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)       September 30, 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 nine-month and three-month periods ended September 30, 2007. On October 10, 2007, Citizens & Northern Corporation issued a press release titled “C&N Announces Third 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 October 19, 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 October 10, 2007, titled “C&N Announces Third 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: 10/10/07	By:	/s/ Craig G. Litchfield
		Chairman, President and Chief Executive Officer

EX-99.1

Exhibit 99.1

October 10, 2007

Contact: Yvonne Gill
570-724-0247
yvonneg@cnbankpa.com

C&N ANNOUNCES THIRD QUARTER 2007 UNAUDITED FINANCIAL RESULTS

FOR IMMEDIATE RELEASE:

     WELLSBORO, PA — Citizens & Northern Corporation announced its unaudited, consolidated financial results for the nine-month and three-month periods ended September 30, 2007. Net Income was $7,242,000 in the first nine months of 2007, down 22.1% from the first nine months of 2006. Net Income Per Share was $0.84 (Basic and Diluted) in the first nine months of 2007, down 24.3% from Net Income Per Share of $1.11 (Basic and Diluted) in the first nine months of 2006. Return on average assets was 0.83% in the first nine months of 2007 and 1.09% in the first nine months of 2006. Return on average equity was 7.03% in the nine months ended September 30, 2007 and 9.45% in the nine months ended September 30, 2006. Cash dividends declared were $0.72 per share in both 2007 and 2006.

     Earnings for the first nine months of 2007 were impacted by a loss (net of tax) on mortgage-backed securities of $1,352,000. These securities were classified as other-than-temporarily impaired in the second quarter 2007, and written down through earnings by $1,175,000, net of tax. The securities were sold in July 2007, with a further loss of $177,000 (net of tax) realized in the third quarter. The impact per share of the loss from these securities, excluding the positive effect of investing the sale proceeds at higher yields, was $0.16 (Basic and Diluted) for the first nine months of 2007.

     C&N’s acquisition of Citizens Bancorp, Inc., which became effective May 1, 2007, contributed significantly to the growth levels reported in the following unaudited financial ratios:

• Total assets amounted to $1,195,031,000 as of September 30, 2007, up 6.2% from September 30, 2006.

• Net loans increased 10.3%, to $737,408,000 at September 30, 2007 from $668,348,000 at September 30, 2006.

• Total deposits and repo sweep accounts increased 10.6%, to $867,218,000 at September 30, 2007 from $784,001,000 at September 30, 2006.

• Assets under management by C&N’s Trust and Financial Management Group increased 38.1%, to $682,428,000 at September 30, 2007 from $494,234,000 at September 30, 2006.

• Tangible Equity/Tangible Assets Ratio was 10.73% at September 30, 2007.

     The net interest margin increased $1,441,000, or 5.7%, in the nine months ended September 30, 2007 as compared to the first nine months of 2006. Much of the increase in the net interest margin between years occurred in the third quarter, as the net interest margin for the third quarter 2007 was $1,188,000 higher than for the third quarter 2006. Factors contributing to recent improvements in the net interest margin include: (1) the acquisition of Citizens Trust Company, which resulted in increased interest and fees on loans, and provided funding to help pay off borrowings, (2) a change in the shape of the yield curve, which has become slightly positive after remaining flat or inverted throughout 2006 and the first half of 2007, thus allowing C&N a few opportunities to earn a positive spread from borrowing and investing activities, and (3) the increase in yield on the investment portfolio resulting from the restructuring described above.

     Noninterest revenue increased $1,684,000 (28.4%) in the nine months ended September 30, 2007 over the first nine months of 2006. Trust and Financial Management revenue increased $722,000 (40.5%). Other significant increases in noninterest revenue included: service charges on deposits, which increased $301,000 and increases totaling $472,000 for other services and revenue items, including letter of credit, debit card, credit card (as a third party agent), ATM, gain from sale of a restricted stock and grant revenue related to training activities.

     Net realized losses (pre-tax) from sales of securities amounted to $79,000 in the first nine months of 2007, as compared to pre-tax securities gains of $4,250,000 in the first nine months of 2006. Excluding the $2,048,000 pre-tax loss on impaired securities described above, securities gains for the nine months ended September 30, 2007, totaled $1,969,000, down $2,281,000 from the first nine months of 2006. Most of the gains realized in both periods were from sales of bank stocks.

     Noninterest expense increased $1,668,000 (7.1%) in the nine months ended September 30, 2007 as compared to the same period in 2006. The increase in expenses reflects the addition of Citizens Trust Company. Also, professional fees totaling $221,000 have been incurred in 2007 related to the computer core system conversions of the New York State (First State Bank) and Citizens Trust Company operations.

     The income tax provision decreased $560,000, to $1,695,000 in the nine months ended September 30, 2007 from $2,255,000 in the first nine months of 2006, as a result of lower pre-tax earnings.

THIRD QUARTER 2007:

     Net Income in the third quarter 2007 was $2,848,000, down $425,000 (13.0%) from the third quarter 2006. Third quarter 2007 Net Income was $912,000 (47.1%) higher than second quarter 2007. Net Income Per Share (Basic and Diluted) was $0.32 in the third quarter 2007, as compared to $0.39 (Basic and Diluted) in the third quarter 2006, and $0.22 (Basic and Diluted) in the second quarter 2007. Net realized losses (pre-tax) from sales of securities amounted to $68,000 in the third quarter 2007, as compared to pre-tax securities gains of $1,602,000 in the third quarter 2006. Third quarter 2007 earnings were positively affected by improvements in the net interest margin and increases in noninterest revenue, as referred to in the discussion of year-to-date results above. In addition to securities losses, third quarter earnings were negatively affected by one time costs totaling $427,000, including professional fees associated with computer conversions and a loss on the disposition of telephone equipment.

     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 24 full service offices throughout Tioga, Bradford, Sullivan and Lycoming counties in Pennsylvania, and through the Citizens Trust Company locations in Coudersport, Emporium and Port Allegany. Citizens Trust Company can be found on the worldwide web at www.citizenstrustcompany.com. 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 improved investment performance, 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 in hard copy or online at www.sec.gov). Citizens & Northern disclaims 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 Member

FEDERAL DEPOSIT INSURANCE CORP

September 30, 2007

QUARTERLY REPORT

Dear Shareholder:

Although year-to-date net income of $7.242 million is down a disappointing 22% compared to last year, there are reasons for optimism. The interest margin increased 5.7%, with most of the year-over-year improvement occurring in the third quarter. Improvements in loan quality have allowed us to reduce our provision for loan losses and thus our interest margin after provision for loan losses is up 6.8%. Other income is up 28.4% due in large part to growth in Trust & Financial Management Group (T&FMG) revenue. As of quarter end, trust assets under management increased 38%, by $188.2 million. The merger with Citizens Trust Company (CTC) accounts for 54% of the increase, and the rest is due to investment returns and new business. Strategically, we have invested in growing the T&FMG to increase our revenues from noninterest business activities. The strategy is beginning to yield the hoped for results.

Last year, we were able to substantially supplement revenues through the third quarter with $4.25 million in gains on sold securities, while this year we have a net pre-tax loss of $79 thousand on sales over the same period. Other expenses have increased 7.1% with a large portion of the increase due to the addition of CTC and to one-time merger related expenses.

Given the significant challenges facing community banking, management has adopted cost reduction and revenue enhancement initiatives. As part of those initiatives, fulltime equivalent staffing is being reduced by 9.75% during the last half of 2007. Other cost cutting measures and revenue enhancing initiatives are in various stages of implementation.

To help our business customers save time and money, we are aggressively marketing cutting edge remote deposit capture that allows customers to transmit images of their checks for deposit via the Internet. All of our branches are now using a similar technology to transmit their transaction tickets and checks to our processing center, thus saving us time and money; and allowing us to extend our branch cutoff times to 4:30 P.M. We thank you for your continued support.

Craig G. Litchfield
Chairman, President & CEO

CITIZENS & NORTHERN CORPORATION
BOARD OF DIRECTORS

Craig G. Litchfield    Chairman of the Board

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

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.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

CITIZENS TRUST COMPANY
a Division of Citizens & Northern Bank
OFFICES

10 N Main Street, COUDERSPORT, PA 16915	814-274-9150
135 East Fourth Street, EMPORIUM, PA 15834	814-486-1112
100 Maple Street, PORT ALLEGANY, PA 16743	814-642-2571
www.citizenstrustcompany.com

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					9 MONTHS ENDED
	SEPTEMBER					SEPTEMBER
	2007			2006		2007			2006
	(Current)			(Prior Yr)		(Current)			(Prior Yr)
Interest and Dividend Income	$	18,058		$	16,152	$	51,993		$	47,999
Interest Expense		8,551			7,833		25,230			22,677
Interest Margin		9,507			8,319		26,763			25,322
Provision for Loan Losses		—			191		229			491
Interest Margin After Provision for Loan Losses		9,507			8,128		26,534			24,831
Other Income		2,877			2,199		7,609			5,925
Realized (Losses) Gains on Securities, Net		(68	)		1,602		(79	)		4,250
Other Expenses		8,691			7,640		25,127			23,459
Income Before Income Tax Provision		3,625			4,289		8,937			11,547
Income Tax Provision		777			1,016		1,695			2,255
NET INCOME	$	2,848		$	3,273	$	7,242		$	9,292
PER SHARE DATA (**):
Net Income — Basic	$	0.32		$	0.39	$	0.84		$	1.11
Net Income — Diluted	$	0.32		$	0.39	$	0.84		$	1.11
Dividend Per Share	$	0.24		$	0.24	$	0.72		$	0.72
Number Shares Used in Computation — Basic		8,897,844			8,322,436		8,656,921			8,355,173
Number Shares Used in Computation — Diluted		8,905,827			8,344,340		8,669,444			8,382,610

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

	SEPT. 30,			SEPT. 30,
	2007			2006
ASSETS
Cash & Due from Banks	$	21,853		$	21,373
Trading Securities		2,515			—
Available-for-Sale Securities		344,310			368,481
Loans, Net		737,408			668,348
Intangible Assets		13,606			3,287
Other Assets		75,339			63,798
TOTAL ASSETS	$	1,195,031		$	1,125,287
LIABILITIES
Deposits	$	827,389		$	756,372
Repo Sweep Accounts		39,829			27,629
Total Deposits and Repo Sweeps		867,218			784,001
Borrowed Funds		177,467			204,320
Other Liabilities		9,963			7,235
TOTAL LIABILITIES		1,054,648			995,556
SHAREHOLDERS’ EQUITY
Shareholders’ Equity, Excluding Net Unrealized Gains/Losses on Available-for-Sale Securities		143,674			128,431
Accumulated Other Comprehensive Income/ Loss:
Net Unrealized Gains/Losses on Available-for-Sale Securities		(2,130	)		1,300
Defined Benefit Plans Adjustment, Net (*)		(1,161	)		—
TOTAL SHAREHOLDERS’ EQUITY		140,383			129,731
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,195,031		$	1,125,287

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

	9 MONTHS ENDED						%
	SEPTEMBER						INCREASE
	2007			2006			(DECREASE)
EARNINGS PERFORMANCE
Net Income	$	7,242		$	9,292			-22.06	%
Return on Average Assets		0.83	%		1.09	%		-23.85	%
Return on Average Equity		7.03	%		9.45	%		-25.61	%
BALANCE SHEET HIGHLIGHTS
Total Assets	$	1,195,031		$	1,125,287			6.20	%
Available-for-Sale Securities		344,310			368,481			-6.56	%
Loans (Net)		737,408			668,348			10.33	%
Allowance for Loan Losses		8,709			8,095			7.58	%
Deposits and Repo Sweep Accounts		867,218			784,001			10.61	%
Trust Assets Under Management		682,428			494,234			38.08	%
SHAREHOLDERS’ VALUE (PER SHARE) (**)
Net Income — Basic	$	0.84		$	1.11			-24.32	%
Net Income — Diluted	$	0.84		$	1.11			-24.32	%
Dividends	$	0.72		$	0.72			0.00	%
Book Value	$	15.79		$	15.65			0.89	%
Tangible Book Value	$	14.26		$	15.25			-6.49	%
Market Value (Last Trade)	$	18.37		$	22.43			-18.10	%
Market Value / Book Value		116.34	%		143.32	%		-18.83	%
Market Value / Tangible Book Value		128.82	%		147.08	%		-12.41	%
Price Earnings Multiple		16.40			15.16			8.18	%
Dividend Yield		5.23	%		4.28	%		22.20	%
SAFETY AND SOUNDNESS
Tangible Equity / Tangible Assets		10.73	%		11.27	%		-4.79	%
Nonperforming Assets / Total Assets		0.43	%		0.77	%		-44.16	%
Allowance for Loan Losses / Total Loans		1.17	%		1.20	%		-2.50	%
Risk Based Capital Ratio		16.56	%		17.91	%		-7.54	%
AVERAGE BALANCES
Average Assets	$	1,168,152			1,137,545			2.69	%
Average Equity		137,316			131,095			4.75	%

(*)	Effective December 31, 2006, Statement of Financial Accounting Standards No. 158 requires gains or losses, prior service costs or credits, and transition assets or obligations as of the end of the period that have not yet been included in net periodic benefit cost be recognized as accumulated other comprehensive income or loss, net of tax.
(**)	For purposes of per share calculations, the number of outstanding shares has been retroactively adjusted for the effects of 1% stock dividends issued in January 2007.