CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
Citizens & Northern Corporation is a bank holding company with assets exceeding $1.2 billion and is headquartered in Wellsboro, PA. Banking services are provided by its subsidiary, Citizens & Northern Bank, from 24 banking offices in Bradford, Cameron, Lycoming, McKean, Potter, Sullivan and Tioga Counties.
In addition, the corporation’s subsidiary, First State Bank, operates banking offices in Canisteo and Hornell, NY in Steuben County.
Investment and insurance products are offered through Citizens & Northern Bank’s subsidiary, C&N Financial Services Corp. Trust services are offered by Citizens & Northern Bank and First State Bank through the C&N Trust and Financial Management Group. Citizens & Northern Corporation stock trades on the NASDAQ Capital Market Securities under the symbol CZNC.
Citizens & Northern Corporation officers include: Craig G. Litchfield, chairman of the board, president and chief executive officer; Mark A. Hughes, treasurer, and Jessica R. Brown, corporate secretary.
MESSAGE TO SHAREHOLDERS
From Craig G. Litchfield
Chairman, President and CEO
In economics, as in poetry, it is always darkest before the dawn.
At this moment in time, the country and the world are suffering an economic recession, which has been compared to other severe recessions and, although with much hyperbole, the Great Depression of the thirties. The causes of the current economic crisis are many and the solutions seem elusive. The actions of the Federal Reserve during 2008 to reduce interest rates and to increase liquidity in the economy have seemed ineffective thus far. As this letter is being composed, the U.S. Congress and the new administration are constructing an economic stimulus package of unprecedented proportions. The implications of both actions (the Federal Reserve’s and those of Congress), economic and political, are not certain, but they are likely to result in unexpected consequences — some good and some bad. Historically, we know that Federal Reserve Monetary policy actions take time, six months to a year, to begin moving the economy toward the desired results. Whether congressional action will make a positive difference may be even more of an uncertainty.
One consolation is that the U.S. economy has been through significant stresses before and has managed to rebound and be even stronger. The free market principles and individual liberties on which our country was founded have proven, repeatedly, to be the engines of wealth creation and prosperity. In time, the economy and the country will rise out of this current dilemma and be stronger for the experience.
It is important that we do not lose sight of the fact that in the long run this economic crisis will pass. During this time, opportunities are there for those willing to identify them and to act. The management, board of directors and employees of Citizens & Northern have taken steps over the past 18 months to position us for better financial performance and customer service. Beginning in the fourth quarter of 2007 and continuing through all of 2008, steps were taken to identify opportunities to improve products, processes, pricing and performance. In 2008, with the assistance of a nationally respected bank consulting firm, action teams were formed to conduct reviews of all of our processes, procedures and staffing levels. Additionally, our operational structure was reviewed resulting in improved credit administration, centralized loan operations, realignment of our organizational structure and about a 20% reduction in staffing. The goals of a leaner and more efficient organization have been and are being realized.
FINANCIAL RESULTS
As 2008 unfolded, we saw changes that had both positive and negative effects upon our income and balance sheet. The most significant negative change was the sudden illiquidity and downward rating of still performing, but out of favor, investment securities: pooled trust preferreds. This occurred as we began the required implementation of the new Fair Value accounting standard, FASB No. 157. FASB No. 157 lacked clear guidance on accounting for such investment securities and thus was imposing Draconian, and we and most of the banking industry believed, inappropriate accounting treatment. In October, the Financial Accounting Standards Board
(continued page 2)
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MESSAGE TO SHAREHOLDERS
(Continued)
(FSAB) adopted guidelines that corrected some of the shortcomings in the rule, and in late December 2008, FASB made welcome changes to a related standard called EITF 99-20. Even with the corrections, the pooled trust preferred securities have had a detrimental impact on both our income statement and balance sheet. When purchased, trust preferred securities were investment grade and among those securities deemed acceptable and appropriate for bank portfolios by federal bank regulators. They also had a positive impact on our interest rate risk because they are variable rate, unlike most of our other earning assets.
In addition to the trust preferred issues, we recognized other-than-temporary-impairment losses on some of our investments in bank stocks. Historically, Citizens & Northern has generated significant profits from bank stocks, from both dividend income and, in many instances, realized gains from sales of appreciated stock. In 2008, however, bank stocks generally fell out of favor and realized significant drops in value. We were forced to write down (through earnings) some of the stocks.
The income statement impact of the pooled trust preferreds and bank stocks was $9.8 million in other than temporary impairment charges that resulted in a net securities loss of $9.3 million for 2008. The balance sheet impact is the large increase in accumulated other comprehensive loss to $23.2 million as of Dec. 31, 2008, mostly attributable to the valuation of the pooled trust preferreds.
On the positive side, due to higher earnings on the investment portfolio and to the substantial reduction in deposit rates brought on by the Federal Reserve’s reduction in the fed funds rate and the increase in the money supply, our interest margin increased by 18.9% over the results of 2007. Noninterest income increased by 23.4% due to growth in deposit volumes from the Citizens Trust acquisition, higher fee income associated with a new overdraft privilege program and a pre-tax gain of $533 thousand from redemption of restricted shares from a Visa initial public offering.
Net income for the year ended December 31, 2008 was $10.059 million, or $1.12 per diluted share, as compared to income of $10.424 million, or $1.19 per diluted share in 2007. Net income per diluted share, excluding the after-tax impact of impairment losses on securities, was $1.84 in 2008 or 54.6% higher than the corresponding amount in 2007.
Total assets amounted to $1.282 billion at the end of 2008, virtually unchanged from the $1.284 billion at the end of 2007. Net loans for the year increased about 1.2% to $735.7 million, or about $8.6 million. Total deposits and repo sweep accounts increased to $902 million at the end of 2008, up $27.9 million, or 3.2% from year-end 2007. Total shareholders’ equity was $122.0 million at December 31, 2008 versus $137.8 million at December 31, 2007. Shareholders’ equity included total accumulated other comprehensive loss of $23.2 million at December 31, 2008 versus $7.1 million at December 31, 2007. The accumulated other comprehensive loss is due to temporary unrealized losses on available-for-sale securities, most of which is attributable to the trust preferred securities mentioned earlier.
The quarterly dividend to shareholders was held at 24 cents for all four quarters of 2008. The regulatory capital measures declined slightly from year-2007 to year-end 2008. Nevertheless, the regulatory capital measures all stood well above the “well capitalized” level as of year-end.
(Continued Page 3)
MESSAGE TO SHAREHOLDERS
(Continued)
Assets under management by C&N’s Trust and Financial Management Group dropped by 16.5% to $550.5 million at the end of 2008 versus year-end 2007. Despite falling stock market prices, which negatively impacted the value of Trust Assets, the Group did an excellent job of building on existing client relationships, and adding new relationships.
NEW SERVICES
To keep our product line current and attractive to existing and new customers we continually look for new services to offer or for ways to enhance existing services. Thus during 2008, we introduced the following new services.
| | • | | Mobile Bankingthat permits Internet Banking customers to securely access their balances and transfer funds between their accounts using a Smartphone or PDA phone. |
| |
| | • | | E-Z Money Checking:This new checking product pays a high rate of interest and reimburses for non-C&N ATM use. It requires customers to use more electronic, paperless, environmentally-friendly features like our Visa Check Card, an electronic deposit or debit via ACH, Internet Banking and Bill Payer and electronic statement delivery. |
| |
| | • | | While we began offering remote deposit capture in 2007, in 2008 we more than doubled the users who find the convenience of secure Internet deposits time and money saving. |
| |
| | • | | Client Contact Center:This new service was begun in late 2008 to provide increased customer service to our clients who call for information and assistance. This service will reduce the telephone call volume at our branches, thus allowing branch personnel more time to focus on walk-in customers. Over time, we believe the Call Center will be a core aspect of our customer service delivery. |
CAPITAL PURCHASE PROGRAM
In mid-November, considering the economic and accounting uncertainties, management and the board of directors believed it prudent to apply for participation in the U.S. Treasury’s Capital Purchase Program. The program was created to provide healthy financial institutions with a source of short term capital during these uncertain times. We look at the program as a form of insurance to protect us from possible further deterioration of our securities portfolio or unexpected loan losses. On January 16th, 2009, we received an investment of $26.44 million in senior preferred stock. We will pay the Treasury an after-tax dividend of 5% for up to the first 5 years. Our intention is to redeem the preferred stock at the end of three (3) years when we hope the current economic crisis has ended. The Treasury’s investment came with conditions including the issuance of a warrant for the purchase of 194,794 shares of C&N common stock and restrictions on executive compensation and benefits. Be assured that we are paying our way and the U.S. taxpayer will profit from providing this capital “insurance policy” to C&N and other healthy banks.
(Conclusion Page 16)
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FIVE YEAR PERFORMANCE
OUR EXECUTIVE TEAM
Seated, from left, Craig G. Litchfield, Chairman, President and Chief Executive Officer
Deborah E. Scott, EVP and Trust Department Director
Dawn A. Besse, EVP and Chief Credit Officer
Standing, from left, George R. Raup, EVP and Chief Information Officer
Thomas L. Rudy, Jr., EVP and Director of Branch Delivery
Harold F. Hoose, III, EVP and Director of Lending
Mark A. Hughes, EVP and Chief Financial Officer
Charles H. Updegraff, Jr., EVP and Chief Operating Officer
CONTACT US
| | | | |
| CLIENT CONTACT CENTER | | | 1-800-726-2265 |
| | | | |
| INTERNET BANKING | | | 1-877-838-2517 |
| | | | |
| TELEPHONE BANKING | | | 1-877-622-5526 |
| | | | |
| C&N FINANCIAL SERVICES | | | |
| Wellsboro | | | 1-866-ASK-CNFS |
| Coudersport | | | 814-274-9150 |
| | | | |
| TRUST AND FINANCIAL MANAGEMENT | | | |
| Wellsboro | | | 1-800-487-8784 |
| Sayre | | | 1-888-760-8192 |
| Towanda | | | 1-888-987-8784 |
| Williamsport | | | 1-866-732-7213 |
| Canisteo, NY | | | 607-698-4295 |
| Coudersport | | | 814-272-9150 |
| Emporium | | | 814-486-1112 |
www.cnbankpa.com
www.fsbcanisteo.com
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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QUARTERLY SHARE DATA
Trades of the Corporation’s stock are executed through various brokers who maintain a market in the Corporation’s stock. The Corporation’s stock is listed on NASDAQ Capital Market Securities with the trading symbol CZNC.
The following table sets forth the approximate high and and low sales price of the common stock during 2008 and 2007:
| | | | | | | | | | | | | |
2008
|
| | | | | | | | | | | Dividend |
| | | | | | | | | | | Declared |
| | | High | | Low | | Per Quarter |
| First Quarter | | $ | 21.00 | | | $ | 16.85 | | | | 0.24 | |
| Second Quarter | | $ | 20.50 | | | $ | 15.82 | | | | 0.24 | |
| Third Quarter | | $ | 25.80 | | | $ | 16.13 | | | | 0.24 | |
| Fourth Quarter | | $ | 25.45 | | | $ | 17.18 | | | | 0.24 | |
| | | | | | | | | | | | | |
2007
|
| | | | | | | | | | | Dividend |
| | | | | | | | | | | Declared |
| | | High | | Low | | Per Quarter |
| First Quarter | | $ | 23.21 | | | $ | 20.30 | | | | 0.24 | |
| Second Quarter | | $ | 21.13 | | | $ | 19.36 | | | | 0.24 | |
| Third Quarter | | $ | 19.82 | | | $ | 17.82 | | | | 0.24 | |
| Fourth Quarter | | $ | 20.19 | | | $ | 17.28 | | | | 0.24 | |
COMMON STOCK AND PER SHARE DATA
Per Common Share (1)
| | | | | | | | | | | | | | | | | | | | | |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 |
| Net income per share — basic | | $ | 1.12 | | | $ | 1.19 | | | $ | 1.42 | | | $ | 1.53 | | | $ | 1.76 | |
| Net income per share — diluted | | $ | 1.12 | | | $ | 1.19 | | | $ | 1.42 | | | $ | 1.52 | | | $ | 1.75 | |
| Cash dividends declared per share | | $ | 0.96 | | | $ | 0.96 | | | $ | 0.96 | | | $ | 0.93 | | | $ | 0.89 | |
| Stock dividend | | None | | | | 1 | % | | | 1 | % | | | 1 | % | | | 1 | % |
| Book value at period-end | | $ | 13.66 | | | $ | 15.34 | | | $ | 15.51 | | | $ | 15.58 | | | $ | 15.61 | |
| Tangible book value at period-end | | $ | 12.22 | | | $ | 13.85 | | | $ | 15.13 | | | $ | 15.18 | | | $ | 15.61 | |
| Weighted average common shares outstanding — basic | | | 8,961,805 | | | | 8,784,134 | | | | 8,422,495 | | | | 8,458,813 | | | | 8,433,494 | |
| Weighted average common shares outstanding — diluted | | | 8,983,300 | | | | 8,795,366 | | | | 8,448,169 | | | | 8,517,598 | | | | 8,481,750 | |
| | |
| (1) | | All share and per share data have been restated to give effect to stock dividends and splits. |
STOCKHOLDER INQUIRIES
A copy of the Corporation’s Annual Report Form 10K for the year ended December 31, 2008, as required to be filed with the Securities and Exchange Commission, will be furnished to any stockholder without charge upon written request to the Corporation’s Treasurer at our principal office at P.O. Box 58, Wellsboro, PA 16901.
The information is also available through the Citizens & Northern Bank website at www.cnbankpa.com and at the website of the Securities and Exchange Commission at www.sec.gov.
This statement has not been reviewed or confirmed for accuracy or relevance by the Federal Deposit Insurance Corporation.
INVESTOR INFORMATION
The Annual Meeting of Shareholders will be held in the second floor training room at the Wellsboro branch office, 90-92 Main Street in Wellsboro, PA at 2:00 p.m. Tuesday, April 21st, 2009.
General shareholder inquiries should be sent to: Citizens & Northern Corporation, 90-92 Main Street, P.O. Box 58, Wellsboro, PA 16901.
Our Stock Transfer Agent is: American Stock Transfer
& Trust Company, 59 Maiden Lane, Plaza Level,
New York, NY 10038.
Telephone: 800-278-4353
Our Independent Auditors are:
Parente Randolph, LLC, 400 Market Street,
Williamsport, PA 17701
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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FIVE-YEAR SUMMARY OF OPERATIONS
INCOME STATEMENT
(in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 |
| Interest and fee income | | $ | 74,237 | | | $ | 70,221 | | | $ | 64,642 | | | $ | 61,108 | | | $ | 57,922 | |
| Interest expense | | | 31,049 | | | | 33,909 | | | | 30,774 | | | | 25,687 | | | | 22,606 | |
| Net interest income | | | 43,188 | | | | 36,312 | | | | 33,688 | | | | 35,421 | | | | 35,316 | |
| Provision for loan losses | | | 909 | | | | 529 | | | | 672 | | | | 2,026 | | | | 1,400 | |
| Net interest income after provision for loan losses | | | 42,279 | | | | 35,783 | | | | 33,016 | | | | 33,395 | | | | 33,916 | |
| Noninterest income excluding securities (losses)/gains and gains from sale of credit card loans | | | 12,883 | | | | 10,440 | | | | 7,970 | | | | 7,636 | | | | 6,922 | |
| Realized (losses)/ gains on available-for-sale securities | | | (9,338 | ) | | | 127 | | | | 5,046 | | | | 1,802 | | | | 2,877 | |
| Gain from sale of credit card loans | | | 0 | | | | 0 | | | | 340 | | | | 1,906 | | | | 0 | |
| Noninterest expense | | | 33,446 | | | | 33,283 | | | | 31,614 | | | | 28,962 | | | | 26,001 | |
| Income before income tax provision | | | 12,378 | | | | 13,067 | | | | 14,758 | | | | 15,777 | | | | 17,714 | |
| Income tax provision | | | 2,319 | | | | 2,643 | | | | 2,772 | | | | 2,793 | | | | 2,851 | |
| Net income | | $ | 10,059 | | | $ | 10,424 | | | $ | 11,986 | | | $ | 12,984 | | | $ | 14,863 | |
BALANCE SHEET AT YEAR END
(in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| Available-for-sale securities | | $ | 419,688 | | | $ | 432,755 | | | $ | 356,665 | | | $ | 427,298 | | | $ | 475,085 | |
| Gross loans | | | 743,544 | | | | 735,941 | | | | 687,501 | | | | 653,299 | | | | 579,613 | |
| Allowance for loan losses | | | 7,857 | | | | 8,859 | | | | 8,201 | | | | 8,361 | | | | 6,787 | |
| Assets | | | 1,281,637 | | | | 1,283,746 | | | | 1,127,368 | | | | 1,162,954 | | | | 1,123,002 | |
| Deposits | | | 864,057 | | | | 838,503 | | | | 760,349 | | | | 757,065 | | | | 676,545 | |
| Borrowings | | | 285,473 | | | | 300,132 | | | | 228,440 | | | | 266,939 | | | | 305,005 | |
| Stockholders’ equity | | $ | 122,026 | | | $ | 137,781 | | | $ | 129,888 | | | $ | 131,968 | | | $ | 131,585 | |
FIVE-YEAR SUMMARY OF OPERATIONS
AVERAGE BALANCE SHEET
(in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 |
| Total assets | | $ | 1,280,924 | | | $ | 1,178,904 | | | $ | 1,134,689 | | | $ | 1,144,619 | | | $ | 1,114,041 | |
| Earning assets | | | 1,202,872 | | | | 1,090,035 | | | | 1,055,103 | | | | 1,065,189 | | | | 1,036,535 | |
| Gross loans | | | 743,741 | | | | 729,269 | | | | 662,714 | | | | 618,344 | | | | 551,352 | |
| Deposits | | | 847,714 | | | | 812,255 | | | | 750,982 | | | | 702,404 | | | | 669,307 | |
| Stockholders’ equity | | | 130,790 | | | | 138,669 | | | | 131,082 | | | | 132,465 | | | | 128,374 | |
KEY RATIOS
| | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.79 | % | | | 0.88 | % | | | 1.06 | % | | | 1.13 | % | | | 1.33 | % |
| Return on average equity | | | 7.69 | % | | | 7.52 | % | | | 9.14 | % | | | 9.80 | % | | | 11.58 | % |
| Average equity to average assets | | | 10.21 | % | | | 11.76 | % | | | 11.55 | % | | | 11.57 | % | | | 11.52 | % |
| Net interest margin (1) | | | 3.77 | % | | | 3.51 | % | | | 3.42 | % | | | 3.62 | % | | | 3.78 | % |
| Efficiency (2) | | | 57.40 | % | | | 68.39 | % | | | 71.73 | % | | | 62.88 | % | | | 56.35 | % |
| Cash dividends as a % of diluted earnings per share | | | 85.71 | % | | | 80.67 | % | | | 67.61 | % | | | 61.18 | % | | | 50.86 | % |
| Tier 1 leverage | | | 10.12 | % | | | 10.91 | % | | | 11.22 | % | | | 10.62 | % | | | 10.69 | % |
| Tier 1 risk-based capital | | | 13.99 | % | | | 15.46 | % | | | 16.51 | % | | | 16.52 | % | | | 17.17 | % |
| Total risk-based capital | | | 14.84 | % | | | 16.52 | % | | | 17.97 | % | | | 18.19 | % | | | 18.89 | % |
| | |
| (1) | | Rates of return on tax-exempt securities and loans are calculated on a fully-taxable equivalent basis. |
| |
| (2) | | The efficiency ratio is calculated by dividing total noninterest expense by the sum of net interest income (including income from tax-exempt securities and loans on a fully-taxable equivalent basis) and noninterest income excluding securities (losses)/gains and gains from sale of credit card loans. |
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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QUARTERLY FINANCIAL DATA
The following table presents summarized quarterly financial data for 2008 (unaudited) (In thousands, except per share)
2008 QUARTER ENDED
| | | | | | | | | | | | | | | | | |
| | | March 31 | | June 30 | | Sept. 30 | | Dec. 31 |
| Interest income | | $ | 18,700 | | | $ | 18,373 | | | $ | 18,575 | | | $ | 18,589 | |
| Interest expense | | | 8,656 | | | | 7,724 | | | | 7,474 | | | | 7,195 | |
| Interest margin | | | 10,044 | | | | 10,649 | | | | 11,101 | | | | 11,394 | |
| Provision (credit) for loan losses | | | 904 | | | | (376 | ) | | | 141 | | | | 240 | |
| Interest margin after provision for loan losses | | | 9,140 | | | | 11,025 | | | | 10,960 | | | | 11,154 | |
| Other income | | | 3,487 | | | | 3,155 | | | | 3,062 | | | | 3,179 | |
| Net (losses) on available-for-sale securities | | | (110 | ) | | | (867 | ) | | | (4,483 | ) | | | (3,878 | ) |
| Other expenses | | | 8,464 | | | | 8,257 | | | | 8,736 | | | | 7,989 | |
| Income before income tax provision | | | 4,053 | | | | 5,056 | | | | 803 | | | | 2,466 | |
| Income tax provision (credit) | | | 937 | | | | 1,303 | | | | (209 | ) | | | 288 | |
| Net income | | $ | 3,116 | | | $ | 3,753 | | | $ | 1,012 | | | $ | 2,178 | |
| Net income per share — basic | | $ | 0.35 | | | $ | 0.42 | | | $ | 0.11 | | | $ | 0.24 | |
| Net income per share — diluted | | $ | 0.35 | | | $ | 0.42 | | | $ | 0.11 | | | $ | 0.24 | |
QUARTERLY FINANCIAL DATA
The following table presents summarized quarterly financial data for 2007 (unaudited)
(In thousands, except per share)
2007 QUARTER ENDED
| | | | | | | | | | | | | | | | | |
| | | March 31 | | June 30 | | Sept. 30 | | Dec. 31 |
| Interest income | | $ | 16,243 | | | $ | 17,692 | | | $ | 18,058 | | | $ | 18,228 | |
| Interest expense | | | 8,000 | | | | 8,679 | | | | 8,551 | | | | 8,679 | |
| Interest margin | | | 8,243 | | | | 9,013 | | | | 9,507 | | | | 9,549 | |
| Provision for loan losses | | | 229 | | | | 0 | | | | 0 | | | | 300 | |
| Interest margin after provision for loan losses | | | 8,014 | | | | 9,013 | | | | 9,507 | | | | 9,249 | |
| Other income | | | 2,088 | | | | 2,644 | | | | 2,877 | | | | 2,831 | |
| Net gains (losses) on available-for-sale securities | | | 1,161 | | | | (1,172 | ) | | | (68 | ) | | | 206 | |
| Other expenses | | | 8,247 | | | | 8,189 | | | | 8,691 | | | | 8,156 | |
| Income before tax provision | | | 3,016 | | | | 2,296 | | | | 3,625 | | | | 4,130 | |
| Income tax provision | | | 558 | | | | 360 | | | | 777 | | | | 948 | |
| Net income | | $ | 2,458 | | | $ | 1,936 | | | $ | 2,848 | | | $ | 3,182 | |
| Net income per share — basic | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.32 | | | $ | 0.35 | |
| Net income per share — diluted | | $ | 0.29 | | | $ | 0.22 | | | $ | 0.32 | | | $ | 0.35 | |
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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TRUST AND FINANCIAL MANAGEMENT GROUP
Seated, from left, Joseph Kilmer, Financial Consultant
Marge Brown, Retirement Services; Lori Brown, Trust Account Administrator
Back, Jon Cleveland, Trust Officer; John Abplanalp, Trust Investment Officer
FIVE YEAR COMPARISON
(in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 |
| Assets | | $ | 550,496 | | | $ | 659,193 | | | $ | 517,775 | | | $ | 418,259 | | | $ | 383,062 | |
| Revenue | | $ | 3,443 | | | $ | 3,440 | | | $ | 2,409 | | | $ | 2,088 | | | $ | 2,105 | |
The composition of Trust assets under management and accounts as of December 31, 2008 and 2007 follow:
ACCOUNTS(in thousands)
| | | | | | | | | |
| | | 2008 | | 2007 |
| Investment management | | $ | 190,726 | | | $ | 194,844 | |
| Pension/profit sharing | | | 185,647 | | | | 245,217 | |
| Trusts | | | 96,851 | | | | 124,125 | |
| Custody | | | 70,807 | | | | 90,936 | |
| Estates | | | 767 | | | | 3,020 | |
| Guardianships | | | 5,698 | | | | 1,051 | |
| Total | | $ | 550,496 | | | $ | 659,193 | |
INVESTMENTS(in thousands)
| | | | | | | | | |
| | | 2008 | | 2007 |
| Mutual funds | | $ | 189,670 | | | $ | 237,824 | |
| Bonds | | | 146,946 | | | | 178,829 | |
| Savings and Money Market funds | | | 109,281 | | | | 76,866 | |
| Stocks | | | 99,197 | | | | 157,690 | |
| Miscellaneous | | | 3,724 | | | | 6,267 | |
| Real estate | | | 1,076 | | | | 1,098 | |
| Mortgages | | | 602 | | | | 619 | |
| Total | | $ | 550,496 | | | $ | 659,193 | |
2008 ADVISORY BOARDS
Our Advisory Board members are the eyes and ears of their communities. We are grateful for their time, talent and loyalty to our local Citizens & Northern offices.
ATHENS/SAYRE
Warren J. Croft, Mark Elsbree, Max P. Gannon, Jr., R. Bruce Haner, Susan E. Hartley, Dr. Edward Jones, Wayne E. Lowery, David Rosenbloom, Virginia L. Reap, Mary Theresa Sullivan, L. Joseph Tomasso, Jr.
COUDERSPORT
Edwin H. Corey, Joseph F. Costa, Patrice D. Lavavasseur, Robert C. Smith, Michael Wetzel, Jr.
DUSHORE
Ronald A. Gutosky, Leo F. Lambert, Dennis K. McCarty, Kerry A. Meehan, Brenda Whiteley
EAST SMITHFIELD
Roy L. Beardslee, Peggy A. Brown, Thomas G. Furman, James G. Wilcox
ELKLAND
Lynette Burrous, Mary C. Heitzenrater, Mark R. Howe, John C. Kenyon, Edward L. Learn
EMPORIUM
Anthony C. Moscato, Edwin W. Tompkins, III, Kimberlea Whiting
JERSEY SHORE
Thomas F. Charles, Debra R. Martin, Melanie McLane, David A. Schall
KNOXVILLE
Brian Bicksler, L. Grant Gehman, Karl W. Kroeck, William W. Roosa, Amy Wherley
LAPORTE
David L. Baumunk, Linda M. Etzel, Robin A. Fiester, William B. Saxe, Leonard Simpson
LIBERTY
Lyle R. Brion, Gary L. Dinnison, Michael Goodreau, James H. Route, Jr., Ray E. Wheeland
MANSFIELD
David Kurzejewki, Larry Mansfield, Joseph R. Maresco, Diane K. Wilson
MUNCY
James R. Fetter, Jr., Kenneth F. Fry, Thomas D. Hess, Roger D. Jarrett, Dawn Myers
(Cont. Page 14)
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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2008 ADVISORY BOARDS — CONTINUED
OLD LYCOMING
John Confer, Stacy Elliott, Karen Maseto, Louis “Terry” Waldman
PORT ALLEGANY
P. Gregory Buchanan, Madelyn Farber, Edwin M. Schott, Bryan T. Smith
RALSTON
Courtney Baker, William W. Brooks, III, Stephen L. Davis, Ronald Roan
TIOGA
Lisa Cook, Dirk D’Haene, C. Frederick LaVancher, Leisa L. LaVancher
TOWANDA/MONROETON
Gary Baker, James A. Bowen, Dorine Crisman, Mark Gannon, W. John Greenland, Jeffrey A. Smith, Mark W. Smith
TROY
Dennis F. Beardslee, Roy W. Cummings, Jr., J. Robert Garrison, William Holmes, Gregory W. Powers, Evan S. Williams, Jr.
WELLSBORO
Donald R. Abplanalp, Todd Coolidge, Robert F. Cox, Jr., R. Robert DeCamp, Craig Eccher, Jan E. Fisher, Scott Lewis, Edward H. Owlett, III
WILLIAMSPORT
Keith Boatman, Daniel Mathers, Raymond Mattie, Frank G. Pellegrino, Ann M. Tyler
WYSOX
Robert L. Fulmer, Gary Hennip, Debra S. Kithcart, James E. Towner, Walter E. Warburton, Jr.
FIRST STATE BANK, CANISTEO and HORNELL
Michael Deebs, Frank Spitulnik, William Hatch, Brian Schu
2008 BOARD OF DIRECTORS
Citizens & Northern Corporation
Citizens & Northern Bank
Seated, from left, James E. Towner, Susan E. Hartley, Jan E. Fisher, Ann M. Tyler and Karl W. Kroeck.
Standing, from left, R. Bruce Haner, Leo F. Lambert, Leonard Simpson, Raymond R. Mattie, R. Robert DeCamp,
Edward H. Owlett, III, Dennis F. Beardslee, Craig G. Litchfield and Charles H. Updegraff, Jr.
Absent from photo, Edward L. Learn.
| | | |
| Citizens & Northern Board Members |
| Dennis F. Beardslee | | Owner, Terrace Lanes Bowling Center |
| R. Robert DeCamp | | President, Patterson Lumber Co., Inc. |
| Jan E. Fisher | | Executive Vice President/ COO, Laurel Health System |
| R. Bruce Haner | | Auto buyer for new car dealers |
| Susan E. Hartley | | Attorney at law |
| Karl W. Kroeck | | Farmer (Director Emeritus) |
| Leo F. Lambert | | President and General Manager, Fitzpatrick & Lambert, Inc. |
| Edward L. Learn | | Former owner, Learn Hardware and Building Supply |
| Craig G. Litchfield | | C&N Chairman of the Board, President and Chief Executive Officer |
| Raymond R. Mattie | | President, M&S Conversion Co., Inc. |
| Edward H. Owlett, III, | | President and CEO, Putnam Company |
| Leonard Simpson | | Attorney at law and Sullivan County District Attorney |
| James E. Towner | | General Manager, The Times Tribune |
| Ann M. Tyler | | Certified Public Accountant, Ann M. Tyler CPA, PC |
| Charles H. Updegraff, Jr. | | C&N Executive Vice President and Chief Operating Officer |
| | | |
| First State Bank Board Members |
| Carl E. Chase | | Pharmacist, retired |
| William O. Hatch | | President, Staffing & Payroll Solutions, Inc. |
| Karl W. Kroeck | | Farmer |
| Craig G. Litchfield | | Chairman, President and CEO, Citizens & Northern Corp. and Bank |
| Harold L. Miller | | Building construction, retired |
| Brian C. Schu | | Attorney at law |
| Charles H. Updegraff, Jr. | | Executive Vice President, COO, Citizens & Northern Bank |
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
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MESSAGE TO SHAREHOLDERS
(Continued)
RETIREMENTS
During 2008, twelve (12) employees retired with 288 total years of service. We thank them all for their commitment and hard work.
| | | | | |
• Ann Yuscavage, Liberty Branch Manager | | 46 Years of Service | | |
• Marion Pond, Athens Customer Service Representative | | 32 Years of Service | | |
• Judith Dates, Port Allegany Teller | | 30 Years of Service | | |
• Barbara Roupp, Liberty Branch Teller | | 28 Years of Service | | |
• David Schucker, Troy Branch Loan Officer | | 28 Years of Service | | |
• Helen Ferris, Dushore Branch Manager | | 27 Years of Service | | |
• Rose Bordas, Account Services Manager | | 20 Years of Service | | |
• Janet Norman, ATM/Visa Check Card Representative | | 18 Years of Service | | |
• Mary Bergh, First State Bank, Canisteo, Loan Officer | | 18 Years of Service | | |
• Mary Hokkanen, Dushore Branch Teller | | 16 Years of Service | | |
• Bonnie Duart, Troy Customer Service Representative | | 13 Years of Service | | |
• Sandy Parulas, Teller and CSR Specialist | | 12 Years of Service | | |
CONCLUSION
Finally, the successful merger of Citizens Trust Company into Citizens & Northern Bank was finalized in December with the renaming of the three (3) former Citizens Trust offices located in Coudersport, Port Allegany and Emporium. The positive contributions of Citizens Trust’s people and the bottom line financial enhancement from the merger are proving the merger to be a success.
During this difficult economic time, we thank you for your continued support.
OUR MISSION:
Our clients are our top priority. We will be proactive in the identification and understanding of our clients’ needs and goals, and in developing creative solutions to meet them. We will provide world-class service to each client at every opportunity. We will nurture and expand relationships by earning client trust.
C&N’s success is directly linked to our employees’ success. We understand the success of all depends on each of us being responsible and accountable for our role within the organization. We will foster an environment where teamwork is emphasized and each individual is valued and respected. We will provide ongoing training and education to promote professional and personal growth. We will maintain an open attitude and commitment to change.
We recognize the economic vitality of our local communities is the lifeblood of our institution. Accordingly, we will continue to support them through volunteerism, leadership and financial actions. We will maintain our image as a strong, independent, community-based financial institution.
We will continue to earn our shareholders’ confidence by producing consistent, long-term returns on investment. We will maintain a willingness to sacrifice, if necessary, short-term gains and benefits for larger, longer-term advantages. We understand our role is to identify and manage the risks and opportunities inherent in our business. In choosing new lines of business, each venture must be projected to have sufficient real growth potential to make the investment of capital desirable.
OUR OFFICES
| | | | | |
| Athens | | 428 S. Main St., Athens, PA | | 570-888-2291 |
| Canisteo | | 3 Main St., Canisteo, NY | | 607-698-4295 |
| Coudersport | | 10 N. Main St., Coudersport, PA 16915 | | 814-274-9150 |
| Dushore | | 111 W. Main St., Dushore, PA 18614 | | 570-928-8124 |
| East Smithfield | | Main St., East Smithfield, PA 18817 | | 570-596-3131 |
| Elkland | | 104 Main St., Elkland, PA 16920 | | 814-258-5111 |
| Emporium | | 135 E. Fourth St., Emporium, PA 15834 | | 814-486-1112 |
| Hornell | | 6250 County Rte. 64, Hornell, NY 14843 | | 607-324-4081 |
| Jersey Shore | | 230 Railroad St., Jersey Shore, PA 17740 | | 570-398-4555 |
| Knoxville | | 102 E. Main St., Knoxville, PA 16928 | | 814-326-4151 |
| Laporte | | 514 Main St., Laporte, PA 18626 | | 570-946-4011 |
| Liberty | | 4534 Williamson Trail, Liberty, PA 16930 | | 570-324-2331 |
| Mansfield | | 1085 Main St., Mansfield, PA 16933 | | 570-662-1111 |
| Monroeton | | RR2, Monroeton, PA 18832 | | 570-265-2157 |
| Muncy | | 3461 Route 405 Hwy., Muncy, PA 17756 | | 570-546-6666 |
| Old Lycoming | | 1510 Dewey Ave., Williamsport, PA 17701 | | 570-323-9305 |
| Port Allegany | | 100 Maple St., Port Allegany, PA 16743 | | 814-642-2571 |
| Ralston | | 24 Thompson St., Ralston, PA 17763 | | 570-995-5421 |
| Sayre | | 1827 Elmira St., Sayre, PA 18840 | | 570-888-2220 |
| South Williamsport | | 2 E. Mountain Ave., South Williamsport, PA 17702 | | 570-601-3016 |
| Tioga | | 41 Main St., Tioga, PA 16946 | | 570-835-5236 |
| Towanda | | 428 Main St., Towanda, PA 18848 | | 570-265-6171 |
| Troy | | Court House Square, Troy, PA 16947 | | 570-297-2158 |
| Wellsboro | | 90-92 Main St., Wellsboro, PA 16901 | | 570-724-3411 |
| Williamsport | | 130 Court St., Williamsport, PA 17701 | | 570-320-0100 |
| Wysox | | Route 6, Wysox, PA 18854 | | 570-265-9148 |
CITIZENS & NORTHERN CORPORATION 2008 ANNUAL HIGHLIGHTS
