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ACNB Corporation Reports 2024 Second Quarter Financial Results
ソース: Nasdaq GlobeNewswire / 24 7 2024 07:45:01 America/New_York
GETTYSBURG, Pa., July 24, 2024 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $11.3 million, or $1.32 diluted earnings per share, for the three months ended June 30, 2024 compared to net income of $9.5 million, or $1.12 diluted earnings per share, for the three months ended June 30, 2023. Compared to the three months ended March 31, 2024, net income and diluted earnings per share for the three months ended June 30, 2024 increased $4.5 million and $0.52, respectively. The financial results for the three month period ended June 30, 2024 were impacted by a $3.2 million reversal of the provision for credit losses and unfunded commitments.
2024 Second Quarter Highlights
- Return on average assets was 1.86% and return on average equity was 16.12% for the three months ended June 30, 2024.
- Fully taxable equivalent (“FTE”) net interest margin was 3.82% for the three months ended June 30, 2024 compared to 3.77% for the three months ended March 31, 2024 and 4.11% for the three months ended June 30, 2023. This marked the first linked quarter increase in FTE net interest margin after 4 consecutive quarterly declines.
- Total loans were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023.
- Total non-performing loans to total loans, net of unearned income, was 0.19% at June 30, 2024 compared to 0.24% at March 31, 2024 and 0.23% at June 30, 2023. Net charge-offs to average loans outstanding (annualized) were 0.00% for both the three months ended June 30, 2024 and the three months ended March 31, 2024 compared to 0.02% for the three months ended June 30, 2023.
- Total deposits were $1.84 billion at June 30, 2024, an increase of $3.4 million compared to March 31, 2024. This marked the first linked quarter increase in deposits after 9 consecutive quarterly declines. Total deposits decreased $125.2 million compared to June 30, 2023.
- The loan to deposit ratio was 91.35% at June 30, 2024 and the ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.
- Tangible common equity to tangible assets ratio1 of 9.84% at June 30, 2024 compared to 9.61% at March 31, 2024 and 8.75% at June 30, 2023. The net unrealized loss on the available for sale securities portfolio was $52.7 million at June 30, 2024 compared to a net unrealized loss of $53.0 million at March 31, 2024 and a net unrealized loss of $66.1 million at June 30, 2023.
- ACNB and ACNB Bank capital levels remain well in excess of ACNB’s internal minimums and those required to be categorized as a well-capitalized institution by our bank regulators. ACNB’s overall liquidity position remains strong and stable.
“We are pleased to announce strong results for the second quarter of 2024 which reflect our continued focus on profitability. In spite of the continued economic challenges to the financial services industry our team remains focused on executing our strategic plan centered on our shareholders, customers and our communities,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.
“We continued to experience strong loan demand through the first half of the year combined with stellar asset quality metrics. Our ongoing efforts to diversify our revenue streams with ACNB Insurance Services and our Wealth Management teams continue to show positive momentum. Our net interest margin improved during the quarter, our non-interest expenses were down quarter over quarter and as result we are pleased to report solid operating results both the quarter and year to date.”
Mr. Helt continued, “As we look forward to the remainder of 2024, we remain cautiously optimistic that our strong capital position, ample liquidity, superior asset quality metrics and our focus on profitability will enable us to deliver on our commitment to our many different stakeholders.”
Net Interest Income and Margin
Net interest income for the three months ended June 30, 2024 totaled $21.0 million, a decrease of $1.0 million, or 4.7%, compared to the three months ended June 30, 2023 due to a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 was 3.82%, a decrease of 29 basis points from 4.11% for the three months ended June 30, 2023. The decrease in FTE net interest margin was driven primarily by an increase in long-term borrowings and promotional time deposit balances and costs. Total average borrowings increased $198.6 million for the three months ended June 30, 2024 compared to the same period in June 30, 2023. The average rate paid on total borrowings was 4.48% for the three months ended June 30, 2024, an increase of 133 basis points from the three months ended June 30, 2023. Total average interest-bearing deposits decreased $99.8 million, or 6.9%, for the three months ended June 30, 2024 compared to June 30, 2023; however, average time deposit balances increased $38.4 million due to the ongoing promotions. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 66 basis points from the three months ended June 30, 2023.
Net interest income increased by $371 thousand, or 1.8%, for the three months ended June 30, 2024 compared to the three months ended March 31, 2024 driven by an increase in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 increased 5 basis points from 3.77% for the three months ended March 31, 2024. The increase in FTE net interest margin was driven primarily by an increase in loan yields, the recognition of nonaccrual interest income related to a specific large relationship, and the stabilization of average interest-bearing and noninterest-bearing demand deposit balances during the quarter. The average yield on loans was 5.53% for the three months ended June 30, 2024, an increase of 16 basis points from the three months ended March 31, 2024. Excluding nonaccrual interest income related to the payoff of a specific large relationship, the FTE net interest margin was 3.79%. Total average interest-bearing deposits increased $11.0 million, or 0.8%, for the three months ended June 30, 2024 compared to the prior three months. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 14 basis points from the three months ended March 31, 2024. Total average noninterest-bearing demand deposits decreased $1.3 million, or 0.3%, for the three months ended June 30, 2024 compared to the prior three months.
Noninterest Income
Noninterest income for the three months ended June 30, 2024 was $6.4 million, an increase of $233 thousand, or 3.8%, from the three months ended June 30, 2023. Insurance commissions for the three months ended June 30, 2024 were $2.7 million, a decrease of $93 thousand from the three months ended June 30, 2023 driven primarily by lower contingent income partially offset by organic growth and timing of policy renewals in the current quarter. Wealth management income for the three months ended June 30, 2024 was $1.1 million, an increase of $90 thousand from the three months ended June 30, 2023 driven primarily by market appreciation and new business generation. Net gains on sales or calls of investment securities for the three months ended June 30, 2023 was a loss of $546 thousand compared to none for the three months ended June 30, 2024. Gain on assets held for sale for the three months ended June 30, 2023 was a gain of $323 thousand compared to none for the three months ended June 30, 2024.
Compared to the three months ended March 31, 2024, noninterest income for the three months ended June 30, 2024 increased $760 thousand, or 13.4%, driven primarily by increases in insurance commissions, as a result of the timing of policy renewals and contingent commissions received. Additionally, wealth management income increased driven primarily by market appreciation and new business generation.
Noninterest Expense
Noninterest expense for the three months ended June 30, 2024 was $16.4 million, an increase of $110 thousand, or 0.7%, from the three months ended June 30, 2023. The increase was driven primarily by increases in salaries and employee benefits. Salaries and employee benefits expense increased $602 thousand driven primarily by higher incentive payment accruals and higher base wages. Partially offsetting this increase was lower other operating expenses of $329 thousand, driven primarily by a reduction in third-party vendor costs and a reduction in limited partnership investment losses occurring in the three months ended June 30, 2023. In addition, professional services declined $72 thousand, due to recruiting expenses incurred in the same period of the prior year. Marketing and corporate relations declined $71 thousand, due to rebranding expenses in the same period of the prior year.
Noninterest expense for the three months ended June 30, 2024 decreased $1.3 million, or 7.2%, from the three months ended March 31, 2024. The decrease was across all expense categories. Salaries and employee benefits decreased $742 thousand driven primarily by decreases in equity compensation, lower health insurance costs due to lower claims and employer insurance refunds, and lower payroll taxes compared to the prior quarter. Equipment expense decreased $159 thousand driven primarily by lower purchases of office equipment compared to the prior quarter. Net occupancy decreased $139 thousand driven primarily by lower snow removal, building maintenance, and utilities expenses compared to the prior quarter. Other expenses decreased $89 thousand driven primarily by lower bank insurance costs and timing of charitable donations. Professional services decreased $87 thousand driven primarily by lower loan collection costs.
Loans and Asset Quality
Total loans outstanding were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023. The increase in both periods was driven primarily by growth in the commercial real estate portfolio in our core markets. Growth in the commercial real estate portfolio was spread throughout the footprint and across various property types. Despite the intense competition in the Corporation’s Market Areas, management continues to focus on asset quality and disciplined underwriting standards in the loan origination process. The commercial real estate portfolio grew $51.4 million, or 5.7%, in 2024. The collateral for these loans is primarily spread across Pennsylvania and Maryland.
Asset quality metrics continue to be stable. The provision for credit losses was a reversal of $3.0 million and the provision for unfunded commitments was a reversal of $259 thousand for the three months ended June 30, 2024 compared to a provision for credit losses of $223 thousand and the provision for unfunded commitments was a reversal of $151 thousand for the three months ended March 31, 2024. For the three months ended June 30, 2023, there was a reversal to the provision for credit losses of $273 thousand and a $121 thousand provision for unfunded commitments. The decrease in the provision for credit losses and unfunded commitments for the three months ended June 30, 2024 compared to the prior quarter and the same quarter of 2023 was driven primarily by updated estimates utilized as input assumptions within the Current Expected Credit Loss “CECL” model calculation. These estimates, which were based on more current information available as of June 30, 2024, drive input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. Non-performing loans were $3.1 million, or 0.19%, of total loans at June 30, 2024 compared to $3.9 million, or 0.24%, of total loans at March 31, 2024 and $3.7 million, or 0.23%, of total loans at June 30, 2023. The decrease in non-performing loans at June 30, 2024 compared to the prior quarter was the result of one relationship payoff and several unrelated paydowns. Annualized net charge-offs for the three months ended June 30, 2024 and March 31, 2024 were 0.00% of total average loans compared to 0.02% for the three months ended June 30, 2023.
Deposits and Borrowings
Deposits totaled $1.84 billion at June 30, 2024, an increase of $3.4 million, or 0.2%, since March 31, 2024 and a decrease of $125.2 million, or 6.4%, from June 30, 2023. Included in total deposits were $1.36 billion interest-bearing deposits at June 30, 2024 which increased $23.2 million, or 1.7%, from March 31, 2024 and decreased by $35.2 million, or 2.5%, from June 30, 2023. Total noninterest-bearing deposits were $479.7 million at June 30, 2024 compared to $499.6 million at March 31, 2024 and $569.7 million at June 30, 2023. The ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.
Total borrowings were $304.3 million at June 30, 2024, an increase of $31.7 million, or 11.6%, compared to March 31, 2024 and an increase of $171.6 million, or 129.3%, compared to June 30, 2023. The average rate on total borrowings was 4.48% for the three months ended June 30, 2024 compared to 4.38% for the three months ended March 31, 2024 and 3.15% for the three months ended June 30, 2023.
Stockholders’ Equity, Dividends and Share Repurchases
Total stockholders’ equity was $289.3 million at June 30, 2024 compared to $279.9 million at March 31, 2024 and $257.1 million at June 30, 2023. Tangible book value2 per share was $27.82, $26.70 and $23.83 at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
As announced on Form 8-K on July 24, 2024, the Board of Directors approved and declared a regular quarterly cash dividend of $0.32 per share of ACNB Corporation common stock payable on September 13, 2024, to shareholders of record as of August 30, 2024. This per share amount reflects a $0.04, or 14.3%, increase over the same quarter of 2023.
ACNB did not repurchase any shares of ACNB common stock during the three months ended June 30, 2024.
About ACNB Corporation
ACNB Corporation, headquartered in Gettysburg, PA, is the $2.46 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 26 community banking offices and three loan offices located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 46 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, MD, and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.acnb.com.
SAFE HARBOR AND FORWARD-LOOKING STATEMENTS - Should there be a material subsequent event prior to the filing of the Quarterly Report on Form 10-Q with the Securities and Exchange Commission, the financial information reported in this press release is subject to change to reflect the subsequent event. In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties, and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; banking instability caused by bank failures and continuing financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of the Corporation's consolidated financial statements when filed with the SEC. Accordingly, the financial information in this announcement is subject to change. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.
ACNB #2024-10
July 24, 2024ACNB Corporation Financial Highlights
Selected Financial Data by Respective Quarter End
(Unaudited)(Dollars in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 BALANCE SHEET DATA Assets $ 2,457,753 $ 2,414,288 $ 2,418,847 $ 2,388,522 $ 2,378,151 Investment securities 483,868 490,626 517,221 501,063 518,093 Total loans, net of unearned income 1,679,600 1,664,980 1,627,988 1,615,966 1,573,817 Allowance for credit losses (17,162) (20,172 ) (19,969 ) (19,264 ) (19,148 ) Deposits 1,838,588 1,835,224 1,861,813 1,951,359 1,963,754 Allowance for unfunded commitments 1,310 1,569 1,719 1,962 2,132 Borrowings 304,286 272,605 252,174 153,388 132,703 Stockholders’ equity 289,331 279,920 277,461 255,638 257,069 INCOME STATEMENT DATA Interest and dividend income $ 26,869 $ 25,974 $ 25,284 $ 24,234 $ 23,213 Interest expense 5,905 5,381 3,791 2,489 1,223 Net interest income 20,964 20,593 21,493 21,745 21,990 (Reversal of ) provision for credit losses (2,990 ) 223 786 250 (273 ) (Reversal of) provision for unfunded commitments (259 ) (151 ) (242 ) (171 ) 121 Net interest income after provisions for credit losses and unfunded commitments 24,213 20,521 20,949 21,666 22,142 Noninterest income 6,427 5,667 970 6,297 6,194 Noninterest expenses 16,391 17,662 17,173 16,336 16,281 Income before income taxes 14,249 8,526 4,746 11,627 12,055 Provision for income taxes 2,970 1,758 649 2,583 2,531 Net income $ 11,279 $ 6,768 $ 4,097 $ 9,044 $ 9,524 PROFITABILITY RATIOS Total loans, net of unearned income to deposits 91.35 % 90.72 % 87.44 % 82.81 % 80.14 % Return on average assets (annualized) 1.86 1.12 0.68 1.52 1.62 Return on average equity (annualized) 16.12 9.76 6.09 13.84 14.74 Efficiency ratio3 58.69 66.18 62.48 56.97 55.52 FTE Net interest margin 3.82 3.77 3.93 4.01 4.11 Yield on average earning assets 4.89 4.74 4.62 4.46 4.33 Yield on investment securities 2.65 2.70 2.36 2.24 2.24 Yield on total loans 5.53 5.37 5.29 5.16 5.05 Cost of funds 1.12 1.02 0.71 0.47 0.23 PER SHARE DATA Diluted earnings per share $ 1.32 $ 0.80 $ 0.48 $ 1.06 $ 1.12 Cash dividends paid per share 0.32 0.30 0.30 0.28 0.28 Tangible book value per share3 27.82 26.70 26.44 23.80 23.83 Tangible book value per share3 (excluding AOCI)4 33.28 32.21 31.74 31.43 30.64 CAPITAL RATIOS5 Tier 1 leverage ratio 12.25 % 11.91 % 11.57 % 11.97 % 11.79 % Common equity tier 1 ratio 15.78 15.40 15.16 15.30 15.38 Tier 1 risk based capital ratio 16.07 15.69 15.45 15.59 15.72 Total risk based capital ratio 17.86 17.68 17.41 17.49 17.67 CREDIT QUALITY Net charge-offs to average loans outstanding (annualized) 0.00 % 0.00 % 0.02 % 0.03 % 0.02 % Total non-performing loans to total loans, net of unearned income6 0.19 0.24 0.26 0.22 0.23 Total non-performing assets to total assets7 0.14 0.18 0.19 0.17 0.17 Allowance for credit losses to total loans, net of unearned income 1.02 1.21 1.23 1.19 1.22 Consolidated Balance Sheet
(Unaudited)(Dollars in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023 ASSETS Cash and due from banks $ 26,681 17,395 $ 21,442 Interest-bearing deposits with banks 59,593 35,740 44,516 Total Cash and Cash Equivalents 86,274 53,135 65,958 Equity securities with readily determinable fair values 919 918 928 Investment securities available for sale, at estimated fair value 418,364 425,114 451,693 Investment securities held to maturity, at amortized cost (fair value $57,026, $58,084, and $59,057) 64,585 64,594 64,600 Loans held for sale 1,801 88 280 Total loans, net of unearned income 1,679,600 1,664,980 1,627,988 Less: Allowance for credit losses (17,162 ) (20,172 ) (19,969 ) Loans, net 1,662,438 1,644,808 1,608,019 Premises and equipment, net 25,760 25,916 26,283 Right of use asset 2,278 2,447 2,615 Restricted investment in bank stocks 11,853 10,877 9,677 Investment in bank-owned life insurance 80,841 80,348 79,871 Investments in low-income housing partnerships 940 971 1,003 Goodwill 44,185 44,185 44,185 Intangible assets, net 8,446 8,761 9,082 Foreclosed assets held for resale 406 467 467 Other assets 48,663 51,659 54,186 Total Assets $ 2,457,753 $ 2,414,288 $ 2,418,847 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Noninterest-bearing $ 479,726 $ 499,583 $ 500,332 Interest-bearing 1,358,862 1,335,641 1,361,481 Total Deposits 1,838,588 1,835,224 1,861,813 Short-term borrowings 48,974 17,303 56,882 Long-term borrowings 255,312 255,302 195,292 Lease liability 2,278 2,447 2,615 Allowance for unfunded commitments 1,310 1,569 1,719 Other liabilities 21,960 22,523 23,065 Total Liabilities 2,168,422 2,134,368 2,141,386 Stockholders’ Equity: Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively — — — Common stock, $2.50 par value; 20,000,000 shares authorized; 8,934,495, 8,928,441, and 8,896,119 shares issued; 8,545,629, 8,539,575, and 8,511,453 shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively 22,330 22,315 22,231 Treasury stock, at cost; 388,866, 388,866, and 384,666 shares at June 30, 2024, March 31, 2024 and December 31, 2023, respectively (11,101 ) (11,101 ) (10,954 ) Additional paid-in capital 98,230 97,818 97,602 Retained earnings 226,271 217,712 213,491 Accumulated other comprehensive loss (46,399 ) (46,824 ) (44,909 ) Total Stockholders’ Equity 289,331 279,920 277,461 Total Liabilities and Stockholders’ Equity $ 2,457,753 $ 2,414,288 $ 2,418,847 Consolidated Income Statements
(Unaudited)Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands, except per share data) 2024 2023 2024 2023 INTEREST AND DIVIDEND INCOME Loans, including fees Taxable $ 22,675 $ 18,947 $ 44,145 $ 37,845 Tax-exempt 313 352 632 708 Investment securities: Taxable 2,665 2,688 5,576 5,974 Tax-exempt 284 285 568 599 Dividends 248 51 488 92 Other 684 890 1,434 1,904 Total Interest and Dividend Income 26,869 23,213 52,843 47,122 INTEREST EXPENSE Deposits 2,643 486 4,803 959 Short-term borrowings 304 108 643 125 Long-term borrowings 2,958 629 5,840 956 Total Interest Expense 5,905 1,223 11,286 2,040 Net Interest Income 20,964 21,990 41,557 45,082 Reversal of credit losses (2,990 ) (273 ) (2,767 ) (176 ) (Reversal of) provision for unfunded commitments (259 ) 121 (410 ) 397 Net Interest Income after Provisions for Credit Losses and Unfunded Commitments 24,213 22,142 44,734 44,861 NONINTEREST INCOME Insurance commissions 2,747 2,840 4,862 4,742 Service charges on deposits 1,021 989 2,012 1,951 Wealth management 1,069 979 2,031 1,819 ATM debit card charges 841 834 1,660 1,657 Earnings on investment in bank-owned life insurance 493 484 970 926 Gain from mortgage loans held for sale 34 14 82 31 Net (losses) gains on sales or calls of investment securities — (546 ) 69 (739 ) Net gains (losses) on equity securities 1 (15 ) (9 ) 5 Gain on assets held for sale — 323 — 323 Other 221 292 417 463 Total Noninterest Income 6,427 6,194 12,094 11,178 NONINTEREST EXPENSES Salaries and employee benefits 10,426 9,824 21,594 20,266 Equipment 1,570 1,623 3,299 3,230 Net occupancy 991 1,002 2,121 2,039 Professional services 529 601 1,145 983 FDIC and regulatory 348 295 723 544 Other tax 356 305 726 642 Intangible assets amortization 315 360 636 720 Supplies and postage 183 198 374 404 Marketing and corporate relations 88 159 176 313 Other 1,585 1,914 3,259 3,422 Total Noninterest Expenses 16,391 16,281 34,053 32,563 Income Before Income Taxes 14,249 12,055 22,775 23,476 Provision for income taxes 2,970 2,531 4,728 4,929 Net Income $ 11,279 $ 9,524 $ 18,047 $ 18,547 PER SHARE DATA Basic earnings $ 1.32 $ 1.12 $ 2.12 $ 2.18 Diluted earnings $ 1.32 $ 1.12 $ 2.12 $ 2.17 Average Balances, Income and Expenses, Yields and Rates Three months ended Three months ended Three months ended Three months ended Three months ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 (Dollars in thousands) Average
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RateASSETS Loans: Taxable $ 1,612,380 $ 22,675 5.66 % $ 1,573,109 $ 21,470 5.49 % $ 1,559,411 $ 21,303 5.42 % $ 1,520,134 $ 20,285 5.29 % 1,463,967 18,946 5.19 % Tax-exempt 64,276 396 2.48 65,825 404 2.47 69,058 425 2.44 73,995 457 2.45 75,670 446 2.36 Total Loans9 1,676,656 23,071 5.53 1,638,934 21,874 5.37 1,628,469 21,728 5.29 1,594,129 20,742 5.16 1,539,637 19,392 5.05 Investment Securities: Taxable 442,390 2,913 2.65 467,466 3,151 2.71 453,713 2,669 2.33 466,402 2,581 2.20 498,401 2,739 2.20 Tax-exempt 54,644 359 2.64 54,740 359 2.64 54,835 361 2.61 55,027 359 2.59 55,588 361 2.60 Total Investments10 497,034 3,272 2.65 522,206 3,510 2.70 508,548 3,030 2.36 521,429 2,940 2.24 553,989 3,100 2.24 Interest-bearing deposits with banks 50,851 684 5.41 54,156 750 5.57 50,225 691 5.46 53,324 723 5.38 71,040 890 5.03 Total Earning Assets 2,224,541 27,027 4.89 2,215,296 26,134 4.74 2,187,242 25,449 4.62 2,168,882 24,405 4.46 2,164,666 23,382 4.33 Cash and due from banks 21,041 20,540 21,578 23,783 22,215 Premises and equipment 25,903 26,102 25,983 25,980 26,420 Other assets 187,937 187,075 191,329 165,821 163,783 Allowance for credit losses (20,124 ) (19,963 ) (19,232 ) (19,101 ) (19,458 ) Total Assets $ 2,439,298 $ 2,429,050 $ 2,406,900 $ 2,365,365 $ 2,357,626 LIABILITIES Interest-bearing demand deposits $ 513,163 $ 275 0.22 % $ 512,701 $ 264 0.21 % $ 560,510 $ 275 0.19 % $ 571,314 $ 185 0.13 % $ 577,480 $ 150 0.10 % Money markets 248,191 613 0.99 248,297 536 0.87 274,226 707 1.02 245,899 312 0.50 261,560 100 0.15 Savings deposits 327,274 30 0.04 335,215 29 0.03 348,244 28 0.03 366,398 30 0.03 387,847 31 0.03 Time deposits 263,045 1,725 2.64 244,481 1,331 2.19 221,778 798 1.43 212,159 401 0.75 224,608 205 0.37 Total Interest-Bearing Deposits 1,351,673 2,643 0.79 1,340,694 2,160 0.65 1,404,758 1,808 0.51 1,395,770 928 0.26 1,451,495 486 0.13 Short-term borrowings 37,256 304 3.28 47,084 339 2.90 56,872 334 2.33 66,942 439 2.60 34,080 108 1.27 Long-term borrowings 255,305 2,958 4.66 248,701 2,882 4.66 137,026 1,649 4.77 94,554 1,122 4.71 59,901 629 4.21 Total Borrowings 292,561 3,262 4.48 295,785 3,221 4.38 193,898 1,983 4.06 161,496 1,561 3.83 93,981 737 3.15 Total Interest-Bearing Liabilities 1,644,234 5,905 1.44 1,636,479 5,381 1.32 1,598,656 3,791 0.94 1,557,266 2,489 0.63 1,545,476 1,223 0.32 Noninterest-bearing demand deposits 485,351 486,648 519,797 541,995 550,581 Other liabilities 28,348 26,904 21,648 6,820 2,330 Stockholders’ Equity 281,365 279,019 266,799 259,284 259,239 Total Liabilities and Stockholders’ Equity $ 2,439,298 $ 2,429,050 $ 2,406,900 $ 2,365,365 $ 2,357,626 Taxable Equivalent Net Interest Income 21,122 20,753 21,658 21,916 22,159 Taxable Equivalent Adjustment (158 ) (160 ) (165 ) (171 ) (169 ) Net Interest Income $ 20,964 $ 20,593 $ 21,493 $ 21,745 $ 21,990 Cost of Funds 1.12 % 1.02 % 0.71 % 0.47 % 0.23 % FTE Net Interest Margin 3.82 % 3.77 % 3.93 % 4.01 % 4.11 % Average Balances, Income and Expenses, Yields and Rates Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 (Dollars in thousands) Average
BalanceInterest11 Yield/
RateAverage
BalanceInterest11 Yield/
RateASSETS Loans: Taxable $ 1,592,745 $ 44,145 5.57 % $ 1,459,455 $ 37,844 5.23 % Tax-exempt 65,050 800 2.47 76,501 897 2.36 Total Loans12 1,657,795 44,945 5.45 1,535,956 38,741 5.09 Investment Securities: Taxable 454,928 6,064 2.68 527,576 6,066 2.32 Tax-exempt 54,692 719 2.64 55,449 758 2.76 Total Investments13 509,620 6,783 2.68 583,025 6,824 2.36 Interest-bearing deposits with banks 52,504 1,434 5.49 80,958 1,904 4.74 Total Earning Assets 2,219,919 53,162 4.82 2,199,939 47,469 4.35 Cash and due from banks 20,790 30,189 Premises and equipment 26,051 26,637 Other assets 187,458 160,316 Allowance for credit losses (20,044 ) (18,658 ) Total Assets $ 2,434,174 $ 2,398,423 LIABILITIES Interest-bearing demand deposits $ 512,932 $ 540 0.21 % $ 584,686 $ 331 0.11 % Money markets 248,244 1,149 0.93 285,996 139 0.10 Savings deposits 331,244 58 0.04 395,590 64 0.03 Time deposits 253,763 3,056 2.42 246,536 425 0.35 Total Interest-Bearing Deposits 1,346,183 4,803 0.72 1,512,808 959 0.13 Short-term borrowings 42,170 643 3.07 34,834 125 0.72 Long-term borrowings 252,004 5,840 4.66 43,597 956 4.42 Total Borrowings 294,174 6,483 4.43 78,431 1,081 2.78 Total Interest-Bearing Liabilities 1,640,357 11,286 1.38 1,591,239 2,040 0.26 Noninterest-bearing demand deposits 485,999 554,340 Other liabilities 27,626 (2,303 ) Stockholders’ Equity 280,192 255,147 Total Liabilities and Stockholders’ Equity $ 2,434,174 $ 2,398,423 Taxable Equivalent Net Interest Income 41,876 Taxable Equivalent Adjustment (319 ) Net Interest Income $ 41,557 Cost of Funds 1.07 % 0.19 % FTE Net Interest Margin 3.79 % 4.16 % Non-GAAP Reconciliation
Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.
Three Months Ended (Dollars in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Tangible book value per share Stockholders’ equity $ 289,331 $ 279,920 $ 277,461 $ 255,638 $ 257,069 Less: Goodwill and intangible assets (52,631 ) (52,946 ) (53,267 ) (53,619 ) (53,797 ) Tangible common stockholders’ equity (numerator) $ 236,700 $ 226,974 $ 224,194 $ 202,019 $ 203,272 Shares outstanding, less unvested shares, end of period (denominator) 8,507,191 8,501,137 8,478,460 8,488,446 8,528,782 Tangible book value per share $ 27.82 $ 26.70 $ 26.44 $ 23.80 $ 23.83 Tangible book value per share (excluding AOCI) Tangible common stockholders’ equity $ 236,700 $ 226,974 $ 224,194 $ 202,019 $ 203,272 Less: AOCI (46,399 ) (46,824 ) (44,909 ) (64,767 ) (58,052 ) Tangible equity (excluding AOCI) $ 283,099 $ 273,798 $ 269,103 $ 266,786 $ 261,324 Tangible book value per share (excluding AOCI) $ 33.28 $ 32.21 $ 31.74 $ 31.43 $ 30.64 Tangible common equity to tangible assets (TCE/TA Ratio) Tangible common stockholders’ equity (numerator) $ 236,700 $ 226,974 $ 224,194 $ 202,019 $ 203,272 Total assets $ 2,457,753 $ 2,414,288 $ 2,418,847 $ 2,388,522 $ 2,378,151 Less: Goodwill and intangible assets (52,631 ) (52,946 ) (53,267 ) (53,619 ) (53,797 ) Total tangible assets (denominator) $ 2,405,122 $ 2,361,342 $ 2,365,580 $ 2,334,903 $ 2,324,354 Tangible common equity to tangible assets 9.84 % 9.61 % 9.48 % 8.65 % 8.75 % Efficiency Ratio Noninterest expense $ 16,391 $ 17,662 $ 17,173 $ 16,336 $ 16,281 Less: Intangible amortization 315 321 352 352 360 Less: Loss on MD Title Investment — — — — 142 Noninterest expense (numerator) $ 16,076 $ 17,341 $ 16,821 $ 15,984 $ 15,779 Net interest income $ 20,964 $ 20,593 $ 21,493 $ 21,745 $ 21,990 Plus: Total noninterest income 6,427 5,667 970 6,297 6,194 Less: Net gains (losses) on sales or calls of securities — 69 (4,501 ) — (546 ) Less: Net gains (losses) on equity securities 1 (10 ) 40 (27 ) (15 ) Less: Gain on assets held for sale — — — 14 323 Total revenue (denominator) $ 27,390 $ 26,201 $ 26,924 $ 28,055 $ 28,422 Efficiency ratio 58.69 % 66.18 % 62.48 % 56.97 % 55.52 %
1 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
2 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
3 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
4 Accumulated Other Comprehensive Income (Loss).
5 Regulatory capital ratios as of June 30, 2024 are preliminary.
6 Non-performing Loans consists of loans on nonaccrual status and loans greater than ninety days past due and still accruing interest.
7 Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.
8 Income on interest-earning assets has been computed on a fully taxable equivalent (FTE) basis using the 21% federal income tax statutory rate.
9 Average balances include non-accrual loans and are net of unearned income.
10 Average balances of investment securities is computed at fair value.
11 Income on interest-earning assets has been computed on a fully taxable equivalent basis (FTE) using the 21% federal income tax statutory rate.
12 Average balances include non-accrual loans and are net of unearned income.
13 Average balances of investment securities is computed at fair value.Contact: Jason H. Weber EVP/Treasurer & Chief Financial Officer 717.339.5090 jweber@acnb.com 
- Return on average assets was 1.86% and return on average equity was 16.12% for the three months ended June 30, 2024.