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ACNB Corporation Reports 2024 Second Quarter Financial Results

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ACNB (NASDAQ: ACNB) reported net income of $11.3 million, or $1.32 diluted earnings per share, for Q2 2024, up from $9.5 million, or $1.12 per share, in Q2 2023. Key highlights include:

- Return on average assets: 1.86%
- Return on average equity: 16.12%
- FTE net interest margin: 3.82%, up from 3.77% in Q1 2024
- Total loans: $1.68 billion, up 6.7% year-over-year
- Non-performing loans ratio: 0.19%, down from 0.24% in Q1 2024
- Total deposits: $1.84 billion
- Loan to deposit ratio: 91.35%

The company's capital levels remain strong, and it declared a quarterly cash dividend of $0.32 per share, a 14.3% increase from the previous year.

ACNB (NASDAQ: ACNB) ha riportato un utile netto di 11,3 milioni di dollari, ovvero 1,32 dollari di utile per azione diluito, per il secondo trimestre del 2024, in aumento rispetto ai 9,5 milioni di dollari, ovvero 1,12 dollari per azione, nel secondo trimestre del 2023. I principali punti salienti includono:

- Rendimento medio sugli attivi: 1,86%
- Rendimento medio sul capitale: 16,12%
- Margine di interesse netto FTE: 3,82%, in aumento rispetto al 3,77% nel primo trimestre del 2024
- Totale prestiti: 1,68 miliardi di dollari, in aumento del 6,7% rispetto all'anno precedente
- Rapporto di prestiti non performanti: 0,19%, in diminuzione rispetto allo 0,24% nel primo trimestre del 2024
- Totale depositi: 1,84 miliardi di dollari
- Rapporto prestiti/depositi: 91,35%

I livelli di capitale dell'azienda rimangono solidi e ha dichiarato un dividendo in contante trimestrale di 0,32 dollari per azione, con un incremento del 14,3% rispetto all'anno precedente.

ACNB (NASDAQ: ACNB) reportó un ingreso neto de 11,3 millones de dólares, o 1,32 dólares de ganancias por acción diluida, para el segundo trimestre de 2024, un aumento desde los 9,5 millones de dólares, o 1,12 dólares por acción, en el segundo trimestre de 2023. Los aspectos destacados incluyen:

- Rendimiento sobre activos promedio: 1,86%
- Rendimiento sobre capital promedio: 16,12%
- Margen de interés neto FTE: 3,82%, en aumento desde el 3,77% en el primer trimestre de 2024
- Total de préstamos: 1,68 mil millones de dólares, un aumento del 6,7% interanual
- Relación de préstamos no productivos: 0,19%, en disminución desde el 0,24% en el primer trimestre de 2024
- Total de depósitos: 1,84 mil millones de dólares
- Relación préstamos/depositos: 91,35%

Los niveles de capital de la empresa permanecen sólidos y se declaró un dividendo en efectivo trimestral de 0,32 dólares por acción, un aumento del 14,3% con respecto al año anterior.

ACNB (NASDAQ: ACNB)는 2024년 2분기에 1,130만 달러의 순이익, 또는 주당 희석 이익 1.32달러를 보고했으며, 이는 2023년 2분기의 950만 달러, 또는 주당 1.12달러에서 증가한 수치입니다. 주요 하이라이트는 다음과 같습니다:

- 평균 자산에 대한 수익률: 1.86%
- 평균 자본에 대한 수익률: 16.12%
- FTE 순 이자 마진: 3.82%, 2024년 1분기의 3.77%에서 증가
- 총 대출: 16.8억 달러, 전년 대비 6.7% 증가
- 부실 대출 비율: 0.19%, 2024년 1분기의 0.24%에서 감소
- 총 예금: 18.4억 달러
- 대출 대비 예금 비율: 91.35%

회사의 자본 수준은 여전히 강력하며, 주당 0.32달러의 분기 현금 배당금을 선언하였고, 이는 전년 대비 14.3% 증가한 수치입니다.

ACNB (NASDAQ: ACNB) a reported un bénéfice net de 11,3 millions de dollars, soit 1,32 dollar de bénéfice par action dilué, pour le deuxième trimestre 2024, en hausse par rapport à 9,5 millions de dollars, soit 1,12 dollar par action, au deuxième trimestre 2023. Les principaux points saillants incluent :

- Rendement sur actifs moyens : 1,86%
- Rendement sur capitaux propres moyens : 16,12%
- Marge d'intérêt net FTE : 3,82%, en hausse par rapport à 3,77% au premier trimestre 2024
- Total des prêts : 1,68 milliard de dollars, en hausse de 6,7 % par rapport à l'année précédente
- Ratio de prêts non performants : 0,19%, en baisse par rapport à 0,24% au premier trimestre 2024
- Total des dépôts : 1,84 milliard de dollars
- Ratio prêts/dépôts : 91,35%

Les niveaux de capital de l'entreprise restent solides et un dividende en espèces trimestriel de 0,32 dollar par action a été déclaré, ce qui représente une augmentation de 14,3 % par rapport à l'année précédente.

ACNB (NASDAQ: ACNB) berichtete über Nettoeinnahmen von 11,3 Millionen Dollar oder 1,32 Dollar verwässertes Ergebnis pro Aktie für das zweite Quartal 2024, ein Anstieg gegenüber 9,5 Millionen Dollar oder 1,12 Dollar pro Aktie im zweiten Quartal 2023. Zu den wichtigsten Highlights gehören:

- Rendite auf durchschnittliche Vermögenswerte: 1,86%
- Rendite auf durchschnittliches Eigenkapital: 16,12%
- Nettozinsspanne FTE: 3,82%, gestiegen von 3,77% im ersten Quartal 2024
- Gesamtbetrag der Kredite: 1,68 Milliarden Dollar, ein Anstieg von 6,7% im Jahresvergleich
- Quote der notleidenden Kredite: 0,19%, gesunken von 0,24% im ersten Quartal 2024
- Gesamteinlagen: 1,84 Milliarden Dollar
- Kredite zu Einlagen Verhältnis: 91,35%

Die Kapitalstufen des Unternehmens bleiben stark, und es wurde eine vierteljährliche Barausschüttung von 0,32 Dollar pro Aktie erklärt, was einem Anstieg von 14,3% im Vergleich zum Vorjahr entspricht.

Positive
  • Net income increased to $11.3 million, up from $9.5 million in Q2 2023
  • Diluted earnings per share rose to $1.32, up from $1.12 in Q2 2023
  • FTE net interest margin improved to 3.82%, marking the first increase after 4 consecutive quarterly declines
  • Total loans grew by 6.7% year-over-year to $1.68 billion
  • Non-performing loans ratio decreased to 0.19% from 0.24% in Q1 2024
  • Quarterly cash dividend increased by 14.3% to $0.32 per share
Negative
  • Total deposits decreased by $125.2 million compared to June 30, 2023
  • Net interest income decreased by $1.0 million, or 4.7%, compared to Q2 2023
  • FTE net interest margin decreased by 29 basis points from 4.11% in Q2 2023 to 3.82% in Q2 2024

Insights

ACNB Corporation's Q2 2024 financial results are strong and show marked improvements compared to both Q1 2024 and Q2 2023. Key metrics such as net income, return on average assets and return on equity have all increased significantly. The net income of $11.3 million and earnings per share of $1.32 reflect the company's ability to manage its assets efficiently, particularly notable given the $3.2 million reversal of the provision for credit losses. This indicates an improvement in loan quality and prudent risk management.

The net interest margin's slight increase to 3.82% is encouraging after four consecutive declines, suggesting stabilization in interest-bearing accounts and loan yields. However, the 4.48% average rate on borrowings, driven by higher promotional deposit rates, indicates rising costs. Investors should keep an eye on how these dynamics evolve.

For retail investors, the performance of ACNB Corporation is promising. The increase in net interest income by 1.8% from Q1 2024 and the uptick in the net interest margin, indicates potential growth opportunities. The reversal of credit loss provisions reflects better-than-expected asset quality. With total loans growing by 6.7% and non-performing loans decreasing, the company is capitalizing on commercial real estate demands.

Noninterest income's rise, driven primarily by insurance commissions and wealth management, underscores ACNB’s strategy to diversify revenue sources. These streams can provide more stability in volatile market conditions. The 14.3% increase in quarterly dividends to $0.32 per share is attractive to income-focused investors, signaling confidence in future cash flows.

ACNB Corporation's financial health is robust, evidenced by a tangible common equity ratio of 9.84% and a stable liquidity position. The increase in total stockholders’ equity by 3.4% from Q1 2024 and 12.5% year-over-year highlights a solid capital base. The corporation’s focus on profitability, despite economic challenges, is reflected in the efficient management of salaries and other operating expenses, which saw notable declines from the previous quarter.

Additionally, ACNB’s strategy to enhance loan quality, reduce non-performing loans and maintain zero net charge-offs speaks volumes about their risk management practices. The bank’s performance amidst rising borrowing costs and promotional deposit rates showcases their ability to manage interest rate risks effectively.

GETTYSBURG, Pa., July 24, 2024 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $11.3 million, or $1.32 diluted earnings per share, for the three months ended June 30, 2024 compared to net income of $9.5 million, or $1.12 diluted earnings per share, for the three months ended June 30, 2023. Compared to the three months ended March 31, 2024, net income and diluted earnings per share for the three months ended June 30, 2024 increased $4.5 million and $0.52, respectively. The financial results for the three month period ended June 30, 2024 were impacted by a $3.2 million reversal of the provision for credit losses and unfunded commitments.

2024 Second Quarter Highlights

  • Return on average assets was 1.86% and return on average equity was 16.12% for the three months ended June 30, 2024.
  • Fully taxable equivalent (“FTE”) net interest margin was 3.82% for the three months ended June 30, 2024 compared to 3.77% for the three months ended March 31, 2024 and 4.11% for the three months ended June 30, 2023. This marked the first linked quarter increase in FTE net interest margin after 4 consecutive quarterly declines.
  • Total loans were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023.
  • Total non-performing loans to total loans, net of unearned income, was 0.19% at June 30, 2024 compared to 0.24% at March 31, 2024 and 0.23% at June 30, 2023. Net charge-offs to average loans outstanding (annualized) were 0.00% for both the three months ended June 30, 2024 and the three months ended March 31, 2024 compared to 0.02% for the three months ended June 30, 2023.
  • Total deposits were $1.84 billion at June 30, 2024, an increase of $3.4 million compared to March 31, 2024. This marked the first linked quarter increase in deposits after 9 consecutive quarterly declines. Total deposits decreased $125.2 million compared to June 30, 2023.
  • The loan to deposit ratio was 91.35% at June 30, 2024 and the ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.
  • Tangible common equity to tangible assets ratio1 of 9.84% at June 30, 2024 compared to 9.61% at March 31, 2024 and 8.75% at June 30, 2023. The net unrealized loss on the available for sale securities portfolio was $52.7 million at June 30, 2024 compared to a net unrealized loss of $53.0 million at March 31, 2024 and a net unrealized loss of $66.1 million at June 30, 2023.
  • ACNB and ACNB Bank capital levels remain well in excess of ACNB’s internal minimums and those required to be categorized as a well-capitalized institution by our bank regulators. ACNB’s overall liquidity position remains strong and stable.

“We are pleased to announce strong results for the second quarter of 2024 which reflect our continued focus on profitability. In spite of the continued economic challenges to the financial services industry our team remains focused on executing our strategic plan centered on our shareholders, customers and our communities,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.

“We continued to experience strong loan demand through the first half of the year combined with stellar asset quality metrics. Our ongoing efforts to diversify our revenue streams with ACNB Insurance Services and our Wealth Management teams continue to show positive momentum. Our net interest margin improved during the quarter, our non-interest expenses were down quarter over quarter and as result we are pleased to report solid operating results both the quarter and year to date.”

Mr. Helt continued, “As we look forward to the remainder of 2024, we remain cautiously optimistic that our strong capital position, ample liquidity, superior asset quality metrics and our focus on profitability will enable us to deliver on our commitment to our many different stakeholders.”

Net Interest Income and Margin

Net interest income for the three months ended June 30, 2024 totaled $21.0 million, a decrease of $1.0 million, or 4.7%, compared to the three months ended June 30, 2023 due to a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 was 3.82%, a decrease of 29 basis points from 4.11% for the three months ended June 30, 2023. The decrease in FTE net interest margin was driven primarily by an increase in long-term borrowings and promotional time deposit balances and costs. Total average borrowings increased $198.6 million for the three months ended June 30, 2024 compared to the same period in June 30, 2023. The average rate paid on total borrowings was 4.48% for the three months ended June 30, 2024, an increase of 133 basis points from the three months ended June 30, 2023. Total average interest-bearing deposits decreased $99.8 million, or 6.9%, for the three months ended June 30, 2024 compared to June 30, 2023; however, average time deposit balances increased $38.4 million due to the ongoing promotions. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 66 basis points from the three months ended June 30, 2023.

Net interest income increased by $371 thousand, or 1.8%, for the three months ended June 30, 2024 compared to the three months ended March 31, 2024 driven by an increase in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 increased 5 basis points from 3.77% for the three months ended March 31, 2024. The increase in FTE net interest margin was driven primarily by an increase in loan yields, the recognition of nonaccrual interest income related to a specific large relationship, and the stabilization of average interest-bearing and noninterest-bearing demand deposit balances during the quarter. The average yield on loans was 5.53% for the three months ended June 30, 2024, an increase of 16 basis points from the three months ended March 31, 2024. Excluding nonaccrual interest income related to the payoff of a specific large relationship, the FTE net interest margin was 3.79%. Total average interest-bearing deposits increased $11.0 million, or 0.8%, for the three months ended June 30, 2024 compared to the prior three months. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 14 basis points from the three months ended March 31, 2024. Total average noninterest-bearing demand deposits decreased $1.3 million, or 0.3%, for the three months ended June 30, 2024 compared to the prior three months.

Noninterest Income

Noninterest income for the three months ended June 30, 2024 was $6.4 million, an increase of $233 thousand, or 3.8%, from the three months ended June 30, 2023. Insurance commissions for the three months ended June 30, 2024 were $2.7 million, a decrease of $93 thousand from the three months ended June 30, 2023 driven primarily by lower contingent income partially offset by organic growth and timing of policy renewals in the current quarter. Wealth management income for the three months ended June 30, 2024 was $1.1 million, an increase of $90 thousand from the three months ended June 30, 2023 driven primarily by market appreciation and new business generation. Net gains on sales or calls of investment securities for the three months ended June 30, 2023 was a loss of $546 thousand compared to none for the three months ended June 30, 2024. Gain on assets held for sale for the three months ended June 30, 2023 was a gain of $323 thousand compared to none for the three months ended June 30, 2024.

Compared to the three months ended March 31, 2024, noninterest income for the three months ended June 30, 2024 increased $760 thousand, or 13.4%, driven primarily by increases in insurance commissions, as a result of the timing of policy renewals and contingent commissions received. Additionally, wealth management income increased driven primarily by market appreciation and new business generation.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2024 was $16.4 million, an increase of $110 thousand, or 0.7%, from the three months ended June 30, 2023. The increase was driven primarily by increases in salaries and employee benefits. Salaries and employee benefits expense increased $602 thousand driven primarily by higher incentive payment accruals and higher base wages. Partially offsetting this increase was lower other operating expenses of $329 thousand, driven primarily by a reduction in third-party vendor costs and a reduction in limited partnership investment losses occurring in the three months ended June 30, 2023. In addition, professional services declined $72 thousand, due to recruiting expenses incurred in the same period of the prior year. Marketing and corporate relations declined $71 thousand, due to rebranding expenses in the same period of the prior year.

Noninterest expense for the three months ended June 30, 2024 decreased $1.3 million, or 7.2%, from the three months ended March 31, 2024. The decrease was across all expense categories. Salaries and employee benefits decreased $742 thousand driven primarily by decreases in equity compensation, lower health insurance costs due to lower claims and employer insurance refunds, and lower payroll taxes compared to the prior quarter. Equipment expense decreased $159 thousand driven primarily by lower purchases of office equipment compared to the prior quarter. Net occupancy decreased $139 thousand driven primarily by lower snow removal, building maintenance, and utilities expenses compared to the prior quarter. Other expenses decreased $89 thousand driven primarily by lower bank insurance costs and timing of charitable donations. Professional services decreased $87 thousand driven primarily by lower loan collection costs.

Loans and Asset Quality

Total loans outstanding were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023. The increase in both periods was driven primarily by growth in the commercial real estate portfolio in our core markets. Growth in the commercial real estate portfolio was spread throughout the footprint and across various property types. Despite the intense competition in the Corporation’s Market Areas, management continues to focus on asset quality and disciplined underwriting standards in the loan origination process. The commercial real estate portfolio grew $51.4 million, or 5.7%, in 2024. The collateral for these loans is primarily spread across Pennsylvania and Maryland.

Asset quality metrics continue to be stable. The provision for credit losses was a reversal of $3.0 million and the provision for unfunded commitments was a reversal of $259 thousand for the three months ended June 30, 2024 compared to a provision for credit losses of $223 thousand and the provision for unfunded commitments was a reversal of $151 thousand for the three months ended March 31, 2024. For the three months ended June 30, 2023, there was a reversal to the provision for credit losses of $273 thousand and a $121 thousand provision for unfunded commitments. The decrease in the provision for credit losses and unfunded commitments for the three months ended June 30, 2024 compared to the prior quarter and the same quarter of 2023 was driven primarily by updated estimates utilized as input assumptions within the Current Expected Credit Loss “CECL” model calculation. These estimates, which were based on more current information available as of June 30, 2024, drive input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. Non-performing loans were $3.1 million, or 0.19%, of total loans at June 30, 2024 compared to $3.9 million, or 0.24%, of total loans at March 31, 2024 and $3.7 million, or 0.23%, of total loans at June 30, 2023. The decrease in non-performing loans at June 30, 2024 compared to the prior quarter was the result of one relationship payoff and several unrelated paydowns. Annualized net charge-offs for the three months ended June 30, 2024 and March 31, 2024 were 0.00% of total average loans compared to 0.02% for the three months ended June 30, 2023.

Deposits and Borrowings

Deposits totaled $1.84 billion at June 30, 2024, an increase of $3.4 million, or 0.2%, since March 31, 2024 and a decrease of $125.2 million, or 6.4%, from June 30, 2023. Included in total deposits were $1.36 billion interest-bearing deposits at June 30, 2024 which increased $23.2 million, or 1.7%, from March 31, 2024 and decreased by $35.2 million, or 2.5%, from June 30, 2023. Total noninterest-bearing deposits were $479.7 million at June 30, 2024 compared to $499.6 million at March 31, 2024 and $569.7 million at June 30, 2023. The ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.

Total borrowings were $304.3 million at June 30, 2024, an increase of $31.7 million, or 11.6%, compared to March 31, 2024 and an increase of $171.6 million, or 129.3%, compared to June 30, 2023. The average rate on total borrowings was 4.48% for the three months ended June 30, 2024 compared to 4.38% for the three months ended March 31, 2024 and 3.15% for the three months ended June 30, 2023.

Stockholders’ Equity, Dividends and Share Repurchases

Total stockholders’ equity was $289.3 million at June 30, 2024 compared to $279.9 million at March 31, 2024 and $257.1 million at June 30, 2023. Tangible book value2 per share was $27.82, $26.70 and $23.83 at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

As announced on Form 8-K on July 24, 2024, the Board of Directors approved and declared a regular quarterly cash dividend of $0.32 per share of ACNB Corporation common stock payable on September 13, 2024, to shareholders of record as of August 30, 2024. This per share amount reflects a $0.04, or 14.3%, increase over the same quarter of 2023.

ACNB did not repurchase any shares of ACNB common stock during the three months ended June 30, 2024.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.46 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 26 community banking offices and three loan offices located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 46 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, MD, and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.acnb.com.

SAFE HARBOR AND FORWARD-LOOKING STATEMENTS - Should there be a material subsequent event prior to the filing of the Quarterly Report on Form 10-Q with the Securities and Exchange Commission, the financial information reported in this press release is subject to change to reflect the subsequent event. In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties, and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; banking instability caused by bank failures and continuing financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of the Corporation's consolidated financial statements when filed with the SEC. Accordingly, the financial information in this announcement is subject to change. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

ACNB #2024-10
July 24, 2024


ACNB Corporation Financial Highlights
Selected Financial Data by Respective Quarter End
(Unaudited)

(Dollars in thousands, except per share data)June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
BALANCE SHEET DATA         
Assets$2,457,753  $2,414,288  $2,418,847  $2,388,522  $2,378,151 
Investment securities 483,868   490,626   517,221   501,063   518,093 
Total loans, net of unearned income 1,679,600   1,664,980   1,627,988   1,615,966   1,573,817 
Allowance for credit losses (17,162)   (20,172)  (19,969)  (19,264)  (19,148)
Deposits 1,838,588   1,835,224   1,861,813   1,951,359   1,963,754 
Allowance for unfunded commitments 1,310   1,569   1,719   1,962   2,132 
Borrowings 304,286   272,605   252,174   153,388   132,703 
Stockholders’ equity 289,331   279,920   277,461   255,638   257,069 
INCOME STATEMENT DATA         
Interest and dividend income$26,869  $25,974  $25,284  $24,234  $23,213 
Interest expense 5,905   5,381   3,791   2,489   1,223 
Net interest income 20,964   20,593   21,493   21,745   21,990 
(Reversal of ) provision for credit losses (2,990)  223   786   250   (273)
(Reversal of) provision for unfunded commitments (259)  (151)  (242)  (171)  121 
Net interest income after provisions for credit losses and unfunded commitments 24,213   20,521   20,949   21,666   22,142 
Noninterest income 6,427   5,667   970   6,297   6,194 
Noninterest expenses 16,391   17,662   17,173   16,336   16,281 
Income before income taxes 14,249   8,526   4,746   11,627   12,055 
Provision for income taxes 2,970   1,758   649   2,583   2,531 
Net income$11,279  $6,768  $4,097  $9,044  $9,524 
PROFITABILITY RATIOS         
Total loans, net of unearned income to deposits 91.35%  90.72%  87.44%  82.81%  80.14%
Return on average assets (annualized) 1.86   1.12   0.68   1.52   1.62 
Return on average equity (annualized) 16.12   9.76   6.09   13.84   14.74 
Efficiency ratio3 58.69   66.18   62.48   56.97   55.52 
FTE Net interest margin 3.82   3.77   3.93   4.01   4.11 
Yield on average earning assets 4.89   4.74   4.62   4.46   4.33 
Yield on investment securities 2.65   2.70   2.36   2.24   2.24 
Yield on total loans 5.53   5.37   5.29   5.16   5.05 
Cost of funds 1.12   1.02   0.71   0.47   0.23 
PER SHARE DATA         
Diluted earnings per share$1.32  $0.80  $0.48  $1.06  $1.12 
Cash dividends paid per share 0.32   0.30   0.30   0.28   0.28 
Tangible book value per share3 27.82   26.70   26.44   23.80   23.83 
Tangible book value per share3 (excluding AOCI)4 33.28   32.21   31.74   31.43   30.64 
CAPITAL RATIOS5         
Tier 1 leverage ratio 12.25%  11.91%  11.57%  11.97%  11.79%
Common equity tier 1 ratio 15.78   15.40   15.16   15.30   15.38 
Tier 1 risk based capital ratio 16.07   15.69   15.45   15.59   15.72 
Total risk based capital ratio 17.86   17.68   17.41   17.49   17.67 
CREDIT QUALITY         
Net charge-offs to average loans outstanding (annualized) 0.00%  0.00%  0.02%  0.03%  0.02%
Total non-performing loans to total loans, net of unearned income6 0.19   0.24   0.26   0.22   0.23 
Total non-performing assets to total assets7 0.14   0.18   0.19   0.17   0.17 
Allowance for credit losses to total loans, net of unearned income 1.02   1.21   1.23   1.19   1.22 


Consolidated Balance Sheet
(Unaudited)

(Dollars in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023
ASSETS      
Cash and due from banks $26,681   17,395  $21,442 
Interest-bearing deposits with banks  59,593   35,740   44,516 
Total Cash and Cash Equivalents  86,274   53,135   65,958 
Equity securities with readily determinable fair values  919   918   928 
Investment securities available for sale, at estimated fair value  418,364   425,114   451,693 
Investment securities held to maturity, at amortized cost (fair value $57,026, $58,084, and $59,057)  64,585   64,594   64,600 
Loans held for sale  1,801   88   280 
Total loans, net of unearned income  1,679,600   1,664,980   1,627,988 
Less: Allowance for credit losses  (17,162)  (20,172)  (19,969)
Loans, net  1,662,438   1,644,808   1,608,019 
Premises and equipment, net  25,760   25,916   26,283 
Right of use asset  2,278   2,447   2,615 
Restricted investment in bank stocks  11,853   10,877   9,677 
Investment in bank-owned life insurance  80,841   80,348   79,871 
Investments in low-income housing partnerships  940   971   1,003 
Goodwill  44,185   44,185   44,185 
Intangible assets, net  8,446   8,761   9,082 
Foreclosed assets held for resale  406   467   467 
Other assets  48,663   51,659   54,186 
Total Assets $2,457,753  $2,414,288  $2,418,847 
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Deposits:      
Noninterest-bearing $479,726  $499,583  $500,332 
Interest-bearing  1,358,862   1,335,641   1,361,481 
Total Deposits  1,838,588   1,835,224   1,861,813 
Short-term borrowings  48,974   17,303   56,882 
Long-term borrowings  255,312   255,302   195,292 
Lease liability  2,278   2,447   2,615 
Allowance for unfunded commitments  1,310   1,569   1,719 
Other liabilities  21,960   22,523   23,065 
Total Liabilities  2,168,422   2,134,368   2,141,386 
       
Stockholders’ Equity:      
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively         
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,934,495, 8,928,441, and 8,896,119 shares issued; 8,545,629, 8,539,575, and 8,511,453 shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively  22,330   22,315   22,231 
Treasury stock, at cost; 388,866, 388,866, and 384,666 shares at June 30, 2024, March 31, 2024 and December 31, 2023, respectively  (11,101)  (11,101)  (10,954)
Additional paid-in capital  98,230   97,818   97,602 
Retained earnings  226,271   217,712   213,491 
Accumulated other comprehensive loss  (46,399)  (46,824)  (44,909)
Total Stockholders’ Equity  289,331   279,920   277,461 
Total Liabilities and Stockholders’ Equity $2,457,753  $2,414,288  $2,418,847 


Consolidated Income Statements
(Unaudited)

 Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share data) 2024   2023   2024   2023 
INTEREST AND DIVIDEND INCOME       
Loans, including fees       
Taxable$22,675  $18,947  $44,145  $37,845 
Tax-exempt 313   352   632   708 
Investment securities:       
Taxable 2,665   2,688   5,576   5,974 
Tax-exempt 284   285   568   599 
Dividends 248   51   488   92 
Other 684   890   1,434   1,904 
Total Interest and Dividend Income 26,869   23,213   52,843   47,122 
INTEREST EXPENSE       
Deposits 2,643   486   4,803   959 
Short-term borrowings 304   108   643   125 
Long-term borrowings 2,958   629   5,840   956 
Total Interest Expense 5,905   1,223   11,286   2,040 
Net Interest Income 20,964   21,990   41,557   45,082 
Reversal of credit losses (2,990)  (273)  (2,767)  (176)
(Reversal of) provision for unfunded commitments (259)  121   (410)  397 
Net Interest Income after Provisions for Credit Losses and Unfunded Commitments 24,213   22,142   44,734   44,861 
NONINTEREST INCOME       
Insurance commissions 2,747   2,840   4,862   4,742 
Service charges on deposits 1,021   989   2,012   1,951 
Wealth management 1,069   979   2,031   1,819 
ATM debit card charges 841   834   1,660   1,657 
Earnings on investment in bank-owned life insurance 493   484   970   926 
Gain from mortgage loans held for sale 34   14   82   31 
Net (losses) gains on sales or calls of investment securities    (546)  69   (739)
Net gains (losses) on equity securities 1   (15)  (9)  5 
Gain on assets held for sale    323      323 
Other 221   292   417   463 
Total Noninterest Income 6,427   6,194   12,094   11,178 
NONINTEREST EXPENSES       
Salaries and employee benefits 10,426   9,824   21,594   20,266 
Equipment 1,570   1,623   3,299   3,230 
Net occupancy 991   1,002   2,121   2,039 
Professional services 529   601   1,145   983 
FDIC and regulatory 348   295   723   544 
Other tax 356   305   726   642 
Intangible assets amortization 315   360   636   720 
Supplies and postage 183   198   374   404 
Marketing and corporate relations 88   159   176   313 
Other 1,585   1,914   3,259   3,422 
Total Noninterest Expenses 16,391   16,281   34,053   32,563 
Income Before Income Taxes 14,249   12,055   22,775   23,476 
Provision for income taxes 2,970   2,531   4,728   4,929 
Net Income$11,279  $9,524  $18,047  $18,547 
PER SHARE DATA       
Basic earnings$1.32  $1.12  $2.12  $2.18 
Diluted earnings$1.32  $1.12  $2.12  $2.17 


Average Balances, Income and Expenses, Yields and Rates

  Three months ended Three months ended Three months ended Three months ended Three months ended
  June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
(Dollars in thousands) Average
Balance
 Interest8 Yield/
Rate
 Average
Balance
 Interest8 Yield/
Rate
 Average
Balance
 Interest8 Yield/
Rate
 Average
Balance
 Interest8 Yield/
Rate
 Average
Balance
 Interest8 Yield/
Rate
ASSETS                              
Loans:                              
Taxable $1,612,380  $22,675  5.66% $1,573,109  $21,470  5.49% $1,559,411  $21,303  5.42% $1,520,134  $20,285  5.29%  1,463,967   18,946  5.19%
Tax-exempt  64,276   396  2.48   65,825   404  2.47   69,058   425  2.44   73,995   457  2.45   75,670   446  2.36 
Total Loans9  1,676,656   23,071  5.53   1,638,934   21,874  5.37   1,628,469   21,728  5.29   1,594,129   20,742  5.16   1,539,637   19,392  5.05 
Investment Securities:                              
Taxable  442,390   2,913  2.65   467,466   3,151  2.71   453,713   2,669  2.33   466,402   2,581  2.20   498,401   2,739  2.20 
Tax-exempt  54,644   359  2.64   54,740   359  2.64   54,835   361  2.61   55,027   359  2.59   55,588   361  2.60 
Total Investments10  497,034   3,272  2.65   522,206   3,510  2.70   508,548   3,030  2.36   521,429   2,940  2.24   553,989   3,100  2.24 
Interest-bearing deposits with banks  50,851   684  5.41   54,156   750  5.57   50,225   691  5.46   53,324   723  5.38   71,040   890  5.03 
Total Earning Assets  2,224,541   27,027  4.89   2,215,296   26,134  4.74   2,187,242   25,449  4.62   2,168,882   24,405  4.46   2,164,666   23,382  4.33 
Cash and due from banks  21,041       20,540       21,578       23,783       22,215     
Premises and equipment  25,903       26,102       25,983       25,980       26,420     
Other assets  187,937       187,075       191,329       165,821       163,783     
Allowance for credit losses  (20,124)      (19,963)      (19,232)      (19,101)      (19,458)    
Total Assets $2,439,298      $2,429,050      $2,406,900      $2,365,365      $2,357,626     
LIABILITIES                              
Interest-bearing demand deposits $513,163  $275  0.22% $512,701  $264  0.21% $560,510  $275  0.19% $571,314  $185  0.13% $577,480  $150  0.10%
Money markets  248,191   613  0.99   248,297   536  0.87   274,226   707  1.02   245,899   312  0.50   261,560   100  0.15 
Savings deposits  327,274   30  0.04   335,215   29  0.03   348,244   28  0.03   366,398   30  0.03   387,847   31  0.03 
Time deposits  263,045   1,725  2.64   244,481   1,331  2.19   221,778   798  1.43   212,159   401  0.75   224,608   205  0.37 
Total Interest-Bearing Deposits  1,351,673   2,643  0.79   1,340,694   2,160  0.65   1,404,758   1,808  0.51   1,395,770   928  0.26   1,451,495   486  0.13 
Short-term borrowings  37,256   304  3.28   47,084   339  2.90   56,872   334  2.33   66,942   439  2.60   34,080   108  1.27 
Long-term borrowings  255,305   2,958  4.66   248,701   2,882  4.66   137,026   1,649  4.77   94,554   1,122  4.71   59,901   629  4.21 
Total Borrowings  292,561   3,262  4.48   295,785   3,221  4.38   193,898   1,983  4.06   161,496   1,561  3.83   93,981   737  3.15 
Total Interest-Bearing Liabilities  1,644,234   5,905  1.44   1,636,479   5,381  1.32   1,598,656   3,791  0.94   1,557,266   2,489  0.63   1,545,476   1,223  0.32 
Noninterest-bearing demand deposits  485,351       486,648       519,797       541,995       550,581     
Other liabilities  28,348       26,904       21,648       6,820       2,330     
Stockholders’ Equity  281,365       279,019       266,799       259,284       259,239     
Total Liabilities and Stockholders’ Equity $2,439,298      $2,429,050      $2,406,900      $2,365,365      $2,357,626     
Taxable Equivalent Net Interest Income    21,122       20,753       21,658       21,916       22,159   
Taxable Equivalent Adjustment    (158)      (160)      (165)      (171)      (169)  
Net Interest Income   $20,964      $20,593      $21,493      $21,745      $21,990   
Cost of Funds     1.12%     1.02%     0.71%     0.47%     0.23%
FTE Net Interest Margin     3.82%     3.77%     3.93%     4.01%     4.11%


Average Balances, Income and Expenses, Yields and Rates

 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023
(Dollars in thousands)Average
Balance
 Interest11 Yield/
Rate
 Average
Balance
 Interest11 Yield/
Rate
ASSETS           
Loans:           
Taxable$1,592,745  $44,145  5.57% $1,459,455  $37,844 5.23%
Tax-exempt 65,050   800  2.47   76,501   897 2.36 
Total Loans12 1,657,795   44,945  5.45   1,535,956   38,741 5.09 
Investment Securities:           
Taxable 454,928   6,064  2.68   527,576   6,066 2.32 
Tax-exempt 54,692   719  2.64   55,449   758 2.76 
Total Investments13 509,620   6,783  2.68   583,025   6,824 2.36 
Interest-bearing deposits with banks 52,504   1,434  5.49   80,958   1,904 4.74 
Total Earning Assets 2,219,919   53,162  4.82   2,199,939   47,469 4.35 
Cash and due from banks 20,790       30,189     
Premises and equipment 26,051       26,637     
Other assets 187,458       160,316     
Allowance for credit losses (20,044)      (18,658)    
Total Assets$2,434,174      $2,398,423     
LIABILITIES           
Interest-bearing demand deposits$512,932  $540  0.21% $584,686  $331 0.11%
Money markets 248,244   1,149  0.93   285,996   139 0.10 
Savings deposits 331,244   58  0.04   395,590   64 0.03 
Time deposits 253,763   3,056  2.42   246,536   425 0.35 
Total Interest-Bearing Deposits 1,346,183   4,803  0.72   1,512,808   959 0.13 
Short-term borrowings 42,170   643  3.07   34,834   125 0.72 
Long-term borrowings 252,004   5,840  4.66   43,597   956 4.42 
Total Borrowings 294,174   6,483  4.43   78,431   1,081 2.78 
Total Interest-Bearing Liabilities 1,640,357   11,286  1.38   1,591,239   2,040 0.26 
Noninterest-bearing demand deposits 485,999       554,340     
Other liabilities 27,626       (2,303)    
Stockholders’ Equity 280,192       255,147     
Total Liabilities and Stockholders’ Equity$2,434,174      $2,398,423     
Taxable Equivalent Net Interest Income   41,876         
Taxable Equivalent Adjustment   (319)        
Net Interest Income  $41,557         
Cost of Funds    1.07%     0.19%
FTE Net Interest Margin    3.79%     4.16%
              

Non-GAAP Reconciliation

Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.

  Three Months Ended
(Dollars in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
Tangible book value per share          
Stockholders’ equity $289,331  $279,920  $277,461  $255,638  $257,069 
Less: Goodwill and intangible assets  (52,631)  (52,946)  (53,267)  (53,619)  (53,797)
Tangible common stockholders’ equity (numerator) $236,700  $226,974  $224,194  $202,019  $203,272 
Shares outstanding, less unvested shares, end of period (denominator)  8,507,191   8,501,137   8,478,460   8,488,446   8,528,782 
Tangible book value per share $27.82  $26.70  $26.44  $23.80  $23.83 
Tangible book value per share (excluding AOCI)          
Tangible common stockholders’ equity $236,700  $226,974  $224,194  $202,019  $203,272 
Less: AOCI  (46,399)  (46,824)  (44,909)  (64,767)  (58,052)
Tangible equity (excluding AOCI) $283,099  $273,798  $269,103  $266,786  $261,324 
Tangible book value per share (excluding AOCI) $33.28  $32.21  $31.74  $31.43  $30.64 
Tangible common equity to tangible assets (TCE/TA Ratio)          
Tangible common stockholders’ equity (numerator) $236,700  $226,974  $224,194  $202,019  $203,272 
Total assets $2,457,753  $2,414,288  $2,418,847  $2,388,522  $2,378,151 
Less: Goodwill and intangible assets  (52,631)  (52,946)  (53,267)  (53,619)  (53,797)
Total tangible assets (denominator) $2,405,122  $2,361,342  $2,365,580  $2,334,903  $2,324,354 
Tangible common equity to tangible assets  9.84%  9.61%  9.48%  8.65%  8.75%
Efficiency Ratio          
Noninterest expense $16,391  $17,662  $17,173  $16,336  $16,281 
Less: Intangible amortization  315   321   352   352   360 
Less: Loss on MD Title Investment              142 
Noninterest expense (numerator) $16,076  $17,341  $16,821  $15,984  $15,779 
Net interest income $20,964  $20,593  $21,493  $21,745  $21,990 
Plus: Total noninterest income  6,427   5,667   970   6,297   6,194 
Less: Net gains (losses) on sales or calls of securities     69   (4,501)     (546)
Less: Net gains (losses) on equity securities  1   (10)  40   (27)  (15)
Less: Gain on assets held for sale           14   323 
Total revenue (denominator) $27,390  $26,201  $26,924  $28,055  $28,422 
Efficiency ratio  58.69%  66.18%  62.48%  56.97%  55.52%



1 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
2 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
3 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
4 Accumulated Other Comprehensive Income (Loss).
5 Regulatory capital ratios as of June 30, 2024 are preliminary.
6 Non-performing Loans consists of loans on nonaccrual status and loans greater than ninety days past due and still accruing interest.
7 Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.
8 Income on interest-earning assets has been computed on a fully taxable equivalent (FTE) basis using the 21% federal income tax statutory rate.
9 Average balances include non-accrual loans and are net of unearned income.
10 Average balances of investment securities is computed at fair value.
11 Income on interest-earning assets has been computed on a fully taxable equivalent basis (FTE) using the 21% federal income tax statutory rate.
12 Average balances include non-accrual loans and are net of unearned income.
13 Average balances of investment securities is computed at fair value.

Contact:Jason H. Weber
 EVP/Treasurer &
 Chief Financial Officer
 717.339.5090
 jweber@acnb.com

FAQ

What was ACNB 's net income for Q2 2024?

ACNB reported net income of $11.3 million for Q2 2024.

How did ACNB's diluted earnings per share change in Q2 2024 compared to Q2 2023?

ACNB's diluted earnings per share increased to $1.32 in Q2 2024, up from $1.12 in Q2 2023.

What was ACNB's total loan balance as of June 30, 2024?

ACNB's total loans were $1.68 billion as of June 30, 2024, an increase of 6.7% from June 30, 2023.

How did ACNB's FTE net interest margin change in Q2 2024?

ACNB's FTE net interest margin improved to 3.82% in Q2 2024, up from 3.77% in Q1 2024, marking the first increase after 4 consecutive quarterly declines.

What dividend did ACNB declare for Q2 2024?

ACNB declared a quarterly cash dividend of $0.32 per share, a 14.3% increase from the previous year.

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