Exhibit 99.2

[C&N VOLUNTEERS LOGO]

enhancing the lives

of our neighbors

in the communities

we serve.

[PICTURES]

49 corridor enterprise zone
alparon community park
american cancer society
american heart association
athens chamber of commerce
athens rotary
athens township police pension
austinburg methodist church
B.O.O.M.
big brothers-big sisters of bradford county
big brothers-big sisters of wellsboro
bradford county historical society
bradford county industrial development authority
bradford county pool league
bradford/sullivan american red cross
bradford/sullivan county eye bank
bradford/sullivan county outstanding young women
butler hill baptist church
calvary baptist church
calvary tabernacle assembly of god church
camptown little league
canton borough
canton lions club
canton park cemetery
central bradford county chamber of commerce
central bradford county united way
cogan house tv co-op
cooks pond association
corey creek golf club
cub scouts
cowanesque valley rod & gun club
dexter baptist church
ducks unlimited
dushore fire company
dushore midget league
dushore music club
eagles mere ambulance association
eldredsville firemen's relief association
eldredsville volunteer fire company
elkland area chamber of commerce
elkland area community library
elkland jubilee
elkland little league
endless mountain church league
endless mountain firemen's relief association
first presbyterian church
forksville area sportsmen association
forksville volunteer fire company
forksville united methodist church
franklin township

2002 ANNUAL HIGHLIGHTS

[LOGO] CITIZENS & NORTHERN CORPORATION

galeton little league
girl scouts usa
glenwood cemetery
good christian radio broadcasting
grand canyon airport authority
grandparents against illiteracy in schools
greater hughesville business association
greater mansfield area chamber of commerce
greater valley assembly of god
greater valley chamber of commerce
green free library
grover church of christ
growth resources of wellsboro
guthrie health services
habitat for humanity - williamsport chapter
herrickville volunteer fire company
herrickville wesleyan church
holiday veterans memorial
holiday christian & missionary alliance church
hope lutheran church
horance b. packer foundation
independent bible church of wellsboro
international managers council
jack russell terrier association
just us kids parent care club
kids club
knoxville cemetery association
knoxville ladies vfw
knoxville players
knoxville united methodist church
lackawanna college advisory board
lake makoma association
lambs creek sportsmen's club
laporte woman's club
laporte little theatre
laporte sesquicentennial committee
laporte volunteer fire company
laurel festival
laurel health services
laurel health system
laurel wellness center
liberty blockhouse festival
liberty booster club
liberty community 4-h club
liberty high school alumni
liberty salvation army
liberty visioning committee
liberty volunteer fire company
little league
lycoming college
lycoming county chapter american red cross
lycoming hospice
lycoming united way
mansfield band booster club
mansfield instructional ball league
mansfield international student organization
mansfield kiwanis club
mansfield p.e.o. woman's organization

[PICTURE]
"To me, the amount of time I spent volunteering for various organizations is
just a natural extension of my desire to serve people. When most people think
about a financial institution's employees,they think that we are in the business
of finance. That is only partially true. I believe that mostly we're in the
"people" business - that is to say the business of serving people.
Larry Alderson
AVP, Trust Officer

[PICTURE]
"I was privileged to grow up in a small town with caring parents and five
siblings. We learned early to give and take. Reaching out brought joy back.
Actually, all I can say is giving of yourself increases the joy in your life.
Volunteering is gaining happiness and helping people. It is impossible to give
more than you receive back in joy.
Mary Rose Sacks
AVP, Knoxville Branch Manager

[PICTURE]
"I strongly believe if you volunteer your time to a local civic,non-profit or
youth organization, that ANYONE can make a difference in helping better the
quality of life in your community.
Dave Schucker
AVP, Loan Officer,Troy

[LOGO] CITIZENS & NORTHERN CORPORATION

[PICTURE]
"Everyone needs to take a turn in helping the communities that they live in.
It's not a burden, but a privilege.
Terry Depew
VP, Regional Manager
Athens Office

[PICTURE]
"Organizations need volunteers and the more volunteers the lighter the load. It
is very satisfying to help out.
Diane Elvidge
AC, Teller
East Smithfield

A MESSAGE TO OUR SHAREHOLDERS...

We certainly live at a challenging time. Terrorism, the prospect of war in
Iraq, never-ending unrest in the Middle East, and North Korea's possession of
nuclear weapons present dangers and threats to life in the democratic free
world. Investors' and shareholders' faith in corporate America has been severely
damaged by accounting and corporate governance scandals. A recent recession, a
slow recovery, fears of deflation, mortgage and short-term interest rates at
40-year lows, and an unprecedented three consecutive years of decline in the
U.S. equity market only add to the uncertainties and challenges. While rural
north central Pennsylvania seems removed from these more global political and
economic issues, we are nonetheless affected. Low interest rates have benefited
borrowers, who have refinanced existing loans and mortgages at a record pace
over the past two years. Unfortunately, depositors have seen the rates offered
on their accounts drop as precipitously. Planning and saving for retirement or
college education is more of a challenge now that more realistic investment
returns must be used to project future values. Wealth creation and preservation
are both a challenge.

VALUES

Through it all Citizens & Northern has continued to deliver value and
stability to shareholders, communities, clients and employees. We define
ourselves by our shared values, vision and mission. We believe that these key
and fundamental values provide the foundation of what we are and what we want to
be:

- Client-Focus - We understand the needs, values and aspirations of our
customers; create quality products to address those needs; and provide
professional, consistent and prompt service and advice.

- Excellence - We must strive to be the best at everything we do.

- Integrity - Honesty and adherence to the highest ethical standards is
non-negotiable.

- Teamwork - We must work as a unified and dedicated team of specialists
to deliver on our promises to clients.

- Respect - We trust the capabilities, character and judgment of our
colleagues.

- Responsibility and Accountability - Each employee of C&N takes
ownership of the opportunities and challenges we identify and
encounter daily.

VISION

The C&N professionals will be recognized by the communities and clients we
serve as the foremost source of advice, counsel and solutions for their changing
financial needs.

I believe in the people of C&N. Our people have brought us to where we are
and will take us to even higher levels of service, profitability and quality for
all of our constituencies.

[PICTURE]
Craig G. Litchfield
President, CEO
"We define ourselves by our shared values, vision and mission."

2002 FINANCIAL HIGHLIGHTS

The continued low rate environment was, for a second consecutive year, very
beneficial to our interest margin and our ability to grow our earning assets -
loans and securities. The combination of a 4.8% increase in interest and
dividend income and a 7.2% decrease in interest expense produced an increase in
interest margin of nearly 18%. Other Income increased by over 8% and realized
net gains on securities increased 50% due to significant price improvements in
bank stocks held in our portfolios. Other Expenses, a major component of which
is employee wages and benefits, increased by 11.7% as we continue to build and
enhance our delivery system. Net Income increased by over 24% to nearly $15
million. This is the highest net income in history for your company. Total
dividends paid increased by 9.4% over the previous year. Additionally, for the
28th consecutive year a 1% stock dividend was declared.

Available-for-Sale securities increased to over $512 million, or 18%. Loans (net
of Allowance for Loan Losses) increased $71.4 million or 19%. Deposits and Repo
Sweep balances grew by nearly $64.5 million, or 10.8%. Borrowings increased by
41.3% to support our securities and loan growth. Total Assets increased by 17.5%
to just over one billion dollars.

Loan quality as measured by Nonperforming Assets to Total Assets (0.12%) and Net
Charge-Offs to Total Loans (0.1%) remains strong.

The book value of one share of our stock
(excluding adjustment for unrealized gains and
losses on Available-for-Sale securities) increased by
9.3% to $19.62. The Shareholder Equity to

(Continued Page 2)

CITIZENS & NORTHERN CORPORATION PAGE 1

[PICTURE]
"Volunteering is an investment in both myself and the organizations I serve.
Support from my employer helps me improve my quality of life as well as those I
choose to donate time to.
Shawn Schreck
VP, Compliance and
Security Officer
Wellsboro Office

[PICTURE]
"I've always enjoyed sports and working with kids, so coaching was a natural fit
for me. Hopefully, they've learned baseball skills as well as some life lessons
along the way I've learned a lot from them as well.

Bob Miller
Courier, Wellsboro
A MESSAGE TO OUR SHAREHOLDERS...(CONT.)

(From Page 1)

Average Assets ratio is a strong 11% and regulatory Risk-Based Capital Ratio
stands equally strong 20.1%. As of year-end our was trading at $31.00, which is
an 18.6% from the end of 2001. The dividend yield stock for 2002 was 3.74%.

Trust Assets Under Management shrunk 6.1% due mostly to the continued weakness
equity markets. Nevertheless, our Trust Financial Management staff has continued
to increase the number of client relationships. Additionally, during 2002 we
introduced a Daily Valuation 401(k) product that telephone and Internet access
to account information. During 2003, we will provide and Asset Management
clients who so desire secure Internet access to their accounts.

In January of 2002, renovations and remodeling of the Bower Building in
Wellsboro were completed. The building now serves as the base for our
broker/dealer and insurance subsidiary, C&N Financial Services; and is the home
of C&N University, our employee training and education program. Our Tioga Office
was expanded and remodeled to include a two lane covered drive-in facility and a
walk-in vault. Additionally, our Athens Office lobby and teller area received a
much delayed and needed remodeling. Our plans call for more investment in our
existing infrastructure in the form of renovation and remodeling to meet the
growth in customer relationships and to deal with general wear and tear.

Looking into the future, we anticipate another year of good financial
performance in 2003. However, we believe that it will be difficult to duplicate
the earnings growth that we have seen in 2001 and 2002. With interest rates at
historic lows, there is not much farther for them to fall. Most economists are
predicting a rising interest rate environment as the U. S. economy recovers from
the brief recession and when the uncertainty of war with Iraq is resolved. Our
interest margin will be affected as higher yielding loans mature or are
refinanced and as higher yielding investments mature or are called. We began
seeing some reduction in the margin in the fourth quarter of 2002. If interest
rates do begin to rise, we will experience some additional stress on the
interest margin because our liabilities (deposits and borrowings) reprice faster
than our assets (loans and investment securities). We continue to look for
opportunities to increase our non-interest revenues to make us less reliant upon
interest rates.

"Our plans call for more investment in our existing infrastructure . . . to meet
the growth in customer relationships."

PRODUCTS AND SERVICES

In 2002, we introduced the Index Powered CD(SM) IRA giving our IRA customers
another investment alternative. Like any other deposit the Index Powered CD(SM)
IRA is protected by FDIC insurance and provides investors with a return that is
tied to the performance of the Standard & Poor's 500((C)) Index. The FDIC and
C&N guarantee the investor's principal, subject to FDIC insurance limitations
and assuming the CD is held to maturity. Therefore, if the Index drops,
investors will get at least their principal back. Thus the Index Powered CD(SM)
IRA has the potential to outperform traditional savings products. If the Index
Powered CD(SM) IRA is withdrawn prior to maturity, the investor could lose some
principal.

Through our Insurance and Broker/Dealer subsidiary, C&N Financial Services, we
began offering Section 529 Plans to help our customers save for their children's
and grandchildren's college educations. These plans are state sponsored,
qualified-tuition saving programs. 529's provide tax-free growth of earnings for
qualified withdrawals. 529's utilize a wide array of mutual funds for their
investments and have very attractive benefits for those saving for college. They
include, but are not limited to, control of the account, higher contribution
limits, no age restrictions, no income restrictions and multiple investment
choices. Individuals and Employers can set up these programs.

In 2002, we introduced the Sammy Saver(TM) Ju$t for Kid$ program. Sammy Saver
is a life-size beetle-like mascot that has visited area schools to deliver
education to young people related to saving, budgeting and responsible
borrowing. We have created special Sammy Saver savings accounts as part of the
program. Sammy will be appearing in local parades and in advertising of products
for children like 529 Plans and Educational Savings Accounts. With children's
financial illiteracy at an all-time high in our country, we believe the Sammy
Saver program will make a difference for the children in our market.

(Continued Page 3)

CITIZENS & NORTHERN CORPORATION PAGE 2

[PICTURE]
"Growing up, I remembered mostly the volunteers who molded me through sports and
Scouting. Returning this to young adults through sports, Scouting, church and
community development is a rich reward to me personally.
Larry Pick, AVP,
Mortgage Specialist
Muncy Office

[PICTURE]
"The organizations that I volunteer for are church related programs for
children. I enjoy working with the children because they have a zest for life,
are honest and are open to hear the Gospel message. I am always refreshed after
spending time with them.
Sue Hunsberger
Loan Processor
Wellsboro Office

A MESSAGE TO OUR SHAREHOLDERS...(CONT.)

(From Page 2)

THE FUTURE

C&N's management and board of directors will strive to build an organization
that will continue its quest to be the premier, locally-based financial
institution in its market. Maximizing long-term shareholder value, delivering
quality, high-value, relationship-based client service, supporting and
strengthening the socio-economic systems in our communities and being the
employer of choice are our enduring objectives.

Finally, at our February 2003 directors meeting, the board reluctantly
accepted Dave Pennypacker's request to retire from his position as director and
as chair of the Executive Committee. Dave's request was driven by both medical
and personal reasons. Dave joined the board of directors in 1993 and immediately
earned the admiration and respect of his fellow directors. Dave's CPA
background, his knowledge of business and his sound judgment have greatly
enhanced our corporate governance processes considerably over the past 10 years.
Dave has agreed to accept a role as Director Emeritus and will continue to serve
as a Wellsboro Advisory and Tioga County Regional Board member. Dave has been a
mentor and friend to us all. We thank him for his contributions and commitment
to C&N.

TIOGA OFFICE HAS A BRAND NEW LOOK!

The major project for Citizens & Northern Bank this year was the renovation
of the Tioga Branch office.

The transformation included expanding the facility from two to four offices
and installing a new, full size vault. A second drive-up lane was added, along
with a new customer service office.

The major construction project was unveiled for the public during an open
house celebration in January.

The week-long event culminated with a ribbon cutting, refreshments and
drawings for prizes.

The renovation project at Tioga is another indication of C&N's commitment
to making all of its offices as user-friendly as possible, according to Craig G.
Litchfield, chairman, president and CEO.

[PICTURE]
Tioga Mayor Curtis Osterhoudt congratulates Craig G. Litchfield on the Tioga
renovations.

SAMMY MAKES A BIG IMPACT!

Sammy Saver, C&N Bank's favorite "spokesbug" and mascot, has proven a big hit
with people of all ages.

This year Sammy embarked on summer and holiday tours, traveling throughout
C&N country. Sammy promotes C&N's highly successful "Ju$t For Kid$" savings
program, which is open to children age 12 and under.

Another successful aspect of the Sammy Saver program has been school
visitations. This fall, the C&N Bank Marketing Department sent letters to local
schools advising teachers that Sammy, armed with a full curriculum to teach
children the value of saving money, was available to visit classrooms. A number
of local schools have participated in the Sammy Saver program. Programs are
available for young people of all age levels.

[PICTURE]
Children from a nearby day care center visit with Sammy at the Ralston Branch
office.

CITIZENS & NORTHERN CORPORATION PAGE 3

[PICTURE]
"I believe it's up to each of us to give back to our community as those before
us gave.
Jeff Aeppli
AVP, Loan Officer
Wysox Office

[PICTURE]
"I feel volunteerism is vital to the well-being of my community. I have chosen
to be an active member of several organizations in order to serve my community
in many ways.
Linda Etzel
AC, Branch Manager
Laporte Office

FIVE-YEAR PERFORMANCE

Net Income (In Millions)
[GRAPH]
1998 1999 2000 2001 2002
$11.1 $11.5 $8.5 $12.1 $15.0

Total Assets (In Millions)
[GRAPH]
1998 1999 2000 2001 2002
$646 $706 $719 $867 $1,019

Total Stockholders' Equity ((In Millions)
[GRAPH]
1998 1999 2000 2001 2002
$90.6 $76.6 $89.0 $100.2 $115.8

Deposits (In Millions)
[GRAPH]
1998 1999 2000 2001 2002
$477 $500 $529 $576 $640

Net Loans (In Millions)
[GRAPH]
1998 1999 2000 2001 2002
$286 $306 $323 $374 $445

Cash Dividends Declared
[GRAPH]
1998 1999 2000 2001 2002
$0.82 $0.90 $0.98 $1.06 $1.16
(Per share,historical basis*)
*Plus 1 stock dividend each year

CITIZENS & NORTHERN CORPORATION PAGE 4

[PICTURE]
" I began working with young people when my own children were small and continue
to do so, believing that they are, indeed, our future.
Bonnie Bennett
AC/CSR, Dushore

[PICTURE]
" I work and live in my community and if it takes volunteer work to make it a
better community, I'm here to help in any way I can.
Pat Church
Teller, Elkland

QUARTERLY SHARE DATA

Trades of the Corporation's stock are executed through various brokers who
maintain a market in the Corporation's stock. Information regarding sales prices
of the Corporation's stock is available through the OTC Bulletin Board
(www.otcbb.com). The Corporation's stock is not listed or traded on NASDAQ or a
national securities exchange. The Corporation's stock symbol is CZNC.OB.

The following table sets forth the approximate high and low sales prices of the
common stock during 2002 and 2001:

2002 2001
----------------------------------------- -----------------------------------------
High Low Dividend Declared High Low Dividend Declared
per Quarter per Quarter

First Quarter $28.50 $24.50 $0.28 $22.00 $20.00 $0.26
Second Quarter 30.00 27.70 0.28 21.75 20.41 0.26
Third Quarter 32.00 29.30 0.30 23.45 21.00 0.26
Fourth Quarter 33.00 30.15 0.30 26.50 23.10 0.28
plus 1% stock plus 1% stock
dividend dividend

COMMON STOCK AND PER SHARE DATA

2002 2001 2000 1999 1998
--------- --------- --------- --------- ---------

Net income per share - basic ....................... $2.80 $2.25 $1.58 $2.14 $2.06
Net income per share - diluted ..................... $2.79 $2.25 $1.58 $2.14 $2.06
Cash dividends declared per share .................. $1.16 $1.04 $0.95 $0.87 $0.78
Cash dividends declared per share - historical basis $1.16 $1.06 $0.98 $0.90 $0.82
Stock dividend ..................................... 1% 1% 1% 1% 1%
Stockholders' equity per share (a) ................. $21.70 $18.76 $16.58 $14.29 $16.89

Stockholders' equity per share, excluding
accumulated other comprehensive income (loss) (a) .. $19.42 $17.77 $16.57 $15.94 $14.67

Weighted average shares outstanding - basic ........ 5,339,449 5,348,963 5,363,232 5,362,861 5,367,497
Weighted average shares outstanding - diluted ...... 5,354,041 5,350,452 5,364,386 5,368,325 5,377,392
Number of shares outstanding at year end ........... 5,285,606 5,234,800 5,207,244 5,153,729 5,102,028

(a) For purposes of this computation, the number of shares outstanding has been
increased for the effects of 1% stock dividends issued in January following each
year-end.

KNOWN "MARKET MAKERS" WHO HANDLE CITIZENS & NORTHERN CORPORATION STOCK
TRANSACTIONS ARE:

BAIRD PATRICK & CO.
20 Exchange Place
New York, NY 10005
(212)-493-6619

F.J. MORRISSEY & CO., INC.
BOENNING &
SCATTERGOOD, INC.
4 Tower Bridge - Suite 300
200 Barr Harbor Drive
West Conshohocken,PA 19428
(800)-842-8928

FERRIS, BAKER WATTS, INC.
6 Bird Cage Walk
Holidaysburg, PA 16648
(800)-343-5149

MONROE SECURITIES, INC
47 State Street
Rochester, NY 14614
(800)-766-5560

RBC DAIN RAUSCHER
3 Times Square, 24th Floor
New York, NY 10036
(866)-835-1422

RYAN, BECK & COMPANY
3 Parkway
Philadelphia, PA 19102
(800)-342-2325

SANDLER O'NEILL &
PARTNERS, LP
919 Third Avenue, 6th Floor
New York, NY 10022
(800)-635-6851

INDEPENDENT AUDITORS
PARENTE RANDOLPH, PC
400 Market Street
Williamsport, PA 17701

INVESTOR INFORMATION
ANNUAL MEETING OF
SHAREHOLDERS
The Annual Meeting of Shareholders will be held in the Arcadia Theater,
Wellsboro, PA, at 2:00 p.m. Tuesday, April 15, 2003.

General shareholder inquiries should be sent to:

CITIZENS & NORTHERN CORPORATION
90-92 Main Street, P.O. Box 58
Wellsboro, PA 16901

STOCK TRANSFER AGENT
American Stock Transfer & Trust Co.
59 Maiden Lane, Plaza Level
New York, NY 10038
(800)-278-4353

CITIZENS & NORTHERN CORPORATION PAGE 5

FIVE YEAR SUMMARY OF OPERATIONS

(In thousands) 2002 2001 2000 1999 1998
- -------------- ---- ---- ---- ---- ----

INCOME STATEMENT
Interest income ................................. $57,285 $54,661 $51,643 $48,036 $45,183
Interest expense ................................ 26,315 28,356 30,145 24,571 22,693
- --------------------------------------------------------------------------------------------------------------
Interest margin ................................. 30,970 26,305 21,498 23,465 22,490
Provision for loan losses ....................... 940 600 676 760 763
- --------------------------------------------------------------------------------------------------------------
Interest margin after provision for loan losses . 30,030 25,705 20,822 22,705 21,727
Other income .................................... 6,624 6,120 5,002 6,823 6,359
Securities gains ................................ 2,888 1,920 1,377 3,043 3,001
Other expenses .................................. 20,849 18,671 16,906 17,732 16,483
- --------------------------------------------------------------------------------------------------------------
Income before income tax provision .............. 18,693 15,074 10,295 14,839 14,604
Income tax provision ............................ 3,734 3,022 1,819 3,354 3,527
- --------------------------------------------------------------------------------------------------------------
Net income ...................................... $14,959 $12,052 $8,476 $11,485 $11,077
==============================================================================================================
BALANCE SHEET AT YEAR END
Total securities (1) ............................ $513,597 $437,398 $343,596 $356,287 $327,309
Gross loans, excluding unearned discount ........ 451,145 379,228 328,305 310,892 291,003
Total assets .................................... 1,018,768 866,999 719,335 705,898 646,298
Total deposits .................................. 640,304 576,274 528,967 500,474 476,518
Stockholders' equity, excluding accumulated
other comprehensive income ..................... 103,691 94,903 88,887 85,507 78,645
Total stockholders' equity ...................... 115,837 100,187 88,969 76,623 90,567

AVERAGE BALANCE SHEET
Total securities, at amortized cost (1) ......... 470,764 412,654 371,360 349,133 300,692
Gross loans, excluding unearned discount ........ 410,670 346,353 318,382 301,584 285,275
Earning assets .................................. 881,434 759,007 689,743 650,717 585,966
Total assets .................................... 943,001 805,229 704,221 680,864 626,102
Total assets excluding unrealized gains or losses 930,539 798,590 717,052 672,999 606,163
Total deposits .................................. 613,392 544,579 503,848 483,858 448,601
Stockholders' equity, excluding accumulated
other comprehensive income ..................... 99,361 91,703 87,258 81,767 74,810
Stockholders' equity ............................ 107,595 96,021 78,792 87,143 87,997

FINANCIAL RATIOS
Return on stockholders' equity, excluding
accumulated other comprehensive income (2) ..... 15.06% 13.14% 9.71% 14.05% 14.81%
Return on stockholders' equity (2) .............. 13.90% 12.55% 10.76% 13.18% 12.59%
Return on assets (2) ............................ 1.59% 1.50% 1.20% 1.69% 1.77%
Stockholders' equity to assets, excluding
accumulated other comprehensive income (2) ..... 10.68% 11.48% 12.17% 12.15% 12.34%
Stockholders' equity to assets (2) .............. 11.41% 11.92% 11.19% 12.80% 14.05%
Stockholders' equity to loans (2) ............... 26.20% 27.72% 24.75% 28.90% 30.85%
Net income to:
Total interest income .......................... 26.11% 22.05% 16.41% 23.91% 24.52%
Interest margin ................................ 48.30% 45.82% 39.43% 48.95% 49.25%
Dividends as a % of net income .................. 41.17% 46.08% 60.19% 40.39% 37.81%

(1) Includes available-for-sale and held-to maturity securities, and
interest-bearing cash and due from banks

(2) Financial ratios calculated based on average balance sheet data

CITIZENS & NORTHERN CORPORATION PAGE 6

QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents summarized quarterly financial data for 2002
and 2001.

(IN THOUSANDS,EXCEPT PER SHARE DATA) 2002 QUARTER ENDED
MARCH 31, JUNE 30, SEPT.30, DEC.31

Interest income ............................... $13,642 $14,523 $14,675 $14,445
Interest expense .............................. 6,316 6,745 6,675 6,579
- ---------------------------------------------------------------------------------------
Interest margin ............................... 7,326 7,778 8,000 7,866
Provision for loan losses ..................... 180 180 280 300
- ---------------------------------------------------------------------------------------
Interest margin after provision for loan losses 7,146 7,598 7,720 7,566
Other income .................................. 1,687 1,681 1,642 1,614
Securities gains .............................. 1,226 781 489 392
Other expenses ................................ 5,106 5,248 5,310 5,185
- ---------------------------------------------------------------------------------------
Income before income tax provision ............ 4,953 4,812 4,541 4,387
Income tax provision .......................... 1,115 992 831 796
- ---------------------------------------------------------------------------------------
Net income .................................... $3,838 $3,820 $3,710 $3,591
- ---------------------------------------------------------------------------------------
Net income per share - basic .................. $0.72 $0.72 $0.70 $0.67
- ---------------------------------------------------------------------------------------
Net income per share - diluted ................ $0.72 $0.71 $0.69 $0.67
- ---------------------------------------------------------------------------------------

(IN THOUSANDS,EXCEPT PER SHARE DATA) 2001 QUARTER ENDED
MARCH 31, JUNE 30, SEPT.30, DEC.31

Interest income ............................... $13,093 $13,830 $13,962 $13,776
Interest expense .............................. 7,492 7,278 7,037 6,549
- ---------------------------------------------------------------------------------------
Interest margin ............................... 5,601 6,552 6,925 7,227
Provision for loan losses ..................... 150 150 150 150
- ---------------------------------------------------------------------------------------
Interest margin after provision for loan losses 5,451 6,402 6,775 7,077
Other income .................................. 1,434 1,516 1,600 1,570
Securities gains .............................. 455 742 520 203
Other expenses ................................ 4,598 4,580 4,575 4,918
- ---------------------------------------------------------------------------------------
Income before income tax provision ............ 2,742 4,080 4,320 3,932
Income tax provision .......................... 477 891 914 740
- ---------------------------------------------------------------------------------------
Net income .................................... $2,265 $3,189 $3,406 $3,192
- ---------------------------------------------------------------------------------------
Net income per share - basic .................. $0.42 $0.60 $0.64 $0.60
- ---------------------------------------------------------------------------------------
Net income per share - diluted ................ $0.42 $0.60 $0.64 $0.60
- ---------------------------------------------------------------------------------------

2002 annual highlights

CITIZENS & NORTHERN CORPORATION PAGE 7

TRUST AND FINANCIAL MANAGEMENT GROUP

(IN THOUSANDS) 2002 2001 2000 1999 1998
---- ---- ---- ---- ----

Assets ........................... $ 285,221 $303,868 $ 327,063 $ 320,385 $ 283,262
Revenue ......................... $ 1,755 $ 1,576 $ 1,613 $ 1,456 $ 1,288

The composition of trust assets under management and accounts as of December 31,

2002 and 2001 are shown in the following table:

(IN THOUSANDS)
INVESTMENTS

2002 2001
---- ----

Bonds ............................ $ 100,053 $ 98,098
Stocks .......................... 83,620 93,487
Mutual funds ..................... 77,573 83,618
Savings and Money Market funds .. 21,394 27,005
Real estate ..................... 1,457 721
Mortgages ........................ 508 643
Miscellaneous ................... 616 296
--------- --------
Total ........................... $ 285,221 $303,868
========= ========

Pension/profit sharing .......... $ 103,986 $114,776
Investment management ........... 85,120 86,024
Trusts ........................... 79,753 85,228
Custody ......................... 12,919 14,858
Guardianships ................... 1,310 1,557
Estates ......................... 2,133 1,425
--------- --------
Total ........................... $ 285,221 $303,868
========= ========

[CITIZENS & NORTHER BANK LOGO] TRUST AND
FINANCIAL MANAGEMENT
GROUP

STOCKHOLDER INQUIRIES

A copy of the Corporation's Annual Report on Form 10-K for the year ended
December 31, 2002, as required to be filed with the Securities and Exchange
Commission, will be furnished to a stockholder without charge upon written
request to the Corporation's Treasurer at the principal office at P.O. Box 58,
Wellsboro, PA 16901. The information is also available through C&N's 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.

CITIZENS & NORTHERN CORPORATION PAGE 8

CITIZENS & NORTHERN CORPORATION OFFICERS

CRAIG G. LITCHFIELD, Chairman of the Board, President and
Chief Executive Officer
MARK A. HUGHES, Treasurer
KATHLEEN M. OSGOOD, Corporate Secretary

[PICTURE]

"Opportunities to volunteer in our communities are endless - as is the need for
volunteers. There is no better way to contribute to the organizations we support
than with our time.

Valerie Kinney
AVP, Branch Manager
Towanda Office

[PICTURE]

"Giving back to your community is something I feel is important. A community can
only grow when its people share an interest and care about each other. It's very
rewarding to be a part of this experience.

Joan Blackwell
AC, Loan Officer
Liberty Office

ADVISORY BOARD MEMBERS

ATHENS AND SAYRE
- ----------------
Virginia L. Reap
Brenda L. May
Warren J. Croft
Max P. Gannon, Jr.
R. Bruce Haner
Susan E. Hartley
George D. Howell
Wayne E. Lowery
David Rosenbloom
Mary Theresa Sullivan

DUSHORE
- -------
Helen W. Ferris
Ronald A. Gutosky
Leo F. Lambert
Dennis K. McCarty
Kerry A. Meehan
Julie Gavitt Shaffer

EAST SMITHFIELD
- ---------------
Peggy A. Brown
Roy L. Beardslee
Thomas G. Furman
Liston D. Pepper
Bennett R. Young

ELKLAND
- -------
Roberta C. Heck
Mark R. Howe
John C. Kenyon
Edward L. Learn

KNOXVILLE
- ---------
Mary Rose Sacks
Gerald L. Bliss
L. Grant Gehman
Karl W. Kroeck
William W. Roosa

LAPORTE
- -------
Linda M. Etzel
David L. Baumunk
Robin A. Fiester
William B. Saxe
Leonard Simpson

LIBERTY
- -------
Ann L. Yuscavage
Lyle R. Brion
Gary L. Dinnison
Lawrence F. Mase
Ray E. Wheeland

MANSFIELD
- ---------
Robin K. Carleton
Gary Ray Butters
Clifford Cross, Jr.
David Kurzejewski
John F. Wise, Jr.

MUNCY
- -----
Dawn Myers
Kenneth F. Fry
Roger D. Jarrett
Daniel Mathers
Ann M. Tyler

RALSTON
- -------
William C. Holmes
George E. Bittner
William W. Brooks, III
Richard T. Demitras

TIOGA
- -----
Lois C. Wood
John E. Brackley
C. Frederick LaVancher
Leisa L. LaVancher
Donald E. Treat

TOWANDA AND
MONROETON
- -----------
Valerie W. Kinney
James A. Brown
Adelbert E. Eldridge
W. John Greenland
Robert J. Murphy
Jeffrey A. Smith
James E. Towner
Deborah J. Weisbrod

TROY
- ----
Mark C. Griffis
Dennis F. Beardslee
Roy W. Cummings, Jr.
J. Robert Garrison
Gregory W. Powers
Evan S. Williams, Jr.

WELLSBORO
- ---------
Richard L. Wilkinson
Donald R. Abplanalp
J. Robert Bower
Robert F. Cox, Jr.
R. Robert DeCamp
Craig Eccher
Jan E. Fisher
Edward H. Owlett, III
F. David Pennypacker

WYSOX
- -----
Debra S. Kithcart
Lucille P. Donovan
Robert L. Fulmer
Mark W. Smith
Walter E. Warburton, Jr.

CITIZENS & NORTHERN CORPORATION PAGE 9

CITIZENS & NORTHERN BANK OFFICERS

[PICTURE]

"Volunteering with worthwhile children's organizations gives me a chance to
share wonderful moments with several children in the community, and the time
spent working with my own children is very precious to me.

Lisa Cook
Teller, Tioga

[PICTURE]

"The richest people in the world are not necessarily the people with wealth, but
the people who give freely of themselves. No matter how much time you devote to
volunteerism, you get back so much more.

Will Holmes
AVP, Branch Manager
Ralston Office

OPERATIONS
- ----------

Craig G. Litchfield
Chairman, President and Chief
Executive Officer

Brian L. Canfield
Senior Executive Vice
President and Branch System
Administrator

Dawn A. Besse
Executive Vice President, Sales,
Service and Employee Development
Coordinator

Mark A. Hughes
Executive Vice President and Chief
Financial Officer

Matthew P. Prosseda
Executive Vice President and
Commercial Loan Coordinator

Harold F. Hoose III
Vice President

Michelle M. Karas
Vice President and Marketing
Coordinator

Scott A. Keck
Vice President and Bank
Operations Coordinator
and Chief Privacy Officer

Kathleen M. Osgood
Corporate Secretary

Klas G. Anderson
Assistant Vice President

Robert E. Bolt
Assistant Vice President

Carl M. Chambers
Assistant Vice President

Joan L. Grenell
Assistant Vice President

Karen L. Keck
Assistant Vice President,
Account Services

Daniel Manetta
Corporate Education Director

Jeffrey B. Osgood, SPHR
Human Resource Director

Joseph A. Snell
Assistant Controller

Nancy L. Tubbs
Assistant Vice President and
IRA Administrator

Kevin Weinhoffer
Assistant Vice President

Sandra G. Andrews
Assistant Cashier

Rosalie L. Bordas
Assistant Cashier,
Account Services

Teresa L. Mitchell
Assistant Cashier and Funds
Management Officer

Sandra A. Parulas
Training Officer

Linda M. Prough-Shuey
Assistant Cashier

Joan E. Rohe
Assistant Cashier and Staff
Accountant

TRUST & FINANCIAL MANAGEMENT GROUP
- ----------------------------------
Thomas L. Briggs
Executive Vice President and
Senior Trust Officer

Deborah E. Scott, CFP
Executive Vice President and
Senior Trust Officer

Linda L. Kriner
Vice President and Trust
Officer

Renee D. Laychur, CFP
Vice President and Trust
Officer

Rhonda J. Litchfield
Vice President and Trust
Investment Officer

Larry D. Alderson, CFP
Assistant Vice President and
Trust Officer

Michael G. Charles
Assistant Vice President and
Tax Officer

Keith T. Safford
Employee Benefit Officer

Mary J. Wood
Trust Officer

Lori Brown
Assistant Trust Officer

James D. Butters
Assistant Trust Officer

MANAGEMENT INFORMATION SYSTEMS
- ------------------------------
Rick J. Cisco
Vice President and
Senior Systems Analyst

James H. Shelmire
Vice President and
Senior Systems Analyst

AUDIT AND COMPLIANCE
- --------------------
Russell H. Bauman
Vice President and Auditor

Shawn M. Schreck
Vice President, Compliance
and Security Officer

Glenda R. Marzo
Assistant Vice President
and Assistant Auditor

BANKCARD SERVICES
- -----------------
Keith C. Cavanaugh
Assistant Vice President,
BankCard Sales Manager

Eileen K. Ranck
Assistant Vice President,
BankCard Manager

INTERNET BANKING
- ----------------
Shelley L. D'Haene
Internet Banking
Coordinator

C&N FINANCIAL SERVICES CORPORATION
- ----------------------------------

INSURANCE DIVISION
- ------------------
Thomas L. Rudy, Jr.
President

BROKER/DEALER DIVISION
- ----------------------
Philip A. Prough
Vice President,
Broker/Dealer Division

OFFICES
- -------

ATHENS
- ------
428 South Main St.
Athens, PA 18810
570.888.2291
Virginia L. Reap
Assistant Vice President,
Branch Manager

Terry R. Depew
Vice President,
Regional Manager

Amir Sabanovic
Assistant Cashier,
Loan Officer

Kathy L. Griffis
Assistant Cashier

DUSHORE
- -------
111 Main St.
Dushore, PA 18614
570.928.8124
Helen W. Ferris
Vice President,
Branch Manager and
Regional Manager

Bonnie L. Bennett
Assistant Cashier

Raechelle N. Curry
Assistant Cashier

Brenda B. Whiteley
Assistant Cashier

EAST SMITHFIELD
- ---------------
Main Street
East Smithfield, PA 18817
570.596.3131
Peggy A. Brown
Assistant Vice President,
Branch Manager

Elaine F. Johnston
Assistant Vice President

Diane B. Elvidge
Assistant Cashier

Sandra J. McNeal
Assistant Cashier

ELKLAND
- -------
104 Main Street
Elkland, PA 16920
814.258.5111
Roberta C. Heck
Assistant Vice President,
Branch Manager

Lynette Burrous
Assistant Cashier

CITIZENS & NORTHERN CORPORATION PAGE 10

CITIZENS & NORTHERN BANK OFFICERS

[PICTURE]

"Volunteerism has been and will continue to be an essential ingredient in
maintaining the quality of life for our nation. As individuals, God has blessed
each of us with different talents, abilities and interests. I believe it is
both a responsibility and a joy to give those talents and abilities to make our
communities a better place to live and work in.

Brian Canfield
Senior Executive VP
Branch Administrator

KNOXVILLE
- ---------
102 East Main St.
Knoxville, PA 16928
814.326.4151
Mary Rose Sacks
Assistant Vice President,
Branch Manager
Leonard Mitchell, III
Assistant Cashier

LAPORTE
- -------
Main Street
Laporte, PA 18626
570.946.4011
Linda M. Etzel
Assistant Cashier,
Branch Manager

Margaret J. Black
Assistant Cashier

LIBERTY
- -------
Main Street
Liberty, PA 16930
570.324.2331
Ann L. Yuscavage
Vice President,
Branch Manager

Joan M. Blackwell
Assistant Cashier

MANSFIELD
- ---------
1085 South Main St.
Mansfield, PA 16933
570.662.1111
Robin K. Carleton
Vice President,
Branch Manager

Diane K. Wilson
Assistant Cashier

MONROETON
- ---------
Route 220
Monroeton, PA 18832
570.265.2157
Valerie Kinney
Assistant Vice President,
Branch Manager

MUNCY
- -----
3461 Route 405 Highway
Muncy, PA 17756
570.546.6666
Dawn L. Myers
Assistant Cashier,
Branch Manager

Larry N. Pick
Assistant Vice President
and Mortgage Specialist

Linda L. Gordner
Assistant Cashier

RALSTON
- -------
Thompson Street
Ralston, PA 17763
570.995.5421
William C. Holmes
Assistant Vice President,
Branch Manager

SAYRE
- -----
503 North Elmira St.
Sayre, PA 18840
570.888.2220
Brenda L. May
Assistant Vice President,
Branch Manager

Stacey A. Sickler
Assistant Vice President and
Mortgage Specialist
Marcella J. Chaykosky
Assistant Cashier

Mark W. Elsbree
Assistant Cashier

TIOGA
- -----
41 Main Street
Tioga, PA 16946
570.835.5236
Lois C. Wood
Assistant Vice President, Branch Manager

Deborah K. Beck
Assistant Cashier

TOWANDA
- -------
428 Main St.
Towanda, PA 18848
570.265.6171
Valerie W. Kinney
Assistant Vice President, Branch Manager

James E. Parks
Vice President, Regional Manager

Chad R. Smith
Assistant Cashier

TROY
- ----
Courthouse Square
Troy, PA 16947
570.297.2159
Rosalie H. Hall
Assistant Cashier, Branch Operations Mgr.

Mark C. Griffis
Vice President, Regional
Manager

David S. Schucker
Assistant Vice President

WELLSBORO
- ---------
90-92 Main Street
Wellsboro, PA 16901
570.724.3411
Richard L. Wilkinson
Vice President, Regional Manager

Kim L. Miller
Vice President Senior Loan Officer

George M. Greeley
Assistant Cashier

Brett W. Kennedy
Assistant Cashier

WYSOX
- -----
Route 6
Wysox, PA 18854
570.265.9148
Debra S. Kithcart
Assistant Vice President,
Branch Manager

Jeffery E. Aeppli
Assistant Vice President

CITIZENS & NORTHERN CORPORATION AND CITIZENS & NORTHERN BANK

Dennis F. Beardslee
Owner, Terrace Lanes Bowling Center

R. Robert DeCamp
President, Patterson Lumber, Inc.

Jan E. Fisher
Executive Director for
Healthcare Services,
Laurel Health System

R. Bruce Haner
Auto Buyer for New Car Dealers

Susan E. Hartley
Attorney at Law

Karl W. Kroeck
Farmer

Leo F. Lambert
President and General Manager
Fitzpatrick & Lambert, Inc.

Edward L. Learn
Owner, Learn Hardware and
Building Supply

Craig G. Litchfield
Chairman of the Board,
President and Chief Executive
Officer

Edward H. Owlett, III
President and CEO of Putnam
Company

Leonard Simpson
Attorney at Law

James E. Towner
Publisher of "The Daily and
Sunday Review"

Ann M. Tyler
Certified Public Accountant,
Ann M. Tyler CPA, PC

DIRECTORS EMERITI
- -----------------
J. Robert Bower
Pharmacist

Adelbert E. Eldridge
Retired Regional Director of
Susquehanna Region of
Pennsylvania Electric Co.

Lawrence F. Mase
Retired, formerly President of
Mase's, Inc.

Robert J. Murphy
Retired, formerly attorney in the
law firm of Davis, Murphy,
Niemiec & Smith

Donald E. Treat
Retired, formerly owner of
Treat Hardware

CITIZENS & NORTHERN CORPORATION PAGE 11

[PICTURE]

"I have been involved in Jack Russell Terrier Rescue for over 6 years. Being a
breeder, I feel it is a breeder's duty to help a dog in need. It has become a
disposable world, and animals suffer for it. In Rescue we try to find the
"right" new home for a dog and most of the time with great results and happy
endings.

Lindalee Sweitzer
Branch Supervisor
Monroeton Office

"I feel that volunteering is an important part of being a member of my community
and working with others to make a difference.

Renee Laychur
Vice President and
Trust Officer
Muncy Officer

Our service departments may be contacted directly:

BANKCARD SERVICES
- -----------------
RR #7, Wellsboro, PA 16901
1-800-676-6639

ACCOUNT SERVICES
- ----------------
90-92 Main Street, Wellsboro, PA 16901
1-800-726-2265

TRUST & FINANCIAL MANAGEMENT GROUP
- ----------------------------------
90-92 Main Street, Wellsboro, PA 16901
1-800-487-8784

428 Main Street, Towanda, PA 18848
1-888-987-8784

428 South Main Street, Athens, PA 18810
1-888-760-8192

3461 Route 405 Highway, Muncy, PA 17756
570-546-6666

C&N FINANCIAL SERVICES CORPORATION
- ----------------------------------
64 Main Street, Wellsboro, PA 16901
1-866-ASK-CNFS
www.cnfinancialservices.com

INTERNET BANKING
- ----------------
90-92 Main Street, Wellsboro, PA 16920
570-724-0266
www.cnbankpa.com

SNAPSHOTS FROM THE YEAR JUST PAST...

[PICTURE]
CITIZENS & NORTHERN CORPORATION PAGE 12

[PICTURE]

"Community involvement is a meaningful part of life at C&N. Getting to know
people in the community is important, helping others is important and helping
others makes you feel good about yourself.

Tom Rudy
President, C&NFS

[PICTURE]

"By being actively involved in one's community, a business person is able to
stay in touch with the everyday needs of the people with whom he works and
serves.
Bringing the personal perspective in alignment with professional
objectives is not only what I enjoy, it's also C&N's mission..."Professionals
dedicated to meeting your lifetime financial needs, with a personal touch."

Rob Carleton
VP, Mansfield Branch Manager

[PICTURE]

"My goal is not only to help the community I live in, but hopefully pass on the
spirit of community service to my four children so they can better serve their
future communities.

Mark Elsbree
Loan Officer, Sayre

mansfield university business & industry campaign
mansfield university foundation
mansfield university board of trustees
mansfield wrestling booster club
march creek fellowship baptist church
masonic fraternity lodge
mennonite bible fellowship
middlebury baptist church
montgomery area crop walk
montgomery community development
muncy valley area volunteer ambulance company
muncy valley area volunteer fire company
neighborhood housing management
nessmuk chapter national wild turkey federation
new albany vfw
north central pa estate planners council
north rome christian school
north towanda fire rescue
northern tier recreation association
northern tier region
pa bowhunters festival
parkhurst presbyterian church
pba legislative committee
pike township
powell united methodist church
redeemer united church of christ
roosevelt trail league
rotary international
saint francis picnic
saint paul's episcopal church
saint paul's united church of christ
saint peter's united church of christ
salem church
sayre church of the redeemer
sayre little league
sayre rotary
shepherd of the hills lutheran church
smithfield township volunteer fire department
southern tier cocker spaniel club
southside alliance church
springfield baptist church
st. basil's catholic church
standing stone vesper church
sullivan county action Inc.
sullivan county fair
sullivan county food pantry
sullivan county high school athletic booster club
sullivan county scholarship association
sullivan terrace board
tioga central railroad
tioga county 4-h
tioga county chapter of american red cross
tioga county christian academy
tioga county partnership for community health
tioga county community leadership program
tioga county development corporation
tioga county fair association

[CITIZENS & NORTHERN CORPORATION LOGO]

tioga county partnership for community health
towanda junior football
towanda junior wrestling club
towanda lions club
towanda little league
towanda main street
towanda memorial hospital
towanda rifle & pistol club
towanda rotary club
towanda ymca
trinity lutheran church & school
troy area school sports
troy community swimming pool
troy fair
troy lions club
troy little league
troy community soccer league
tyoga country club
tyoga county car club
united church of nelson
united methodist church of wellsboro
united way of wellsboro
valley alliance church
valley ambulance association
valley christian & missionary alliance church of ansonia
valley economic development association
valley grange
valley kiwanis
valley leadership program
valley youth soccer
wellsboro area youth soccer
wellsboro chamber of commerce
wellsboro fire & ambulance association
wellsboro gridders club
western bradford development corporation
williamson alumni association
williamson girls basketball booster club
williamson girls volleyball booster club
winfall united methodist church
wyalusing valley hoopsters club
wysox ambulance
wysox chamber of commerce
wysox fire company
wysox presbyterian church
xi gamma sigma
ymca of bradford county

[PICTURE]

Last year, C&N Bank employees contributed more than 20,400 hours of their time
and talent to charitable organizations in the communities served by the
17-branches of Citizens & Northern Bank.

I can think of no better way to salute that effort than by highlighting their
achievements in our annual review.

I am proud of the over 300 employees that work for Citizens & Northern Bank, and
prouder still of their involvement in their local communities.

Craig G. Litchfield
Chairman, President &
Chief Executive Officer

[PICTURE]

[CITIZENS & NORTHERN CORPORATION LOGO]

Athens/Dushore/East Smithfield/Elkland/Knoxville/Laporte/Liberty/Mansfield/
Monroeton/Muncy/Ralston/Sayre/Tioga/Towanda/Troy/Wellsboro/Wysox/Member FDIC/
Stock Symbol CZNC-OB