Citizens & Northern: Time To Jump Back In On This Bank

Aug. 27, 2019 10:03 AM ETCitizens & Northern Corporation (CZNC)3 Comments
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Dividend Diplomats


  • Citizens is down from a high of $29.24 to the current price of $22.66, a 22.5% drop.
  • Citizens acquired Monument Bancorp, Inc., pushing them over $1.6 billion in total assets.
  • Citizens recorded record earnings, excluding merger expenses, through 6 months 2019.

Who exactly is Citizens & Northern (NASDAQ:CZNC) ? They are a $1.6 billion total asset sized bank, based in Wellsboro, PA. They provide traditional banking services - taking in deposits and originating loans. Further, they also have a significant investment and insurance business, with almost $950 million in assets under management on the investment service side.

This may sound plain Jane, but they are an exceptional community bank. In fact, in the last year, Citizens & Northern has gone through a vast change. First, they are currently rebranding their image. Their logo has changed, their culture is changing, and that's partly because of the next big item.

Citizens & Northern, in April 2019, closed on their merger of Monument Bancorp in a deal that cost ~$43 million. Monument had $348 million in total assets that was added right to CZNC's balance sheet after the close.

As I am always eager to add an undervalued community bank to my portfolio, I wanted to re-look at CZNC, as I've owned them in the past, and with the new acquisition, I wanted to see how business was performing and if the dividend metrics look ripe for an add to the current position.

Citizen & Northern's Q2 2019 Performance Review

Where shall we begin? I would say the income statement is a great place to start, as we will have to dissect it slightly, due to the merger we discussed earlier.

Through the first 6 months of 2019, CZNC earned $30.2 in interest income and dividend revenue. Comparatively to last year, this is better by $6 million, as June 30, 2018 produced $24.2 million. That is a massive 25% increase from prior year. Non-interest income remained relatively flat, with a modest 3.4% growth from 6 months 2019 compared to 6 months 2018. The driver of the increase in interest income is primarily related to the merger, as loans

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Two guys who love Investing, Dividends, Frugality, Passive Income & attempting to Reinvest Our Dividends to one day achieve Financial Freedom! Follow us on your journey towards a work-free life! We share EVERY ASPECT of our journey on our blog, social media, and YouTube Channel. Make sure to follow us so you don't miss an update. Updates include the stocks we are watching, buying, selling, and our overall thoughts about the the marketBlog: http://www.dividenddiplomats.comYouTube Channel:

Disclosure: I am/we are long CZNC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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