ACNB CORP

Note 1 –Basis of Presentation

Nature of Operations

ACNB Corporation, headquartered in Gettysburg, Pennsylvania, provides banking, wealth management, mortgage and insurance services to businesses and consumers through its wholly-owned subsidiaries, ACNB Bank and ACNB Insurance Services. The Bank engages in full-service commercial and consumer banking and wealth management services, including trust and retail brokerage, through its 33 community banking offices, including 24 community banking office locations in Adams, Cumberland, Franklin, Lancaster and York Counties, Pennsylvania, andnine community banking office locations in Carroll and Frederick Counties, Maryland. There aretwo loan production offices located in West Lawn, Pennsylvania and in Hunt Valley, Maryland. ACNB Insurance Services is a full-service insurance agency based in Westminster, Maryland, with an additional location in Gettysburg, Pennsylvania. The agency offers a broad range of property, casualty, health, life and disability insurance to both individual and commercial clients.

Recent Acquisition

Effective February 1, 2025, ACNB closed the acquisition of Traditions Bancorp, Inc., holding company for Traditions Bank, York, Pennsylvania. Traditions was merged with and into a wholly-owned subsidiary of ACNB Corporation immediately followed by the merger of Traditions Bank with and into ACNB Bank. ACNB Bank is operating four of the former Traditions Bank offices as “Traditions Bank, A Division of ACNB Bank”.

Basis of Financial Statements

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary for a fair presentation. All such adjustments are of a normal recurring nature. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025. The Corporation evaluates subsequent events through the filing date of this Form 10-Q with the SEC. The results of operations for the three and six month period ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year.

Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. Reclassifications had no material effect on prior year net income or stockholders’ equity.

Significant Accounting Policies

The significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the Corporation’s 2025 Annual Report on Form 10-K. Those significant accounting policies are unchanged at June 30, 2026.

Accounting Standards Pending Adoption

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Subtopic 220-40)”. This ASU is intended to improve the decision usefulness of expense information on public business entities’ income statements through the disaggregation of relevant expense captions in the notes to the financial statements. The amendments of ASU 2024-03 are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and early adoption is permitted. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

In November 2025, the FASB issued ASU 2025-08, “Financial Instruments–Credit Losses (Topic 326): Purchased Loans”. The amendments in this ASU expand the population of acquired financial assets subject to the gross-up approach in Topic 326. Financial assets acquired with a “more-than-insignificant” deterioration of credit quality since its origination (PCD assets) and non-PCD assets are accounted for using the “gross up approach” to both populations. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, and early adoption is permitted. The amendments in this ASU should be applied prospectively to loans that are acquired on or after the initial application date. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements”. This ASU was issued to clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. The objective of this ASU is to more closely align hedge accounting with the economics of an entity’s risk management activities. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, and early adoption is permitted. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow Scope Improvements”. This ASU was issued to improve the guidance in Topic 270 by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. The amendments add to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The objective of this amendment is to provide clarity on the current interim reporting requirements. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

Note 2 – Earnings Per Share

The Corporation has a simple capital structure. Basic earnings per share of common stock is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding less unvested restricted stock at the end of the period. Diluted earnings per share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding.

There were no antidilutive instruments at June 30, 2026 and 2025.

Share Repurchase Plans

On April 29, 2026, the Corporation announced that the Board of Directors approved a plan to repurchase, in open market transactions at prevailing market prices, up to 310,000 shares, or approximately 3%, of the outstanding shares of ACNB’s common stock. This common stock repurchase program replaced and superseded any and all earlier announced repurchase plans. During the three months ended June 30, 2026, the Corporation repurchased 56,308 shares under this plan.

On June 18, 2025, the Corporation announced that the Board of Directors approved a plan to repurchase, in open market transactions at prevailing market prices, up to 314,000 shares, or approximately 3%, of the outstanding shares of ACNB’s common stock. There were 116,929 shares purchased under this plan through December 31, 2025. During the three and six months ended June 30, 2026 the Corporation repurchased 123,099 and 197,071 shares, respectively, which completed this plan.

Employee Stock Purchase Plan

On May 5, 2026, shareholders approved the ACNB Corporation Employee Stock Purchase Plan effective July 1, 2026. The ESPP provides employees of ACNB the opportunity to acquire an ownership interest in the Corporation through a regular investment program to purchase its common stock. A total of 300,000 shares of the Corporation’s common stock are reserved for issuance under the ESPP.

Note 3 –Investment Securities

Fair value of equity securities with readily determinable fair values at June 30, 2026 and December 31, 2025 are as follows:

Amortized cost and fair value of investment securities were as follows:

The following table shows the Corporation’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

All mortgage-backed securities, and those of a similar asset class, are government-sponsored enterprise pass-through instruments issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation or they are issued by the Government National Mortgage Association which is backed by the U.S. government which guarantees the timely payment of principal on these investments.

The Company evaluates AFS debt securities for impairment at each measurement date to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. In estimating credit events, management considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before anticipated recovery or if it does not expect to recover the entire amortized cost basis. There was no impairment on AFS debt securities as of June 30, 2026 and December 31, 2025. The Company evaluates HTM debt securities for expected credit losses at each measurement date to determine the ACL. The Corporation’s ACL on its HTM investment securities was de minimis as of June 30, 2026 and December 31, 2025.

The Company monitors the credit quality of HTM debt securities through the use of credit analysis on a quarterly basis. The credit quality indicators were updated as of June 30, 2026. The following table shows the amortized cost of HTM debt securities as of June 30, 2026 and December 31, 2025, aggregated by credit quality indicator:

Amortized cost and fair value at June 30, 2026, by contractual maturity, where applicable, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay with or without penalties. Securities not due at a single maturity date are shown separately below.

The proceeds from sales and calls of investment securities and the associated gains and losses are listed below:

During the six months ended June 30, 2025, ACNB received $97.7 million in proceeds from the sale of Traditions’ investments subsequent to the Acquisition date.

At June 30, 2026 and December 31, 2025, securities with a carrying value of $158.4 million and $159.6 million, respectively, were pledged as collateral as required by law on public and trust deposits, repurchase agreements and for other purposes.

Note 4 –Loans and Allowance for Credit Losses

The following table presents the composition of the loan portfolio:

One of the factors used to monitor the performance and credit quality of the loan portfolio is to analyze the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status:

Nonaccrual and Nonperforming Loans

Loans individually evaluated consist of nonaccrual loans, presented in the following table:

During the six months ended June 30, 2026, no material amount of interest income was recognized on nonaccrual loans subsequent to their classification as nonaccrual.

Total nonperforming loans are as follows:

1 Nonperforming loans include consumer residential mortgages and home equity lines of credit which are well secured by residential real estate properties, all of which are in the process of collection and are not considered nonaccrual.

Collateral-Dependent Loans

A loan is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. If the estimated value of the loan is less than the amortized cost basis, the loan is written down through the ACL as a credit loss. Substantially all of the collateral supporting collateral-dependent loans consists of various types of real estate, including residential properties, commercial properties such as retail centers, office buildings and lodging, agriculture land and vacant land. Changes in the fair value of the collateral for individually evaluated loans are reported as a component of the provision for credit losses in the period of change.

The following table presents the amortized cost basis of individually evaluated loans by type of collateral as of the periods presented:

Loan Modifications

The Corporation evaluates all loan restructurings to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or combinations of the above. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

There were no loans modified during the three months ended June 30, 2026 and 2025 and the six months ended June 30, 2025.

The following table presents the amortized cost basis of loans that were experiencing financial difficulty and modified during the six months ended June 30, 2026, by class, type of modification and financial effect. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:

The following presents the performance of loans modified in the previous twelve months as of June 30, 2026:

The following presents the performance of loans modified in the previous twelve months as of June 30, 2025:

As of June 30, 2026, the Corporation had no commitments to lend any additional funds on modified loans. During the six months ended June 30, 2026, one residential mortgage loan in the amount of $92 thousand defaulted on the modified terms of the agreement by failure to make the monthly payments after the deferment period ended. During the three and six months ended June 30, 2025, there were no loans modified due to financial difficulty that defaulted subsequent to the modification. For purposes of this disclosure, a default occurs when, within 12 months of the original modification, either a full or partial charge-off occurs or the loan becomes 90 days or more past due.

Allowance for Credit Losses

The Corporation maintains an ACL at a level determined to be adequate by management to absorb expected credit losses associated with the Corporation’s financial instruments over the life of those instruments as of the balance sheet date. The ACL consists of loans evaluated collectively and individually for expected credit losses. The Corporation considers the performance of the loan portfolio and its impact on the ACL and does not assign internal risk ratings to smaller balance, homogeneous loans such as certain residential mortgage, home equity lines of credit, construction loans to individuals secured by residential real estate and consumer loans. For these loans, the Corporation evaluates credit quality based on the aging status of the loan and designates as performing and nonperforming.

The following summarizes designated internal risk categories by portfolio segment for loans assigned a risk rating and those evaluated based on the performance status:

The following table presents the activity in the ACL by loan portfolio segment:

Note 5 –Deposits

Deposits were comprised of the following as of the periods presented:

Time deposits include brokered deposits totaling $75.0 million at June 30, 2026 and $59.1 million at December 31, 2025.

Scheduled maturities of time deposits at June 30, 2026 are as follows:

Note 6 –Borrowings

Short-term borrowings and weighted-average interest rates for the periods presented:

Borrowings with original maturities of one year or less are classified as short-term. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are sweep accounts with next-day maturities utilized by larger commercial customers to earn interest on their funds. Securities are pledged to these customers in an amount at least equal to the outstanding balance. Under an agreement with the FHLB, the Bank has short-term borrowing capacity included within its maximum borrowing capacity. All FHLB advances are collateralized by a security agreement covering qualifying loans. In addition, all FHLB advances are secured by the FHLB capital stock owned by the Bank having a par value of $14.0 million at June 30, 2026.

Long-term borrowings and their weighted-average contractual rates were comprised of the following for the periods presented:

1 Net of purchase accounting fair value mark.

2 Net of unamortized issuance costs.

The long-term FHLB advances have a weighted average rate of 4.42% and are collateralized by the assets defined in the security agreement and FHLB capital stock described previously. Based on this collateral and ACNB’s holding of FHLB stock, ACNB is eligible to borrow up to $1.30 billion, of which $1.01 billion was available at June 30, 2026.

The trust preferred subordinated debt is comprised of debt securities issued by FCBI in December 2006 and assumed by ACNB Corporation through the acquisition of FCBI. FCBI completed the private placement of an aggregate of $6.0 million of trust preferred securities. The interest rate on the subordinated debentures is adjusted quarterly to 163 bps over the three-month CME Term SOFR plus applicable tenor spread adjustment. On June 11, 2026, the most recent interest rate reset date, the interest rate was adjusted to 5.56% through the period ending September 14, 2026. The trust preferred securities mature on December 15, 2036, and may be redeemed at par, at the Corporation’s option, on any interest payment date. The trust preferred subordinated debt is considered Tier 1 capital for the consolidated capital ratios.

On March 12, 2026, the Company entered into subordinated note purchase agreements with the Purchasers pursuant to which the Company sold and issued $15.0 million in aggregate principal amount of its 5.875% fixed-to-floating rate subordinated notes due March 15, 2036. The 2026 Subordinated Notes bear interest at a fixed rate, for the period up to, but excluding March 15, 2031. From and including March 15, 2031 until maturity or redemption, the interest rate will adjust to a floating rate equal to a benchmark rate, which is expected to be the then-current Three-Month Term SOFR, plus 245 bps. The Company will pay interest in arrears semi-annually during the fixed interest rate period and quarterly during the floating interest rate period. The 2026 Subordinated Notes constitute unsecured and subordinated obligations of the Company and rank junior in right of payment to any senior indebtedness and obligations to general and secured creditors. Subject to limited exceptions, the Company cannot redeem the 2026 Subordinated Notes before March 15, 2031. The 2026 Subordinated Notes were issued by the Corporation to the Purchasers at a price equal to 100% of their face amount. The issuance costs for the 2026 Subordinated Notes were $537 thousand and are reported net on the Consolidated Statements of Condition. The 2026 Subordinated Notes have a stated maturity of March 15, 2036, are redeemable by the Company at its option, in whole or in part, on or after March 15, 2031, and at any time upon the occurrences of certain events. The 2026 Subordinated Notes are considered Tier 2 capital for the consolidated capital ratios.

On March 30, 2021, the Company entered into subordinated note purchase agreements with the Purchasers pursuant to which the Company sold and issued $15.0 million in aggregate principal amount of its 4.00% fixed-to-floating rate subordinated notes due March 31, 2031. The Company redeemed on March 31, 2026 all of the Company’s outstanding 4.00% fixed-to-floating rate 2021 Subordinated Notes due March 31, 2031, having an aggregate principal amount of $15.0 million in accordance with the terms of the 2021 Subordinated Notes. The total redemption price was 100% of the aggregate principal amount of the 2021 Subordinated Notes, plus interest accrued and unpaid to March 31, 2026.

Note 7 –Derivative Financial Instruments

ACNB is exposed to certain risks arising from both its business operations and economic conditions. ACNB manages market risk, including interest rate risk, primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage interest rate risk that arise from business operations.

All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Condition. Until a derivative is settled, favorable changes in fair values result in unrealized gains that are recognized as assets, while unfavorable changes result in unrealized losses that are recognized as liabilities.

The Company may enter into a risk participation agreement with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed. This type of derivative is referred to as sold credit protection. In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Company has provided a loan structured with a derivative, the Company may purchase an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as purchased credit protection.

The following table presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Consolidated Statements of Condition:

The following table presents a summary of the fair value gains and losses on derivative financial instruments for the periods presented:

The following table presents the effect of fair value and cash flow hedge accounting on AOCI for the periods presented:

The following table presents the effect of fair value and cash flow hedge accounting on the Consolidated Statements of Income for the periods presented:

During the next 12 months, the Company estimates that an additional $248 thousand will be reclassified as a reduction to interest expense.

Note 8 –Fair Value Measurements

Fair value is the exchange price that would be received to sell the asset or paid to transfer the liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

Fair value measurement establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 — Quoted prices for similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following tables present assets and liabilities carried at fair value and the basis of measurement used at the periods presented:

The valuation techniques used to measure fair value for the items in the preceding tables are as follows:

Equity securities — The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Statements of Condition, with realized and unrealized gains and losses reported in noninterest income on the Consolidated Statements of Income. They are classified as Level 1 assets.

Available for sale investment securities —Included in this asset category are debt and pass through securities. Level 2 investment securities are valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics. Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing. Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, including market research publications. For certain security types, additional inputs may be used, or some of the standard market inputs may not be applicable.

• U.S. Government and agencies —Fair values are determined by a third-party pricing service, as detailed above. These debt securities are classified as Level 2.

• Collateralized mortgage obligations, Mortgage-backed securities and State and Municipal securities —Fair values are determined by a third-party pricing service, as detailed above. These debt securities are classified as Level 2.

• Corporate bonds —This category consists of subordinated and senior debt issued by financial institutions and the fair values for these corporate debt securities are determined by a third-party pricing service, as detailed above. They are classified as Level 2 investments.

Loans held for sale —This category includes mortgage loans HFS that are measured at fair value utilizing Level 2 measurements. Fair values are measured as the price that secondary market investors were offering for loans with similar characteristics.

Derivative financial instruments —Derivative financial instruments include interest rate lock commitments, forward commitments and interest rate derivatives. The fair value of interest rate lock commitments is derived from the value of the underlying loans, adjusted for changes in market interest rates relative to the committed rate. The fair value of forward commitments is based on quoted prices for mortgage-backed securities with similar characteristics. The fair value of interest rate derivatives and risk participations is based upon broker quotes. The fair value of both the assets and the related liabilities are determined in the same manner and are all classified as Level 2 assets.

Individually evaluated loans —This category consists of loans that were individually evaluated for impairment and have a specific reserve. They are classified as Level 3 assets.

Foreclosed assets held for resale —This category consists of foreclosed assets that are held for resale and classified as Level 3 assets, for which the fair values were based on estimated selling prices less estimated selling costs for similar assets in active markets.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

1 Fair value is generally determined through management’s estimate or independent third-party appraisals of the underlying collateral, which generally

includes various Level 3 inputs which are not observable.

2 Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received and/or age of the appraisal.

Management uses its best judgment in estimating the fair value of the Corporation’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Corporation could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these Consolidated Financial Statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful.

FHLB and Atlantic Community Banker’s Bank stock represent restricted investments and are carried at cost less any impairment on the Consolidated Statement of Condition, which is a reasonable estimate of fair value. There was no impairment identified as of June 30, 2026 or December 31, 2025.

The following tables present the carrying amount and the estimated fair value of the Corporation’s financial instruments:

Note 9 –Defined Benefit Pension Plan

The components of net periodic benefit income related to the non-contributory, defined benefit pension plan were as follows:

The Corporation has determined that it will not be contributing to the defined benefit plan in 2026 based on current levels and expected returns on plan assets. Effective April 1, 2012, no inactive or former participant in the plan is eligible to again participate in the plan and no employee hired after March 31, 2012 is eligible to participate in the plan.

Note 10 –Commitments and Contingencies

Commitments

The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit (typically mortgages and commercial loans) and, to a lesser extent, standby letters of credit. To varying degrees, these instruments involve elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition.

The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on balance sheet instruments. The Corporation does not anticipate any material losses from these commitments.

Commitments to extend credit, including commitments to grant loans and unfunded commitments under lines of credit, are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extensions of credit, is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, property and equipment and income-producing commercial properties. On loans secured by real estate, the Corporation generally requires loan to value ratios of no greater than 80%.

Standby letters of credit are conditional commitments issued by the Corporation to guarantee the performance of a customer to a third-party. Those guarantees are primarily issued to support public and private borrowing arrangements and similar transactions. The terms of the letters of credit vary and may have renewal features. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Corporation generally holds collateral and/or personal guarantees supporting those commitments for which collateral is deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral and the enforcement of guarantees would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.

The Corporation maintains a $5.0 million unsecured line of credit with a correspondent bank. The Corporation guarantees a note related to a $1.5 million commercial line of credit with a correspondent bank, with normal terms and conditions for such a line, for ACNB Insurance Services, the borrower. The commercial line of credit is for general working capital needs as they arise by ACNB Insurance Services. The liability is recorded for the net drawn amount of this line, no further liability is recorded for the remaining line as to the guarantor’s obligation as the guarantor would have full recourse from all assets of its wholly-owned subsidiary. There were no advances on these lines at June 30, 2026 and at December 31, 2025.

The Corporation has not been required to perform on any financial guarantees and has not incurred any losses on its commitments during the past three years.

A summary of the Corporation’s commitments were as follows:

Contingencies

The Corporation is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Corporation in connection with any such claims and lawsuits, it is the opinion of management that the disposition or ultimate determination of any such claims and lawsuits will not have a material adverse effect on the consolidated financial position, consolidated results of operations or liquidity of the Corporation.

Note 11 –Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of taxes, are as follows:

Note 12 –Segment Reporting

The Corporation hastwo reporting segments, the Bank and ACNB Insurance Services.

Segment information as of and for the periods listed below is as follows:

1 Includes the holding company and intercompany eliminations, including the intersegment elimination of interest income and interest expense.

2 Other noninterest expense for Banking includes equipment, net occupancy, professional services, other tax, FDIC and regulatory and merger-related expenses.

Other noninterest expense for Insurance includes equipment, net occupancy and professional services expenses.

1 Includes the holding company and intercompany eliminations, including the intersegment elimination of interest income and interest expense.

2 Other noninterest expense for Banking includes equipment, net occupancy, professional services, other tax, FDIC and regulatory and merger-related expenses.

Other noninterest expense for Insurance includes equipment, net occupancy and professional services expenses.