Citizens & Northern Corporation Stock

Hello, and welcome to the Citizens & Northern Corporation Annual Shareholders Meeting. Please note that this meeting is being recorded. [Operator Instructions]

Welcome to the 38th Annual Meeting of Shareholders of Citizens & Northern Corporation. As mentioned, shareholders who have logged in using their control number may ask questions at any time during the meeting. Shareholders who logged in as a guest will not be able to ask questions. [Operator Instructions] I will now call the meeting to order.

My name is Terry Lehman, Board Chair. I also Chair the Risk Committee and the M&A Committee and a member of the Audit and Compensation Committees. I have been appointed by the Board of Directors to be Chair of this Annual Meeting of Shareholders. Glenn James has similarly been appointed Secretary of this meeting. Glenn serves as General Counsel and Corporate Secretary for Citizens & Northern Corporation. I now ask the Secretary to present the affidavit of mailing of notice of the meeting and proxy statement.

Mr. Chairman, as set forth in the affidavit, the notice of meeting and the proxy statement were mailed to shareholders on March 13, 2026.

Proper notice of this meeting having been given, the order of business will be: one, introductions of the directors; two, voting on the 3 proposals set out in the meeting notice; three, President's remarks; and four, questions and answers.

Now I would like to introduce our Board of Directors. The Board is very engaged throughout the year and has solid committee leadership. Brad Scovill, President and member of the Risk and M&A Committees; Frank Pellegrino, Wealth Committee Chair and Member of the Compensation and M&A Committees; Aaron Singer, Governance and Nominating Committee Chair, member of the Risk and Audit Committees; Bobbi Kilmer, Compensation Committee Chair and member of the Risk, M&A and Governance and Nominating Committees; Stephen Dorwart, Audit Committee Chair and Member of the Compensation Committee; Rob Loughery, member of the Risk and Governance and Nominating Committees; Helen Santiago, member of the Wealth and Audit Committees; Kate Shattuck, member of the Wealth, Compensation and Governance and Nominating Committees; and Christian Trate, member of the Risk and Audit Committees.

You can find each director's bio in the proxy statement starting on Page 9. I'd also like to recognize Leo Lambert, who retired from the Board today after 25 years of dedicated service, including 7 years as Chairman of the Board. Also, Susan Hartley retired from the Board in September 2025 after 27 years of service. As many of you are aware, our President and CEO, Brad Scovill, announced that he will be retiring on April 30, 2027, approximately 1 year from today. The Board has formed a search committee and engaged outside advisers to assist in finding the company's next CEO.

I'd also like to recognize Nicole Spiker, the partner with Crowe LLP, the company's independent audit firm. This meeting has been called for the purpose of: one, election of 3 Class III directors to serve for a term of 3 years; election of 1 Class II director to serve for a term of 2 years and until their successors are elected. Two, approving in an advisory vote, the compensation of the corporation's named executive officers for 2025; three, ratifying the appointment of Crowe LLP as independent registered public accounting firm for the year ending December 31, 2026; and four, transacting such other business as may properly come before the meeting.

Shareholders of record as of February 25, 2026, holding a total of 17,910,243 shares are entitled to vote online or by proxy. The Secretary means the official record of all shares as of the record date. Shareholders who have not yet voted may do so online by clicking the voting link on the meeting screens and following the instructions provided. Mr. Secretary, do we have a quorum?

The majority of shares being represented online or by proxy. Mr. Chairman, we have a quorum.

As the first order of business, may I have a motion to waive the reading of the minutes of last year's Annual Meeting of Shareholders.

So moved.

Is there a second? Thank you. In accordance with the bylaws, the Board of Directors have appointed Tom Rudy; Harold Hoose; and Blair Rush as judges of election. Is there anyone who has not voted but wants to vote?

Hearing none, I declare the polls closed. I call for a motion to elect the following nominees as Class III directors for a term of 3 years and until their successors are elected: Stephen M. Dorwart; J. Bradley Scovill; Aaron K. Singer.

So moved.

I have a motion. Is there a second? We have a motion and a second. Judges of election, may we have the results of the vote.

The motion for election of the nominees as Class III directors passed with no less than 63.6% of the shares present or represented by proxy voting in favor of each nominee.

On the question of the election of 3 Class III directors for 3-year terms and until their successors are elected, each of the nominees receiving a majority of the votes cast. Mr. Dorwart, Mr. Scovill, Mr. Singer stand elected. I call for a motion to elect the following nominee as Class II director for a term of 2 years and until his successor is elected, Christian C. Trate.

So moved.

Is there a second? We have a motion and a second. Judges of election. May we have the results of the vote?

The motion for the election of the nominee as Class II director passed with no less than 70.1% of the shares present or represented by proxy voting in favor.

On the question of the election of 1 Class II director for a 2-year term and until his successor is elected, the nominee receiving a majority of the votes cast, Mr. Trate stands elected. I now call for a motion to approve the 2025 compensation of the named executive officers as disclosed in the proxy statement.

So moved.

We have a motion and a second. Judges of election, may we have the results of the vote.

The motion to approve the advisory nonbinding vote on the 2025 compensation for named executive officers as disclosed in the proxy statement passed with 62.2% of the shares voting in favor.

On the question the approval of the 2025 compensation of the named executive officers, a majority of votes being cast to approve that compensation, that compensation stands approved. I now call for a motion to ratify the appointment of Crowe LLP as the corporation's independent registered public accounting firm for 2026.

Motion.

Second.

We have a motion and a second. Judges of election, may we have the results of the voting?

The motion to ratify the appointment of Crowe LLP as the corporation's independent registered public accounting firm for 2026 as disclosed in the proxy statement passed with 99% of the shares voting in favor.

On the question of ratification of appointment of Crowe LLP as independent registered public accounting firm, a majority of the votes being cast to ratify the appointment of Crowe LLP stand ratified.

This concludes the business portion of the meeting. Now I have the pleasure to turn the virtual podium over to our President, Brad Scovill, to give you his report on the state of the company. Brad?

Thanks, Terry, and good afternoon to all C&N shareholders joining us today. Your interest in our company and ongoing support is greatly appreciated.

I'd like to first add my thanks and appreciation to Leo Lambert, a good friend, for his 25 years of service on our Board. Leo was a Chair when I joined the bank in 2015 and our first independent Chairperson. His love of people, community and C&N have always been evident and his leadership and counsel are appreciated by all who he has touched as he's been involved with C&N. So Leo, thank you. Thank you so much. You'll be missed.

Throughout its 162-year history, C&N has been built through steady intentional work conducted day after day by a team focused on creating value for the customers and communities they serve. During 2025, the C&N team delivered strong results, illustrating its commitment and engagement to continue this legacy. While the financial services industry continues to change dramatically, C&N once again demonstrated the strength of a business model rooted in relationships, disciplined strategy and long-term thinking.

We seek to run a fundamentally sound company that is both resilient through volatile times and capable of delivering profitable growth. That steady approach also guided the October 1 completion of our merger with Susquehanna Community Bank, a significant milestone for C&N. Partnership with SCB expanded our footprint, added 7 new offices and brought together 2 community banking organizations with strong cultural alignment. It also strengthened our position as a leading community bank in Central Pennsylvania and enhanced our ability to create long-term value for our customers, teammates and shareholders.

The additional scale achieved through the SCB acquisition provides C&N with greater capacity to adapt and successfully compete while managing through continuous volatility in the economy and domestic and world politics. Additionally, in 2025, there was a material increase in fraud in the banking industry that demanded more cybersecurity resources. This no normal environment has persisted since COVID and applies not only to managing C&N, but also to our customers seeking stability, clarity and guidance as they navigate through new and unique challenges. The investments we have made over the past 5 years are already paying dividends as the companies integrate, and we expect even greater synergies in the next 2 to 3 years.

With this backdrop, C&N delivered overall improving financial performance throughout 2026 and for the year overall. Core earnings strengthened from the beginning of 2025, supported by expanding net interest margin, balanced loan and deposit growth, stable credit quality and carefully managed operating expenses. In each of the first 3 quarters of the year, net income improved compared to the prior year, reflecting the benefits of consistent execution and long-term planning. And during the fourth quarter, excluding merger expenses, we began to experience the benefits of scale from combining the 2 companies in our financial results.

Generating and retaining core deposits remained an important focus as competition for balances intensified last year. Through relationship-based outreach, expanded digital tools and personalized service, we maintained strong liquidity while supporting responsible loan growth across our markets. Disciplined expense management also allowed us to continue investing in technology, facilities and talent while improving efficiency. This balance between growth and discipline remains central to how we manage the organization and position C&N for long-term success.

Along with sustaining core strength and improving performance, much of our focus in 2025 centered on the long-term alignment of the SCB franchise as an extension of C&N. Bringing together the 2 organizations required careful planning, clear communication and a shared commitment to doing what is right for customers, teammates and shareholders. Following the announcement of the deal in April, our combined teams worked diligently to ensure continuity of service, clarity for employees and consistency in how we support our communities.

From the beginning, our teams approached each phase of integration with care, recognizing that behind every system change and operational decision for customers depending on continuity and security and employees expecting transparency and support. This sense of teamwork helped us maintain stability while building a unified operating model. We also welcomed our new colleagues from SCB to Wellsboro orientation to experience the leadership approach, culture and community focus that defines C&N. It was important as these early connections helped lay the foundation for strong working relationships and are reinforcing the shared values that brought our organizations together.

We completed the systems conversion in December and have resolved most of the normal challenges faced when consolidating platforms. We are now operating as a unified organization and on schedule to realize the promise of this partnership, leveraging the combined strengths of our teams, enhancing our regional presence and delivering broader service capabilities. This integration is not just about growth, it's about strengthening our ability to deliver value, deepen relationships and respond to the evolving needs of the people and businesses we serve across our footprint.

2025 was also a year of continued investment in our people and infrastructure. We enhanced our digital banking platforms to provide convenient, secure access to financial services. Technology also plays a critical role in both customer experience and risk management. As I mentioned earlier, throughout the year, we continued to strengthen our cybersecurity measures, enhancing fraud detection capabilities and refining internal systems to improve efficiency and responsiveness. These investments protect customer information while allowing teammates to focus more time on building relationships and giving guidance.

At the heart of our culture is our commitment to strengthening the places we call home. This year marked the 10th anniversary of Giving Back, Giving Together, a signature program that has become one of the most visible expressions of C&N's community focus. During this decade of service, our teammates have raised nearly $1 million, donated over 42,000 items and volunteered for almost 2,000 hours to support 245 local organizations. These efforts reflect a culture of compassion, generosity and shared responsibility for the well-being of our neighbors. They also underscore that community involvement is not separate from our business mission. It is an extension of how we define success at C&N.

2025, our Giving Back, Giving Together initiative focused on honoring our heroes supporting veterans and active duty service members. Given current world events, this initiative is both very timely and a reflection of our appreciation for those who serve and the families who support them. Once again, our teammates demonstrated creativity, dedication and genuine care in bringing this cause to life.

As we look to the year ahead and begin my final year serving as CEO, we do so with optimism and confidence in both our strategy and our team. Our strong balance sheet, disciplined risk management, expanded franchise and relationship-focused culture position us well to drive profitable growth while navigating change within the financial services industry. Reinforcing this strength and confidence in the future, earlier today, the Board took action to declare a regular quarterly cash dividend of $0.28 a share payable on May 15 to shareholders of record on May 4.

While challenges continue to emerge, we remain committed to thoughtful growth, responsible stewardship and delivering consistent value to our customers, communities and shareholders. Most importantly, we're blessed with strong leadership and are supported by a team that believes in our mission and brings professionalism, integrity and care to their work every day.

2025 was a year of meaningful progress and important transformation. We're grateful for the trust that our customers place in us, dedication of our teammates and the continued support of all of our shareholders. Together, we'll continue to build a stronger C&N grounded in relationships, guided by purpose and focused on creating lasting value for generations to come.

Thank you for your continued support. And Mr. Chairman, I'll turn the virtual microphone back to you.

Thank you, Brad. The floor is now open for questions from our shareholders. [Operator Instructions] Are there any questions?

All right. It doesn't appear that we have any questions. I would like to thank you all who took the time to participate in today's meeting. If there is any further business to be brought before this [indiscernible], we will...

[indiscernible] it now.

Hearing none without objection, this meeting stands adjourned.

Today's conference call. Thank you for participating. You may now disconnect.