10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _________________________.

Commission file number: 000-16084

CITIZENS & NORTHERN CORPORATION

(Exact name of Registrant as specified in its charter)

PENNSYLVANIA	23-2451943
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

90-92 MAIN STREET, WELLSBORO, PA 16901

(Address of principal executive offices) (Zip code)

570-724-3411

(Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨   Accelerated filer x   Non-accelerated filer ¨   Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Common Stock ($1.00 par value) 12,048,128 Shares Outstanding on May 2, 2016

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

CITIZENS & NORTHERN CORPORATION

Index

Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) – March 31, 2016 and December 31, 2015	Page 3
Consolidated Statements of Income (Unaudited) – Three Months Ended March 31, 2016 and 2015	Page 4
Consolidated Statements of Comprehensive Income  (Unaudited) – Three Months Ended March 31, 2016 and 2015	Page 5
Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended March 31, 2016 and 2015	Page 6
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - Three Months Ended March 31, 2016 and 2015	Page 7
Notes to Unaudited Consolidated Financial Statements	Pages 8 – 36
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	Pages 37 – 53
Item 3. Quantitative and Qualitative Disclosures About Market Risk	Pages 54 – 56
Item 4. Controls and Procedures	Page 56
Part II. Other Information	Pages 57 – 58
Signatures	Page 59
Exhibit 31.1. Rule 13a-14(a)/15d-14(a) Certification - Chief Executive Officer	Page 60
Exhibit 31.2. Rule 13a-14(a)/15d-14(a) Certification - Chief Financial Officer	Page 61
Exhibit 32. Section 1350 Certifications	Page 62

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

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

	March 31,			December 31,
	2016			2015
ASSETS
Cash and due from banks:
Noninterest-bearing	$	13,744		$	14,710
Interest-bearing		27,429			21,351
Total cash and due from banks		41,173			36,061
Available-for-sale securities, at fair value		413,606			420,290
Loans held for sale		526			280
Loans receivable		701,605			704,880
Allowance for loan losses		(7,661	)		(7,889	)
Loans, net		693,944			696,991
Bank-owned life insurance		19,418			20,764
Accrued interest receivable		3,900			3,768
Bank premises and equipment, net		15,376			15,406
Foreclosed assets held for sale		1,584			1,260
Deferred tax asset, net		949			3,115
Intangible asset - Core deposit intangibles		27			30
Intangible asset - Goodwill		11,942			11,942
Other assets		14,099			13,510
TOTAL ASSETS	$	1,216,544		$	1,223,417
LIABILITIES
Deposits:
Noninterest-bearing	$	216,679		$	211,041
Interest-bearing		739,169			724,574
Total deposits		955,848			935,615
Short-term borrowings		25,952			53,496
Long-term borrowings		38,692			38,767
Accrued interest and other liabilities		7,742			8,052
TOTAL LIABILITIES		1,028,234			1,035,930
STOCKHOLDERS' EQUITY
Preferred stock, $1,000 par value; authorized 30,000 shares; $1,000 liquidation preference per share; no shares issued at March 31, 2016 and December 31, 2015		0			0
Common stock, par value $1.00 per share; authorized 20,000,000 shares in 2016 and 2015; issued 12,655,171 at March 31, 2016 and December 31, 2015; outstanding 12,081,030 at March 31, 2016 and 12,180,623 December 31, 2015		12,655			12,655
Paid-in capital		71,212			71,654
Retained earnings		109,901			109,454
Treasury stock, at cost; 574,141 shares at March 31, 2016 and 474,548 shares at December 31, 2015		(10,854	)		(8,804	)
Sub-total		182,914			184,959
Accumulated other comprehensive income:
Unrealized gain on available-for-sale securities		5,347			2,493
Defined benefit plans gain		49			35
Total accumulated other comprehensive income		5,396			2,528
TOTAL STOCKHOLDERS' EQUITY		188,310			187,487
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,216,544		$	1,223,417

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Consolidated Statements of Income

(In Thousands Except Per Share Data) (Unaudited)

	3 Months Ended
	March 31,			March 31,
	2016			2015
INTEREST INCOME
Interest and fees on loans	$	7,974		$	7,709
Interest on balances with depository institutions		24			26
Interest on loans to political subdivisions		448			349
Interest on mortgages held for sale		6			2
Income from available-for-sale securities:
Taxable		1,555			1,974
Tax-exempt		896			1,016
Dividends		34			87
Total interest and dividend income		10,937			11,163
INTEREST EXPENSE
Interest on deposits		479			486
Interest on short-term borrowings		62			1
Interest on long-term borrowings		363			726
Total interest expense		904			1,213
Net interest income		10,033			9,950
Provision for loan losses		368			3
Net interest income after provision for loan losses		9,665			9,947
OTHER INCOME
Service charges on deposit accounts		1,138			1,022
Service charges and fees		94			113
Trust and financial management revenue		1,144			1,114
Brokerage revenue		173			219
Insurance commissions, fees and premiums		21			40
Interchange revenue from debit card transactions		463			474
Net gains from sale of loans		168			147
(Decrease) in fair value of servicing rights		(71	)		(117	)
Increase in cash surrender value of life insurance		96			97
Other operating income		464			447
Sub-total		3,690			3,556
Realized gains on available-for-sale securities, net		383			74
Total other income		4,073			3,630
OTHER EXPENSES
Salaries and wages		3,887			3,487
Pensions and other employee benefits		1,437			1,385
Occupancy expense, net		609			722
Furniture and equipment expense		427			454
FDIC Assessments		142			151
Pennsylvania shares tax		322			318
Professional fees		289			156
Automated teller machine and interchange expense		249			246
Software subscriptions		241			197
Other operating expense		1,469			1,417
Total other expenses		9,072			8,533
Income before income tax provision		4,666			5,044
Income tax provision		1,093			1,229
NET INCOME	$	3,573		$	3,815
NET INCOME PER SHARE - BASIC	$	0.29		$	0.31
NET INCOME PER SHARE - DILUTED	$	0.29		$	0.31

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Consolidated Statements of Comprehensive Income

(In Thousands)

	3 Months Ended
	March 31,			March 31,
	2016			2015
Net income	$	3,573		$	3,815
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities		4,774			3,725
Reclassification adjustment for gains realized in income		(383	)		(74	)
Other comprehensive gain on available-for-sale securities		4,391			3,651
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in accumulated other comprehensive gain (loss)		26			(100	)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(5	)		(3	)
Other comprehensive gain (loss) on unfunded retirement obligations		21			(103	)
Other comprehensive income before income tax		4,412			3,548
Income tax related to other comprehensive income		(1,544	)		(1,242	)
Net other comprehensive income		2,868			2,306
Comprehensive income	$	6,441		$	6,121

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands) (Unaudited)

	3 Months Ended
	March 31,			March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,573		$	3,815
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		368			3
Realized gains on available-for-sale securities, net		(383	)		(74	)
Realized loss on foreclosed assets		46			13
Depreciation expense		408			469
Accretion and amortization on securities, net		297			383
Accretion and amortization on loans and deposits, net		(4	)		(5	)
Decrease in fair value of servicing rights		71			117
Increase in cash surrender value of life insurance		(96	)		(97	)
Stock-based compensation		162			150
Amortization of core deposit intangibles		3			5
Deferred income taxes		622			440
Gains on sales of loans, net		(168	)		(147	)
Origination of loans for sale		(4,975	)		(4,150	)
Proceeds from sales of loans		4,861			4,052
Increase in accrued interest receivable and other assets		(759	)		(1,752	)
(Decrease) increase in accrued interest payable and other liabilities		(289	)		487
Net Cash Provided by Operating Activities		3,737			3,709
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of certificates of deposit		100			0
Purchase of certificate of deposit		(100	)		0
Proceeds from sales of available-for-sale securities		8,695			861
Proceeds from calls and maturities of available-for-sale securities		17,318			19,400
Purchase of available-for-sale securities		(14,852	)		(28,152	)
Redemption of Federal Home Loan Bank of Pittsburgh stock		2,297			485
Purchase of Federal Home Loan Bank of Pittsburgh stock		(901	)		(546	)
Net decrease in loans		2,313			1,402
Purchase of premises and equipment		(378	)		(367	)
Return of principal on limited liability entity investments		49			54
Proceeds from sale of foreclosed assets		0			191
Net Cash Provided by (Used in) Investing Activities		14,541			(6,672	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		20,233			8,645
Net (decrease) increase in short-term borrowings		(27,544	)		303
Repayments of long-term borrowings		(75	)		(72	)
Purchase of treasury stock		(3,070	)		(3,022	)
Sale of treasury stock		34			279
Tax benefit from compensation plans		45			42
Common dividends paid		(2,789	)		(2,829	)
Net Cash (Used in) Provided by Financing Activities		(13,166	)		3,346
INCREASE IN CASH AND CASH EQUIVALENTS		5,112			383
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		33,313			31,619
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	38,425		$	32,002
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Assets acquired through foreclosure of real estate loans	$	370		$	598
Accrued redemption of bank-owned life insurance policy	$	1,442		$	0
Interest paid	$	905		$	1,201
Income taxes paid	$	225		$	175

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Consolidated Statements of Changes in Stockholders' Equity

(In Thousands Except Share and Per Share Data)

(Unaudited)

														Accumulated
														Other
	Common		Treasury			Common		Paid-in			Retained			Comprehensive		Treasury
	Shares		Shares			Stock		Capital			Earnings			Income		Stock			Total
Three Months Ended March 31, 2016
Balance, December 31, 2015		12,655,171		474,548		$	12,655	$	71,654		$	109,454		$	2,528	$	(8,804	)	$	187,487
Net income												3,573								3,573
Other comprehensive income, net															2,868					2,868
Cash dividends declared on common stock, $0.26 per share												(3,165	)							(3,165	)
Shares issued for dividend reinvestment plan				(18,777	)				24								352			376
Treasury stock purchased				154,350													(3,070	)		(3,070	)
Shares issued from treasury for exercise of stock options				(2,090	)				(4	)							38			34
Restricted stock granted				(34,199	)				(635	)							635			0
Forfeiture of restricted stock				309					5								(5	)		0
Stock-based compensation expense									162											162
Tax benefit from dividends on restricted stock									6											6
Tax benefit from employee benefit plan												39								39
Balance, March 31, 2016		12,655,171		574,141		$	12,655	$	71,212		$	109,901		$	5,396	$	(10,854	)	$	188,310
Three Months Ended March 31, 2015
Balance, December 31, 2014		12,655,171		375,191		$	12,655	$	71,541		$	105,550		$	5,360	$	(6,744	)	$	188,362
Net income												3,815								3,815
Other comprehensive income, net															2,306					2,306
Cash dividends declared on common stock, $0.26 per share												(3,201	)							(3,201	)
Shares issued for dividend reinvestment plan				(19,239	)												372			372
Treasury stock purchased				155,800													(3,022	)		(3,022	)
Shares issued from treasury for exercise of stock options				(16,908	)				(28	)							307			279
Restricted stock granted				(34,800	)				(627	)							627			0
Forfeiture of restricted stock				1,943					33								(33	)		0
Stock-based compensation expense									150											150
Tax benefit from dividends on restricted stock									5											5
Tax benefit from employee benefit plan												37								37
Balance, March 31, 2015		12,655,171		461,987		$	12,655	$	71,074		$	106,201		$	7,666	$	(8,493	)	$	189,103

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF INTERIM PRESENTATION

The consolidated financial information included herein, with the exception of the consolidated balance sheet dated December 31, 2015, is unaudited. Such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity for the interim periods; however, the information does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for a complete set of financial statements. Certain 2015 information has been reclassified for consistency with the 2016 presentation.

Operating results reported for the three-month ended March 31, 2016 might not be indicative of the results for the year ending December 31, 2016. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission.

2. PER SHARE DATA

Net income per share is based on the weighted-average number of shares of common stock outstanding. The following data show the amounts used in computing basic and diluted net income per share. As shown in the table that follows, diluted earnings per share is computed using weighted average common shares outstanding, plus weighted-average common shares available from the exercise of all dilutive stock options, less the number of shares that could be repurchased with the proceeds of stock option exercises based on the average share price of the Corporation's common stock during the period.

			Weighted-
			Average			Earnings
	Net		Common			Per
	Income		Shares			Share
Three Months Ended March 31, 2016
Earnings per share – basic	$	3,573,000		12,155,108		$	0.29
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				198,985
Hypothetical share repurchase at $20.05				(178,215	)
Earnings per share – diluted	$	3,573,000		12,175,878		$	0.29
Three Months Ended March 31, 2015
Earnings per share – basic	$	3,815,000		12,268,306		$	0.31
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				181,385
Hypothetical share repurchase at $19.78				(160,552	)
Earnings per share – diluted	$	3,815,000		12,289,139		$	0.31

Stock options that were anti-dilutive were excluded from net income per share calculations. Weighted-average common shares available from anti-dilutive instruments totaled 47,309 shares in the three-month period ended March 31, 2016 and 103,104 shares in the three-month period ended March 31, 2015.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

3. COMPREHENSIVE INCOME

Comprehensive income is the total of (1) net income, and (2) all other changes in equity from non-stockholder sources, which are referred to as other comprehensive income. The components of other comprehensive income, and the related tax effects, are as follows:

(In Thousands)	Before- Tax			Income Tax			Net-of- Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2016
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	4,774		$	(1,671	)	$	3,103
Reclassification adjustment for (gains) realized in income		(383	)		134			(249	)
Other comprehensive income on available-for-sale securities		4,391			(1,537	)		2,854
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		26			(9	)		17
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(5	)		2			(3	)
Other comprehensive income on unfunded retirement obligations		21			(7	)		14
Total other comprehensive income	$	4,412		$	(1,544	)	$	2,868

(In Thousands)	Before- Tax			Income Tax			Net-of- Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2015
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	3,725		$	(1,304	)	$	2,421
Reclassification adjustment for (gains) realized in income		(74	)		26			(48	)
Other comprehensive income on available-for-sale securities		3,651			(1,278	)		2,373
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		(100	)		35			(65	)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(3	)		1			(2	)
Other comprehensive loss on unfunded retirement obligations		(103	)		36			(67	)
Total other comprehensive income	$	3,548		$	(1,242	)	$	2,306

Changes in the components of accumulated other comprehensive income are as follows and are presented net of tax:

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2016
Balance, beginning of period	$	2,493		$	35		$	2,528
Other comprehensive income before reclassifications		3,103			17			3,120
Amounts reclassified from accumulated other comprehensive income		(249	)		(3	)		(252	)
Other comprehensive income		2,854			14			2,868
Balance, end of period	$	5,347		$	49		$	5,396

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2015
Balance, beginning of period	$	5,281		$	79		$	5,360
Other comprehensive income before reclassifications		2,421			(65	)		2,356
Amounts reclassified from accumulated other comprehensive income		(48	)		(2	)		(50	)
Other comprehensive income		2,373			(67	)		2,306
Balance, end of period	$	7,654		$	12		$	7,666

Items reclassified out of each component of other comprehensive income are as follows:

For the Three Months Ended March 31, 2016
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(383	)	Realized gains on available-for-sale securities, net
		134		Income tax provision
		(249	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(8	)	Pensions and other employee benefits
Actuarial loss		3		Pensions and other employee benefits
		(5	)	Total before tax
		2		Income tax provision
		(3	)	Net of tax
Total reclassifications for the period	$	(252	)

For the Three Months Ended March 31, 2015
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(74	)	Realized gains on available-for-sale securities, net
		26		Income tax provision
		(48	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(7	)	Pensions and other employee benefits
Actuarial loss		4		Pensions and other employee benefits
		(3	)	Total before tax
		1		Income tax provision
		(2	)	Net of tax
Total reclassifications for the period	$	(50	)

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

4. CASH AND DUE FROM BANKS

Cash and due from banks at March 31, 2016 and December 31, 2015 include the following:

(In thousands)	March 31,		Dec. 31,
	2016		2015
Cash and cash equivalents	$	38,425	$	33,313
Certificates of deposit		2,748		2,748
Total cash and due from banks	$	41,173	$	36,061

Certificates of deposit are issues by U.S. banks with original maturities greater than three months. Each certificate of deposit is fully FDIC-insured. The Corporation maintains cash and cash equivalents with certain financial institutions in excess of the FDIC insurance limit.

The Corporation is required to maintain reserves against deposit liabilities in the form of cash and balances with the Federal Reserve Bank of Philadelphia. The reserves are based on deposit levels, account activity, and other services provided by the Federal Reserve Bank. Required reserves were $14,562,000 at March 31, 2016 and $15,327,000 at December 31, 2015.

5. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

The Corporation measures certain assets at fair value. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. FASB ASC topic 820, “Fair Value Measurements and Disclosures” establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Corporation for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2 – Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets and other observable inputs.

Level 3 – Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows and other similar techniques.

The Corporation monitors and evaluates available data relating to fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date of an event or change in circumstances that affects the valuation method chosen. Examples of such changes may include the market for a particular asset becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2016 and December 31, 2015, assets measured at fair value and the valuation methods used are as follows:

			March 31, 2016
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,707	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		0		111,959		0			111,959
Taxable		0		35,094		0			35,094
Mortgage-backed securities		0		73,243		0			73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		180,860		0			180,860
Collateralized debt obligations		0		7		0			7
Total debt securities		0		411,870		0			411,870
Marketable equity securities		1,736		0		0			1,736
Total available-for-sale securities		1,736		411,870		0			413,606
Servicing rights		0		0		1,261			1,261
Total recurring fair value measurements	$	1,736	$	411,870	$	1,261		$	414,867
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,420		$	1,420
Valuation allowance		0		0		(306	)		(306	)
Impaired loans, net		0		0		1,114			1,114
Foreclosed assets held for sale		0		0		1,584			1,584
Total nonrecurring fair value measurements	$	0	$	0	$	2,698		$	2,698

12

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

			December 31, 2015
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,483	$	0		$	10,483
Obligations of states and political subdivisions:
Tax-exempt		0		107,757		0			107,757
Taxable		0		34,597		0			34,597
Mortgage-backed securities		0		73,343		0			73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		191,715		0			191,715
Collateralized debt obligations		0		9		0			9
Total debt securities		0		417,904		0			417,904
Marketable equity securities		2,386		0		0			2,386
Total available-for-sale securities		2,386		417,904		0			420,290
Servicing rights		0		0		1,296			1,296
Total recurring fair value measurements	$	2,386	$	417,904	$	1,296		$	421,586
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,933		$	1,933
Valuation allowance		0		0		(820	)		(820	)
Impaired loans, net		0		0		1,113			1,113
Foreclosed assets held for sale		0		0		1,260			1,260
Total nonrecurring fair value measurements	$	0	$	0	$	2,373		$	2,373

Management’s evaluation and selection of valuation techniques and the unobservable inputs used in determining the fair values of assets valued using Level 3 methodologies include sensitive assumptions. Other market participants might use substantially different assumptions, which could result in calculations of fair values that would be substantially different than the amount calculated by management.

At March 31, 2016 and December 31, 2015, quantitative information regarding significant techniques and inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows:

	Fair Value at
	3/31/16		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				3/31/16
Servicing rights	$	1,261	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		168.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

13

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

	Fair Value at
	12/31/15		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				12/31/15
Servicing rights	$	1,296	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		146.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

The fair value of servicing rights is affected by expected future interest rates. Increases (decreases) in future expected interest rates tend to increase (decrease) the fair value of the Corporation’s servicing rights because of changes in expected prepayment behavior by the borrowers on the underlying loans.

Following is a reconciliation of activity for Level 3 assets measured at fair value on a recurring basis:

(In Thousands)	3 Months Ended
	March 31,			March 31,
	2016			2015
Servicing rights balance, beginning of period	$	1,296		$	1,281
Issuances of servicing rights		36			31
Unrealized losses included in earnings		(71	)		(117	)
Service rights balance, end of period	$	1,261		$	1,195

Loans are classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Foreclosed assets held for sale consist of real estate acquired by foreclosure. For impaired commercial loans secured by real estate and foreclosed assets held for sale, estimated fair values are determined primarily using values from third-party appraisals. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

14

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2016 and December 31, 2015, quantitative information regarding significant techniques and inputs used for nonrecurring fair value measurements using unobservable inputs (Level 3 methodologies) are as follows:

(In Thousands, Except									Value at
Percentages)			Valuation						3/31/16
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	3/31/16		3/31/16		3/31/16		Technique	Inputs	Average)
Impaired loans:
Commercial:
Commercial loans secured by real estate	$	311	$	96	$	215	Sales comparison	Discount to appraised value		47	%
Commercial and industrial		599		158		441	Sales comparison	Discount to appraised value		52	%
Loans secured by farmland		510		52		458	Sales comparison	Discount to appraised value		49	%
Total impaired loans	$	1,420	$	306	$	1,114
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	883	$	0	$	883	Sales comparison	Discount to appraised value		39	%
Land		701		0		701	Sales comparison	Discount to appraised value		30	%
Total foreclosed assets held for sale	$	1,584	$	0	$	1,584

(In Thousands, Except									Value at
Percentages)			Valuation						12/31/15
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	12/31/15		12/31/15		12/31/15		Technique	Inputs	Average)
Impaired loans:
Residential mortgage loans - first liens	$	42	$	1	$	41	Sales comparison	Discount to appraised value		31	%
Commercial:
Commercial loans secured by real estate		317		97		220	Sales comparison	Discount to appraised value		46	%
Commercial and industrial		75		75		0	Sales comparison	Discount to appraised value		31	%
Loans secured by farmland		512		52		460	Sales comparison	Discount to appraised value		49	%
Multi-family (5 or more) residential		987		595		392	Sales comparison	Discount to appraised value		41	%
Total impaired loans	$	1,933	$	820	$	1,113
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	556	$	0	$	556	Sales comparison	Discount to appraised value		32	%
Land		704		0		704	Sales comparison	Discount to appraised value		29	%
Total foreclosed assets held for sale	$	1,260	$	0	$	1,260

Certain of the Corporation’s financial instruments are not measured at fair value in the consolidated financial statements. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Therefore, the aggregate fair value amounts presented may not represent the underlying fair value of the Corporation.

15

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation used the following methods and assumptions in estimating fair value disclosures for financial instruments:

CASH AND CASH EQUIVALENTS - The carrying amounts of cash and short-term instruments approximate fair values.

CERTIFICATES OF DEPOSIT - Fair values for certificates of deposit, included in cash and due from banks in the consolidated balance sheet, are based on quoted market prices for certificates of similar remaining maturities.

SECURITIES - Fair values for securities, excluding restricted equity securities, are based on quoted market prices or other methods as described above. The carrying value of restricted equity securities approximates fair value based on applicable redemption provisions.

LOANS HELD FOR SALE - Fair values of loans held for sale are determined based on applicable sale prices available under the Federal Home Loan Banks’ MPF Xtra and MPF Original programs.

LOANS - Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, commercial real estate, residential mortgage and other consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of performing loans is calculated by discounting contractual cash flows, adjusted for estimated prepayments based on historical experience, using estimated market discount rates that reflect the credit and interest rate risk inherent in the loans. Fair value of nonperforming loans is based on recent appraisals or estimates prepared by the Corporation’s lending officers.

SERVICING RIGHTS - The fair value of servicing rights, included in other assets in the consolidated balance sheet, is determined through a discounted cash flow valuation. Significant inputs include expected net servicing income, the discount rate and the expected prepayment speeds of the underlying loans.

DEPOSITS - The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, money market and interest checking accounts, is (by definition) equal to the amount payable on demand at March 31, 2016 and December 31, 2015. The fair value of time deposits, such as certificates of deposit and Individual Retirement Accounts, is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The fair value estimates of deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible.

BORROWED FUNDS - The fair value of borrowings is estimated using discounted cash flow analyses based on rates currently available to the Corporation for similar types of borrowing arrangements.

ACCRUED INTEREST - The carrying amounts of accrued interest receivable and payable approximate fair values.

OFF-BALANCE SHEET COMMITMENTS - The Corporation has commitments to extend credit and has issued standby letters of credit. Standby letters of credit are conditional guarantees of performance by a customer to a third party. Estimates of the fair value of these off-balance sheet items were not made because of the short-term nature of these arrangements and the credit standing of the counterparties.

16

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments are as follows:

(In Thousands)	Valuation	March 31, 2016				December 31, 2015
	Method(s)	Carrying		Fair		Carrying		Fair
	Used	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	38,425	$	38,425	$	33,313	$	33,313
Certificates of deposit	Level 2		2,748		2,773		2,748		2,752
Available-for-sale securities	See Above		413,606		413,606		420,290		420,290
Restricted equity securities (included in Other Assets)	Level 2		3,261		3,261		4,657		4,657
Loans held for sale	Level 2		526		526		280		280
Loans, net	Level 3		693,944		688,359		696,991		685,552
Accrued interest receivable	Level 2		3,900		3,900		3,768		3,768
Servicing rights	Level 3		1,261		1,261		1,296		1,296
Financial liabilities:
Deposits with no stated maturity	Level 2		736,837		736,837		713,931		713,931
Time deposits	Level 2		219,011		219,237		221,684		221,891
Short-term borrowings	Level 2		25,952		25,841		53,496		53,398
Long-term borrowings	Level 2		38,692		40,247		38,767		40,166
Accrued interest payable	Level 2		69		69		70		70

6. SECURITIES

Amortized cost and fair value of available-for-sale securities at March 31, 2016 and December 31, 2015 are summarized as follows:

			March 31, 2016
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,661	$	46	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		107,269		4,756		(66	)		111,959
Taxable		34,249		845		0			35,094
Mortgage-backed securities		72,210		1,060		(27	)		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		1,665		(536	)		180,860
Collateralized debt obligations		7		0		0			7
Total debt securities		404,127		8,372		(629	)		411,870
Marketable equity securities		1,253		483		0			1,736
Total	$	405,380	$	8,855	$	(629	)	$	413,606

17

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

			December 31, 2015
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,663	$	12	$	(192	)	$	10,483
Obligations of states and political subdivisions:
Tax-exempt		103,414		4,365		(22	)		107,757
Taxable		34,317		381		(101	)		34,597
Mortgage-backed securities		73,227		486		(370	)		73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		193,145		623		(2,053	)		191,715
Collateralized debt obligations:		9		0		0			9
Total debt securities		414,775		5,867		(2,738	)		417,904
Marketable equity securities		1,680		706		0			2,386
Total	$	416,455	$	6,573	$	(2,738	)	$	420,290

The following table presents gross unrealized losses and fair value of available-for-sale securities with unrealized loss positions that are not deemed to be other-than-temporarily impaired, aggregated by length of time that individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015:

March 31, 2016	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of states and political subdivisions, Tax-exempt	$	10,017	$	(66	)	$	0	$	0		$	10,017	$	(66	)
Mortgage-backed securities		5,899		(27	)		0		0			5,899		(27	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		5,820		(105	)		44,291		(431	)		50,111		(536	)
Total temporarily impaired available-for-sale securities	$	21,736	$	(198	)	$	44,291	$	(431	)	$	66,027	$	(629	)

December 31, 2015	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of U.S. Government agencies	$	0	$	0		$	7,850	$	(192	)	$	7,850	$	(192	)
Obligations of states and political subdivisions:
Tax-exempt		5,200		(19	)		216		(3	)		5,416		(22	)
Taxable		10,605		(60	)		2,910		(41	)		13,515		(101	)
Mortgage-backed securities		38,764		(295	)		3,503		(75	)		42,267		(370	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		88,355		(648	)		49,273		(1,405	)		137,628		(2,053	)
Total temporarily impaired available-for-sale securities	$	142,924	$	(1,022	)	$	63,752	$	(1,716	)	$	206,676	$	(2,738	)

18

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Gross realized gains and losses from available-for-sale securities were as follows:

(In Thousands)	3 Months Ended
	March 31,		March 31,
	2016		2015
Gross realized gains from sales	$	383	$	74
Gross realized losses from sales		0		0
Net realized gains	$	383	$	74

The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of March 31, 2016. Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
(In Thousands)	Cost		Value
Due in one year or less	$	10,374	$	10,451
Due from one year through five years		65,791		67,520
Due from five years through ten years		45,949		47,676
Due after ten years		30,072		32,120
Subtotal		152,186		157,767
Mortgage-backed securities		72,210		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		180,860
Total	$	404,127	$	411,870

The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.

Investment securities carried at $215,510,000 at March 31, 2016 and $228,616,000 at December 31, 2015 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law. See Note 8 for information concerning securities pledged to secure borrowing arrangements.

Management evaluates securities for other-than-temporary impairment (OTTI) at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether the Corporation intends to sell the security or more likely than not will be required to sell the security before its anticipated recovery.

A summary of information management considered in evaluating debt and equity securities for OTTI at March 31, 2016 is provided below.

Debt Securities

At March 31, 2016, management performed an assessment for possible OTTI of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. The extent of individual analysis applied to each security depended on the size of the Corporation’s investment, as well as management’s perception of the credit risk associated with each security. Based on the results of the assessment, management believes impairment of debt securities at March 31, 2016 to be temporary.

Equity Securities

The Corporation’s marketable equity securities at March 31, 2016 and December 31, 2015 consisted exclusively of stocks of banking companies. At March 31, 2016, the Corporation held no stocks with an unrealized loss.

19

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In the first quarter 2016, the Corporation had realized gains of $249,000 from the sale of bank stocks. The Corporation had no realized gains or losses from the sale of equity securities in the first quarter of 2015.

C&N Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, C&N Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. C&N Bank’s investment in FHLB-Pittsburgh stock, included in Other Assets in the consolidated balance sheet, was $3,131,000 at March 31, 2016 and $4,527,000 at December 31, 2015. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at March 31, 2016 and December 31, 2015. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available.

7. LOANS

The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at March 31, 2016 and December 31, 2015 are summarized by segment, and by classes within each segment, as follows:

Summary of Loans by Type
(In Thousands)	Mar. 31,			Dec. 31,
	2016			2015
Residential mortgage:
Residential mortgage loans - first liens	$	306,753		$	304,783
Residential mortgage loans - junior liens		21,622			21,146
Home equity lines of credit		38,627			39,040
1-4 Family residential construction		20,010			21,121
Total residential mortgage		387,012			386,090
Commercial:
Commercial loans secured by real estate		154,646			154,779
Commercial and industrial		71,628			75,196
Political subdivisions		38,364			40,007
Commercial construction and land		7,445			5,122
Loans secured by farmland		7,168			7,019
Multi-family (5 or more) residential		8,393			9,188
Agricultural loans		4,492			4,671
Other commercial loans		11,387			12,152
Total commercial		303,523			308,134
Consumer		11,070			10,656
Total		701,605			704,880
Less: allowance for loan losses		(7,661	)		(7,889	)
Loans, net	$	693,944		$	696,991

The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in the Pennsylvania and New York counties that comprise the market serviced by Citizens & Northern Bank. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. There is no concentration of loans to borrowers engaged in similar businesses or activities that exceed 10% of total loans at either March 31, 2016 or December 31, 2015.

The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and recorded as a reduction of the investment in loans. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. In the process of evaluating the loan portfolio, management also considers the Corporation’s exposure to losses from unfunded loan commitments. As of March 31, 2016 and December 31, 2015, management determined that no allowance for credit losses related to unfunded loan commitments was required.

20

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Transactions within the allowance for loan losses, summarized by segment and class, for the three-month periods ended March 31, 2016 and 2015 were as follows:

	Dec. 31,										March 31,
Three Months Ended March 31, 2016 (In Thousands)	2015 Balance		Charge-offs			Recoveries		Provision (Credit)			2016 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,645	$	0		$	0	$	77		$	2,722
Residential mortgage loans - junior liens		219		0			0		9			228
Home equity lines of credit		347		0			0		4			351
1-4 Family residential construction		207		0			0		(7	)		200
Total residential mortgage		3,418		0			0		83			3,501
Commercial:
Commercial loans secured by real estate		1,939		0			1		87			2,027
Commercial and industrial		981		0			1		(6	)		976
Commercial construction and land		58		0			0		26			84
Loans secured by farmland		106		0			0		2			108
Multi-family (5 or more) residential		675		(595	)		0		176			256
Agricultural loans		45		0			0		(1	)		44
Other commercial loans		118		0			0		(6	)		112
Total commercial		3,922		(595	)		2		278			3,607
Consumer		122		(18	)		15		7			126
Unallocated		427		0			0		0			427
Total Allowance for Loan Losses	$	7,889	$	(613	)	$	17	$	368		$	7,661

21

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

	Dec. 31,										March 31,
Three Months Ended March 31, 2015 (In Thousands)	2014 Balance		Charge-offs			Recoveries		Provision (Credit)			2015 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,941	$	(79	)	$	1	$	(89	)	$	2,774
Residential mortgage loans - junior liens		176		0			0		24			200
Home equity lines of credit		322		0			0		0			322
1-4 Family residential construction		214		0			0		(7	)		207
Total residential mortgage		3,653		(79	)		1		(72	)		3,503
Commercial:
Commercial loans secured by real estate		1,758		(115	)		0		93			1,736
Commercial and industrial		688		(10	)		1		5			684
Commercial construction and land		283		0			0		3			286
Loans secured by farmland		165		0			0		(6	)		159
Multi-family (5 or more) residential		87		0			0		(6	)		81
Agricultural loans		31		0			0		(2	)		29
Other commercial loans		131		0			0		(8	)		123
Total commercial		3,143		(125	)		1		79			3,098
Consumer		145		(18	)		15		(3	)		139
Unallocated		395		0			0		(1	)		394
Total Allowance for Loan Losses	$	7,336	$	(222	)	$	17	$	3		$	7,134

In the evaluation of the loan portfolio, management determines two major components for the allowance for loan losses – (1) a specific component based on an assessment of certain larger relationships, mainly commercial purpose loans, on a loan-by-loan basis; and (2) a general component for the remainder of the portfolio based on a collective evaluation of pools of loans with similar risk characteristics. The general component is assigned to each pool of loans based on both historical net charge-off experience, and an evaluation of certain qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the above methodologies for estimating specific and general losses in the portfolio.

In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table below.

22

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of March 31, 2016 and December 31, 2015:

March 31, 2016
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	296,394	$	378	$	9,915	$	66	$	306,753
Residential mortgage loans - junior liens		20,920		276		426		0		21,622
Home Equity lines of credit		37,570		492		565		0		38,627
1-4 Family residential construction		19,994		16		0		0		20,010
Total residential mortgage		374,878		1,162		10,906		66		387,012
Commercial:
Commercial loans secured by real estate		140,985		4,444		9,217		0		154,646
Commercial and Industrial		67,568		2,257		1,676		127		71,628
Political subdivisions		38,364		0		0		0		38,364
Commercial construction and land		7,282		60		103		0		7,445
Loans secured by farmland		5,452		171		1,525		20		7,168
Multi-family (5 or more) residential		7,751		0		642		0		8,393
Agricultural loans		4,478		0		14		0		4,492
Other commercial loans		11,309		0		78		0		11,387
Total commercial		283,189		6,932		13,255		147		303,523
Consumer		10,878		20		172		0		11,070
Totals	$	668,945	$	8,114	$	24,333	$	213	$	701,605

December 31, 2015
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	295,302	$	407	$	9,007	$	67	$	304,783
Residential mortgage loans - junior liens		20,558		185		403		0		21,146
Home equity lines of credit		38,071		543		426		0		39,040
1-4 Family residential construction		21,104		17		0		0		21,121
Total residential mortgage		375,035		1,152		9,836		67		386,090
Commercial:
Commercial loans secured by real estate		140,381		5,862		8,536		0		154,779
Commercial and Industrial		71,225		2,106		1,737		128		75,196
Political subdivisions		40,007		0		0		0		40,007
Commercial construction and land		4,957		60		105		0		5,122
Loans secured by farmland		5,084		483		1,432		20		7,019
Multi-family (5 or more) residential		7,943		0		1,245		0		9,188
Agricultural loans		4,655		0		16		0		4,671
Other commercial loans		12,073		0		79		0		12,152
Total commercial		286,325		8,511		13,150		148		308,134
Consumer		10,490		21		145		0		10,656
Totals	$	671,850	$	9,684	$	23,131	$	215	$	704,880

23

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The general component of the allowance for loan losses covers pools of loans including commercial loans not considered individually impaired, as well as smaller balance homogeneous classes of loans, such as residential real estate, home equity lines of credit and other consumer loans. Accordingly, the Corporation generally does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are subject to a restructuring agreement. The pools of loans are evaluated for loss exposure based upon three-year average historical net charge-off rates for each loan class, adjusted for qualitative factors. Qualitative risk factors (described in the following paragraph) are evaluated for the impact on each of the three segments (residential mortgage, commercial and consumer) within the loan portfolio. Each qualitative factor is assigned a value to reflect improving, stable or declining conditions based on management’s judgment using relevant information available at the time of the evaluation. The adjustment for qualitative factors is applied as an increase or decrease to the three-year average net charge-off rate to each loan class within each segment.

The qualitative factors used in the general component calculations are designed to address credit risk characteristics associated with each segment. The Corporation’s credit risk associated with all of the segments is significantly impacted by these factors, which include economic conditions within its market area, the Corporation’s lending policies, changes or trends in the portfolio, risk profile, competition, regulatory requirements and other factors. Further, the residential mortgage segment is significantly affected by the values of residential real estate that provide collateral for the loans. The majority of the Corporation’s commercial segment loans (approximately 59% at March 31, 2016) is secured by real estate, and accordingly, the Corporation’s risk for the commercial segment is significantly affected by commercial real estate values. The consumer segment includes a wide mix of loans for different purposes, primarily secured loans, including loans secured by motor vehicles, manufactured housing and other types of collateral.

Loans are classified as impaired, when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans, by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price.

The scope of loans evaluated individually for impairment include all loan relationships greater than $200,000 for which there is at least one extension of credit graded Special Mention, Substandard or Doubtful. Also, all loans classified as troubled debt restructurings (discussed in more detail below) and all loan relationships less than $200,000 in the aggregate, but with an estimated loss of $100,000 or more, are individually evaluated for impairment. Loans that are individually evaluated for impairment, but which are not determined to be impaired, are combined with all remaining loans that are not reviewed on a specific basis, and such loans are included within larger pools of loans based on similar risk and loss characteristics for purposes of determining the general component of the allowance. The loans that have been individually evaluated, but which have not been determined to be impaired, are included in the “Collectively Evaluated” column in the tables summarizing the allowance and associated loan balances as of March 31, 2016 and December 31, 2015.

24

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of March 31, 2016 and December 31, 2015:

March 31, 2016	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	833	$	305,920	$	306,753	$	0	$	2,722	$	2,722
Residential mortgage loans - junior liens		72		21,550		21,622		0		228		228
Home equity lines of credit		0		38,627		38,627		0		351		351
1-4 Family residential construction		0		20,010		20,010		0		200		200
Total residential mortgage		905		386,107		387,012		0		3,501		3,501
Commercial:
Commercial loans secured by real estate		6,065		148,581		154,646		96		1,931		2,027
Commercial and industrial		832		70,796		71,628		155		821		976
Political subdivisions		0		38,364		38,364		0		0		0
Commercial construction and land		0		7,445		7,445		0		84		84
Loans secured by farmland		1,418		5,750		7,168		52		56		108
Multi-family (5 or more) residential		392		8,001		8,393		0		256		256
Agricultural loans		14		4,478		4,492		0		44		44
Other commercial loans		0		11,387		11,387		0		112		112
Total commercial		8,721		294,802		303,523		303		3,304		3,607
Consumer		4		11,066		11,070		3		123		126
Unallocated												427
Total	$	9,630	$	691,975	$	701,605	$	306	$	6,928	$	7,661

December 31, 2015	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	884	$	303,899	$	304,783	$	1	$	2,644	$	2,645
Residential mortgage loans - junior liens		74		21,072		21,146		0		219		219
Home equity lines of credit		0		39,040		39,040		0		347		347
1-4 Family residential construction		0		21,121		21,121		0		207		207
Total residential mortgage		958		385,132		386,090		1		3,417		3,418
Commercial:
Commercial loans secured by real estate		6,262		148,517		154,779		97		1,842		1,939
Commercial and industrial		324		74,872		75,196		75		906		981
Political subdivisions		0		40,007		40,007		0		0		0
Commercial construction and land		0		5,122		5,122		0		58		58
Loans secured by farmland		1,427		5,592		7,019		52		54		106
Multi-family (5 or more) residential		987		8,201		9,188		595		80		675
Agricultural loans		16		4,655		4,671		0		45		45
Other commercial loans		0		12,152		12,152		0		118		118
Total commercial		9,016		299,118		308,134		819		3,103		3,922
Consumer		0		10,656		10,656		0		122		122
Unallocated												427
Total	$	9,974	$	694,906	$	704,880	$	820	$	6,642	$	7,889

25

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Summary information related to impaired loans at March 31, 2016 and December 31, 2015 is as follows:

(In Thousands)	March 31, 2016						December 31, 2015
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
	Balance		Investment		Allowance		Balance		Investment		Allowance
With no related allowance recorded:
Residential mortgage loans - first liens	$	833	$	833	$	0	$	842	$	842	$	0
Residential mortgage loans - junior liens		72		72		0		74		74		0
Commercial loans secured by real estate		7,415		5,754		0		7,580		5,945		0
Commercial and industrial		237		237		0		249		249		0
Loans secured by farmland		908		908		0		915		915		0
Multi-family (5 or more) residential		987		392		0		0		0		0
Agricultural loans		14		14		0		16		16		0
Total with no related allowance recorded		10,466		8,210		0		9,676		8,041		0
With a related allowance recorded:
Residential mortgage loans - first liens		0		0		0		42		42		1
Commercial loans secured by real estate		311		311		96		317		317		97
Commercial and industrial		595		595		155		75		75		75
Loans secured by farmland		510		510		52		512		512		52
Multi-family (5 or more) residential		0		0		0		987		987		595
Consumer		4		4		3		0		0		0
Total with a related allowance recorded		1,420		1,420		306		1,933		1,933		820
Total	$	11,886	$	9,630	$	306	$	11,609	$	9,974	$	820

The average balance of impaired loans and interest income recognized on impaired loans is as follows:

					Interest Income Recognized on
	Average Investment in Impaired Loans				Impaired Loans on a Cash Basis
(In Thousands)	3 Months Ended				3 Months Ended
	March 31,				March 31,
	2016		2015		2016		2015
Residential mortgage:
Residential mortgage loans - first lien	$	861	$	3,442	$	10	$	14
Residential mortgage loans - junior lien		73		48		1		1
Total residential mortgage		934		3,490		11		15
Commercial:
Commercial loans secured by real estate		6,160		6,588		110		112
Commercial and industrial		568		603		3		7
Commercial construction and land		0		75		0		0
Loans secured by farmland		1,423		1,465		21		26
Multi-family (5 or more) residential		690		519		0		25
Agricultural loans		15		0		1		0
Total commercial		8,856		9,250		135		170
Consumer		12		0		0		0
Total	$	9,802	$	12,740	$	146	$	185

26

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Loans are placed on nonaccrual status for all classes of loans when, in the opinion of management, collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is not recognized on specific impaired loans unless the likelihood of further loss is remote. Interest payments received on loans for which the risk of further loss is greater than remote are applied as a reduction of the loan principal balance. Interest income on other nonaccrual loans, including impaired loans, is recognized only to the extent of interest payments received. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Also, the amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety days or more and still accruing is as follows:

(In Thousands)	March 31, 2016				December 31, 2015
	Past Due				Past Due
	90+ Days and				90+ Days and
	Accruing		Nonaccrual		Accruing		Nonaccrual
Residential mortgage:
Residential mortgage loans - first liens	$	2,680	$	3,080	$	2,381	$	3,044
Residential mortgage loans - junior liens		140		0		79		0
Home equity lines of credit		175		0		130		0
Total residential mortgage		2,995		3,080		2,590		3,044
Commercial:
Commercial loans secured by real estate		539		5,689		503		5,730
Commercial and industrial		318		312		65		313
Loans secured by farmland		102		1,418		0		1,427
Multi-family (5 or more) residential		0		392		0		987
Agricultural loans		0		14		0		16
Total commercial		959		7,825		568		8,473
Consumer		3		39		71		0
Totals	$	3,957	$	10,944	$	3,229	$	11,517

The amounts shown in the table immediately above include loans classified as troubled debt restructurings (described in more detail below), if such loans are past due ninety days or more or nonaccrual.

27

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The table below presents a summary of the contractual aging of loans as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016								As of December 31, 2015
	Current &								Current &
(In Thousands)	Past Due		Past Due		Past Due				Past Due		Past Due		Past Due
	Less than		30-89		90+				Less than		30-89		90+
	30 Days		Days		Days		Total		30 Days		Days		Days		Total
Residential mortgage:
Residential mortgage loans - first liens	$	295,485	$	7,234	$	4,034	$	306,753	$	294,703	$	6,156	$	3,924	$	304,783
Residential mortgage loans - junior liens		21,340		142		140		21,622		20,816		251		79		21,146
Home equity lines of credit		37,977		475		175		38,627		38,581		329		130		39,040
1-4 Family residential construction		19,867		143		0		20,010		21,121		0		0		21,121
Total residential mortgage		374,669		7,994		4,349		387,012		375,221		6,736		4,133		386,090
Commercial:
Commercial loans secured by real estate		150,087		3,280		1,279		154,646		153,427		108		1,244		154,779
Commercial and industrial		71,123		168		337		71,628		75,002		118		76		75,196
Political subdivisions		38,364		0		0		38,364		40,007		0		0		40,007
Commercial construction and land		7,311		134		0		7,445		5,018		104		0		5,122
Loans secured by farmland		6,025		221		922		7,168		5,970		223		826		7,019
Multi-family (5 or more) residential		7,928		73		392		8,393		8,201		0		987		9,188
Agricultural loans		4,398		80		14		4,492		4,642		13		16		4,671
Other commercial loans		11,387		0		0		11,387		12,152		0		0		12,152
Total commercial		296,623		3,956		2,944		303,523		304,419		566		3,149		308,134
Consumer		10,933		95		42		11,070		10,537		48		71		10,656
Totals	$	682,225	$	12,045	$	7,335	$	701,605	$	690,177	$	7,350	$	7,353	$	704,880

Nonaccrual loans are included in the contractual aging in the immediately preceding table. A summary of the contractual aging of nonaccrual loans at March 31, 2016 and December 31, 2015 is as follows:

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Total
March 31, 2016 Nonaccrual Totals	$	6,894	$	672	$	3,378	$	10,944
December 31, 2015 Nonaccrual Totals	$	7,100	$	293	$	4,124	$	11,517

Loans whose terms are modified are classified as Troubled Debt Restructurings (TDRs) if the Corporation grants such borrowers concessions, and it is deemed that those borrowers are experiencing financial difficulty. Loans classified as TDRs are designated as impaired. The outstanding balance of loans subject to TDRs, as well as contractual aging information at March 31, 2016 and December 31, 2015 is as follows:

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Nonaccrual		Total
March 31, 2016 Totals	$	925	$	242	$	86	$	5,060	$	6,313
December 31, 2015 Totals	$	1,186	$	0	$	81	$	5,097	$	6,364

28

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TDRs that occurred during the three-month periods ended March 31, 2016 and 2015 are as follows:

Three Months Ended March 31, 2016			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Commercial, Commercial and industrial		1	$	5	$	5

Three Months Ended March 31, 2015			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Residential mortgage:
Residential mortgage loans - first liens		1	$	56	$	56
Residential mortgage loans - junior liens		1		32		32
Consumer		1		30		30

The TDR in the three-month period ended March 31, 2016 resulted from an extension of a final maturity date. There was no allowance for loan losses on this loan at March 31, 2016 and no change in allowance for loan losses resulting from this TDR.

The TDRs in the three-month period ended March 31, 2015 included an extended maturity date and a reduction in interest rate on a residential mortgage – first lien, a lowered interest rate and reduced payment amount on a residential mortgage – junior lien and a lowered interest rate and reduced payment amount on the consumer loan. There was no allowance for loan losses on these loans at March 31, 2015 and no change in the allowance for loan losses resulting from these TDRs.

In the three-month period ended March 31, 2016 and 2015, defaults on loans for which modifications considered to be TDRs were entered into within the previous 12 months were as follows:

Three Months Ended March 31, 2016	Number
(Balances in Thousands)	of		Recorded
	Contracts		Investment
Residential mortgage, Residential mortgage loans - first liens		1	$	31
Commercial, Commercial and industrial		1		5

Three Months Ended March 31, 2015	Number
(Balances in Thousands)	of		Recorded
	Contracts		Investment
Residential mortgage, Residential mortgage loans - first liens		2	$	115
Commercial:
Commercial loans secured by real estate		1		407
Commercial construction and land		1		25

29

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In the first quarter 2016, the events of default in the table listed above resulted from a borrower’s failure to pay in a timely manner after reduced payment amounts for six months expired in the Residential mortgage – first lien and a borrower’s failure to pay off a loan after the maturity date was extended and passed on the Commercial and industrial loan. There was no allowance for loan losses recorded on these loans at March 31, 2016.

In the first quarter 2015, the events of default in the table listed above resulted from the borrowers’ failure to make timely payments under the following circumstances: (1) for one customer relationship included in the Residential first lien mortgage class, payment was missed after the interest rate and monthly payment amount had been reduced; (2) for the other customer relationship included in the Residential first lien class, monthly payments were missed after reducing the monthly payments to interest only payments; (3) for the Commercial loan secured by real estate, monthly payments were missed after reducing the monthly payments to interest only; and (4) for the Commercial construction and land loan, monthly payments were missed after extending the term of maturity. There were no allowances for loan losses recorded on these loans at March 31, 2015.

The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the unaudited Consolidated Balance Sheet) is as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Foreclosed residential real estate	$	883	$	555

The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Residential real estate in process of foreclosure	$	931	$	1,173

8. BORROWED FUNDS

Short-term borrowings include the following:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
FHLB-Pittsburgh borrowings	$	18,811	$	48,581
Customer repurchase agreements		7,141		4,915
Total short-term borrowings	$	25,952	$	53,496

Short-term borrowings from FHLB-Pittsburgh are as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Overnight borrowing	$	0	$	23,500
Other short-term advances		18,811		25,081
Total short-term FHLB-Pittsburgh borrowings	$	18,811	$	48,581

The FHLB-Pittsburgh loan facilities are collateralized by qualifying loans secured by real estate with a book value totaling $448,336,000 at March 31, 2016 and $450,883,000 at December 31, 2015. Also, the FHLB-Pittsburgh loan facilities require the Corporation to invest in established amounts of FHLB-Pittsburgh stock. The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in Other Assets) were $3,131,000 at March 31, 2016 and $4,527,000 at December 31, 2015.

At March 31, 2016, short-term borrowings from the FHLB-Pittsburgh include 9 advances of approximately $2,090,000 each maturing monthly throughout the remainder of the year ended December 31, 2016, with a weighted average interest rate of 0.94% and rates ranging from 0.77% to 1.052%. In the first quarter 2016, the Corporation repaid 3 advances of approximately $2,090,000 each with a weighted average rate of 0.62%.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation engages in repurchase agreements with certain commercial customers. These agreements provide that the Corporation sells specified investment securities to the customers on an overnight basis and repurchases them on the following business day. The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10% at March 31, 2016 and December 31, 2015. The carrying value of the underlying securities was $12,100,000 at March 31, 2016 and $12,613,000 at December 31, 2015.

Long-term borrowings are as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
FHLB-Pittsburgh borrowings	$	11,692	$	11,767
Repurchase agreement		27,000		27,000
Total long-term borrowings	$	38,692	$	38,767

Long-term borrowings from FHLB-Pittsburgh are as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Loan maturing in 2016 with a rate of 6.86%	$	45	$	57
Loan maturing in 2017 with a rate of 6.83%		9		10
Loan maturing in 2017 with a rate of 3.81%		10,000		10,000
Loan maturing in 2020 with a rate of 4.79%		778		821
Loan maturing in 2025 with a rate of 4.91%		860		879
Total long-term FHLB-Pittsburgh borrowings	$	11,692	$	11,767

The repurchase agreement included in long-term borrowings has an interest rate of 3.595% and an effective maturity date in December 2017.

The “Repurchase Date,” as defined in the Master Repurchase Agreement between the Corporation and the broker-dealer, occurs quarterly on or about the 20^th of each March, June, September and December until the “Final Repurchase Date” (as defined) on December 20, 2017. The Corporation pays interest, and the borrowing is putable by the issuer, on each Repurchase Date. The Final Repurchase Date is the effective maturity date of the borrowings.

Securities sold under repurchase agreements were delivered to the broker-dealer who is the counter-party to the transactions. The broker-dealer may have sold, loaned or otherwise disposed of such securities to other parties in the normal course of their operations, and has agreed to resell to the Corporation substantially identical securities at the maturities of the agreements. The Master Repurchase Agreement provides that the Agreement constitutes a “netting contract,” as defined; however, the Corporation and the broker-dealer have no other obligations to one another and accordingly, no netting has occurred.

The carrying value of the underlying securities was $32,701,000 at March 31, 2016 and $33,780,000 at December 31, 2015, detailed in the following table:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Mortgage-backed securities	$	15,526	$	15,772
Collateralized mortgage obligations, Issued by U.S. Government agencies		17,175		18,008
Total	$	32,701	$	33,780

Two of the more significant risks associated with the repurchase agreement with the broker-dealer are as follows:

· The borrowings are putable at quarterly intervals by the issuer. Accordingly, if interest rates were to rise to a sufficient level, the issuer would be expected to require the Corporation to pay off the borrowing. In this circumstance, the Corporation would be required to obtain a new borrowing at a higher interest rate than the existing repurchase agreement or utilize cash from other sources to pay off the borrowing. If sales of available-for-sale securities were used to generate cash to pay off the borrowing, the value of such securities would be expected to have fallen, which could result in the Corporation recognizing a loss.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

· As principal pay-downs of mortgage backed securities and CMOs occur, the Corporation must have available, unencumbered assets or purchase a sufficient amount of assets with credit quality suitable to the broker-dealer to replace the amounts being paid off. Since pre-payments of mortgages typically increase as interest rates fall, the Corporation may be required to purchase additional assets at times when market rates are lower than the rates paid on the borrowing.

The Corporation manages these risks by maintaining sufficient available assets of acceptable credit quality, as well as maintaining other borrowing facilities, to meet ongoing collateral maintenance requirements or pay off the borrowing if required. In particular, the Corporation had unused borrowing capacity available from the FHLB-Pittsburgh of $297,186,000 at March 31, 2016.

9. DEFINED BENEFIT PLANS

The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits and life insurance to employees who meet certain age and length of service requirements. Full-time employees no longer accrue service time toward the Corporation-subsidized portion of the medical benefits. This plan contains a cost-sharing feature, which causes participants to pay for all future increases in costs related to benefit coverage. Accordingly, actuarial assumptions related to health care cost trend rates do not significantly affect the liability balance at March 31, 2016 and December 31, 2015, and are not expected to significantly affect the Corporation's future expenses. The Corporation uses a December 31 measurement date for the postretirement plan.

In an acquisition in 2007, the Corporation assumed the Citizens Trust Company Retirement Plan, a defined benefit pension plan. This plan covers certain employees who were employed by Citizens Trust Company on December 31, 2002, when the plan was amended to discontinue admittance of any future participant and to freeze benefit accruals. Information related to the Citizens Trust Company Retirement Plan has been included in the tables that follow. The Corporation uses a December 31 measurement date for this plan.

The components of net periodic benefit costs from these defined benefit plans are as follows:

Defined Benefit Plans
(In Thousands)	Pension						Postretirement
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2016			2015
Service cost	$	0		$	0		$	9		$	10
Interest cost		7			9			16			13
Expected return on plan assets		(7	)		(11	)		0			0
Amortization of prior service cost		0			0			(8	)		(7	)
Recognized net actuarial loss		3			4			0			0
Net periodic benefit cost	$	3		$	2		$	17		$	16

In the first three months of 2016, the Corporation funded postretirement contributions totaling $18,000, with estimated annual postretirement contributions of $68,000 expected in 2016 for the full year. Based upon the related actuarial reports, no defined benefit pension contributions are required in 2016, though the Corporation may make discretionary contributions.

10. STOCK-BASED COMPENSATION PLANS

The Corporation has a Stock Incentive Plan for a selected group of officers and an Independent Directors Stock Incentive Plan. In the three-month periods ended March 31, 2016 and 2015, the Corporation issued restricted stock under each of the Plans.

In the first quarter 2016, the Corporation awarded a total of 34,199 shares of restricted stock under the Stock Incentive and Independent Directors Stock Incentive Plans. Restricted stock awards in the first quarter 2016 included the following: (1) a total of 17,289 shares to employees, vesting over a three-year term, with vesting contingent upon the Corporation meeting an annual return on average equity (“ROAE”) performance ratio, as defined; (2) a total of 10,304 shares to employees, vesting over a three-year term, with vesting dependent on satisfactory performance; and (3) a total of 6,606 shares under the Independent Directors Incentive Plan, vesting over a term of one year.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In the first quarter 2015, a total of 34,800 shares of restricted stock were awarded under the Plans. Restricted stock awards in 2015 included the following: (1) a total of 20,298 shares to employees, vesting over a four-year term, with vesting contingent upon the Corporation meeting an annual ROAE performance ratio, as defined; (2) a total of 2,198 shares to employees, vesting over a four-year term, with vesting dependent on satisfactory performance; (3) an award to the Chief Executive Officer of 5,174 shares, vesting over a three-year term, with vesting dependent on satisfactory performance; and (4) a total of 7,130 shares under the Independent Directors Incentive Plan, vesting over a term of one year.

Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. Management has estimated restricted stock expense in the first three months of 2016 based on an assumption that the ROAE target for 2016 will be met. Total stock-based compensation expense attributable to restricted stock awards amounted to $162,000 in the first quarter 2016 and $150,000 in the first quarter 2015.

11. INCOME TAXES

The net deferred tax asset at March 31, 2016 and December 31, 2015 represents the following temporary difference components:

	March 31,		December 31,
(In Thousands)	2016		2015
Deferred tax assets:
Net realized losses on securities	$	36	$	69
Allowance for loan losses		2,623		2,761
Other deferred tax assets		2,238		2,634
Total deferred tax assets		4,897		5,464
Deferred tax liabilities:
Unrealized holding gains on securities		2,879		1,342
Defined benefit plans - ASC 835		26		19
Bank premises and equipment		926		869
Core deposit intangibles		10		11
Other deferred tax liabilities		107		108
Total deferred tax liabilities		3,948		2,349
Deferred tax asset, net	$	949	$	3,115

The provision for income tax for the three-month periods ended March 31, 2016 and 2015 is based on the Corporation’s estimate of the effective tax rate expected to be applicable for the full year. The effective tax rates for the Corporation are as follows:

	Three Months Ended
(In thousands)	March 31,
	2016			2015
Income before income tax provision	$	4,666		$	5,044
Income tax provision		1,093			1,229
Effective tax rate		23.42	%		24.37	%

The effective tax rate for each period presented differs from the statutory rate of 35% principally because of the effects of tax-exempt interest income.

The Corporation has investments in three limited partnerships that manage affordable housing projects that have qualified for the federal low-income housing tax credit. The Corporation’s expected return from these investments is based on the receipt of tax credits and tax benefits from deductions of operating losses. The Corporation uses the effective yield method to account for these investments, with the benefits recognized as a reduction of the provision for income taxes. For two of the three limited partnership investments, the tax credits have been received in full in prior years, and the Corporation has fully realized the benefits of the credits and amortized its initial investments in the partnerships. The most recent affordable housing project was completed in 2013, and the Corporation received tax credits in 2013, 2014 and 2015 and expects to continue to receive tax credits annually through 2022. The carrying amount of the Corporation’s investment is $787,000 at March 31, 2016 and $812,000 at December 31, 2015 (included in Other Assets in the consolidated balance sheets). For the year ending December 31, 2016, the estimated amount of tax credits and other tax benefits to be received is $158,000 and the estimated amount to be recognized as a reduction of the provision for income taxes is $76,000. For the year ended December 31, 2015, tax credits and other tax benefits totaled $158,000 and the amount recognized as a reduction of the provision for income taxes for 2015 was $80,000. The total reduction in the provision for income taxes resulting from this investment is $19,000 in the first quarter 2016 and $20,000 in the first quarter 2015.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation has no unrecognized tax benefits, nor pending examination issues related to tax positions taken in preparation of its income tax returns. With limited exceptions, the Corporation is no longer subject to examination by the Internal Revenue Service for years prior to 2012.

12. CONTINGENCIES

In the normal course of business, the Corporation may be subject to pending and threatened lawsuits in which claims for monetary damages could be asserted. In management’s opinion, the Corporation’s financial position and results of operations would not be materially affected by the outcome of such pending legal proceedings.

13. RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides a principles-based framework for revenue recognition that supersedes virtually all previously issued revenue recognition guidance under U.S. GAAP. Additionally, the ASU requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The core principle of the five-step revenue recognition framework is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015 the FASB issued ASU 2015-14, which deferred the effective date of the revenue recognition standard by a year, making it applicable for the Corporation in the first quarter 2018 and for the annual period ending December 31, 2018. The amendments should be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. The Corporation is in the process of evaluating the potential impact of adopting the amendments, including determining which transition method to apply.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities. This makes significant changes in U.S. GAAP related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The changes provided for in this Update that are applicable to the Corporation are as follows: (1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; however, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (2) for equity investments without readily determinable fair values, require a qualitative assessment to identify impairment, and if a qualitative assessment indicates that impairment exists, requiring an entity to measure the investment at fair value; (3) eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (4) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (5) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments (at March 31, 2016 and December 31, 2015, the Corporation has no liabilities for which the fair value measurement option has been elected); (6) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (7) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this Update will become effective for the Corporation for annual and interim periods beginning in the first quarter 2018. With limited exceptions, early adoption of the amendments in this Update is not permitted. Amendments are to be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values should be applied prospectively.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. Specifically, a lessee should recognize on the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee would be permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. Topic 842 would not significantly change the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee from current U.S. GAAP; however, the principal change from current GAAP is that lease assets and liabilities arising from operating leases would be recognized on the balance sheet. Topic 842 provides several other changes or clarifications to existing GAAP, and will require qualitative disclosures, along with quantitative disclosures, so that financial statement users can understand more about the nature of an entity’s leasing activities. In transition, Topic 842 provides that lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including optional practical expedients. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees will be required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. Topic 842 will become effective for the Corporation for annual and interim periods beginning in the first quarter 2019.

In March 2016, the FASB issued ASU No. 2016-07, Investments – Equity Method and Joint Ventures. This ASU eliminates the requirement that when an investment qualifies for the equity method as a result of an increase in the level of ownership interest or influence, an investor must adjust the investment, results of operations and retained earnings retroactively as if the equity method had been in effect during all previous periods the investment had been held. The ASU requires the equity method investor to add the cost of acquiring an additional interest in the investee to the basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for the equity method. The ASU further requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method recognize through earnings the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for the Corporation for annual and interim periods beginning in the first quarter 2017, with earlier application permitted. The amendments should be applied prospectively upon their effective date.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation. This ASU changes several aspects of accounting for share-based payment transactions, and includes some changes that apply only to nonpublic companies. This Update includes amendments that currently apply, or may apply in the future, to the Corporation related to the following: (1) accounting for the difference between the deduction for tax purposes and the amount of compensation cost recognized for financial reporting purposes; (2) classification of excess tax benefits on the statement of cash flows; (3) accounting for forfeitures; (4) accounting for awards partially settled in cash in excess of the employer’s minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this Update are effective for the Corporation for annual and interim periods beginning in the first quarter 2017, with earlier adoption permitted. The ASU provides separate transition provisions for each of the amendments. The Corporation is in the process of evaluating the potential impact of adopting the amendments.

14. SUBSEQUENT EVENT

Effective April 21, 2016, the Corporation announced a new treasury stock repurchase program. Announcement of a new treasury stock repurchase program follows the recent completion of a common stock repurchase plan authorized by the Board of Directors in July 2014. Through March 31, 2016, 589,550 shares had been repurchased under the July 2014 program for a total cost of $11,870,000. In April 2016, the Corporation repurchased the remainder of the shares authorized under that program. In total, 622,500 shares were repurchased for a total cost of $12,140,000, at an average price of $19.50 per share.

Under the new program, the Corporation is authorized to repurchase up to 600,000 shares of the Corporation’s common stock, or slightly less than 5% of the Corporation’s issued and outstanding shares at April 19, 2016. As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases under the new program may be made from time to time in the open market at prevailing prices, or through privately negotiated transactions.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Consistent with the previous program, the Board of Directors’ April 21, 2016 authorization provides that: (1) the new treasury stock repurchase program shall be effective when publicly announced and shall continue thereafter until suspended or terminated by the Board of Directors, in its sole discretion; and (2) all shares of common stock repurchased pursuant to the new program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation program.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this section and elsewhere in this quarterly report on Form 10-Q are forward-looking statements. Citizens & Northern Corporation and its wholly-owned subsidiaries (collectively, the Corporation) intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995. Forward-looking statements, which are not historical facts, are based on certain assumptions and describe future plans, business objectives and expectations, and are generally identifiable by the use of words such as, "should", “likely”, "expect", “plan”, "anticipate", “target”, “forecast”, and “goal”. These forward-looking statements are subject to risks and uncertainties that are difficult to predict, may be beyond management’s control and could cause results to differ materially from those expressed or implied by such forward-looking statements. Factors which could have a material, adverse impact on the operations and future prospects of the Corporation include, but are not limited to, the following:

· changes in monetary and fiscal policies of the Federal Reserve Board and the U. S. Government, particularly related to changes in interest rates

· changes in general economic conditions

· legislative or regulatory changes

· downturn in demand for loan, deposit and other financial services in the Corporation’s market area

· increased competition from other banks and non-bank providers of financial services

· technological changes and increased technology-related costs

· changes in accounting principles, or the application of generally accepted accounting principles.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

EARNINGS OVERVIEW

Net income per basic and diluted share was $0.29 in the first quarter 2016, as compared to $0.33 per share in the fourth quarter 2015 and $0.31 per share in the first quarter 2015. The return on average assets for the first quarter 2016 was 1.18%, and the return on average equity was 7.60%.

Some of the more significant fluctuations in revenues and expenses between the three-month period ended March 31, 2016 and the corresponding period in 2015 were as follows:

· Net interest income was up $83,000 (0.8%) in the first quarter 2016 as compared to the first quarter 2015. The first quarter 2016 net interest margin of 3.81% improved by 0.07% over the first quarter 2015 due to a lower cost of borrowed funds and a more favorable mix of earning assets. The lower rate on borrowed funds resulted from prepayments in 2015 totaling $34 million of principal of a repurchase agreement with an interest rate of 4.265%. Average total loans outstanding increased $77.2 million (12.4%) in the first quarter 2016 as compared to the first quarter 2015, while average total available-for-sale securities fell $94.5 million. The average balance of earning assets fell $23.6 million, reflecting a reduction in funding available for investment, as average total deposits decreased $21.4 million (2.2%).

· The first quarter 2016 provision for loan losses of $368,000 was $365,000 higher than the comparative first quarter 2015 amount of $3,000. The higher provision in the first quarter 2016 resulted from an increase in the collectively determined portion of the allowance for loan losses, including the effect of an increase in the average net charge-off percentage used to calculate the allowance due to a partial charge-off of $595,000 on one commercial loan in the first quarter 2016. In comparison, the lower first quarter 2015 provision included the net effect of a decrease in qualitative factor percentages used in determining the collectively evaluated portion of the allowance for loan losses, lower loan balances and a reduction in the specific allowance on impaired loans.

· Noninterest revenue of $3,690,000 in the first quarter 2016 was higher by $134,000 (3.8%) than the first quarter 2015 amount. Service charges on deposit accounts were $116,000 (11.4%) higher in the first quarter 2016 than in the first quarter 2015, reflecting changes made in the fee structure of certain checking products effective in April 2015.

· In the first quarter 2016, realized gains from securities totaled $383,000, including gains from sales of bank stocks of $249,000. Realized gains from securities in the first quarter 2016 exceeded the first quarter 2015 amount by $309,000.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

· Noninterest expenses, excluding loss on prepayment of borrowings, of $9,072,000 in the first quarter 2016 exceeded the first quarter 2015 amount by $539,000 (6.3%). Salaries and wages expense increased $400,000 (11.5%), reflecting an increase in number of employees and the effects of a significant portion of 2016 employee annual performance evaluations and merit increases occurring in the first quarter. The average number of full-time equivalent employees was 288 in the first quarter 2016, up from 278 in the first quarter 2015, including new positions established for lending, lending support, information technology, training and marketing functions. Professional fees expense increased $133,000 in the first quarter 2016 over the first quarter 2015 amount, including increases related to employee sales and service training, information technology, marketing and outsourced commercial loan credit review.

More detailed information concerning fluctuations in the Corporation’s earnings results and other financial information are provided in other sections of Management’s Discussion and Analysis.

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

CRITICAL ACCOUNTING POLICIES

The presentation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect many of the reported amounts and disclosures. Actual results could differ from these estimates.

A material estimate that is particularly susceptible to significant change is the determination of the allowance for loan losses. Management believes the allowance for loan losses is adequate and reasonable. Analytical information related to the Corporation’s aggregate loans and the related allowance for loan losses is summarized by loan segment and classes of loans in Note 7 to the unaudited consolidated financial statements. Additional discussion of the Corporation’s allowance for loan losses is provided in a separate section later in Management’s Discussion and Analysis. Given the very subjective nature of identifying and valuing loan losses, it is likely that well-informed individuals could make materially different assumptions, and could, therefore calculate a materially different allowance value. While management uses available information to recognize losses on loans, changes in economic conditions may necessitate revisions in future years. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation’s allowance for loan losses. Such agencies may require the Corporation to recognize adjustments to the allowance based on their judgments of information available to them at the time of their examination.

Another material estimate is the calculation of fair values of the Corporation’s debt securities. For most of the Corporation’s debt securities, the Corporation receives estimated fair values of debt securities from an independent valuation service, or from brokers. In developing fair values, the valuation service and the brokers use estimates of cash flows, based on historical performance of similar instruments in similar interest rate environments. Based on experience, management is aware that estimated fair values of debt securities tend to vary among brokers and other valuation services.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

As described in Note 6 to the unaudited consolidated financial statements, management evaluates securities for other-than-temporary impairment (OTTI). In making that evaluation, consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether the Corporation intends to sell the security or more likely than not will be required to sell the security before its anticipated recovery. Management’s assessments of the likelihood and potential for recovery in value of securities are subjective and based on sensitive assumptions.

NET INTEREST INCOME

The Corporation’s primary source of operating income is net interest income, which is equal to the difference between the amounts of interest income and interest expense. Tables II, III and IV include information regarding the Corporation’s net interest income for the three-month periods ended March 31, 2016 and March 31, 2015. In each of these tables, the amounts of interest income earned on tax-exempt securities and loans have been adjusted to a fully taxable-equivalent basis. Accordingly, the net interest income amounts reflected in these tables exceed the amounts presented in the consolidated financial statements. The discussion that follows is based on amounts in the related Tables.

Fully taxable equivalent net interest income was $10,744,000 in 2016, $76,000 (0.7%) higher than in 2015. Interest income was $233,000 lower in 2016 as compared to 2015; however, interest expense was lower by $309,000 in comparing the same periods. As presented in Table III, the Net Interest Margin was 3.81% in 2016 as compared to 3.74% in 2015, and the “Interest Rate Spread” (excess of average rate of return on earning assets over average cost of funds on interest-bearing liabilities) was 3.68% in 2016 as compared to 3.57% in 2015. In the first quarter 2016, the Corporation recognized accretion (interest) income of $33,000 on an accelerated basis on three tax-exempt securities that were called during the quarter, with the call dates occurring later in the year. The fully taxable equivalent benefit of the accelerated accretion was $51,000, which increased the Margin and Spread by 0.02% each over the levels that would have been reported in the absence of the accelerated recognition. The favorable change in Margin and Spread were partially offset by the impact of a reduction in earning assets, which fell $23,562,000, reflecting a reduction in investable funds due to a lower amount of average deposits.

INTEREST INCOME AND EARNING ASSETS

Interest income totaled $11,648,000 in 2016, a decrease of 2.0% from 2015. Interest and fees on loans receivable increased $418,000, or 5.1%, while income from available-for-sale securities decreased $653,000 (18.1%). As discussed in more detail in the “Financial Condition” section of Management’s Discussion and Analysis, the average balance of gross loans receivable increased 12.4% to $701,636,000 in 2016 from $624,423,000 in 2015. The Corporation’s average rate of return on loans receivable declined to 4.96% in 2015 from 5.35% in 2015 as rates on new loans have decreased.

As indicated in Table III, average available-for-sale securities (at amortized cost) totaled $411,286,000 in 2016, a decrease of $94,492,000 (18.7%) from 2015. The net decrease in the Corporation’s available-for-sale securities portfolio consisted of decreases in all categories of securities. The average rate of return on available-for-sale securities of 2.89% was essentially flat in 2016 as compared to 2015 at 2.90%. Excluding the accelerated accretion from the three called securities, as described above, the average rate of return on available-for-sale securities for the first quarter 2016 would have been 2.84%.

INTEREST EXPENSE AND INTEREST-BEARING LIABILITIES

Interest expense fell $309,000, or 25.5%, to $904,000 in 2016 from $1,213,000 in 2015. The reduction in interest expense included a reduction in interest on borrowed funds of $302,000. Table III shows that the overall cost of funds on interest-bearing liabilities fell to 0.45% in 2016 from 0.59% in 2015.

Total average deposits (interest-bearing and noninterest-bearing) decreased 2.2%, to $944,599,000 in 2016 from $966,027,000 in 2015. Decreases in the average balances of money market, certificates of deposit, Individual Retirement Accounts, and noninterest-bearing demand deposit accounts were partially offset by increases in interest checking and savings accounts.

Total average borrowed funds decreased $4,629,000 to $74,408,000 in 2016 from $79,037,000 in 2015. The average rate on borrowed funds was 2.30% in 2016 compared to 3.73% in 2015, reflecting a $34,295,000 reduction in the average balance of higher-rate, long-term borrowings resulting from prepayment in the second and fourth quarters of 2015 of a long-term repurchase agreement borrowing with an interest rate of 4.265%. The average balance of short-term borrowings increased $29,666,000 in 2016 over 2015, as average overnight borrowings were higher in 2016 and the Corporation funded the pay-off of the long-term repurchase agreement with a series of short-term advances from the FHLB-Pittsburgh.

39

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE II - ANALYSIS OF INTEREST INCOME AND EXPENSE

	Three Months Ended
	March 31,				Increase/
(In Thousands)	2016		2015		(Decrease)
INTEREST INCOME
Available-for-sale securities:
Taxable	$	1,589	$	2,061	($	472	)
Tax-exempt		1,370		1,551		(181	)
Total available-for-sale securities		2,959		3,612		(653	)
Interest-bearing due from banks		24		26		(2	)
Loans held for sale		6		2		4
Loans receivable:
Taxable		7,974		7,709		265
Tax-exempt		685		532		153
Total loans receivable		8,659		8,241		418
Total Interest Income		11,648		11,881		(233	)
INTEREST EXPENSE
Interest-bearing deposits:
Interest checking		58		55		3
Money market		79		72		7
Savings		32		31		1
Certificates of deposit		202		215		(13	)
Individual Retirement Accounts		108		113		(5	)
Total interest-bearing deposits		479		486		(7	)
Borrowed funds:
Short-term		62		1		61
Long-term		363		726		(363	)
Total borrowed funds		425		727		(302	)
Total Interest Expense		904		1,213		(309	)
Net Interest Income	$	10,744	$	10,668	$	76

Note: Interest income from tax-exempt securities and loans has been adjusted to a fully tax-equivalent basis, using the Corporation’s marginal federal income tax rate of 35%.

40

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE III - ANALYSIS OF AVERAGE DAILY BALANCES AND RATES

(Dollars in Thousands)

	3 Months						3 Months
	Ended			Rate of			Ended			Rate of
	3/31/2016			Return/			3/31/2015			Return/
	Average			Cost of			Average			Cost of
	Balance			Funds %			Balance			Funds %
EARNING ASSETS
Available-for-sale securities, at amortized cost:
Taxable	$	305,880			2.09	%	$	388,104			2.15	%
Tax-exempt		105,406			5.23	%		117,674			5.35	%
Total available-for-sale securities		411,286			2.89	%		505,778			2.90	%
Interest-bearing due from banks		20,348			0.47	%		26,994			0.39	%
Loans held for sale		452			5.34	%		89			9.11	%
Loans receivable:
Taxable		640,959			5.00	%		582,498			5.37	%
Tax-exempt		60,677			4.54	%		41,925			5.15	%
Total loans receivable		701,636			4.96	%		624,423			5.35	%
Total Earning Assets		1,133,722			4.13	%		1,157,284			4.16	%
Cash		15,588						16,127
Unrealized gain/loss on securities		7,055						10,626
Allowance for loan losses		(7,932	)					(7,391	)
Bank premises and equipment		15,458						16,252
Intangible Asset - Core Deposit Intangible		29						50
Intangible Asset - Goodwill		11,942						11,942
Other assets		38,530						37,135
Total Assets	$	1,214,392					$	1,242,025
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking	$	195,142			0.12	%	$	191,705			0.12	%
Money market		191,514			0.17	%		194,834			0.15	%
Savings		130,003			0.10	%		127,853			0.10	%
Certificates of deposit		113,411			0.72	%		122,007			0.71	%
Individual Retirement Accounts		105,562			0.41	%		113,806			0.40	%
Other time deposits		804			0.00	%		803			0.00	%
Total interest-bearing deposits		736,436			0.26	%		751,008			0.26	%
Borrowed funds:
Short-term		35,683			0.70	%		6,017			0.07	%
Long-term		38,725			3.77	%		73,020			4.03	%
Total borrowed funds		74,408			2.30	%		79,037			3.73	%
Total Interest-bearing Liabilities		810,844			0.45	%		830,045			0.59	%
Demand deposits		208,163						215,019
Other liabilities		7,378						8,120
Total Liabilities		1,026,385						1,053,184
Stockholders' equity, excluding other comprehensive income/loss		183,376						181,944
Other comprehensive income/loss		4,631						6,897
Total Stockholders' Equity		188,007						188,841
Total Liabilities and Stockholders' Equity	$	1,214,392					$	1,242,025
Interest Rate Spread					3.68	%					3.57	%
Net Interest Income/Earning Assets					3.81	%					3.74	%
Total Deposits (Interest-bearing
and Demand)	$	944,599					$	966,027

(1) Annualized 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.

(3) Rates of return on earning assets and costs of funds are presented on an annualized basis.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE IV - ANALYSIS OF VOLUME AND RATE CHANGES

	3 Months Ended  3/31/16 vs. 3/31/15
	Change in			Change in			Total
(In Thousands)	Volume			Rate			Change
EARNING ASSETS
Available-for-sale securities:
Taxable	$	(414	)	$	(58	)	$	(472	)
Tax-exempt		(150	)		(31	)		(181	)
Total available-for-sale securities		(564	)		(89	)		(653	)
Interest-bearing due from banks		(7	)		5			(2	)
Loans held for sale		5			(1	)		4
Loans receivable:
Taxable		787			(522	)		265
Tax-exempt		221			(68	)		153
Total loans receivable		1,008			(590	)		418
Total Interest Income		442			(675	)		(233	)
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		1			2			3
Money market		(1	)		8			7
Savings		1			0			1
Certificates of deposit		(14	)		1			(13	)
Individual Retirement Accounts		(7	)		2			(5	)
Total interest-bearing deposits		(20	)		13			(7	)
Borrowed funds:
Short-term		22			39			61
Long-term		(319	)		(44	)		(363	)
Total borrowed funds		(297	)		(5	)		(302	)
Total Interest Expense		(317	)		8			(309	)
Net Interest Income	$	759		($	683	)	$	76

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

(2) The change in interest due to both volume and rates has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amount of the change in each.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE V - COMPARISON OF NONINTEREST INCOME

(In Thousands)

	3 Months Ended
	March 31,						$			%
	2016			2015			Change			Change
Service charges on deposit accounts	$	1,138		$	1,022		$	116			11.4
Service charges and fees		94			113			(19	)		(16.8	)
Trust and financial management revenue		1,144			1,114			30			2.7
Brokerage revenue		173			219			(46	)		(21.0	)
Insurance commissions, fees and premiums		21			40			(19	)		(47.5	)
Interchange revenue from debit card transactions		463			474			(11	)		(2.3	)
Net gains from sales of loans		168			147			21			14.3
Decrease in fair value of servicing rights		(71	)		(117	)		46			(39.3	)
Increase in cash surrender value of life insurance		96			97			(1	)		(1.0	)
Other operating income		464			447			17			3.8
Total other operating income before realized gains    on available-for-sale securities, net	$	3,690		$	3,556		$	134			3.8

Table V excludes realized gains on available-for-sale securities, which are discussed in the “Earnings Overview” section of Management’s Discussion and Analysis. Total noninterest income shown in Table V increased $134,000 or 3.8%, in the first three months of 2016 as compared to the first three months of 2015. The most significant variances include the following:

· Service charges on deposit accounts increased $116,000 (11.4%) in the first quarter 2016 compared to the first quarter 2015, primarily as a result of changes made in the fee structure of certain checking products effective in April 2015.

· The fair value of servicing rights associated with residential mortgage loans decreased $71,000 in the first quarter 2016 as compared to a decrease of $117,000 in the first quarter 2015. The decreases in fair value resulted mainly from changes in prepayment assumptions driven by market assumptions of lower interest rates.

· Broker dealer revenue was $46,000 lower in the first quarter of 2016 than in the first quarter 2015 as a result of lower volume of sales transactions as well as lower fees resulting from market value decreases.

TABLE VI - COMPARISON OF NONINTEREST EXPENSE

(In Thousands)

	3 Months Ended
	March 31,				$			%
	2016		2015		Change			Change
Salaries and wages	$	3,887	$	3,487	$	400			11.5
Pensions and other employee benefits		1,437		1,385		52			3.8
Occupancy expense, net		609		722		(113	)		(15.7	)
Furniture and equipment expense		427		454		(27	)		(5.9	)
FDIC Assessments		142		151		(9	)		(6.0	)
Pennsylvania shares tax		322		318		4			1.3
Professional fees		289		156		133			85.3
Automated teller machine and interchange expense		249		246		3			1.2
Software subscriptions		241		197		44			22.3
Other operating expense		1,469		1,417		52			3.7
Total Other Expense	$	9,072	$	8,533	$	539			6.3

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

As shown in Table VI, total noninterest expense increased $539,000 or 6.3% in the first three months of 2016 as compared to the first three months of 2015. Significant variances include the following:

· Salaries and wages expense increased $400,000 (11.5%), reflecting an increase in number of employees and the effects of a significant portion of 2016 employee annual performance evaluations and merit increases occurring in the first quarter. The average number of full-time equivalent employees was 288 in the first quarter 2016, up from 278 in the first quarter 2015, including new positions established for lending, lending support, information technology, training and marketing functions.

· Professional fees expense increased $133,000 (85.3%) in the first quarter 2016 over the first quarter 2015 amount, including increases related to employee sales and service training, information technology, marketing and outsourced commercial loan credit review.

· Pensions and other employee benefits increased $52,000 (3.8%) in the first quarter 2016 over the first quarter 2015 as a result of increased healthcare claims as well as increases in other benefits related to new hires.

· Other operating expense increased $52,000 (3.7%) in the first quarter 2016 over the first quarter 2015, including an increase in charitable donations of $70,000.

· Software subscriptions and updates increased $44,000 (22.3%) in the first quarter 2016 over the first quarter 2015 as a result of enhancements and new applications initiated in 2015 and continuing into 2016.

· Occupancy expenses in the first quarter of 2016 were $113,000 (15.7%) under the first quarter 2015 primarily as a result of lower depreciation costs as well as lower winter related expenses such as snow removal and fuel costs.

FINANCIAL CONDITION

Gross loans outstanding (excluding mortgage loans held for sale) were $701,605,000 at March 31, 2016, down 0.5% from $704,880,000 at December 31, 2015. The total outstanding balances of residential mortgage and consumer loans were slightly higher at March 31, 2016 as compared to December 31, 2015; however, the balance of commercial loans was lower by $4,611,000, or 1.5%. In contrast, average loans outstanding in the first quarter 2016 of $701,636,000 were $77,213,000, or 12.4%, higher than the corresponding total in the first quarter 2015. The increase in loans outstanding over the last three quarters of 2015 included significant increases in tax-exempt municipal loans and in commercial participation loans. A significant portion of the 2015 growth in municipal loans stemmed from loans to two school districts located in the Corporation’s market area. Participation loans represent portions of larger commercial transactions for which other institutions are the “lead banks”. Although not the lead bank, the Corporation conducts detailed underwriting and monitoring of participation loan opportunities. Participation loans are included in the “Commercial and industrial” and “Commercial loans secured by real estate” classes in the loan tables presented in this Form 10-Q. Total participation loans outstanding amounted to $32,671,000 at March 31, 2016, down slightly from $33,059,000 at December 31, 2015. At March 31, 2016, the balance of participation loans outstanding includes $7,126,000 to a business based in the Corporation’s market area, $10,000,000 to an entity located outside of the Corporation’s market area and $11,089,000 from participations in loans originated through the Corporation’s membership in a network that originates loans throughout the U.S. The Corporation’s participation loans originated through the network consist of loans to businesses that are larger than the Corporation’s typical commercial customer base. The loans originated through the network are considered “leveraged loans,” meaning the businesses typically have minimal tangible book equity and the extent of collateral available is limited, though the businesses have demonstrated strong cash flow performance in their recent histories.

The balance of available-for-sale securities fell $6,684,000 to $413,606,000 at March 31, 2016 from $420,290,000 at December 31, 2015. The reduction related primarily to the use of proceeds from calls and maturities of securities to pay down short-term debt. The average balance of available-for-sale securities, at amortized cost, was $411,286,000 for the first three months of 2016, or $94.5 million (18.7%) lower than the average balance for the first three months of 2015.

Although average deposits were 2.2% lower in the first quarter 2016 as compared to the first quarter 2015, total deposits of $955,848,000 at March 31, 2016 were up $20,233,000, or 2.2%, from the corresponding total at December 31, 2015. In the first quarter 2016, the Corporation’s total municipal deposits increased, as the Pennsylvania state budget impasse that had delayed funding to many municipal customers and depressed total deposits outstanding as of the end of 2015 was resolved.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Other significant changes in the average balances of the Corporation’s earning assets and interest-bearing liabilities are described in the “Net Interest Income” section of Management’s Discussion and Analysis. Other significant balance sheet items, including the allowance for loan losses and stockholders’ equity, are discussed in separate sections of Management’s Discussion and Analysis.

Management does not expect capital expenditures to have a material, detrimental effect on the Corporation’s financial condition in 2016.

Since 2009, the Corporation has originated and sold residential mortgage loans to the secondary market through the MPF Xtra program administered by the Federal Home Loan Banks of Pittsburgh and Chicago. Residential mortgages originated and sold through the MPF Xtra program consist primarily of conforming, prime loans sold to the Federal National Mortgage Association (Fannie Mae), a government agency. In 2014, the Corporation began to originate and sell residential mortgage loans to the secondary market through the MPF Original program, which is also administered by the Federal Home Loan Banks of Pittsburgh and Chicago. Residential mortgages originated and sold through the MPF Original program consist primarily of conforming, prime loans sold to the Federal Home Loan Bank of Pittsburgh. For loans sold under the Original program, the Corporation provides a credit enhancement whereby the Corporation would assume credit losses in excess of a defined First Loss Account (“FLA”) balance, up to specified amounts. The FLA is funded by the Federal Home Loan Bank of Pittsburgh based on a percentage of the outstanding balance of loans sold. The Corporation does not provide a credit enhancement for loans sold through the Xtra program.

For loan sales originated under the MPF Xtra and Original programs, the Corporation provides customary representations and warranties to investors that specify, among other things, that the loans have been underwritten to the standards established by the investor. The Corporation may be required to repurchase a loan and reimburse a portion of fees received, or reimburse the investor for a credit loss incurred on a loan, if it is determined that the representations and warranties have not been met. Such repurchases or reimbursements generally result from an underwriting or documentation deficiency. At March 31, 2016, the total outstanding balance of loans the Corporation has repurchased as a result of identified instances of noncompliance amounted to $1,952,000, and the corresponding total outstanding balance repurchased at December 31, 2015 was $1,968,000.

At March 31, 2016, outstanding balances of loans sold and serviced through the two programs totaled $153,778,000, including loans sold through the MPF Xtra program of $123,227,000 and loans sold through the Original program of $30,551,000. At December 31, 2015, outstanding balances of loans sold and serviced through the two programs totaled $152,448,000, including loans sold through the MPF Xtra program of $125,571,000 and loans sold through the Original program of $26,877,000. Based on the fairly limited volume of required repurchases to date, and of sales through the Original program with credit enhancement, no allowance had been established for representation and warranty exposures, or for credit losses on loan sales through the Original program as of March 31, 2016 and December 31, 2015.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction of the investment in loans. Note 7 to the unaudited consolidated financial statements provides an overview of the process management uses for evaluating and determining the allowance for loan losses.

While management uses available information to recognize losses on loans, changes in economic conditions may necessitate revisions in future years. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation’s allowance for loan losses. Such agencies may require the Corporation to recognize adjustments to the allowance based on their judgments of information available to them at the time of their examination.

The allowance for loan losses was $7,661,000 at March 31, 2016, down from $7,889,000 at December 31, 2015. As shown in Table VIII, the specific allowance on impaired loans totaled $306,000 at March 31, 2016, which was $514,000 lower than the total specific allowance at December 31, 2015 primarily as a result of a $595,000 partial charge-off on one commercial loan. Table VIII also shows the collectively determined component of the allowance for commercial loans was $201,000 higher at March 31, 2016 than at December 31, 2015, reflecting a higher allocation because average net charge-offs were higher primarily as a result of the charge-off in the first quarter 2016 previously noted.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The provision (credit) for loan losses by segment in the three-month period ended March 31, 2016 and 2015 is as follows:

(In Thousands)	3 Months Ended
	March 31,		March 31,
	2016		2015
Residential mortgage	$	83	$	(72	)
Commercial		278		79
Consumer		7		(3	)
Unallocated		0		(1	)
Total	$	368	$	3

In the first quarter 2016, the total provision for loan losses was $368,000 compared to the first quarter 2015 total of $3,000. The provision for loan losses on commercial loans in the first quarter 2016 exceeded the first quarter of 2015 by $199,000. In 2016, the provision for the commercial segment included the effects of an increase in the portion of the collectively determined allowance based on average net charge-offs (based on historical experience over the previous thirty-six months) used to estimate a portion of the collectively determined allowance. The provision for loan losses on residential mortgages in the first quarter 2016 was $83,000 compared to a credit of $72,000 in 2015. In 2016, the provision for residential mortgages included the effects of an increase as compared to year-end 2015 in the qualitative factors used to estimate a portion of the collectively determined allowance. The provision for loan losses in the first quarter 2015 includes the net effect of a decrease in qualitative factor percentages used in determining the collectively evaluated portions of the allowance for loan losses, lower loan balances and a reduction in the specific allowance on impaired loans of $69,000, which were partially offset by increases in net charge-off percentages used in determining the collectively evaluated portions of the allowance for loan losses.

Table IX presents information related to past due and impaired loans, and loans that have been modified under terms that are considered troubled debt restructurings (TDRs). Table IX shows total impaired loans of $9,630,000 at March 31, 2016, down $344,000 from the corresponding amount at December 31, 2015 of $9,974,000. As also shown in Table IX, loans classified as TDRs totaled $6,313,000 at March 31, 2016 down slightly from $6,364,000 at December 31, 2015, and nonaccrual loans totaled $10,944,000 at March 31, 2016 as compared to $11,517,000 at December 31, 2015.

The outstanding balances of impaired loans without a valuation allowance, nonaccrual loans and nonperforming TDRs at March 31, 2016, include an outstanding balance of $4,961,000 from loans to one commercial entity. In 2014, the Corporation entered into a forbearance agreement with this commercial borrower which includes a reduction in monthly payment amounts over a fifteen-month period. At the end of the fifteen-month period, the monthly payment amounts would revert to the original amounts, unless the forbearance agreement is extended or the payment requirements are otherwise modified. In July 2015, the forbearance agreement was extended for twelve months. The Corporation recorded a charge-off of $1,486,000 in the second quarter 2014 as a result of these modifications, as the payment amounts based on the forbearance agreement are not sufficient to fully amortize the contractual amount of principal outstanding on the loans.

As also shown in Table IX, the amount of loans past due 30-89 days and accruing interest increased $4,316,000, to $11,373,000 at March 31, 2016. The increase in the balance in the 30-89 days delinquent category included one commercial loan with an outstanding balance of $2,736,000 that was 35 days past due (and had been current prior to the first quarter 2016), and an increase of $807,000 in 1-4 family residential mortgage loans. Total loans past due 90 days or more and still accruing interest increased to $3,957,000 at March 31, 2016 from $3,229,000 at December 31, 2015. This category includes first lien residential mortgages with a total outstanding balance of $2,680,000 at March 31, 2016. The Corporation reviews the status of loans past due 90 days or more each quarter to determine if it is appropriate to continue to accrue interest, and has determined the loans included in this category are well secured and that ultimate collection of all principal and interest is probable.

Each period presented in Table IX includes a few large commercial relationships that have required significant monitoring and workout efforts. As a result, a limited number of relationships may significantly impact the total amount of allowance required on impaired loans, and may significantly impact the amount of total charge-offs reported in any one period.

Management believes it has been conservative in its decisions concerning identification of impaired loans, estimates of loss, and nonaccrual status; however, the actual losses realized from these relationships could vary materially from the allowances calculated as of March 31, 2016. Management continues to closely monitor its commercial loan relationships for possible credit losses, and will adjust its estimates of loss and decisions concerning nonaccrual status, if appropriate.

46

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Tables VII through X present historical data related to loans and the allowance for loan losses.

TABLE VII - ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(In Thousands)

	3 Months Ended
	March 31,			March 31,			Years Ended December 31,
	2016			2015			2015			2014			2013			2012			2011
Balance, beginning of year	$	7,889		$	7,336		$	7,336		$	8,663		$	6,857		$	7,705		$	9,107
Charge-offs:
Residential mortgage		0			(79	)		(217	)		(327	)		(95	)		(552	)		(100	)
Commercial		(595	)		(125	)		(251	)		(1,715	)		(459	)		(498	)		(1,189	)
Consumer		(18	)		(18	)		(94	)		(97	)		(117	)		(171	)		(157	)
Total charge-offs		(613	)		(222	)		(562	)		(2,139	)		(671	)		(1,221	)		(1,446	)
Recoveries:
Residential mortgage		0			1			1			25			24			18			3
Commercial		2			1			214			264			348			8			255
Consumer		15			15			55			47			58			59			71
Total recoveries		17			17			270			336			430			85			329
Net charge-offs		(596	)		(205	)		(292	)		(1,803	)		(241	)		(1,136	)		(1,117	)
Provision (credit) for loan losses		368			3			845			476			2,047			288			(285	)
Balance, end of period	$	7,661		$	7,134		$	7,889		$	7,336		$	8,663		$	6,857		$	7,705
Net charge-offs as a % of average loans		0.08	%		0.03	%		0.04	%		0.29	%		0.04	%		0.16	%		0.16	%

TABLE VIII - COMPONENTS OF THE ALLOWANCE FOR LOAN LOSSES

(In Thousands)

	Mar. 31,		As of December 31,
	2016		2015		2014		2013		2012		2011
ASC 310 - Impaired loans	$	306	$	820	$	769	$	2,333	$	623	$	1,126
ASC 450 - Collective segments:
Commercial		3,304		3,103		2,732		2,583		2,594		2,811
Residential mortgage		3,501		3,417		3,295		3,156		3,011		3,130
Consumer		123		122		145		193		188		204
Unallocated		427		427		395		398		441		434
Total Allowance	$	7,661	$	7,889	$	7,336	$	8,663	$	6,857	$	7,705

The above allocation is based on estimates and subjective judgments and is not necessarily indicative of the specific amounts or loan categories in which losses may occur.

47

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE IX - PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS

AND TROUBLED DEBT RESTRUCTURINGS (TDRs)

(In Thousands)

	As of
	March 31,			As of December 31,
	2016			2015			2014			2013			2012			2011
Impaired loans with a valuation allowance	$	1,420		$	1,933		$	3,241		$	9,889		$	2,710		$	3,433
Impaired loans without a valuation allowance		8,210			8,041			9,075			6,432			4,719			4,431
Total impaired loans	$	9,630		$	9,974		$	12,316		$	16,321		$	7,429		$	7,864
Total loans past due 30-89 days and still accruing	$	11,373		$	7,057		$	7,121		$	8,305		$	7,756		$	7,898
Nonperforming assets:
Total nonaccrual loans	$	10,944		$	11,517		$	12,610		$	14,934		$	7,353		$	7,197
Total loans past due 90 days or more and still accruing		3,957			3,229			2,843			3,131			2,311			1,267
Total nonperforming loans		14,901			14,746			15,453			18,065			9,664			8,464
Foreclosed assets held for sale (real estate)		1,584			1,260			1,189			892			879			1,235
Total nonperforming assets	$	16,485		$	16,006		$	16,642		$	18,957		$	10,543		$	9,699
Loans subject to troubled debt restructurings (TDRs):
Performing	$	1,167		$	1,186		$	1,807		$	3,267		$	906		$	1,064
Nonperforming		5,146			5,178			5,388			908			1,155			2,413
Total TDRs	$	6,313		$	6,364		$	7,195		$	4,175		$	2,061		$	3,477
Total nonperforming loans as a % of loans		2.12	%		2.09	%		2.45	%		2.80	%		1.41	%		1.19	%
Total nonperforming assets as a % of assets		1.36	%		1.31	%		1.34	%		1.53	%		0.82	%		0.73	%
Allowance for loan losses as a % of total loans		1.09	%		1.12	%		1.16	%		1.34	%		1.00	%		1.09	%
Allowance for loan losses as a % of nonperforming loans		51.41	%		53.50	%		47.47	%		47.95	%		70.95	%		91.03	%

TABLE X - SUMMARY OF LOANS BY TYPE

Summary of Loans by Type

(In Thousands)

	Mar. 31,			As of December 31,
	2016			2015			2014			2013			2012			2011
Residential mortgage:
Residential mortgage loans - first liens	$	306,753		$	304,783		$	291,882		$	299,831		$	311,627		$	331,015
Residential mortgage loans - junior liens		21,622			21,146			21,166			23,040			26,748			28,851
Home equity lines of credit		38,627			39,040			36,629			34,530			33,017			30,037
1-4 Family residential construction		20,010			21,121			16,739			13,909			12,842			9,959
Total residential mortgage		387,012			386,090			366,416			371,310			384,234			399,862
Commercial:
Commercial loans secured by real estate		154,646			154,779			145,878			147,215			158,413			156,388
Commercial and industrial		71,628			75,196			50,157			42,387			48,442			57,191
Political subdivisions		38,364			40,007			17,534			16,291			31,789			37,620
Commercial construction and land		7,445			5,122			6,938			17,003			28,200			23,518
Loans secured by farmland		7,168			7,019			7,916			10,468			11,403			10,949
Multi-family (5 or more) residential		8,393			9,188			8,917			10,985			6,745			6,583
Agricultural loans		4,492			4,671			3,221			3,251			3,053			2,987
Other commercial loans		11,387			12,152			13,334			14,631			362			552
Total commercial		303,523			308,134			253,895			262,231			288,407			295,788
Consumer		11,070			10,656			10,234			10,762			11,269			12,665
Total		701,605			704,880			630,545			644,303			683,910			708,315
Less: allowance for loan losses		(7,661	)		(7,889	)		(7,336	)		(8,663	)		(6,857	)		(7,705	)
Loans, net	$	693,944		$	696,991		$	623,209		$	635,640		$	677,053		$	700,610

48

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

LIQUIDITY

Liquidity is the ability to quickly raise cash at a reasonable cost. An adequate liquidity position permits the Corporation to pay creditors, compensate for unforeseen deposit fluctuations and fund unexpected loan demand. At March 31, 2016, the Corporation maintained overnight interest-bearing deposits with the Federal Reserve Bank of Philadelphia and other correspondent banks totaling $24,681,000.

The Corporation maintains overnight borrowing facilities with several correspondent banks that provide a source of day-to-day liquidity. Also, the Corporation maintains borrowing facilities with the Federal Home Loan Bank of Pittsburgh, secured by various mortgage loans.

The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. Management intends to use this line of credit as a contingency funding source. As collateral for the line, the Corporation has pledged available-for-sale securities with a carrying value of $19,021,000 at March 31, 2016.

The Corporation’s outstanding, available, and total credit facilities at March 31, 2016 and December 31, 2015 are as follows:

	Outstanding				Available				Total Credit
(In Thousands)	Mar. 31,		Dec. 31,		Mar. 31,		Dec. 31,		Mar. 31,		Dec. 31,
	2016		2015		2016		2015		2016		2015
Federal Home Loan Bank of Pittsburgh	$	30,503	$	60,348	$	297,186	$	262,361	$	327,689	$	322,709
Federal Reserve Bank Discount Window		0		0		18,595		19,606		18,595		19,606
Other correspondent banks		0		0		45,000		45,000		45,000		45,000
Total credit facilities	$	30,503	$	60,348	$	360,781	$	326,967	$	391,284	$	387,315

At March 31, 2016, the Corporation’s outstanding credit facilities with the Federal Home Loan Bank of Pittsburgh consisted of short-term borrowings of $18,811,000, and long-term borrowings with a total amount of $11,692,000. At December 31, 2015, the Corporation’s outstanding credit facilities with the Federal Home Loan Bank of Pittsburgh consisted of overnight borrowings of $23,500,000, short-term borrowings of $25,081,000, and long-term borrowings with a total amount of $11,767,000. Additional information regarding borrowed funds is included in Note 8 of the unaudited consolidated financial statements.

Additionally, the Corporation uses repurchase agreements placed with brokers to borrow funds secured by investment assets and “RepoSweep” arrangements to borrow funds from commercial banking customers on an overnight basis. If required to raise cash in an emergency situation, the Corporation could sell available-for-sale securities to meet its obligations. At March 31, 2016, the carrying value of available-for-sale securities in excess of amounts required to meet pledging or repurchase agreement obligations was $233,985,000.

Management believes the Corporation is well-positioned to meet its short-term and long-term obligations.

49

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

STOCKHOLDERS’ EQUITY AND CAPITAL ADEQUACY

The Corporation and C&N Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Details concerning capital ratios at March 31, 2016 and December 31, 2015 are presented below. Management believes, as of March 31, 2016 and December 31, 2015, that the Corporation and C&N Bank meet all capital adequacy requirements to which they are subject and maintain capital conservation buffers (described in more detail in the “New Capital Rule” section below) that allow the Corporation and C&N Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers.

(Dollars in Thousands)																Minimum To Be Well
						Minimum					Minimum To Maintain					Capitalized Under
						Capital					Capital Conservation					Prompt Corrective
	Actual					Requirement					Buffer at Reporting Date					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2016:
Total capital to risk-weighted assets:
Consolidated	$	178,839		24.19	%	$	59,148		³8	%	$	63,769		³8.625	%	$	73,935		³10	%
C&N Bank		161,558		21.99	%		58,788		³8	%		63,381		³8.625	%		73,485		³10	%
Tier 1 capital to risk-weighted assets:
Consolidated		170,961		23.12	%		29,574		³6	%		48,982		³6.625	%		59,148		³8	%
C&N Bank		153,897		20.94	%		29,394		³6	%		48,684		³6.625	%		58,788		³8	%
Common equity tier 1 capital to risk-weighted assets:
Consolidated		170,961		23.12	%		29,574		³4.5	%		37,892		³5.125	%		48,058		³6.5	%
C&N Bank		153,897		20.94	%		29,394		³4.5	%		37,661		³5.125	%		47,765		³6.5	%
Tier 1 capital to average assets:
Consolidated		170,961		14.26	%		47,954		³4	%		N/A		N/A			59,943		³5	%
C&N Bank		153,897		12.98	%		47,415		³4	%		N/A		N/A			59,269		³5	%
December 31, 2015:
Total capital to risk-weighted assets:
Consolidated	$	181,216		24.40	%	$	59,424		³8	%		N/A		N/A		$	74,281		³10	%
C&N Bank		161,187		21.83	%		59,058		³8	%		N/A		N/A			73,823		³10	%
Tier 1 capital to risk-weighted assets:
Consolidated		173,009		23.29	%		29,712		³6	%		N/A		N/A			59,424		³8	%
C&N Bank		153,298		20.77	%		29,529		³6	%		N/A		N/A			59,058		³8	%
Common equity tier 1 capital to risk-weighted assets:
Consolidated		173,009		23.29	%		29,712		³4.5	%		N/A		N/A			48,282		³6.5	%
C&N Bank		153,298		20.77	%		29,529		³4.5	%		N/A		N/A			47,985		³6.5	%
Tier 1 capital to average assets:
Consolidated		173,009		14.31	%		48,355		³4	%		N/A		N/A			60,444		³5	%
C&N Bank		153,298		12.81	%		47,861		³4	%		N/A		N/A			59,826		³5	%

Management expects the Corporation and C&N Bank to maintain capital levels that exceed the regulatory standards for well-capitalized institutions and the applicable capital conservation buffers for the next 12 months and for the foreseeable future.

Future dividend payments will depend upon maintenance of a strong financial condition, future earnings and capital and regulatory requirements. As described in more detail in the section below titled “New Capital Rule," the Corporation and C&N Bank are subject to restrictions on the amount of dividends that may be paid without approval of banking regulatory authorities.

50

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

NEW CAPITAL RULE

In July 2013, the federal regulatory authorities issued a new capital rule based, in part, on revisions developed by the Basel Committee on Banking Supervision to the Basel capital framework (Basel III). The Corporation and C&N Bank became subject to the new rule effective January 1, 2015. Generally, the new rule implemented higher minimum capital requirements, revised the definition of regulatory capital components and related calculations, added a new common equity tier 1 capital ratio, implemented a new capital conservation buffer, increased the risk weighting for past due loans and provided a transition period for several aspects of the new rule.

The current (new) capital rule provides that, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity tier 1 capital above its minimum risk-based capital requirements. The buffer is measured relative to risk-weighted assets. Phase-in of the capital conservation buffer requirements began January 1, 2016. The transition schedule for new ratios, including the capital conservation buffer, is as follows:

	As of January 1:
	2015			2016			2017			2018			2019
Minimum common equity tier 1 capital ratio		4.5	%		4.5	%		4.5	%		4.5	%		4.5	%
Common equity tier 1 capital conservation buffer		N/A			0.625	%		1.25	%		1.875	%		2.5	%
Minimum common equity tier 1 capital ratio plus capital conservation buffer		4.5	%		5.125	%		5.75	%		6.375	%		7.0	%
Phase-in of most deductions from common equity tier 1 capital		40	%		60	%		80	%		100	%		100	%
Minimum tier 1 capital ratio		6.0	%		6.0	%		6.0	%		6.0	%		6.0	%
Minimum tier 1 capital ratio plus capital conservation buffer		N/A			6.625	%		7.25	%		7.875	%		8.5	%
Minimum total capital ratio		8.0	%		8.0	%		8.0	%		8.0	%		8.0	%
Minimum total capital ratio plus capital conservation buffer		N/A			8.625	%		9.25	%		9.875	%		10.5	%

As fully phased in, a banking organization with a buffer greater than 2.5% would not be subject to additional limits on dividend payments or discretionary bonus payments; however, a banking organization with a buffer less than 2.5% would be subject to increasingly stringent limitations as the buffer approaches zero. The new rule also prohibits a banking organization from making dividend payments or discretionary bonus payments if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% as of the beginning of that quarter. Eligible net income is defined as net income for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income. A summary of payout restrictions based on the capital conservation buffer is as follows:

Capital Conservation Buffer	Maximum Payout
(as a % of risk-weighted assets)	(as a % of eligible retained income)
Greater than 2.5%		No payout limitation applies
≤2.5% and >1.875%		60	%
≤1.875% and >1.25%		40	%
≤1.25% and >0.625%		20	%
≤0.625%		0	%

The Corporation’s total stockholders’ equity is affected by fluctuations in the fair values of available-for-sale securities. The difference between amortized cost and fair value of available-for-sale securities, net of deferred income tax, is included in Accumulated Other Comprehensive Income within stockholders’ equity. The balance in Accumulated Other Comprehensive Income related to unrealized gains on available-for-sale securities, net of deferred income tax, amounted to $5,347,000 at March 31, 2016 and $2,493,000 at December 31, 2015. Changes in accumulated other comprehensive income are excluded from earnings and directly increase or decrease stockholders’ equity. If available-for-sale securities are deemed to be other-than-temporarily impaired, unrealized losses are recorded as a charge against earnings, and amortized cost for the affected securities is reduced. Note 6 to the unaudited consolidated financial statements provides additional information concerning management’s evaluation of available-for-sale securities for other-than-temporary impairment at March 31, 2016.

51

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Stockholders’ equity is also affected by the underfunded or overfunded status of defined benefit pension and postretirement plans. The balance in Accumulated Other Comprehensive Income related to defined benefit plans, net of deferred income tax, was $49,000 at March 31, 2016 and $35,000 at December 31, 2015.

COMPREHENSIVE INCOME

Comprehensive Income is the total of (1) net income, and (2) all other changes in equity from non-stockholder sources, which are referred to as Other Comprehensive Income. Changes in the components of Accumulated Other Comprehensive Income (Loss) are included in Other Comprehensive Income, and for the Corporation, consist of changes in unrealized gains or losses on available-for-sale securities and changes in underfunded or overfunded defined benefit plans.

Fluctuations in interest rates significantly affect fair values of available-for-sale securities, and accordingly have an effect on Other Comprehensive Income (Loss) in each period. Comprehensive Income totaled $6,441,000 for the three months ended March 31, 2016 as compared to $6,121,000 in the first quarter 2015. For the three months ended March 31, 2016, Comprehensive Income included: (1) Net Income of $3,573,000, which was $242,000 lower than in the first quarter 2015; (2) Other Comprehensive Income from an increase in net unrealized gains on available-for-sale securities of $2,854,000 as compared to Other Comprehensive Gain of $2,373,000 from an increase in net unrealized gains on available-for-sale securities in the first quarter 2015; and (3) Other Comprehensive Gain from defined benefit plans of $14,000, as compared to Other Comprehensive Loss of $67,000 from defined benefit plans in the first quarter 2015.

INCOME TAXES

The effective income tax rate was 23.4% of pre-tax income for the first quarter 2016 and 24.4% for the first quarter 2015. The provision for income tax for interim periods is based on the Corporation’s estimate of the effective tax rate expected to be applicable for the full year. The Corporation’s effective tax rates differ from the statutory rate of 35% principally because of the effects of tax-exempt interest income.

The Corporation recognizes deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of assets and liabilities. At March 31, 2016, the net deferred tax asset was $949,000, down from $3,115,000 at December 31, 2015. The most significant change in temporary difference components was an increase of $1,537,000 in the deferred tax liability associated with unrealized gains on available-for-sale securities.

The Corporation regularly reviews deferred tax assets for recoverability based on history of earnings, expectations for future earnings and expected timing of reversals of temporary differences. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income, including taxable income in prior carryback years, as well as future taxable income. Management believes the recorded net deferred tax asset at March 31, 2016 is fully realizable; however, if management determines the Corporation will be unable to realize all or part of the net deferred tax asset, the Corporation would adjust the deferred tax asset, which would negatively impact earnings.

Additional information related to income taxes is presented in Note 11 to the unaudited, consolidated financial statements.

INFLATION

The Corporation is significantly affected by the Federal Reserve Board’s efforts to control inflation through changes in short-term interest rates. Beginning in September 2007, in response to concerns about weakness in the U.S. economy, the Federal Reserve lowered the fed funds target rate numerous times; in December 2008, it established a target range of 0% to 0.25%, which it maintained through mid-December 2015. On December 16, 2015, the Federal Reserve raised their target for the federal funds rate to 0.25% to 0.50%. This decision was based on data available that suggested economic activity had been expanding at a moderate pace. This included an increase in household spending, business fixed investments increasing, and an improvement in labor market conditions. Also, throughout this period, the Federal Reserve has injected massive amounts of liquidity into the nation’s monetary system through a variety of programs. The Federal Reserve has purchased large amounts of securities in an effort to keep interest rates low and stimulate economic growth. Beginning in late 2013, the Federal Reserve began reducing the amount of securities purchased under its asset purchase program and then ended the program in October 2014, though still reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and continued to roll over maturing Treasury securities at auction. The Federal Reserve maintained their commitment to this policy in their March 16, 2016 statement and anticipates doing so until normalization of the level of the federal funds rate is well under way.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Despite the current low short-term rate environment, inflation statistics indicate that the overall rate of inflation is unlikely to significantly affect the Corporation’s operations within the near future. Although management cannot predict future changes in the rates of inflation, management monitors the impact of economic trends, including any indicators of inflationary pressures, in managing interest rate and other financial risks.

53

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and prices of the Corporation’s financial instruments. In addition to the effects of interest rates, the market prices of the Corporation’s debt securities within the available-for-sale securities portfolio are affected by fluctuations in the risk premiums (amounts of spread over risk-free rates) demanded by investors. Management attempts to limit the risk that economic conditions would force the Corporation to sell securities for realized losses by maintaining a strong capital position (discussed in the “Stockholders’ Equity and Capital Adequacy” section of Management’s Discussion and Analysis) and ample sources of liquidity (discussed in the “Liquidity” section of Management’s Discussion and Analysis).

The Corporation’s two major categories of market risk are interest rate risk and equity securities risk, which are discussed in the following sections.

INTEREST RATE RISK

Business risk arising from changes in interest rates is an inherent factor in operating a bank. The Corporation’s assets are predominantly long-term, fixed-rate loans and debt securities. Funding for these assets comes principally from shorter-term deposits and borrowed funds. Accordingly, there is an inherent risk of lower future earnings or decline in fair value of the Corporation’s financial instruments when interest rates change.

The Corporation uses a simulation model to calculate the potential effects of interest rate fluctuations on net interest income and the market value of portfolio equity. For purposes of these calculations, the market value of portfolio equity includes the fair values of financial instruments, such as securities, loans, deposits and borrowed funds, and the book values of nonfinancial assets and liabilities, such as premises and equipment and accrued expenses. The model measures and projects the amount of potential changes in net interest income, and calculates the discounted present value of anticipated cash flows of financial instruments, assuming an immediate increase or decrease in interest rates. Management ordinarily runs a variety of scenarios within a range of plus or minus 100-400 basis points of current rates.

The model makes estimates, at each level of interest rate change, regarding cash flows from principal repayments on loans and mortgage-backed securities and call activity on other investment securities. Actual results could vary significantly from these estimates, which could result in significant differences in the calculations of projected changes in net interest income and market value of portfolio equity. Also, the model does not make estimates related to changes in the composition of the deposit portfolio that could occur due to rate competition, and the table does not necessarily reflect changes that management would make to realign the portfolio as a result of changes in interest rates.

The Corporation’s Board of Directors has established policy guidelines for acceptable levels of interest rate risk, based on an immediate increase or decrease in interest rates. The policy limits acceptable fluctuations in net interest income from the baseline (flat rates) one-year scenario and variances in the market value of portfolio equity from the baseline values based on current rates.

Table XI, which follows this discussion, is based on the results of calculations performed using the simulation model as of January 31, 2016 and December 31, 2015. The table shows that as of the respective dates, the changes in net interest income and changes in market value were within the policy limits in all scenarios.

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CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TABLE XI - THE EFFECT OF HYPOTHETICAL CHANGES IN INTEREST RATES

January 31, 2016 Data
(In Thousands)			Period Ending January 31, 2017
Basis Point	Interest		Interest		Net Interest		NII			NII
Change in Rates	Income		Expense		Income (NII)		% Change			Risk Limit
+400	$	51,937	$	22,130	$	29,807		-20.0	%		25.0	%
+300		49,274		17,351		31,923		-14.3	%		20.0	%
+200		46,592		12,661		33,931		-8.9	%		15.0	%
+100		43,824		8,146		35,678		-4.3	%		10.0	%
0		40,967		3,705		37,262		0.0	%		0.0	%
-100		38,268		3,182		35,086		-5.8	%		10.0	%
-200		36,868		3,179		33,689		-9.6	%		15.0	%
-300		36,351		3,179		33,172		-11.0	%		20.0	%
-400		36,208		3,179		33,029		-11.4	%		25.0	%

	Market Value of Portfolio Equity at January 31, 2016
	Present		Present			Present
Basis Point	Value		Value			Value
Change in Rates	Equity		% Change			Risk Limit
+400	$	166,868		-24.3	%		50.0	%
+300		178,584		-19.0	%		45.0	%
+200		192,086		-12.8	%		35.0	%
+100		205,639		-6.7	%		25.0	%
0		220,406		0.0	%		0.0	%
-100		219,868		-0.2	%		25.0	%
-200		226,004		2.5	%		35.0	%
-300		258,154		17.1	%		45.0	%
-400		292,212		32.6	%		50.0	%

December 31, 2015 Data
(In Thousands)			Period Ending December 31, 2016
Basis Point	Interest		Interest		Net Interest		NII			NII
Change in Rates	Income		Expense		Income (NII)		% Change			Risk Limit
+400	$	52,181	$	21,985	$	30,196		-20.8	%		25.0	%
+300		49,687		17,282		32,405		-15.0	%		20.0	%
+200		47,136		12,659		34,477		-9.6	%		15.0	%
+100		44,546		8,109		36,437		-4.4	%		10.0	%
0		41,835		3,715		38,120		0.0	%		0.0	%
-100		39,116		3,171		35,945		-5.7	%		10.0	%
-200		37,417		3,168		34,249		-10.2	%		15.0	%
-300		36,838		3,168		33,670		-11.7	%		20.0	%
-400		36,689		3,168		33,521		-12.1	%		25.0	%

	Market Value of Portfolio Equity at December 31, 2016
	Present		Present			Present
Basis Point	Value		Value			Value
Change in Rates	Equity		% Change			Risk Limit
+400	$	167,741		-24.4	%		50.0	%
+300		179,772		-18.9	%		45.0	%
+200		193,823		-12.6	%		35.0	%
+100		207,803		-6.3	%		25.0	%
0		221,750		0.0	%		0.0	%
-100		223,517		0.8	%		25.0	%
-200		225,185		1.5	%		35.0	%
-300		250,353		12.9	%		45.0	%
-400		286,210		29.1	%		50.0	%

55

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

EQUITY SECURITIES RISK

The Corporation’s equity securities portfolio consists of investments in stocks of banks and bank holding companies. Investments in bank stocks are subject to risk factors that affect the banking industry in general, including credit risk, competition from non-bank entities, interest rate risk and other factors, which could result in a decline in market prices. Also, losses could occur in individual stocks held by the Corporation because of specific circumstances related to each bank.

Equity securities held as of March 31, 2016 and December 31, 2015 are presented in Table XII. Table XII presents quantitative data concerning the effects of a decline in fair value of the Corporation’s equity securities of 10% or 20%. The data in Table XII does not reflect the effects of any appreciation in value that may occur, nor does it present the Corporation’s maximum exposure to loss on equity securities, which would be 100% of their fair value as of March 31, 2016.

TABLE XII - EQUITY SECURITIES RISK

(In Thousands)

	March 31,			Dec. 31,
	2016			2015
Cost	$	1,253		$	1,680
Fair Value		1,736			2,386
Hypothetical 10% Decline In Market Value		(174	)		(239	)
Hypothetical 20% Decline In Market Value		(347	)		(477	)

ITEM 4. CONTROLS AND PROCEDURES

The Corporation’s management, under the supervision of and with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, has carried out an evaluation of the design and effectiveness of the Corporation’s disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Corporation’s disclosure controls and procedures are effective to ensure that all material information required to be disclosed in reports the Corporation files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There were no significant changes in the Corporation’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that are reasonably likely to affect, our internal control over financial reporting.

56

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Corporation and C&N Bank are involved in various legal proceedings incidental to their business. Management believes the aggregate liability, if any, resulting from such pending and threatened legal proceedings will not have a material, adverse effect on the Corporation’s financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Item 1A of the Corporation’s Form 10-K filed February 18, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Effective July 17, 2014, the Corporation terminated its existing treasury stock repurchase programs and approved a new treasury stock repurchase program. Under the new program, the Corporation is authorized to repurchase up to 622,500 shares of the Corporation’s common stock, or approximately 5% of the Corporation’s issued and outstanding shares at July 16, 2014. As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases under the new program may be made from time to time in the open market at prevailing prices, or through privately negotiated transactions.

Consistent with previous programs, the Board of Directors’ July 17, 2014 authorization provides that: (1) the new treasury stock repurchase program shall be effective when publicly announced and shall continue thereafter until suspended or terminated by the Board of Directors, in its sole discretion; and (2) all shares of common stock repurchased pursuant to the new program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation program.

The following table sets forth a summary of the purchases by the Corporation, on the open market, of its equity securities during the first quarter 2016:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
January 1 - 31, 2016		35,300	$	19.83		470,500		152,000
February 1 - 29, 2016		75,550	$	19.86		546,050		76,450
March 1 - 31, 2016		43,500	$	19.98		589,550		32,950

Through March 31, 2016, 589,550 shares had been repurchased for a total cost of $11,870,000. In April 2016, the Corporation repurchased the remainder of the shares authorized under the program. In total, 622,500 shares were repurchased for a total cost of $12,140,000, at an average price of $19.50 per share.

Effective April 21, 2016, the Corporation’s Board of Directors approved a new treasury stock repurchase program. Under the newly approved stock repurchase program, the Corporation is authorized to repurchase up to 600,000 shares of the Corporation's common stock or slightly less than 5% of the Corporation's issued and outstanding shares at April 19, 2016. Consistent with the previous program, the Board of Directors’ April 21, 2016 authorization provides that: (1) the new treasury stock repurchase program shall be effective when publicly announced and shall continue thereafter until suspended or terminated by the Board of Directors, in its sole discretion; and (2) all shares of common stock repurchased pursuant to the new program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation program.

57

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

2. Plan of acquisition, reorganization, arrangement, liquidation or succession	Not applicable
3. (i) Articles of Incorporation	Incorporated by reference to Exhibit 3.1 of the Corporation's Form 8-K filed September 21, 2009
3. (ii) By-laws	Incorporated by reference to Exhibit 3.1 of the Corporation's Form 8-K filed April 19, 2013
4. Instruments defining the rights of Security holders, including indentures	Not applicable
10. Material contracts	Not applicable
11. Statement re: computation of per share earnings	Information concerning the computation of earnings per share is provided in Note 2 to the unaudited consolidated financial statements, which is included in Part I, Item 1 of Form 10-Q
15. Letter re: unaudited interim information	Not applicable
18. Letter re: change in accounting principles	Not applicable
19. Report furnished to security holders	Not applicable
22. Published report regarding matters submitted to vote of security holders	Not applicable
23. Consents of experts and counsel	Not applicable
24. Power of attorney	Not applicable
31. Rule 13a-14(a)/15d-14(a) certifications:
31.1 Certification of Chief Executive Officer	Filed herewith
31.2 Certification of Chief Financial Officer	Filed herewith
32. Section 1350 certifications	Filed herewith
99. Additional exhibits	Not applicable
100. XBRL-related documents	Not applicable
101. Interactive data file	Filed herewith

58

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITIZENS & NORTHERN CORPORATION
May 5, 2016	By:	/s/ J. Bradley Scovill
Date	President and Chief Executive Officer
May 5, 2016	By:	/s/ Mark A. Hughes
Date	Treasurer and Chief Financial Officer

59

EX-31.1

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Exhibit 31.1

CERTIFICATION

I, J. Bradley Scovill, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Citizens & Northern Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2016	By:	/s/ J. Bradley Scovill
Date		President and Chief Executive Officer

EX-31.2

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Exhibit 31.2

CERTIFICATION

I, Mark A. Hughes, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Citizens & Northern Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2016	By:	/s/ Mark A. Hughes
Date		Treasurer and Chief Financial Officer

EX-32

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Exhibit 32

SECTION 1350 CERTIFICATIONS

In connection with the Quarterly Report of Citizens & Northern Corporation (the “Corporation”) on Form 10-Q for the quarterly period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to each of the undersigned’s best knowledge and belief:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

May 5, 2016	By:	/s/ J. Bradley Scovill
Date		President and Chief Executive Officer
May 5, 2016	By:	/s/ Mark A. Hughes
Date		Treasurer and Chief Financial Officer

These certifications accompany this report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Corporation specifically incorporates them by reference.

A signed original of this written statement required by Section 906 has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Entity Registrant Name	CITIZENS & NORTHERN CORP
Entity Central Index Key	0000810958
Trading Symbol	cznc
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		12,048,128
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Noninterest-bearing	$ 13,744,000	$ 14,710,000
Interest-bearing	27,429,000	21,351,000
Total cash and due from banks	41,173,000	36,061,000
Available-for-sale securities, at fair value	413,606,000	420,290,000
Loans held for sale	526,000	280,000
Loans receivable	701,605,000	704,880,000
Allowance for loan losses	(7,661,000)	(7,889,000)
Loans, net	693,944,000	696,991,000
Bank-owned life insurance	19,418,000	20,764,000
Accrued interest receivable	3,900,000	3,768,000
Bank premises and equipment, net	15,376,000	15,406,000
Foreclosed assets held for sale	1,584,000	1,260,000
Deferred tax asset, net	949,000	3,115,000
Intangible asset - Core deposit intangibles	27,000	30,000
Intangible asset - Goodwill	11,942,000	11,942,000
Other assets	14,099,000	13,510,000
TOTAL ASSETS	1,216,544,000	1,223,417,000
LIABILITIES
Noninterest-bearing	216,679,000	211,041,000
Interest-bearing	739,169,000	724,574,000
Total deposits	955,848,000	935,615,000
Short-term borrowings	25,952,000	53,496,000
Long-term borrowings	38,692,000	38,767,000
Accrued interest and other liabilities	7,742,000	8,052,000
TOTAL LIABILITIES	1,028,234,000	1,035,930,000
STOCKHOLDERS' EQUITY
Preferred stock, $1,000 par value; authorized 30,000 shares; $1,000 liquidation preference per share; no shares issued at March 31, 2016 and December 31, 2015	0	0
Common stock, par value $1.00 per share; authorized 20,000,000 shares in 2016 and 2015; issued 12,655,171 at March 31, 2016 and December 31, 2015; outstanding 12,081,030 at March 31, 2016 and 12,180,623 December 31, 2015	12,655,000	12,655,000
Paid-in capital	71,212,000	71,654,000
Retained earnings	109,901,000	109,454,000
Treasury stock, at cost; 574,141 shares at March 31, 2016 and 474,548 shares at December 31, 2015	(10,854,000)	(8,804,000)
Sub-total	182,914,000	184,959,000
Accumulated other comprehensive income:
Unrealized gain on available-for-sale securities	5,347,000	2,493,000
Defined benefit plans gain	49,000	35,000
Total accumulated other comprehensive income	5,396,000	2,528,000
TOTAL STOCKHOLDERS' EQUITY	188,310,000	187,487,000
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$ 1,216,544,000	$ 1,223,417,000

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Preferred stock, par value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, authorized shares (in shares)	30,000	30,000
Preferred stock, liquidation preference per share (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares issued	$ 0	$ 0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized shares (in shares)	20,000,000	20,000,000
Common stock, issued shares (in shares)	12,655,171	12,655,171
Common stock, shares outstanding (in shares)	12,081,030	12,180,623
Treasury stock, shares (in shares)	574,141	474,548

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest and fees on loans	$ 7,974,000	$ 7,709,000
Interest on balances with depository institutions	24,000	26,000
Interest on loans to political subdivisions	448,000	349,000
Interest on mortgages held for sale	6,000	2,000
Income from available-for-sale securities:
Taxable	1,555,000	1,974,000
Tax-exempt	896,000	1,016,000
Dividends	34,000	87,000
Total interest and dividend income	10,937,000	11,163,000
INTEREST EXPENSE
Interest on deposits	479,000	486,000
Interest on short-term borrowings	62,000	1,000
Interest on long-term borrowings	363,000	726,000
Total interest expense	904,000	1,213,000
Net interest income	10,033,000	9,950,000
Provision for loan losses	368,000	3,000
Net interest income after provision for loan losses	9,665,000	9,947,000
OTHER INCOME
Service charges on deposit accounts	1,138,000	1,022,000
Service charges and fees	94,000	113,000
Trust and financial management revenue	1,144,000	1,114,000
Brokerage revenue	173,000	219,000
Insurance commissions, fees and premiums	21,000	40,000
Interchange revenue from debit card transactions	463,000	474,000
Net gains from sale of loans	168,000	147,000
(Decrease) in fair value of servicing rights	(71,000)	(117,000)
Increase in cash surrender value of life insurance	96,000	97,000
Other operating income	464,000	447,000
Sub-total	3,690,000	3,556,000
Realized gains on available-for-sale securities, net	383,000	74,000
Total other income	4,073,000	3,630,000
OTHER EXPENSES
Salaries and wages	3,887,000	3,487,000
Pensions and other employee benefits	1,437,000	1,385,000
Occupancy expense, net	609,000	722,000
Furniture and equipment expense	427,000	454,000
FDIC Assessments	142,000	151,000
Pennsylvania shares tax	322,000	318,000
Professional fees	289,000	156,000
Automated teller machine and interchange expense	249,000	246,000
Software subscriptions	241,000	197,000
Other operating expense	1,469,000	1,417,000
Total other expenses	9,072,000	8,533,000
Income before income tax provision	4,666,000	5,044,000
Income tax provision	1,093,000	1,229,000
NET INCOME	$ 3,573,000	$ 3,815,000
NET INCOME PER SHARE - BASIC (in dollars per share)	$ 0.29	$ 0.31
NET INCOME PER SHARE - DILUTED (in dollars per share)	$ 0.29	$ 0.31

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 3,573,000	$ 3,815,000
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	4,774,000	3,725,000
Reclassification adjustment for gains realized in income	(383,000)	(74,000)
Other comprehensive gain on available-for-sale securities	4,391,000	3,651,000
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in accumulated other comprehensive gain (loss)	26,000	(100,000)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost	(5,000)	(3,000)
Other comprehensive gain (loss) on unfunded retirement obligations	21,000	(103,000)
Other comprehensive income before income tax	4,412,000	3,548,000
Income tax related to other comprehensive income	(1,544,000)	(1,242,000)
Net other comprehensive income	2,868,000	2,306,000
Comprehensive income	$ 6,441,000	$ 6,121,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,573,000	$ 3,815,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	368,000	3,000
Realized gains on available-for-sale securities, net	(383,000)	(74,000)
Realized loss on foreclosed assets	46,000	13,000
Depreciation expense	408,000	469,000
Accretion and amortization on securities, net	297,000	383,000
Accretion and amortization on loans and deposits, net	(4,000)	(5,000)
Decrease in fair value of servicing rights	71,000	117,000
Increase in cash surrender value of life insurance	(96,000)	(97,000)
Stock-based compensation	162,000	150,000
Amortization of core deposit intangibles	3,000	5,000
Deferred income taxes	622,000	440,000
Gains on sales of loans, net	(168,000)	(147,000)
Origination of loans for sale	(4,975,000)	(4,150,000)
Proceeds from sales of loans	4,861,000	4,052,000
Increase in accrued interest receivable and other assets	(759,000)	(1,752,000)
(Decrease) increase in accrued interest payable and other liabilities	(289,000)	487,000
Net Cash Provided by Operating Activities	3,737,000	3,709,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of certificates of deposit	100,000	0
Purchase of certificate of deposit	(100,000)	0
Proceeds from sales of available-for-sale securities	8,695,000	861,000
Proceeds from calls and maturities of available-for-sale securities	17,318,000	19,400,000
Purchase of available-for-sale securities	(14,852,000)	(28,152,000)
Redemption of Federal Home Loan Bank of Pittsburgh stock	2,297,000	485,000
Purchase of Federal Home Loan Bank of Pittsburgh stock	(901,000)	(546,000)
Net decrease in loans	2,313,000	1,402,000
Purchase of premises and equipment	(378,000)	(367,000)
Return of principal on limited liability entity investments	49,000	54,000
Proceeds from sale of foreclosed assets	0	191,000
Net Cash Provided by (Used in) Investing Activities	14,541,000	(6,672,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	20,233,000	8,645,000
Net (decrease) increase in short-term borrowings	(27,544,000)	303,000
Repayments of long-term borrowings	(75,000)	(72,000)
Purchase of treasury stock	(3,070,000)	(3,022,000)
Sale of treasury stock	34,000	279,000
Tax benefit from compensation plans	45,000	42,000
Common dividends paid	(2,789,000)	(2,829,000)
Net Cash (Used in) Provided by Financing Activities	(13,166,000)	3,346,000
INCREASE IN CASH AND CASH EQUIVALENTS	5,112,000	383,000
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	33,313,000	31,619,000
CASH AND CASH EQUIVALENTS, END OF PERIOD	38,425,000	32,002,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Assets acquired through foreclosure of real estate loans	370,000	598,000
Accrued redemption of bank owned life insurance policy	1,442,000	0
Interest paid	905,000	1,201,000
Income taxes paid	$ 225,000	$ 175,000

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2014	12,655,171	375,191
Balance at Dec. 31, 2014	$ 12,655,000	$ (6,744,000)	$ 71,541,000	$ 105,550,000	$ 5,360,000	$ 188,362,000
Net income				3,815,000		3,815,000
Other comprehensive income, net					2,306,000	2,306,000
Cash dividends declared on common stock, $0.26 per share				(3,201,000)		(3,201,000)
Shares issued for dividend reinvestment plan (in shares)		19,239
Shares issued for dividend reinvestment plan		$ 372,000				372,000
Treasury stock purchased (in shares)		155,800
Treasury stock purchased		$ (3,022,000)				(3,022,000)
Shares issued from treasury for exercise of stock options (in shares)		(16,908)
Shares issued from treasury for exercise of stock options		$ 307,000	(28,000)			279,000
Restricted stock granted (in shares)		34,800
Restricted stock granted		$ 627,000	(627,000)			0
Forfeiture of restricted stock (in shares)		1,943
Forfeiture of restricted stock		$ (33,000)	33,000			0
Stock-based compensation expense			150,000			150,000
Tax benefit from dividends on restricted stock			5,000			5,000
Tax benefit from employee benefit plan				37,000		37,000
Balance (in shares) at Mar. 31, 2015	12,655,171	461,987
Balance at Mar. 31, 2015	$ 12,655,000	$ (8,493,000)	71,074,000	106,201,000	7,666,000	189,103,000
Shares issued for dividend reinvestment plan (in shares)		(19,239)
Balance (in shares) at Dec. 31, 2015	12,655,171	474,548
Balance at Dec. 31, 2015	$ 12,655,000	$ (8,804,000)	71,654,000	109,454,000	2,528,000	187,487,000
Net income				3,573,000		3,573,000
Other comprehensive income, net					2,868,000	2,868,000
Cash dividends declared on common stock, $0.26 per share				(3,165,000)		(3,165,000)
Shares issued for dividend reinvestment plan (in shares)		18,777
Shares issued for dividend reinvestment plan		$ 352,000	24,000			376,000
Treasury stock purchased (in shares)		154,350
Treasury stock purchased		$ (3,070,000)				(3,070,000)
Shares issued from treasury for exercise of stock options (in shares)		(2,090)
Shares issued from treasury for exercise of stock options		$ 38,000	(4,000)			34,000
Restricted stock granted (in shares)		34,199
Restricted stock granted		$ 635,000	(635,000)			0
Forfeiture of restricted stock (in shares)		309
Forfeiture of restricted stock		$ (5,000)	5,000			0
Stock-based compensation expense			162,000			162,000
Tax benefit from dividends on restricted stock			6,000			6,000
Tax benefit from employee benefit plan				39,000		39,000
Balance (in shares) at Mar. 31, 2016	12,655,171	574,141
Balance at Mar. 31, 2016	$ 12,655,000	$ (10,854,000)	$ 71,212,000	$ 109,901,000	$ 5,396,000	$ 188,310,000
Shares issued for dividend reinvestment plan (in shares)		(18,777)

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Retained Earnings [Member]
Common stock, dividends, per share (in dollars per share)	$ 0.26	$ 0.26

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Note 1 - Basis of Interim Presentation

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Basis of Accounting [Text Block]

1. BASIS OF INTERIM PRESENTATION

The consolidated financial information included herein, with the exception of the consolidated balance sheet dated December 31, 2015, is unaudited. Such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity for the interim periods; however, the information does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for a complete set of financial statements. Certain 2015 information has been reclassified for consistency with the 2016 presentation.

Operating results reported for the three-month ended March 31, 2016 might not be indicative of the results for the year ending December 31, 2016. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission.

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Note 2 - Per Share Data

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

2. PER SHARE DATA

Net income per share is based on the weighted-average number of shares of common stock outstanding. The following data show the amounts used in computing basic and diluted net income per share. As shown in the table that follows, diluted earnings per share is computed using weighted average common shares outstanding, plus weighted-average common shares available from the exercise of all dilutive stock options, less the number of shares that could be repurchased with the proceeds of stock option exercises based on the average share price of the Corporation's common stock during the period.

			Weighted-
			Average			Earnings
	Net		Common			Per
	Income		Shares			Share
Three Months Ended March 31, 2016
Earnings per share – basic	$	3,573,000		12,155,108		$	0.29
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				198,985
Hypothetical share repurchase at $20.05				(178,215	)
Earnings per share – diluted	$	3,573,000		12,175,878		$	0.29
Three Months Ended March 31, 2015
Earnings per share – basic	$	3,815,000		12,268,306		$	0.31
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				181,385
Hypothetical share repurchase at $19.78				(160,552	)
Earnings per share – diluted	$	3,815,000		12,289,139		$	0.31

Stock options that were anti-dilutive were excluded from net income per share calculations. Weighted-average common shares available from anti-dilutive instruments totaled 47,309 shares in the three-month period ended March 31, 2016 and 103,104 shares in the three-month period ended March 31, 2015.

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Note 3 - Comprehensive Income

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

3. COMPREHENSIVE INCOME

Comprehensive income is the total of (1) net income, and (2) all other changes in equity from non-stockholder sources, which are referred to as other comprehensive income. The components of other comprehensive income, and the related tax effects, are as follows:

(In Thousands)	Before-Tax			Income Tax			Net-of-Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2016
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	4,774		$	(1,671	)	$	3,103
Reclassification adjustment for (gains) realized in income		(383	)		134			(249	)
Other comprehensive income on available-for-sale securities		4,391			(1,537	)		2,854
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		26			(9	)		17
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(5	)		2			(3	)
Other comprehensive income on unfunded retirement obligations		21			(7	)		14
Total other comprehensive income	$	4,412		$	(1,544	)	$	2,868

(In Thousands)	Before-Tax			Income Tax			Net-of-Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2015
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	3,725		$	(1,304	)	$	2,421
Reclassification adjustment for (gains) realized in income		(74	)		26			(48	)
Other comprehensive income on available-for-sale securities		3,651			(1,278	)		2,373
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		(100	)		35			(65	)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(3	)		1			(2	)
Other comprehensive loss on unfunded retirement obligations		(103	)		36			(67	)
Total other comprehensive income	$	3,548		$	(1,242	)	$	2,306

Changes in the components of accumulated other comprehensive income are as follows and are presented net of tax:

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2016
Balance, beginning of period	$	2,493		$	35		$	2,528
Other comprehensive income before reclassifications		3,103			17			3,120
Amounts reclassified from accumulated other comprehensive income		(249	)		(3	)		(252	)
Other comprehensive income		2,854			14			2,868
Balance, end of period	$	5,347		$	49		$	5,396

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2015
Balance, beginning of period	$	5,281		$	79		$	5,360
Other comprehensive income before reclassifications		2,421			(65	)		2,356
Amounts reclassified from accumulated other comprehensive income		(48	)		(2	)		(50	)
Other comprehensive income		2,373			(67	)		2,306
Balance, end of period	$	7,654		$	12		$	7,666

Items reclassified out of each component of other comprehensive income are as follows:

For the Three Months Ended March 31, 2016
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(383	)	Realized gains on available-for-sale securities, net
		134		Income tax provision
		(249	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(8	)	Pensions and other employee benefits
Actuarial loss		3		Pensions and other employee benefits
		(5	)	Total before tax
		2		Income tax provision
		(3	)	Net of tax
Total reclassifications for the period	$	(252	)

For the Three Months Ended March 31, 2015
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(74	)	Realized gains on available-for-sale securities, net
		26		Income tax provision
		(48	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(7	)	Pensions and other employee benefits
Actuarial loss		4		Pensions and other employee benefits
		(3	)	Total before tax
		1		Income tax provision
		(2	)	Net of tax
Total reclassifications for the period	$	(50	)

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Note 4 - Cash and Due from Banks

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Cash and Cash Equivalents Disclosure [Text Block]

4. CASH AND DUE FROM BANKS

Cash and due from banks at March 31, 2016 and December 31, 2015 include the following:

(In thousands)	March 31,		Dec. 31,
	2016		2015
Cash and cash equivalents	$	38,425	$	33,313
Certificates of deposit		2,748		2,748
Total cash and due from banks	$	41,173	$	36,061

Certificates of deposit are issues by U.S. banks with original maturities greater than three months. Each certificate of deposit is fully FDIC-insured. The Corporation maintains cash and cash equivalents with certain financial institutions in excess of the FDIC insurance limit.

The Corporation is required to maintain reserves against deposit liabilities in the form of cash and balances with the Federal Reserve Bank of Philadelphia. The reserves are based on deposit levels, account activity, and other services provided by the Federal Reserve Bank. Required reserves were $14,562,000 at March 31, 2016 and $15,327,000 at December 31, 2015.

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

5.

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

The Corporation measures certain assets at fair value. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. FASB ASC topic 820, “Fair Value Measurements and Disclosures” establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Corporation for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2 – Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets and other observable inputs.

Level 3 – Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows and other similar techniques.

The Corporation monitors and evaluates available data relating to fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date of an event or change in circumstances that affects the valuation method chosen. Examples of such changes may include the market for a particular asset becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2016 and December 31, 2015, assets measured at fair value and the valuation methods used are as follows:

			March 31, 2016
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,707	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		0		111,959		0			111,959
Taxable		0		35,094		0			35,094
Mortgage-backed securities		0		73,243		0			73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		180,860		0			180,860
Collateralized debt obligations		0		7		0			7
Total debt securities		0		411,870		0			411,870
Marketable equity securities		1,736		0		0			1,736
Total available-for-sale securities		1,736		411,870		0			413,606
Servicing rights		0		0		1,261			1,261
Total recurring fair value measurements	$	1,736	$	411,870	$	1,261		$	414,867
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,420		$	1,420
Valuation allowance		0		0		(306	)		(306	)
Impaired loans, net		0		0		1,114			1,114
Foreclosed assets held for sale		0		0		1,584			1,584
Total nonrecurring fair value measurements	$	0	$	0	$	2,698		$	2,698

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

			December 31, 2015
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,483	$	0		$	10,483
Obligations of states and political subdivisions:
Tax-exempt		0		107,757		0			107,757
Taxable		0		34,597		0			34,597
Mortgage-backed securities		0		73,343		0			73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		191,715		0			191,715
Collateralized debt obligations		0		9		0			9
Total debt securities		0		417,904		0			417,904
Marketable equity securities		2,386		0		0			2,386
Total available-for-sale securities		2,386		417,904		0			420,290
Servicing rights		0		0		1,296			1,296
Total recurring fair value measurements	$	2,386	$	417,904	$	1,296		$	421,586
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,933		$	1,933
Valuation allowance		0		0		(820	)		(820	)
Impaired loans, net		0		0		1,113			1,113
Foreclosed assets held for sale		0		0		1,260			1,260
Total nonrecurring fair value measurements	$	0	$	0	$	2,373		$	2,373

Management’s evaluation and selection of valuation techniques and the unobservable inputs used in determining the fair values of assets valued using Level 3 methodologies include sensitive assumptions. Other market participants might use substantially different assumptions, which could result in calculations of fair values that would be substantially different than the amount calculated by management.

At March 31, 2016 and December 31, 2015, quantitative information regarding significant techniques and inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows:

	Fair Value at
	3/31/16		Valuation	Unobservable	Method or Value As of
Asset	(In Thousands)		Technique	Input(s)	3/31/16
Servicing rights	$	1,261	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		168.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

	Fair Value at
	12/31/15		Valuation	Unobservable	Method or Value As of
Asset	(In Thousands)		Technique	Input(s)	12/31/15
Servicing rights	$	1,296	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		146.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

The fair value of servicing rights is affected by expected future interest rates. Increases (decreases) in future expected interest rates tend to increase (decrease) the fair value of the Corporation’s servicing rights because of changes in expected prepayment behavior by the borrowers on the underlying loans.

Following is a reconciliation of activity for Level 3 assets measured at fair value on a recurring basis:

(In Thousands)	3 Months Ended
	March 31,			March 31,
	201 6			2015
Servicing rights balance, beginning of period	$	1,296		$	1,281
Issuances of servicing rights		36			31
Unrealized losses included in earnings		(71	)		(117	)
Service rights balance, end of period	$	1,261		$	1,195

Loans are classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Foreclosed assets held for sale consist of real estate acquired by foreclosure. For impaired commercial loans secured by real estate and foreclosed assets held for sale, estimated fair values are determined primarily using values from third-party appraisals. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

At March 31, 2016 and December 31, 2015, quantitative information regarding significant techniques and inputs used for nonrecurring fair value measurements using unobservable inputs (Level 3 methodologies) are as follows:

(In Thousands, Except									Value at
Percentages)			Valuation						3 /31/1 6
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	3/31/16		3/31/16		3/31/16		Technique	Inputs	Average)
Impaired loans:
Commercial:
Commercial loans secured by real estate	$	311	$	96	$	215	Sales comparison	Discount to appraised value		47	%
Commercial and industrial		599		158		441	Sales comparison	Discount to appraised value		52	%
Loans secured by farmland		510		52		458	Sales comparison	Discount to appraised value		49	%
Total impaired loans	$	1,420	$	306	$	1,114
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	883	$	0	$	883	Sales comparison	Discount to appraised value		39	%
Land		701		0		701	Sales comparison	Discount to appraised value		30	%
Total foreclosed assets held for sale	$	1,584	$	0	$	1,584

(In Thousands, Except									Value at
Percentages)			Valuation						12/31/15
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	12/31/15		12/31/15		12/31/15		Technique	Inputs	Average)
Impaired loans:
Residential mortgage loans - first liens	$	42	$	1	$	41	Sales comparison	Discount to appraised value		31	%
Commercial:
Commercial loans secured by real estate		317		97		220	Sales comparison	Discount to appraised value		46	%
Commercial and industrial		75		75		0	Sales comparison	Discount to appraised value		31	%
Loans secured by farmland		512		52		460	Sales comparison	Discount to appraised value		49	%
Multi-family (5 or more) residential		987		595		392	Sales comparison	Discount to appraised value		41	%
Total impaired loans	$	1,933	$	820	$	1,113
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	556	$	0	$	556	Sales comparison	Discount to appraised value		32	%
Land		704		0		704	Sales comparison	Discount to appraised value		29	%
Total foreclosed assets held for sale	$	1,260	$	0	$	1,260

Certain of the Corporation’s financial instruments are not measured at fair value in the consolidated financial statements. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Therefore, the aggregate fair value amounts presented may not represent the underlying fair value of the Corporation.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation used the following methods and assumptions in estimating fair value disclosures for financial instruments:

CASH AND CASH EQUIVALENTS -

The carrying amounts of cash and short-term instruments approximate fair values.

CERTIFICATES OF DEPOSIT -

Fair values for certificates of deposit, included in cash and due from banks in the consolidated balance sheet, are based on quoted market prices for certificates of similar remaining maturities.

SECURITIES -

Fair values for securities, excluding restricted equity securities, are based on quoted market prices or other methods as described above. The carrying value of restricted equity securities approximates fair value based on applicable redemption provisions.

LOANS HELD FOR SALE -

Fair values of loans held for sale are determined based on applicable sale prices available under the Federal Home Loan Banks’ MPF Xtra and MPF Original programs.

LOANS -

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, commercial real estate, residential mortgage and other consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of performing loans is calculated by discounting contractual cash flows, adjusted for estimated prepayments based on historical experience, using estimated market discount rates that reflect the credit and interest rate risk inherent in the loans. Fair value of nonperforming loans is based on recent appraisals or estimates prepared by the Corporation’s lending officers.

SERVICING RIGHTS -

The fair value of servicing rights, included in other assets in the consolidated balance sheet, is determined through a discounted cash flow valuation. Significant inputs include expected net servicing income, the discount rate and the expected prepayment speeds of the underlying loans.

DEPOSITS -

The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, money market and interest checking accounts, is (by definition) equal to the amount payable on demand at March 31, 2016 and December 31, 2015. The fair value of time deposits, such as certificates of deposit and Individual Retirement Accounts, is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The fair value estimates of deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible.

BORROWED FUNDS -

The fair value of borrowings is estimated using discounted cash flow analyses based on rates currently available to the Corporation for similar types of borrowing arrangements.

ACCRUED INTEREST -

The carrying amounts of accrued interest receivable and payable approximate fair values.

OFF-BALANCE SHEET COMMITMENTS -

The Corporation has commitments to extend credit and has issued standby letters of credit. Standby letters of credit are conditional guarantees of performance by a customer to a third party. Estimates of the fair value of these off-balance sheet items were not made because of the short-term nature of these arrangements and the credit standing of the counterparties.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments are as follows:

(In Thousands)	Valuation	March 31, 2016				December 31, 2015
	Method(s)	Carrying		Fair		Carrying		Fair
	Used	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	38,425	$	38,425	$	33,313	$	33,313
Certificates of deposit	Level 2		2,748		2,773		2,748		2,752
Available-for-sale securities	See Above		413,606		413,606		420,290		420,290
Restricted equity securities (included in Other Assets)	Level 2		3,261		3,261		4,657		4,657
Loans held for sale	Level 2		526		526		280		280
Loans, net	Level 3		693,944		688,359		696,991		685,552
Accrued interest receivable	Level 2		3,900		3,900		3,768		3,768
Servicing rights	Level 3		1,261		1,261		1,296		1,296
Financial liabilities:
Deposits with no stated maturity	Level 2		736,837		736,837		713,931		713,931
Time deposits	Level 2		219,011		219,237		221,684		221,891
Short-term borrowings	Level 2		25,952		25,841		53,496		53,398
Long-term borrowings	Level 2		38,692		40,247		38,767		40,166
Accrued interest payable	Level 2		69		69		70		70

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Note 6 - Securities

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

6. SECURITIES

Amortized cost and fair value of available-for-sale securities at March 31, 2016 and December 31, 2015 are summarized as follows:

			March 31, 2016
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,661	$	46	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		107,269		4,756		(66	)		111,959
Taxable		34,249		845		0			35,094
Mortgage-backed securities		72,210		1,060		(27	)		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		1,665		(536	)		180,860
Collateralized debt obligations		7		0		0			7
Total debt securities		404,127		8,372		(629	)		411,870
Marketable equity securities		1,253		483		0			1,736
Total	$	405,380	$	8,855	$	(629	)	$	413,606

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

			December 31, 2015
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,663	$	12	$	(192	)	$	10,483
Obligations of states and political subdivisions:
Tax-exempt		103,414		4,365		(22	)		107,757
Taxable		34,317		381		(101	)		34,597
Mortgage-backed securities		73,227		486		(370	)		73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		193,145		623		(2,053	)		191,715
Collateralized debt obligations:		9		0		0			9
Total debt securities		414,775		5,867		(2,738	)		417,904
Marketable equity securities		1,680		706		0			2,386
Total	$	416,455	$	6,573	$	(2,738	)	$	420,290

The following table presents gross unrealized losses and fair value of available-for-sale securities with unrealized loss positions that are not deemed to be other-than-temporarily impaired, aggregated by length of time that individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015:

March 31, 2016	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of states and political subdivisions, Tax-exempt	$	10,017	$	(66	)	$	0	$	0		$	10,017	$	(66	)
Mortgage-backed securities		5,899		(27	)		0		0			5,899		(27	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		5,820		(105	)		44,291		(431	)		50,111		(536	)
Total temporarily impaired available-for-sale securities	$	21,736	$	(198	)	$	44,291	$	(431	)	$	66,027	$	(629	)

December 31, 2015	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of U.S. Government agencies	$	0	$	0		$	7,850	$	(192	)	$	7,850	$	(192	)
Obligations of states and political subdivisions:
Tax-exempt		5,200		(19	)		216		(3	)		5,416		(22	)
Taxable		10,605		(60	)		2,910		(41	)		13,515		(101	)
Mortgage-backed securities		38,764		(295	)		3,503		(75	)		42,267		(370	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		88,355		(648	)		49,273		(1,405	)		137,628		(2,053	)
Total temporarily impaired available-for-sale securities	$	142,924	$	(1,022	)	$	63,752	$	(1,716	)	$	206,676	$	(2,738	)

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Gross realized gains and losses from available-for-sale securities were as follows:

(In Thousands)	3 Months Ended
	March 31,		March 31,
	2016		2015
Gross realized gains from sales	$	383	$	74
Gross realized losses from sales		0		0
Net realized gains	$	383	$	74

The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of March 31, 2016. Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
(In Thousands)	Cost		Value
Due in one year or less	$	10,374	$	10,451
Due from one year through five years		65,791		67,520
Due from five years through ten years		45,949		47,676
Due after ten years		30,072		32,120
Subtotal		152,186		157,767
Mortgage-backed securities		72,210		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		180,860
Total	$	404,127	$	411,870

The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.

Investment securities carried at $215,510,000 at March 31, 2016 and $228,616,000 at December 31, 2015 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law. See Note 8 for information concerning securities pledged to secure borrowing arrangements.

Management evaluates securities for other-than-temporary impairment (OTTI) at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether the Corporation intends to sell the security or more likely than not will be required to sell the security before its anticipated recovery.

A summary of information management considered in evaluating debt and equity securities for OTTI at March 31, 2016 is provided below.

Debt Securities

At March 31, 2016, management performed an assessment for possible OTTI of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. The extent of individual analysis applied to each security depended on the size of the Corporation’s investment, as well as management’s perception of the credit risk associated with each security. Based on the results of the assessment, management believes impairment of debt securities at March 31, 2016 to be temporary.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Equity Securities

The Corporation’s marketable equity securities at March 31, 2016 and December 31, 2015 consisted exclusively of stocks of banking companies. At March 31, 2016, the Corporation held no stocks with an unrealized loss.

In the first quarter 2016, the Corporation had realized gains of $249,000 from the sale of bank stocks. The Corporation had no realized gains or losses from the sale of equity securities in the first quarter of 2015.

C&N Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, C&N Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. C&N Bank’s investment in FHLB-Pittsburgh stock, included in Other Assets in the consolidated balance sheet, was $3,131,000 at March 31, 2016 and $4,527,000 at December 31, 2015. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at March 31, 2016 and December 31, 2015. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available.

XML

Note 7 - Loans

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

7. LOANS

The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at March 31, 2016 and December 31, 2015 are summarized by segment, and by classes within each segment, as follows:

Summary of Loans by Type
(In Thousands)	Mar. 31,			Dec. 31,
	2016			2015
Residential mortgage:
Residential mortgage loans - first liens	$	306,753		$	304,783
Residential mortgage loans - junior liens		21,622			21,146
Home equity lines of credit		38,627			39,040
1-4 Family residential construction		20,010			21,121
Total residential mortgage		387,012			386,090
Commercial:
Commercial loans secured by real estate		154,646			154,779
Commercial and industrial		71,628			75,196
Political subdivisions		38,364			40,007
Commercial construction and land		7,445			5,122
Loans secured by farmland		7,168			7,019
Multi-family (5 or more) residential		8,393			9,188
Agricultural loans		4,492			4,671
Other commercial loans		11,387			12,152
Total commercial		303,523			308,134
Consumer		11,070			10,656
Total		701,605			704,880
Less: allowance for loan losses		(7,661	)		(7,889	)
Loans, net	$	693,944		$	696,991

The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in the Pennsylvania and New York counties that comprise the market serviced by Citizens & Northern Bank. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. There is no concentration of loans to borrowers engaged in similar businesses or activities that exceed 10% of total loans at either March 31, 2016 or December 31, 2015.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and recorded as a reduction of the investment in loans. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. In the process of evaluating the loan portfolio, management also considers the Corporation’s exposure to losses from unfunded loan commitments. As of March 31, 2016 and December 31, 2015, management determined that no allowance for credit losses related to unfunded loan commitments was required.

Transactions within the allowance for loan losses, summarized by segment and class, for the three-month periods ended March 31, 2016 and 2015 were as follows:

Three Months Ended March 31, 2016	Dec. 31,							Provision			March 31,
(In Thousands)	2015 Balance		Charge-offs			Recoveries		(Credit)			2016 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,645	$	0		$	0	$	77		$	2,722
Residential mortgage loans - junior liens		219		0			0		9			228
Home equity lines of credit		347		0			0		4			351
1-4 Family residential construction		207		0			0		(7	)		200
Total residential mortgage		3,418		0			0		83			3,501
Commercial:
Commercial loans secured by real estate		1,939		0			1		87			2,027
Commercial and industrial		981		0			1		(6	)		976
Commercial construction and land		58		0			0		26			84
Loans secured by farmland		106		0			0		2			108
Multi-family (5 or more) residential		675		(595	)		0		176			256
Agricultural loans		45		0			0		(1	)		44
Other commercial loans		118		0			0		(6	)		112
Total commercial		3,922		(595	)		2		278			3,607
Consumer		122		(18	)		15		7			126
Unallocated		427		0			0		0			427
Total Allowance for Loan Losses	$	7,889	$	(613	)	$	17	$	368		$	7,661

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Three Months Ended March 31, 2015	Dec. 31,										March 31,
(In Thousands)	2014 Balance		Charge-offs			Recoveries		Provision (Credit)			2015 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,941	$	(79	)	$	1	$	(89	)	$	2,774
Residential mortgage loans - junior liens		176		0			0		24			200
Home equity lines of credit		322		0			0		0			322
1-4 Family residential construction		214		0			0		(7	)		207
Total residential mortgage		3,653		(79	)		1		(72	)		3,503
Commercial:
Commercial loans secured by real estate		1,758		(115	)		0		93			1,736
Commercial and industrial		688		(10	)		1		5			684
Commercial construction and land		283		0			0		3			286
Loans secured by farmland		165		0			0		(6	)		159
Multi-family (5 or more) residential		87		0			0		(6	)		81
Agricultural loans		31		0			0		(2	)		29
Other commercial loans		131		0			0		(8	)		123
Total commercial		3,143		(125	)		1		79			3,098
Consumer		145		(18	)		15		(3	)		139
Unallocated		395		0			0		(1	)		394
Total Allowance for Loan Losses	$	7,336	$	(222	)	$	17	$	3		$	7,134

In the evaluation of the loan portfolio, management determines two major components for the allowance for loan losses – (1) a specific component based on an assessment of certain larger relationships, mainly commercial purpose loans, on a loan-by-loan basis; and (2) a general component for the remainder of the portfolio based on a collective evaluation of pools of loans with similar risk characteristics. The general component is assigned to each pool of loans based on both historical net charge-off experience, and an evaluation of certain qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the above methodologies for estimating specific and general losses in the portfolio.

In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table below.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of March 31, 2016 and December 31, 2015:

March 31, 2016
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	296,394	$	378	$	9,915	$	66	$	306,753
Residential mortgage loans - junior liens		20,920		276		426		0		21,622
Home Equity lines of credit		37,570		492		565		0		38,627
1-4 Family residential construction		19,994		16		0		0		20,010
Total residential mortgage		374,878		1,162		10,906		66		387,012
Commercial:
Commercial loans secured by real estate		140,985		4,444		9,217		0		154,646
Commercial and Industrial		67,568		2,257		1,676		127		71,628
Political subdivisions		38,364		0		0		0		38,364
Commercial construction and land		7,282		60		103		0		7,445
Loans secured by farmland		5,452		171		1,525		20		7,168
Multi-family (5 or more) residential		7,751		0		642		0		8,393
Agricultural loans		4,478		0		14		0		4,492
Other commercial loans		11,309		0		78		0		11,387
Total commercial		283,189		6,932		13,255		147		303,523
Consumer		10,878		20		172		0		11,070
Totals	$	668,945	$	8,114	$	24,333	$	213	$	701,605

December 31, 2015
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	295,302	$	407	$	9,007	$	67	$	304,783
Residential mortgage loans - junior liens		20,558		185		403		0		21,146
Home equity lines of credit		38,071		543		426		0		39,040
1-4 Family residential construction		21,104		17		0		0		21,121
Total residential mortgage		375,035		1,152		9,836		67		386,090
Commercial:
Commercial loans secured by real estate		140,381		5,862		8,536		0		154,779
Commercial and Industrial		71,225		2,106		1,737		128		75,196
Political subdivisions		40,007		0		0		0		40,007
Commercial construction and land		4,957		60		105		0		5,122
Loans secured by farmland		5,084		483		1,432		20		7,019
Multi-family (5 or more) residential		7,943		0		1,245		0		9,188
Agricultural loans		4,655		0		16		0		4,671
Other commercial loans		12,073		0		79		0		12,152
Total commercial		286,325		8,511		13,150		148		308,134
Consumer		10,490		21		145		0		10,656
Totals	$	671,850	$	9,684	$	23,131	$	215	$	704,880

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The general component of the allowance for loan losses covers pools of loans including commercial loans not considered individually impaired, as well as smaller balance homogeneous classes of loans, such as residential real estate, home equity lines of credit and other consumer loans. Accordingly, the Corporation generally does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are subject to a restructuring agreement. The pools of loans are evaluated for loss exposure based upon three-year average historical net charge-off rates for each loan class, adjusted for qualitative factors. Qualitative risk factors (described in the following paragraph) are evaluated for the impact on each of the three segments (residential mortgage, commercial and consumer) within the loan portfolio. Each qualitative factor is assigned a value to reflect improving, stable or declining conditions based on management’s judgment using relevant information available at the time of the evaluation. The adjustment for qualitative factors is applied as an increase or decrease to the three-year average net charge-off rate to each loan class within each segment.

The qualitative factors used in the general component calculations are designed to address credit risk characteristics associated with each segment. The Corporation’s credit risk associated with all of the segments is significantly impacted by these factors, which include economic conditions within its market area, the Corporation’s lending policies, changes or trends in the portfolio, risk profile, competition, regulatory requirements and other factors. Further, the residential mortgage segment is significantly affected by the values of residential real estate that provide collateral for the loans. The majority of the Corporation’s commercial segment loans (approximately 59% at March 31, 2016) is secured by real estate, and accordingly, the Corporation’s risk for the commercial segment is significantly affected by commercial real estate values. The consumer segment includes a wide mix of loans for different purposes, primarily secured loans, including loans secured by motor vehicles, manufactured housing and other types of collateral.

Loans are classified as impaired, when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans, by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price.

The scope of loans evaluated individually for impairment include all loan relationships greater than $200,000 for which there is at least one extension of credit graded Special Mention, Substandard or Doubtful. Also, all loans classified as troubled debt restructurings (discussed in more detail below) and all loan relationships less than $200,000 in the aggregate, but with an estimated loss of $100,000 or more, are individually evaluated for impairment. Loans that are individually evaluated for impairment, but which are not determined to be impaired, are combined with all remaining loans that are not reviewed on a specific basis, and such loans are included within larger pools of loans based on similar risk and loss characteristics for purposes of determining the general component of the allowance. The loans that have been individually evaluated, but which have not been determined to be impaired, are included in the “Collectively Evaluated” column in the tables summarizing the allowance and associated loan balances as of March 31, 2016 and December 31, 2015.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of March 31, 2016 and December 31, 2015:

March 31, 2016	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	833	$	305,920	$	306,753	$	0	$	2,722	$	2,722
Residential mortgage loans - junior liens		72		21,550		21,622		0		228		228
Home equity lines of credit		0		38,627		38,627		0		351		351
1-4 Family residential construction		0		20,010		20,010		0		200		200
Total residential mortgage		905		386,107		387,012		0		3,501		3,501
Commercial:
Commercial loans secured by real estate		6,065		148,581		154,646		96		1,931		2,027
Commercial and industrial		832		70,796		71,628		155		821		976
Political subdivisions		0		38,364		38,364		0		0		0
Commercial construction and land		0		7,445		7,445		0		84		84
Loans secured by farmland		1,418		5,750		7,168		52		56		108
Multi-family (5 or more) residential		392		8,001		8,393		0		256		256
Agricultural loans		14		4,478		4,492		0		44		44
Other commercial loans		0		11,387		11,387		0		112		112
Total commercial		8,721		294,802		303,523		303		3,304		3,607
Consumer		4		11,066		11,070		3		123		126
Unallocated												427
Total	$	9,630	$	691,975	$	701,605	$	306	$	6,928	$	7,661

December 31, 2015	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	884	$	303,899	$	304,783	$	1	$	2,644	$	2,645
Residential mortgage loans - junior liens		74		21,072		21,146		0		219		219
Home equity lines of credit		0		39,040		39,040		0		347		347
1-4 Family residential construction		0		21,121		21,121		0		207		207
Total residential mortgage		958		385,132		386,090		1		3,417		3,418
Commercial:
Commercial loans secured by real estate		6,262		148,517		154,779		97		1,842		1,939
Commercial and industrial		324		74,872		75,196		75		906		981
Political subdivisions		0		40,007		40,007		0		0		0
Commercial construction and land		0		5,122		5,122		0		58		58
Loans secured by farmland		1,427		5,592		7,019		52		54		106
Multi-family (5 or more) residential		987		8,201		9,188		595		80		675
Agricultural loans		16		4,655		4,671		0		45		45
Other commercial loans		0		12,152		12,152		0		118		118
Total commercial		9,016		299,118		308,134		819		3,103		3,922
Consumer		0		10,656		10,656		0		122		122
Unallocated												427
Total	$	9,974	$	694,906	$	704,880	$	820	$	6,642	$	7,889

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Summary information related to impaired loans at March 31, 2016 and December 31, 2015 is as follows:

(In Thousands)	March 31, 2016						December 31, 2015
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
	Balance		Investment		Allowance		Balance		Investment		Allowance
With no related allowance recorded:
Residential mortgage loans - first liens	$	833	$	833	$	0	$	842	$	842	$	0
Residential mortgage loans - junior liens		72		72		0		74		74		0
Commercial loans secured by real estate		7,415		5,754		0		7,580		5,945		0
Commercial and industrial		237		237		0		249		249		0
Loans secured by farmland		908		908		0		915		915		0
Multi-family (5 or more) residential		987		392		0		0		0		0
Agricultural loans		14		14		0		16		16		0
Total with no related allowance recorded		10,466		8,210		0		9,676		8,041		0
With a related allowance recorded:
Residential mortgage loans - first liens		0		0		0		42		42		1
Commercial loans secured by real estate		311		311		96		317		317		97
Commercial and industrial		595		595		155		75		75		75
Loans secured by farmland		510		510		52		512		512		52
Multi-family (5 or more) residential		0		0		0		987		987		595
Consumer		4		4		3		0		0		0
Total with a related allowance recorded		1,420		1,420		306		1,933		1,933		820
Total	$	11,886	$	9,630	$	306	$	11,609	$	9,974	$	820

The average balance of impaired loans and interest income recognized on impaired loans is as follows:

					Interest Income Recognized on
	Average Investment in Impaired Loans				Impaired Loans on a Cash Basis
(In Thousands)	3 Months Ended				3 Months Ended
	March 31,				March 31,
	2016		2015		2016		2015
Residential mortgage:
Residential mortgage loans - first lien	$	861	$	3,442	$	10	$	14
Residential mortgage loans - junior lien		73		48		1		1
Total residential mortgage		934		3,490		11		15
Commercial:
Commercial loans secured by real estate		6,160		6,588		110		112
Commercial and industrial		568		603		3		7
Commercial construction and land		0		75		0		0
Loans secured by farmland		1,423		1,465		21		26
Multi-family (5 or more) residential		690		519		0		25
Agricultural loans		15		0		1		0
Total commercial		8,856		9,250		135		170
Consumer		12		0		0		0
Total	$	9,802	$	12,740	$	146	$	185

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

Loans are placed on nonaccrual status for all classes of loans when, in the opinion of management, collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is not recognized on specific impaired loans unless the likelihood of further loss is remote. Interest payments received on loans for which the risk of further loss is greater than remote are applied as a reduction of the loan principal balance. Interest income on other nonaccrual loans, including impaired loans, is recognized only to the extent of interest payments received. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Also, the amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety days or more and still accruing is as follows:

(In Thousands)	March 31, 2016				December 31, 2015
	Past Due				Past Due
	90+ Days and				90+ Days and
	Accruing		Nonaccrual		Accruing		Nonaccrual
Residential mortgage:
Residential mortgage loans - first liens	$	2,680	$	3,080	$	2,381	$	3,044
Residential mortgage loans - junior liens		140		0		79		0
Home equity lines of credit		175		0		130		0
Total residential mortgage		2,995		3,080		2,590		3,044
Commercial:
Commercial loans secured by real estate		539		5,689		503		5,730
Commercial and industrial		318		312		65		313
Loans secured by farmland		102		1,418		0		1,427
Multi-family (5 or more) residential		0		392		0		987
Agricultural loans		0		14		0		16
Total commercial		959		7,825		568		8,473
Consumer		3		39		71		0
Totals	$	3,957	$	10,944	$	3,229	$	11,517

The amounts shown in the table immediately above include loans classified as troubled debt restructurings (described in more detail below), if such loans are past due ninety days or more or nonaccrual.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The table below presents a summary of the contractual aging of loans as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016								As of December 31, 2015
	Current &								Current &
(In Thousands)	Past Due		Past Due		Past Due				Past Due		Past Due		Past Due
	Less than		30-89		90+				Less than		30-89		90+
	30 Days		Days		Days		Total		30 Days		Days		Days		Total
Residential mortgage:
Residential mortgage loans - first liens	$	295,485	$	7,234	$	4,034	$	306,753	$	294,703	$	6,156	$	3,924	$	304,783
Residential mortgage loans - junior liens		21,340		142		140		21,622		20,816		251		79		21,146
Home equity lines of credit		37,977		475		175		38,627		38,581		329		130		39,040
1-4 Family residential construction		19,867		143		0		20,010		21,121		0		0		21,121
Total residential mortgage		374,669		7,994		4,349		387,012		375,221		6,736		4,133		386,090
Commercial:
Commercial loans secured by real estate		150,087		3,280		1,279		154,646		153,427		108		1,244		154,779
Commercial and industrial		71,123		168		337		71,628		75,002		118		76		75,196
Political subdivisions		38,364		0		0		38,364		40,007		0		0		40,007
Commercial construction and land		7,311		134		0		7,445		5,018		104		0		5,122
Loans secured by farmland		6,025		221		922		7,168		5,970		223		826		7,019
Multi-family (5 or more) residential		7,928		73		392		8,393		8,201		0		987		9,188
Agricultural loans		4,398		80		14		4,492		4,642		13		16		4,671
Other commercial loans		11,387		0		0		11,387		12,152		0		0		12,152
Total commercial		296,623		3,956		2,944		303,523		304,419		566		3,149		308,134
Consumer		10,933		95		42		11,070		10,537		48		71		10,656
Totals	$	682,225	$	12,045	$	7,335	$	701,605	$	690,177	$	7,350	$	7,353	$	704,880

Nonaccrual loans are included in the contractual aging in the immediately preceding table. A summary of the contractual aging of nonaccrual loans at March 31, 2016 and December 31, 2015 is as follows:

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Total
March 31, 2016 Nonaccrual Totals	$	6,894	$	672	$	3,378	$	10,944
December 31, 2015 Nonaccrual Totals	$	7,100	$	293	$	4,124	$	11,517

Loans whose terms are modified are classified as Troubled Debt Restructurings (TDRs) if the Corporation grants such borrowers concessions, and it is deemed that those borrowers are experiencing financial difficulty. Loans classified as TDRs are designated as impaired. The outstanding balance of loans subject to TDRs, as well as contractual aging information at March 31, 2016 and December 31, 2015 is as follows:

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Nonaccrual		Total
March 31, 2016 Totals	$	925	$	242	$	86	$	5,060	$	6,313
December 31, 2015 Totals	$	1,186	$	0	$	81	$	5,097	$	6,364

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

TDRs that occurred during the three-month periods ended March 31, 2016 and 2015 are as follows:

Three Months Ended March 31, 2016			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Commercial,
Commercial and industrial		1	$	5	$	5

Three Months Ended March 31, 2015			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Residential mortgage:
Residential mortgage loans - first liens		1	$	56	$	56
Residential mortgage loans - junior liens		1		32		32
Consumer		1		30		30

The TDR in the three-month period ended March 31, 2016 resulted from an extension of a final maturity date. There was no allowance for loan losses on this loan at March 31, 2016 and no change in allowance for loan losses resulting from this TDR.

The TDRs in the three-month period ended March 31, 2015 included an extended maturity date and a reduction in interest rate on a residential mortgage – first lien, a lowered interest rate and reduced payment amount on a residential mortgage – junior lien and a lowered interest rate and reduced payment amount on the consumer loan. There was no allowance for loan losses on these loans at March 31, 2015 and no change in the allowance for loan losses resulting from these TDRs.

In the three-month period ended March 31, 2016 and 2015, defaults on loans for which modifications considered to be TDRs were entered into within the previous 12 months were as follows:

	Number
	of		Recorded
	Contracts		Investment
Three Months Ended March 31, 2016
(Balances in Thousands)
Residential mortgage, Residential mortgage loans - first liens		1	$	31
Commercial, Commercial and industrial		1		5

	Number
	of		Recorded
	Contracts		Investment
Three Months Ended March 31, 2015
(Balances in Thousands)
Residential mortgage, Residential mortgage loans - first liens		2	$	115
Commercial:
Commercial loans secured by real estate		1		407
Commercial construction and land		1		25

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In the first quarter 2016, the events of default in the table listed above resulted from a borrower’s failure to pay in a timely manner after reduced payment amounts for six months expired in the Residential mortgage – first lien and a borrower’s failure to pay off a loan after the maturity date was extended and passed on the Commercial and industrial loan. There was no allowance for loan losses recorded on these loans at March 31, 2016.

In the first quarter 2015, the events of default in the table listed above resulted from the borrowers’ failure to make timely payments under the following circumstances: (1) for one customer relationship included in the Residential first lien mortgage class, payment was missed after the interest rate and monthly payment amount had been reduced; (2) for the other customer relationship included in the Residential first lien class, monthly payments were missed after reducing the monthly payments to interest only payments; (3) for the Commercial loan secured by real estate, monthly payments were missed after reducing the monthly payments to interest only; and (4) for the Commercial construction and land loan, monthly payments were missed after extending the term of maturity. There were no allowances for loan losses recorded on these loans at March 31, 2015.

The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the unaudited Consolidated Balance Sheet) is as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Foreclosed residential real estate	$	883	$	555

The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Residential real estate in process of foreclosure	$	931	$	1,173

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Note 8 - Borrowed Funds

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

8. BORROWED FUNDS

Short-term borrowings include the following:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
FHLB-Pittsburgh borrowings	$	18,811	$	48,581
Customer repurchase agreements		7,141		4,915
Total short-term borrowings	$	25,952	$	53,496

Short-term borrowings from FHLB-Pittsburgh are as follows:

(In Thousands)	March 31,		Dec. 31 ,
	2016		2015
Overnight borrowing	$	0	$	23,500
Other short-term advances		18,811		25,081
Total short-term FHLB-Pittsburgh borrowings	$	18,811	$	48,581

The FHLB-Pittsburgh loan facilities are collateralized by qualifying loans secured by real estate with a book value totaling $448,336,000 at March 31, 2016 and $450,883,000 at December 31, 2015. Also, the FHLB-Pittsburgh loan facilities require the Corporation to invest in established amounts of FHLB-Pittsburgh stock. The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in Other Assets) were $3,131,000 at March 31, 2016 and $4,527,000 at December 31, 2015.

At March 31, 2016, short-term borrowings from the FHLB-Pittsburgh include 9 advances of approximately $2,090,000 each maturing monthly throughout the remainder of the year ended December 31, 2016, with a weighted average interest rate of 0.94% and rates ranging from 0.77% to 1.052%. In the first quarter 2016, the Corporation repaid 3 advances of approximately $2,090,000 each with a weighted average rate of 0.62%.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation engages in repurchase agreements with certain commercial customers. These agreements provide that the Corporation sells specified investment securities to the customers on an overnight basis and repurchases them on the following business day. The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10% at March 31, 2016 and December 31, 2015. The carrying value of the underlying securities was $12,100,000 at March 31, 2016 and $12,613,000 at December 31, 2015.

Long-term borrowings are as follows:

(In Thousands)	March 31,		Dec. 31 ,
	2016		2015
FHLB-Pittsburgh borrowings	$	11,692	$	11,767
Repurchase agreement		27,000		27,000
Total long-term borrowings	$	38,692	$	38,767

Long-term borrowings from FHLB-Pittsburgh are as follows:

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Loan maturing in 2016 with a rate of 6.86%	$	45	$	57
Loan maturing in 2017 with a rate of 6.83%		9		10
Loan maturing in 2017 with a rate of 3.81%		10,000		10,000
Loan maturing in 2020 with a rate of 4.79%		778		821
Loan maturing in 2025 with a rate of 4.91%		860		879
Total long-term FHLB-Pittsburgh borrowings	$	11,692	$	11,767

The repurchase agreement included in long-term borrowings has an interest rate of 3.595% and an effective maturity date in December 2017.

The “Repurchase Date,” as defined in the Master Repurchase Agreement between the Corporation and the broker-dealer, occurs quarterly on or about the 20

th

of each March, June, September and December until the “Final Repurchase Date” (as defined) on December 20, 2017. The Corporation pays interest, and the borrowing is putable by the issuer, on each Repurchase Date. The Final Repurchase Date is the effective maturity date of the borrowings.

Securities sold under repurchase agreements were delivered to the broker-dealer who is the counter-party to the transactions. The broker-dealer may have sold, loaned or otherwise disposed of such securities to other parties in the normal course of their operations, and has agreed to resell to the Corporation substantially identical securities at the maturities of the agreements. The Master Repurchase Agreement provides that the Agreement constitutes a “netting contract,” as defined; however, the Corporation and the broker-dealer have no other obligations to one another and accordingly, no netting has occurred.

The carrying value of the underlying securities was $32,701,000 at March 31, 2016 and $33,780,000 at December 31, 2015, detailed in the following table:

(In Thousands)	March 31,		Dec . 31,
	2016		2015
Mortgage-backed securities	$	15,526	$	15,772
Collateralized mortgage obligations, Issued by U.S. Government agencies		17,175		18,008
Total	$	32,701	$	33,780

Two of the more significant risks associated with the repurchase agreement with the broker-dealer are as follows:

● The borrowings are putable at quarterly intervals by the issuer. Accordingly, if interest rates were to rise to a sufficient level, the issuer would be expected to require the Corporation to pay off the borrowing. In this circumstance, the Corporation would be required to obtain a new borrowing at a higher interest rate than the existing repurchase agreement or utilize cash from other sources to pay off the borrowing. If sales of available-for-sale securities were used to generate cash to pay off the borrowing, the value of such securities would be expected to have fallen, which could result in the Corporation recognizing a loss.

● As principal pay-downs of mortgage backed securities and CMOs occur, the Corporation must have available, unencumbered assets or purchase a sufficient amount of assets with credit quality suitable to the broker-dealer to replace the amounts being paid off. Since pre-payments of mortgages typically increase as interest rates fall, the Corporation may be required to purchase additional assets at times when market rates are lower than the rates paid on the borrowing.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation manages these risks by maintaining sufficient available assets of acceptable credit quality, as well as maintaining other borrowing facilities, to meet ongoing collateral maintenance requirements or pay off the borrowing if required. In particular, the Corporation had unused borrowing capacity available from the FHLB-Pittsburgh of $297,186,000 at March 31, 2016.

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Note 9 - Defined Benefit Plans

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

9. DEFINED BENEFIT PLANS

The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits and life insurance to employees who meet certain age and length of service requirements. Full-time employees no longer accrue service time toward the Corporation-subsidized portion of the medical benefits. This plan contains a cost-sharing feature, which causes participants to pay for all future increases in costs related to benefit coverage. Accordingly, actuarial assumptions related to health care cost trend rates do not significantly affect the liability balance at March 31, 2016 and December 31, 2015, and are not expected to significantly affect the Corporation's future expenses. The Corporation uses a December 31 measurement date for the postretirement plan.

In an acquisition in 2007, the Corporation assumed the Citizens Trust Company Retirement Plan, a defined benefit pension plan. This plan covers certain employees who were employed by Citizens Trust Company on December 31, 2002, when the plan was amended to discontinue admittance of any future participant and to freeze benefit accruals. Information related to the Citizens Trust Company Retirement Plan has been included in the tables that follow. The Corporation uses a December 31 measurement date for this plan.

The components of net periodic benefit costs from these defined benefit plans are as follows:

Defined Benefit Plans
(In Thousands)	Pension						Postretirement
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2016			2015
Service cost	$	0		$	0		$	9		$	10
Interest cost		7			9			16			13
Expected return on plan assets		(7	)		(11	)		0			0
Amortization of prior service cost		0			0			(8	)		(7	)
Recognized net actuarial loss		3			4			0			0
Net periodic benefit cost	$	3		$	2		$	17		$	16

In the first three months of 2016, the Corporation funded postretirement contributions totaling $18,000, with estimated annual postretirement contributions of $68,000 expected in 2016 for the full year. Based upon the related actuarial reports, no defined benefit pension contributions are required in 2016, though the Corporation may make discretionary contributions.

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Note 10 - Stock-based Compensation Plans

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

10. STOCK-BASED COMPENSATION PLANS

The Corporation has a Stock Incentive Plan for a selected group of officers and an Independent Directors Stock Incentive Plan. In the three-month periods ended March 31, 2016 and 2015, the Corporation issued restricted stock under each of the Plans.

In the first quarter 2016, the Corporation awarded a total of 34,199 shares of restricted stock under the Stock Incentive and Independent Directors Stock Incentive Plans. Restricted stock awards in the first quarter 2016 included the following: (1) a total of 17,289 shares to employees, vesting over a three-year term, with vesting contingent upon the Corporation meeting an annual return on average equity (“ROAE”) performance ratio, as defined; (2) a total of 10,304 shares to employees, vesting over a three-year term, with vesting dependent on satisfactory performance; and (3) a total of 6,606 shares under the Independent Directors Incentive Plan, vesting over a term of one year.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In the first quarter 2015, a total of 34,800 shares of restricted stock were awarded under the Plans. Restricted stock awards in 2015 included the following: (1) a total of 20,298 shares to employees, vesting over a four-year term, with vesting contingent upon the Corporation meeting an annual ROAE performance ratio, as defined; (2) a total of 2,198 shares to employees, vesting over a four-year term, with vesting dependent on satisfactory performance; (3) an award to the Chief Executive Officer of 5,174 shares, vesting over a three-year term, with vesting dependent on satisfactory performance; and (4) a total of 7,130 shares under the Independent Directors Incentive Plan, vesting over a term of one year.

Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. Management has estimated restricted stock expense in the first three months of 2016 based on an assumption that the ROAE target for 2016 will be met. Total stock-based compensation expense attributable to restricted stock awards amounted to $162,000 in the first quarter 2016 and $150,000 in the first quarter 2015.

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Note 11 - Income Taxes

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11. INCOME TAXES

The net deferred tax asset at March 31, 2016 and December 31, 2015 represents the following temporary difference components:

	March 31,		December 31,
(In Thousands)	2016		2015
Deferred tax assets:
Net realized losses on securities	$	36	$	69
Allowance for loan losses		2,623		2,761
Other deferred tax assets		2,238		2,634
Total deferred tax assets		4,897		5,464
Deferred tax liabilities:
Unrealized holding gains on securities		2,879		1,342
Defined benefit plans - ASC 835		26		19
Bank premises and equipment		926		869
Core deposit intangibles		10		11
Other deferred tax liabilities		107		108
Total deferred tax liabilities		3,948		2,349
Deferred tax asset, net	$	949	$	3,115

The provision for income tax for the three-month periods ended March 31, 2016 and 2015 is based on the Corporation’s estimate of the effective tax rate expected to be applicable for the full year. The effective tax rates for the Corporation are as follows:

	Three Months Ended
(In thousands)	March 31,
	2016			2015
Income before income tax provision	$	4,666		$	5,044
Income tax provision		1,093			1,229
Effective tax rate		23.42	%		24.37	%

The effective tax rate for each period presented differs from the statutory rate of 35% principally because of the effects of tax-exempt interest income.

The Corporation has investments in three limited partnerships that manage affordable housing projects that have qualified for the federal low-income housing tax credit. The Corporation’s expected return from these investments is based on the receipt of tax credits and tax benefits from deductions of operating losses. The Corporation uses the effective yield method to account for these investments, with the benefits recognized as a reduction of the provision for income taxes. For two of the three limited partnership investments, the tax credits have been received in full in prior years, and the Corporation has fully realized the benefits of the credits and amortized its initial investments in the partnerships. The most recent affordable housing project was completed in 2013, and the Corporation received tax credits in 2013, 2014 and 2015 and expects to continue to receive tax credits annually through 2022. The carrying amount of the Corporation’s investment is $787,000 at March 31, 2016 and $812,000 at December 31, 2015 (included in Other Assets in the consolidated balance sheets). For the year ending December 31, 2016, the estimated amount of tax credits and other tax benefits to be received is $158,000 and the estimated amount to be recognized as a reduction of the provision for income taxes is $76,000. For the year ended December 31, 2015, tax credits and other tax benefits totaled $158,000 and the amount recognized as a reduction of the provision for income taxes for 2015 was $80,000. The total reduction in the provision for income taxes resulting from this investment is $19,000 in the first quarter 2016 and $20,000 in the first quarter 2015.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

The Corporation has no unrecognized tax benefits, nor pending examination issues related to tax positions taken in preparation of its income tax returns. With limited exceptions, the Corporation is no longer subject to examination by the Internal Revenue Service for years prior to 2012.

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Note 12 - Contingencies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

12.

CONTINGENCIES

In the normal course of business, the Corporation may be subject to pending and threatened lawsuits in which claims for monetary damages could be asserted. In management’s opinion, the Corporation’s financial position and results of operations would not be materially affected by the outcome of such pending legal proceedings.

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Note 13 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Accounting Changes and Error Corrections [Text Block]

13

. R

ECENT ACCOUNTING PRONOUNCEMENTS

The FASB issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides a principles-based framework for revenue recognition that supersedes virtually all previously issued revenue recognition guidance under U.S. GAAP. Additionally, the ASU requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The core principle of the five-step revenue recognition framework is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015 the FASB issued ASU 2015-14, which deferred the effective date of the revenue recognition standard by a year, making it applicable for the Corporation in the first quarter 2018 and for the annual period ending December 31, 2018. The amendments should be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. The Corporation is in the process of evaluating the potential impact of adopting the amendments, including determining which transition method to apply.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities. This makes significant changes in U.S. GAAP related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The changes provided for in this Update that are applicable to the Corporation are as follows: (1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; however, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (2) for equity investments without readily determinable fair values, require a qualitative assessment to identify impairment, and if a qualitative assessment indicates that impairment exists, requiring an entity to measure the investment at fair value; (3) eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (4) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (5) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments (at March 31, 2016 and December 31, 2015, the Corporation has no liabilities for which the fair value measurement option has been elected); (6) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (7) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this Update will become effective for the Corporation for annual and interim periods beginning in the first quarter 2018. With limited exceptions, early adoption of the amendments in this Update is not permitted. Amendments are to be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values should be applied prospectively.

CITIZENS & NORTHERN CORPORATION – FORM 10-Q

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. Specifically, a lessee should recognize on the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee would be permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. Topic 842 would not significantly change the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee from current U.S. GAAP; however, the principal change from current GAAP is that lease assets and liabilities arising from operating leases would be recognized on the balance sheet. Topic 842 provides several other changes or clarifications to existing GAAP, and will require qualitative disclosures, along with quantitative disclosures, so that financial statement users can understand more about the nature of an entity’s leasing activities. In transition, Topic 842 provides that lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including optional practical expedients. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees will be required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. Topic 842 will become effective for the Corporation for annual and interim periods beginning in the first quarter 2019.

In March 2016, the FASB issued ASU No. 2016-07, Investments – Equity Method and Joint Ventures. This ASU eliminates the requirement that when an investment qualifies for the equity method as a result of an increase in the level of ownership interest or influence, an investor must adjust the investment, results of operations and retained earnings retroactively as if the equity method had been in effect during all previous periods the investment had been held. The ASU requires the equity method investor add the cost of acquiring additional interest in the investee to the basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for the equity method. The ASU further requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method recognize through earnings the unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for the Corporation for annual and interim periods beginning in the first quarter 2017, with earlier application permitted. The amendments should be applied prospectively upon their effective date.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation. This ASU changes several aspects of accounting for share-based payment transactions, and includes some changes that apply only to nonpublic companies. This Update includes amendments that currently apply, or may apply in the future, to the Corporation related to the following: (1) accounting for the difference between the deduction for tax purposes and the amount of compensation cost recognized for financial reporting purposes; (2) classification of excess tax benefits on the statement of cash flows; (3) accounting for forfeitures; (4) accounting for awards partially settled in cash in excess of the employer’s minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this Update are effective for the Corporation for annual and interim periods beginning in the first quarter 2017, with earlier adoption permitted. The ASU provides separate transition provisions for each of the amendments. The Corporation is in the process of evaluating the potential impact of adopting the amendments.

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Note 14 -Subsequent Event

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

14. SUBSEQUENT EVENT

Effective April 21, 2016, the Corporation announced a new treasury stock repurchase program. Announcement of a new treasury stock repurchase program follows the recent completion of a common stock repurchase plan authorized by the Board of Directors in July 2014. Through March 31, 2016, 589,550 shares had been repurchased under the July 2014 program for a total cost of $11,870,000. In April 2016, the Corporation repurchased the remainder of the shares authorized under that program. In total, 622,500 shares were repurchased for a total cost of $12,140,000, at an average price of $19.50 per share.

Under the new program, the Corporation is authorized to repurchase up to 600,000 shares of the Corporation’s common stock, or slightly less than 5% of the Corporation’s issued and outstanding shares at April 19, 2016. As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases under the new program may be made from time to time in the open market at prevailing prices, or through privately negotiated transactions.

Consistent with the previous program, the Board of Directors’ April 21, 2016 authorization provides that: (1) the new treasury stock repurchase program shall be effective when publicly announced and shall continue thereafter until suspended or terminated by the Board of Directors, in its sole discretion; and (2) all shares of common stock repurchased pursuant to the new program shall be held as treasury shares and be available for use and reissuance for purposes as and when determined by the Board of Directors including, without limitation, pursuant to the Corporation’s Dividend Reinvestment and Stock Purchase Plan and its equity compensation program.

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Note 2 - Per Share Data (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

			Weighted-
			Average			Earnings
	Net		Common			Per
	Income		Shares			Share
Three Months Ended March 31, 2016
Earnings per share – basic	$	3,573,000		12,155,108		$	0.29
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				198,985
Hypothetical share repurchase at $20.05				(178,215	)
Earnings per share – diluted	$	3,573,000		12,175,878		$	0.29
Three Months Ended March 31, 2015
Earnings per share – basic	$	3,815,000		12,268,306		$	0.31
Dilutive effect of potential common stock arising from stock options:
Exercise of outstanding stock options				181,385
Hypothetical share repurchase at $19.78				(160,552	)
Earnings per share – diluted	$	3,815,000		12,289,139		$	0.31

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Note 3 - Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

(In Thousands)	Before-Tax			Income Tax			Net-of-Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2016
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	4,774		$	(1,671	)	$	3,103
Reclassification adjustment for (gains) realized in income		(383	)		134			(249	)
Other comprehensive income on available-for-sale securities		4,391			(1,537	)		2,854
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		26			(9	)		17
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(5	)		2			(3	)
Other comprehensive income on unfunded retirement obligations		21			(7	)		14
Total other comprehensive income	$	4,412		$	(1,544	)	$	2,868

(In Thousands)	Before-Tax			Income Tax			Net-of-Tax
	Amount			Effect			Amount
Three Months Ended March 31, 2015
Unrealized gains on available-for-sale securities:
Unrealized holding gains on available-for-sale securities	$	3,725		$	(1,304	)	$	2,421
Reclassification adjustment for (gains) realized in income		(74	)		26			(48	)
Other comprehensive income on available-for-sale securities		3,651			(1,278	)		2,373
Unfunded pension and postretirement obligations:
Changes from plan amendments and actuarial gains and losses included in other comprehensive income		(100	)		35			(65	)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost		(3	)		1			(2	)
Other comprehensive loss on unfunded retirement obligations		(103	)		36			(67	)
Total other comprehensive income	$	3,548		$	(1,242	)	$	2,306

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2016
Balance, beginning of period	$	2,493		$	35		$	2,528
Other comprehensive income before reclassifications		3,103			17			3,120
Amounts reclassified from accumulated other comprehensive income		(249	)		(3	)		(252	)
Other comprehensive income		2,854			14			2,868
Balance, end of period	$	5,347		$	49		$	5,396

(In Thousands)	Unrealized			Unfunded			Accumulated
	Holding			Pension and			Other
	Gains			Postretirement			Comprehensive
	on Securities			Obligations			Income
Three Months Ended March 31, 2015
Balance, beginning of period	$	5,281		$	79		$	5,360
Other comprehensive income before reclassifications		2,421			(65	)		2,356
Amounts reclassified from accumulated other comprehensive income		(48	)		(2	)		(50	)
Other comprehensive income		2,373			(67	)		2,306
Balance, end of period	$	7,654		$	12		$	7,666

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

For the Three Months Ended March 31, 2016
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(383	)	Realized gains on available-for-sale securities, net
		134		Income tax provision
		(249	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(8	)	Pensions and other employee benefits
Actuarial loss		3		Pensions and other employee benefits
		(5	)	Total before tax
		2		Income tax provision
		(3	)	Net of tax
Total reclassifications for the period	$	(252	)

For the Three Months Ended March 31, 2015
(In Thousands)
	Reclassified from
Details about Accumulated Other	Accumulated Other			Affected Line Item in the Consolidated
Comprehensive Income Components	Comprehensive Income			Statements of Income
Unrealized gains and losses on available-for-sale securities	$	(74	)	Realized gains on available-for-sale securities, net
		26		Income tax provision
		(48	)	Net of tax
Amortization of defined benefit pension and postretirement items:
Prior service cost		(7	)	Pensions and other employee benefits
Actuarial loss		4		Pensions and other employee benefits
		(3	)	Total before tax
		1		Income tax provision
		(2	)	Net of tax
Total reclassifications for the period	$	(50	)

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Note 4 - Cash and Due from Banks (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Cash and Cash Equivalents [Table Text Block]

(In thousands)	March 31,		Dec. 31,
	2016		2015
Cash and cash equivalents	$	38,425	$	33,313
Certificates of deposit		2,748		2,748
Total cash and due from banks	$	41,173	$	36,061

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value, Measurements, Nonrecurring [Member]

Notes Tables

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

(In Thousands, Except									Value at
Percentages)			Valuation						3 /31/1 6
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	3/31/16		3/31/16		3/31/16		Technique	Inputs	Average)
Impaired loans:
Commercial:
Commercial loans secured by real estate	$	311	$	96	$	215	Sales comparison	Discount to appraised value		47	%
Commercial and industrial		599		158		441	Sales comparison	Discount to appraised value		52	%
Loans secured by farmland		510		52		458	Sales comparison	Discount to appraised value		49	%
Total impaired loans	$	1,420	$	306	$	1,114
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	883	$	0	$	883	Sales comparison	Discount to appraised value		39	%
Land		701		0		701	Sales comparison	Discount to appraised value		30	%
Total foreclosed assets held for sale	$	1,584	$	0	$	1,584

(In Thousands, Except									Value at
Percentages)			Valuation						12/31/15
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	(Weighted
Asset	12/31/15		12/31/15		12/31/15		Technique	Inputs	Average)
Impaired loans:
Residential mortgage loans - first liens	$	42	$	1	$	41	Sales comparison	Discount to appraised value		31	%
Commercial:
Commercial loans secured by real estate		317		97		220	Sales comparison	Discount to appraised value		46	%
Commercial and industrial		75		75		0	Sales comparison	Discount to appraised value		31	%
Loans secured by farmland		512		52		460	Sales comparison	Discount to appraised value		49	%
Multi-family (5 or more) residential		987		595		392	Sales comparison	Discount to appraised value		41	%
Total impaired loans	$	1,933	$	820	$	1,113
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	556	$	0	$	556	Sales comparison	Discount to appraised value		32	%
Land		704		0		704	Sales comparison	Discount to appraised value		29	%
Total foreclosed assets held for sale	$	1,260	$	0	$	1,260

Fair Value, Measurements, Recurring [Member]

Notes Tables

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Fair Value at
	3/31/16		Valuation	Unobservable	Method or Value As of
Asset	(In Thousands)		Technique	Input(s)	3/31/16
Servicing rights	$	1,261	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		168.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

	Fair Value at
	12/31/15		Valuation	Unobservable	Method or Value As of
Asset	(In Thousands)		Technique	Input(s)	12/31/15
Servicing rights	$	1,296	Discounted cash flow	Discount rate		10.00	%	Rate used through modeling period
				Loan prepayment speeds		146.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

Fair Value, by Balance Sheet Grouping [Table Text Block]

			March 31, 2016
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,707	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		0		111,959		0			111,959
Taxable		0		35,094		0			35,094
Mortgage-backed securities		0		73,243		0			73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		180,860		0			180,860
Collateralized debt obligations		0		7		0			7
Total debt securities		0		411,870		0			411,870
Marketable equity securities		1,736		0		0			1,736
Total available-for-sale securities		1,736		411,870		0			413,606
Servicing rights		0		0		1,261			1,261
Total recurring fair value measurements	$	1,736	$	411,870	$	1,261		$	414,867
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,420		$	1,420
Valuation allowance		0		0		(306	)		(306	)
Impaired loans, net		0		0		1,114			1,114
Foreclosed assets held for sale		0		0		1,584			1,584
Total nonrecurring fair value measurements	$	0	$	0	$	2,698		$	2,698

			December 31, 2015
	Quoted Prices		Other
	in Active		Observable		Unobservable			Total
	Markets		Inputs		Inputs			Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)			Value
Recurring fair value measurements
AVAILABLE-FOR-SALE SECURITIES:
Obligations of U.S. Government agencies	$	0	$	10,483	$	0		$	10,483
Obligations of states and political subdivisions:
Tax-exempt		0		107,757		0			107,757
Taxable		0		34,597		0			34,597
Mortgage-backed securities		0		73,343		0			73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		0		191,715		0			191,715
Collateralized debt obligations		0		9		0			9
Total debt securities		0		417,904		0			417,904
Marketable equity securities		2,386		0		0			2,386
Total available-for-sale securities		2,386		417,904		0			420,290
Servicing rights		0		0		1,296			1,296
Total recurring fair value measurements	$	2,386	$	417,904	$	1,296		$	421,586
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	$	0	$	0	$	1,933		$	1,933
Valuation allowance		0		0		(820	)		(820	)
Impaired loans, net		0		0		1,113			1,113
Foreclosed assets held for sale		0		0		1,260			1,260
Total nonrecurring fair value measurements	$	0	$	0	$	2,373		$	2,373

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

(In Thousands)	3 Months Ended
	March 31,			March 31,
	201 6			2015
Servicing rights balance, beginning of period	$	1,296		$	1,281
Issuances of servicing rights		36			31
Unrealized losses included in earnings		(71	)		(117	)
Service rights balance, end of period	$	1,261		$	1,195

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

(In Thousands)	Valuation	March 31, 2016				December 31, 2015
	Method(s)	Carrying		Fair		Carrying		Fair
	Used	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	38,425	$	38,425	$	33,313	$	33,313
Certificates of deposit	Level 2		2,748		2,773		2,748		2,752
Available-for-sale securities	See Above		413,606		413,606		420,290		420,290
Restricted equity securities (included in Other Assets)	Level 2		3,261		3,261		4,657		4,657
Loans held for sale	Level 2		526		526		280		280
Loans, net	Level 3		693,944		688,359		696,991		685,552
Accrued interest receivable	Level 2		3,900		3,900		3,768		3,768
Servicing rights	Level 3		1,261		1,261		1,296		1,296
Financial liabilities:
Deposits with no stated maturity	Level 2		736,837		736,837		713,931		713,931
Time deposits	Level 2		219,011		219,237		221,684		221,891
Short-term borrowings	Level 2		25,952		25,841		53,496		53,398
Long-term borrowings	Level 2		38,692		40,247		38,767		40,166
Accrued interest payable	Level 2		69		69		70		70

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Note 6 - Securities (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Available-for-sale Securities [Table Text Block]

			March 31, 2016
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,661	$	46	$	0		$	10,707
Obligations of states and political subdivisions:
Tax-exempt		107,269		4,756		(66	)		111,959
Taxable		34,249		845		0			35,094
Mortgage-backed securities		72,210		1,060		(27	)		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		1,665		(536	)		180,860
Collateralized debt obligations		7		0		0			7
Total debt securities		404,127		8,372		(629	)		411,870
Marketable equity securities		1,253		483		0			1,736
Total	$	405,380	$	8,855	$	(629	)	$	413,606

			December 31, 2015
			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding			Fair
(In Thousands)	Cost		Gains		Losses			Value
Obligations of U.S. Government agencies	$	10,663	$	12	$	(192	)	$	10,483
Obligations of states and political subdivisions:
Tax-exempt		103,414		4,365		(22	)		107,757
Taxable		34,317		381		(101	)		34,597
Mortgage-backed securities		73,227		486		(370	)		73,343
Collateralized mortgage obligations, Issued by U.S. Government agencies		193,145		623		(2,053	)		191,715
Collateralized debt obligations:		9		0		0			9
Total debt securities		414,775		5,867		(2,738	)		417,904
Marketable equity securities		1,680		706		0			2,386
Total	$	416,455	$	6,573	$	(2,738	)	$	420,290

Schedule of Unrealized Loss on Investments [Table Text Block]

March 31, 2016	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of states and political subdivisions, Tax-exempt	$	10,017	$	(66	)	$	0	$	0		$	10,017	$	(66	)
Mortgage-backed securities		5,899		(27	)		0		0			5,899		(27	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		5,820		(105	)		44,291		(431	)		50,111		(536	)
Total temporarily impaired available-for-sale securities	$	21,736	$	(198	)	$	44,291	$	(431	)	$	66,027	$	(629	)

December 31, 2015	Less Than 12 Months					12 Months or More					Total
(In Thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Obligations of U.S. Government agencies	$	0	$	0		$	7,850	$	(192	)	$	7,850	$	(192	)
Obligations of states and political subdivisions:
Tax-exempt		5,200		(19	)		216		(3	)		5,416		(22	)
Taxable		10,605		(60	)		2,910		(41	)		13,515		(101	)
Mortgage-backed securities		38,764		(295	)		3,503		(75	)		42,267		(370	)
Collateralized mortgage obligations, Issued by U.S. Government agencies		88,355		(648	)		49,273		(1,405	)		137,628		(2,053	)
Total temporarily impaired available-for-sale securities	$	142,924	$	(1,022	)	$	63,752	$	(1,716	)	$	206,676	$	(2,738	)

Realized Gain (Loss) on Investments [Table Text Block]

(In Thousands)	3 Months Ended
	March 31,		March 31,
	2016		2015
Gross realized gains from sales	$	383	$	74
Gross realized losses from sales		0		0
Net realized gains	$	383	$	74

Investments Classified by Contractual Maturity Date [Table Text Block]

	Amortized		Fair
(In Thousands)	Cost		Value
Due in one year or less	$	10,374	$	10,451
Due from one year through five years		65,791		67,520
Due from five years through ten years		45,949		47,676
Due after ten years		30,072		32,120
Subtotal		152,186		157,767
Mortgage-backed securities		72,210		73,243
Collateralized mortgage obligations, Issued by U.S. Government agencies		179,731		180,860
Total	$	404,127	$	411,870

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Note 7 - Loans (Tables)

3 Months Ended

Mar. 31, 2016

Troubled Debt Restructuring [Member]

Notes Tables

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Three Months Ended March 31, 2016			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Commercial,
Commercial and industrial		1	$	5	$	5

Three Months Ended March 31, 2015			Pre-		Post-
(Balances in Thousands)			Modification		Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
Residential mortgage:
Residential mortgage loans - first liens		1	$	56	$	56
Residential mortgage loans - junior liens		1		32		32
Consumer		1		30		30

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Summary of Loans by Type
(In Thousands)	Mar. 31,			Dec. 31,
	2016			2015
Residential mortgage:
Residential mortgage loans - first liens	$	306,753		$	304,783
Residential mortgage loans - junior liens		21,622			21,146
Home equity lines of credit		38,627			39,040
1-4 Family residential construction		20,010			21,121
Total residential mortgage		387,012			386,090
Commercial:
Commercial loans secured by real estate		154,646			154,779
Commercial and industrial		71,628			75,196
Political subdivisions		38,364			40,007
Commercial construction and land		7,445			5,122
Loans secured by farmland		7,168			7,019
Multi-family (5 or more) residential		8,393			9,188
Agricultural loans		4,492			4,671
Other commercial loans		11,387			12,152
Total commercial		303,523			308,134
Consumer		11,070			10,656
Total		701,605			704,880
Less: allowance for loan losses		(7,661	)		(7,889	)
Loans, net	$	693,944		$	696,991

Allowance for Credit Losses on Financing Receivables [Table Text Block]

Three Months Ended March 31, 2016	Dec. 31,							Provision			March 31,
(In Thousands)	2015 Balance		Charge-offs			Recoveries		(Credit)			2016 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,645	$	0		$	0	$	77		$	2,722
Residential mortgage loans - junior liens		219		0			0		9			228
Home equity lines of credit		347		0			0		4			351
1-4 Family residential construction		207		0			0		(7	)		200
Total residential mortgage		3,418		0			0		83			3,501
Commercial:
Commercial loans secured by real estate		1,939		0			1		87			2,027
Commercial and industrial		981		0			1		(6	)		976
Commercial construction and land		58		0			0		26			84
Loans secured by farmland		106		0			0		2			108
Multi-family (5 or more) residential		675		(595	)		0		176			256
Agricultural loans		45		0			0		(1	)		44
Other commercial loans		118		0			0		(6	)		112
Total commercial		3,922		(595	)		2		278			3,607
Consumer		122		(18	)		15		7			126
Unallocated		427		0			0		0			427
Total Allowance for Loan Losses	$	7,889	$	(613	)	$	17	$	368		$	7,661

Three Months Ended March 31, 2015	Dec. 31,										March 31,
(In Thousands)	2014 Balance		Charge-offs			Recoveries		Provision (Credit)			2015 Balance
Allowance for Loan Losses:
Residential mortgage:
Residential mortgage loans - first liens	$	2,941	$	(79	)	$	1	$	(89	)	$	2,774
Residential mortgage loans - junior liens		176		0			0		24			200
Home equity lines of credit		322		0			0		0			322
1-4 Family residential construction		214		0			0		(7	)		207
Total residential mortgage		3,653		(79	)		1		(72	)		3,503
Commercial:
Commercial loans secured by real estate		1,758		(115	)		0		93			1,736
Commercial and industrial		688		(10	)		1		5			684
Commercial construction and land		283		0			0		3			286
Loans secured by farmland		165		0			0		(6	)		159
Multi-family (5 or more) residential		87		0			0		(6	)		81
Agricultural loans		31		0			0		(2	)		29
Other commercial loans		131		0			0		(8	)		123
Total commercial		3,143		(125	)		1		79			3,098
Consumer		145		(18	)		15		(3	)		139
Unallocated		395		0			0		(1	)		394
Total Allowance for Loan Losses	$	7,336	$	(222	)	$	17	$	3		$	7,134

Financing Receivable Credit Quality Indicators [Table Text Block]

March 31, 2016
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	296,394	$	378	$	9,915	$	66	$	306,753
Residential mortgage loans - junior liens		20,920		276		426		0		21,622
Home Equity lines of credit		37,570		492		565		0		38,627
1-4 Family residential construction		19,994		16		0		0		20,010
Total residential mortgage		374,878		1,162		10,906		66		387,012
Commercial:
Commercial loans secured by real estate		140,985		4,444		9,217		0		154,646
Commercial and Industrial		67,568		2,257		1,676		127		71,628
Political subdivisions		38,364		0		0		0		38,364
Commercial construction and land		7,282		60		103		0		7,445
Loans secured by farmland		5,452		171		1,525		20		7,168
Multi-family (5 or more) residential		7,751		0		642		0		8,393
Agricultural loans		4,478		0		14		0		4,492
Other commercial loans		11,309		0		78		0		11,387
Total commercial		283,189		6,932		13,255		147		303,523
Consumer		10,878		20		172		0		11,070
Totals	$	668,945	$	8,114	$	24,333	$	213	$	701,605

December 31, 2015
(In Thousands)			Special
	Pass		Mention		Substandard		Doubtful		Total
Residential Mortgage:
Residential mortgage loans - first liens	$	295,302	$	407	$	9,007	$	67	$	304,783
Residential mortgage loans - junior liens		20,558		185		403		0		21,146
Home equity lines of credit		38,071		543		426		0		39,040
1-4 Family residential construction		21,104		17		0		0		21,121
Total residential mortgage		375,035		1,152		9,836		67		386,090
Commercial:
Commercial loans secured by real estate		140,381		5,862		8,536		0		154,779
Commercial and Industrial		71,225		2,106		1,737		128		75,196
Political subdivisions		40,007		0		0		0		40,007
Commercial construction and land		4,957		60		105		0		5,122
Loans secured by farmland		5,084		483		1,432		20		7,019
Multi-family (5 or more) residential		7,943		0		1,245		0		9,188
Agricultural loans		4,655		0		16		0		4,671
Other commercial loans		12,073		0		79		0		12,152
Total commercial		286,325		8,511		13,150		148		308,134
Consumer		10,490		21		145		0		10,656
Totals	$	671,850	$	9,684	$	23,131	$	215	$	704,880

Impaired Financing Receivable by Portfolio Segment Table Text Block

March 31, 2016	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	833	$	305,920	$	306,753	$	0	$	2,722	$	2,722
Residential mortgage loans - junior liens		72		21,550		21,622		0		228		228
Home equity lines of credit		0		38,627		38,627		0		351		351
1-4 Family residential construction		0		20,010		20,010		0		200		200
Total residential mortgage		905		386,107		387,012		0		3,501		3,501
Commercial:
Commercial loans secured by real estate		6,065		148,581		154,646		96		1,931		2,027
Commercial and industrial		832		70,796		71,628		155		821		976
Political subdivisions		0		38,364		38,364		0		0		0
Commercial construction and land		0		7,445		7,445		0		84		84
Loans secured by farmland		1,418		5,750		7,168		52		56		108
Multi-family (5 or more) residential		392		8,001		8,393		0		256		256
Agricultural loans		14		4,478		4,492		0		44		44
Other commercial loans		0		11,387		11,387		0		112		112
Total commercial		8,721		294,802		303,523		303		3,304		3,607
Consumer		4		11,066		11,070		3		123		126
Unallocated												427
Total	$	9,630	$	691,975	$	701,605	$	306	$	6,928	$	7,661

December 31, 2015	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Residential mortgage:
Residential mortgage loans - first liens	$	884	$	303,899	$	304,783	$	1	$	2,644	$	2,645
Residential mortgage loans - junior liens		74		21,072		21,146		0		219		219
Home equity lines of credit		0		39,040		39,040		0		347		347
1-4 Family residential construction		0		21,121		21,121		0		207		207
Total residential mortgage		958		385,132		386,090		1		3,417		3,418
Commercial:
Commercial loans secured by real estate		6,262		148,517		154,779		97		1,842		1,939
Commercial and industrial		324		74,872		75,196		75		906		981
Political subdivisions		0		40,007		40,007		0		0		0
Commercial construction and land		0		5,122		5,122		0		58		58
Loans secured by farmland		1,427		5,592		7,019		52		54		106
Multi-family (5 or more) residential		987		8,201		9,188		595		80		675
Agricultural loans		16		4,655		4,671		0		45		45
Other commercial loans		0		12,152		12,152		0		118		118
Total commercial		9,016		299,118		308,134		819		3,103		3,922
Consumer		0		10,656		10,656		0		122		122
Unallocated												427
Total	$	9,974	$	694,906	$	704,880	$	820	$	6,642	$	7,889

Impaired Financing Receivables [Table Text Block]

(In Thousands)	March 31, 2016						December 31, 2015
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
	Balance		Investment		Allowance		Balance		Investment		Allowance
With no related allowance recorded:
Residential mortgage loans - first liens	$	833	$	833	$	0	$	842	$	842	$	0
Residential mortgage loans - junior liens		72		72		0		74		74		0
Commercial loans secured by real estate		7,415		5,754		0		7,580		5,945		0
Commercial and industrial		237		237		0		249		249		0
Loans secured by farmland		908		908		0		915		915		0
Multi-family (5 or more) residential		987		392		0		0		0		0
Agricultural loans		14		14		0		16		16		0
Total with no related allowance recorded		10,466		8,210		0		9,676		8,041		0
With a related allowance recorded:
Residential mortgage loans - first liens		0		0		0		42		42		1
Commercial loans secured by real estate		311		311		96		317		317		97
Commercial and industrial		595		595		155		75		75		75
Loans secured by farmland		510		510		52		512		512		52
Multi-family (5 or more) residential		0		0		0		987		987		595
Consumer		4		4		3		0		0		0
Total with a related allowance recorded		1,420		1,420		306		1,933		1,933		820
Total	$	11,886	$	9,630	$	306	$	11,609	$	9,974	$	820

Schedule Of Additional Information On Impaired Loans [Table Text Block]

					Interest Income Recognized on
	Average Investment in Impaired Loans				Impaired Loans on a Cash Basis
(In Thousands)	3 Months Ended				3 Months Ended
	March 31,				March 31,
	2016		2015		2016		2015
Residential mortgage:
Residential mortgage loans - first lien	$	861	$	3,442	$	10	$	14
Residential mortgage loans - junior lien		73		48		1		1
Total residential mortgage		934		3,490		11		15
Commercial:
Commercial loans secured by real estate		6,160		6,588		110		112
Commercial and industrial		568		603		3		7
Commercial construction and land		0		75		0		0
Loans secured by farmland		1,423		1,465		21		26
Multi-family (5 or more) residential		690		519		0		25
Agricultural loans		15		0		1		0
Total commercial		8,856		9,250		135		170
Consumer		12		0		0		0
Total	$	9,802	$	12,740	$	146	$	185

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

(In Thousands)	March 31, 2016				December 31, 2015
	Past Due				Past Due
	90+ Days and				90+ Days and
	Accruing		Nonaccrual		Accruing		Nonaccrual
Residential mortgage:
Residential mortgage loans - first liens	$	2,680	$	3,080	$	2,381	$	3,044
Residential mortgage loans - junior liens		140		0		79		0
Home equity lines of credit		175		0		130		0
Total residential mortgage		2,995		3,080		2,590		3,044
Commercial:
Commercial loans secured by real estate		539		5,689		503		5,730
Commercial and industrial		318		312		65		313
Loans secured by farmland		102		1,418		0		1,427
Multi-family (5 or more) residential		0		392		0		987
Agricultural loans		0		14		0		16
Total commercial		959		7,825		568		8,473
Consumer		3		39		71		0
Totals	$	3,957	$	10,944	$	3,229	$	11,517

Past Due Financing Receivables [Table Text Block]

	As of March 31, 2016								As of December 31, 2015
	Current &								Current &
(In Thousands)	Past Due		Past Due		Past Due				Past Due		Past Due		Past Due
	Less than		30-89		90+				Less than		30-89		90+
	30 Days		Days		Days		Total		30 Days		Days		Days		Total
Residential mortgage:
Residential mortgage loans - first liens	$	295,485	$	7,234	$	4,034	$	306,753	$	294,703	$	6,156	$	3,924	$	304,783
Residential mortgage loans - junior liens		21,340		142		140		21,622		20,816		251		79		21,146
Home equity lines of credit		37,977		475		175		38,627		38,581		329		130		39,040
1-4 Family residential construction		19,867		143		0		20,010		21,121		0		0		21,121
Total residential mortgage		374,669		7,994		4,349		387,012		375,221		6,736		4,133		386,090
Commercial:
Commercial loans secured by real estate		150,087		3,280		1,279		154,646		153,427		108		1,244		154,779
Commercial and industrial		71,123		168		337		71,628		75,002		118		76		75,196
Political subdivisions		38,364		0		0		38,364		40,007		0		0		40,007
Commercial construction and land		7,311		134		0		7,445		5,018		104		0		5,122
Loans secured by farmland		6,025		221		922		7,168		5,970		223		826		7,019
Multi-family (5 or more) residential		7,928		73		392		8,393		8,201		0		987		9,188
Agricultural loans		4,398		80		14		4,492		4,642		13		16		4,671
Other commercial loans		11,387		0		0		11,387		12,152		0		0		12,152
Total commercial		296,623		3,956		2,944		303,523		304,419		566		3,149		308,134
Consumer		10,933		95		42		11,070		10,537		48		71		10,656
Totals	$	682,225	$	12,045	$	7,335	$	701,605	$	690,177	$	7,350	$	7,353	$	704,880

Contractual Aging of Nonaccrual Loans [Table Text Block]

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Total
March 31, 2016 Nonaccrual Totals	$	6,894	$	672	$	3,378	$	10,944
December 31, 2015 Nonaccrual Totals	$	7,100	$	293	$	4,124	$	11,517

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Current &
(In Thousands)	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Nonaccrual		Total
March 31, 2016 Totals	$	925	$	242	$	86	$	5,060	$	6,313
December 31, 2015 Totals	$	1,186	$	0	$	81	$	5,097	$	6,364

Schedule of Troubled Debt Restructurings With Subsequent Default [Table Text Block]

	Number
	of		Recorded
	Contracts		Investment
Three Months Ended March 31, 2016
(Balances in Thousands)
Residential mortgage, Residential mortgage loans - first liens		1	$	31
Commercial, Commercial and industrial		1		5

	Number
	of		Recorded
	Contracts		Investment
Three Months Ended March 31, 2015
(Balances in Thousands)
Residential mortgage, Residential mortgage loans - first liens		2	$	115
Commercial:
Commercial loans secured by real estate		1		407
Commercial construction and land		1		25

Schedule of Real Estate Acquired Through Foreclosure [Table Text Block]

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Foreclosed residential real estate	$	883	$	555

Schedule of Mortgage Loans in Process of Foreclosure [Table Text Block]

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Residential real estate in process of foreclosure	$	931	$	1,173

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Note 8 - Borrowed Funds (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Short-term Debt [Table Text Block]

(In Thousands)	March 31,		Dec. 31,
	2016		2015
FHLB-Pittsburgh borrowings	$	18,811	$	48,581
Customer repurchase agreements		7,141		4,915
Total short-term borrowings	$	25,952	$	53,496

(In Thousands)	March 31,		Dec. 31 ,
	2016		2015
Overnight borrowing	$	0	$	23,500
Other short-term advances		18,811		25,081
Total short-term FHLB-Pittsburgh borrowings	$	18,811	$	48,581

Schedule of Long-term Debt Instruments [Table Text Block]

(In Thousands)	March 31,		Dec. 31 ,
	2016		2015
FHLB-Pittsburgh borrowings	$	11,692	$	11,767
Repurchase agreement		27,000		27,000
Total long-term borrowings	$	38,692	$	38,767

Schedule of Maturities of Long-term Debt [Table Text Block]

(In Thousands)	March 31,		Dec. 31,
	2016		2015
Loan maturing in 2016 with a rate of 6.86%	$	45	$	57
Loan maturing in 2017 with a rate of 6.83%		9		10
Loan maturing in 2017 with a rate of 3.81%		10,000		10,000
Loan maturing in 2020 with a rate of 4.79%		778		821
Loan maturing in 2025 with a rate of 4.91%		860		879
Total long-term FHLB-Pittsburgh borrowings	$	11,692	$	11,767

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets [Table Text Block]

(In Thousands)	March 31,		Dec . 31,
	2016		2015
Mortgage-backed securities	$	15,526	$	15,772
Collateralized mortgage obligations, Issued by U.S. Government agencies		17,175		18,008
Total	$	32,701	$	33,780

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Note 9 - Defined Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

Defined Benefit Plans
(In Thousands)	Pension						Postretirement
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2016			2015
Service cost	$	0		$	0		$	9		$	10
Interest cost		7			9			16			13
Expected return on plan assets		(7	)		(11	)		0			0
Amortization of prior service cost		0			0			(8	)		(7	)
Recognized net actuarial loss		3			4			0			0
Net periodic benefit cost	$	3		$	2		$	17		$	16

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Note 11 - Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	March 31,		December 31,
(In Thousands)	2016		2015
Deferred tax assets:
Net realized losses on securities	$	36	$	69
Allowance for loan losses		2,623		2,761
Other deferred tax assets		2,238		2,634
Total deferred tax assets		4,897		5,464
Deferred tax liabilities:
Unrealized holding gains on securities		2,879		1,342
Defined benefit plans - ASC 835		26		19
Bank premises and equipment		926		869
Core deposit intangibles		10		11
Other deferred tax liabilities		107		108
Total deferred tax liabilities		3,948		2,349
Deferred tax asset, net	$	949	$	3,115

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended
(In thousands)	March 31,
	2016			2015
Income before income tax provision	$	4,666		$	5,044
Income tax provision		1,093			1,229
Effective tax rate		23.42	%		24.37	%

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Note 2 - Per Share Data (Details Textual) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	47,309	103,104

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Note 2 - Per Share Data - Net Income Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 3,573,000	$ 3,815,000
Earnings per share – basic (in shares)	12,155,108	12,268,306
Earnings per share – basic (in dollars per share)	$ 0.29	$ 0.31
Exercise of outstanding stock options (in shares)	198,985	181,385
Hypothetical share repurchase (in shares)	(178,215)	(160,552)
Earnings per share – diluted (in shares)	12,175,878	12,289,139
Earnings per share – diluted (in dollars per share)	$ 0.29	$ 0.31

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Note 3 - Comprehensive Income - Components of Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Unrealized holding gains (losses) on available-for-sale securities, before tax amount	$ 4,774	$ 3,725
Unrealized holding gains (losses) on available-for-sale securities, income tax effect	(1,671)	(1,304)
Unrealized holding gains (losses) on available-for-sale securities, net of tax amount	3,103	2,421
Reclassification adjustment for (gains) realized in income, before tax amount	(383)	(74)
Reclassification adjustment for (gains) realized in income, income tax effect	134	26
Reclassification adjustment for (gains) realized in income, net of tax amount	(249)	(48)
Other comprehensive gain on available-for-sale securities, before tax amount	4,391	3,651
Other comprehensive gain on available-for-sale securities, income tax effect	(1,537)	(1,278)
Other comprehensive gain on available-for-sale securities, net of tax amount	2,854	2,373
Changes from plan amendments and actuarial gains and losses included in other comprehensive income, before tax amount	26	(100)
Changes from plan amendments and actuarial gains and losses included in other comprehensive income, income tax effect	(9)	35
Changes from plan amendments and actuarial gains and losses included in other comprehensive income, net of tax amount	17	(65)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost, before tax amount	(5)	(3)
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost, income tax effect	2	1
Amortization of net transition obligation, prior service cost and net actuarial loss included in net periodic benefit cost, net of tax amount	(3)	(2)
Other comprehensive income on unfunded retirement obligations	21	(103)
Other comprehensive income on unfunded retirement obligations	(7)	36
Other comprehensive income on unfunded retirement obligations	14	(67)
Total other comprehensive gain, before tax amount	4,412	3,548
Total other comprehensive gain, income tax effect	(1,544)	(1,242)
Net other comprehensive income (loss)	2,868	2,306
Other comprehensive loss on unfunded retirement obligations	21	(103)
Other comprehensive loss on unfunded retirement obligations	(7)	36
Other comprehensive loss on unfunded retirement obligations	$ 14	$ (67)

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Note 3 - Comprehensive Income - Changes in the Components of Accumulated Other Comprehensive Income (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Balance, beginning of period	$ 2,493,000	$ 5,281,000
Other comprehensive income before reclassifications	3,103,000	2,421,000
Amounts reclassified from accumulated other comprehensive income	(249,000)	(48,000)
Net other comprehensive income (loss)	2,854,000	2,373,000
Balance, end of period	5,347,000	7,654,000
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance, beginning of period	35,000	79,000
Other comprehensive income before reclassifications	17,000	(65,000)
Amounts reclassified from accumulated other comprehensive income	(3,000)	(2,000)
Net other comprehensive income (loss)	14,000	(67,000)
Balance, end of period	49,000	12,000
AOCI Attributable to Parent [Member]
Balance, beginning of period	2,528,000	5,360,000
Other comprehensive income before reclassifications	3,120,000	2,356,000
Amounts reclassified from accumulated other comprehensive income	(252,000)	(50,000)
Net other comprehensive income (loss)	2,868,000	2,306,000
Balance, end of period	5,396,000	7,666,000
Balance, beginning of period	2,528,000
Net other comprehensive income (loss)	2,868,000	$ 2,306,000
Balance, end of period	$ 5,396,000

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Note 3 - Comprehensive Income - Amounts Reclassified Out of Each Component of OCI (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Unrealized gains and losses on available-for-sale securities	$ (383,000)	$ (74,000)
Income tax provision	134,000	26,000
Net income	(249,000)	(48,000)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Income tax provision	2,000	1,000
Net income	(3,000)	(2,000)
Prior service cost	(8,000)	(7,000)
Actuarial loss	3,000	4,000
Total before tax	(5,000)	(3,000)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Net income	(252,000)	(50,000)
Unrealized gains and losses on available-for-sale securities	(383,000)	(74,000)
Income tax provision	1,093,000	1,229,000
Net income	(3,573,000)	(3,815,000)
Total before tax	$ (4,666,000)	$ (5,044,000)

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Note 4 - Cash and Due from Banks (Details Textual) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Restricted Cash and Cash Equivalents, Current	$ 14,562,000	$ 15,327,000

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Note 4 - Cash and Due from Banks - Cash and Due From Banks (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Cash and cash equivalents	$ 38,425,000	$ 33,313,000
Certificates of deposit	2,748,000	2,748,000
Total cash and due from banks	$ 41,173,000	$ 36,061,000

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments - Assets Measured at Fair Value (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Measurements, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	$ 0	$ 0
Fair Value, Measurements, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	10,707,000	10,483,000
Fair Value, Measurements, Recurring [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | US Government Agencies Debt Securities [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	10,707,000	10,483,000
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Tax Exempt [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Tax Exempt [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	111,959,000	107,757,000
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Tax Exempt [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Tax Exempt [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	111,959,000	107,757,000
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Taxable [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Taxable [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	35,094,000	34,597,000
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Taxable [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions Taxable [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	35,094,000	34,597,000
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	73,243,000	73,343,000
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	73,243,000	73,343,000
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	180,860,000	191,715,000
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	180,860,000	191,715,000
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	7,000	9,000
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	7,000	9,000
Fair Value, Measurements, Recurring [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	411,870,000	417,904,000
Fair Value, Measurements, Recurring [Member] | Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Debt Securities [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	411,870,000	417,904,000
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	1,736,000	2,386,000
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	1,736,000	2,386,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	1,736,000	2,386,000
Servicing rights	0	0
Total recurring fair value measurements	1,736,000	2,386,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	411,870,000	417,904,000
Servicing rights	0	0
Total recurring fair value measurements	411,870,000	417,904,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	0	0
Servicing rights	1,261,000	1,296,000
Total recurring fair value measurements	1,261,000	1,296,000
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	413,606,000	420,290,000
Servicing rights	1,261,000	1,296,000
Total recurring fair value measurements	414,867,000	421,586,000
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	0	0
Valuation allowance	0	0
Impaired loans, net	0	0
Foreclosed assets held for sale	0	0
Total nonrecurring fair value measurements	0	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	0	0
Valuation allowance	0	0
Impaired loans, net	0	0
Foreclosed assets held for sale	0	0
Total nonrecurring fair value measurements	0	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	1,420,000	1,933,000
Valuation allowance	(306,000)	(820,000)
Impaired loans, net	1,114,000	1,113,000
Foreclosed assets held for sale	1,584,000	1,260,000
Total nonrecurring fair value measurements	2,698,000	2,373,000
Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value Measurement [Member]
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	1,420,000	1,933,000
Valuation allowance	(306,000)	(820,000)
Impaired loans, net	1,114,000	1,113,000
Foreclosed assets held for sale	1,584,000	1,260,000
Total nonrecurring fair value measurements	2,698,000	2,373,000
US Government Agencies Debt Securities [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	10,707,000	10,483,000
Obligations of States and Political Subdivisions Tax Exempt [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	111,959,000	107,757,000
Obligations of States and Political Subdivisions Taxable [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	35,094,000	34,597,000
Collateralized Mortgage Backed Securities [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	73,243,000	73,343,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	180,860,000	191,715,000
Collateralized Debt Obligations [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	7,000	9,000
Debt Securities [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	411,870,000	417,904,000
Equity Securities [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	1,736,000	2,386,000
Estimate of Fair Value Measurement [Member]
AVAILABLE-FOR-SALE SECURITIES:
Available-for-sale securities	413,606,000	420,290,000
Available-for-sale securities	413,606,000	420,290,000
Nonrecurring fair value measurements
Impaired loans with a valuation allowance	1,420,000	1,933,000
Valuation allowance	(306,000)	(820,000)
Impaired loans, net	$ 1,420,000	$ 1,933,000

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments - Valuation Techniques and the Unobservable Inputs Used in Determining Fair Value- Recurring Basis (Details) - Servicing Rights Assets [Member] - Income Approach Valuation Technique [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair value	$ 1,261,000	$ 1,296,000
Discount rate	10.00%	10.00%
Weighted-average PSA	168.00%	146.00%
Servicing fees of loan balances	0.25%	0.25%
Servicing fees of payments are late	4.00%	4.00%
Late fees assessed	5.00%	5.00%
Miscellaneous fees per account per month	$ 1.94	$ 1.94
Monthly servicing cost per account	6	6
Additional monthly servicing cost per loan on loans more than 30 days delinquent	$ 24	$ 24
Servicing costs of loans more than 30 days delinquent	1.50%	1.50%
Annual increase in servicing costs	3.00%	3.00%

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments - Reconciliation of Activity for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details) - Servicing Rights Assets [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Servicing rights balance, beginning of period	$ 1,296	$ 1,281
Issuances of servicing rights	36	31
Unrealized losses included in earnings	(71)	(117)
Service rights balance, end of period	$ 1,261	$ 1,195

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments - Valuation Techniques and the Unobservable Inputs Used in Determining Fair Value- Nonrecurring Basis (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Impaired Loans [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate		31.00%
Impaired Loans [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Market Approach Valuation Technique [Member]
Impaired loans		$ 42,000
Valuation allowance		1,000
Fair value		41,000
Impaired loans		42,000
Valuation allowance		$ 1,000
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate	47.00%	46.00%
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Market Approach Valuation Technique [Member]
Impaired loans	$ 311,000	$ 317,000
Valuation allowance	96,000	97,000
Fair value	215,000	220,000
Impaired loans	311,000	317,000
Valuation allowance	$ 96,000	$ 97,000
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate	52.00%	31.00%
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Market Approach Valuation Technique [Member]
Impaired loans	$ 599,000	$ 75,000
Valuation allowance	158,000	75,000
Fair value	441,000	0
Impaired loans	599,000	75,000
Valuation allowance	$ 158,000	$ 75,000
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate	49.00%	49.00%
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member] | Market Approach Valuation Technique [Member]
Impaired loans	$ 510,000	$ 512,000
Valuation allowance	52,000	52,000
Fair value	458,000	460,000
Impaired loans	510,000	512,000
Valuation allowance	52,000	$ 52,000
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate		41.00%
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member] | Market Approach Valuation Technique [Member]
Impaired loans		$ 987,000
Valuation allowance		595,000
Fair value		392,000
Impaired loans		987,000
Valuation allowance		595,000
Impaired Loans [Member]
Impaired loans	1,420,000	1,933,000
Valuation allowance	306,000	820,000
Fair value	1,114,000	1,113,000
Impaired loans	1,420,000	1,933,000
Valuation allowance	$ 306,000	$ 820,000
Foreclosed Assets Held For Sale [Member] | Residential Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate	39.00%	32.00%
Foreclosed Assets Held For Sale [Member] | Residential Portfolio Segment [Member] | Market Approach Valuation Technique [Member]
Fair value	$ 883,000	$ 556,000
Foreclosed assets held for sale	883,000	556,000
Valuation allowance	$ 0	$ 0
Foreclosed Assets Held For Sale [Member] | Land Receivable [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Discount rate	30.00%	29.00%
Foreclosed Assets Held For Sale [Member] | Land Receivable [Member] | Market Approach Valuation Technique [Member]
Fair value	$ 701,000	$ 704,000
Foreclosed assets held for sale	701,000	704,000
Valuation allowance	0	0
Foreclosed Assets Held For Sale [Member]
Fair value	$ 1,584,000	1,260,000
Discount rate
Foreclosed assets held for sale	$ 1,584,000	1,260,000
Valuation allowance	0	0
Residential Portfolio Segment [Member]
Foreclosed assets held for sale	883,000	555,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Impaired loans	311,000	317,000
Valuation allowance	96,000	97,000
Impaired loans	311,000	317,000
Valuation allowance	96,000	97,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Impaired loans	595,000	75,000
Valuation allowance	155,000	75,000
Impaired loans	595,000	75,000
Valuation allowance	155,000	75,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Impaired loans	510,000	512,000
Valuation allowance	52,000	52,000
Impaired loans	510,000	512,000
Valuation allowance	52,000	52,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Impaired loans	0	987,000
Valuation allowance	0	595,000
Impaired loans	0	987,000
Valuation allowance	0	595,000
Impaired loans	1,420,000	1,933,000
Valuation allowance	306,000	820,000
Impaired loans	1,420,000	1,933,000
Valuation allowance	$ 306,000	$ 820,000

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Note 5 - Fair Value Measurements and Fair Values of Financial Instruments - Estimated Fair Values, and Related Carrying Amounts, of the Financial Instruments (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Reported Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	$ 38,425,000	$ 33,313,000
Reported Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Financial assets:
Certificates of deposit	2,748,000	2,748,000
Restricted equity securities (included in Other Assets)	3,261,000	4,657,000
Loans held for sale	526,000	280,000
Accrued interest receivable	3,900,000	3,768,000
Financial liabilities:
Deposits with no stated maturity	736,837,000	713,931,000
Time deposits	219,011,000	221,684,000
Short-term borrowings	25,952,000	53,496,000
Long-term borrowings	38,692,000	38,767,000
Accrued interest payable	69,000	70,000
Reported Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Financial assets:
Loans, net	693,944,000	696,991,000
Servicing rights	1,261,000	1,296,000
Reported Value Measurement [Member]
Financial assets:
Available-for-sale securities	413,606,000	420,290,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	38,425,000	33,313,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Financial assets:
Certificates of deposit	2,773,000	2,752,000
Restricted equity securities (included in Other Assets)	3,261,000	4,657,000
Loans held for sale	526,000	280,000
Accrued interest receivable	3,900,000	3,768,000
Financial liabilities:
Deposits with no stated maturity	736,837,000	713,931,000
Time deposits	219,237,000	221,891,000
Short-term borrowings	25,841,000	53,398,000
Long-term borrowings	40,247,000	40,166,000
Accrued interest payable	69,000	70,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Financial assets:
Loans, net	688,359,000	685,552,000
Servicing rights	1,261,000	1,296,000
Estimate of Fair Value Measurement [Member]
Financial assets:
Available-for-sale securities	413,606,000	420,290,000
Cash and cash equivalents	38,425,000	33,313,000	$ 32,002,000	$ 31,619,000
Certificates of deposit	2,748,000	2,748,000
Available-for-sale securities	413,606,000	420,290,000
Loans held for sale	526,000	280,000
Loans, net	693,944,000	696,991,000
Accrued interest receivable	3,900,000	3,768,000
Financial liabilities:
Short-term borrowings	25,952,000	53,496,000
Long-term borrowings	$ 38,692,000	$ 38,767,000

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Note 6 - Securities (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Bank Stocks [Member]
Available-for-sale Securities, Gross Realized Gains	$ 249,000
Equity Securities [Member]
Available-for-sale Securities, Gross Realized Gains	0
FHLB Stock [Member] | Federal Home Loan Bank of Pittsburgh [Member]
Other than Temporary Impairment Losses, Investments	0		$ 0
Other Assets [Member] | Federal Home Loan Bank of Pittsburgh [Member]
Federal Home Loan Bank Stock	3,131,000		4,527,000
Available-for-sale Securities Pledged as Collateral	215,510,000		$ 228,616,000
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax	0
Available-for-sale Securities, Gross Realized Gains	$ 383,000	$ 74,000

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Note 6 - Securities - Available-for-sale Securities (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member]
Available-for-sale securities, amortized cost	$ 10,661,000	$ 10,663,000
Available-for-sale securities, gross unrealized holding gains	46,000	12,000
Available-for-sale securities, gross unrealized holding losses	0	(192,000)
Available-for-sale securities	10,707,000	10,483,000
Obligations of States and Political Subdivisions Tax Exempt [Member]
Available-for-sale securities, amortized cost	107,269,000	103,414,000
Available-for-sale securities, gross unrealized holding gains	4,756,000	4,365,000
Available-for-sale securities, gross unrealized holding losses	(66,000)	(22,000)
Available-for-sale securities	111,959,000	107,757,000
Obligations of States and Political Subdivisions Taxable [Member]
Available-for-sale securities, amortized cost	34,249,000	34,317,000
Available-for-sale securities, gross unrealized holding gains	845,000	381,000
Available-for-sale securities, gross unrealized holding losses	0	(101,000)
Available-for-sale securities	35,094,000	34,597,000
Collateralized Mortgage Backed Securities [Member]
Available-for-sale securities, amortized cost	72,210,000	73,227,000
Available-for-sale securities, gross unrealized holding gains	1,060,000	486,000
Available-for-sale securities, gross unrealized holding losses	(27,000)	(370,000)
Available-for-sale securities	73,243,000	73,343,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities, amortized cost	179,731,000	193,145,000
Available-for-sale securities, gross unrealized holding gains	1,665,000	623,000
Available-for-sale securities, gross unrealized holding losses	(536,000)	(2,053,000)
Available-for-sale securities	180,860,000	191,715,000
Collateralized Debt Obligations [Member]
Available-for-sale securities, amortized cost	7,000	9,000
Available-for-sale securities, gross unrealized holding gains	0	0
Available-for-sale securities, gross unrealized holding losses	0	0
Available-for-sale securities	7,000	9,000
Debt Securities [Member]
Available-for-sale securities, amortized cost	404,127,000	414,775,000
Available-for-sale securities, gross unrealized holding gains	8,372,000	5,867,000
Available-for-sale securities, gross unrealized holding losses	(629,000)	(2,738,000)
Available-for-sale securities	411,870,000	417,904,000
Equity Securities [Member]
Available-for-sale securities, amortized cost	1,253,000	1,680,000
Available-for-sale securities, gross unrealized holding gains	483,000	706,000
Available-for-sale securities, gross unrealized holding losses	0	0
Available-for-sale securities	1,736,000	2,386,000
Available-for-sale securities, amortized cost	405,380,000	416,455,000
Available-for-sale securities, gross unrealized holding gains	8,855,000	6,573,000
Available-for-sale securities, gross unrealized holding losses	(629,000)	(2,738,000)
Available-for-sale securities	$ 413,606,000	$ 420,290,000

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Note 6 - Securities - Available-for-sale Securities With Unrealized Loss Positions (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Obligations of States and Political Subdivisions Tax Exempt [Member]
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	$ 10,017,000	$ 5,200,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(66,000)	(19,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	0	216,000
Obligations of states and political subdivisions, Tax-exempt	0	(3,000)
Available-for-sale securities with unrealized loss positions, fair value	10,017,000	5,416,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(66,000)	(22,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	10,017,000	5,200,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(66,000)	(19,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	0	216,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses	0	(3,000)
Available-for-sale securities with unrealized loss positions, fair value	10,017,000	5,416,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(66,000)	(22,000)
US Government Agencies Debt Securities [Member]
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value		0
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses		0
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value		7,850,000
Obligations of states and political subdivisions, Tax-exempt		(192,000)
Available-for-sale securities with unrealized loss positions, fair value		7,850,000
Available-for-sale securities, with unrealized loss positions, unrealized losses		(192,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value		0
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses		0
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value		7,850,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses		(192,000)
Available-for-sale securities with unrealized loss positions, fair value		7,850,000
Available-for-sale securities, with unrealized loss positions, unrealized losses		(192,000)
Collateralized Mortgage Backed Securities [Member]
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	5,899,000	38,764,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(27,000)	(295,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	0	3,503,000
Obligations of states and political subdivisions, Tax-exempt	0	(75,000)
Available-for-sale securities with unrealized loss positions, fair value	5,899,000	42,267,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(27,000)	(370,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	5,899,000	38,764,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(27,000)	(295,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	0	3,503,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses	0	(75,000)
Available-for-sale securities with unrealized loss positions, fair value	5,899,000	42,267,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(27,000)	(370,000)
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	5,820,000	88,355,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(105,000)	(648,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	44,291,000	49,273,000
Obligations of states and political subdivisions, Tax-exempt	(431,000)	(1,405,000)
Available-for-sale securities with unrealized loss positions, fair value	50,111,000	137,628,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(536,000)	(2,053,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	5,820,000	88,355,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(105,000)	(648,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	44,291,000	49,273,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses	(431,000)	(1,405,000)
Available-for-sale securities with unrealized loss positions, fair value	50,111,000	137,628,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(536,000)	(2,053,000)
Obligations of States and Political Subdivisions Taxable [Member]
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value		10,605,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses		(60,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value		2,910,000
Obligations of states and political subdivisions, Tax-exempt		(41,000)
Available-for-sale securities with unrealized loss positions, fair value		13,515,000
Available-for-sale securities, with unrealized loss positions, unrealized losses		(101,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value		10,605,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses		(60,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value		2,910,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses		(41,000)
Available-for-sale securities with unrealized loss positions, fair value		13,515,000
Available-for-sale securities, with unrealized loss positions, unrealized losses		(101,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	21,736,000	142,924,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(198,000)	(1,022,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	44,291,000	63,752,000
Obligations of states and political subdivisions, Tax-exempt	(431,000)	(1,716,000)
Available-for-sale securities with unrealized loss positions, fair value	66,027,000	206,676,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	(629,000)	(2,738,000)
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value	21,736,000	142,924,000
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses	(198,000)	(1,022,000)
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value	44,291,000	63,752,000
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses	(431,000)	(1,716,000)
Available-for-sale securities with unrealized loss positions, fair value	66,027,000	206,676,000
Available-for-sale securities, with unrealized loss positions, unrealized losses	$ (629,000)	$ (2,738,000)

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Note 6 - Securities - Gross Realized Gains and Losses from Available-for-sale Securities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Available-for-sale Securities, Gross Realized Gains	$ 383,000	$ 74,000
Gross realized losses from sales	0	0
Net realized gains	$ 383,000	$ 74,000

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Note 6 - Securities - Available-for-sale Debt Securities by Contractual Maturity (Details) $ in Thousands	Mar. 31, 2016 USD ($)
Collateralized Mortgage Obligations [Member]
Available-for-sale debt securities, amortized cost	$ 72,210
Available-for-sale debt securities, fair value	73,243
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Available-for-sale debt securities, amortized cost	179,731
Available-for-sale debt securities, fair value	180,860
Due in one year or less	10,374
Due in one year or less	10,451
Due from one year through five years	65,791
Due from one year through five years	67,520
Due from five years through ten years	45,949
Due from five years through ten years	47,676
Due after ten years	30,072
Due after ten years	32,120
Subtotal	152,186
Subtotal	157,767
Total	404,127
Total	$ 411,870

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Note 7 - Loans (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Loans Receivable 1 [Member] | Credit Availability Concentration Risk [Member]
Concentration Risk, Percentage	0.00%	0.00%
Unfunded Loan Commitment [Member]
Financing Receivable, Allowance for Credit Losses	$ 0	$ 0
Commercial and Industrial [Member] | Commercial Portfolio Segment [Member] | Extended Maturity [Member]
Allowance for Credit Losses, Change in Method of Calculating Impairment	0
Allowance for Loan and Lease Losses, Period Increase (Decrease)	0
Commercial and Industrial [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses	976,000	981,000	$ 684,000	$ 688,000
Real Estate Loan [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses	2,027,000	1,939,000	1,736,000	1,758,000
Real Estate Loan [Member] | Residential Portfolio Segment [Member] | Senior Lien [Member]
Financing Receivable, Allowance for Credit Losses	$ 2,722,000	2,645,000	2,774,000	2,941,000
Allowance for Credit Losses, Change in Method of Calculating Impairment		0
Allowance for Loan and Lease Losses, Period Increase (Decrease)		0
Commercial Loan [Member]
Loans Receivable Secured by Real Estate Percentage	59.00%
Minimum [Member]
Financing Receivable Individually Evaluated for Impairment Threshold With Extension of Credit	$ 200,000
Financing Receivable Individually Evaluated for Impairment Estimated Loss Trigger	100,000
Maximum [Member]
Financing Receivable Individually Evaluated for Impairment Threshold With Estimated Loss	200,000
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses	3,607,000	3,922,000	3,098,000	3,143,000
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses	3,501,000	3,418,000	3,503,000	3,653,000
Financing Receivable, Allowance for Credit Losses	7,661,000	$ 7,889,000	7,134,000	$ 7,336,000
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 0		$ 0

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Note 7 - Loans - Loans Receivable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	$ 306,753,000	$ 304,783,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	21,622,000	21,146,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	38,627,000	39,040,000
Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	20,010,000	21,121,000
Residential Portfolio Segment [Member]
Loans receivable	387,012,000	386,090,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	154,646,000	154,779,000
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	7,445,000	5,122,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	71,628,000	75,196,000
Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	38,364,000	40,007,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	7,168,000	7,019,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	8,393,000	9,188,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	4,492,000	4,671,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	11,387,000	12,152,000
Commercial Portfolio Segment [Member]
Loans receivable	303,523,000	308,134,000
Consumer Portfolio Segment [Member]
Loans receivable	11,070,000	10,656,000
Loans receivable	701,605,000	704,880,000
Less: allowance for loan losses	(7,661,000)	(7,889,000)
Loans, net	$ 693,944,000	$ 696,991,000

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Note 7 - Loans - Allowance for Loan Losses (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Allowance for loan losses	$ 2,645,000	$ 2,941,000
Allowance for loan losses, charge-offs	0	(79,000)
Allowance for loan losses, recoveries	0	1,000
Allowance for loan losses, provision	77,000	(89,000)
Allowance for loan losses	2,722,000	2,774,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Allowance for loan losses	219,000	176,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	9,000	24,000
Allowance for loan losses	228,000	200,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Allowance for loan losses	347,000	322,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	4,000	0
Allowance for loan losses	351,000	322,000
Residential Portfolio Segment [Member] | Construction Loans [Member]
Allowance for loan losses	207,000	214,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	(7,000)	(7,000)
Allowance for loan losses	200,000	207,000
Residential Portfolio Segment [Member]
Allowance for loan losses	3,418,000	3,653,000
Allowance for loan losses, charge-offs	0	(79,000)
Allowance for loan losses, recoveries	0	1,000
Allowance for loan losses, provision	83,000	(72,000)
Allowance for loan losses	3,501,000	3,503,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Allowance for loan losses	1,939,000	1,758,000
Allowance for loan losses, charge-offs	0	(115,000)
Allowance for loan losses, recoveries	1,000	0
Allowance for loan losses, provision	87,000	93,000
Allowance for loan losses	2,027,000	1,736,000
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Allowance for loan losses	58,000	283,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	26,000	3,000
Allowance for loan losses	84,000	286,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Allowance for loan losses	981,000	688,000
Allowance for loan losses, charge-offs	0	(10,000)
Allowance for loan losses, recoveries	1,000	1,000
Allowance for loan losses, provision	(6,000)	5,000
Allowance for loan losses	976,000	684,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Allowance for loan losses	106,000	165,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	2,000	(6,000)
Allowance for loan losses	108,000	159,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Allowance for loan losses	675,000	87,000
Allowance for loan losses, charge-offs	(595,000)	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	176,000	(6,000)
Allowance for loan losses	256,000	81,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Allowance for loan losses	45,000	31,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	(1,000)	(2,000)
Allowance for loan losses	44,000	29,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Allowance for loan losses	118,000	131,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	(6,000)	(8,000)
Allowance for loan losses	112,000	123,000
Commercial Portfolio Segment [Member]
Allowance for loan losses	3,922,000	3,143,000
Allowance for loan losses, charge-offs	(595,000)	(125,000)
Allowance for loan losses, recoveries	2,000	1,000
Allowance for loan losses, provision	278,000	79,000
Allowance for loan losses	3,607,000	3,098,000
Consumer Portfolio Segment [Member]
Allowance for loan losses	122,000	145,000
Allowance for loan losses, charge-offs	(18,000)	(18,000)
Allowance for loan losses, recoveries	15,000	15,000
Allowance for loan losses, provision	7,000	(3,000)
Allowance for loan losses	126,000	139,000
Unallocated Financing Receivables [Member]
Allowance for loan losses	427,000	395,000
Allowance for loan losses, charge-offs	0	0
Allowance for loan losses, recoveries	0	0
Allowance for loan losses, provision	0	(1,000)
Allowance for loan losses	427,000	394,000
Allowance for loan losses	7,889,000	7,336,000
Allowance for loan losses, charge-offs	(613,000)	(222,000)
Allowance for loan losses, recoveries	17,000	17,000
Allowance for loan losses, provision	368,000	3,000
Allowance for loan losses	$ 7,661,000	$ 7,134,000

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Note 7 - Loans - Outstanding Loans by Risk Rating (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Pass [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	$ 296,394,000	$ 295,302,000
Pass [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	20,920,000	20,558,000
Pass [Member] | Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	37,570,000	38,071,000
Pass [Member] | Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	19,994,000	21,104,000
Pass [Member] | Residential Portfolio Segment [Member]
Loans receivable	374,878,000	375,035,000
Pass [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	140,985,000	140,381,000
Pass [Member] | Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	7,282,000	4,957,000
Pass [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	67,568,000	71,225,000
Pass [Member] | Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	38,364,000	40,007,000
Pass [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	5,452,000	5,084,000
Pass [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	7,751,000	7,943,000
Pass [Member] | Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	4,478,000	4,655,000
Pass [Member] | Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	11,309,000	12,073,000
Pass [Member] | Commercial Portfolio Segment [Member]
Loans receivable	283,189,000	286,325,000
Pass [Member] | Consumer Portfolio Segment [Member]
Loans receivable	10,878,000	10,490,000
Pass [Member]
Loans receivable	668,945,000	671,850,000
Special Mention [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	378,000	407,000
Special Mention [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	276,000	185,000
Special Mention [Member] | Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	492,000	543,000
Special Mention [Member] | Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	16,000	17,000
Special Mention [Member] | Residential Portfolio Segment [Member]
Loans receivable	1,162,000	1,152,000
Special Mention [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	4,444,000	5,862,000
Special Mention [Member] | Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	60,000	60,000
Special Mention [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	2,257,000	2,106,000
Special Mention [Member] | Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	171,000	483,000
Special Mention [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member]
Loans receivable	6,932,000	8,511,000
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans receivable	20,000	21,000
Special Mention [Member]
Loans receivable	8,114,000	9,684,000
Substandard [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	9,915,000	9,007,000
Substandard [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	426,000	403,000
Substandard [Member] | Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	565,000	426,000
Substandard [Member] | Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Substandard [Member] | Residential Portfolio Segment [Member]
Loans receivable	10,906,000	9,836,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	9,217,000	8,536,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	103,000	105,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	1,676,000	1,737,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	0	0
Substandard [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	1,525,000	1,432,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	642,000	1,245,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	14,000	16,000
Substandard [Member] | Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	78,000	79,000
Substandard [Member] | Commercial Portfolio Segment [Member]
Loans receivable	13,255,000	13,150,000
Substandard [Member] | Consumer Portfolio Segment [Member]
Loans receivable	172,000	145,000
Substandard [Member]
Loans receivable	24,333,000	23,131,000
Doubtful [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	66,000	67,000
Doubtful [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	0	0
Doubtful [Member] | Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	0	0
Doubtful [Member] | Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Doubtful [Member] | Residential Portfolio Segment [Member]
Loans receivable	66,000	67,000
Doubtful [Member] | Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	127,000	128,000
Doubtful [Member] | Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	20,000	20,000
Doubtful [Member] | Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member]
Loans receivable	147,000	148,000
Doubtful [Member] | Consumer Portfolio Segment [Member]
Loans receivable	0	0
Doubtful [Member]
Loans receivable	213,000	215,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	306,753,000	304,783,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	21,622,000	21,146,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	38,627,000	39,040,000
Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	20,010,000	21,121,000
Residential Portfolio Segment [Member]
Loans receivable	387,012,000	386,090,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	154,646,000	154,779,000
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	7,445,000	5,122,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	71,628,000	75,196,000
Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	38,364,000	40,007,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	7,168,000	7,019,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	8,393,000	9,188,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	4,492,000	4,671,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	11,387,000	12,152,000
Commercial Portfolio Segment [Member]
Loans receivable	303,523,000	308,134,000
Consumer Portfolio Segment [Member]
Loans receivable	11,070,000	10,656,000
Loans receivable	$ 701,605,000	$ 704,880,000

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Note 7 - Loans - Loan Balances and Allowance for Loan Losses for Each Impairment Method (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable: individually evaluated	$ 833,000	$ 884,000
Loans receivable: collectively evaluated	305,920,000	303,899,000
Loans receivable	306,753,000	304,783,000
Allowance for loan losses: individually evaluated	0	1,000
Allowance for loan losses: collectively evaluated	2,722,000	2,644,000
Financing Receivable, Allowance for Credit Losses	2,722,000	2,645,000	$ 2,774,000	$ 2,941,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable: individually evaluated	72,000	74,000
Loans receivable: collectively evaluated	21,550,000	21,072,000
Loans receivable	21,622,000	21,146,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	228,000	219,000
Financing Receivable, Allowance for Credit Losses	228,000	219,000	200,000	176,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable: individually evaluated	0	0
Loans receivable: collectively evaluated	38,627,000	39,040,000
Loans receivable	38,627,000	39,040,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	351,000	347,000
Financing Receivable, Allowance for Credit Losses	351,000	347,000	322,000	322,000
Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable: individually evaluated	0	0
Loans receivable: collectively evaluated	20,010,000	21,121,000
Loans receivable	20,010,000	21,121,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	200,000	207,000
Financing Receivable, Allowance for Credit Losses	200,000	207,000	207,000	214,000
Residential Portfolio Segment [Member]
Loans receivable: individually evaluated	905,000	958,000
Loans receivable: collectively evaluated	386,107,000	385,132,000
Loans receivable	387,012,000	386,090,000
Allowance for loan losses: individually evaluated	0	1,000
Allowance for loan losses: collectively evaluated	3,501,000	3,417,000
Financing Receivable, Allowance for Credit Losses	3,501,000	3,418,000	3,503,000	3,653,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable: individually evaluated	6,065,000	6,262,000
Loans receivable: collectively evaluated	148,581,000	148,517,000
Loans receivable	154,646,000	154,779,000
Allowance for loan losses: individually evaluated	96,000	97,000
Allowance for loan losses: collectively evaluated	1,931,000	1,842,000
Financing Receivable, Allowance for Credit Losses	2,027,000	1,939,000	1,736,000	1,758,000
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable: individually evaluated	0	0
Loans receivable: collectively evaluated	7,445,000	5,122,000
Loans receivable	7,445,000	5,122,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	84,000	58,000
Financing Receivable, Allowance for Credit Losses	84,000	58,000	286,000	283,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable: individually evaluated	832,000	324,000
Loans receivable: collectively evaluated	70,796,000	74,872,000
Loans receivable	71,628,000	75,196,000
Allowance for loan losses: individually evaluated	155,000	75,000
Allowance for loan losses: collectively evaluated	821,000	906,000
Financing Receivable, Allowance for Credit Losses	976,000	981,000	684,000	688,000
Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable: individually evaluated	0	0
Loans receivable: collectively evaluated	38,364,000	40,007,000
Loans receivable	38,364,000	40,007,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	0	0
Financing Receivable, Allowance for Credit Losses	0	0
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable: individually evaluated	1,418,000	1,427,000
Loans receivable: collectively evaluated	5,750,000	5,592,000
Loans receivable	7,168,000	7,019,000
Allowance for loan losses: individually evaluated	52,000	52,000
Allowance for loan losses: collectively evaluated	56,000	54,000
Financing Receivable, Allowance for Credit Losses	108,000	106,000	159,000	165,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable: individually evaluated	392,000	987,000
Loans receivable: collectively evaluated	8,001,000	8,201,000
Loans receivable	8,393,000	9,188,000
Allowance for loan losses: individually evaluated	0	595,000
Allowance for loan losses: collectively evaluated	256,000	80,000
Financing Receivable, Allowance for Credit Losses	256,000	675,000	81,000	87,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable: individually evaluated	14,000	16,000
Loans receivable: collectively evaluated	4,478,000	4,655,000
Loans receivable	4,492,000	4,671,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	44,000	45,000
Financing Receivable, Allowance for Credit Losses	44,000	45,000	29,000	31,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable: individually evaluated	0	0
Loans receivable: collectively evaluated	11,387,000	12,152,000
Loans receivable	11,387,000	12,152,000
Allowance for loan losses: individually evaluated	0	0
Allowance for loan losses: collectively evaluated	112,000	118,000
Financing Receivable, Allowance for Credit Losses	112,000	118,000	123,000	131,000
Commercial Portfolio Segment [Member]
Loans receivable: individually evaluated	8,721,000	9,016,000
Loans receivable: collectively evaluated	294,802,000	299,118,000
Loans receivable	303,523,000	308,134,000
Allowance for loan losses: individually evaluated	303,000	819,000
Allowance for loan losses: collectively evaluated	3,304,000	3,103,000
Financing Receivable, Allowance for Credit Losses	3,607,000	3,922,000	3,098,000	3,143,000
Consumer Portfolio Segment [Member]
Loans receivable: individually evaluated	4,000	0
Loans receivable: collectively evaluated	11,066,000	10,656,000
Loans receivable	11,070,000	10,656,000
Allowance for loan losses: individually evaluated	3,000	0
Allowance for loan losses: collectively evaluated	123,000	122,000
Financing Receivable, Allowance for Credit Losses	126,000	122,000	139,000	145,000
Unallocated Financing Receivables [Member]
Financing Receivable, Allowance for Credit Losses	427,000	427,000	394,000	395,000
Loans receivable: individually evaluated	9,630,000	9,974,000
Loans receivable: collectively evaluated	691,975,000	694,906,000
Loans receivable	701,605,000	704,880,000
Allowance for loan losses: individually evaluated	306,000	820,000
Allowance for loan losses: collectively evaluated	6,928,000	6,642,000
Financing Receivable, Allowance for Credit Losses	$ 7,661,000	$ 7,889,000	$ 7,134,000	$ 7,336,000

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Note 7 - Loans - Impaired Loans (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	$ 833,000	$ 842,000
Recorded investment - with no allowance	833,000	842,000
With a related allowance recorded:
Unpaid principal - with allowance	0	42,000
Recorded investment - with allowance	0	42,000
Related allowance - with allowance	0	1,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	72,000	74,000
Recorded investment - with no allowance	72,000	74,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	7,415,000	7,580,000
Recorded investment - with no allowance	5,754,000	5,945,000
With a related allowance recorded:
Unpaid principal - with allowance	311,000	317,000
Recorded investment - with allowance	311,000	317,000
Related allowance - with allowance	96,000	97,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	237,000	249,000
Recorded investment - with no allowance	237,000	249,000
With a related allowance recorded:
Unpaid principal - with allowance	595,000	75,000
Recorded investment - with allowance	595,000	75,000
Related allowance - with allowance	155,000	75,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	908,000	915,000
Recorded investment - with no allowance	908,000	915,000
With a related allowance recorded:
Unpaid principal - with allowance	510,000	512,000
Recorded investment - with allowance	510,000	512,000
Related allowance - with allowance	52,000	52,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	987,000	0
Recorded investment - with no allowance	392,000	0
With a related allowance recorded:
Unpaid principal - with allowance	0	987,000
Recorded investment - with allowance	0	987,000
Related allowance - with allowance	0	595,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
With no related allowance recorded:
Unpaid principal - with no allowance	14,000	16,000
Recorded investment - with no allowance	14,000	16,000
Consumer Portfolio Segment [Member]
With a related allowance recorded:
Unpaid principal - with allowance	4,000	0
Recorded investment - with allowance	4,000	0
Related allowance - with allowance	3,000	0
Unpaid principal - with no allowance	10,466,000	9,676,000
Recorded investment - with no allowance	8,210,000	8,041,000
Unpaid principal - with allowance	1,420,000	1,933,000
Recorded investment - with allowance	1,420,000	1,933,000
Related allowance - with allowance	306,000	820,000
Total	11,886,000	11,609,000
Total	$ 9,630,000	$ 9,974,000

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Note 7 - Loans - Average Balance of Impaired Loans and Income Recognized on Impaired Loans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Average investment in impaired loans	$ 861,000	$ 3,442,000
Interest income recognized on impaired loans on a cash basis	10,000	14,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Average investment in impaired loans	73,000	48,000
Interest income recognized on impaired loans on a cash basis	1,000	1,000
Residential Portfolio Segment [Member]
Average investment in impaired loans	934,000	3,490,000
Interest income recognized on impaired loans on a cash basis	11,000	15,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Average investment in impaired loans	6,160,000	6,588,000
Interest income recognized on impaired loans on a cash basis	110,000	112,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Average investment in impaired loans	568,000	603,000
Interest income recognized on impaired loans on a cash basis	3,000	7,000
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Average investment in impaired loans	0	75,000
Interest income recognized on impaired loans on a cash basis	0	0
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Average investment in impaired loans	1,423,000	1,465,000
Interest income recognized on impaired loans on a cash basis	21,000	26,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Average investment in impaired loans	690,000	519,000
Interest income recognized on impaired loans on a cash basis	0	25,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Average investment in impaired loans	15,000	0
Interest income recognized on impaired loans on a cash basis	1,000	0
Commercial Portfolio Segment [Member]
Average investment in impaired loans	8,856,000	9,250,000
Interest income recognized on impaired loans on a cash basis	135,000	170,000
Consumer Portfolio Segment [Member]
Average investment in impaired loans	12,000	0
Interest income recognized on impaired loans on a cash basis	0	0
Average investment in impaired loans	9,802,000	12,740,000
Interest income recognized on impaired loans on a cash basis	$ 146,000	$ 185,000

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Note 7 - Loans - Nonaccrual Loans and Loans Past Due Ninety Days or More and Still Accruing (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans past due 90+ days and accruing	$ 2,680,000	$ 2,381,000
Nonaccrual loans	3,080,000	3,044,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans past due 90+ days and accruing	140,000	79,000
Nonaccrual loans	0	0
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans past due 90+ days and accruing	175,000	130,000
Nonaccrual loans	0	0
Residential Portfolio Segment [Member]
Loans past due 90+ days and accruing	2,995,000	2,590,000
Nonaccrual loans	3,080,000	3,044,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans past due 90+ days and accruing	539,000	503,000
Nonaccrual loans	5,689,000	5,730,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans past due 90+ days and accruing	318,000	65,000
Nonaccrual loans	312,000	313,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans past due 90+ days and accruing	102,000	0
Nonaccrual loans	1,418,000	1,427,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans past due 90+ days and accruing	0	0
Nonaccrual loans	392,000	987,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans past due 90+ days and accruing	0	0
Nonaccrual loans	14,000	16,000
Commercial Portfolio Segment [Member]
Loans past due 90+ days and accruing	959,000	568,000
Nonaccrual loans	7,825,000	8,473,000
Consumer Portfolio Segment [Member]
Loans past due 90+ days and accruing	3,000	71,000
Nonaccrual loans	39,000	0
Loans past due 90+ days and accruing	3,957,000	3,229,000
Nonaccrual loans	$ 10,944,000	$ 11,517,000

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Note 7 - Loans - Contractual Aging of Loans (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	$ 295,485,000	$ 294,703,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	7,234,000	6,156,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	4,034,000	3,924,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Loans receivable	306,753,000	304,783,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	21,340,000	20,816,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	142,000	251,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	140,000	79,000
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Loans receivable	21,622,000	21,146,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	37,977,000	38,581,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	475,000	329,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	175,000	130,000
Residential Portfolio Segment [Member] | Home Equity Line of Credit 1 [Member]
Loans receivable	38,627,000	39,040,000
Residential Portfolio Segment [Member] | Construction Loans [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	19,867,000	21,121,000
Residential Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	143,000	0
Residential Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Residential Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	20,010,000	21,121,000
Residential Portfolio Segment [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	374,669,000	375,221,000
Residential Portfolio Segment [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	7,994,000	6,736,000
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	4,349,000	4,133,000
Residential Portfolio Segment [Member]
Loans receivable	387,012,000	386,090,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	150,087,000	153,427,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	3,280,000	108,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	1,279,000	1,244,000
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Loans receivable	154,646,000	154,779,000
Commercial Portfolio Segment [Member] | Construction Loans [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	7,311,000	5,018,000
Commercial Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	134,000	104,000
Commercial Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	7,445,000	5,122,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	71,123,000	75,002,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	168,000	118,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	337,000	76,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Loans receivable	71,628,000	75,196,000
Commercial Portfolio Segment [Member] | Political Subdivisions [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	38,364,000	40,007,000
Commercial Portfolio Segment [Member] | Political Subdivisions [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Political Subdivisions [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Political Subdivisions [Member]
Loans receivable	38,364,000	40,007,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	6,025,000	5,970,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	221,000	223,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	922,000	826,000
Commercial Portfolio Segment [Member] | Loans Secured by Farmland [Member]
Loans receivable	7,168,000	7,019,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	7,928,000	8,201,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	73,000	0
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	392,000	987,000
Commercial Portfolio Segment [Member] | Multifamily 5 or More Residential [Member]
Loans receivable	8,393,000	9,188,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	4,398,000	4,642,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	80,000	13,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	14,000	16,000
Commercial Portfolio Segment [Member] | Agricultural Loans [Member]
Loans receivable	4,492,000	4,671,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	11,387,000	12,152,000
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	0	0
Commercial Portfolio Segment [Member] | Other Commercial Loans[Member]
Loans receivable	11,387,000	12,152,000
Commercial Portfolio Segment [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	296,623,000	304,419,000
Commercial Portfolio Segment [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	3,956,000	566,000
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	2,944,000	3,149,000
Commercial Portfolio Segment [Member]
Loans receivable	303,523,000	308,134,000
Consumer Portfolio Segment [Member] | Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	10,933,000	10,537,000
Consumer Portfolio Segment [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	95,000	48,000
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	42,000	71,000
Consumer Portfolio Segment [Member]
Loans receivable	11,070,000	10,656,000
Current Financing Receivables, 1 to 29 Days Past Due [Member]
Loans past due	682,225,000	690,177,000
Financing Receivables 30 to 89 Days Past Due [Member]
Loans past due	12,045,000	7,350,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	7,335,000	7,353,000
Loans receivable	$ 701,605,000	$ 704,880,000

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Note 7 - Loans - Contractual Aging of Nonaccrual Loans (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Non accrual Loans [Member] | Financing Receivables, 1 to 29 Days Past Due [Member]
Loans current and past due	$ 6,894,000	$ 7,100,000
Non accrual Loans [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Loans current and past due	672,000	293,000
Non accrual Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans current and past due	3,378,000	4,124,000
Non accrual Loans [Member]
Loans current and past due	10,944,000	11,517,000
Loans current and past due	$ 10,944,000	$ 11,517,000

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Note 7 - Loans - Aging of Troubled Debt Restructings (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Troubled Debt Restructuring [Member] | Financing Receivables, 1 to 29 Days Past Due [Member]
Troubled debt restructurings, current and past due	$ 925,000	$ 1,186,000
Troubled Debt Restructuring [Member] | Financing Receivables 30 to 89 Days Past Due [Member]
Troubled debt restructurings, current and past due	242,000	0
Troubled Debt Restructuring [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Troubled debt restructurings, current and past due	86,000	81,000
Troubled Debt Restructuring [Member]
Troubled debt restructurings, current and past due	6,313,000	6,364,000
Troubled debt restructurings, nonaccrual	5,060,000	5,097,000
Financing Receivables 30 to 89 Days Past Due [Member]
Troubled debt restructurings, current and past due	12,045,000	7,350,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Troubled debt restructurings, current and past due	7,335,000	7,353,000
Troubled debt restructurings, nonaccrual	$ 10,944,000	$ 11,517,000

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Note 7 - Loans - Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Troubled debt restructurings, number of contracts	1
Troubled debt restructurings, pre-modification outstanding recorded investment	$ 5
Troubled debt restructurings, post-modification outstanding recorded investment	$ 5
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Troubled debt restructurings, number of contracts		1
Troubled debt restructurings, pre-modification outstanding recorded investment		$ 56
Troubled debt restructurings, post-modification outstanding recorded investment		$ 56
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Junior Lien [Member]
Troubled debt restructurings, number of contracts		1
Troubled debt restructurings, pre-modification outstanding recorded investment		$ 32
Troubled debt restructurings, post-modification outstanding recorded investment		$ 32
Consumer Portfolio Segment [Member]
Troubled debt restructurings, number of contracts		1
Troubled debt restructurings, pre-modification outstanding recorded investment		$ 30
Troubled debt restructurings, post-modification outstanding recorded investment		$ 30

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Note 7 - Loans - Defaults on Loans with Previous Modifications (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Senior Lien [Member]
Troubled debt restructuring defaults, number of contracts	1	2
Troubled debt restructuring defaults, recorded investment	$ 31	$ 115
Commercial Portfolio Segment [Member] | Real Estate Loan [Member]
Troubled debt restructuring defaults, number of contracts		1
Troubled debt restructuring defaults, recorded investment		$ 407
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Troubled debt restructuring defaults, number of contracts	1
Troubled debt restructuring defaults, recorded investment	$ 5
Commercial Portfolio Segment [Member] | Construction Loans [Member]
Troubled debt restructuring defaults, number of contracts		1
Troubled debt restructuring defaults, recorded investment		$ 25

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Note 7 - Loans - Foreclosed Residential Real Estate (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member]
Foreclosed residential real estate	$ 883	$ 555

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Note 7 - Loans - Mortgage Loans in Process of Foreclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member]
Residential real estate in process of foreclosure	$ 931	$ 1,173

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Note 8 - Borrowed Funds (Details Textual)	3 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Federal Home Loan Bank of Pittsburgh [Member] | Other Assets [Member]
Federal Home Loan Bank Stock	$ 3,131,000	$ 4,527,000
Federal Home Loan Bank of Pittsburgh [Member] | Federal Home Loan Bank Advances [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage	0.77%
Federal Home Loan Bank of Pittsburgh [Member] | Federal Home Loan Bank Advances [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.052%
Federal Home Loan Bank of Pittsburgh [Member] | Federal Home Loan Bank Advances [Member]
Number of Short-term Advances	9
Short-term Borrowing, Amount of Each Borrowing	$ 2,090,000
Short-term Debt, Weighted Average Interest Rate	0.94%
Repayment of Short-term Borrowing, Number of Advances	3
Repayments of Short-term Borrowing, Amount of Each Borrowing	$ 2,090,000
Repayment of Short-term Debt, Weighted Average Interest Rate	0.62%
Federal Home Loan Bank of Pittsburgh [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 448,336,000	450,883,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 297,186,000
Securities Sold under Agreements to Repurchase [Member]
Debt, Weighted Average Interest Rate	0.10%
Repurchase Agreement Maturing in 2017 with a Rate of 3.595% [Member]
Debt Instrument, Interest Rate, Stated Percentage	3.595%
Carrying Value of Securities Sold under Repurchase Agreements and Deposits Received for Securities Loaned	$ 12,100,000	12,613,000
Securities Sold under Agreements to Repurchase, Asset	$ 32,701,000	$ 33,780,000

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Note 8 - Borrowed Funds - Short-term Borrowings (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Federal Home Loan Bank of Pittsburgh [Member] | Federal Home Loan Bank Advances [Member]
Short-term borrowings	$ 18,811,000	$ 48,581,000
Federal Home Loan Bank of Pittsburgh [Member] | Overnight Borrowing [Member]
Short-term borrowings	0	23,500,000
Federal Home Loan Bank of Pittsburgh [Member] | Other Short-term Debt [Member]
Short-term borrowings	18,811,000	25,081,000
Federal Home Loan Bank of Pittsburgh [Member]
Short-term borrowings	18,811,000	48,581,000
Securities Sold under Agreements to Repurchase [Member]
Short-term borrowings	7,141,000	4,915,000
Short-term borrowings	$ 25,952,000	$ 53,496,000

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Note 8 - Borrowed Funds - Long-term Borrowings (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Federal Home Loan Bank Advances [Member]
Long-term borrowings	$ 11,692,000	$ 11,767,000
Repurchase Agreements [Member]
Long-term borrowings	27,000,000	27,000,000
Long-term borrowings	$ 38,692,000	$ 38,767,000

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Note 8 - Borrowed Funds - Long-term Borrowing Maturities (Details) - Federal Home Loan Bank of Pittsburgh [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Federal Home Loan Bank Borrowings Loan Maturing in 2016 with Rate of 686 [Member]
Long-term borrowings from FHLB- Pittsburgh	$ 45	$ 57
Federal Home Loan Bank Borrowings Loan Maturing in 2017 With Rate of 683 [Member]
Long-term borrowings from FHLB- Pittsburgh	9	10
Federal Home Loan Bank Borrowings Loan Maturing in 2017 with Rate of 381 [Member]
Long-term borrowings from FHLB- Pittsburgh	10,000	10,000
Federal Home Loan Bank Borrowings Loan Maturing in 2020 with Rate of 479 [Member]
Long-term borrowings from FHLB- Pittsburgh	778	821
Federal Home Loan Bank Borrowings Loan Maturing in 2025 with Rate of 491 [Member]
Long-term borrowings from FHLB- Pittsburgh	860	879
Long-term borrowings from FHLB- Pittsburgh	$ 11,692	$ 11,767

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Note 8 - Borrowed Funds - Long-term Borrowing Maturities (Details) (Parentheticals) - Federal Home Loan Bank of Pittsburgh [Member]	Mar. 31, 2016 Rate	Dec. 31, 2015 Rate
Federal Home Loan Bank Borrowings Loan Maturing in 2016 with Rate of 686 [Member]
Rate	6.86%	6.86%
Federal Home Loan Bank Borrowings Loan Maturing in 2017 With Rate of 683 [Member]
Rate	6.83%	6.83%
Federal Home Loan Bank Borrowings Loan Maturing in 2017 with Rate of 381 [Member]
Rate	3.81%	3.81%
Federal Home Loan Bank Borrowings Loan Maturing in 2020 with Rate of 479 [Member]
Rate	4.79%	4.79%
Federal Home Loan Bank Borrowings Loan Maturing in 2025 with Rate of 491 [Member]
Rate	4.91%	4.91%

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Note 8 - Borrowed Funds - Underlying Securities (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities Sold under Agreements to Repurchase, Asset	$ 15,526,000	$ 15,772,000
Collateralized Mortgage Obligations [Member]
Securities Sold under Agreements to Repurchase, Asset	17,175,000	18,008,000
Securities Sold under Agreements to Repurchase, Asset	$ 32,701,000	$ 33,780,000

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Note 9 - Defined Benefit Plans (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2016
Scenario, Forecast [Member]
Pension and Other Postretirement Benefit Contributions		$ 68,000
Defined Benefit Plan Required Contributions in Current Fiscal Year	$ 0
Pension and Other Postretirement Benefit Contributions	$ 18,000

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Note 9 - Defined Benefit Plans - Net Periodic Benefit Costs (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension Plan [Member]
Service cost	$ 0	$ 0
Interest cost	7,000	9,000
Expected return on plan assets	(7,000)	(11,000)
Amortization of prior service cost	0	0
Recognized net actuarial loss	3,000	4,000
Net periodic benefit cost	3,000	2,000
Other Postretirement Benefit Plan [Member]
Service cost	9,000	10,000
Interest cost	16,000	13,000
Expected return on plan assets	0	0
Amortization of prior service cost	(8,000)	(7,000)
Recognized net actuarial loss	0	0
Net periodic benefit cost	$ 17,000	$ 16,000

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Note 10 - Stock-based Compensation Plans (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restricted Stock [Member] | Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		20,298
Share Based Compensation Arrangement by Share Based Payment Award Contingent Vesting Shares	17,289
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years	4 years
Restricted Stock [Member] | Independent Directors Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	6,606	7,130
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year	1 year
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	34,199	34,800
Allocated Share-based Compensation Expense	$ 162,000	$ 150,000
Performance Shares [Member] | Stock Incentive Plan [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		5,174
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years
Performance Shares [Member] | Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	10,304	2,198
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years	4 years

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Note 11 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Other Assets [Member]
Amortization Method Qualified Affordable Housing Project Investments	$ 787,000			$ 812,000
Scenario, Forecast [Member]
Income Tax Credits and Adjustments			$ 158,000
Income Tax Expense Benefit Increase Decrease			$ 76,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%
Income Tax Credits and Adjustments				158,000
Income Tax Expense Benefit Increase Decrease	$ 19,000	$ 20,000		$ 80,000
Unrecognized Tax Benefits	$ 0

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Note 11 - Income Taxes - Net Deferred Tax Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Net realized losses on securities	$ 36	$ 69
Allowance for loan losses	2,623	2,761
Other deferred tax assets	2,238	2,634
Total deferred tax assets	4,897	5,464
Deferred tax liabilities:
Unrealized holding gains on securities	2,879	1,342
Defined benefit plans - ASC 835	26	19
Bank premises and equipment	926	869
Core deposit intangibles	10	11
Other deferred tax liabilities	107	108
Total deferred tax liabilities	3,948	2,349
Deferred tax asset, net	$ 949	$ 3,115

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Note 11 - Income Taxes - Reconciliation of Income Tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income before income tax provision	$ 4,666	$ 5,044
Income tax provision	$ 1,093	$ 1,229
Effective tax rate	23.42%	24.37%

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Note 14 -Subsequent Event (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015	Apr. 21, 2016	Dec. 31, 2015
July 2014 Repurchase Program [Member] | Subsequent Event [Member]
Treasury Stock, Shares, Acquired	622,500
Treasury Stock, Value, Acquired, Cost Method	$ 12,140,000
Treasury Stock Acquired, Average Cost Per Share	$ 19.50
July 2014 Repurchase Program [Member]
Treasury Stock, Shares		589,550
Treasury Stock, Value		$ 11,870,000
Treasury Stock, Shares		574,141			474,548
Treasury Stock, Value		$ 10,854,000			$ 8,804,000
Treasury Stock, Value, Acquired, Cost Method		$ 3,070,000	$ 3,022,000
Stock Repurchase Program, Number of Shares Authorized to be Repurchased				600,000
Stock Repurchase Program, Shares Authorized to be Repurchase, Percentage of Outstanding Common Stock				5.00%