ​ ​ ​ (98) ​ 176 ​ 78 ​ ​ (286) ​ 2 ​ (284) Total available-for-sale debt securities ​ ​ ​ 424 ​ 1,481 ​ 1,905 ​ ​ (1,439) ​ 1,193 ​ (246) Loans receivable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable ​ ​ ​ 8,722 ​ ​ 1,479 ​ 10,201 ​ ​ 5,209 ​ ​ 6,333 ​ 11,542 Tax-exempt ​ ​ ​ (65) ​ 106 ​ 41 ​ ​ 52 ​ 136 ​ 188 Total loans receivable ​ ​ ​ 8,657 ​ 1,585 ​ 10,242 ​ ​ 5,261 ​ 6,469 ​ 11,730 Other earning assets ​ ​ ​ 22 ​ ​ (19) ​ 3 ​ ​ 44 ​ ​ 18 ​ 62 Total Interest Income ​ ​ ​ 8,781 ​ 2,421 ​ 11,202 ​ ​ 6,508 ​ 7,966 ​ 14,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST-BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking ​ ​ ​ 894 ​ (2,176) ​ (1,282) ​ ​ 822 ​ 3,661 ​ 4,483 Money market ​ ​ ​ 426 ​ (847) ​ (421) ​ ​ 188 ​ 2,715 ​ 2,903 Savings ​ ​ ​ 45 ​ 935 ​ 980 ​ ​ (36) ​ 0 ​ (36) Time deposits ​ ​ ​ 2,196 ​ (1,198) ​ 998 ​ ​ 2,690 ​ 4,927 ​ 7,617 Total interest-bearing deposits ​ ​ ​ 3,561 ​ (3,286) ​ 275 ​ ​ 3,664 ​ 11,303 ​ 14,967 Borrowed funds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term ​ ​ ​ (593) ​ (568) ​ (1,161) ​ ​ (2,064) ​ (8) ​ (2,072) Long-term - FHLB advances ​ ​ ​ (1,025) ​ 305 ​ (720) ​ ​ 2,363 ​ 595 ​ 2,958 Senior notes, net ​ ​ ​ ​ 2 ​ ​ 0 ​ ​ 2 ​ ​ ​ 2 ​ ​ 0 ​ ​ 2 Subordinated debt, net ​ ​ ​ 4 ​ 1 ​ 5 ​ ​ 4 ​ 0 ​ 4 Total borrowed funds ​ ​ ​ (1,612) ​ (262) ​ (1,874) ​ ​ 305 ​ 587 ​ 892 Total Interest Expense ​ ​ ​ 1,949 ​ (3,548) ​ (1,599) ​ ​ 3,969 ​ 11,890 ​ 15,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ ​ ​ $ 6,832 ​ $ 5,969 ​ $ 12,801 ​ ​ $ 2,539 ​ $ (3,924) ​ $ (1,385) (1) Changes in income on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.
For callable securities, yields on securities purchased at a discount are based on yield-to-maturity, while yields on securities purchased at a premium are based on yield to the first call date. Yields on mortgage-backed securities are estimated and include the effects of prepayment assumptions.
Yields on tax-exempt securities are presented on a fully taxable-equivalent basis using the Corporation’s marginal tax rate of 21%. For callable securities, yields on securities purchased at a discount are based on yield-to-maturity, while yields on securities purchased at a premium are based on yield to the first call date.
Based on the fairly limited volume of required repurchases to date, no allowance has been established for representation and warranty exposures as of December 31, 2024. 28 Table of Contents TABLE VII – Five-Year Summary of Loans by Type ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) 2024 % ​ 2023 % ​ 2022 % ​ 2021 % ​ 2020 % Commercial real estate - non-owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 471,171 ​ 24.9 ​ $ 499,104 ​ 27.0 ​ $ 454,386 ​ 26.1 ​ $ 358,352 ​ 22.9 ​ $ 328,662 ​ 20.0 Multi-family (5 or more) residential ​ ​ 105,174 ​ 5.5 ​ ​ 64,076 ​ 3.5 ​ ​ 55,406 ​ 3.2 ​ ​ 49,054 ​ 3.1 ​ ​ 54,893 ​ 3.3 1-4 Family - commercial purpose ​ 163,220 8.6 ​ ​ 174,162 9.4 ​ ​ 165,805 9.5 ​ ​ 175,027 11.2 ​ ​ 198,918 12.1 Total commercial real estate - non-owner occupied ​ 739,565 39.0 ​ 737,342 39.9 ​ 675,597 38.8 ​ 582,433 37.2 ​ 582,473 35.4 Commercial real estate - owner occupied ​ ​ 261,071 ​ 13.8 ​ ​ 237,246 ​ 12.8 ​ ​ 205,910 ​ 11.8 ​ ​ 196,083 ​ 12.5 ​ ​ 191,075 ​ 11.6 All other commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 96,665 5.1 ​ 78,832 4.3 ​ 95,368 5.5 ​ 118,488 7.6 ​ 222,923 13.6 Commercial lines of credit ​ 120,078 6.3 ​ 117,236 6.3 ​ 141,444 8.1 ​ 106,338 6.8 ​ 105,802 6.4 Political subdivisions ​ 94,009 5.0 ​ 79,031 4.3 ​ 86,663 5.0 ​ 75,401 4.8 ​ 46,295 2.8 Commercial construction and land ​ 92,741 4.9 ​ 104,123 5.6 ​ 60,892 3.5 ​ 59,505 3.8 ​ 41,000 2.5 Other commercial loans ​ 19,784 1.0 ​ 20,471 1.2 ​ 25,710 1.5 ​ 26,498 1.8 ​ 29,310 1.9 Total all other commercial loans ​ 423,277 22.3 ​ 399,693 21.7 ​ 410,077 23.6 ​ 386,230 24.8 ​ 445,330 27.2 Residential mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family - residential ​ ​ 383,797 20.2 ​ ​ 389,262 21.1 ​ ​ 363,005 ​ 20.9 ​ ​ 327,593 ​ 20.9 ​ ​ 356,532 ​ 21.7 1-4 Family residential construction ​ ​ 24,212 1.3 ​ ​ 24,452 1.3 ​ ​ 30,577 1.8 ​ ​ 23,151 1.5 ​ ​ 18,736 1.1 Total residential mortgage ​ 408,009 21.5 ​ 413,714 22.4 ​ 393,582 22.7 ​ 350,744 22.4 ​ 375,268 22.8 Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer lines of credit (including HELOCs) ​ 47,196 2.5 ​ 41,503 2.2 ​ 36,650 2.1 ​ 33,522 2.1 ​ 34,566 2.1 All other consumer ​ ​ 16,730 0.9 ​ 18,641 1.0 ​ 18,224 1.0 ​ 15,837 1.0 ​ 15,497 0.9 Total consumer ​ 63,926 3.4 ​ 60,144 3.2 ​ 54,874 3.1 ​ 49,359 3.1 ​ 50,063 3.0 Total ​ 1,895,848 100.0 ​ 1,848,139 100.0 ​ 1,740,040 100.0 ​ 1,564,849 100.0 ​ 1,644,209 100.0 Less: allowance for credit losses on loans ​ (20,035) ​ ​ (19,208) ​ ​ (16,615) ​ ​ (13,537) ​ ​ (11,385) ​ Loans, net ​ $ 1,875,813 ​ ​ ​ $ 1,828,931 ​ ​ ​ $ 1,723,425 ​ ​ ​ $ 1,551,312 ​ ​ ​ $ 1,632,824 ​ ​ ​ Additional details regarding the composition of the non-owner occupied commercial real estate loan portfolio at December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ % of Non-owner ​ % of ​ ​ 2024 ​ Occupied CRE ​ Total Loans Office ​ $ 102,831 ​ 21.8 % ​ 5.4 % Retail ​ ​ 96,142 ​ 20.4 % ​ 5.1 % Industrial ​ ​ 79,839 ​ 16.9 % ​ 4.2 % Hotels ​ ​ 70,229 ​ 14.9 % ​ 3.7 % Mixed Use ​ ​ 60,837 ​ 12.9 % ​ 3.2 % Other ​ ​ 61,293 ​ 13.0 % ​ 3.2 % Total Non-owner Occupied CRE Loans ​ $ 471,171 ​ ​ ​ ​ ​ ​ Total Gross Loans ​ $ 1,895,848 ​ ​ ​ ​ ​ ​ ​ ​ 29 Table of Contents TABLE VIII – LOAN MATURITY DISTRIBUTION ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed-Rate Loans ​ ​ Variable- or Adjustable-Rate Loans ​ All Loans ​ ​ 1 Year 1-5 >5-15 >15 ​ ​ ​ ​ 1 Year 1-5 >5-15 >15 ​ ​ ​ ​ ​ (In Thousands) or Less Years Years Years Total or Less Years Years Years Total ​ ​ Total Commercial Real Estate- Nonowner Occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 19,319 $ 202,763 $ 11,483 $ 9 $ 233,574 ​ ​ $ 80,396 $ 154,149 $ 3,052 $ 0 $ 237,597 ​ ​ $ 471,171 Multi-family (5 or more) residential ​ 7,335 18,009 2,419 678 28,441 ​ ​ 22,578 54,155 0 0 76,733 ​ ​ ​ 105,174 1-4 Family - commercial purpose ​ ​ 8,245 ​ 45,212 ​ 12,347 ​ 94 ​ 65,898 ​ ​ 10,228 86,931 ​ 163 0 97,322 ​ ​ ​ 163,220 Total commercial real estate - non-owner occupied ​ ​ 34,899 ​ 265,984 ​ 26,249 ​ 781 ​ 327,913 ​ ​ ​ 113,202 ​ 295,235 ​ 3,215 ​ 0 ​ 411,652 ​ ​ ​ 739,565 Commercial real estate - owner occupied ​ ​ 10,073 ​ 81,204 ​ 24,696 ​ 410 ​ 116,382 ​ ​ ​ 28,786 ​ 115,903 ​ 0 ​ 0 ​ 144,689 ​ ​ ​ 261,071 All other commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ 1,828 ​ 47,387 ​ 14,186 ​ 464 ​ 63,865 ​ ​ ​ 12,950 ​ 19,248 ​ 602 ​ 0 ​ 32,800 ​ ​ ​ 96,665 Commercial lines of credit ​ ​ 5,539 ​ 74 ​ 764 ​ 0 ​ 6,377 ​ ​ ​ 113,627 ​ 74 ​ 0 ​ 0 ​ 113,701 ​ ​ ​ 120,078 Political subdivisions ​ ​ 7,206 ​ 15,636 ​ 47,035 ​ 7,763 ​ 77,640 ​ ​ ​ 0 ​ 6,380 ​ 9,989 ​ 0 ​ 16,369 ​ ​ ​ 94,009 Commercial construction and land ​ ​ 6,712 ​ 24,838 ​ 658 ​ 0 ​ 32,208 ​ ​ ​ 56,420 ​ 4,113 ​ 0 ​ 0 ​ 60,533 ​ ​ ​ 92,741 Other commercial loans ​ ​ 277 ​ 5,283 ​ 1,918 ​ 87 ​ 7,565 ​ ​ ​ 4,283 ​ 7,936 ​ 0 ​ 0 ​ 12,219 ​ ​ ​ 19,784 Total all other commercial loans ​ ​ 21,562 ​ 93,218 ​ 64,561 ​ 8,314 ​ 187,655 ​ ​ ​ 187,280 ​ 37,751 ​ 10,591 ​ 0 ​ 235,622 ​ ​ ​ 423,277 Residential mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family - residential ​ ​ 1,232 ​ 5,807 ​ 88,293 ​ 52,103 ​ 147,435 ​ ​ ​ 18,796 ​ 66,055 ​ 151,511 ​ 0 ​ 236,362 ​ ​ ​ 383,797 1-4 Family residential construction ​ ​ 163 ​ 811 ​ 5,553 ​ 2,448 ​ 8,975 ​ ​ ​ 0 ​ 0 ​ 15,237 ​ 0 ​ 15,237 ​ ​ ​ 24,212 Total residential mortgage ​ ​ 1,395 ​ 6,618 ​ 93,846 ​ 54,551 ​ 156,410 ​ ​ ​ 18,796 ​ 66,055 ​ 166,748 ​ 0 ​ 251,599 ​ ​ ​ 408,009 Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer lines of credit (including HELOCs) ​ ​ 321 ​ 0 ​ 0 ​ 1 ​ 322 ​ ​ ​ 46,874 ​ 0 ​ 0 ​ 0 ​ 46,874 ​ ​ ​ 47,196 All other consumer ​ ​ 1,003 ​ 9,864 ​ 1,920 ​ 0 ​ 12,787 ​ ​ ​ 3,943 ​ 0 ​ 0 ​ 0 ​ 3,943 ​ ​ ​ 16,730 Total consumer ​ ​ 1,324 ​ 9,864 ​ 1,920 ​ 1 ​ 13,109 ​ ​ ​ 50,817 ​ 0 ​ 0 ​ 0 ​ 50,817 ​ ​ ​ 63,926 Total ​ $ 69,253 $ 456,888 $ 211,272 $ 64,057 $ 801,469 ​ ​ $ 398,881 $ 514,944 $ 180,554 $ 0 $ 1,094,379 ​ ​ $ 1,895,848 ​ ​ ​ 30 Table of Contents PROVISION AND ALLOWANCE FOR CREDIT LOSSES A summary of the provision for credit losses for the years ended December 31, 2024 and 2023, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Year ​ Year ​ ​ ​ Ended ​ Ended ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ Provision for credit losses: ​ ​ ​ ​ ​ ​ ​ Loans receivable ​ $ 2,430 ​ $ 753 ​ Off-balance sheet exposures ​ (235) ​ (567) ​ Total provision for credit losses ​ $ 2,195 ​ $ 186 ​ For the year ended December 31, 2024, there was a provision for credit losses of $2,195,000, an increase of $2,009,000 in expense compared to a provision for loan losses of $186,000 in 2023.
Based on the fairly limited volume of required repurchases to date, no allowance has been established for representation and warranty exposures as of December 31, 2025. 29 Table of Contents TABLE VII – Five-Year Summary of Loans by Type ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars In Thousands) ​ ​ ​ 2025 ​ ​ ​ % ​ 2024 ​ ​ ​ % ​ 2023 ​ ​ ​ % ​ 2022 ​ ​ ​ % ​ 2021 ​ ​ ​ % Commercial real estate - non-owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 569,974 ​ 24.2 ​ $ 471,171 ​ 24.9 ​ $ 499,104 ​ 27.0 ​ $ 454,386 ​ 26.1 ​ $ 358,352 ​ 22.9 Multi-family (5 or more) residential ​ ​ 160,284 ​ 6.8 ​ ​ 105,174 ​ 5.5 ​ ​ 64,076 ​ 3.5 ​ ​ 55,406 ​ 3.2 ​ ​ 49,054 ​ 3.1 1-4 Family - commercial purpose ​ 197,480 8.4 ​ ​ 163,220 8.6 ​ ​ 174,162 9.4 ​ ​ 165,805 9.5 ​ ​ 175,027 11.2 Total commercial real estate - non-owner occupied ​ 927,738 39.4 ​ 739,565 39.0 ​ 737,342 39.9 ​ 675,597 38.8 ​ 582,433 37.2 Commercial real estate - owner occupied ​ ​ 311,792 ​ 13.2 ​ ​ 261,071 ​ 13.8 ​ ​ 237,246 ​ 12.8 ​ ​ 205,910 ​ 11.8 ​ ​ 196,083 ​ 12.5 All other commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 128,679 5.5 ​ 96,665 5.1 ​ 78,832 4.3 ​ 95,368 5.5 ​ 118,488 7.6 Commercial lines of credit ​ 139,727 5.9 ​ 120,078 6.3 ​ 117,236 6.3 ​ 141,444 8.1 ​ 106,338 6.8 Political subdivisions ​ 96,349 4.1 ​ 94,009 5.0 ​ 79,031 4.3 ​ 86,663 5.0 ​ 75,401 4.8 Commercial construction and land ​ 123,887 5.3 ​ 92,741 4.9 ​ 104,123 5.6 ​ 60,892 3.5 ​ 59,505 3.8 Other commercial loans ​ 71,895 3.0 ​ 19,784 1.0 ​ 20,471 1.2 ​ 25,710 1.5 ​ 26,498 1.8 Total all other commercial loans ​ 560,537 23.8 ​ 423,277 22.3 ​ 399,693 21.7 ​ 410,077 23.6 ​ 386,230 24.8 Residential mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family - residential ​ ​ 411,827 17.5 ​ ​ 383,797 20.2 ​ ​ 389,262 21.1 ​ ​ 363,005 ​ 20.9 ​ ​ 327,593 ​ 20.9 1-4 Family residential construction ​ ​ 32,123 1.4 ​ ​ 24,212 1.3 ​ ​ 24,452 1.3 ​ ​ 30,577 1.8 ​ ​ 23,151 1.5 Total residential mortgage ​ 443,950 18.9 ​ 408,009 21.5 ​ 413,714 22.4 ​ 393,582 22.7 ​ 350,744 22.4 Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer lines of credit (including HELOCs) ​ 94,060 4.0 ​ 47,196 2.5 ​ 41,503 2.2 ​ 36,650 2.1 ​ 33,522 2.1 All other consumer ​ ​ 16,288 0.7 ​ 16,730 0.9 ​ 18,641 1.0 ​ 18,224 1.0 ​ 15,837 1.0 Total consumer ​ 110,348 4.7 ​ 63,926 3.4 ​ 60,144 3.2 ​ 54,874 3.1 ​ 49,359 3.1 Total ​ 2,354,365 100.0 ​ 1,895,848 100.0 ​ 1,848,139 100.0 ​ 1,740,040 100.0 ​ 1,564,849 100.0 Less: allowance for credit losses on loans ​ (31,048) ​ ​ (20,035) ​ ​ (19,208) ​ ​ (16,615) ​ ​ (13,537) ​ Loans, net ​ $ 2,323,317 ​ ​ ​ $ 1,875,813 ​ ​ ​ $ 1,828,931 ​ ​ ​ $ 1,723,425 ​ ​ ​ $ 1,551,312 ​ ​ ​ Additional details regarding the composition of the non-owner occupied commercial real estate loan portfolio at December 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ December 31, ​ % of Non-owner ​ % of ​ ​ 2025 ​ Occupied CRE ​ Total Loans Office ​ $ 125,175 ​ 22.0 % ​ 5.3 % Retail ​ ​ 104,513 ​ 18.3 % ​ 4.4 % Industrial ​ ​ 99,476 ​ 17.5 % ​ 4.2 % Hotels ​ ​ 82,692 ​ 14.5 % ​ 3.5 % Mixed Use ​ ​ 64,390 ​ 11.3 % ​ 2.7 % Self Storage Facilities ​ ​ 55,434 ​ 9.7 % ​ 2.4 % Other ​ ​ 38,294 ​ 6.7 % ​ 1.6 % Total Non-owner Occupied CRE Loans ​ $ 569,974 ​ ​ ​ ​ ​ ​ Total Gross Loans ​ $ 2,354,365 ​ ​ ​ ​ ​ ​ ​ ​ 30 Table of Contents TABLE VIII – LOAN MATURITY DISTRIBUTION ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed-Rate Loans ​ ​ Variable- or Adjustable-Rate Loans ​ All Loans ​ ​ 1 Year 1-5 >5-15 >15 ​ ​ ​ ​ 1 Year 1-5 >5-15 >15 ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ or Less Years Years Years Total ​ ​ or Less Years Years Years Total ​ ​ Total Commercial Real Estate- Nonowner Occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 53,384 $ 205,341 $ 13,073 $ 8 $ 271,806 ​ ​ $ 108,069 $ 184,627 $ 5,472 $ 0 $ 298,168 ​ ​ $ 569,974 Multi-family (5 or more) residential ​ 5,126 25,971 12,675 759 44,531 ​ ​ 33,724 80,505 1,524 0 115,753 ​ ​ ​ 160,284 1-4 Family - commercial purpose ​ ​ 13,428 ​ 38,720 ​ 10,546 ​ 28 ​ 62,722 ​ ​ 24,932 104,359 ​ 5,467 0 134,758 ​ ​ ​ 197,480 Total commercial real estate - non-owner occupied ​ ​ 71,938 ​ 270,032 ​ 36,294 ​ 795 ​ 379,059 ​ ​ ​ 166,725 ​ 369,491 ​ 12,463 ​ 0 ​ 548,679 ​ ​ ​ 927,738 Commercial real estate - owner occupied ​ ​ 17,104 ​ 74,817 ​ 26,793 ​ 394 ​ 119,108 ​ ​ ​ 44,597 ​ 141,962 ​ 6,125 ​ 0 ​ 192,684 ​ ​ ​ 311,792 All other commercial loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ 5,550 ​ 62,691 ​ 18,369 ​ 453 ​ 87,063 ​ ​ ​ 11,073 ​ 29,441 ​ 1,102 ​ 0 ​ 41,616 ​ ​ ​ 128,679 Commercial lines of credit ​ ​ 9,278 ​ 0 ​ 0 ​ 0 ​ 9,278 ​ ​ ​ 129,416 ​ 1,033 ​ 0 ​ 0 ​ 130,449 ​ ​ ​ 139,727 Political subdivisions ​ ​ 10,652 ​ 15,420 ​ 47,604 ​ 4,403 ​ 78,079 ​ ​ ​ 23 ​ 7,329 ​ 10,918 ​ 0 ​ 18,270 ​ ​ ​ 96,349 Commercial construction and land ​ ​ 11,659 ​ 16,403 ​ 786 ​ 0 ​ 28,848 ​ ​ ​ 81,494 ​ 13,346 ​ 199 ​ 0 ​ 95,039 ​ ​ ​ 123,887 Other commercial loans ​ ​ 648 ​ 3,333 ​ 2,237 ​ 2,064 ​ 8,282 ​ ​ ​ 23,999 ​ 32,493 ​ 7,121 ​ 0 ​ 63,613 ​ ​ ​ 71,895 Total all other commercial loans ​ ​ 37,787 ​ 97,847 ​ 68,996 ​ 6,920 ​ 211,550 ​ ​ ​ 246,005 ​ 83,642 ​ 19,340 ​ 0 ​ 348,987 ​ ​ ​ 560,537 Residential mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family - residential ​ ​ 480 ​ 6,639 ​ 87,060 ​ 54,047 ​ 148,226 ​ ​ ​ 29,805 ​ 72,511 ​ 160,906 ​ 379 ​ 263,601 ​ ​ ​ 411,827 1-4 Family residential construction ​ ​ 1,701 ​ 445 ​ 5,978 ​ 2,874 ​ 10,998 ​ ​ ​ 94 ​ 330 ​ 20,701 ​ 0 ​ 21,125 ​ ​ ​ 32,123 Total residential mortgage ​ ​ 2,181 ​ 7,084 ​ 93,038 ​ 56,921 ​ 159,224 ​ ​ ​ 29,899 ​ 72,841 ​ 181,607 ​ 379 ​ 284,726 ​ ​ ​ 443,950 Consumer loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer lines of credit (including HELOCs) ​ ​ 307 ​ 589 ​ 3,000 ​ 1 ​ 3,897 ​ ​ ​ 89,198 ​ 889 ​ 76 ​ 0 ​ 90,163 ​ ​ ​ 94,060 All other consumer ​ ​ 1,559 ​ 8,494 ​ 1,821 ​ 0 ​ 11,874 ​ ​ ​ 4,414 ​ 0 ​ 0 ​ 0 ​ 4,414 ​ ​ ​ 16,288 Total consumer ​ ​ 1,866 ​ 9,083 ​ 4,821 ​ 1 ​ 15,771 ​ ​ ​ 93,612 ​ 889 ​ 76 ​ 0 ​ 94,577 ​ ​ ​ 110,348 Total ​ $ 130,876 $ 458,863 $ 229,942 $ 65,031 $ 884,712 ​ ​ $ 580,838 $ 668,825 $ 219,611 $ 379 $ 1,469,653 ​ ​ $ 2,354,365 ​ ​ ​ 31 Table of Contents PROVISION AND ALLOWANCE FOR CREDIT LOSSES A summary of the provision for credit losses for the years ended December 31, 2025 and 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ 12 Months ​ 12 Months ​ ​ Ended ​ Ended ​ ​ December 31, ​ December 31, ​ ​ 2025 ​ 2024 Provision for credit losses: ​ ​ ​ ​ ​ ​ Loans receivable ​ $ 5,556 ​ $ 2,430 Off-balance sheet exposures ​ 517 ​ (235) Total provision for credit losses ​ $ 6,073 ​ $ 2,195 For the year ended December 31, 2025, there was a provision for credit losses of $6,073,000, an increase of $3,878,000 compared to $2,195,000 in 2024.
The most significant change in temporary difference components among those periods was a decrease in the net deferred tax liabilities of $950,000 related to a tax charge for the surrender of BOLI in 2023. The Corporation regularly reviews deferred tax assets for recoverability based on history of earnings, expectations for future earnings and expected timing of reversals of temporary differences.
Other significant changes included increases in the net deferred tax asset related to the ACL and acquisition accounting valuation adjustments on loans and a decrease related to core deposit intangibles. The Corporation regularly reviews deferred tax assets for recoverability based on history of earnings, expectations for future earnings and expected timing of reversals of temporary differences.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−1 removed10 unchanged
Biggest changeIn contrast, most of the Corporation’s other financial instruments, including loans receivable (held for investment), deposits and borrowed funds are carried on the balance sheet at historical cost without adjustment for the impact of changes in interest rates. ​ TABLE XIII – THE EFFECT OF HYPOTHETICAL CHANGES IN INTEREST RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Period Ending December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Interest ​ ​ Interest ​ ​ Net Interest ​ NII ​ ​ NII ​ Change in Rates ​ ​ Income ​ ​ Expense ​ ​ Income (NII) ​ % Change ​ ​ Risk Limit ​ +400 ​ $ 157,710 ​ $ 87,489 ​ $ 70,221 ​ (17.4) % ​ 25.0 % +300 ​ ​ 151,610 ​ ​ 75,796 ​ ​ 75,814 ​ (10.8) % ​ 20.0 % +200 ​ ​ 145,458 ​ ​ 65,308 ​ ​ 80,150 ​ (5.7) % ​ 15.0 % +100 ​ ​ 139,233 ​ ​ 56,023 ​ ​ 83,210 ​ (2.1) % ​ 10.0 % 0 ​ ​ 132,939 ​ ​ 47,942 ​ ​ 84,997 ​ 0.0 % ​ 0.0 % -100 ​ ​ 126,757 ​ ​ 42,671 ​ ​ 84,086 ​ (1.1) % ​ 10.0 % -200 ​ ​ 119,814 ​ ​ 37,450 ​ ​ 82,364 ​ (3.1) % ​ 15.0 % -300 ​ ​ 111,964 ​ ​ 32,229 ​ ​ 79,735 ​ (6.2) % ​ 20.0 % -400 ​ ​ 103,390 ​ ​ 27,650 ​ ​ 75,740 ​ (10.9) % ​ 25.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of Equity at December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Present ​ ​ Present ​ ​ Present ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Value ​ ​ Value ​ ​ Value ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ Equity ​ ​ % Change ​ ​ Risk Limit ​ ​ ​ ​ ​ ​ +400 ​ $ 475,112 ​ ​ (16.1) % ​ 50.0 % ​ ​ ​ ​ ​ +300 ​ ​ 507,221 ​ ​ (10.4) % ​ 45.0 % ​ ​ ​ ​ ​ +200 ​ ​ 534,636 ​ ​ (5.6) % ​ 35.0 % ​ ​ ​ ​ ​ +100 ​ ​ 555,058 ​ ​ (2.0) % ​ 25.0 % ​ ​ ​ ​ ​ 0 ​ ​ 566,339 ​ ​ 0.0 % ​ 0.0 % ​ ​ ​ ​ ​ -100 ​ ​ 552,813 ​ ​ (2.4) % ​ 25.0 % ​ ​ ​ ​ ​ -200 ​ ​ 520,196 ​ ​ (8.1) % ​ 35.0 % ​ ​ ​ ​ ​ -300 ​ ​ 470,155 ​ ​ (17.0) % ​ 45.0 % ​ ​ ​ ​ ​ -400 ​ ​ 403,255 ​ ​ (28.8) % ​ 50.0 % ​ ​ ​ ​ ​ 38 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Period Ending December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Interest ​ ​ Interest ​ ​ Net Interest ​ NII ​ ​ NII ​ Change in Rates ​ ​ Income ​ ​ Expense ​ ​ Income (NII) ​ % Change ​ ​ Risk Limit ​ +400 ​ $ 148,407 ​ $ 81,707 ​ $ 66,700 ​ (21.5) % ​ 25.0 % +300 ​ ​ 143,333 ​ ​ 70,165 ​ ​ 73,168 ​ (13.9) % ​ 20.0 % +200 ​ ​ 138,291 ​ ​ 59,859 ​ ​ 78,432 ​ (7.7) % ​ 15.0 % +100 ​ ​ 133,224 ​ ​ 50,797 ​ ​ 82,427 ​ (3.0) % ​ 10.0 % 0 ​ ​ 127,920 ​ ​ 42,979 ​ ​ 84,941 ​ 0.0 % ​ 0.0 % -100 ​ ​ 122,446 ​ ​ 37,701 ​ ​ 84,745 ​ (0.2) % ​ 10.0 % -200 ​ ​ 116,922 ​ ​ 32,462 ​ ​ 84,460 ​ (0.6) % ​ 15.0 % -300 ​ ​ 110,919 ​ ​ 27,710 ​ ​ 83,209 ​ (2.0) % ​ 20.0 % -400 ​ ​ 104,495 ​ ​ 23,067 ​ ​ 81,428 ​ (4.1) % ​ 25.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of Equity at December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Present ​ ​ Present ​ ​ Present ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Value ​ ​ Value ​ ​ Value ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ Equity ​ ​ % Change ​ ​ Risk Limit ​ ​ ​ ​ ​ ​ +400 ​ $ 330,130 ​ ​ (21.2) % ​ 50.0 % ​ ​ ​ ​ ​ +300 ​ ​ 359,302 ​ ​ (14.3) % ​ 45.0 % ​ ​ ​ ​ ​ +200 ​ ​ 385,045 ​ ​ (8.1) % ​ 35.0 % ​ ​ ​ ​ ​ +100 ​ ​ 405,178 ​ ​ (3.3) % ​ 25.0 % ​ ​ ​ ​ ​ 0 ​ ​ 419,199 ​ ​ 0.0 % ​ 0.0 % ​ ​ ​ ​ ​ -100 ​ ​ 406,957 ​ ​ (2.9) % ​ 25.0 % ​ ​ ​ ​ ​ -200 ​ ​ 406,145 ​ ​ (3.1) % ​ 35.0 % ​ ​ ​ ​ ​ -300 ​ ​ 385,859 ​ ​ (8.0) % ​ 45.0 % ​ ​ ​ ​ ​ -400 ​ ​ 363,763 ​ ​ (13.2) % ​ 50.0 % ​ ​ ​ ​ ​ ​ ​ ​ 39 Table of Contents
Biggest changeIn contrast, most of the Corporation’s other financial instruments, including loans receivable (held for investment), deposits and borrowed funds are carried on the balance sheet at historical cost without adjustment for the impact of changes in interest rates. ​ 39 Table of Contents TABLE XIII – THE EFFECT OF HYPOTHETICAL CHANGES IN INTEREST RATES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Period Ending December 31, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Interest ​ ​ Interest ​ ​ Net Interest ​ NII ​ ​ NII ​ Change in Rates ​ ​ Income ​ ​ Expense ​ ​ Income (NII) ​ % Change ​ ​ Risk Limit ​ +400 ​ $ 190,241 ​ $ 101,840 ​ $ 88,401 ​ (22.4) % ​ 25.0 % +300 ​ ​ 183,502 ​ ​ 86,341 ​ ​ 97,161 ​ (14.7) % ​ 20.0 % +200 ​ ​ 176,675 ​ ​ 72,323 ​ ​ 104,352 ​ (8.4) % ​ 15.0 % +100 ​ ​ 169,739 ​ ​ 59,787 ​ ​ 109,952 ​ (3.5) % ​ 10.0 % 0 ​ ​ 162,684 ​ ​ 48,733 ​ ​ 113,951 ​ 0.0 % ​ 0.0 % -100 ​ ​ 155,164 ​ ​ 41,661 ​ ​ 113,503 ​ (0.4) % ​ 10.0 % -200 ​ ​ 146,491 ​ ​ 34,657 ​ ​ 111,834 ​ (1.9) % ​ 15.0 % -300 ​ ​ 136,961 ​ ​ 28,400 ​ ​ 108,561 ​ (4.7) % ​ 20.0 % -400 ​ ​ 126,625 ​ ​ 23,288 ​ ​ 103,337 ​ (9.3) % ​ 25.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of Equity at December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Present ​ ​ Present ​ ​ Present ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Value ​ ​ Value ​ ​ Value ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ Equity ​ ​ % Change ​ ​ Risk Limit ​ ​ ​ ​ ​ ​ +400 ​ $ 572,841 ​ ​ (16.8) % ​ 40.0 % ​ ​ ​ ​ ​ +300 ​ ​ 614,522 ​ ​ (10.7) % ​ 30.0 % ​ ​ ​ ​ ​ +200 ​ ​ 649,738 ​ ​ (5.6) % ​ 25.0 % ​ ​ ​ ​ ​ +100 ​ ​ 675,284 ​ ​ (1.9) % ​ 15.0 % ​ ​ ​ ​ ​ 0 ​ ​ 688,389 ​ ​ 0.0 % ​ 0.0 % ​ ​ ​ ​ ​ -100 ​ ​ 665,037 ​ ​ (3.4) % ​ 15.0 % ​ ​ ​ ​ ​ -200 ​ ​ 617,865 ​ ​ (10.2) % ​ 25.0 % ​ ​ ​ ​ ​ -300 ​ ​ 553,948 ​ ​ (19.5) % ​ 30.0 % ​ ​ ​ ​ ​ -400 ​ ​ 474,663 ​ ​ (31.0) % ​ 40.0 % ​ ​ ​ ​ ​ ​ ​ 40 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) ​ Period Ending December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Interest ​ ​ Interest ​ ​ Net Interest ​ NII ​ ​ NII ​ Change in Rates ​ ​ Income ​ ​ Expense ​ ​ Income (NII) ​ % Change ​ ​ Risk Limit ​ +400 ​ $ 157,710 ​ $ 87,489 ​ $ 70,221 ​ (17.4) % ​ 25.0 % +300 ​ ​ 151,610 ​ ​ 75,796 ​ ​ 75,814 ​ (10.8) % ​ 20.0 % +200 ​ ​ 145,458 ​ ​ 65,308 ​ ​ 80,150 ​ (5.7) % ​ 15.0 % +100 ​ ​ 139,233 ​ ​ 56,023 ​ ​ 83,210 ​ (2.1) % ​ 10.0 % 0 ​ ​ 132,939 ​ ​ 47,942 ​ ​ 84,997 ​ 0.0 % ​ 0.0 % -100 ​ ​ 126,757 ​ ​ 42,671 ​ ​ 84,086 ​ (1.1) % ​ 10.0 % -200 ​ ​ 119,814 ​ ​ 37,450 ​ ​ 82,364 ​ (3.1) % ​ 15.0 % -300 ​ ​ 111,964 ​ ​ 32,229 ​ ​ 79,735 ​ (6.2) % ​ 20.0 % -400 ​ ​ 103,390 ​ ​ 27,650 ​ ​ 75,740 ​ (10.9) % ​ 25.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic Value of Equity at December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Present ​ ​ Present ​ ​ Present ​ ​ ​ ​ ​ ​ Basis Point ​ ​ Value ​ ​ Value ​ ​ Value ​ ​ ​ ​ ​ ​ Change in Rates ​ ​ Equity ​ ​ % Change ​ ​ Risk Limit ​ ​ ​ ​ ​ ​ +400 ​ $ 475,112 ​ ​ (16.1) % ​ 40.0 % ​ ​ ​ ​ ​ +300 ​ ​ 507,221 ​ ​ (10.4) % ​ 30.0 % ​ ​ ​ ​ ​ +200 ​ ​ 534,636 ​ ​ (5.6) % ​ 25.0 % ​ ​ ​ ​ ​ +100 ​ ​ 555,058 ​ ​ (2.0) % ​ 15.0 % ​ ​ ​ ​ ​ 0 ​ ​ 566,339 ​ ​ 0.0 % ​ 0.0 % ​ ​ ​ ​ ​ -100 ​ ​ 552,813 ​ ​ (2.4) % ​ 15.0 % ​ ​ ​ ​ ​ -200 ​ ​ 520,196 ​ ​ (8.1) % ​ 25.0 % ​ ​ ​ ​ ​ -300 ​ ​ 470,155 ​ ​ (17.0) % ​ 30.0 % ​ ​ ​ ​ ​ -400 ​ ​ 403,255 ​ ​ (28.8) % ​ 40.0 % ​ ​ ​ ​ ​ ​ ​ ​ 41 Table of Contents
The policy limits acceptable fluctuations in net interest income from the baseline (flat rates) one-year scenario and variances in EVE from the baseline values based on current rates. ​ Table XIII, which follows this discussion, is based on the results of calculations performed using the simulation model as of December 31, 2024 and 2023.
The policy limits acceptable fluctuations in net interest income from the baseline (flat rates) one-year scenario and variances in EVE from the baseline values based on current rates. ​ Table XIII, which follows this discussion, is based on the results of calculations performed using the simulation model as of December 31, 2025 and 2024.
The projected results based on the model includes the impact of estimates, at each level of interest rate change, regarding cash flows from principal repayments on loans and mortgage-backed securities and call activity on other investment securities.
The projected results based on the model include the impact of estimates, at each level of interest rate change, regarding cash flows from principal repayments on loans and mortgage-backed securities and call activity on other investment securities.
The Table shows that as of the respective dates, the changes in net interest income and changes in EVE were within the policy limits in all scenarios. ​ 37 Table of Contents Based on December 31, 2024 and 2023 data, the amounts of net interest income decrease, as compared to the amounts based on current interest rates, in both the upward and downward rate scenarios.
The Table shows that as of the respective dates, the changes in net interest income and changes in EVE were within the policy limits in all scenarios. ​ Based on December 31, 2025 and 2024 data, the amounts of net interest income decrease, as compared to the amounts based on current interest rates, in both the upward and downward rate scenarios.
The difference between amortized cost and fair value of available-for-sale debt securities, net of deferred income tax, is included in accumulated other comprehensive income (loss) within stockholders’ equity. Increases in interest rates have caused the fair value of the Corporation’s available-for-sale debt securities to decrease, resulting in an accumulated other comprehensive loss of $37.1 million at December 31, 2024.
The difference between amortized cost and fair value of available-for-sale debt securities, net of deferred income tax, is included in accumulated other comprehensive income (loss) within stockholders’ equity.
Further, results in the downward rate scenarios reflect limitations on the benefit of falling rates on some deposit types due to a 0% assumed floor. ​ At December 31, 2024 and 2023, EVE is modeled to decrease compared to the 0 basis point scenario in all of the rising and falling rate scenarios.
Similarly, at December 31, 2025 and 2024, EVE is modeled to decrease compared to the 0 basis point scenario in all of the rising and falling rate scenarios.
The increases in EVE also reflect generally higher long-term interest rates used in calculating the present values of nonmaturity deposits at December 31, 2024 as compared to December 31, 2023. ​ Under U.S. generally accepted accounting principles, available-for-sale debt securities are carried at fair value as of each balance sheet date.
Further, results in the downward rate scenarios reflect limitations on the benefit of falling rates on some deposit types due to a 0% assumed floor. ​ Under U.S. generally accepted accounting principles, available-for-sale debt securities are carried at fair value as of each balance sheet date.
Removed
In Table XIII, EVE is higher at December 31, 2024 as compared to December 31, 2023 all of the rate scenarios. The increases in comparative amounts of EVE reflects the impact of an overall increase in the assumed lives of nonmaturity deposits used in the December 31, 2024 analysis based on an updated study completed in the second quarter 2024.
Added
Increases in interest rates have caused the fair value of the Corporation’s available-for-sale debt securities to decrease, resulting in an accumulated other comprehensive loss related to securities of $23.2 million at December 31, 2025.

Other CZNC 10-K year-over-year comparisons