- Citizens & Northern Corporation (CZNC, Financial) announces an all-stock acquisition of Susquehanna Community Financial, Inc. (SQCF) valued at $44.3 million.
- The transaction is expected to add approximately $600 million in assets to CZNC's balance sheet, expanding its presence in central Pennsylvania.
- The acquisition includes cost savings of about 30% of SQCF's operating base, with full savings anticipated in 2026.
On April 23, 2025, Citizens & Northern Corporation (CZNC), the parent company of Citizens & Northern Bank, revealed its plans to acquire Susquehanna Community Financial, Inc. (SQCF), the parent company of Susquehanna Community Bank, in a definitive all-stock deal valued at $44.3 million. The merger is anticipated to close in the fourth quarter of 2025, pending regulatory approvals.
This strategic acquisition will enable CZNC to extend its reach and solidify its footprint in central Pennsylvania by integrating approximately $600 million in assets. Following the merger, the combined company will feature a pro forma total of $3.2 billion in assets, $2.3 billion in loans, and $2.6 billion in deposits, along with the addition of 7 new branch locations.
In a bid to realize operational efficiencies, CZNC projects cost savings of approximately 30% from SQCF's current operating base, with full savings expected by 2026. Leadership changes accompanying the transaction include Chris Trate, SQCF's Board Chairman, joining the C&N board, and SQCF's CEO Dave Runk and President/COO Jeffrey Hollenbach taking on significant roles within the combined entity.
The acquisition leverages both companies' strong credit quality and complementary loan portfolio compositions, demonstrating nominal credit loss history. CZNC has conducted a thorough review of the loan portfolio to ensure disciplined underwriting standards are maintained, projecting a total gross pre-tax credit mark of $6.2 million and a pre-tax interest rate mark of $14.6 million to be accreted over five years.
Despite a forecasted decline in its CET1 ratio from 13.6% to 11.5% at closing, CZNC's pro forma earnings are expected to support a robust capital rebuild post-acquisition. Overall, the merger aligns with CZNC's growth strategy, aiming to enhance its market position while adhering to its community banking values.
