ACNB Corporation Reports 2024 Third Quarter Financial Results
GETTYSBURG, Pa., Oct. 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 $7.2 million, or $0.84 diluted earnings per share, for the three months ended September 30, 2024 compared to net income of $9.0 million, or $1.06 diluted earnings per share, for the three months ended September 30, 2023 and net income of $11.3 million, or $1.32 diluted earnings per share, for the three months ended June 30, 2024. Financial results for the three months ended September 30, 2024 were impacted by $1.1 million in merger-related expense due to the pending acquisition of Traditions Bancorp, Inc. Financial results for the three month period ended June 30, 2024 were impacted by a $3.2 million reversal of the provisions for credit losses and unfunded commitments.
*2024 Third Quarter Highlights*
· Return on average assets was 1.17% and return on average equity was 9.63% for the three months ended September 30, 2024. Core return on average assets^1 was 1.32% and core return on average equity^1 was 10.81% for the three months ended September 30, 2024.
· Fully taxable equivalent (“FTE”) net interest margin was 3.77% for the three months ended September 30, 2024 compared to 3.82% for the three months ended June 30, 2024 and 4.01% for the three months ended September 30, 2023.
· Total non-performing loans to total loans, net of unearned income, was 0.39% at September 30, 2024 compared to 0.19% at June 30, 2024 and 0.22% at September 30, 2023. The increase in non-performing loans to total loans, net of unearned income, for the three months ended September 30, 2024 was the result of 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 the current quarter.
· Net charge-offs to average loans outstanding (annualized) were 0.01% for the three months ended September 30, 2024 and 0.00% for the three months ended June 30, 2024 compared to 0.03% for the three months ended September 30, 2023.
· Tangible common equity to tangible assets ratio^1 of 10.74% at September 30, 2024 compared to 9.84% at June 30, 2024 and 8.65% at September 30, 2023. The net unrealized loss on the available for sale securities portfolio was $36.8 million at September 30, 2024 compared to a net unrealized loss of $52.7 million at June 30, 2024 and a net unrealized loss of $75.2 million at September 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.
“We are once again pleased to share strong operating results for the third quarter of 2024. Our continued focus on profitability and asset quality as evidenced by our return on average assets and return on average equity are a testament to the continued focus on our strategic objectives,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.
“During the third quarter, we were also pleased to announce the strategic acquisition of Traditions Bancorp, Inc. This acquisition will create the largest community bank in Pennsylvania with assets less than $5 billion and enhances our presence in York County and expands our branch footprint in neighboring Lancaster County. We are excited to welcome Traditions as ACNB continues to expand our market presence. This strategic acquisition will complement our current operations with profitable growth opportunities in adjacent markets while contributing to the Corporation’s established commitment of enhancing long-term shareholder value.”
Mr. Helt continued, “As we look forward to the remainder of 2024 and the start of a new year in 2025, we are excited that our strong foundation based on community banking principles combined with the growth opportunities now before us through our strategic planning objectives will enable us to continue to deliver on our commitment to our stakeholders.”
*Net Interest Income and Margin*
Net interest income for the three months ended September 30, 2024 totaled $20.9 million, a decrease of $803 thousand, or 3.7%, compared to the three months ended September 30, 2023 driven by a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended September 30, 2024 was 3.77%, a decrease of 24 basis points from 4.01% for the three months ended September 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 $132.5 million for the three months ended September 30, 2024 compared to the same period in September 30, 2023. The average rate paid on total borrowings was 4.31% for the three months ended September 30, 2024, an increase of 48 basis points from the three months ended September 30, 2023. Total average interest-bearing deposits decreased $54.4 million, or 3.9%, for the three months ended September 30, 2024 compared to September 30, 2023; however, average time deposit balances increased $45.9 million due to ongoing promotions. The average rate paid on interest-bearing deposits was 0.92% for the three months ended September 30, 2024, an increase of 66 basis points from the three months ended September 30, 2023.
Net interest income for the three months ended September 30, 2024 totaled $20.9 million, a decrease of $22 thousand, or 0.1%, compared to $21.0 million for the three months ended June 30, 2024 driven by a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended September 30, 2024 decreased 5 basis points from 3.82% for the three months ended June 30, 2024. The decrease in FTE net interest margin was driven primarily by the recognition of nonaccrual interest income related to a specific large relationship during the three months ended June 30, 2024 and increases in the cost of average interest-bearing deposits during the three months ended September 30, 2024. Excluding nonaccrual interest income related to the payoff of a specific large relationship, the FTE net interest margin was 3.79% for the three months ended June 30, 2024. The average rate paid on interest-bearing deposits was 0.92% for the three months ended September 30, 2024, an increase of 13 basis points from the three months ended June 30, 2024.
*Noninterest Income*
Noninterest income for the three months ended September 30, 2024 was $6.8 million, an increase of $536 thousand, or 8.5%, from the three months ended September 30, 2023. Wealth management income for the three months ended September 30, 2024 was $1.2 million, an increase of $235 thousand from the three months ended September 30, 2023 driven primarily by portfolio market appreciation, estate income and new business generation. Insurance commissions for the three months ended September 30, 2024 were $2.8 million, an increase of $158 thousand from the three months ended September 30, 2023 driven primarily by growth in commissions on policy renewals and new business in the current quarter. Gain from mortgage loans held for sale totaled $112 thousand for the three months ended September 30, 2024 compared to none for the three months ended September 30, 2023.
Noninterest income for the three months ended September 30, 2024 increased $406 thousand, or 6.3%, from the three months ended June 30, 2024. The increase was driven primarily by increases in wealth management income driven by higher estate income and other income driven by annual check ordering incentives received during the three months ended September 30, 2024. Additionally, there was a higher volume of mortgages sold in the current quarter, which resulted in a higher gain from mortgage loans held for sale for the three months ended September 30, 2024 compared to the three months ended June 30, 2024.
*Noninterest Expense*
Noninterest expense for the three months ended September 30, 2024 was $18.2 million, an increase of $1.9 million, or 11.7%, from the three months ended September 30, 2023. The increase was driven primarily by merger-related and salaries and employee benefits expenses. The increase in merger-related expense was driven primarily by professional service expenses incurred for the Traditions acquisition and totaled $1.1 million for the three months ended September 30, 2024. Salaries and employee benefits expense increased $948 thousand driven primarily by $682 thousand in higher employee health insurance expense and $273 thousand higher base wages. In addition, equipment expense increased $144 thousand driven primarily by higher core processing expenses and incremental purchases of office equipment. Partially offsetting these increases, professional services decreased $208 thousand for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 driven primarily by lower recruiting expenses for talent acquisition and consulting expenses. Marketing and corporate relations declined $60 thousand in the current quarter primarily due to rebranding expenses incurred for the three months ended September 30, 2023.
Noninterest expense for the three months ended September 30, 2024 increased $1.9 million, or 11.3%, from the three months ended June 30, 2024. The increase was driven primarily by merger-related and salaries and employee benefits expenses. Merger-related expense totaled $1.1 million for the three months ended September 30, 2024 compared to $23 thousand for the three months ended June 30, 2024. Salaries and employee benefits expense increased $591 thousand during the three months ended September 30, 2024 compared to the three months ended June 30, 2024 driven primarily by higher employee health insurance expense of $519 thousand. Additionally, equipment expense increased $128 thousand driven primarily by higher core processing and software maintenance expenses coupled with incremental purchases of office equipment. Professional services expense decreased $120 thousand during the three months ended September 30, 2024 compared to the three months ended June 30, 2024 driven primarily by lower transfer agent and audit expenses.
*Loans and Asset Quality *
Total loans outstanding were $1.68 billion at September 30, 2024, a decrease of $2.5 million, or 0.1%, from June 30, 2024 and an increase of $61.1 million, or 3.8%, from September 30, 2023. The decrease from June 30, 2024 was driven primarily by real estate construction. The increase from September 30, 2023 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 Bank’s geographic footprint and across various property types. The commercial real estate portfolio grew $59.2 million, or 6.6%, in 2024. The collateral for these loans is primarily spread across our Pennsylvania and Maryland market areas. 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.
Asset quality metrics continue to be stable. The provision for credit losses was $81 thousand and the provision for unfunded commitments was $40 thousand for the three months ended September 30, 2024 compared to a reversal to the provision for credit losses of $3.0 million and a reversal to the provision for unfunded commitments of $259 thousand for the three months ended June 30, 2024. For the three months ended September 30, 2023, there was a provision for credit losses of $250 thousand and a $171 thousand reversal to the provision for unfunded commitments. The increase in the provision for credit losses and unfunded commitments for the three months ended September 30, 2024 compared to the prior quarter was driven primarily by a $3.2 million reversal of the provision for credit losses and unfunded commitments in the prior quarter and 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 the current quarter.
Non-performing loans were $6.6 million, or 0.39%, of total loans, net of unearned income, at September 30, 2024 compared to $3.1 million, or 0.19%, of total loans at June 30, 2024 and $3.6 million, or 0.22%, of total loans at September 30, 2023. The increase in non-performing loans at September 30, 2024 compared to the prior quarter was primarily the result of 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 the current quarter. Annualized net charge-offs for the three months ended September 30, 2024 were 0.01% of total average loans compared to 0.00% and 0.03% for the three months ended June 30, 2024 and September 30, 2023, respectively.
*Deposits and Borrowings*
Deposits totaled $1.79 billion at September 30, 2024, a decrease of $47.3 million, or 2.6%, since June 30, 2024 and a decrease of $160.0 million, or 8.2%, from September 30, 2023. Included in total deposits were $1.33 billion interest-bearing deposits at September 30, 2024 which decreased $31.0 million, or 2.3%, from June 30, 2024 and decreased $58.0 million, or 4.2%, from September 30, 2023. Time deposits, included in interest-bearing deposits, increased $1.3 million, or 0.5%, and $43.5 million, or 20.4%, since June 30, 2024 and September 30, 2023, respectively. Total noninterest-bearing deposits were $463.5 million at September 30, 2024 compared to $479.7 million at June 30, 2024 and $565.5 million at September 30, 2023.
Total borrowings were $293.1 million at September 30, 2024, a decrease of $11.2 million, or 3.7%, compared to June 30, 2024 and an increase of $139.7 million, or 91.1%, compared to September 30, 2023. A $25.0 million short-term borrowing was paid off during the quarter. The average rate on total borrowings was 4.31% for the three months ended September 30, 2024 compared to 4.48% for the three months ended June 30, 2024 and 3.83% for the three months ended September 30, 2023.
*Stockholders’ Equity, **Dividends and Share Repurchases *
Total stockholders’ equity was $306.8 million at September 30, 2024 compared to $289.3 million at June 30, 2024 and $255.6 million at September 30, 2023. Tangible book value^2 per share was $29.90, $27.82 and $23.80 at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
As announced on Form 8-K on October 16, 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 December 13, 2024, to shareholders of record as of November 29, 2024. This per share amount reflects a $0.02, or 6.7%, increase over the same quarter of 2023.
ACNB repurchased 2,642 shares of ACNB common stock during the three months ended September 30, 2024.
*About ACNB Corporation*
ACNB Corporation, headquartered in Gettysburg, PA, is the $2.42 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 27 community banking offices and two 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 #2024-17
October 24, 2024
*ACNB Corporation Financial Highlights*
*Selected Financial Data by Respective Quarter End*
*(Unaudited)*
(Dollars in thousands, except per share data) *September 30, 2024* *June 30, 2024* *March 31, 2024* *December 31, 2023* *September 30, 2023*
*BALANCE SHEET DATA*
Assets *$* *2,420,914* $ 2,457,753 $ 2,414,288 $ 2,418,847 $ 2,388,522
Investment securities *483,604* 483,868 490,626 517,221 501,063
Total loans, net of unearned income *1,677,112* 1,679,600 1,664,980 1,627,988 1,615,966
Allowance for credit losses *(17,214* *)* (17,162 ) (20,172 ) (19,969 ) (19,264 )
Deposits *1,791,317* 1,838,588 1,835,224 1,861,813 1,951,359
Allowance for unfunded commitments *1,349* 1,310 1,569 1,719 1,962
Borrowings *293,091* 304,286 272,605 252,174 153,388
Stockholders’ equity *306,755* 289,331 279,920 277,461 255,638
*INCOME STATEMENT DATA*
Interest and dividend income *$* *27,241* $ 26,869 $ 25,974 $ 25,284 $ 24,234
Interest expense *6,299* 5,905 5,381 3,791 2,489
Net interest income *20,942* 20,964 20,593 21,493 21,745
Provision for (reversal of ) credit losses *81* (2,990 ) 223 786 250
Provision for (reversal of) unfunded commitments *40* (259 ) (151 ) (242 ) (171 )
Net interest income after provisions for credit losses and unfunded commitments *20,821* 24,213 20,521 20,949 21,666
Noninterest income *6,833* 6,427 5,667 970 6,297
Noninterest expenses *18,244* 16,391 17,662 17,173 16,336
Income before income taxes *9,410* 14,249 8,526 4,746 11,627
Provision for income taxes *2,206* 2,970 1,758 649 2,583
Net income *$* *7,204* $ 11,279 $ 6,768 $ 4,097 $ 9,044
*PROFITABILITY RATIOS*
Total loans, net of unearned income to deposits *93.62* *%* 91.35 % 90.72 % 87.44 % 82.81 %
Return on average assets (annualized) *1.17* 1.86 1.12 0.68 1.52
Return on average equity (annualized) *9.63* 16.12 9.76 6.09 13.84
Efficiency ratio^3 *60.56* 58.61 66.18 62.48 56.97
FTE Net interest margin *3.77* 3.82 3.77 3.93 4.01
Yield on average earning assets *4.90* 4.89 4.74 4.62 4.46
Yield on investment securities *2.59* 2.65 2.70 2.36 2.24
Yield on total loans *5.56* 5.53 5.37 5.29 5.16
Cost of funds *1.19* 1.12 1.02 0.71 0.47
*PER SHARE DATA*
Diluted earnings per share *$* *0.84* $ 1.32 $ 0.80 $ 0.48 $ 1.06
Cash dividends paid per share *0.32* 0.32 0.30 0.30 0.28
Tangible book value per share^3 *29.90* 27.82 26.70 26.44 23.80
Tangible book value per share^3 (excluding AOCI)^4 *33.87* 33.28 32.21 31.74 31.43
*CAPITAL RATIOS*^*5*
Tier 1 leverage ratio *12.46* *%* 12.25 % 11.91 % 11.57 % 11.97 %
Common equity tier 1 ratio *16.07* 15.78 15.40 15.16 15.30
Tier 1 risk based capital ratio *16.36* 16.07 15.69 15.45 15.59
Total risk based capital ratio *18.15* 17.86 17.68 17.41 17.49
*CREDIT QUALITY*
Net charge-offs to average loans outstanding (annualized) *0.01* *%* 0.00 % 0.00 % 0.02 % 0.03 %
Total non-performing loans to total loans, net of unearned income^6 *0.39* 0.19 0.24 0.26 0.22
Total non-performing assets to total assets^7 *0.29* 0.14 0.18 0.19 0.17
Allowance for credit losses to total loans, net of unearned income *1.03* 1.02 1.21 1.23 1.19
*Consolidated Balance Sheet*
*(Unaudited)*
(Dollars in thousands, except per share data) *September 30,*
*2024* *June 30,*
*2024* *March 31,*
*2024*
*ASSETS*
Cash and due from banks *$* *24,636* $ 26,681 $ 17,395
Interest-bearing deposits with banks *33,456* 59,593 35,740
Total Cash and Cash Equivalents *58,092* 86,274 53,135
Equity securities with readily determinable fair values *947* 919 918
Investment securities available for sale, at estimated fair value *418,079* 418,364 425,114
Investment securities held to maturity, at amortized cost (fair value $59,038, $57,026, and $58,084) *64,578* 64,585 64,594
Loans held for sale *1,080* 1,801 88
Total loans, net of unearned income *1,677,112* 1,679,600 1,664,980
Less: Allowance for credit losses *(17,214* *)* (17,162 ) (20,172 )
Loans, net *1,659,898* 1,662,438 1,644,808
Premises and equipment, net *25,542* 25,760 25,916
Right of use asset *2,110* 2,278 2,447
Restricted investment in bank stocks *10,853* 11,853 10,877
Investment in bank-owned life insurance *81,344* 80,841 80,348
Investments in low-income housing partnerships *909* 940 971
Goodwill *44,185* 44,185 44,185
Intangible assets, net *8,142* 8,446 8,761
Foreclosed assets held for resale *406* 406 467
Other assets *44,749* 48,663 51,659
*Total Assets* *$* *2,420,914* $ 2,457,753 $ 2,414,288
*LIABILITIES AND STOCKHOLDERS’ EQUITY*
Deposits:
Noninterest-bearing *$* *463,501* $ 479,726 $ 499,583
Interest-bearing *1,327,816* 1,358,862 1,335,641
Total Deposits *1,791,317* 1,838,588 1,835,224
Short-term borrowings *37,769* 48,974 17,303
Long-term borrowings *255,322* 255,312 255,302
Lease liability *2,110* 2,278 2,447
Allowance for unfunded commitments *1,349* 1,310 1,569
Other liabilities *26,292* 21,960 22,523
*Total Liabilities* *2,114,159* 2,168,422 2,134,368
Stockholders’ Equity:
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at September 30, 2024, June 30, 2024 and March 31, 2024 *—* — —
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,940,133, 8,934,495, and 8,928,441 shares issued; 8,548,625, 8,545,629, and 8,539,575 shares outstanding at September 30, 2024, June 30, 2024 and March 31, 2024, respectively *22,344* 22,330 22,315
Treasury stock, at cost; 391,508, at September 30, 2024, and 388,866 at both June 30, 2024 and March 31, 2024 *(11,203* *)* (11,101 ) (11,101 )
Additional paid-in capital *98,697* 98,230 97,818
Retained earnings *230,752* 226,271 217,712
Accumulated other comprehensive loss *(33,835* *)* (46,399 ) (46,824 )
*Total Stockholders’ Equity* *306,755* 289,331 279,920
*Total Liabilities and Stockholders’ Equity* *$* *2,420,914* $ 2,457,753 $ 2,414,288
*Consolidated Income Statements*
*(Unaudited)* *Three Months Ended
September 30,* *Nine Months Ended
September 30,*
(Dollars in thousands, except per share data) *2024**
* *2023* *2024* *2023*
*INTEREST AND DIVIDEND INCOME*
Loans, including fees
Taxable *$* *23,108* $ 20,285 *$* *67,253* $ 58,130
Tax-exempt *311* 361 *943* 1,069
Investment securities:
Taxable *2,617* 2,477 *8,193* 8,451
Tax-exempt *284* 284 *852* 883
Dividends *251* 104 *739* 196
Other *670* 723 *2,104* 2,627
*Total Interest and Dividend Income* *27,241* 24,234 *80,084* 71,356
*INTEREST EXPENSE*
Deposits *3,112* 928 *7,915* 1,887
Short-term borrowings *204* 439 *847* 564
Long-term borrowings *2,983* 1,122 *8,823* 2,078
*Total Interest Expense* *6,299* 2,489 *17,585* 4,529
*Net Interest Income* *20,942* 21,745 *62,499* 66,827
Provision for (reversal of) credit losses *81* 250 *(2,686* *)* 74
Provision for (reversal of) unfunded commitments *40* (171 ) *(370* *)* 226
*Net Interest Income after Provisions for (Reversal of) Credit Losses and Unfunded Commitments* *20,821* 21,666 *65,555* 66,527
*NONINTEREST INCOME*
Insurance commissions *2,787* 2,629 *7,649* 7,371
Service charges on deposits *1,048* 1,000 *3,060* 2,951
Wealth management *1,188* 953 *3,219* 2,772
ATM debit card charges *828* 845 *2,488* 2,502
Earnings on investment in bank-owned life insurance *503* 473 *1,473* 1,399
Gain from mortgage loans held for sale *112* — *194* 31
Net gains (losses) on sales or calls of investment securities *—* — *69* (739 )
Net gains (losses) on equity securities *28* (27 ) *19* (22 )
Gain on assets held for sale *—* 14 *—* 337
Other *339* 410 *756* 873
*Total Noninterest Income* *6,833* 6,297 *18,927* 17,475
*NONINTEREST EXPENSES*
Salaries and employee benefits *11,017* 10,069 *32,611* 30,335
Equipment *1,698* 1,554 *4,997* 4,784
Net occupancy *945* 942 *3,066* 2,981
Professional services *409* 617 *1,554* 1,600
FDIC and regulatory *365* 388 *1,088* 932
Other tax *360* 323 *1,086* 965
Intangible assets amortization *304* 352 *940* 1,072
Supplies and postage *236* 229 *610* 633
Marketing and corporate relations *99* 159 *275* 472
Merger-related *1,137* — *1,160* —
Other *1,674* 1,703 *4,910* 5,125
*Total Noninterest Expenses* *18,244* 16,336 *52,297* 48,899
*Income Before Income Taxes* *9,410* 11,627 *32,185* 35,103
Provision for income taxes *2,206* 2,583 *6,934* 7,512
*Net Income* *$* *7,204* $ 9,044 *$* *25,251* $ 27,591
*PER SHARE DATA*
Basic earnings *$* *0.85* $ 1.06 *$* *2.97* $ 3.24
Diluted earnings *$* *0.84* $ 1.06 *$* *2.96* $ 3.23
Weighted average shares basic *8,507,140* 8,517,917 *8,500,860* 8,518,006
Weighted average shares diluted *8,545,578* 8,551,545 *8,532,691* 8,544,732
*Average Balances, Income and Expenses, Yields and Rates* *Three months ended* *Three months ended* *Three months ended* *Three months ended* *Three months ended* *September 30, 2024* *June 30, 2024* *March 31, 2024* *December 31, 2023* *September 30, 2023*
(Dollars in thousands) *Average*
*Balance* *Interest*^*8* *Yield/*
*Rate* *Average*
*Balance* *Interest*^*8* *Yield/*
*Rate* *Average*
*Balance* *Interest*^*8* *Yield/*
*Rate* *Average*
*Balance* *Interest*^*8* *Yield/*
*Rate* *Average*
*Balance* *Interest*^*8* *Yield/*
*Rate*
*ASSETS*
Loans:
Taxable *$* *1,618,879* *$* *23,108* *5.68* *%* $ 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 %
Tax-exempt *62,401* *394* *2.51* 64,276 396 2.48 65,825 404 2.47 69,058 425 2.44 73,995 457 2.45
*Total Loans*^*9* *1,681,280* *23,502* *5.56* 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
Investment Securities:
Taxable *441,135* *2,868* *2.59* 442,390 2,913 2.65 467,466 3,151 2.71 453,713 2,669 2.33 466,402 2,581 2.20
Tax-exempt *54,549* *359* *2.62* 54,644 359 2.64 54,740 359 2.64 54,835 361 2.61 55,027 359 2.59
*Total Investments*^*10* *495,684* *3,227* *2.59* 497,034 3,272 2.65 522,206 3,510 2.70 508,548 3,030 2.36 521,429 2,940 2.24
Interest-bearing deposits with banks *48,794* *670* *5.46* 50,851 684 5.41 54,156 750 5.57 50,225 691 5.46 53,324 723 5.38
*Total Earning Assets* *2,225,758* *27,399* *4.90* 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
Cash and due from banks *21,684* 21,041 20,540 21,578 23,783
Premises and equipment *25,716* 25,903 26,102 25,983 25,980
Other assets *184,105* 187,937 187,075 191,329 165,821
Allowance for credit losses *(17,147* *)* (20,124 ) (19,963 ) (19,232 ) (19,101 )
*Total Assets* *$* *2,440,116* $ 2,439,298 $ 2,429,050 $ 2,406,900 $ 2,365,365
*LIABILITIES*
Interest-bearing demand deposits *$* *518,368* *$* *552* *0.42* *%* $ 513,163 $ 275 0.22 % $ 512,701 $ 264 0.21 % $ 560,510 $ 275 0.19 % $ 571,314 $ 185 0.13 %
Money markets *246,653* *692* *1.12* 248,191 613 0.99 248,297 536 0.87 274,226 707 1.02 245,899 312 0.50
Savings deposits *318,291* *26* *0.03* 327,274 30 0.04 335,215 29 0.03 348,244 28 0.03 366,398 30 0.03
Time deposits *258,053* *1,842* *2.84* 263,045 1,725 2.64 244,481 1,331 2.19 221,778 798 1.43 212,159 401 0.75
*Total Interest-Bearing Deposits* *1,341,365* *3,112* *0.92* 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
Short-term borrowings *38,666* *204* *2.10* 37,256 304 3.28 47,084 339 2.90 56,872 334 2.33 66,942 439 2.60
Long-term borrowings *255,316* *2,983* *4.65* 255,305 2,958 4.66 248,701 2,882 4.66 137,026 1,649 4.77 94,554 1,122 4.71
*Total Borrowings* *293,982* *3,187* *4.31* 292,561 3,262 4.48 295,785 3,221 4.38 193,898 1,983 4.06 161,496 1,561 3.83
*Total Interest-Bearing Liabilities* *1,635,347* *6,299* *1.53* 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
Noninterest-bearing demand deposits *477,350* 485,351 486,648 519,797 541,995
Other liabilities *29,946* 28,348 26,904 21,648 6,820
Stockholders’ Equity *297,473* 281,365 279,019 266,799 259,284
*Total Liabilities and Stockholders’ Equity* *$* *2,440,116* $ 2,439,298 $ 2,429,050 $ 2,406,900 $ 2,365,365
*Taxable Equivalent Net Interest Income* *21,100* 21,122 20,753 21,658 21,916
*Taxable Equivalent Adjustment* *(158* *)* (158 ) (160 ) (165 ) (171 )
*Net Interest Income* *$* *20,942* $ 20,964 $ 20,593 $ 21,493 $ 21,745
*Cost of Funds* *1.19* *%* 1.12 % 1.02 % 0.71 % 0.47 %
*FTE Net Interest Margin* *3.77* *%* 3.82 % 3.77 % 3.93 % 4.01 %
*Average Balances, Income and Expenses, Yields and Rates* *Nine Months Ended September 30, 2024* *Nine Months Ended September 30, 2023*
(Dollars in thousands) *Average*
*Balance* *Interest*^*11* *Yield/*
*Rate* *Average*
*Balance* *Interest*^*11* *Yield/*
*Rate*
*ASSETS*
Loans:
Taxable *$* *1,601,520* *$* *67,253* *5.61* *%* $ 1,479,690 $ 58,130 5.25 %
Tax-exempt *64,161* *1,194* *2.49* 75,657 1,353 2.39
*Total Loans*^*12* *1,665,681* *68,447* *5.49* 1,555,347 59,483 5.11
Investment Securities:
Taxable *450,297* *8,932* *2.65* 507,061 8,647 2.28
Tax-exempt *54,644* *1,078* *2.64* 55,307 1,118 2.70
*Total Investments*^*13* *504,941* *10,010* *2.65* 562,368 9,765 2.32
Interest-bearing deposits with banks *51,258* *2,104* *5.48* 71,645 2,627 4.90
*Total Earning Assets* *2,221,880* *80,561* *4.84* 2,189,360 71,875 4.39
Cash and due from banks *21,091* 30,891
Premises and equipment *25,939* 26,415
Other assets *186,330* 159,544
Allowance for credit losses *(19,071* *)* (18,807 )
*Total Assets* *$* *2,436,169* $ 2,387,403
*LIABILITIES*
Interest-bearing demand deposits *$* *514,757* *$* *1,092* *0.28* *%* $ 580,180 $ 690 0.16 %
Money markets *247,710* *1,841* *0.99* 276,154 277 0.13
Savings deposits *326,895* *84* *0.03* 385,753 94 0.03
Time deposits *255,203* *4,898* *2.56* 234,951 826 0.47
*Total Interest-Bearing Deposits* *1,344,565* *7,915* *0.79* 1,477,038 1,887 0.17
Short-term borrowings *40,993* *847* *2.76* 47,852 564 1.58
Long-term borrowings *253,116* *8,823* *4.66* 58,333 2,078 4.76
*Total Borrowings* *294,109* *9,670* *4.39* 106,185 2,642 3.33
*Total Interest-Bearing Liabilities* *1,638,674* *17,585* *1.43* 1,583,223 4,529 0.38
Noninterest-bearing demand deposits *483,095* 550,206
Other liabilities *28,406* (2,552 )
Stockholders’ Equity *285,994* 256,526
*Total Liabilities and Stockholders’ Equity* *$* *2,436,169* $ 2,387,403
*Taxable Equivalent Net Interest Income* *62,976* 67,346
*Taxable Equivalent Adjustment* *(477* *)* (519 )
*Net Interest Income* *$* *62,499* $ 66,827
*Cost of Funds* *1.11* *%* 0.28 %
*FTE Net Interest Margin* *3.79* *%* 4.11 %
*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) *September 30, 2024* *June 30, 2024* *March 31, 2024* *December 31, 2023* *September 30, 2023*
*Tangible book value per share*
Stockholders’ equity *$* *306,755* $ 289,331 $ 279,920 $ 277,461 $ 255,638
Less: Goodwill and intangible assets *(52,327* *)* (52,631 ) (52,946 ) (53,267 ) (53,619 )
Tangible common stockholders’ equity (numerator) *$* *254,428* $ 236,700 $ 226,974 $ 224,194 $ 202,019
Shares outstanding, less unvested shares, end of period (denominator) *8,510,187* 8,507,191 8,501,137 8,478,460 8,488,446
Tangible book value per share *$* *29.90* $ 27.82 $ 26.70 $ 26.44 $ 23.80
*Tangible book value per share (excluding AOCI)*
Tangible common stockholders’ equity *$* *254,428* $ 236,700 $ 226,974 $ 224,194 $ 202,019
Less: AOCI *(33,835* *)* (46,399 ) (46,824 ) (44,909 ) (64,767 )
Tangible equity (excluding AOCI) *$* *288,263* $ 283,099 $ 273,798 $ 269,103 $ 266,786
Tangible book value per share (excluding AOCI) *$* *33.87* $ 33.28 $ 32.21 $ 31.74 $ 31.43
*Tangible common equity to tangible assets (TCE/TA Ratio)*
Tangible common stockholders’ equity (numerator) *$* *254,428* $ 236,700 $ 226,974 $ 224,194 $ 202,019
Total assets *$* *2,420,914* $ 2,457,753 $ 2,414,288 $ 2,418,847 $ 2,388,522
Less: Goodwill and intangible assets *(52,327* *)* (52,631 ) (52,946 ) (53,267 ) (53,619 )
Total tangible assets (denominator) *$* *2,368,587* $ 2,405,122 $ 2,361,342 $ 2,365,580 $ 2,334,903
Tangible common equity to tangible assets *10.74* *%* 9.84 % 9.61 % 9.48 % 8.65 %
*Efficiency Ratio*
Noninterest expense *$* *18,244* $ 16,391 $ 17,662 $ 17,173 $ 16,336
Less: Intangible amortization *304* 315 321 352 352
Less: Merger-related expense *1,137* 23 — — —
Noninterest expense (numerator) *$* *16,803* $ 16,053 $ 17,341 $ 16,821 $ 15,984
Net interest income *$* *20,942* $ 20,964 $ 20,593 $ 21,493 $ 21,745
Plus: Total noninterest income *6,833* 6,427 5,667 970 6,297
Less: Net gains (losses) on sales or calls of securities *—* — 69 (4,501 ) —
Less: Net gains (losses) on equity securities *28* 1 (10 ) 40 (27 )
Less: Gain on assets held for sale *—* — — — 14
Total revenue (denominator) *$* *27,747* $ 27,390 $ 26,201 $ 26,924 $ 28,055
Efficiency ratio *60.56* *%* 58.61 % 66.18 % 62.48 % 56.97 %
*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.
(Dollars in thousands) *Three Months Ended
**September 30, 2024*
*Core return on average assets*
Net income *$* *7,204*
Merger-related expense, net of taxes *879*
Core net income (numerator) *$* *8,083*
Average assets (denominator) *$* *2,440,116*
Core return on average assets *1.32* *%*
*Core return on average equity*
Core net income (numerator) *$* *8,083*
Average equity (denominator) *$* *297,473*
Core return on average equity *10.81* *%*
--------------------
^^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 Loss.
^^5 Regulatory capital ratios as of September 30, 2024 are preliminary.
^^6 Non-performing Loans consists of loans on nonaccrual status and loans greater than 90 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