ACNB CORP
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
ACNB$65.54+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000715579-25-000080
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001628280-25-038816
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 140 current paragraphs.
59 unchanged; 45 reworded; 24 added; 14 removed; 0 previous and 12 current paragraphs rearranged.
Tables are not compared: 10 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
◦During the three months ended June 30, 2025, the Bank’s ACL model was updated to incorporate post-COVID data which resulted in lower loss rates utilized in the model. This model update resulted in reversals of the provision for credit losses and unfunded commitments of $228 thousand and $354 thousand, respectively, for the three months ended June 30, 2025. For the six months ended June 30, 2025, the provision for credit losses was $5.7 million and the provision for unfunded commitments was a reversal of $834 thousand.
Current report
•Noninterest expenses —Noninterest expense was $25.4 million and $54.7 million for the three and six months ended June 30, 2025, respectively, an increase of $9.0 million and $20.6 million, respectively, for the same periods of 2024. The increases were driven primarily by the Acquisition.
Current report
The provision for credit losses and unfunded commitments were reversals of $228 thousand and $354 thousand, respectively, for the three months ended June 30, 2025 compared to reversals of $3.0 million and $259 thousand, respectively, for the same period of 2024. The reversals of the provisions for credit losses and unfunded commitments for the three months ended June 30, 2025 were driven primarily by the incorporation of post-COVID data which resulted in lower loss rates utilized within the Bank’s ACL model. During the three months ended June 30, 2024, the Corporation revised estimates driven by a realignment of the peer group used for the CECL allowance process, an update to loss driver factors from third-party data, and an update to the application of prepayment and curtailment rate studies since implementation of CECL on January 1, 2023. 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. These updated estimates were the primary drivers for the reversal of the provision for credit losses and unfunded commitments for the three months ended June 30, 2024. The Corporation assesses risks and reserves required compared with the balances in the ACL and unfunded commitments quarterly.
Current report
Total noninterest income was $8.7 million for the three months ended June 30, 2025 compared to $6.4 million for the same period of 2024. The increase was driven primarily by the Acquisition. The increase in insurance commissions was driven primarily by timing of policy renewals and new business.
Current report
•Salaries and employee benefits, the largest component of noninterest expenses, increase was driven primarily by an increased number of employees attributable to the Acquisition, merit increases and higher mortgage commissions.
Current report
•Equipment expenses increase was driven primarily by the Acquisition and the implementation of additional products into the core processing system.
Current report
•Other tax decreased driven primarily by earned income tax credits recognized in the three months ended June 30, 2025.
Current report
•Other increased $1.5 million driven primarily by the Acquisition, earned income tax related donations, and higher internet banking services.
Current report
•Merger-related expenses included professional services, lease terminations and fixed asset disposals, among other expenses incurred for the Acquisition.
Current report
Six months ended June 30, 2025 compared to six months ended June 30, 2024
Current report
Net Interest Income
Current report
Net interest income totaled $58.1 million for the six months ended June 30, 2025 compared to $41.6 million for the same period of 2024, an increase of $16.5 million. The FTE net interest margin for the six months ended June 30, 2025 was 4.14%, a 35 bps increase from 3.79% for the same period of 2024. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $3.7 million for the six months ended June 30, 2025.
Current report
The increases in FTE interest income, interest expense and the increases to average interest-earning assets and liabilities were driven primarily by the Acquisition.
Current report
Noninterest Income
Current report
•Insurance commissions increased compared to the same period of 2024 driven primarily by higher contingent income, growth in commissions on policy renewals and new business.
Current report
•Wealth management income increased compared to the same period of 2024 driven primarily by portfolio market appreciation and new business generation.
Current report
Noninterest Expenses
Current report
Noninterest expenses increased $20.6 million during the six months ended June 30, 2025 compared to the same period of 2024 driven primarily by the Acquisition. The more significant fluctuations by category explained below:
Current report
•Salaries and employee benefits, the largest component of noninterest expenses, increase was driven primarily by an increased number of employees attributable to the Acquisition, merit increases, higher mortgage commissions, and higher employee benefits.
Current report
•Equipment expense increase was driven primarily by the Acquisition and the implementation of new additional products into the core processing system.
Current report
•Professional services increases were driven primarily by higher expenses related to loan review and rate studies, external, internal audit and collection fees.
Current report
•FDIC and regulatory increased as a result of a higher FDIC assessment rate for 2025.
Current report
•Other increased driven primarily by the Acquisition, earned income tax related donations, and higher internet banking services.
Current report
Provision for Income Taxes
Removed paragraphs (14)
Previous report
1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.
Previous report
•Asset Quality —The provision for credit losses was $6.0 million and the reversal of the provision for unfunded commitments was $480 thousand for the three months ended March 31, 2025 compared to the provision for credit losses of $223 thousand and a $151 thousand reversal of the provision for unfunded commitments for the same period of 2024.
Previous report
•Noninterest expenses —Noninterest expenses increased to $29.3 million for the three months ended March 31, 2025 compared to $17.7 million in the same period of 2024. The increase was driven primarily by the Acquisition.
Previous report
1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.
Previous report
•Service charges on deposits totaled$1.1 million for the three months ended March 31, 2025, an increase of $103 thousand compared to the same period of 2024.
Previous report
•Wealth management income for the three months ended March 31, 2025 increased $98 thousand compared to the same period of 2024 driven primarily by increased sales activity and market performance.
Previous report
•Gain from mortgage loans held for sale totaled $855 thousand compared to $48 thousand in the same period of 2024.
Previous report
•Earnings on investment in bank-owned life insurance increased $103 thousand from the same period of 2024.
Previous report
•Salaries and employee benefits, the largest component of noninterest expenses, increased $1.7 million during the three months ended March 31, 2025 to $12.9 million compared to $11.2 million in the same period of 2024. The increase was driven primarily by higher base wages as a result of the Acquisition, higher restricted stock compensation and higher payroll taxes.
Previous report
•Equipment expenses increased $551 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition.
Previous report
•Other tax increased $157 thousand for the three months ended March 31, 2025 compared to the same period of 2024.
Previous report
•Net occupancy increased $312 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition and increased seasonal maintenance.
Previous report
•Intangible assets amortization increased $536 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven by the Acquisition.
Previous report
ACNB relies on deposits as a primary source of funds for lending activities with total deposits of $2.54 billion as of March 31, 2025. Deposits increased by $747.5 million, or 41.7%, from December 31, 2024 to March 31, 2025 driven primarily by the
Reworded paragraphs (45)
Previous wording
In addition to historical information, this Form 10-Q 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, noninterest 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; legislative and regulatory changes; banking system instability caused by 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 or any similar 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, …
Excerpt shortened here; the source contains the full paragraph.
Current wording
In addition to historical information, this Form 10-Q 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, noninterest 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; legislative and regulatory changes; banking system instability caused by failures and 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 or any similar 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 chan…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 33 community banking offices. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.
Current wording
ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 33 community banking offices and a loan production office in Hunt Valley, Maryland. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.
Previous wording
ACNB closed the Acquisition of Traditions effective February 1, 2025. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. Financial results for the three months ended March 31, 2025 were impacted by two discrete items that were related to the Acquisition: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million.
Current wording
ACNB closed the Acquisition of Traditions effective February 1, 2025. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. Financial results for the six months ended June 30, 2025 were impacted by two discrete items that were related to the Acquisition: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $7.8 million.
Previous wording
•Net Interest Income —Net interest income was $27.1 million for the three months ended March 31, 2025 compared to $20.6 million for the same period of 2024, an increase of $6.5 million. The increase in net interest income was driven primarily by the Acquisition.
Current wording
•Net Interest Income —Net interest income was $31.0 million for the three months ended June 30, 2025 compared to $21.0 million for the same period of 2024, an increase of $10.0 million. For the six months ended June 30, 2025, net interest income was $58.1 million compared to $41.6 million for the same period of 2024. The increase in net interest income and growth in average loans and deposits was driven primarily by the Acquisition.
Previous wording
◦Net Interest Margin —The Corporation’s FTE net interest margin increased to 4.07% for the three months ended March 31, 2025 compared to 3.77% in the same period of 2024, an increase of 30 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025.
Current wording
◦Net Interest Margin —The Corporation’s FTE net interest margin increased to 4.21% for the three months ended June 30, 2025 compared to 3.82% in the same period of 2024, an increase of 39 bps. The FTE net interest margin for the six months ended June 30, 2025 was 4.14%, an increase of 35 bps from the same period of 2024. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $2.2 million and $3.7 million for the three and six months ended June 30, 2025, respectively.
Previous wording
◦Yield on Average Earning Assets —For the three months ended March 31, 2025, the yield on average earning assets was 5.45%, an increase of 71 bps compared to the same period of 2024 driven primarily by the accretion impact of the acquisition accounting adjustments on loans.
Current wording
◦Yield on Average Earning Assets —For the three and six months ended June 30, 2025, the yield on average earning assets was 5.64% and 5.55%, respectively, an increase of 75 and 73 bps, respectively, compared to the same periods of 2024.
Previous wording
◦Loan Growth —Average loans increased $499.3 million for the three months ended March 31, 2025 compared to the same period of 2024 driven by the Acquisition.
Current wording
◦Loan Growth —Average loans increased $678.7 million and $589.5 million for the three and six months ended June 30, 2025, respectively, compared to the same periods of 2024.
Previous wording
◦Deposit Growth —Average interest-bearing deposits increased $421.8 million for the three months ended March 31, 2025 compared to the same period of 2024, driven primarily by the Acquisition.
Current wording
◦Deposit Growth —Average interest-bearing deposits increased $613.8 million and $518.4 million for the three and six months ended June 30, 2025, respectively, compared to the same periods of 2024.
Previous wording
◦The allowance for credit losses was $24.6 million at March 31, 2025 compared to $17.3 million at December 31, 2024. The increase was driven primarily by an initial allowance for credit losses of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.
Current wording
•Asset Quality —The allowance for credit losses was $24.4 million at June 30, 2025 compared to $17.3 million at December 31, 2024. The increase was driven primarily by an initial allowance for credit losses of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.
Previous wording
◦Non-performing loans were $10.0 million, or 0.43%, of total loans at March 31, 2025 compared to $6.8 million, or 0.40%, of total loans at December 31, 2024. The increase was driven primarily by the Acquisition.
Current wording
◦Non-performing loans were $10.1 million, or 0.43%, of total loans at June 30, 2025 compared to $3.1 million, or 0.19%, of total loans at June 30, 2024. The increase was driven primarily by one long-standing commercial relationship in the healthcare industry, comprised of both owner-occupied commercial real estate and commercial and industrial loans, that moved into non-performing loan status during 2024 and by the Acquisition.
Previous wording
◦Annualized net charge-offs for the three months ended March 31, 2025 were 0.01% of total average loans compared to 0.00% for the same period of 2024.
Current wording
◦Annualized net charge-offs for both the three and six months ended June 30, 2025 were 0.01% of total average loans compared to 0.00% for both of the same periods of 2024.
Previous wording
•Noninterest income —Noninterest income was $7.2 million for the three months ended March 31, 2025, an increase of $1.5 million from $5.7 million for the same period of 2024. The increase was driven primarily by the Acquisition, an increase in wealth management income and an increase in life insurance proceeds.
Current wording
•Noninterest income —Noninterest income was $8.7 million and $15.9 million for the three and six months ended June 30, 2025, respectively, an increase of $2.3 million and $3.8 million, respectively, for the same periods of 2024. The increase for the three months ended June 30, 2025 was driven primarily by the Acquisition, and an increase in insurance commissions. In addition to those factors, the increase for the six months ended June 30, 2025 was also driven by higher wealth management income and a gain on life insurance proceeds.
Previous wording
•Net Loss/Income —Net loss for the three months ended March 31, 2025 was $272 thousand compared to net income of $6.8 million for the same period of 2024, a decrease of $7.0 million. Diluted loss per share for the three months ended March 31, 2025 was $0.03 compared to diluted earnings per share of $0.80 for the same period of 2024.
Current wording
Net income for the three months ended June 30, 2025 was $11.6 million, or $1.11 diluted earnings per share, compared to net income of $11.3 million, or $1.32 diluted earnings per share for the same period of 2024, an increase of $369 thousand, or $0.21 diluted earnings per share. The increase in net income was driven primarily by the Acquisition.
Previous wording
Net interest income totaled $27.1 million for the three months ended March 31, 2025 compared to $20.6 million for the same period of 2024, an increase of $6.5 million. The FTE net interest margin for the three months ended March 31, 2025 was 4.07%, a 30 bps increase from 3.77% for the same period of 2024. The increase in FTE net interest income and margin was driven primarily by the Acquisition. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 3, “Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report on Form 10-Q.
Current wording
Net interest income totaled $31.0 million for the three months ended June 30, 2025 compared to $21.0 million for the same period of 2024, an increase of $10.0 million. The FTE net interest margin for the three months ended June 30, 2025 was 4.21%, a 39 bps increase from 3.82% for the same period of 2024. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $2.2 million for the three months ended June 30, 2025. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 3, “Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report on Form 10-Q.
Previous wording
The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for thethree months ended March 31, 2025 compared to the same period in 2024:
Current wording
The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for thethree months ended June 30, 2025 compared to thesame period of 2024:
Previous wording
The increases to average interest-earning assets and liabilities was driven primarily by the Acquisition. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025.
Current wording
The increases in FTE interest income, interest expense and the increases to average interest-earning assets and liabilities were driven primarily by the Acquisition.
Previous wording
The increases in FTE interest income and interest expense were primarily driven by the Acquisition. Total FTE interest income increased $10.3 million during the three months ended March 31, 2025 compared to the same period of 2024. ACNB experienced a $6.9 million increase in FTE interest income due to an increase in the average balance of interest earning assets and $3.4 million attributable to an increase in the yield on interest earning assets. FTE interest income on total loans increased $10.2 million compared to the same period of 2024. The yield on total loans increased 71 bps, contributing $3.4 million to the increase. Average loans increased $499.3 million contributing $6.8 million to the increase in FTE interest income.
Current wording
Total FTE interest income increased $14.7 million during the three months ended June 30, 2025 compared to the same period of 2024. ACNB experienced a $10.2 million increase in FTE interest income due to an increase in the average balance of interest earning assets and $4.5 million attributable to an increase in the yield on interest earning assets. FTE interest income on total loans increased $13.9 million compared to the same period of 2024. Average loans increased $678.7 million contributing $9.6 million to the increase in FTE interest income. The yield on total loans increased 76 bps, contributing $4.3 million to the increase.
Previous wording
Total interest expense increased $3.8 million during the three months ended March 31, 2025 compared to the same period of 2024. Total average interest-bearing deposits increased $421.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Interest expense increased $2.5 million due to higher rates on interest-bearing deposits and increased $1.4 million as a result of the increase in average interest-bearing deposits. The cost of interest-bearing deposits was 1.38% for the three months ended March 31, 2025, an increase of 73 bps from the three months ended March 31, 2024. The largest increases in rates were in time deposits and money markets which increased 123 and 93 bps, respectively.
Current wording
Total interest expense increased $4.7 million during the three months ended June 30, 2025 compared to the same period of 2024. Total average interest-bearing deposits increased $613.8 million for the three months ended June 30, 2025 compared to the same period of 2024. Interest expense increased $2.5 million due to higher rates on interest-bearing deposits and increased $2.2 million as a result of the increase in average interest-bearing deposits. The cost of interest-bearing deposits was 1.49% for the three months ended June 30, 2025, an increase of 70 bps from the same period of 2024. The largest increases in rates were in money markets and time deposits which increased 103 and 78 bps, respectively.
Previous wording
Noninterest expenses increased $11.7 million for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition. The more significant fluctuations by category are explained below:
Current wording
Noninterest expenses increased $9.0 million for the three months ended June 30, 2025 compared to the same period of 2024 driven primarily by the Acquisition. The more significant fluctuations by category are explained below:
Previous wording
The Corporation recognized an income tax benefit of $277 thousand during the three months ended March 31, 2025 compared to a provision for income taxes of $1.8 million during the same period of 2024. The income tax benefit for the three months ended March 31, 2025 was due to the net loss driven by the Acquisition. Any variances from the federal statutory rate of 21% are generally due to tax-free income, which includes interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, and the impact of non-tax deductible expense. Additionally, ACNB has incurred non-deductible costs related to the Acquisition which are recorded within merger-related costs on the Consolidated Statements of (Loss) Income.
Current wording
The Corporation recognized income tax expense of $3.3 million during the three months ended June 30, 2025 compared to $3.0 million during the same period of 2024. The provision for income taxes for the three months ended June 30, 2025 reflects a combined Federal and State ETR of 21.9% compared to an ETR of 20.8% for the same period of the prior year. Any variances from the federal statutory rate of 21% are generally due to tax-free income, which includes, but not limited to, interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, the impact of non-tax deductible expense and state taxes. Additionally, ACNB has incurred non-deductible costs related to the Acquisition which are recorded within merger-related expenses on the Consolidated Statements of Income.
Previous wording
Net loss for the three months ended March 31, 2025 was $272 thousand, or $0.03 diluted loss per share, compared to net income of $6.8 million, or $0.80 diluted earnings per share for the same period of 2024, a decrease of $7.0 million, or $0.83 diluted earnings per share. The decrease in net income for the three months ended March 31, 2025 was impacted by two discrete items that were related to the Acquisition of Traditions: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million.
Current wording
Net income for the six months ended June 30, 2025 was $11.4 million, or $1.12 diluted earnings per share, compared to net income of $18.0 million, or $2.12 diluted earnings per share for the same period of 2024, a decrease of $6.7 million, or $1.00 diluted earnings per share. The decrease in net income for the six months ended June 30, 2025 was driven primarily by merger-related expenses, a higher provision for credit losses and higher noninterest expenses partially offset by an increase in net interest income and an increase in noninterest income compared to the same period of 2024.
Previous wording
The provision for credit losses was $6.0 million and a reversal of the provision for unfunded commitments was $480 thousand for the three months ended March 31, 2025 compared to a provision for credit losses of $223 thousand and a reversal of the provision for unfunded commitments of $151 thousand for the same period of 2024. ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The determination of the provisions was a result of the analysis of the adequacy of the ACL and unfunded commitments calculations. Each quarter, the Corporation assesses risks and reserves required compared with the balances in the allowance for credit losses and unfunded commitments.
Current wording
During the six months ended June 30, 2025, the provision for credit losses was $5.7 million and the provision for unfunded commitments was a reversal of $834 thousand compared to reversals of both the provision for credit losses and the provision for unfunded commitments of $2.8 million and $410 thousand, respectively, for the same period of 2024. In 2025, ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The reversal of the provision for unfunded commitments was impacted by the incorporation of post-COVID data which resulted in lower loss rates utilized within the Bank’s ACL model. During the three months ended June 30, 2024, the reversals of both the provision for credit losses and the provision for unfunded commitments were a result of the Corporation’s revision to estimates driven by a realignment of the peer group used for the CECL allowance process, an update to loss driver factors from third-party data, and an update to the application of prepayment and curtailment rate studies since implementation of CECL on January 1, 2023. 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. These updated estimates were the primary drivers for the reversal of the provision for credit losses and unfunded commitments for the six months ended June 30, 2024. The Corporation assesses risks and reserves required compared with the balances in the ACL and unfunded commitments quarterly.
Previous wording
Total noninterest income was $7.2 million for the three months ended March 31, 2025 compared to $5.7 million for the same period of 2024. The increase was driven primarily by the Acquisition unless noted otherwise. The more significant fluctuations by category are explained below:
Current wording
Total noninterest income was $15.9 million for the six months ended June 30, 2025 compared to $12.1 million for the same period of 2024. The increase was driven primarily by the Acquisition unless noted otherwise in categories with significant variances below:
Previous wording
•Gain on life insurance proceeds was $254 thousand for the three months ended March 31, 2025 as a result of a death benefit paid on a life insurance policy.
Current wording
•Gain on life insurance proceeds for the six months ended June 30, 2025 was a result of a death benefit received on a life insurance policy.
Previous wording
•Merger-related expenses include legal, external accounting, loan review, advisory fees, severance and change in control expenses incurred for the Acquisition.
Current wording
•Merger-related expenses included professional fees, legal, external accounting, loan review, advisory fees, lease terminations, fixed asset disposals and severance and change in control expenses incurred for the Acquisition.
Previous wording
Assets totaled $3.27 billion at March 31, 2025 and $2.39 billion at December 31, 2024. The Acquisition contributed $877.7 million to total assets.
Current wording
Assets totaled $3.26 billion at June 30, 2025 and $2.39 billion at December 31, 2024. The Acquisition contributed $877.7 million to total assets.
Previous wording
Total investment securities were $521.3 million at March 31, 2025 compared to $459.5 million at December 31, 2024, an increase of 13.5%. Following the Acquisition date, ACNB completed the sale of approximately $98.0 million of investment securities previously held by Traditions with a yield of 5.03%. ACNB paid off $40.2 million of Traditions’ FHLB borrowings with a cost of 4.73% with the proceeds from the sale of the investment securities, and invested the remainder of the proceeds into investment securities with a yield of 5.07%. At March 31, 2025, the securities balance included a net unrealized loss on AFS securities of $31.8 million on amortized cost of $495.5 million compared to a net unrealized loss of $38.2 million on amortized cost of $441.6 million at December 31, 2024. At March 31, 2025, the securities balance included HTM securities with an amortized cost of $64.6 million and a fair value of $56.2 million as compared to an amortized cost of $64.6 million and a fair value of $56.9 million at December 31, 2024.
Current wording
Total investment securities were $520.8 million at June 30, 2025 compared to $459.5 million at December 31, 2024, an increase of 13.3%. Following the Acquisition date, ACNB completed the sale of approximately $98.0 million of investment securities previously held by Traditions with a yield of 5.03%. ACNB paid off $40.2 million of Traditions’ FHLB borrowings with a cost of 4.73% with the proceeds from the sale of the investment securities, and invested the remainder of the proceeds into investment securities with a yield of 5.07%. At June 30, 2025, the securities balance included a net unrealized loss on AFS securities of $29.3 million on amortized cost of $491.5 million compared to a net unrealized loss of $38.2 million on amortized cost of $441.6 million at December 31, 2024. At June 30, 2025, the securities balance included HTM securities with an amortized cost of $64.5 million and a fair value of $56.4 million as compared to an amortized cost of $64.6 million and a fair value of $56.9 million at December 31, 2024.
Previous wording
Total loans, net of unearned income, outstanding increased $639.3 million, or 38.0%, from December 31, 2024 to March 31, 2025. The increase was driven primarily by the Acquisition. ACNB acquired $648.5 million in loans at the Acquisition date. As of March 31, 2025, total acquisition accounting adjustments on loans were $24.5 million. The majority of the loan acquisition accounting adjustments are expected to accrete back through as income as loans pay off or mature. ACNB does not have a significant concentration of credit risk with any single borrower, industry or geographic location. Most of the Corporation’s lending activities are with customers located within the Bank’s Market Area.
Current wording
Total loans, net of unearned income, outstanding increased $658.9 million, or 39.2%, from December 31, 2024 to June 30, 2025. The increase was driven primarily by the Acquisition. ACNB acquired $648.5 million in loans at the Acquisition date. Total acquisition accounting adjustments on loans were $22.2 million at June 30, 2025. The majority of the loan acquisition accounting adjustments are expected to accrete back through as income as loans pay off or mature. ACNB does not have a significant concentration of credit risk with any single borrower, industry or geographic location. Most of the Corporation’s lending activities are with customers located within the Bank’s Market Area.
Previous wording
The commercial real estate portfolio, which includes farmland, multifamily, owner-occupied and non-owner occupied commercial real-estate, grew $284.9 million, or 29.4%, in 2025. The following data related to the commercial real estate portfolio through the breakout charts excludes the impact of the acquisition accounting adjustments on loans. The collateral for these loans is primarily spread across Pennsylvania and Maryland, 65.3% and 32.5%, respectively, at March 31, 2025, compared to 56.0% and 42.1%, respectively, at December 31, 2024. Less than 3% of the portfolio is for real estate in Urban areas of Baltimore, Maryland and Philadelphia, Pennsylvania. The largest sectors of the commercial real estate portfolio are retail and mixed-use commercial rental units, office complexes and hotels, motels and bed and breakfast entities. Non-owner occupied commercial real estate represented 66.3% of the commercial real estate portfolio. Non-owner occupied commercial real estate borrowers are geographically dispersed throughout ACNB’s Market Area and are leasing commercial properties to a varied group of tenants including medical offices, retail space, and other commercial purpose facilities. Because of the varied nature of the tenants, in aggregate, management believes that these loans present an acceptable risk when compared to commercial loans in general.
Current wording
The commercial real estate portfolio, which includes farmland, multifamily, owner-occupied and non-owner occupied commercial real-estate, grew $285.2 million, or 29.4%, compared to December 31, 2024. The following data related to the commercial real estate portfolio through the breakout charts excludes the impact of the acquisition accounting adjustments on loans. The collateral for these loans is primarily spread across Pennsylvania and Maryland, 65.2% and 32.4%, respectively, at June 30, 2025, compared to 56.0% and 42.1%, respectively, at December 31, 2024. Less than 3% of the portfolio is for real estate in Urban areas of Baltimore, Maryland and Philadelphia, Pennsylvania. The largest sectors of the commercial real estate portfolio are retail and mixed-use commercial rental units, office complexes and hotels, motels and bed and breakfast entities. Non-owner occupied commercial real estate represented 65.5% of the commercial real estate portfolio. Non-owner occupied commercial real estate borrowers are geographically dispersed throughout ACNB’s Market Area and are leasing commercial properties to a varied group of tenants including medical offices, retail space, and other commercial purpose facilities. Because of the varied nature of the tenants, in aggregate, management believes that these loans present an acceptable risk when compared to commercial loans in general.
Previous wording
1 Constitutes over 40 loan categories that do not fit into the categories presented above.
Current wording
1 Constitutes over 40 loan categories that do not fit into the categories presented above, with no loan category representing more than 3% of the total.
Previous wording
The concentration of non-owner occupied commercial real estate, construction, and multi-family was 253.1% of total risk-based capital of the Bank as of March 31, 2025 compared to 207.0% of total risk-based capital of the Bank as of December 31, 2024. The increase was a result of the addition of Traditions’ portfolio.
Current wording
The concentration of non-owner occupied commercial real estate, construction, and multi-family was 250.7% of total risk-based capital of the Bank as of June 30, 2025 compared to 207.0% of total risk-based capital of the Bank as of December 31, 2024. The increase was primarily a result of the addition of Traditions’ portfolio.
Previous wording
Residential real estate mortgages totaled $591.5 million, an increase of $189.5 million, or 47.2%, in 2025. Included in the residential real estate mortgages were $56.4 million in junior liens. Junior liens inherently have more credit risk by virtue of the fact that another financial institution may have a senior security position in the case of foreclosure liquidation of collateral to extinguish the debt.
Current wording
Residential real estate mortgages totaled $594.9 million, an increase of $192.9 million, or 48.0%, compared to December 31, 2024. Included in the residential real estate mortgages are $214.4 million of commercial loans and $66.6 million of consumer loans secured by residential real estate mortgages. Total residential real estate mortgages include $53.5 million in junior liens. Junior liens inherently have more credit risk by virtue of the fact that another financial institution may have a senior security position in the case of foreclosure liquidation of collateral to extinguish the debt.
Previous wording
Commercial and industrial loans totaled $220.8 million, an increase of $79.9 million, or 56.7% in 2025. This segment includes loans to school districts, municipalities (including townships) and essential purpose authorities. In many cases, these loans are obtained through a bid process that includes other local and regional banks and are especially subject to refinancing in certain rate environments.
Current wording
Commercial and industrial loans totaled $226.3 million, an increase of $85.4 million, or 60.6% compared to December 31, 2024. This segment includes loans to school districts, municipalities (including townships) and essential purpose authorities. In many cases, these loans are obtained through a bid process that includes other local and regional banks and are especially subject to refinancing in certain rate environments.
Previous wording
The ACL at March 31, 2025 was $24.6 million, or 1.06% of total loans, net of unearned income as compared to $17.3 million, or 1.03% of loans, at December 31, 2024 and $20.2 million, or 1.21% of loans, at March 31, 2024. The increase of $7.4 million compared to December 31, 2024 and $4.5 million compared to March 31, 2024 was driven primarily by an initial $5.5 million allowance for credit losses for non-PCD loans, which was recognized through the provision for credit losses, and a $1.5 million allowance for credit losses for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans, at the Acquisition date.
Current wording
The ACL at June 30, 2025 was $24.4 million, or 1.04% of total loans, net of unearned income as compared to $17.3 million, or 1.03% of loans, at December 31, 2024 and $17.2 million, or 1.02% of loans, at June 30, 2024. The increases of $7.1 million compared to December 31, 2024 and $7.2 million compared to June 30, 2024 were driven primarily by an initial $5.5 million ACL for non-PCD loans, which was recognized through the provision for credit losses, and a $1.5 million ACL for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans, at the Acquisition date.
Previous wording
Nonaccrual loans increased $2.2 million during the three months ended March 31, 2025 driven primarily by the Acquisition. Information on nonaccrual loans, by collateral type rather than loan segment, at March 31, 2025, as compared to December 31, 2024, is as follows:
Current wording
Information on nonaccrual loans, by collateral type rather than loan segment, at June 30, 2025, as compared to December 31, 2024, is as follows:
Previous wording
All nonaccrual loans are to borrowers located within ACNB’s Market Area and were originated by ACNB’s banking subsidiary or were part of the Acquisition and were originated by Traditions’ banking subsidiary.
Current wording
Nonaccrual loans increased $1.8 million from December 31, 2024 to June 30, 2025 driven primarily by the Acquisition. All nonaccrual loans are to borrowers located within ACNB’s Market Area and were originated by ACNB’s banking subsidiary or were part of the Acquisition and were originated by Traditions’ banking subsidiary.
Previous wording
Acquisition. ACNB acquired $741.5 million in deposits at the Acquisition date. Historically, deposit balances fluctuate reflecting different balance levels held by local companies, government units and school districts during different times of the year. Included in total deposits at March 31, 2025 were municipal deposits totaling $137.2 million, or 5.4%, compared to $111.0 million, or 6.2%, at December 31, 2024. Time deposits increased $204.1 million, or 74.8%. Time deposits include brokered deposits totaling $54.0 million at March 31, 2025 compared to $24.1 million at December 31, 2024. In January 2025, ACNB Bank issued $20.0 million in brokered time deposits to offset seasonal fluctuations in commercial deposits during the quarter, and as a result of the Acquisition, ACNB assumed $15.0 million of brokered time deposits of which $5.0 million matured in February 2025. The loan-to-deposit ratio was 91.43% at March 31, 2025 compared to 93.89% at December 31, 2024.
Current wording
ACNB relies on deposits as a primary source of funds for lending activities. The increase in deposits from December 31, 2024 to June 30, 2025 was driven primarily by the Acquisition. ACNB acquired $741.5 million in deposits at the Acquisition date. Historically, deposit balances fluctuate reflecting different balance levels held by local companies, government units and school districts during different times of the year. Included in total deposits at June 30, 2025 were municipal deposits totaling $117.5 million, or 4.7%, of total deposits compared to $111.0 million, or 6.2%, of total deposits at December 31, 2024. Time deposits increased $207.4 million and include brokered deposits totaling $69.0 million at June 30, 2025 compared to $24.1 million at December 31, 2024. ACNB Bank issued $40.0 million in brokered time deposits during the six months ended June 30, 2025 for general balance sheet management purposes. The loan-to-deposit ratio was 92.76% at June 30, 2025 compared to 93.89% at December 31, 2024.
Previous wording
ACNB’s deposit pricing function employs a disciplined pricing approach based upon liquidity needs and alternative funding rates, but also strives to price deposits to be competitive with relevant local competition, including local government investment trusts, credit unions and larger regional banks. Based on total Bank deposits outstanding, consumer and commercial constituted approximately 61% and 39%, respectively, of total Bank deposits as of March 31, 2025 compared to approximately 63% and 37%, respectively, as of December 31, 2024. The ratio of uninsured and non-collateralized Bank deposits to total Bank deposits was approximately 19.7% at March 31, 2025. As of March 31, 2025, cash on hand, the fair value of unencumbered investment securities and collateralized borrowing capacities at the FHLB and the Federal Reserve discount window at the Bank were 242.3% of uninsured and non-collateralized Bank deposits. At March 31, 2025, deposits from the 20 largest unrelated depositors, excluding internal accounts, of the Bank totaled $187.0 million, or 7.3%, of total Bank deposits compared to $143.4 million, or 7.9%, of total Bank deposits at December 31, 2024.
Current wording
ACNB’s deposit pricing function employs a disciplined pricing approach based upon liquidity needs and alternative funding rates, but also strives to price deposits to be competitive with relevant local competition, including local government investment trusts, credit unions and larger regional banks. Based on total Bank deposits outstanding, consumer and commercial constituted approximately 60% and 40%, respectively, of total Bank deposits as of June 30, 2025 compared to approximately 63% and 37%, respectively, as of December 31, 2024. The ratio of uninsured and non-collateralized Bank deposits to total Bank deposits was 20.3% at June 30, 2025. As of June 30, 2025, cash on hand, the fair value of unencumbered investment securities and collateralized borrowing capacities at the FHLB and the Federal Reserve discount window at the Bank were 297.9% of uninsured and non-collateralized Bank deposits. At June 30, 2025, deposits from the 20 largest unrelated depositors, excluding internal accounts, of the Bank totaled $164.0 million, or 6.4%, of total Bank deposits compared to $143.4 million, or 7.9%, of total Bank deposits at December 31, 2024.
Previous wording
Short-term borrowings are comprised primarily of securities sold under agreements to repurchase and short-term borrowings from the FHLB. As of March 31, 2025, short-term borrowings were $44.2 million, an increase of $28.4 million compared to $15.8 million at December 31, 2024. Agreements to repurchase accounts are within the commercial and local government customer base and have attributes similar to core deposits. Investment securities are pledged in sufficient amounts to collateralize these agreements. Compared to December 31, 2024, securities sold under repurchase agreements balances decreased by $1.8 million, or 11.2%, due to normal changes in the cash flow position of ACNB’s commercial and local government customer base. Short-term FHLB advances at March 31, 2025 were $25.0 million compared to none at December 31, 2024. Short-term FHLB borrowings are used forgeneral balance sheet management.
Current wording
Short-term borrowings are comprised primarily of securities sold under agreements to repurchase and short-term borrowings from the FHLB. As of June 30, 2025, short-term borrowings were $43.0 million, an increase of $27.2 million compared to $15.8 million at December 31, 2024. During the first quarter of 2025, ACNB paid off $40.2 million of short-term and long-term FHLB borrowings held by Traditions with a cost of 4.73% shortly following the Acquisition date. Agreements to repurchase accounts are within the commercial and local government customer base and have attributes similar to core deposits. Investment securities are pledged in sufficient amounts to collateralize these agreements. Compared to December 31, 2024, securities sold under repurchase agreements balances decreased by $2.2 million, or 13.6%, due to normal changes in the cash flow position of ACNB’s commercial and local government customer base. Short-term FHLB advances at June 30, 2025 were $25.0 million compared to none at December 31, 2024. Short-term FHLB borrowings are used forgeneral balance sheet management.
Previous wording
Long-term borrowings consist of longer-term advances from the FHLB, trust preferred subordinated debt and subordinated debt and totaled $255.3 million at March 31, 2025 and at December 31, 2024. Further borrowings will be used when necessary for a variety of risk management and funding purposes. Please refer to the Liquidity discussion below for more information on the Corporation’s ability to borrow.
Current wording
Long-term borrowings consist of longer-term advances from the FHLB, trust preferred subordinated debt and subordinated debt. Long-term borrowings totaled $255.4 million at June 30, 2025 compared to $255.3 million at December 31, 2024. Further borrowings will be used when necessary for a variety of risk management and funding purposes. Please refer to the Liquidity discussion below for more information on the Corporation’s ability to borrow.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
The following table provides a comparative average balance sheet and net interest income analysis for the periods presented. The discussion following this table is based on these taxable-equivalent amounts.
Current report — wording carried from elsewhere
2 Average balances include non-accrual loans and are net of unearned income.
Current report — wording carried from elsewhere
3 Average balance of investment securities is computed at fair value.
Current report — wording carried from elsewhere
The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for thesix months ended June 30, 2025 compared to thesame period of 2024:
Current report — wording carried from elsewhere
1 The effect of changing volume and rate, which cannot be segregated, has been allocated entirely to the rate column.
Current report — wording carried from elsewhere
2 Based on average balances and includes non-accrual loans and are net of unearned income.
Current report — wording carried from elsewhere
Total FTE interest income increased $25.0 million during the six months ended June 30, 2025 compared to the same period of 2024. ACNB experienced a $17.1 million increase in FTE interest income due to an increase in the average balance of interest earning assets and $7.9 million attributable to an increase in the yield on interest earning assets. FTE interest income on total loans increased $24.1 million compared to the same period of 2024. Average loans increased $589.5 million contributing $16.4 million to the increase in FTE interest income. The yield on total loans increased 74 bps, contributing $7.7 million to the increase.
Current report — wording carried from elsewhere
Total interest expense increased $8.5 million during the six months ended June 30, 2025 compared to the same period of 2024. Total average interest-bearing deposits increased $518.4 million for the six months ended June 30, 2025 compared to the same period of 2024. Interest expense increased $5.0 million due to higher rates on interest-bearing deposits as a result of the Acquisition and increased $3.5 million as a result of the increase in average interest-bearing deposits. The average cost of interest-bearing deposits was 1.44% for the six months ended June 30, 2025, an increase of 72 bps compared to the same period of 2024. The largest increases in rates were in time deposits and money markets which increased 100 and 99 bps, respectively.
Current report — wording carried from elsewhere
Provision for Credit Losses and Unfunded Commitments
Current report — wording carried from elsewhere
The following table presents the components of noninterest income:
Current report — wording carried from elsewhere
The following table presents the components of noninterest expense:
Current report — wording carried from elsewhere
The Corporation recognized income taxes of $3.0 million for the six months ended June 30, 2025 compared to $4.7 million during the same period of 2024. The provision for income taxes for the six months ended June 30, 2025 and for the same period of 2024 reflects a combined Federal and State ETR of 20.8%. Any variances from the federal statutory rate of 21% are generally due to tax-free income, which includes, but not limited to, interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, the impact of non-tax deductible expense and state taxes. Additionally, ACNB has incurred non-deductible costs related to the Acquisition which are recorded within merger-related expenses on the Consolidated Statements of Income.