8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)      March 31, 2007     

CITIZENS & NORTHERN CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	0-16084	23-2451943
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

90-92 Main Street, Wellsboro, PA	16901
(Address of Principal Executive Office)	(Zip Code)

Registrant’s telephone number, including area code (570) 724-3411

N/A

(Former name or former address, if changed since last report)

ITEM 2.02.  Results of Operations and Financial Condition

Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the three-month period ended March 31, 2007. On April 23, 2007, Citizens & Northern Corporation issued a press release titled “C&N Announces First Quarter 2007 Unaudited Financial Results,” a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Also, Citizens & Northern Corporation’s “Quarterly Report,” a report that includes unaudited financial information, will be mailed to shareholders on or about April 27, 2007. A copy of the Quarterly Report is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01.  Financial Statements and Exhibits

(a)  Not applicable.
(b)  Not applicable.
(c)  Not applicable.
(d)  Exhibits.

Exhibit 99.1: Press Release issued by Citizens & Northern Corporation dated April 23, 2007, titled “C&N Announces First Quarter 2007 Unaudited Financial Results.”

Exhibit 99.2: Quarterly Report, which includes unaudited financial information.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITIZENS & NORTHERN CORPORATION
Date: 4/23/07	By:	Craig G. Litchfield /s/
		Chairman, President and Chief Executive Officer

EX-99.1

Exhibit 99.1

April 23, 2007 Contact: Yvonne Gill
570-724-0247
yvonneg@cnbankpa.com

C&N ANNOUNCES FIRST QUARTER 2007 UNAUDITED FINANCIAL RESULTS

FOR IMMEDIATE RELEASE:

     WELLSBORO, PA — Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the three-month period ended March 31, 2007, which are highlighted below:

• Net Income totaled $2,458,000 in the first quarter 2007, as compared to net income of $2,820,000 in the first quarter 2006. Net Income Per Share was $0.30 (Basic and Diluted) in the first quarter 2007, as compared to $0.34 (Basic) and $0.33 (Diluted) in the first quarter 2006.

• Return on Average Assets was 0.88% for the first quarter 2007, as compared to 0.98% for the first quarter 2006. Return on Average Equity was 7.54% for the first quarter 2007, as compared to 8.51% for the first quarter 2006.

• Cash Dividends declared by C&N were $0.24 per share in the first quarter 2007 and 2006.

• Total assets amounted to $1,120,959,000 as of March 31, 2007, down 3.4% from March 31, 2006.

• Net loans increased 6.8%, to $687,661,000 at March 31, 2007 from $644,071,000 at March 31, 2006.

• Total deposits and repo sweep accounts increased 2.6%, to $797,525,000 at March 31, 2007 from $777,078,000 at March 31, 2006.

• Assets under management by C&N’s Trust and Financial Management Group increased 11.0%, to $526,747,000 at March 31, 2007 from $474,708,000 at March 31, 2006.

• Tangible Equity/Tangible Assets Ratio was 11.33% at March 31, 2007.

     The net interest margin decreased $342,000, or 4.0%, in the first quarter 2007 as compared to the first quarter 2006. The yield curve has been flat or inverted throughout 2006 and 2007, causing interest rates paid on liabilities (mainly deposits and borrowings) to increase more than the rates of interest earned on loans and investment securities. Further, the flat or inverted yield curve has limited opportunities to earn a positive spread from maintaining borrowed funds and holding investment securities. Accordingly, C&N has sold securities and repaid borrowings throughout much of 2007 and 2006. The balance of available-for-sale securities was $85,195,000 lower at March 31, 2007 than one year earlier, and the March 31, 2007 balance of short-term and long-term borrowings was $62,337,000 lower than one year earlier.

     Noninterest expense increased $404,000 (5.2%) in the first quarter 2007 over the same period in 2006. Compensation-related expense increased $315,000, or 7.1% in the first quarter 2007 over the first quarter 2006. The increase in compensation-related expense included the effects of new positions added in late 2006 for lending and Trust and Financial Management services in New York State. Recently, regulatory permission has been received to offer Trust and Financial management services through the Canisteo and South Hornell, NY (First State Bank) locations, and management expects to begin offering Trust and Financial Management services at the New York State locations in the second quarter 2007. Compensation expense for the first quarter 2007 also included $63,000 of stock option expense. Stock option expense has been calculated using an option pricing model to estimate the fair value of stock options awarded. There was no stock option expense in the first quarter 2006. Occupancy expense increased $80,000, or 14.7%, in the first quarter 2007 over the first quarter 2006, mainly because of depreciation and other expenses associated with facilities that were constructed or expanded in 2006, including the Old Lycoming Township office and the Administration building in Wellsboro (both of which opened in March 2006) and the Hornell office (renovations completed in October 2006).

     Net realized gains from sales of securities amounted to $1,167,000 in the first quarter 2007, as compared to $1,315,000 in the first quarter 2006. Most of the gains realized in both periods were from sales of bank stocks.

     The income tax provision increased to $558,000, or 18.5% of pre-tax income, in the first quarter 2007, from $426,000, or 13.1% of pre-tax income, in the first quarter 2006. The higher income tax rate in 2007 reflects management’s decision to reduce the portion of assets held in municipal bonds, in an effort to reduce alternative minimum tax.

     The provision for loan losses was $229,000 in the first quarter 2007, down from $600,000 in the first quarter 2006. The higher loan loss provision in the first quarter 2006 reflected management’s concerns at that time about possible charge-offs related to a few large commercial loans. In the second quarter 2006, settlements were reached on those loans, resulting in charge-offs that were significantly less than the estimated allowances that had been previously established.

     Noninterest revenue increased $293,000 in the first quarter 2007 over the first quarter 2006. The largest increases in noninterest revenue were from Trust and Financial Management services, which generated an increase of $171,000 (33.5%), and an increase of $59,000 in fees related to commercial letters of credit.

     Looking forward, the merger of Citizens Bancorp, Inc. into Citizens & Northern Corporation is expected to close on May 1, 2007. All regulatory approvals have been received, and the Citizens Bancorp, Inc. shareholders approved the merger, with 99.99% of the shares voted in favor, at their April 16, 2007 special meeting. Citizens Bancorp, Inc., with total assets of approximately $144 million as of March 31, 2007, is the parent company of Citizens Trust Company, with offices in Coudersport, Port Allegany and Emporium, PA. These locations will become offices of Citizens & Northern Bank, effective May 1, 2007, and are expected to operate under the name, “Citizens Trust Company, a Division of Citizens & Northern Bank.”

     Citizens & Northern Corporation is the parent company of Citizens & Northern Bank and First State Bank. Citizens & Northern Bank is a local, independent community bank providing complete financial, investment and insurance services through 21 full service offices throughout Tioga, Bradford, Sullivan and Lycoming counties in Pennsylvania. First State Bank provides banking services through its offices in Canisteo and South Hornell, NY. C&N can be found on the worldwide web at www.cnbankpa.com. First State Bank can be found on the web at www.fsbcanisteo.com. The Company’s stock is listed on NASDAQ Capital Market Securities under            the symbol CZNC.

Safe Harbor Statement: Except for historical information contained herein, the matters discussed in this release are forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability to achieve anticipated acquisition related operational efficiencies, the ability to enhance revenues through increased market penetration, expanded lending capacity and product offerings and other risks detailed from time to time in Citizens & Northern’s SEC filings, including Forms 10-Q and 10-K (copies of which are available from Citizens & Northern without charge in hard copy or online at www.sec.gov). Citizens & Northern and Citizens disclaim any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

EX-99.2

Exhibit 99.2

90-92 Main Street, P.O. Box 58
Wellsboro, PA 16901
Phone: (570) 724-3411     Fax: (570) 723-8097
E-Mail: cnemail@cnbankpa.com     Web Page: http://www.cnbankpa.com
Stock Symbol: CZNC

Chartered 1864 FEDERAL DEPOSIT INSURANCE CORP

March 31, 2007 QUARTERLY REPORT

Dear Shareholder:

The merger with Citizens Bancorp and its subsidiary, Citizens Trust Company, will occur on May 1st, 2007. All regulatory approvals have been received, and Citizens Bancorp shareholders overwhelmingly, 99.99% of the shares voted, approved the merger at their April 16th special meeting. This merger will extend the market of your company into Potter, McKean and Cameron Counties. We extend a warm welcome to the customers, communities, shareholders and employees of Citizens Bancorp.

The news on the earnings front is still old news, the yield curve remains flat to slightly inverted, which puts pressure on our interest spread and margin. The interest and dividend income increased 2.4% or $380 thousand compared to the first quarter of 2006 due chiefly to the 6.77% increase on loans. However, the net interest margin decreased by $342 thousand, or 4% due to a 9.9% increase in interest expense. There is no margin to be gained by holding or growing fixed income securities, and we continue to shrink the available for sale securities and borrowings.

Trust Assets Under Management increased by nearly 11% year over year, which has resulted in a $171 thousand, or 33.5% increase in revenue. First State Bank has been approved for trust powers and we are proceeding full speed to establish the department and to begin business development.

The long over due conversion of First State Bank to our computer system has been accomplished and we look forward to the economies and new service opportunities that conversion is expected to deliver. Our new offices in Lycoming County continue to make progress in growing deposits and loans. Short-term we have the extra expense. Long-term we expect greater revenue and net income.

Craig G. Litchfield
Chairman, President & CEO

CITIZENS & NORTHERN CORPORATION
BOARD OF DIRECTORS

Craig G. Litchfield Chairman of the Board

Dennis F. Beardslee	Edward L. Learn
R. Robert DeCamp	Raymond R. Mattie
Jan E. Fisher	Edward H. Owlett, III
R. Bruce Haner	Leonard Simpson
Susan E. Hartley	James E. Towner
Karl W. Kroeck	Ann M. Tyler
Leo F. Lambert

CITIZENS & NORTHERN BANK OFFICES
428 S. Main Street, ATHENS, PA 18810		570-888-2291
111 Main Street, DUSHORE, PA 18614		570-928-8124
Main Street, EAST SMITHFIELD, PA 18817		570-596-3131
104 Main Street, ELKLAND, PA 16920		814-258-5111
230-232 Railroad Street, JERSEY SHORE, PA 17740		570-398-4555
102 E. Main Street, KNOXVILLE, PA 16928		814-326-4151
Main Street, LAPORTE, PA 18626		570-946-4011
Main Street, LIBERTY, PA 16930		570-324-2331
1085 S. Main Street, MANSFIELD, PA 16933		570-662-1111
RR 2 Box 3036, MONROETON, PA 18832		570-265-2157
3461 Rte.405 Highway, MUNCY, PA 17756		570-546-6666
Thompson Street, RALSTON, PA 17763		570-995-5421
1827 Elmira Street, SAYRE, PA 18840		570-888-2220
2 E. Mountain Ave., SO. WILLIAMSPORT, PA 17702		570-601-3016
41 Main Street, TIOGA, PA 16946		570-835-5236
428 Main Street, TOWANDA, PA18848		570-265-6171
Court House Square, TROY, PA 16947		570-297-2159
90-92 Main Street, WELLSBORO, PA 16901		570-724-3411
130 Court Street, WILLIAMSPORT, PA 17701		570-320-0100
1510 Dewey Ave., WILLIAMSPORT, PA 17702		570-323-9305
Route 6, WYSOX, PA 18854		570-265-9148
TRUST & FINANCIAL MANAGEMENT GROUP
90-92 Main Street, Wellsboro, PA 16901		800-487-8784
428 Main Street, Towanda, PA 18848		888-987-8784
503 N. Elmira Street, Sayre, PA 18840		888-760-8192
130 Court Street, Williamsport, PA 17701		570-601-6000
ACCOUNT SERVICES - 90-92 Main St., Wellsboro, PA 16901		800-726-2265
BANKCARD SERVICES - 10 Nichols St., Wellsboro PA 16901		800-676-6639
CASH MANAGEMENT / INTERNET BANKING — 10 Nichols St., Wellsboro, PA 16901		570-724-0266
www.fmt@cnbankpa.com
FUNDS MANAGEMENT — 10 Nichols St., Wellsboro, PA 16901		800-577-9397
www.fmt@cnbankpa.com
C&N FINANCIAL SERVICES CORPORATION — 90-92 Main Street, Wellsboro, PA	866-ASK-CNFS
www.cnfinancialservices.com
CANISTEO VALLEY CORPORATION
3 Main Street, Canisteo, NY 14823		607-698-4295
FIRST STATE BANK OFFICES
3 Main Street, CANISTEO, NY 14823		607-698-4295
6250 County Route 64, HORNELL, NY 14843		607-324-4081
www.fsbcanisteo.com

CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Data) (Unaudited)

	3 MONTHS ENDED
	MARCH
	2007		2006
	(Current)		(Prior Yr)
Interest and Dividend Income	$	16,243	$	15,863
Interest Expense		8,000		7,278
Interest Margin		8,243		8,585
Provision for Loan Losses		229		600
Interest Margin After Provision for Loan Losses		8,014		7,985
Other Income		2,082		1,789
Realized Gains on Securities, Net		1,167		1,315
Other Expenses		8,247		7,843
Income Before Income Tax Provision		3,016		3,246
Income Tax Provision		558		426
NET INCOME	$	2,458	$	2,820
PER SHARE DATA (**):
Net Income — Basic	$	0.30	$	0.34
Net Income — Diluted	$	0.30	$	0.33
Dividend Per Share	$	0.24	$	0.24
Number Shares Used in Computation — Basic		8,295,788		8,379,891
Number Shares Used in Computation — Diluted		8,313,814		8,417,978

CONSOLIDATED BALANCE SHEET
(In Thousands, Except Per Share Data) (Unaudited)

	MARCH 31,			MARCH 31,
	2007			2006
ASSETS
Cash & Due from Banks	$	23,548		$	21,462
Trading Securities		1,528			—
Available-for-Sale Securities		342,780			427,975
Loans, Net		687,661			644,071
Intangible Assets		3,124			3,321
Other Assets		62,318			63,815
TOTAL ASSETS	$	1,120,959		$	1,160,644
LIABILITIES
Deposits	$	770,158		$	752,714
Repo Sweep Accounts		27,367			24,364
Total Deposits and Repo Sweeps		797,525			777,078
Borrowed Funds		182,902			245,239
Other Liabilities		10,767			8,279
TOTAL LIABILITIES		991,194			1,030,596
SHAREHOLDERS’ EQUITY
Shareholders’ Equity, Excluding Net Unrealized Gains/Losses on Available-for sale Securities		129,500			127,716
Accumulated Other Comprehensive Income/ Loss:
Net Unrealized Gains/Losses on Available- for-sale Securities		1,440			2,332
Defined Benefit Plans Adjustment, Net (*)		(1,175	)		—
TOTAL SHAREHOLDERS’ EQUITY		129,765			130,048
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,120,959		$	1,160,644

CONSOLIDATED FINANCIAL HIGHLIGHTS
(In Thousands, Except Per Share Data) (Unaudited)

	3 MONTHS ENDED MARCH						%
							INCREASE
	2007			2006			(DECREASE)
EARNINGS PERFORMANCE
Net Income	$	2,458		$	2,820			-12.84	%
Return on Average Assets		0.88	%		0.98	%		-10.20	%
Return on Average Equity		7.54	%		8.51	%		-11.40	%
BALANCE SHEET HIGHLIGHTS Total Assets	$	1,120,959		$	1,160,644			-3.42	%
Available-for-Sale Securities		342,780			427,975			-19.91	%
Loans (Net)		687,661			644,071			6.77	%
Allowance for Loan Losses		8,338			8,915			-6.47	%
Deposits and Repo Sweep Accounts		797,525			777,078			2.63	%
Trust Assets Under Management		526,747			474,708			10.96	%
SHAREHOLDERS’ VALUE (PER SHARE) (**)
Net Income — Basic	$	0.30		$	0.34			-11.76	%
Net Income — Diluted	$	0.30		$	0.33			-9.09	%
Dividends	$	0.24		$	0.24			0.00	%
Book Value	$	15.67		$	15.54			0.84	%
Market Value (Last Trade)	$	20.60		$	24.20			-14.88	%
Market Value / Book Value		131.46	%		155.73	%		-15.58	%
Price Earnings Multiple		17.17			17.79			-3.49	%
Dividend Yield		4.66	%		3.97	%		17.38	%
SAFETY AND SOUNDNESS Tangible Equity / Tangible Assets		11.33	%		10.95	%		3.47	%
Nonperforming Assets / Total Assets		0.72	%		0.79	%		-8.86	%
Allowance for Loan Losses / Total Loans		1.20	%		1.37	%		-12.41	%
Risk Based Capital Ratio		17.91	%		17.75	%		0.90	%
AVERAGE BALANCES Average Assets	$	1,116,726		$	1,153,203			-3.16	%
Average Equity		130,371			132,609			-1.69	%