CITIZENS & NORTHERN CORP (CZNC)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 EPS of $0.41 and revenue of $26.75M both modestly missed S&P Global consensus ($0.44 EPS; $27.7M revenue) as fewer days in the quarter, lower average earning assets, and higher noninterest expense offset NIM improvement; diluted EPS rose year over year versus Q1 2024 ($0.35) but fell sequentially versus Q4 2024 ($0.53) . EPS and revenue estimates from S&P Global: $0.44 and $27.7M; actuals $0.41 and $26.75M (*) (Values retrieved from S&P Global).
• Net interest margin expanded to 3.38% (from 3.30% in Q4 2024 and 3.29% in Q1 2024) while nonperforming assets increased to 0.93% of assets (from 0.92% in Q4 2024 and 0.78% in Q1 2024); ACL/loans held at 1.06% .
• Deposits grew 0.4% q/q to $2.102B and 5.3% y/y; highly liquid available funding covered 182.7% of uninsured deposits and 234.9% of uninsured and uncollateralized deposits, reinforcing liquidity strength .
• Dividend of $0.28 per share was declared, payable May 15, 2025; KBRA commented on C&N’s proposed all-stock acquisition of Susquehanna Community Financial (expected close 4Q25), highlighting pro forma asset scale (~$3.2B) and planned cost saves (~30% of SQCF opex), with CET1 expected to dip to ~11.5% at closing before rebuilding .

What Went Well and What Went Wrong

What Went Well

• Net interest margin expanded to 3.38% and net interest income rose $0.93M y/y; average loans +2.2% y/y and average deposits +3.0% y/y, supporting core earnings improvement versus Q1 2024 .
• Liquidity remained robust with highly liquid available funding at $1.135B, covering 182.7% of uninsured deposits and 234.9% of uninsured and uncollateralized deposits; brokered deposits declined sequentially .
• Trust revenue increased y/y (+$205K) amid equity market appreciation; service charges rose y/y (+$122K) and other noninterest income benefited from higher dividends and fee growth .

Selected narrative from management in the press release:

• “The net interest margin was 3.38% in the first quarter 2025 as compared to 3.30% in the fourth quarter 2024 and 3.29% in the first quarter 2024.”
• “C&N maintained highly liquid sources of available funds totaling $1.1 billion at March 31, 2025…”

What Went Wrong

• EPS fell sequentially to $0.41 (from $0.53) as net interest income declined $498K q/q due to two fewer days, reduced volume, and lower average earning assets; noninterest income fell $539K q/q, while noninterest expense rose $613K, driven by payroll taxes, tech infrastructure, and occupancy costs .
• Credit costs turned to a provision of $236K versus a $531K credit in Q4 2024; NPLs increased to 1.27% of loans (from 1.26% in Q4) and NPAs to 0.93% of assets (from 0.92%) .
• Earnings missed consensus estimates: EPS ($0.41 vs $0.44) and revenue ($26.75M vs $27.7M), reflecting cost pressure and noninterest income headwinds (*) (Values retrieved from S&P Global).

Financial Results

Sequential and prior-period comparison

Year-over-year comparison (Q1 2025 vs Q1 2024)

S&P Global estimates vs actuals (Q1 2025)

Noninterest income breakdown

KPIs and balance sheet

Guidance Changes

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document set. Themes below reflect 8‑K and supplemental materials across Q3 2024, Q4 2024, and Q1 2025.

Management Commentary

• “Net income was $6,293,000, or $0.41 diluted earnings per share for the first quarter 2025, down from $8,174,000… and up from $5,306,000…” .
• “While the net interest margin improved… the reduction in net interest income included the impact of two fewer days and a reduction in volume in the first quarter 2025.” .
• “C&N maintained highly liquid sources of available funds totaling $1.1 billion at March 31, 2025…” .
• “The allowance for credit losses (“ACL”) on loans was 1.06% of gross loans receivable at both March 31, 2025 and December 31, 2024…” .

Q&A Highlights

No Q1 2025 earnings call transcript was located in the filings set, so Q&A highlights and any real‑time guidance clarifications are unavailable.

Estimates Context

• EPS: $0.41 vs consensus $0.44 (*) → modest miss; drivers include fewer days in the quarter, lower average earning assets, and higher noninterest expense (payroll taxes, technology, occupancy) despite NIM improvement .
• Revenue: $26.75M vs consensus $27.7M () → modest miss; net interest income declined sequentially ($498K q/q) and noninterest income fell ($539K q/q) .
  () Values retrieved from S&P Global.

Implications: Street may trim near‑term EPS/revenue estimates to reflect expense pressure and modest noninterest income softness, while maintaining credit and NIM assumptions given stable ACL coverage and margin expansion .

Key Takeaways for Investors

• Small misses vs consensus on EPS and revenue, but year‑over‑year EPS and NIM improved; the sequential step‑down largely reflects quarter‑specific items (fewer days, seasonal deposit mix) and elevated operating costs .
• Asset quality remains disciplined: ACL/loans steady at 1.06% with low net charge‑offs ($91K); NPAs increased modestly to 0.93% of assets, warranting ongoing focus on CRE office and specific criticized loans .
• Liquidity is a strength: $1.135B of highly liquid funding and reduced brokered deposits support confidence in funding stability into 2025 .
• Operating efficiency is a swing factor: higher tech/telecom and occupancy costs constrained sequential earnings; watch for normalization of payroll taxes and expense actions to protect margins .
• M&A catalyst: proposed SQCF deal adds scale and projected cost saves (~30% of SQCF opex); CET1 expected to dip to ~11.5% at close, with rebuild driven by pro forma earnings—monitor integration milestones and regulatory timing .
• Dividend maintained at $0.28; income profile supports continuation, contingent on credit and expense trends .
• Near‑term trading: stock may be sensitive to updates on credit trends (NPL resolution) and expense control; medium‑term thesis hinges on sustaining NIM, stabilizing noninterest income, and executing M&A cost synergies .