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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
July 21, 2022
Date of Report (Date of earliest event reported)
Citizens & Northern Corporation
(Exact name of registrant as specified in its charter)
Pennsylvania |
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0-16084 |
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23-2451943 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
of incorporation) |
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File Number) |
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Ident. No.) |
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90-92 Main Street, Wellsboro, Pennsylvania |
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16901 |
(Address of principal executive offices) |
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(Zip Code) |
(570) 724-3411
Registrant’s telephone number, including area code
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which |
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Common Stock, par value $1.00 per share |
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CZNC |
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Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. Results of Operations and Financial Condition
Citizens & Northern Corporation (the “Company”) announced unaudited, consolidated financial results for the three-month and six-month periods ended June 30, 2022. On July 21, 2022, the Company issued a press release titled “C&N Declares Dividend and Announces Second Quarter 2022 Unaudited Financial Results,” a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Supplemental, unaudited financial information is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. Also, the Company’s “banCNotes,” a report that includes reference to unaudited financial information in Exhibit 99.2 is furnished as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.
ITEM 9.01. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
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Exhibit 99.2: Supplemental, unaudited financial information. |
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Exhibit 104: Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CITIZENS & NORTHERN CORPORATION |
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Dated: July 21, 2022 |
By: |
/s/ Mark A. Hughes |
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Mark A. Hughes |
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Treasurer and Chief Financial Officer |
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Exhibit 99.1
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Contact: Charity Frantz |
July 21, 2022 |
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570-724-0225 |
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charityf@cnbankpa.com |
C&N DECLARES DIVIDEND AND ANNOUNCES SECOND QUARTER 2022 UNAUDITED FINANCIAL RESULTS
FOR IMMEDIATE RELEASE:
Earnings +8.6% Over the Prior Quarter
Average Loan Balances Excluding PPP Up +13.2% and Average Deposit Balances Up +6.5%
Wellsboro, PA – Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC) announced its most recent dividend declaration and its unaudited, consolidated financial results for the three-month and six-month periods ended June 30, 2022.
Dividend Declared and Unaudited Financial Information
On July 21, 2022, C&N’s Board of Directors declared a regular quarterly cash dividend of $0.28 per share. The dividend is payable on August 12, 2022 to shareholders of record as of August 1, 2022.
Highlights related to C&N’s second quarter and June 30, 2022 year-to-date unaudited U.S. GAAP earnings results as compared to the first quarter 2022 and second quarter of 2021 are presented below.
Second Quarter 2022 as Compared to First Quarter 2022
Net income was $7,489,000 or $0.48 per diluted share, for the second quarter 2022 as compared to $6,895,000, or $0.44 per diluted share, in the first quarter 2022.
| ● | Net interest income totaled $19,625,000 in the second quarter 2022, down $707,000 from the first quarter 2022. Total interest and fees on loans from repayments received on purchased credit impaired (PCI) loans in excess of previous carrying amounts totaled $14,000 in the second quarter 2022, down from $1,398,000 in the first quarter 2022. Total interest and fees from loans originated under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) were $206,000 in the second quarter 2022, a decrease of $369,000 from the first quarter 2022 total of $575,000. Accretion and amortization of purchase accounting adjustments had a net positive impact on net interest income of $497,000 in the second quarter 2022 as compared to a net positive impact of $450,000 in the first quarter 2022. The net interest rate spread decreased 0.26%, as the average yield on earning assets decreased 0.21% to 3.92%, while the average rate on interest-bearing liabilities increased 0.05% to 0.45%. The net interest margin was 3.62% in the second quarter 2022, down from 3.86% in the first quarter 2022. The reduction in net interest margin included the impact of income from excess repayments on PCI loans dropping to a negligible amount in the second quarter from 0.26% of average earning assets in the first quarter. Further, interest and fees on PPP loans amounted to 0.04% of average earning assets in the second quarter, down from 0.11% in the first quarter, while accretion and amortization of purchase accounting adjustments increased to 0.09% in the second quarter from 0.08% in the first quarter. The average balance of loans increased $41.0 million, or an annualized increase of 10.6% in the second quarter 2022 as compared to the first quarter. Average loans, excluding PPP loans, were up $50.6 million, or an annualized increase of 13.2%, in the second quarter 2022 as compared to the first quarter. Average total deposits increased $31.3 million (6.5% annualized) in the second quarter 2022 over the first quarter. |
| ● | The provision for loan losses was $308,000 in the second quarter 2022, a decrease in expense of $583,000 from the first quarter 2022 provision of $891,000. The second quarter 2022 provision included a net recovery of $271,000 related to specific loans (net decrease in specific allowances on loans of $303,000 offset by net charge-offs of $32,000), an increase of $246,000 in the collectively determined portion of the allowance and an increase of $333,000 in the unallocated portion of the allowance. |
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| ● | Noninterest income of $6,830,000 in the second quarter 2022 increased $1,009,000 from the first quarter 2022 amount. Significant variances included the following: |
| Ø | Other noninterest income of $1,456,000 increased $868,000 from the first quarter 2022 total, including an increase in income from tax credits of $795,000. The increase in income from tax credits included credits on the PA Educational Improvement Tax Credit Program donations noted below. |
| Ø | Loan Servicing fees, net of $358,000 increased $148,000 from the first quarter 2022. The fair value of servicing rights increased $150,000 in the second quarter 2022 as compared to an increase of $2,000 in the first quarter 2022 mainly due to changes in assumptions related to prepayments of mortgage loans. |
| Ø | Interchange revenue from debit card transactions of $1,056,000 increased $93,000 from the first quarter 2022, reflecting an increase in transaction volumes. |
| Ø | Service charges on deposit accounts of $1,322,000 increased $87,000 from the first quarter 2022, as consumer and business activity increased. |
| Ø | Net gains from sales of loans of $220,000 decreased $162,000 from the first quarter 2022, reflecting a reduction in volume of residential mortgage loans sold. |
| ● | Noninterest expense of $17,039,000 in the second quarter 2022 increased $153,000 from the first quarter 2022 amount. Significant variances included the following: |
| Ø | Other noninterest expense of $2,431,000 increased $547,000 from the first quarter 2022 total. Within this category, significant variances included the following: |
| ◾ | Donations expense totaled $848,000 in the second quarter 2022, up $820,000 from the first quarter 2022 total, reflecting an increase in donations of $800,000 relating to the PA Educational Improvement Tax Credit Program. |
| ◾ | The allowance for SBA claim adjustments was reduced $48,000, resulting in a reduction in expense of $48,000 in the second quarter 2022 as compared to a reduction in expense of $242,000 in the first quarter 2022. |
| ◾ | There was a net reduction in other operational losses of $272,000 in the second quarter 2022, as compared to expense of $18,000 in the first quarter 2022. Trust Department tax compliance penalties that had been assessed in previous years and accrued in 2020 were abated in the second quarter 2022, resulting in a reduction in expense of $301,000. |
| Ø | Salaries and employee benefits expense of $10,265,000 decreased $342,000 from the first quarter 2022 total, reflecting the customary seasonal increase in payroll taxes and related benefit costs in the first quarter. |
| Ø | Net occupancy and equipment expense of $1,308,000 decreased $103,000 from the first quarter 2022 total, including seasonal decreases in snow removal and fuel costs of $65,000 and a $42,000 decrease in minor equipment purchases. |
| ● | The income tax provision was $1,618,000, or 17.8% of pre-tax income for the second quarter 2022, up from $1,483,000, or 17.7% of pre-tax income for the first quarter 2022. The increase in income tax provision reflected the increase in pre-tax income of $729,000 for the quarter. |
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Second Quarter 2022 as Compared to Second Quarter 2021
Second quarter 2022 net income was $7,489,000, or $0.48 per diluted share, as compared to $7,060,000, or $0.44 per diluted share, in the second quarter 2021. Significant variances were as follows:
| ● | Second quarter 2022 net interest income of $19,625,000 was $944,000 higher than the second quarter 2021 total. The net interest rate spread increased 0.10%, as the average yield on earning assets increased 0.07% to 3.92%, while the average rate on interest-bearing liabilities decreased 0.03% to 0.45%. The net interest margin was 3.62% in the second quarter 2022, up from 3.52% in the second quarter 2021. Interest income from available-for-sale debt securities, on a fully taxable-equivalent basis, increased $984,000 in the second quarter 2022 as compared to the second quarter 2021, as the average balance (at amortized cost) of available-for-sale debt securities increased $205.2 million. Total interest and fees from loans originated under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) were $206,000 in the second quarter 2022, a decrease of $1,043,000 from the second quarter 2021 total of $1,249,000. Total interest and fees from loans excluding PPP was $18,309,000 in the second quarter 2022, an increase of $965,000 from the second quarter 2021 total of $17,344,000. Accretion and amortization of purchase accounting adjustments had a net positive impact on net interest income of $497,000 in the second quarter 2022 as compared to a net positive impact of $713,000 in the second quarter 2021. Average outstanding loans decreased $18.2 million, as average PPP loans decreased $116.2 million. Average loans, excluding PPP loans, were up $98.0 million in the second quarter 2022 over the second quarter 2021, an increase of 6.6%. Average total deposits increased $44.0 million (2.3%). |
| ● | The provision for loan losses was $308,000 in the second quarter 2022 as compared to $744,000 in the second quarter 2021. Details concerning the second quarter 2022 provision for loan losses were described previously. The second quarter 2021 provision included a net charge of $383,000 related to specific loans (net increase in specific allowances on loans of $353,000 and net charge-offs of $30,000), an increase of $367,000 in the collectively determined portion of the allowance and a $6,000 decrease in the unallocated portion. |
| ● | Noninterest income of $6,830,000 in the second quarter 2022 increased $530,000 from the second quarter 2021 amount. Significant variances included the following: |
| Ø | Other noninterest income of $1,456,000 increased $756,000 from the second quarter 2021 total including an increase in income from tax credits of $795,000. The increase in income from tax credits resulted from a timing difference related to PA Educational Improvement Tax Credit Program donations. In the second quarter 2022, C&N made PA Educational Improvement Tax Credit Program donations totaling $800,000, comparable to the amount of such donations made in the first quarter 2021 and for which the associated income from tax credits was recognized in the first quarter 2021. |
| Ø | Service charges on deposit accounts of $1,322,000 increased $249,000 from the second quarter 2021 total, as the volume of consumer and business overdraft and other activity increased. |
| Ø | Loan Servicing fees, net of $358,000 increased $212,000 from the second quarter 2021.The fair value of servicing rights increased $150,000 in the second quarter 2022 as compared to a decrease of $39,000 in the second quarter 2021 mainly due to changes in assumptions related to prepayments of mortgage loans. |
| Ø | Net gains from sales of loans of $220,000 decreased $705,000 from the second quarter 2021, reflecting a reduction in volume of residential mortgage loans sold. |
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| ● | Noninterest expense of $17,039,000 in the second quarter 2022 increased $1,640,000 from the second quarter 2021 amount. Significant variances included the following: |
| Ø | Salaries and employee benefits of $10,265,000 increased $766,000 from the second quarter 2021 total, including an increase in base salaries expense of $774,000. In addition to the impact of merit-based salary increases, the number of employees increased, reflecting expansion of the Southcentral PA market with the opening of an office in Lancaster as well as additions to staffing for information technology (IT), human resources and other functions. In total, the number of full-time equivalent employees (FTEs) increased by 17 (4.4%) to 405 in the second quarter 2022 as compared to the second quarter 2021. Also within this category, there was an increase in health care expense of $269,000 due to higher claims on C&N’s partially self-insured plan. Decreases include a reduction in estimated total cash and stock-based incentive compensation expense of $234,000 and severance expense of $233,000 in 2021 with no comparable amount in 2022. |
| Ø | Other noninterest expense of $2,431,000 increased $680,000 from the second quarter 2021 total. Within this category, significant variances included the following: |
| ◾ | Donations expense totaled $848,000 in the second quarter 2022, up $838,000 from the second quarter 2021 total, including donations relating to the PA Educational Improvement Tax Credit Program as described above. |
| ◾ | Reductions in the allowance for SBA claim adjustments attributable to more favorable claim results than previously estimated resulted in a reduction in expense of $48,000 in the second quarter 2022 as compared to a reduction in expense of $163,000 in the second quarter 2021. |
| ◾ | There was a net reduction in other operational losses of $272,000 in the second quarter 2022, as compared to expense of $26,000 in the second quarter 2021. As noted above, in the second quarter 2022, there was a reduction in expense of $301,000 from abatement of Trust Department tax compliance penalties that were previously accrued or paid. |
| Ø | Data processing and telecommunications of $1,720,000 increased $233,000 from the second quarter 2021 total, including the impact of increases in software licensing and maintenance costs as well as costs related to enhancements of data management capabilities. |
| ● | The income tax provision of $1,618,000, or 17.8% of pre-tax income for the second quarter 2022 decreased $162,000 from $1,780,000, or 20.1% of pre-tax income for the second quarter 2021. City and state tax provisions totaled $107,000 in the second quarter 2022, down $207,000 from the second quarter 2021 amount as the second quarter 2021 total included catch-up adjustments from the previous year and estimates totaling approximately $100,000 that were reduced in the third quarter. Further, the lower effective tax rate for the second quarter 2022 includes the benefit of the $301,000 reversal of Trust Department tax compliance penalties being non-taxable. |
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Six Months Ended June 30, 2022 as Compared to Six Months Ended June 30, 2021
Net income for the six-month period ended June 30, 2022 was $14,384,000, or $0.92 per diluted share, while net income for the first six months of 2021 was $15,847,000 or $0.99 per diluted share. Significant variances were as follows:
| ● | For the six-month period ended June 30, 2022, net interest income of $39,957,000 was $1,193,000 higher than in the same period in 2021. Interest income from available-for-sale debt securities, on a fully taxable-equivalent basis, increased $1,944,000 in 2022 as compared to 2021, as the average balance (at amortized cost) of available-for-sale debt securities increased $202.3 million. Total interest and fees on loans decreased $1,000,000 in 2022 as compared to 2021. Interest and fees on loans included $1,412,000 in 2022 and $18,000 in 2021 from repayments received on purchased credit impaired loans in excess of previous carrying amounts. Total interest and fees from loans originated under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) were $781,000 in 2022, a decrease of $2,466,000 from the 2021 total of $3,247,000. Accretion and amortization of purchase accounting adjustments had a net positive impact on net interest income of $947,000 in 2022 as compared to a net positive impact of $1,665,000 in 2021. Average outstanding loans decreased $52.3 million, including a reduction in average PPP loans of $118.0 million. Average loans, excluding PPP loans, were up $65.7 million (4.4%) in the first six months of 2022 as compared to the first six months of 2021. Average total deposits increased $72.1 million (3.8%) in comparing the first six months of 2022 over the total for the first six months of 2021. |
| ● | For the first six months of 2022, the provision for loan losses was $1,199,000, an increase in expense of $196,000 as compared to $1,003,000 recorded in the first six months of 2021. The provision for the first six months of 2022 includes a net recovery of $124,000 related to specific loans (net decrease in specific allowances on loans of $313,000 offset by net charge-offs of $189,000), an increase of $994,000 in the collectively determined portion of the allowance and a $329,000 increase in the unallocated portion. In comparison, the provision for loan losses in the first six months of 2021 includes a net charge of $565,000 related to specific loans (increase in specific allowances on loans of $552,000 and net charge-offs of $13,000), an increase of $352,000 in the collectively determined portion of the allowance and an $86,000 increase in the unallocated portion. |
| ● | Noninterest income of $12,651,000 for the first six months of 2022 decreased $431,000 from the total for the first six months of 2021. Significant variances included the following: |
| Ø | Net gains from sales of loans of $602,000 decreased $1,387,000 reflecting a reduction in volume of residential mortgage loans sold. |
| Ø | Service charges on deposit accounts of $2,557,000 increased $469,000 as the volume of consumer and business overdraft and other activity increased. |
| Ø | Brokerage and insurance revenue of $1,088,000 increased $256,000, due to commissions on higher transaction volumes. |
| Ø | Loan Servicing fees, net of $568,000 increased $174,000, reflecting growth in volume of residential mortgage loans sold with servicing retained. Further, the fair value of servicing rights increased $152,000 in 2022 as compared to an increase of $36,000 in 2021 mainly due to changes in assumptions related to prepayments of mortgage loans. |
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| ● | Noninterest expense of $33,925,000 for the first six months of 2022 increased $2,817,000 from the total for the first six months of 2021. Significant variances included the following: |
| Ø | Salaries and employee benefits of $20,872,000 increased $2,478,000, including an increase in base salaries expense of $1.8 million reflecting merit-based salary increases and an increase in number of personnel related to expansion as mentioned above. Additional increases include an increase in health care expense of $445,000 due to higher claims on C&N’s partially self-insured plan and, $267,000 due to a lower portion of payroll costs capitalized (added to the carrying value of loans) due to the high volume of PPP loans originated in 2021. Decreases include a reduction in estimated cash and stock-based incentive compensation expense of $113,000 and severance expense of $233,000 in 2021 with no comparable amount in 2022. |
| Ø | Data processing and telecommunications of $3,343,000 increased $476,000, including the impact of increases in software licensing and maintenance costs as well as costs related to enhancements of data management capabilities. |
| Ø | Net occupancy and equipment expense of $2,719,000 increased $196,000, including computer supplies and repairs and maintenance related to IT and Digital departments and increases related to a new branch location in Lancaster, PA. |
| Ø | Other noninterest expense of $4,315,000 decreased $191,000. Within this category, significant variances included the following: |
| ◾ | There was a reduction in expense for other operational losses of $254,000 in 2022, down $403,000 from expense of $149,000 in 2021, including a reduction in expense in 2022 of $301,000 from reversal of previously accrued Trust Department tax compliance penalties. |
| ◾ | The allowance for SBA claim adjustments decreased, reflecting more favorable claim results than previously estimated, resulting in a reduction in expense of $290,000 in 2022 as compared to a reduction in expense of $163,000 in 2021. |
| ◾ | Travel and entertainment expenses totaled $185,000 in the first six months of 2022, an increase of $125,000 over 2021. |
| Ø | Professional fees of $969,000 decreased $176,000, mainly due to decreases in recruiting services and PPP loan processing-related professional fees. |
| ● | The income tax provision of $3,101,000, or 17.7% of pre-tax income for the first six months ended June 30, 2022 decreased $789,000 from $3,890,000, or 19.7% of pre-tax income for the first six months ended June 30, 2021. The lower provision in 2022 includes the impact of a reduction in pre-tax income. The lower effective tax rate in 2022 includes the impact of a $201,000 reduction in city and state tax expense as well as the benefit of the $301,000 reduction in expense from the reversal of tax penalties being non-taxable. |
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Other Information:
Changes in other unaudited financial information are as follows:
| ● | Total assets amounted to $2,410,718,000 at June 30, 2022, up from $2,330,371,000 at March 31, 2022 and $2,339,063,000 at June 30, 2021. |
| ● | Cash & due from banks totaled $69,187,000 at June 30, 2022, down from $114,346,000 at March 31, 2022 and $208,860,000 at June 30, 2021. The decrease in cash reflects the deployment of otherwise excess cash to available-for-sale securities and loans to enhance net interest income. |
| ● | The amortized cost of available-for-sale debt securities increased to $572,794,000 at June 30, 2022 from $558,853,000 at March 31, 2022 and $380,276,000 at June 30, 2021. The increase in the securities portfolio resulted from management’s decision to invest excess funds available from growth in deposits and net repayments of loans throughout much of 2021 and the first quarter 2022. The fair value of available-for-sale debt securities at June 30, 2022 was lower than the amortized cost basis by $45,957,000, or 8.0%. In comparison, the aggregate unrealized loss position was $25,940,000 (4.6%) at March 31, 2022 and there was an unrealized gain of $11,605,000 (3.1%) at June 30, 2021. The unrealized decrease in fair value of the portfolio in 2022 has resulted from an increase in interest rates. Management reviewed the available-for-sale debt securities as of June 30, 2022 and concluded there were no credit-related declines in fair value and that the unrealized losses on all of the securities in an unrealized loss position are considered temporary. |
| ● | Net loans outstanding (excluding mortgage loans held for sale) were $1,643,057,000 at June 30, 2022, up 7.8% or 31.3% annualized from $1,523,919,000 at March 31, 2022 and up 3.6% from $1,585,481,000 at June 30, 2021. Loans outstanding, excluding PPP loans, totaled $1,651,352,000 at June 30, 2022, an increase of $125,539,000 (8.2%) from total loans excluding PPP loans at March 31, 2022 and $12.4 million or 0.77% of total loans at June 30, 2021. In comparing outstanding balances at June 30, 2022 and 2021, total commercial loans were up $81.2 million (8.2%), including a reduction in PPP loans of $104.1 million and an increase in other commercial loans of $185.2 million, total residential mortgage loans were lower by $23.4 million (3.9%) and total consumer loans were up $2.0 million (11.8%). The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $336.7 million at June 30, 2022, up $22.5 million (7.2%) from June 30, 2021. |
| ● | Total nonperforming assets as a percentage of total assets was 0.62% at June 30, 2022, down from 0.81% at March 31, 2022 and 1.12% at June 30, 2021. Total nonperforming assets were $14.8 million at June 30, 2022, down from $18.9 million at March 31, 2022 and $26.2 million at June 30, 2021. Similarly, total impaired loans dropped to $8.6 million at June 30, 2022 from $12.0 million at March 31, 2022 and $19.1 million at June 30, 2021. |
| ● | The allowance for loan losses was $14.5 million at June 30, 2022, or 0.88% of total loans as compared to $14.3 million or 0.93% of total loans at March 31, 2022 and $12.4 million or 0.77% of total loans at June 30, 2021. In 2020 and 2019, C&N recorded performing loans purchased from other financial institutions at fair value. The calculations of fair value included discounts for credit losses, reflecting an estimate of the present value of credit losses based on market expectations. The total allowance for loan losses and the credit adjustment on purchased performing loans at June 30, 2022 was $17.0 million, or 1.02% of total loans receivable and the credit adjustment. The comparative ratios were 1.11% at March 31, 2022, and 1.05% at June 30, 2021. |
| ● | Deposits totaled $1,964,270,000 at June 30, 2022, up from $1,960,952,000 at March 31, 2022 and up 2.5% from $1,916,809,000 at June 30, 2021. |
| ● | Borrowed funds, including Federal Home Loan Bank advances, repurchase agreements, senior notes and subordinated debt, totaled $166,119,000 at June 30, 2022, up from $70,686,000 at March 31, 2022 and $94,087,000 at June 30, 2021. The increase in borrowings provided funding to help support the significant loan growth in the second quarter 2022. |
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| ● | Total stockholders’ equity was $258,619,000 at June 30, 2022, down from $276,208,000 at March 31, 2022 and $304,133,000 at June 30, 2021. Within stockholders’ equity, the portion of accumulated other comprehensive (loss) related to available-for-sale debt securities was ($36,307,000) at June 30, 2022 and ($20,492,000) at March 31, 2022, as compared to accumulated other comprehensive income of $9,167,000 at June 30, 2021. The decrease in stockholders’ equity at June 30, 2022 related to accumulated other comprehensive (loss) income from available-for-sale debt securities has been caused by recent, significant increases in interest rates. Accumulated other comprehensive income (loss) is excluded from C&N’s regulatory capital ratios. |
| ● | In February 2021, C&N amended its existing treasury stock repurchase program. Under the amended program, C&N is authorized to repurchase up to 1,000,000 shares of the Corporation’s common stock, or 6.25% of the Corporation’s issued and outstanding shares at February 18, 2021. In the second quarter 2022, 235,505 shares were repurchased for a total cost of $5,701,000, at an average price of $24.21 per share. Cumulatively through June 30, 2022, 664,431 shares have been repurchased for a total cost of $16,340,000, at an average price of $24.59 per share. |
| ● | Citizens & Northern Bank is subject to various regulatory capital requirements. At June 30, 2022, Citizens & Northern Bank maintains regulatory capital ratios that exceed all capital adequacy requirements. Management expects the Bank to remain well-capitalized for the foreseeable future. |
| ● | Trust assets under management by C&N’s Wealth Management Group amounted to $1,055,290,000 at June 30, 2022, down 11.4% from $1,191,595,000 at March 31, 2022 and 11.5% from $1,192,928,000 at June 30, 2021. Fluctuations in values of assets under management reflect the impact of recent high market volatility. |
| ● | Under U.S. GAAP, interest income on tax-exempt securities and loans are reported at their nominal amounts, with the tax benefit accounted for as a reduction in the income tax provision. The Corporation presents certain analyses and ratios with net interest income determined on a fully taxable-equivalent basis, which are non-GAAP financial measures as presented. The Corporation believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing the returns on tax-exempt securities and loans with returns on taxable securities and loans. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP were $312,000, $302,000, $268,000 for the second quarter 2022, first quarter 2022 and second quarter 2021, respectively. The excess of net interest income over the amounts reported under U.S. GAAP were $614,000 for the six months ended June 30, 2022 and $541,000 for the six months ended June 30, 2021. |
Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania which operates 31 banking offices located in Bradford, Bucks, Cameron, Chester, Lycoming, McKean, Potter, Sullivan, Tioga, York and Lancaster Counties in Pennsylvania and Steuben County in New York, as well as a loan production office in Elmira, New York. Citizens & Northern Corporation trades on NASDAQ under the symbol “CZNC.” For more information about Citizens & Northern Bank and Citizens & Northern Corporation, visit www.cnbankpa.com.
Safe Harbor Statement: Except for historical information contained herein, the matters discussed in this release are forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the following: changes in monetary and fiscal policies of the Federal Reserve Board and the U.S. Government, particularly related to changes in interest rates; changes in general economic conditions; C&N’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses; the effect of the novel coronavirus (COVID-19) and related events; legislative or regulatory changes; downturn in demand for loan, deposit and other financial services in C&N’s market area; increased competition from other banks and non-bank providers of financial services; technological changes and increased technology-related costs; information security breach or other technology difficulties or failures; changes in accounting principles, or the application of generally accepted accounting principles; and failure to achieve merger-related synergies and difficulties in integrating the business and operations of acquired institutions. Citizens & Northern disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
8
EXHIBIT 99.2 – Supplemental, Unaudited Financial Information
CONDENSED, CONSOLIDATED EARNINGS INFORMATION
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
|
|
2ND |
|
2ND |
|
|
|
|
|
|
||
|
|
QUARTER |
|
QUARTER |
|
|
|
|
|
|
||
|
|
2022 |
|
2021 |
|
|
|
|
|
|
||
|
|
(Current) |
|
(Prior Year) |
|
$ Incr. (Decr.) |
|
% Incr. (Decr.) |
|
|||
Interest and Dividend Income |
|
$ |
21,309 |
|
$ |
20,428 |
|
$ |
881 |
|
4.31 |
% |
Interest Expense |
|
|
1,684 |
|
|
1,747 |
|
|
(63) |
|
(3.61) |
% |
Net Interest Income |
|
|
19,625 |
|
|
18,681 |
|
|
944 |
|
5.05 |
% |
Provision for Loan Losses |
|
|
308 |
|
|
744 |
|
|
(436) |
|
(58.60) |
% |
Net Interest Income After Provision for Loan Losses |
|
|
19,317 |
|
|
17,937 |
|
|
1,380 |
|
7.69 |
% |
Noninterest Income |
|
|
6,830 |
|
|
6,300 |
|
|
530 |
|
8.41 |
% |
Net (Losses) Gains on Available-for-sale Debt Securities |
|
|
(1) |
|
|
2 |
|
|
(3) |
|
(150.00) |
% |
Noninterest Expense |
|
|
17,039 |
|
|
15,399 |
|
|
1,640 |
|
10.65 |
% |
Income Before Income Tax Provision |
|
|
9,107 |
|
|
8,840 |
|
|
267 |
|
3.02 |
% |
Income Tax Provision |
|
|
1,618 |
|
|
1,780 |
|
|
(162) |
|
(9.10) |
% |
Net Income |
|
$ |
7,489 |
|
$ |
7,060 |
|
$ |
429 |
|
6.08 |
% |
Net Income Attributable to Common Shares (1) |
|
$ |
7,419 |
|
$ |
6,999 |
|
$ |
420 |
|
6.00 |
% |
PER COMMON SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income - Basic |
|
$ |
0.48 |
|
$ |
0.44 |
|
$ |
0.04 |
|
9.09 |
% |
Net Income - Diluted |
|
$ |
0.48 |
|
$ |
0.44 |
|
$ |
0.04 |
|
9.09 |
% |
Dividends Per Share |
|
$ |
0.28 |
|
$ |
0.28 |
|
$ |
0.00 |
|
0.00 |
% |
Number of Shares Used in Computation - Basic |
|
|
15,441,564 |
|
|
15,868,150 |
|
|
|
|
|
|
Number of Shares Used in Computation - Diluted |
|
|
15,444,573 |
|
|
15,874,983 |
|
|
|
|
|
|
|
|
SIX MONTHS ENDED |
|
|
|
|
|
|
||||
|
|
June 30, |
|
|
|
|
|
|
||||
|
|
2022 |
|
2021 |
|
|
|
|
|
|
||
|
|
(Current) |
|
(Prior Year) |
|
$ Incr. (Decr.) |
|
% Incr. (Decr.) |
|
|||
Interest and Dividend Income |
|
$ |
43,082 |
|
$ |
42,182 |
|
$ |
900 |
|
2.13 |
% |
Interest Expense |
|
|
3,125 |
|
|
3,418 |
|
|
(293) |
|
(8.57) |
% |
Net Interest Income |
|
|
39,957 |
|
|
38,764 |
|
|
1,193 |
|
3.08 |
% |
Provision for Loan Losses |
|
|
1,199 |
|
|
1,003 |
|
|
196 |
|
19.54 |
% |
Net Interest Income After Provision for Loan Losses |
|
|
38,758 |
|
|
37,761 |
|
|
997 |
|
2.64 |
% |
Noninterest Income |
|
|
12,651 |
|
|
13,082 |
|
|
(431) |
|
(3.29) |
% |
Net Gains on Available-for-sale Debt Securities |
|
|
1 |
|
|
2 |
|
|
(1) |
|
(50.00) |
% |
Noninterest Expense |
|
|
33,925 |
|
|
31,108 |
|
|
2,817 |
|
9.06 |
% |
Income Before Income Tax Provision |
|
|
17,485 |
|
|
19,737 |
|
|
(2,252) |
|
(11.41) |
% |
Income Tax Provision |
|
|
3,101 |
|
|
3,890 |
|
|
(789) |
|
(20.28) |
% |
Net Income |
|
$ |
14,384 |
|
$ |
15,847 |
|
$ |
(1,463) |
|
(9.23) |
% |
Net Income Attributable to Common Shares (1) |
|
$ |
14,254 |
|
$ |
15,721 |
|
$ |
(1,467) |
|
(9.33) |
% |
PER COMMON SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income - Basic |
|
$ |
0.92 |
|
$ |
0.99 |
|
$ |
(0.07) |
|
(7.07) |
% |
Net Income - Diluted |
|
$ |
0.92 |
|
$ |
0.99 |
|
$ |
(0.07) |
|
(7.07) |
% |
Dividends Per Share |
|
$ |
0.56 |
|
$ |
0.55 |
|
$ |
0.01 |
|
1.82 |
% |
Number of Shares Used in Computation - Basic |
|
|
15,542,959 |
|
|
15,859,236 |
|
|
|
|
|
|
Number of Shares Used in Computation - Diluted |
|
|
15,546,319 |
|
|
15,865,158 |
|
|
|
|
|
|
(1) |
Basic and diluted net income per common share are determined based on net income less earnings allocated to nonvested restricted shares with nonforfeitable dividends. |
1
CONDENSED, CONSOLIDATED BALANCE SHEET DATA
(Dollars In Thousands)
(Unaudited)
|
|
June 30, |
|
June 30, |
|
|
|
|||||
|
|
2022 |
|
2021 |
|
$ Incr. (Decr.) |
|
% Incr. (Decr.) |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Cash & Due from Banks |
|
$ |
69,187 |
|
$ |
208,860 |
|
$ |
(139,673) |
|
(66.87) |
% |
Available-for-sale Debt Securities |
|
|
526,837 |
|
|
391,881 |
|
|
134,956 |
|
34.44 |
% |
Loans, Net |
|
|
1,643,057 |
|
|
1,585,481 |
|
|
57,576 |
|
3.63 |
% |
Bank-Owned Life Insurance |
|
|
30,941 |
|
|
30,391 |
|
|
550 |
|
1.81 |
% |
Bank Premises and Equipment, Net |
|
|
21,829 |
|
|
20,620 |
|
|
1,209 |
|
5.86 |
% |
Intangible Assets |
|
|
55,602 |
|
|
56,088 |
|
|
(486) |
|
(0.87) |
% |
Other Assets |
|
|
63,265 |
|
|
45,742 |
|
|
17,523 |
|
38.31 |
% |
TOTAL ASSETS |
|
$ |
2,410,718 |
|
$ |
2,339,063 |
|
$ |
71,655 |
|
3.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
1,964,270 |
|
$ |
1,916,809 |
|
$ |
47,461 |
|
2.48 |
% |
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements |
|
|
126,833 |
|
|
46,450 |
|
|
80,383 |
|
173.05 |
% |
Senior Notes, Net |
|
|
14,733 |
|
|
14,670 |
|
|
63 |
|
0.43 |
% |
Subordinated Debt, Net |
|
|
24,553 |
|
|
32,967 |
|
|
(8,414) |
|
(25.52) |
% |
Other Liabilities |
|
|
21,710 |
|
|
24,034 |
|
|
(2,324) |
|
(9.67) |
% |
TOTAL LIABILITIES |
|
|
2,152,099 |
|
|
2,034,930 |
|
|
117,169 |
|
5.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stockholders' Equity, Excluding Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive (Loss) Income |
|
|
294,621 |
|
|
294,857 |
|
|
(236) |
|
(0.08) |
% |
Accumulated Other Comprehensive (Loss) Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Net Unrealized (Losses) Gains on Available-for-sale Debt Securities |
|
|
(36,307) |
|
|
9,167 |
|
|
(45,474) |
|
(496.06) |
% |
Defined Benefit Plans |
|
|
305 |
|
|
109 |
|
|
196 |
|
179.82 |
% |
TOTAL STOCKHOLDERS' EQUITY |
|
|
258,619 |
|
|
304,133 |
|
|
(45,514) |
|
(14.97) |
% |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
|
$ |
2,410,718 |
|
$ |
2,339,063 |
|
$ |
71,655 |
|
3.06 |
% |
2
CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
|
|
FOR THE |
|
|
|
||||
|
|
THREE MONTHS ENDED |
|
% |
|
||||
|
|
June 30, |
|
INCREASE |
|
||||
|
|
2022 |
|
2021 |
|
(DECREASE) |
|
||
EARNINGS PERFORMANCE |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
7,489 |
|
$ |
7,060 |
|
6.08 |
% |
Return on Average Assets (Annualized) |
|
|
1.28 |
% |
|
1.21 |
% |
5.79 |
% |
Return on Average Equity (Annualized) |
|
|
11.29 |
% |
|
9.36 |
% |
20.62 |
% |
|
|
AS OF OR FOR THE |
|
|
|
||||
|
|
SIX MONTHS ENDED |
|
% |
|
||||
|
|
June 30, |
|
INCREASE |
|
||||
|
|
2022 |
|
2021 |
|
(DECREASE) |
|
||
EARNINGS PERFORMANCE |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
14,384 |
|
$ |
15,847 |
|
(9.23) |
% |
Return on Average Assets (Annualized) |
|
|
1.23 |
% |
|
1.39 |
% |
(11.51) |
% |
Return on Average Equity (Annualized) |
|
|
10.29 |
% |
|
10.54 |
% |
(2.37) |
% |
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET HIGHLIGHTS |
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
2,410,718 |
|
$ |
2,339,063 |
|
3.06 |
% |
Available-for-Sale Debt Securities |
|
|
526,837 |
|
|
391,881 |
|
34.44 |
% |
Loans, Net |
|
|
1,643,057 |
|
|
1,585,481 |
|
3.63 |
% |
Allowance for Loan Losses |
|
|
14,547 |
|
|
12,375 |
|
17.55 |
% |
Deposits |
|
|
1,964,270 |
|
|
1,916,809 |
|
2.48 |
% |
|
|
|
|
|
|
|
|
|
|
OFF-BALANCE SHEET |
|
|
|
|
|
|
|
|
|
Outstanding Balance of Mortgage Loans Sold with Servicing Retained |
|
$ |
336,681 |
|
$ |
314,174 |
|
7.16 |
% |
Trust Assets Under Management |
|
|
1,055,290 |
|
|
1,192,928 |
|
(11.54) |
% |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' VALUE (PER COMMON SHARE) |
|
|
|
|
|
|
|
|
|
Net Income - Basic |
|
$ |
0.92 |
|
$ |
0.99 |
|
(7.07) |
% |
Net Income - Diluted |
|
$ |
0.92 |
|
$ |
0.99 |
|
(7.07) |
% |
Dividends |
|
$ |
0.56 |
|
$ |
0.55 |
|
1.82 |
% |
Common Book Value |
|
$ |
16.69 |
|
$ |
19.06 |
|
(12.43) |
% |
Tangible Common Book Value (a) |
|
$ |
13.10 |
|
$ |
15.54 |
|
(15.70) |
% |
Market Value (Last Trade) |
|
$ |
24.17 |
|
$ |
24.50 |
|
(1.35) |
% |
Market Value / Common Book Value |
|
|
144.82 |
% |
|
128.54 |
% |
12.67 |
% |
Market Value / Tangible Common Book Value |
|
|
184.50 |
% |
|
157.66 |
% |
17.02 |
% |
Price Earnings Multiple (Annualized) |
|
|
13.14 |
|
|
12.37 |
|
6.22 |
% |
Dividend Yield (Annualized) |
|
|
4.63 |
% |
|
4.49 |
% |
3.12 |
% |
Common Shares Outstanding, End of Period |
|
|
15,499,214 |
|
|
15,957,512 |
|
(2.87) |
% |
3
CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
|
|
AS OF OR FOR THE |
|
|
|
||||
|
|
SIX MONTHS ENDED |
|
% |
|
||||
|
|
June 30, |
|
INCREASE |
|
||||
|
|
2022 |
|
2021 |
|
(DECREASE) |
|
||
SAFETY AND SOUNDNESS |
|
|
|
|
|
|
|
|
|
Tangible Common Equity / Tangible Assets (a) |
|
|
8.62 |
% |
|
10.86 |
% |
(20.63) |
% |
Nonperforming Assets / Total Assets |
|
|
0.62 |
% |
|
1.12 |
% |
(44.64) |
% |
Allowance for Loan Losses / Total Loans |
|
|
0.88 |
% |
|
0.77 |
% |
14.29 |
% |
Total Risk Based Capital Ratio (b) |
|
|
16.15 |
% |
|
18.99 |
% |
(14.96) |
% |
Tier 1 Risk Based Capital Ratio (b) |
|
|
13.85 |
% |
|
15.93 |
% |
(13.06) |
% |
Common Equity Tier 1 Risk Based Capital Ratio (b) |
|
|
13.85 |
% |
|
15.93 |
% |
(13.06) |
% |
Leverage Ratio (b) |
|
|
10.31 |
% |
|
10.52 |
% |
(2.00) |
% |
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
Average Assets |
|
$ |
2,335,771 |
|
$ |
2,287,465 |
|
2.11 |
% |
Average Equity |
|
$ |
279,708 |
|
$ |
300,776 |
|
(7.00) |
% |
|
|
|
|
|
|
|
|
|
|
EFFICIENCY RATIO (c) |
|
|
|
|
|
|
|
|
|
Net Interest Income on a Fully Taxable-Equivalent |
|
|
|
|
|
|
|
|
|
Basis (c) |
|
$ |
40,571 |
|
$ |
39,305 |
|
3.22 |
% |
Noninterest Income |
|
|
12,651 |
|
|
13,082 |
|
(3.29) |
% |
Total (1) |
|
$ |
53,222 |
|
$ |
52,387 |
|
1.59 |
% |
Noninterest Expense (2) |
|
$ |
33,925 |
|
$ |
31,108 |
|
9.06 |
% |
Efficiency Ratio = (2)/(1) |
|
|
63.74 |
% |
|
59.38 |
% |
7.34 |
% |
(a)Tangible common book value per share and tangible common equity as a percentage of tangible assets are non-U.S. GAAP ratios. Management believes this non-GAAP information is helpful in evaluating the strength of the Corporation's capital and in providing an alternative, conservative valuation of the Corporation's net worth. The ratios shown above are based on the following calculations of tangible assets and tangible common equity:
Total Assets |
|
$ |
2,410,718 |
|
$ |
2,339,063 |
|
|
|
Less: Intangible Assets, Primarily Goodwill |
|
|
(55,602) |
|
|
(56,088) |
|
|
|
Tangible Assets |
|
$ |
2,355,116 |
|
$ |
2,282,975 |
|
|
|
Total Stockholders' Equity |
|
$ |
258,619 |
|
$ |
304,133 |
|
|
|
Less: Intangible Assets, Primarily Goodwill |
|
|
(55,602) |
|
|
(56,088) |
|
|
|
Tangible Common Equity (3) |
|
$ |
203,017 |
|
$ |
248,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Outstanding, End of Period (4) |
|
|
15,499,214 |
|
|
15,957,512 |
|
|
|
Tangible Common Book Value per Share = (3)/(4) |
|
$ |
13.10 |
|
$ |
15.54 |
|
|
|
(b)Capital ratios for the most recent period are estimated.
(c)The efficiency ratio is a non-GAAP ratio that is calculated as shown above. For purposes of calculating the efficiency ratio, net interest income on a fully taxable-equivalent basis includes amounts of interest income on tax-exempt securities and loans that have been increased to a fully taxable-equivalent basis, using the Corporation's marginal federal income tax rate of 21%. A reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis is provided in Exhibit 99.2 under the table “COMPARISON OF INTEREST INCOME AND EXPENSE”.
4
QUARTERLY CONDENSED, CONSOLIDATED
INCOME STATEMENT INFORMATION
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
|
|
For the Three Months Ended : |
||||||||||||||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||
Interest income |
|
$ |
21,309 |
|
$ |
21,773 |
|
$ |
21,246 |
|
$ |
21,073 |
|
$ |
20,428 |
|
$ |
21,754 |
Interest expense |
|
|
1,684 |
|
|
1,441 |
|
|
1,530 |
|
|
1,614 |
|
|
1,747 |
|
|
1,671 |
Net interest income |
|
|
19,625 |
|
|
20,332 |
|
|
19,716 |
|
|
19,459 |
|
|
18,681 |
|
|
20,083 |
Provision for loan losses |
|
|
308 |
|
|
891 |
|
|
1,128 |
|
|
1,530 |
|
|
744 |
|
|
259 |
Net interest income after provision for loan losses |
|
|
19,317 |
|
|
19,441 |
|
|
18,588 |
|
|
17,929 |
|
|
17,937 |
|
|
19,824 |
Noninterest income |
|
|
6,830 |
|
|
5,821 |
|
|
6,416 |
|
|
6,359 |
|
|
6,300 |
|
|
6,782 |
Net (losses) gains on securities |
|
|
(1) |
|
|
2 |
|
|
(1) |
|
|
23 |
|
|
2 |
|
|
0 |
Noninterest expense |
|
|
17,039 |
|
|
16,886 |
|
|
16,018 |
|
|
15,346 |
|
|
15,399 |
|
|
15,709 |
Income before income tax provision |
|
|
9,107 |
|
|
8,378 |
|
|
8,985 |
|
|
8,965 |
|
|
8,840 |
|
|
10,897 |
Income tax provision |
|
|
1,618 |
|
|
1,483 |
|
|
1,677 |
|
|
1,566 |
|
|
1,780 |
|
|
2,110 |
Net income |
|
$ |
7,489 |
|
$ |
6,895 |
|
$ |
7,308 |
|
$ |
7,399 |
|
$ |
7,060 |
|
$ |
8,787 |
Net income attributable to common shares |
|
$ |
7,419 |
|
$ |
6,835 |
|
$ |
7,256 |
|
$ |
7,336 |
|
$ |
6,999 |
|
$ |
8,722 |
Basic earnings per common share |
|
$ |
0.48 |
|
$ |
0.44 |
|
$ |
0.46 |
|
$ |
0.47 |
|
$ |
0.44 |
|
$ |
0.55 |
Diluted earnings per common share |
|
$ |
0.48 |
|
$ |
0.44 |
|
$ |
0.46 |
|
$ |
0.47 |
|
$ |
0.44 |
|
$ |
0.55 |
5
QUARTERLY CONDENSED, CONSOLIDATED
BALANCE SHEET INFORMATION
(In Thousands) (Unaudited)
|
|
As of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & Due from Banks |
|
$ |
69,187 |
|
$ |
114,346 |
|
$ |
104,948 |
|
$ |
198,995 |
|
$ |
208,860 |
|
$ |
207,145 |
Available-for-Sale Debt Securities |
|
|
526,837 |
|
|
532,913 |
|
|
517,679 |
|
|
437,857 |
|
|
391,881 |
|
|
366,376 |
Loans, Net |
|
|
1,643,057 |
|
|
1,523,919 |
|
|
1,551,312 |
|
|
1,563,008 |
|
|
1,585,481 |
|
|
1,602,926 |
Bank-Owned Life Insurance |
|
|
30,941 |
|
|
30,805 |
|
|
30,670 |
|
|
30,530 |
|
|
30,391 |
|
|
30,247 |
Bank Premises and Equipment, Net |
|
|
21,829 |
|
|
21,169 |
|
|
20,683 |
|
|
20,526 |
|
|
20,620 |
|
|
20,740 |
Intangible Assets |
|
|
55,602 |
|
|
55,711 |
|
|
55,821 |
|
|
55,955 |
|
|
56,088 |
|
|
56,222 |
Other Assets |
|
|
63,265 |
|
|
51,508 |
|
|
46,535 |
|
|
48,025 |
|
|
45,742 |
|
|
49,939 |
TOTAL ASSETS |
|
$ |
2,410,718 |
|
$ |
2,330,371 |
|
$ |
2,327,648 |
|
$ |
2,354,896 |
|
$ |
2,339,063 |
|
$ |
2,333,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
1,964,270 |
|
$ |
1,960,952 |
|
$ |
1,925,060 |
|
$ |
1,940,141 |
|
$ |
1,916,809 |
|
$ |
1,923,925 |
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements |
|
|
126,833 |
|
|
22,938 |
|
|
29,845 |
|
|
40,555 |
|
|
46,450 |
|
|
60,230 |
Senior Notes, Net |
|
|
14,733 |
|
|
14,717 |
|
|
14,701 |
|
|
14,685 |
|
|
14,670 |
|
|
0 |
Subordinated Debt, Net |
|
|
24,553 |
|
|
33,031 |
|
|
33,009 |
|
|
32,988 |
|
|
32,967 |
|
|
16,534 |
Other Liabilities |
|
|
21,710 |
|
|
22,525 |
|
|
23,628 |
|
|
27,125 |
|
|
24,034 |
|
|
32,850 |
TOTAL LIABILITIES |
|
|
2,152,099 |
|
|
2,054,163 |
|
|
2,026,243 |
|
|
2,055,494 |
|
|
2,034,930 |
|
|
2,033,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stockholders' Equity, Excluding Accumulated Other Comprehensive (Loss) Income |
|
|
294,621 |
|
|
296,386 |
|
|
296,379 |
|
|
292,997 |
|
|
294,857 |
|
|
293,097 |
Accumulated Other Comprehensive (Loss) Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Unrealized (Losses) Gains on Available-for-sale Securities |
|
|
(36,307) |
|
|
(20,492) |
|
|
4,809 |
|
|
6,300 |
|
|
9,167 |
|
|
6,847 |
Defined Benefit Plans |
|
|
305 |
|
|
314 |
|
|
217 |
|
|
105 |
|
|
109 |
|
|
112 |
TOTAL STOCKHOLDERS' EQUITY |
|
|
258,619 |
|
|
276,208 |
|
|
301,405 |
|
|
299,402 |
|
|
304,133 |
|
|
300,056 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
|
$ |
2,410,718 |
|
$ |
2,330,371 |
|
$ |
2,327,648 |
|
$ |
2,354,896 |
|
$ |
2,339,063 |
|
$ |
2,333,595 |
6
AVAILABLE-FOR-SALE DEBT SECURITIES
(In Thousands)
|
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
June 30, 2021 |
||||||||||||||||
|
|
Amortized |
|
Fair |
|
Amortized |
|
Fair |
|
Amortized |
|
Fair |
|
Amortized |
|
Fair |
||||||||
|
|
Cost |
|
Value |
|
Cost |
|
Value |
|
Cost |
|
Value |
|
Cost |
|
Value |
||||||||
Obligations of the U.S. Treasury |
|
$ |
38,151 |
|
$ |
35,774 |
|
$ |
38,152 |
|
$ |
36,494 |
|
$ |
25,058 |
|
$ |
24,912 |
|
$ |
22,981 |
|
$ |
23,073 |
Obligations of U.S. Government agencies |
|
|
24,454 |
|
|
22,785 |
|
|
24,455 |
|
|
23,408 |
|
|
23,936 |
|
|
24,091 |
|
|
24,764 |
|
|
25,373 |
Bank holding company debt securities |
|
|
28,942 |
|
|
27,415 |
|
|
24,942 |
|
|
24,043 |
|
|
18,000 |
|
|
17,987 |
|
|
0 |
|
|
0 |
Obligations of states and political subdivisions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt |
|
|
152,063 |
|
|
139,400 |
|
|
149,140 |
|
|
143,633 |
|
|
143,427 |
|
|
148,028 |
|
|
127,122 |
|
|
132,310 |
Taxable |
|
|
72,204 |
|
|
63,898 |
|
|
73,732 |
|
|
69,629 |
|
|
72,182 |
|
|
72,765 |
|
|
58,921 |
|
|
60,528 |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential pass-through securities |
|
|
114,367 |
|
|
106,043 |
|
|
112,122 |
|
|
106,568 |
|
|
98,048 |
|
|
98,181 |
|
|
50,397 |
|
|
51,328 |
Residential collateralized mortgage obligations |
|
|
47,295 |
|
|
44,761 |
|
|
45,628 |
|
|
43,868 |
|
|
44,015 |
|
|
44,247 |
|
|
44,536 |
|
|
45,575 |
Commercial mortgage-backed securities |
|
|
95,318 |
|
|
86,761 |
|
|
90,682 |
|
|
85,270 |
|
|
86,926 |
|
|
87,468 |
|
|
51,555 |
|
|
53,694 |
Total Available-for-Sale Debt Securities |
|
$ |
572,794 |
|
$ |
526,837 |
|
$ |
558,853 |
|
$ |
532,913 |
|
$ |
511,592 |
|
$ |
517,679 |
|
$ |
380,276 |
|
$ |
391,881 |
SUMMARY OF LOANS BY TYPE
(Excludes Loans Held for Sale)
(In Thousands)
|
|
June 30, |
|
March 31, |
|
December 31, |
|
June 30, |
||||
|
|
2022 |
|
2022 |
|
2021 |
|
2021 |
||||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans secured by real estate |
|
$ |
656,892 |
|
$ |
585,677 |
|
$ |
569,840 |
|
$ |
544,202 |
Commercial and industrial |
|
|
171,999 |
|
|
159,793 |
|
|
159,073 |
|
|
158,907 |
Paycheck Protection Program - 1st Draw |
|
|
44 |
|
|
887 |
|
|
1,356 |
|
|
37,902 |
Paycheck Protection Program - 2nd Draw |
|
|
6,208 |
|
|
11,490 |
|
|
25,508 |
|
|
72,409 |
Political subdivisions |
|
|
87,512 |
|
|
81,975 |
|
|
81,301 |
|
|
48,849 |
Commercial construction and land |
|
|
58,786 |
|
|
37,258 |
|
|
60,579 |
|
|
43,178 |
Loans secured by farmland |
|
|
12,967 |
|
|
12,507 |
|
|
11,121 |
|
|
10,950 |
Multi-family (5 or more) residential |
|
|
53,753 |
|
|
53,141 |
|
|
50,089 |
|
|
51,916 |
Agricultural loans |
|
|
2,628 |
|
|
2,588 |
|
|
2,351 |
|
|
2,379 |
Other commercial loans |
|
|
15,767 |
|
|
14,827 |
|
|
17,153 |
|
|
14,711 |
Total commercial |
|
|
1,066,556 |
|
|
960,143 |
|
|
978,371 |
|
|
985,403 |
Residential mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans - first liens |
|
|
482,505 |
|
|
481,119 |
|
|
483,629 |
|
|
507,579 |
Residential mortgage loans - junior liens |
|
|
23,036 |
|
|
22,572 |
|
|
23,314 |
|
|
25,287 |
Home equity lines of credit |
|
|
40,887 |
|
|
39,649 |
|
|
39,252 |
|
|
39,432 |
1-4 Family residential construction |
|
|
26,071 |
|
|
16,945 |
|
|
23,151 |
|
|
23,567 |
Total residential mortgage |
|
|
572,499 |
|
|
560,285 |
|
|
569,346 |
|
|
595,865 |
Consumer |
|
|
18,549 |
|
|
17,762 |
|
|
17,132 |
|
|
16,588 |
Total |
|
|
1,657,604 |
|
|
1,538,190 |
|
|
1,564,849 |
|
|
1,597,856 |
Less: allowance for loan losses |
|
|
(14,547) |
|
|
(14,271) |
|
|
(13,537) |
|
|
(12,375) |
Loans, net |
|
$ |
1,643,057 |
|
$ |
1,523,919 |
|
$ |
1,551,312 |
|
$ |
1,585,481 |
7
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(In Thousands)
|
|
3 Months |
|
3 Months |
|
6 Months |
|
6 Months |
||||
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
||||
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
||||
Balance, beginning of period |
|
$ |
14,271 |
|
$ |
13,537 |
|
$ |
13,537 |
|
$ |
11,385 |
Charge-offs |
|
|
(41) |
|
|
(180) |
|
|
(221) |
|
|
(58) |
Recoveries |
|
|
9 |
|
|
23 |
|
|
32 |
|
|
45 |
Net charge-offs |
|
|
(32) |
|
|
(157) |
|
|
(189) |
|
|
(13) |
Provision for loan losses |
|
|
308 |
|
|
891 |
|
|
1,199 |
|
|
1,003 |
Balance, end of period |
|
$ |
14,547 |
|
$ |
14,271 |
|
$ |
14,547 |
|
$ |
12,375 |
PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)
(Dollars In Thousands)
|
|
June 30, |
|
March 31, |
|
December 31, |
|
June 30, |
|
||||
|
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
||||
Impaired loans with a valuation allowance |
|
$ |
3,392 |
|
$ |
6,528 |
|
$ |
6,540 |
|
$ |
10,594 |
|
Impaired loans without a valuation allowance |
|
|
1,376 |
|
|
1,494 |
|
|
2,636 |
|
|
1,819 |
|
Purchased credit impaired loans |
|
|
3,879 |
|
|
3,983 |
|
|
6,558 |
|
|
6,733 |
|
Total impaired loans |
|
$ |
8,647 |
|
$ |
12,005 |
|
$ |
15,734 |
|
$ |
19,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans past due 30-89 days and still accruing |
|
$ |
5,082 |
|
$ |
3,868 |
|
$ |
5,106 |
|
$ |
2,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased credit impaired loans |
|
$ |
3,879 |
|
$ |
3,983 |
|
$ |
6,558 |
|
$ |
6,733 |
|
Other nonaccrual loans |
|
|
7,763 |
|
|
10,962 |
|
|
12,441 |
|
|
16,238 |
|
Total nonaccrual loans |
|
|
11,642 |
|
|
14,945 |
|
|
18,999 |
|
|
22,971 |
|
Total loans past due 90 days or more and still accruing |
|
|
2,694 |
|
|
3,429 |
|
|
2,219 |
|
|
1,881 |
|
Total nonperforming loans |
|
|
14,336 |
|
|
18,374 |
|
|
21,218 |
|
|
24,852 |
|
Foreclosed assets held for sale (real estate) |
|
|
505 |
|
|
531 |
|
|
684 |
|
|
1,332 |
|
Total nonperforming assets |
|
$ |
14,841 |
|
$ |
18,905 |
|
$ |
21,902 |
|
$ |
26,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans subject to troubled debt restructurings (TDRs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing |
|
$ |
239 |
|
$ |
279 |
|
$ |
288 |
|
$ |
199 |
|
Nonperforming |
|
|
3,965 |
|
|
3,954 |
|
|
5,517 |
|
|
5,624 |
|
Total TDRs |
|
$ |
4,204 |
|
$ |
4,233 |
|
$ |
5,805 |
|
$ |
5,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans as a % of total loans |
|
|
0.86 |
% |
|
1.19 |
% |
|
1.36 |
% |
|
1.56 |
% |
Total nonperforming assets as a % of assets |
|
|
0.62 |
% |
|
0.81 |
% |
|
0.94 |
% |
|
1.12 |
% |
Allowance for loan losses as a % of total loans |
|
|
0.88 |
% |
|
0.93 |
% |
|
0.87 |
% |
|
0.77 |
% |
Credit adjustment on purchased non-impaired loans and allowance for loan losses as a % of total loans and the credit adjustment (a) |
|
|
1.02 |
% |
|
1.11 |
% |
|
1.08 |
% |
|
1.05 |
% |
Allowance for loan losses as a % of nonperforming loans |
|
|
101.47 |
% |
|
77.67 |
% |
|
63.80 |
% |
|
49.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Credit adjustment on purchased non-impaired loans at end of period |
|
$ |
2,403 |
|
$ |
2,783 |
|
$ |
3,335 |
|
$ |
4,502 |
|
Allowance for loan losses |
|
|
14,547 |
|
|
14,271 |
|
|
13,537 |
|
|
12,375 |
|
Total credit adjustment on purchased non-impaired loans at end of period and allowance for loan losses (1) |
|
$ |
16,950 |
|
$ |
17,054 |
|
$ |
16,872 |
|
$ |
16,877 |
|
Total loans receivable |
|
$ |
1,657,604 |
|
$ |
1,538,190 |
|
$ |
1,564,849 |
|
$ |
1,597,856 |
|
Credit adjustment on purchased non-impaired loans at end of period |
|
|
2,403 |
|
|
2,783 |
|
|
3,335 |
|
|
4,502 |
|
Total (2) |
|
$ |
1,660,007 |
|
$ |
1,540,973 |
|
$ |
1,568,184 |
|
$ |
1,602,358 |
|
Credit adjustment on purchased non-impaired loans and allowance for loan losses as a % of total loans and the credit adjustment (1)/(2) |
|
|
1.02 |
% |
|
1.11 |
% |
|
1.08 |
% |
|
1.05 |
% |
8
ADJUSTMENTS TO GROSS AMORTIZED COST OF LOANS
(In Thousands)
(In Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
Market Rate Adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to gross amortized cost of loans at beginning of period |
|
$ |
(885) |
|
$ |
(637) |
|
$ |
352 |
|
$ |
(637) |
|
$ |
718 |
Accretion (amortization) recognized in interest income |
|
|
19 |
|
|
(248) |
|
|
(357) |
|
|
(229) |
|
|
(723) |
Adjustments to gross amortized cost of loans at end of period |
|
$ |
(866) |
|
$ |
(885) |
|
$ |
(5) |
|
$ |
(866) |
|
$ |
(5) |
Credit Adjustment on Non-impaired Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to gross amortized cost of loans at beginning of period |
|
$ |
(2,782) |
|
$ |
(3,335) |
|
$ |
(5,182) |
|
$ |
(3,335) |
|
$ |
(5,979) |
Accretion recognized in interest income |
|
|
379 |
|
|
553 |
|
|
680 |
|
|
932 |
|
|
1,477 |
Adjustments to gross amortized cost of loans at end of period |
|
$ |
(2,403) |
|
$ |
(2,782) |
|
$ |
(4,502) |
|
$ |
(2,403) |
|
$ |
(4,502) |
PURCHASED CREDIT IMPAIRED (PCI) LOANS
(In Thousands)
|
|
June 30, |
|
March 31, |
|
June 30, |
|||
|
|
2022 |
|
2022 |
|
2021 |
|||
Outstanding balance |
|
$ |
5,766 |
|
$ |
5,966 |
|
$ |
10,189 |
Carrying amount |
|
|
3,879 |
|
|
3,983 |
|
|
6,733 |
9
COMPARISON OF INTEREST INCOME AND EXPENSE
(In Thousands)
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing due from banks |
|
$ |
92 |
|
$ |
67 |
|
$ |
74 |
|
$ |
159 |
|
$ |
124 |
Available-for-sale debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
2,036 |
|
|
1,969 |
|
|
1,187 |
|
|
4,005 |
|
|
2,300 |
Tax-exempt |
|
|
959 |
|
|
905 |
|
|
824 |
|
|
1,864 |
|
|
1,625 |
Total available-for-sale debt securities |
|
|
2,995 |
|
|
2,874 |
|
|
2,011 |
|
|
5,869 |
|
|
3,925 |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
17,721 |
|
|
17,974 |
|
|
16,826 |
|
|
35,695 |
|
|
34,319 |
Paycheck Protection Program -1st Draw |
|
|
11 |
|
|
38 |
|
|
859 |
|
|
49 |
|
|
2,671 |
Paycheck Protection Program - 2nd Draw |
|
|
195 |
|
|
537 |
|
|
390 |
|
|
732 |
|
|
576 |
Tax-exempt |
|
|
588 |
|
|
573 |
|
|
518 |
|
|
1,161 |
|
|
1,071 |
Total loans receivable |
|
|
18,515 |
|
|
19,122 |
|
|
18,593 |
|
|
37,637 |
|
|
38,637 |
Other earning assets |
|
|
19 |
|
|
12 |
|
|
18 |
|
|
31 |
|
|
37 |
Total Interest Income |
|
|
21,621 |
|
|
22,075 |
|
|
20,696 |
|
|
43,696 |
|
|
42,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
|
308 |
|
|
194 |
|
|
235 |
|
|
502 |
|
|
456 |
Money market |
|
|
369 |
|
|
262 |
|
|
320 |
|
|
631 |
|
|
626 |
Savings |
|
|
64 |
|
|
61 |
|
|
57 |
|
|
125 |
|
|
112 |
Time deposits |
|
|
389 |
|
|
393 |
|
|
605 |
|
|
782 |
|
|
1,301 |
Total interest-bearing deposits |
|
|
1,130 |
|
|
910 |
|
|
1,217 |
|
|
2,040 |
|
|
2,495 |
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term |
|
|
122 |
|
|
1 |
|
|
7 |
|
|
123 |
|
|
22 |
Long-term - FHLB advances |
|
|
55 |
|
|
49 |
|
|
109 |
|
|
104 |
|
|
243 |
Senior notes, net |
|
|
120 |
|
|
118 |
|
|
57 |
|
|
238 |
|
|
57 |
Subordinated debt, net |
|
|
257 |
|
|
363 |
|
|
357 |
|
|
620 |
|
|
601 |
Total borrowed funds |
|
|
554 |
|
|
531 |
|
|
530 |
|
|
1,085 |
|
|
923 |
Total Interest Expense |
|
|
1,684 |
|
|
1,441 |
|
|
1,747 |
|
|
3,125 |
|
|
3,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income |
|
$ |
19,937 |
|
$ |
20,634 |
|
$ |
18,949 |
|
$ |
40,571 |
|
$ |
39,305 |
Note: Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%. The following table is a reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis.
(In Thousands) |
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
Net Interest Income Under U.S. GAAP |
|
$ |
19,625 |
|
$ |
20,332 |
|
$ |
18,681 |
|
$ |
39,957 |
|
$ |
38,764 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities |
|
|
191 |
|
|
183 |
|
|
162 |
|
|
374 |
|
|
321 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans |
|
|
121 |
|
|
119 |
|
|
106 |
|
|
240 |
|
|
220 |
Net Interest Income as adjusted to a fully taxable-equivalent basis |
|
$ |
19,937 |
|
$ |
20,634 |
|
$ |
18,949 |
|
$ |
40,571 |
|
$ |
39,305 |
10
ANALYSIS OF AVERAGE DAILY BALANCES AND RATES
(Dollars in Thousands)
|
|
3 Months |
|
|
|
3 Months |
|
|
|
3 Months |
|
|
|
|||
|
|
Ended |
|
Rate of |
|
Ended |
|
Rate of |
|
Ended |
|
Rate of |
|
|||
|
|
6/30/2022 |
|
Return/ |
|
3/31/2022 |
|
Return/ |
|
6/30/2021 |
|
Return/ |
|
|||
|
|
Average |
|
Cost of |
|
Average |
|
Cost of |
|
Average |
|
Cost of |
|
|||
|
|
Balance |
|
Funds % |
|
Balance |
|
Funds % |
|
Balance |
|
Funds % |
|
|||
EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing due from banks |
|
$ |
47,428 |
|
0.78 |
% |
$ |
84,115 |
|
0.32 |
% |
$ |
182,586 |
|
0.16 |
% |
Available-for-sale debt securities, at amortized cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
419,824 |
|
1.95 |
% |
|
390,301 |
|
2.05 |
% |
|
243,228 |
|
1.96 |
% |
Tax-exempt |
|
|
151,753 |
|
2.53 |
% |
|
144,334 |
|
2.54 |
% |
|
123,101 |
|
2.68 |
% |
Total available-for-sale debt securities |
|
|
571,577 |
|
2.10 |
% |
|
534,635 |
|
2.18 |
% |
|
366,329 |
|
2.20 |
% |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
1,494,165 |
|
4.76 |
% |
|
1,445,353 |
|
5.04 |
% |
|
1,418,171 |
|
4.76 |
% |
Paycheck Protection Program - 1st Draw |
|
|
707 |
|
6.24 |
% |
|
1,049 |
|
14.69 |
% |
|
53,639 |
|
6.42 |
% |
Paycheck Protection Program - 2nd Draw |
|
|
8,565 |
|
9.13 |
% |
|
17,800 |
|
12.24 |
% |
|
71,841 |
|
2.18 |
% |
Tax-exempt |
|
|
85,447 |
|
2.76 |
% |
|
83,659 |
|
2.78 |
% |
|
63,470 |
|
3.27 |
% |
Total loans receivable |
|
|
1,588,884 |
|
4.67 |
% |
|
1,547,861 |
|
5.01 |
% |
|
1,607,121 |
|
4.64 |
% |
Other earning assets |
|
|
2,321 |
|
3.28 |
% |
|
1,983 |
|
2.45 |
% |
|
2,467 |
|
2.93 |
% |
Total Earning Assets |
|
|
2,210,210 |
|
3.92 |
% |
|
2,168,594 |
|
4.13 |
% |
|
2,158,503 |
|
3.85 |
% |
Cash |
|
|
23,114 |
|
|
|
|
20,703 |
|
|
|
|
25,453 |
|
|
|
Unrealized (loss) gain on securities |
|
|
(36,675) |
|
|
|
|
(2,508) |
|
|
|
|
10,197 |
|
|
|
Allowance for loan losses |
|
|
(14,509) |
|
|
|
|
(13,783) |
|
|
|
|
(11,992) |
|
|
|
Bank-owned life insurance |
|
|
30,857 |
|
|
|
|
30,720 |
|
|
|
|
30,301 |
|
|
|
Bank premises and equipment |
|
|
21,556 |
|
|
|
|
21,043 |
|
|
|
|
20,620 |
|
|
|
Intangible assets |
|
|
55,656 |
|
|
|
|
55,765 |
|
|
|
|
56,153 |
|
|
|
Other assets |
|
|
55,735 |
|
|
|
|
44,952 |
|
|
|
|
42,516 |
|
|
|
Total Assets |
|
$ |
2,345,944 |
|
|
|
$ |
2,325,486 |
|
|
|
$ |
2,331,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST-BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
431,997 |
|
0.29 |
% |
$ |
419,130 |
|
0.19 |
% |
$ |
387,942 |
|
0.24 |
% |
Money market |
|
|
449,656 |
|
0.33 |
% |
|
456,904 |
|
0.23 |
% |
|
433,295 |
|
0.30 |
% |
Savings |
|
|
255,578 |
|
0.10 |
% |
|
249,165 |
|
0.10 |
% |
|
227,426 |
|
0.10 |
% |
Time deposits |
|
|
268,753 |
|
0.58 |
% |
|
277,405 |
|
0.57 |
% |
|
335,773 |
|
0.72 |
% |
Total interest-bearing deposits |
|
|
1,405,984 |
|
0.32 |
% |
|
1,402,604 |
|
0.26 |
% |
|
1,384,436 |
|
0.35 |
% |
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term |
|
|
36,848 |
|
1.33 |
% |
|
1,746 |
|
0.23 |
% |
|
6,528 |
|
0.43 |
% |
Long-term - FHLB advances |
|
|
19,516 |
|
1.13 |
% |
|
26,102 |
|
0.76 |
% |
|
46,788 |
|
0.93 |
% |
Senior notes, net |
|
|
14,725 |
|
3.27 |
% |
|
14,709 |
|
3.25 |
% |
|
6,930 |
|
3.30 |
% |
Subordinated debt, net |
|
|
26,476 |
|
3.89 |
% |
|
32,948 |
|
4.47 |
% |
|
26,916 |
|
5.32 |
% |
Total borrowed funds |
|
|
97,565 |
|
2.28 |
% |
|
75,505 |
|
2.85 |
% |
|
87,162 |
|
2.44 |
% |
Total Interest-bearing Liabilities |
|
|
1,503,549 |
|
0.45 |
% |
|
1,478,109 |
|
0.40 |
% |
|
1,471,598 |
|
0.48 |
% |
Demand deposits |
|
|
557,007 |
|
|
|
|
529,077 |
|
|
|
|
534,602 |
|
|
|
Other liabilities |
|
|
20,066 |
|
|
|
|
24,046 |
|
|
|
|
23,898 |
|
|
|
Total Liabilities |
|
|
2,080,622 |
|
|
|
|
2,031,232 |
|
|
|
|
2,030,098 |
|
|
|
Stockholders' equity, excluding accumulated other comprehensive (loss) income |
|
|
293,985 |
|
|
|
|
295,996 |
|
|
|
|
293,487 |
|
|
|
Accumulated other comprehensive (loss) income |
|
|
(28,663) |
|
|
|
|
(1,742) |
|
|
|
|
8,166 |
|
|
|
Total Stockholders' Equity |
|
|
265,322 |
|
|
|
|
294,254 |
|
|
|
|
301,653 |
|
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,345,944 |
|
|
|
$ |
2,325,486 |
|
|
|
$ |
2,331,751 |
|
|
|
Interest Rate Spread |
|
|
|
|
3.47 |
% |
|
|
|
3.73 |
% |
|
|
|
3.37 |
% |
Net Interest Income/Earning Assets |
|
|
|
|
3.62 |
% |
|
|
|
3.86 |
% |
|
|
|
3.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Deposits (Interest-bearing and Demand) |
|
$ |
1,962,991 |
|
|
|
$ |
1,931,681 |
|
|
|
$ |
1,919,038 |
|
|
|
(1)Annualized 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%.
(2) |
Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings. |
(3) |
Rates of return on earning assets and costs of funds have been presented on an annualized basis. |
11
ANALYSIS OF AVERAGE DAILY BALANCES AND RATES
(Dollars in Thousands)
|
|
6 Months |
|
|
|
6 Months |
|
|
|
||
|
|
Ended |
|
Rate of |
|
Ended |
|
Rate of |
|
||
|
|
6/30/2022 |
|
Return/ |
|
6/30/2021 |
|
Return/ |
|
||
|
|
Average |
|
Cost of |
|
Average |
|
Cost of |
|
||
|
|
Balance |
|
Funds % |
|
Balance |
|
Funds% |
|
||
EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing due from banks |
|
$ |
65,670 |
|
0.49 |
% |
$ |
137,851 |
|
0.18 |
% |
Available-for-sale debt securities, at amortized cost: |
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
405,144 |
|
1.99 |
% |
|
230,551 |
|
2.01 |
% |
Tax-exempt |
|
|
148,064 |
|
2.54 |
% |
|
120,332 |
|
2.72 |
% |
Total available-for-sale debt securities |
|
|
553,208 |
|
2.14 |
% |
|
350,883 |
|
2.26 |
% |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
1,469,894 |
|
4.90 |
% |
|
1,423,417 |
|
4.86 |
% |
Paycheck Protection Program - 1st Draw |
|
|
877 |
|
11.27 |
% |
|
78,863 |
|
6.83 |
% |
Paycheck Protection Program - 2nd Draw |
|
|
13,157 |
|
11.22 |
% |
|
53,123 |
|
2.19 |
% |
Tax-exempt |
|
|
84,558 |
|
2.77 |
% |
|
65,375 |
|
3.30 |
% |
Total loans receivable |
|
|
1,568,486 |
|
4.84 |
% |
|
1,620,778 |
|
4.81 |
% |
Other earning assets |
|
|
2,153 |
|
2.90 |
% |
|
2,658 |
|
2.81 |
% |
Total Earning Assets |
|
|
2,189,517 |
|
4.02 |
% |
|
2,112,170 |
|
4.08 |
% |
Cash |
|
|
21,915 |
|
|
|
|
24,629 |
|
|
|
Unrealized (loss) gain on securities |
|
|
(19,686) |
|
|
|
|
11,536 |
|
|
|
Allowance for loan losses |
|
|
(14,148) |
|
|
|
|
(11,866) |
|
|
|
Bank-owned life insurance |
|
|
30,789 |
|
|
|
|
30,228 |
|
|
|
Bank premises and equipment |
|
|
21,301 |
|
|
|
|
20,982 |
|
|
|
Intangible assets |
|
|
55,710 |
|
|
|
|
56,220 |
|
|
|
Other assets |
|
|
50,373 |
|
|
|
|
43,566 |
|
|
|
Total Assets |
|
$ |
2,335,771 |
|
|
|
$ |
2,287,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST-BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
425,599 |
|
0.24 |
% |
$ |
372,056 |
|
0.25 |
% |
Money market |
|
|
453,260 |
|
0.28 |
% |
|
420,141 |
|
0.30 |
% |
Savings |
|
|
252,389 |
|
0.10 |
% |
|
220,470 |
|
0.10 |
% |
Time deposits |
|
|
273,055 |
|
0.58 |
% |
|
353,068 |
|
0.74 |
% |
Total interest-bearing deposits |
|
|
1,404,303 |
|
0.29 |
% |
|
1,365,735 |
|
0.37 |
% |
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
Short-term |
|
|
19,394 |
|
1.28 |
% |
|
10,425 |
|
0.43 |
% |
Long-term - FHLB advances |
|
|
22,791 |
|
0.92 |
% |
|
49,801 |
|
0.98 |
% |
Senior notes, net |
|
|
14,717 |
|
3.26 |
% |
|
3,484 |
|
3.30 |
% |
Subordinated debt, net |
|
|
29,694 |
|
4.21 |
% |
|
21,758 |
|
5.57 |
% |
Total borrowed funds |
|
|
86,596 |
|
2.53 |
% |
|
85,468 |
|
2.18 |
% |
Total Interest-bearing Liabilities |
|
|
1,490,899 |
|
0.42 |
% |
|
1,451,203 |
|
0.47 |
% |
Demand deposits |
|
|
543,119 |
|
|
|
|
509,583 |
|
|
|
Other liabilities |
|
|
22,045 |
|
|
|
|
25,903 |
|
|
|
Total Liabilities |
|
|
2,056,063 |
|
|
|
|
1,986,689 |
|
|
|
Stockholders' equity, excluding accumulated other comprehensive (loss) income |
|
|
294,985 |
|
|
|
|
291,550 |
|
|
|
Accumulated other comprehensive (loss) income |
|
|
(15,277) |
|
|
|
|
9,226 |
|
|
|
Total Stockholders' Equity |
|
|
279,708 |
|
|
|
|
300,776 |
|
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,335,771 |
|
|
|
$ |
2,287,465 |
|
|
|
Interest Rate Spread |
|
|
|
|
3.60 |
% |
|
|
|
3.61 |
% |
Net Interest Income/Earning Assets |
|
|
|
|
3.74 |
% |
|
|
|
3.75 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Deposits (Interest-bearing and Demand) |
|
$ |
1,947,422 |
|
|
|
$ |
1,875,318 |
|
|
|
(1)Annualized 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%.
(2) |
Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings. |
(3) |
Rates of return on earning assets and costs of funds have been presented on an annualized basis. |
12
COMPARISON OF NONINTEREST INCOME
(In Thousands)
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
Trust revenue |
|
$ |
1,715 |
|
$ |
1,786 |
|
$ |
1,807 |
|
$ |
3,501 |
|
$ |
3,433 |
Brokerage and insurance revenue |
|
|
566 |
|
|
522 |
|
|
506 |
|
|
1,088 |
|
|
832 |
Service charges on deposit accounts |
|
|
1,322 |
|
|
1,235 |
|
|
1,073 |
|
|
2,557 |
|
|
2,088 |
Interchange revenue from debit card transactions |
|
|
1,056 |
|
|
963 |
|
|
998 |
|
|
2,019 |
|
|
1,879 |
Net gains from sales of loans |
|
|
220 |
|
|
382 |
|
|
925 |
|
|
602 |
|
|
1,989 |
Loan servicing fees, net |
|
|
358 |
|
|
210 |
|
|
146 |
|
|
568 |
|
|
394 |
Increase in cash surrender value of life insurance |
|
|
137 |
|
|
135 |
|
|
145 |
|
|
272 |
|
|
295 |
Other noninterest income |
|
|
1,456 |
|
|
588 |
|
|
700 |
|
|
2,044 |
|
|
2,172 |
Total noninterest income, excluding realized gains |
|
$ |
6,830 |
|
$ |
5,821 |
|
$ |
6,300 |
|
$ |
12,651 |
|
$ |
13,082 |
COMPARISON OF NONINTEREST EXPENSE
(In Thousands)
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
|
|
2022 |
|
2021 |
|
2021 |
|
2022 |
|
2021 |
|||||
Salaries and employee benefits |
|
$ |
10,265 |
|
$ |
10,607 |
|
$ |
9,499 |
|
$ |
20,872 |
|
$ |
18,394 |
Net occupancy and equipment expense |
|
|
1,308 |
|
|
1,411 |
|
|
1,219 |
|
|
2,719 |
|
|
2,523 |
Data processing and telecommunications expenses |
|
|
1,720 |
|
|
1,623 |
|
|
1,487 |
|
|
3,343 |
|
|
2,867 |
Automated teller machine and interchange expense |
|
|
347 |
|
|
384 |
|
|
355 |
|
|
731 |
|
|
692 |
Pennsylvania shares tax |
|
|
488 |
|
|
488 |
|
|
490 |
|
|
976 |
|
|
981 |
Professional fees |
|
|
480 |
|
|
489 |
|
|
598 |
|
|
969 |
|
|
1,145 |
Other noninterest expense |
|
|
2,431 |
|
|
1,884 |
|
|
1,751 |
|
|
4,315 |
|
|
4,506 |
Total noninterest expense |
|
$ |
17,039 |
|
$ |
16,886 |
|
$ |
15,399 |
|
$ |
33,925 |
|
$ |
31,108 |
13
|
Dear Shareholder: A phrase you’ll commonly hear from C&N teammates is, “How might we?” When a challenge is identified, it takes an innovative mindset and approach to solve for it. This quarter, the world was not short on challenges. Although the general health impact of the pandemic continued to subside, despite a resurgence in cases due to new variants, the economic impact on the labor force, supply chains and inflation caused by the pandemic and government response is ongoing. Add in effects from the war in Ukraine and uncertainty is compounded. That said, the basic U.S. economy has been resilient and business activity during the quarter was solid. Our efforts to position C&N for growth required a “How might we” mindset and produced substantial growth in the commercial loan portfolio in all regions. Behind the strong performance reflected in the numbers that follow, the Team continued to advance the relationship model, made strides in positioning the wealth management business and accelerated C&N’s digital transformation. In the second quarter, credit quality metrics improved and commercial loan production has helped offset ban CN otes C&N Quarterly Report :: JULY 2022 Connect with us: Client Care Center: 1.877.838.2517 C&N Financial Services: 1.866.ASK.CNFS Wealth Management: 1.800.487.8784 cnbankpa.com President CEO challenges presented by the run- off of PPP revenues, the impact of higher interest rates on mortgage originations and sale revenues, and volatility in the equity markets. In our Southeast and Southcentral regions, we set ambitious goals for bringing wealth management services to customers, creating value for existing relationships and positioning for future growth. We expect these efforts to make tangible contributions as the year progresses. Investments in transforming technology and processes that will deliver near-term value while positioning C&N to scale our business efficiently are ongoing. Projects to migrate IT activities to the AWS cloud, improve internal processes through the Salesforce platform, simplify and connect lending activities to digital origination, complete the buildout of our data warehouse and implement enhanced data management tools are all advancing. Collectively, these efforts are creating a set of integrated systems that will enable our teams to serve customers – both internal and external – more productively. Inspire&Innovate Inspire&Innovate Carefull Introduces Vault and Trusted Contacts Carefull has expanded its security capabilities to further protect finances from scams, fraud, and money mistakes. Page 2 Trust&Protect Trust&Protect Weathering an Economic Storm Find out & prepare your finances for any uncertainty ahead with this interactive coaching session, free to you through a partnership between Banzai and C&N. Page 2 Dollars&Sense Dollars&Sense Second Quarter Financial Highlights View our unaudited financial highlights from our second quarter. For additional details on our performance, visit the Investor Relations section at cnbankpa.com/bancnotes. Page 3 Community&Commitment Community&Commitment Giving Back, Giving Together C&N teammates raised over $85,000 to ensure local children, regardless of financial status, had access to basic necessities such as food, clothing, and shelter. Page 3 IN THIS ISSUE (Continued on page 4) | 1 |
|
Inspire Innovate Trust Protect With inflation over 8.5% and the cost of everything going up, everyone is feeling the pinch. Ease concerns about how your finances and retirement will hold up during an economic storm. C&N has partnered with Banzai ® to bring you an interactive coaching session that will help you prepare for the possibility of losing your income, rapidly rising prices, and how an uncertain market can impact your retirement fund. To start, scan the QR code or visit https:// qrco.de/economicstorm *. To start the coaching session, select “Start Here.” A feed will appear; follow along and answer questions as you’re prompted. The session will take around 5 minutes to complete. *web address is case-sensitive. 2 | *Receive $300 Bonus when you open a consumer checking account with a minimum opening deposit of $1,000 and receive an additional $100 Bonus when you open the account online. Use promo code 400BONUS. Offer valid through September 30, 2022 for consumer checking account products only (C&N Everyday Checking, C&N Relationship Checking and C&N Merit Checking) and limited to one per primary account owner age 18 or older. C&N Merit Checking is a variable rate tiered interest-bearing account with an Annual Percentage Yield (APY) of 0.35% for qualifying accounts with collected balances of $.01 to $30,000, .10% APY for qualifying accounts with collected balances over $30,000 and .05% APY for non-qualifying accounts (refer to the Truth In Savings Disclosure for qualifying criteria). APYs accurate as of July 1, 2022. Fees may reduce earnings. Direct deposits totaling $5,000 over consecutive 3-month period required to receive Bonus. Account must remain open for six months from opening date. Payout will occur within 45 days of six-month anniversary of account opening. Payouts valid through May 31, 2023. Offer may be withdrawn at any time. In November 2021, C&N partnered with Carefull to make it easier for financial caregivers to manage an older parent or loved one’s finances by providing free account, credit, and identity monitoring. Carefull watches their money 24/7 for strange transactions, provides identity theft and credit protection, helps you to coordinate with family, and even tells caregivers what to watch out for. Now, Carefull has expanded its security capabilities to further protect finances from scams, fraud, and money mistakes. If you have not yet signed up for this service, sign-up for free – and be one of the first to access these brand new features: VAULT : Your digital safety deposit box – the most secure space to store private passwords, sensitive documents, and emergency contacts all in one location. ● Create strong passwords and safely store them ○ Our bad habits — reusing or keeping passwords in a notepad — makes our accounts vulnerable. Keep track of your online accounts and create stronger, unique passwords with Carefull’s password generator. Then keep them safe with our military- grade encryption. ● Keep critical documents organized and accessible ○ Our most important documents — from tax returns and insurance policies to wills and trusts — need digital security to match. With Vault, you can upload digital copies of important legal and financial documents quickly and easily. ● Make your emergency contact list emergency-ready ○ Take contact information for legal, financial, and medical professionals out of the kitchen drawer and put it at your fingertips. (Continued on page 4) C&N & Carefull: Easily Access & Protect Your Information Online Weathering an Economic Storm 400 Big Ones US Get a $400* bonus. Open a new C&N checking account online and make an initial deposit of $1,000. Then, use ClickSwitch to easily move your automatic deposits (like your paycheck) to C&N and have $5,000 direct-deposited into your account over the next three months – and it’s all yours. |
|
Q2 HIGHLIGHTS (In Thousands, Except Per Share Data) Q-2 2022 q-2 2021 $ Increase (Decrease) % Increase (Decrease) Total Assets $2,410,718 $2,339,063 $71,655 3.06% Net Income $7,489 $7,060 $429 6.08% Net Income - Diluted Per Share $0.48 $0.44 $0.04 9.09% Dividends Per Share $0.28 $0.28 $0.00 0.00% 6 MONTHS ENDED (In Thousands, Except Per Share Data) June 30, 2022 June 30, 2021 $ Increase (Decrease) % Increase (Decrease) Net Income $14,384 $15,847 $(1,463) (9.23%) Net Income - Diluted Per Share $0.92 $0.99 $(0.07) 7.07% Dividends Per Share $0.56 $0.55 $0.01 1.82% TABLE INFORMATION Q-2 2022 q-1 2022 Q-4 2021 Q-3 2021 Q-2 2021 Total Assets $2,410,718 $2,330,371 $2,327,648 $2,354,896 $2,339,063 Dollars Sense Community Commitment C&N’s Giving Back, Giving Together program raised over $85,000 to ensure children in our area have access to food, clothing, and shelter. In addition to the monetary donations, C&N teammates collected 4,646 necessity items and volunteered 32.5 hours at our local children & youth organizations. Underprivileged children are another demographic that was greatly impacted by the COVID-19 pandemic. The closing of schools combined with the high cost of childcare forced many parents to give up their jobs and income to care for their kids. This also increased food insecurity by reducing children’s access to free or reduced lunches at school. A survey by the CBPP shows that around 7 to 11 million children lived in households where kids didn’t get enough food because their families couldn’t afford it. In June 2021, C&N teams partnered with 23 local children & youth programs to collect monetary donations through a variety of online platforms and host different fundraisers bringing in over $85,000. In addition to these efforts, the annual C&N Charity Classic golf tournament brought in a record $25,000 and connected with local business partners to join the cause. 15 responded, bringing in an additional $4,500. Learn more about our Giving Back, Giving Together program, our newest cause, and how you can help at cnbankpa.com/GBGT. Below are unaudited financial highlights. Additional details on our Second Quarter financial results can be found on the Investor Relations section by scanning the QR code or visiting cnbankpa.com/bancnotes . | 3 Q-2 2022 Q-1 2022 Q-4 2021 Q-3 2021 Q-2 2021 $2,420,000 $2,390,000 $2,360,000 $2,330,000 $2,300,000 $2,270,000 $0 TOTAL ASSETS (In Thousands) Citizens & Northern Corporation (CZNC) Date Open High Low Close Volume 6.30.22 23.78 24.20 23.72 24.17 13,300 C&N Teammates Donate over $85,000 to Support Local Underprivileged Children Our Paoli Team volunteered with Ann’s Heart preparing over 100 free meals for the community. Two Wellsboro area teammates purchasing “back to school” clothes for area children. Two of our East Smilthfield team members volunteering for the Smithfield Township Fire Depratment. |
|
c/o American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 Inspire Innovate C&N & Carefull: Easily Access & Protect Your Information Online (continued from page 2) Recent decisions to close two branches will require attention during the second half of the year. These difficult decisions are made only after a thoughtful approach and consideration of detailed activity and financial analysis. In-branch transactions and banking activity have declined over the years due to adoption of digital channels and changes in local economies. We have plans in place to retain customer relationships and C&N teammates and will continue to provide quality C&N service to our clients. Our focus during the third quarter remains on advancing on the initiatives discussed above, while continuing to expand relationships and grow the balance sheet. We are in a unique economic and regulatory climate that requires continued diligence in asking ourselves and each other, “How might we?” How might we create unprecedented value for our customers and communities during times of uncertainty? How might we ease their minds by providing resources, tools and expertise to confidently navigate their financial lives safely and securely? Some of those answers are presented here in this issue of banCNotes in the form of Banzai and Carefull. Other answers will reveal themselves over time and we look forward to the value they’ll create for our customers, communities, teammates and shareholders in the future. J. Bradley Scovill President and CEO President CEO Quarterly Shareholder Letter (continued from cover page) | 4 In addition, Carefull’s smart-suggestion tools can recommend and define age- specific documents connected to your finances such as a will, power of attorney, trust, and insurance! TRUSTED CONTACTS : The easiest and most secure way to name family members, financial advisors, or others you trust. Choose whether to let them help resolve issues in case of a scam, fraud, or medical emergency. Significant financial and personal records often live in unsafe or inaccessible places. Stay organized and in control by securely gathering important items. Share only what you want, when you need to. |
