Citizens & Northern 8K C&N Announces SECOND QUARTER 2016 UNAUDITED Financial RESULTS | CZNC 13 Jul 16

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(In Thousands, Except Per Share Data) (Unaudited)

	6 MONTHS ENDED						%
	JUNE 30,						INCREASE
	2016			2015			(DECREASE)
EARNINGS PERFORMANCE
Net Income	$	7,444		$	8,172			-8.91	%
Return on Average Assets		1.22	%		1.31	%		-6.87	%
Return on Average Equity		7.94	%		8.66	%		-8.31	%

BALANCE SHEET HIGHLIGHTS
Total Assets	$	1,231,018		$	1,255,722			-1.97	%
Available-for-Sale Securities		417,205			497,111			-16.07	%

Loans (Net)		719,913			656,518			9.66	%
Allowance for Loan Losses		7,929			7,300			8.62	%
Deposits and Repo Sweep Accounts		973,612			983,255			-0.98	%

OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold
with Servicing Retained		156,417			151,132			3.50	%
Trust Assets Under Management		847,280			833,762			1.62	%

SHAREHOLDERS' VALUE
(PER COMMON SHARE)
Net Income - Basic	$	0.61		$	0.67			-8.96	%
Net Income - Diluted	$	0.61		$	0.67			-8.96	%
Dividends	$	0.52		$	0.52			0.00	%
Common Book Value	$	15.79		$	15.33			3.00	%
Tangible Common Book Value	$	14.79		$	14.35			3.07	%
Market Value (Last Trade)	$	20.22		$	20.55			-1.61	%
Market Value / Common Book Value		128.06	%		134.05	%		-4.47	%
Market Value / Tangible Common Book Value		136.71	%		143.21	%		-4.54	%
Price Earnings Multiple (Annualized)		16.57			15.34			8.02	%
Dividend Yield (Annualized)		5.14	%		5.06	%		1.58	%
Common Shares Outstanding, End of Period		12,070,195			12,196,830			-1.04	%

SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets		14.65	%		14.07	%		4.12	%
Nonperforming Assets / Total Assets		1.40	%		1.26	%		11.11	%
Allowance for Loan Losses / Total Loans		1.09	%		1.10	%		-0.91	%
Total Risk Based Capital Ratio (a)		23.74	%		24.39	%		-2.67	%
Tier 1 Risk Based Capital Ratio (a)		22.67	%		23.26	%		-2.54	%
Common Equity Tier 1 Risk Based Capital Ratio (a)		22.67	%		23.26	%		-2.54	%
Leverage Ratio (a)		14.20	%		13.82	%		2.75	%

AVERAGE BALANCES
Average Assets	$	1,220,061		$	1,248,904			-2.31	%
Average Equity	$	187,477		$	188,621			-0.61	%

(a) Capital ratios for the most recent period are estimated.

QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION
(In Thousands) (Unaudited)	For the Three Months Ended:
	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2016		2016		2015		2015		2015		2015
Interest income	$	10,924	$	10,937	$	11,036	$	11,134	$	11,186	$	11,163
Interest expense		925		904		1,087		1,126		1,176		1,213
Net interest income		9,999		10,033		9,949		10,008		10,010		9,950
Provision for loan losses		318		368		319		302		221		3
Net interest income after provision
for loan losses		9,681		9,665		9,630		9,706		9,789		9,947
Other income		3,906		3,690		3,999		3,961		3,962		3,556
Net gains on available-for-sale securities		122		383		1,776		79		932		74
Loss on prepayment of borrowings		0		0		1,663		0		910		0
Other expenses		8,535		9,072		8,416		8,117		7,964		8,533
Income before income tax provision		5,174		4,666		5,326		5,629		5,809		5,044
Income tax provision		1,303		1,093		1,261		1,395		1,452		1,229
Net income	$	3,871	$	3,573	$	4,065	$	4,234	$	4,357	$	3,815
Net income per share – basic	$	0.32	$	0.29	$	0.33	$	0.35	$	0.36	$	0.31
Net income per share – diluted	$	0.32	$	0.29	$	0.33	$	0.35	$	0.36	$	0.31

QUARTERLY CONDENSED, CONSOLIDATED BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)	As of:
	June 30,		Mar. 31,		Dec. 31,		June 30,
	2016		2016		2015		2015
ASSETS
Cash & Due from Banks	$	27,436	$	41,173	$	36,061	$	35,405
Available-for-Sale Securities		417,205		413,606		420,290		497,111
Loans Held for Sale		381		526		280		192
Loans, Net		719,913		693,944		696,991		656,518
Intangible Assets		11,966		11,969		11,972		11,983
Other Assets		54,117		55,326		57,823		54,513
TOTAL ASSETS	$	1,231,018	$	1,216,544	$	1,223,417	$	1,255,722

LIABILITIES
Deposits	$	967,951	$	955,848	$	935,615	$	978,449
Repo Sweep Accounts		5,661		7,141		4,915		4,806
Total Deposits and Repo Sweeps		973,612		962,989		940,530		983,255
Borrowed Funds		58,656		57,503		87,348		77,916
Other Liabilities		8,220		7,742		8,052		7,578
TOTAL LIABILITIES		1,040,488		1,028,234		1,035,930		1,068,749

SHAREHOLDERS' EQUITY
Common Shareholders' Equity, Excluding
Accumulated Other Comprehensive Income/ Loss		183,636		182,914		184,959		182,887
Accumulated Other Comprehensive Income/ Loss:
Net Unrealized Gains/Losses on
Available-for-sale Securities		6,849		5,347		2,493		4,077
Defined Benefit Plans Adjustment, Net		45		49		35		9
TOTAL SHAREHOLDERS' EQUITY		190,530		188,310		187,487		186,973
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	1,231,018	$	1,216,544	$	1,223,417	$	1,255,722

AVAILABLE-FOR-SALE SECURITIES	June 30, 2016				March 31, 2016				December 31, 2015
(In Thousands)	Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value

Obligations of U.S. Government agencies	$	9,664	$	9,781	$	10,661	$	10,707	$	10,663	$	10,483
Obligations of states and political subdivisions:
Tax-exempt		110,702		116,056		107,269		111,959		103,414		107,757
Taxable		34,015		35,132		34,249		35,094		34,317		34,597
Mortgage-backed securities issued or guaranteed
by U.S. Government agencies or sponsored
agencies:
Residential pass-through securities		64,108		65,407		72,210		73,243		73,227		73,343
Residential collateralized mortgage obligations		175,889		177,980		179,731		180,860		193,145		191,715
Commercial mortgage-backed securities		11,120		11,239		0		0		0		0
Other collateralized debt obligations		1		1		7		7		9		9
Total debt securities		405,499		415,596		404,127		411,870		414,775		417,904
Marketable equity securities		1,171		1,609		1,253		1,736		1,680		2,386
Total	$	406,670	$	417,205	$	405,380	$	413,606	$	416,455	$	420,290

Summary of Loans by Type
(Excludes Loans Held for Sale)
(In Thousands)	June 30,			March 31,			Dec. 31,			June 30,
	2016			2016			2015			2015
Residential mortgage:
Residential mortgage loans - first liens	$	315,191		$	306,753		$	304,783		$	294,978
Residential mortgage loans - junior liens		22,159			21,622			21,146			21,502
Home equity lines of credit		39,054			38,627			39,040			39,140
1-4 Family residential construction		22,241			20,010			21,121			19,651
Total residential mortgage		398,645			387,012			386,090			375,271
Commercial:
Commercial loans secured by real estate		153,070			154,646			154,779			135,063
Commercial and industrial		82,390			71,628			75,196			61,427
Political subdivisions		41,026			38,364			40,007			40,908
Commercial construction and land		9,193			7,445			5,122			7,826
Loans secured by farmland		6,615			7,168			7,019			7,565
Multi-family (5 or more) residential		8,173			8,393			9,188			8,561
Agricultural loans		4,692			4,492			4,671			4,287
Other commercial loans		11,904			11,387			12,152			12,809
Total commercial		317,063			303,523			308,134			278,446
Consumer		12,134			11,070			10,656			10,101
Total		727,842			701,605			704,880			663,818
Less: allowance for loan losses		(7,929	)		(7,661	)		(7,889	)		(7,300	)
Loans, net	$	719,913		$	693,944		$	696,991		$	656,518

Loans Held for Sale
(In Thousands)	June 30,			March 31,			Dec. 31,			June 30,
	2016			2016			2015			2015
Residential mortgage loans originated
and serviced - outstanding balance	$	156,798		$	154,304		$	152,728		$	151,324
Less: outstanding balance of loans sold		(156,417	)		(153,778	)		(152,448	)		(151,132	)
Loans held for sale, net	$	381		$	526		$	280		$	192

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,
	2016			2016			2016			2015
Balance, beginning of period	$	7,661		$	7,889		$	7,889		$	7,336
Charge-offs		(63	)		(613	)		(676	)		(299	)
Recoveries		13			17			30			39
Net charge-offs		(50	)		(596	)		(646	)		(260	)
Provision for loan losses		318			368			686			224
Balance, end of period	$	7,929		$	7,661		$	7,929		$	7,300

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)
(In Thousands)
	June 30,			March 31,			Dec 31,			June 30,
	2016			2016			2015			2015
Impaired loans with a valuation allowance	$	1,275		$	1,420		$	1,933		$	3,880
Impaired loans without a valuation allowance		8,055			8,210			8,041			7,764
Total impaired loans	$	9,330		$	9,630		$	9,974		$	11,644

Total loans past due 30-89 days and still accruing	$	6,945		$	11,373		$	7,057		$	3,803

Nonperforming assets:
Total nonaccrual loans	$	10,504		$	10,944		$	11,517		$	12,060
Total loans past due 90 days or more and still accruing		4,654			3,957			3,229			2,529
Total nonperforming loans		15,158			14,901			14,746			14,589
Foreclosed assets held for sale (real estate)		2,052			1,584			1,260			1,223
Total nonperforming assets	$	17,210		$	16,485		$	16,006		$	15,812

Loans subject to troubled debt restructurings (TDRs):
Performing	$	1,047		$	1,167		$	1,186		$	1,119
Nonperforming		5,102			5,146			5,178			5,216
Total TDRs	$	6,149		$	6,313		$	6,364		$	6,335

Total nonperforming loans as a % of loans		2.08	%		2.12	%		2.09	%		2.20	%
Total nonperforming assets as a % of assets		1.40	%		1.36	%		1.31	%		1.26	%
Allowance for loan losses as a % of total loans		1.09	%		1.09	%		1.12	%		1.10	%
Allowance for loan losses as a % of nonperforming loans		52.31	%		51.41	%		53.50	%		50.04	%

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
	6/30/2016			Return/			3/31/2016			Return/			6/30/2015			Return/
	Average			Cost of			Average			Cost of			Average			Cost of
	Balance			Funds %			Balance			Funds %			Balance			Funds %
EARNING ASSETS
Available-for-sale securities,
at amortized cost:
Taxable	$	297,608			2.02	%	$	305,880			2.09	%	$	389,705			2.06	%
Tax-exempt		108,652			4.79	%		105,406			5.23	%		116,421			5.33	%
Total available-for-sale securities		406,260			2.76	%		411,286			2.89	%		506,126			2.81	%
Interest-bearing due from banks		24,250			0.60	%		20,348			0.47	%		21,970			0.46	%
Loans held for sale		540			5.96	%		452			5.34	%		145			8.30	%
Loans receivable:
Taxable		650,213			5.00	%		640,959			5.00	%		592,188			5.25	%
Tax-exempt		61,669			4.50	%		60,677			4.54	%		49,026			4.88	%
Total loans receivable		711,882			4.96	%		701,636			4.96	%		641,214			5.22	%
Total Earning Assets		1,142,932			4.09	%		1,133,722			4.13	%		1,169,455			4.09	%
Cash		16,522						15,588						17,072
Unrealized gain/loss on securities		7,737						7,055						10,260
Allowance for loan losses		(7,756	)					(7,932	)					(7,226	)
Bank premises and equipment		15,390						15,458						16,095
Intangible Asset - Core Deposit Intangible		25						29						44
Intangible Asset - Goodwill		11,942						11,942						11,942
Other assets		38,938						38,530						38,065
Total Assets	$	1,225,730					$	1,214,392					$	1,255,707

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking	$	196,918			0.15	%	$	195,142			0.12	%	$	199,373			0.11	%
Money market		200,896			0.17	%		191,514			0.17	%		196,537			0.15	%
Savings		132,353			0.10	%		130,003			0.10	%		128,879			0.10	%
Certificates of deposit		117,825			0.75	%		113,411			0.72	%		122,634			0.67	%
Individual Retirement Accounts		104,030			0.42	%		105,562			0.41	%		111,765			0.41	%
Other time deposits		1,140			0.00	%		804			0.00	%		1,125			0.00	%
Total interest-bearing deposits		753,162			0.28	%		736,436			0.26	%		760,313			0.25	%
Borrowed funds:
Short-term		23,225			0.71	%		35,683			0.70	%		9,185			0.22	%
Long-term		38,649			3.77	%		38,725			3.77	%		69,211			4.01	%
Total borrowed funds		61,874			2.62	%		74,408			2.30	%		78,396			3.57	%
Total Interest-bearing Liabilities		815,036			0.46	%		810,844			0.45	%		838,709			0.56	%
Demand deposits		215,443						208,163						220,839
Other liabilities		8,304						7,378						7,756
Total Liabilities		1,038,783						1,026,385						1,067,304
Stockholders' equity, excluding
other comprehensive income/loss		181,882						183,376						181,683
Other comprehensive income/loss		5,065						4,631						6,720
Total Stockholders' Equity		186,947						188,007						188,403
Total Liabilities and Stockholders' Equity	$	1,225,730					$	1,214,392					$	1,255,707
Interest Rate Spread					3.63	%					3.68	%					3.53	%
Net Interest Income/Earning Assets					3.76	%					3.81	%					3.69	%

Total Deposits (Interest-bearing
and Demand)	$	968,605					$	944,599					$	981,152

(1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 35%.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
	6 Months						6 Months
	Ended			Rate of			Ended			Rate of
	6/30/2016			Return/			6/30/2015			Return/
	Average			Cost of			Average			Cost of
	Balance			Funds %			Balance			Funds %
EARNING ASSETS
Available-for-sale securities,
at amortized cost:
Taxable	$	301,744			2.06	%	$	388,909			2.11	%
Tax-exempt		107,029			5.01	%		117,044			5.34	%
Total available-for-sale securities		408,773			2.83	%		505,953			2.85	%
Interest-bearing due from banks		22,299			0.54	%		24,468			0.42	%
Loans held for sale		496			5.68	%		117			8.62	%
Loans receivable:
Taxable		645,586			5.00	%		587,370			5.31	%
Tax-exempt		61,173			4.52	%		45,495			5.00	%
Total loans receivable		706,759			4.96	%		632,865			5.29	%
Total Earning Assets		1,138,327			4.11	%		1,163,403			4.13	%
Cash		16,055						16,602
Unrealized gain/loss on securities		7,396						10,442
Allowance for loan losses		(7,844	)					(7,308	)
Bank premises and equipment		15,424						16,173
Intangible Asset - Core Deposit Intangible		27						47
Intangible Asset - Goodwill		11,942						11,942
Other assets		38,734						37,603
Total Assets	$	1,220,061					$	1,248,904

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking	$	196,030			0.14	%	$	195,560			0.11	%
Money market		196,205			0.17	%		195,690			0.15	%
Savings		131,178			0.10	%		128,369			0.10	%
Certificates of deposit		115,618			0.73	%		122,322			0.69	%
Individual Retirement Accounts		104,796			0.42	%		112,780			0.41	%
Other time deposits		972			0.00	%		965			0.00	%
Total interest-bearing deposits		744,799			0.27	%		755,686			0.26	%
Borrowed funds:
Short-term		29,454			0.70	%		7,610			0.16	%
Long-term		38,687			3.77	%		71,105			4.02	%
Total borrowed funds		68,141			2.44	%		78,715			3.65	%
Total Interest-bearing Liabilities		812,940			0.45	%		834,401			0.58	%
Demand deposits		211,803						217,945
Other liabilities		7,841						7,937
Total Liabilities		1,032,584						1,060,283
Stockholders' equity, excluding
other comprehensive income/loss		182,629						181,813
Other comprehensive income/loss		4,848						6,808
Total Stockholders' Equity		187,477						188,621
Total Liabilities and Stockholders' Equity	$	1,220,061					$	1,248,904
Interest Rate Spread					3.66	%					3.55	%
Net Interest Income/Earning Assets					3.79	%					3.71	%

Total Deposits (Interest-bearing
and Demand)	$	956,602					$	973,631

(1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 35%.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

COMPARISON OF NONINTEREST INCOME
(In Thousands)	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2016			2016			2015			2016			2015
Service charges on deposit accounts	$	1,164		$	1,138		$	1,305		$	2,302		$	2,327
Service charges and fees		123			94			123			217			236
Trust and financial management revenue		1,251			1,144			1,241			2,395			2,355
Brokerage revenue		180			173			206			353			425
Insurance commissions, fees and premiums		27			21			23			48			63
Interchange revenue from debit card transactions		487			463			500			950			974
Net gains from sales of loans		295			168			183			463			330
Decrease in fair value of servicing rights		(108	)		(71	)		(33	)		(179	)		(150	)
Increase in cash surrender value of life insurance		93			96			102			189			199
Other operating income		394			464			312			858			759
Total other operating income, before realized
gains on available-for-sale securities, net	$	3,906		$	3,690		$	3,962		$	7,596		$	7,518

COMPARISON OF NONINTEREST EXPENSE
(In Thousands)	Three Months Ended						Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2016		2016		2015		2016		2015
Salaries and wages	$	3,913	$	3,887	$	3,603	$	7,800	$	7,090
Pensions and other employee benefits		1,002		1,437		935		2,439		2,320
Occupancy expense, net		560		609		640		1,169		1,362
Furniture and equipment expense		439		427		467		866		921
FDIC Assessments		155		142		148		297		299
Pennsylvania shares tax		323		322		317		645		635
Professional fees		282		289		140		571		296
Automated teller machine and interchange expense		267		249		255		516		501
Software subscriptions		251		241		211		492		408
Other operating expense		1,343		1,469		1,248		2,812		2,665
Total noninterest expense, before loss on
prepayment of borrowings		8,535		9,072		7,964		17,607		16,497
Loss on prepayment of borrowings		0		0		910		0		910
Total noninterest expense	$	8,535	$	9,072	$	8,874	$	17,607	$	17,407

Citizens & Northern (CZNC) 8-KC&N Announces SECOND QUARTER 2016 UNAUDITED Financial RESULTS