ACNB ACNB Corporation

ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $6.6 million, or $0.77 diluted earnings per share, for the three months ended December 31, 2024, a $2.5 million, or 61.0%, increase, compared to net income of $4.1 million, or $0.48 diluted earnings per share, for the three months ended December 31, 2023 and a $609 thousand, or 8.5%, decrease compared to net income of $7.2 million, or $0.84 diluted earnings per share, for the three months ended September 30, 2024. The Corporation reported net income of $31.8 million, or $3.73 per diluted earnings per share, for the twelve months ended December 31, 2024, an increase of $158 thousand, or 0.5%, compared to the twelve months ended December 31, 2023. The financial results for both the three and twelve months ended December 31, 2024 were impacted by $885 thousand and $2.0 million, respectively, in merger-related expense due to the pending acquisition of Traditions Bancorp, Inc. Financial results for the twelve months ended December 31, 2024 were impacted by a $2.8 million reversal of the provisions for credit losses and unfunded commitments. Financial results for the twelve months ended December 31, 2023 were impacted by a repositioning of the investment securities portfolio in which ACNB sold approximately $51.1 million in book value of available for sale investment securities generating an after-tax loss of approximately $3.5 million.

2024 Highlights

• Return on average assets was 1.31% and return on average equity was 10.94% for the twelve months ended December 31, 2024.
• Fully taxable equivalent (“FTE”) net interest margin was 3.79% for the twelve months ended December 31, 2024 compared to 4.07% for the twelve months ended December 31, 2023.
• Total non-performing loans to total loans, net of unearned income, was 0.40% at December 31, 2024 compared to 0.26% at December 31, 2023. The increase in non-performing loans to total loans, net of unearned income, for the twelve months ended December 31, 2024 was driven primarily by one long-standing commercial relationship in the healthcare industry, comprised of both owner-occupied commercial real estate and commercial and industrial loans, that moved into non-performing loan status during the current year.
• Net charge-offs to average loans outstanding were 0.02% for both the twelve months ended December 31, 2024 and 2023.
• Tangible common equity to tangible assets ratio1 of 10.72% at December 31, 2024 compared to 9.48% at December 31, 2023. The net unrealized loss on the available for sale securities portfolio was $47.7 million at December 31, 2024 compared to a net unrealized loss of $50.2 million at December 31, 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 excited to share a strong year of operating results with our shareholders. Our continued focus on community banking principles have produced another year of solid financial performance and continued strong returns for our shareholders. In addition, we were successfully able to announce the strategic acquisition of Traditions Bancorp, Inc. that will create one of the largest community banks in Pennsylvania with assets less than $5 billion. We currently expect the acquisition of Traditions Bancorp, Inc. to be effective February 1, 2025,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.

“As we turn our focus to 2025, we look forward to successfully integrating Traditions Bank’s customers and employees into the ACNB model as we expand our presence in York and Lancaster counties. We are confident that this acquisition will complement our current operations with profitable growth opportunities and will contribute to our commitment of enhancing long-term shareholder value.”

Mr. Helt continued, “We would like to express our gratitude for the continued support of our shareholders, customers and employees that have enabled us to fulfill our vision to be the independent financial services provider of choice in the markets that we serve by building relationships and finding solutions.”

Net Interest Income and Margin

Net interest income for the three months ended December 31, 2024 totaled $21.1 million, an increase of $170 thousand, or 0.8%, compared to the three months ended September 30, 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 December 31, 2024 was 3.81%, an increase of 4 basis points from 3.77% for the three months ended September 30, 2024. The increase in FTE net interest margin was driven primarily by the recognition of nonaccrual interest income on a commercial loan removed from nonaccrual status, a decrease in average short-term borrowings, a decrease in a time deposit promotional rate and an increase in seasonal, lower-cost deposits. Total average loans decreased $4.4 million, or 0.3%, compared to the three months ended September 30, 2024. The yield on total loans was 5.61% for the three months ended December 31, 2024, an increase of 5 basis points compared to the three months ended September 30, 2024. Total average borrowings decreased $15.6 million for the three months ended December 31, 2024 compared to the same period in September 30, 2024. A short-term $25.0 million FHLB advance was paid off during August of 2024. The average rate paid on total borrowings was 4.27% for the three months ended December 31, 2024, a decrease of 4 basis points from the three months ended September 30, 2024. Total average interest-bearing deposits increased $14.3 million, or 1.1%, for the three months ended December 31, 2024 compared to the same period September 30, 2024 driven primarily by a $10.5 million increase in average time deposit balances due to an ongoing promotion and an increase in brokered time deposits. In October of 2024, ACNB Bank issued $24.1 million in brokered time deposits. The average rate paid on interest-bearing deposits was 0.96% for the three months ended December 31, 2024, an increase of 4 basis points from the three months ended September 30, 2024.

Net interest income for the twelve months ended December 31, 2024 totaled $83.6 million, a decrease of $4.7 million, or 5.3%, from $88.3 million for the twelve months ended December 31, 2023 driven by a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the twelve months ended December 31, 2024 was 3.79%, a 28 basis points decrease from 4.07% for the twelve months ended December 31, 2023. The decrease was driven primarily by a higher cost of funds and an increase in long-term borrowings. The average rate paid on interest-bearing deposits was 0.83% for the twelve months ended December 31, 2024, an increase of 58 basis points from the twelve months ended December 31, 2023. The average rate paid on total borrowings was 4.36% for the twelve months ended December 31, 2024, an increase of 74 basis points from the twelve months ended December 31, 2023. Total average borrowings increased $162.5 million, or 127.2%, for the twelve months ended December 31, 2024 compared to the same period of 2023. The average yield on interest-earning assets was 4.86% for the twelve months ended December 31, 2024, an increase of 41 basis points from the twelve months ended December 31, 2023. Total average loans grew $94.9 million, or 6.0%, and the yield increased 36 basis points for the twelve months ended December 31, 2024 compared to the same period of 2023.

Noninterest Income

Noninterest income for the three months ended December 31, 2024 was $5.8 million, a decrease of $1.0 million, or 15.1%, from the three months ended September 30, 2024. The decrease was driven primarily by insurance commissions and wealth management income. Insurance commissions for the three months ended December 31, 2024 were $2.1 million, a $682 thousand, or 24.5%, decrease from the three months ended September 30, 2024 due to seasonality in policy renewals. Wealth management income was $1.0 million for the three months ended December 31, 2024, a $181 thousand, or 15.2%, decrease from the three months ended September 30, 2024 driven primarily by lower estate income.

Noninterest income, excluding net gains (losses) on sales or calls of securities, for the twelve months ended December 31, 2024 was $24.7 million, an increase of $976 thousand, or 4.1%, from the twelve months ended December 31, 2023. On December 15, 2023, ACNB completed a repositioning of the investment securities portfolio by selling $51.1 million in book value of AFS debt securities, consisting of lower-yielding agency debt securities, for an estimated pre-tax loss of $4.5 million. The increase in noninterest income, excluding net gains (losses) on sales or calls of securities, was driven primarily by wealth management income, insurance commissions and gain from mortgage loans held for sale. Wealth management income for the twelve months ended December 31, 2024 was $4.2 million compared to $3.6 million for the twelve months ended December 31, 2023. The increase was driven primarily by portfolio market appreciation, estate income and new business generation. Insurance commissions for the twelve months ended December 31, 2024 were $9.8 million compared to $9.3 million for the twelve months ended December 31, 2023. The increase of $435 thousand was driven primarily by growth in commissions on policy renewals and new business. During the twelve months ended December 31, 2024, gains from mortgage loans held for sale increased $245 thousand, compared to the twelve months ended December 31, 2023 as a result of a higher volume of mortgage loans sold.

Noninterest Expense

Noninterest expense for the three months ended December 31, 2024 was $18.4 million, an increase of $144 thousand, or 0.8%, from the three months ended September 30, 2024. The increase was driven primarily by equipment and other expenses partially offset by lower salaries and employee benefits. Equipment expenses increased $626 thousand, or 36.9%, driven primarily by higher core processing and software expenses and incremental purchases of office equipment related to the upcoming Traditions acquisition of $355 thousand. Other expenses increased $169 thousand, or 8.4%, driven primarily by a decrease in the net asset value of a Small Business Investment Company (“SBIC”) investment and an increase in marketing, miscellaneous employee and director expenses. These increases were partially offset by a decrease in salaries and employee benefits of $699 thousand, or 6.3%, driven primarily by lower base wages and employee health insurance expense. Merger-related expense totaled $885 thousand for the three months ended December 31, 2024 compared to $1.1 million for the three months ended September 30, 2024.

Noninterest expense for the twelve months ended December 31, 2024 increased $4.6 million, or 7.0%, compared to the twelve months ended December 31, 2023. The increase was driven primarily by merger-related and salaries and employee benefits expenses. Merger-related expense totaled $2.0 million for the twelve months ended December 31, 2024 compared to none for the twelve months ended December 31, 2023. Salaries and employee benefits expense increased $2.0 million during the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 driven primarily by higher employee health insurance expense and higher base wages. Additionally, equipment expense increased $807 thousand, or 12.4% due to higher core processing and software maintenance expenses coupled with incremental purchases of office equipment related to the upcoming Traditions acquisition of $355 thousand. Professional services expense decreased $180 thousand, or 7.8%, during the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 driven primarily by a decrease in consulting expenses.

Loans and Asset Quality

Total loans outstanding were $1.68 billion at December 31, 2024, an increase of $5.8 million, or 0.3%, from September 30, 2024 and an increase of $54.9 million, or 3.4%, from December 31, 2023. The increases from both September 30, 2024 and December 31, 2023 were driven primarily by growth in the commercial real estate portfolio in our core markets and was spread throughout the Bank’s geographic footprint and across various property types. The commercial real estate portfolio grew $70.8 million, or 7.9%, 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 provisions for credit losses and unfunded commitments were $249 thousand and $44 thousand, respectively, for the three months ended December 31, 2024 compared to $81 thousand and $40 thousand, respectively, for the three months ended September 30, 2024. For the twelve months ended December 31, 2024, there were reversals to the provisions for credit losses and unfunded commitments of $2.4 million and $326 thousand, respectively, compared to a provision for credit losses of $860 thousand and a $16 thousand reversal to the provision for unfunded commitments for the twelve months ended December 31, 2023. The decrease in the provisions for credit losses and unfunded commitments for the twelve months ended December 31, 2024 compared to the prior year 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 during 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 $6.8 million, or 0.40%, of total loans, net of unearned income, at December 31, 2024 compared to $6.6 million, or 0.39%, of total loans at September 30, 2024 and $4.2 million, or 0.26%, of total loans at December 31, 2023. The increase in non-performing loans at December 31, 2024 compared to the prior quarter was driven primarily by one loan that moved to greater than 90 days past due and still accruing partially offset by the movement of one relationship back to accruing status. The increase in non-performing loans at December 31, 2024 compared to December 31, 2023 was driven primarily by one long-standing commercial relationship in the healthcare industry, comprised of both owner-occupied commercial real estate and commercial and industrial loans, that moved into non-performing loan status during the year. Annualized net charge-offs for the three months ended December 31, 2024 were 0.04% of total average loans compared to 0.01% for the three months ended September 30, 2024. Net charge-offs for both the twelve months ended December 31, 2024 and December 31, 2023 were 0.02% of total average loans.

Deposits and Borrowings

Deposits totaled $1.79 billion at December 31, 2024, an increase of $1.2 million, or 0.1%, since September 30, 2024 and a decrease of $69.3 million, or 3.7%, from December 31, 2023. Included in total deposits were $1.34 billion interest-bearing deposits at December 31, 2024 which increased $13.2 million, or 1.0%, from September 30, 2024 and decreased $20.5 million, or 1.5%, from December 31, 2023. Time deposits, included in interest-bearing deposits, increased $16.3 million, or 6.3%, and $40.9 million, or 17.6%, since September 30, 2024 and December 31, 2023, respectively. In October of 2024, ACNB Bank issued $24.1 million in brokered time deposits to offset outflows of municipal deposits during the quarter. Total noninterest-bearing deposits were $451.5 million at December 31, 2024 compared to $463.5 million at September 30, 2024 and $500.3 million at December 31, 2023.

Total borrowings were $271.2 million at December 31, 2024, a decrease of $21.9 million, or 7.5%, compared to September 30, 2024 and an increase of $19.0 million, or 7.5%, compared to December 31, 2023. The decrease in total borrowings from September 30, 2024 to December 31, 2024 was driven primarily by a seasonal decrease in repurchase agreements. The increase in total borrowings from December 31, 2023 to December 31, 2024 was driven primarily by an increase in FHLB borrowings to fund balance sheet activity.

The average rate on total borrowings was 4.27% for the three months ended December 31, 2024 compared to 4.31% for the three months ended September 30, 2024 and 4.06% for the three months ended December 31, 2023. For the twelve months ended December 31, 2024, the average rate on total borrowings was 4.36% compared to 3.62% for the twelve months ended December 31, 2023.

Stockholders’ Equity

Total stockholders’ equity was $303.3 million at December 31, 2024 compared to $306.8 million at September 30, 2024 and $277.5 million at December 31, 2023. Tangible book value2 per share was $29.51, $29.90 and $26.44 at December 31, 2024, September 30, 2024 and December 31, 2023, respectively. ACNB did not repurchase shares of ACNB common stock during the three months ended December 31, 2024. During the twelve months ended December 31, 2024 ACNB repurchased 6,842 shares of ACNB common stock. As of December 31, 2024, there were 187,667 shares remaining under the current plan.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.39 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, 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 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 #2025-1January 23, 2025

ACNB Corporation Financial HighlightsSelected Financial Data by Respective Quarter End(Unaudited)
(Dollars in thousands, except per share data)	December 31, 2024					September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023
BALANCE SHEET DATA
Assets	$	2,394,830				$	2,420,914				$	2,457,753				$	2,414,288				$	2,418,847
Investment securities		459,472					483,604					483,868					490,626					517,221
Total loans, net of unearned income		1,682,910					1,677,112					1,679,600					1,664,980					1,627,988
Allowance for credit losses		(17,280	)				(17,214	)				(17,162	)				(20,172	)				(19,969	)
Deposits		1,792,501					1,791,317					1,838,588					1,835,224					1,861,813
Allowance for unfunded commitments		1,394					1,349					1,310					1,569					1,719
Borrowings		271,159					293,091					304,286					272,605					252,174
Stockholders’ equity		303,273					306,755					289,331					279,920					277,461
INCOME STATEMENT DATA
Interest and dividend income	$	27,381				$	27,241				$	26,869				$	25,974				$	25,284
Interest expense		6,269					6,299					5,905					5,381					3,791
Net interest income		21,112					20,942					20,964					20,593					21,493
Provision for (reversal of ) credit losses		249					81					(2,990	)				223					786
Provision for (reversal of) unfunded commitments		44					40					(259	)				(151	)				(242	)
Net interest income after provisions for credit losses and unfunded commitments		20,819					20,821					24,213					20,521					20,949
Noninterest income		5,803					6,833					6,427					5,667					970
Noninterest expenses		18,388					18,244					16,391					17,662					17,173
Income before income taxes		8,234					9,410					14,249					8,526					4,746
Provision for income taxes		1,639					2,206					2,970					1,758					649
Net income	$	6,595				$	7,204				$	11,279				$	6,768				$	4,097
PROFITABILITY RATIOS
Total loans, net of unearned income to deposits		93.89		%			93.62		%			91.35		%			90.72		%			87.44		%
Return on average assets (annualized)		1.08					1.17					1.86					1.12					0.68
Return on average equity (annualized)		8.57					9.63					16.12					9.76					6.09
Efficiency ratio3		63.83					60.56					58.61					66.18					62.48
FTE Net interest margin		3.81					3.77					3.82					3.77					3.93
Yield on average earning assets		4.93					4.90					4.89					4.74					4.62
Yield on investment securities		2.58					2.59					2.65					2.70					2.36
Yield on total loans		5.61					5.56					5.53					5.37					5.29
Cost of funds		1.19					1.19					1.12					1.02					0.71
PER SHARE DATA
Diluted earnings per share	$	0.77				$	0.84				$	1.32				$	0.80				$	0.48
Cash dividends paid per share		0.32					0.32					0.32					0.30					0.30
Tangible book value per share3		29.51					29.90					27.82					26.70					26.44
CAPITAL RATIOS4
Tier 1 leverage ratio		12.52		%			12.46		%			12.25		%			11.91		%			11.57		%
Common equity tier 1 ratio		16.27					16.07					15.78					15.40					15.16
Tier 1 risk based capital ratio		16.56					16.36					16.07					15.69					15.45
Total risk based capital ratio		18.36					18.15					17.86					17.68					17.41
CREDIT QUALITY
Net charge-offs to average loans outstanding (annualized)		0.04		%			0.01		%			0.00		%			0.00		%			0.02		%
Total non-performing loans to total loans, net of unearned income5		0.40					0.39					0.19					0.24					0.26
Total non-performing assets to total assets6		0.30					0.29					0.14					0.18					0.19
Allowance for credit losses to total loans, net of unearned income		1.03					1.03					1.02					1.21					1.23

Consolidated Balance Sheet(Unaudited)
(Dollars in thousands, except per share data)	December 31, 2024				September 30,2024				December 31,2023
ASSETS
Cash and due from banks	$	16,352			$	24,636			$	21,442
Interest-bearing deposits with banks		30,910				33,456				44,516
Total Cash and Cash Equivalents		47,262				58,092				65,958
Equity securities with readily determinable fair values		919				947				928
Investment securities available for sale, at estimated fair value		393,975				418,079				451,693
Investment securities held to maturity, at amortized cost (fair value $56,924, $59,038 and $59,057)		64,578				64,578				64,600
Loans held for sale		426				1,080				280
Total loans, net of unearned income		1,682,910				1,677,112				1,627,988
Less: Allowance for credit losses		(17,280	)			(17,214	)			(19,969	)
Loans, net		1,665,630				1,659,898				1,608,019
Premises and equipment, net		25,454				25,542				26,283
Right of use asset		2,663				2,110				2,615
Restricted investment in bank stocks		10,853				10,853				9,677
Investment in bank-owned life insurance		81,850				81,344				79,871
Investments in low-income housing partnerships		877				909				1,003
Goodwill		44,185				44,185				44,185
Intangible assets, net		7,838				8,142				9,082
Foreclosed assets held for resale		438				406				467
Other assets		47,882				44,749				54,186
Total Assets	$	2,394,830			$	2,420,914			$	2,418,847
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	451,503			$	463,501			$	500,332
Interest-bearing		1,340,998				1,327,816				1,361,481
Total Deposits		1,792,501				1,791,317				1,861,813
Short-term borrowings		15,826				37,769				56,882
Long-term borrowings		255,333				255,322				195,292
Lease liability		2,764				2,110				2,615
Allowance for unfunded commitments		1,394				1,349				1,719
Other liabilities		23,739				26,292				23,065
Total Liabilities		2,091,557				2,114,159				2,141,386
Stockholders’ Equity:
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at December 31, 2024, September 30, 2024 and December 31, 2023		—				—				—
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,945,293, 8,940,133, and 8,896,119 shares issued; 8,553,785, 8,548,625, and 8,511,453 shares outstanding at December 31, 2024, September 30, 2024 and December 31, 2023, respectively		22,357				22,344				22,231
Treasury stock, at cost; 391,508 at both December 31, 2024 and September 30, 2024, and 384,666 at December 31, 2023		(11,203	)			(11,203	)			(10,954	)
Additional paid-in capital		99,163				98,697				97,602
Retained earnings		234,624				230,752				213,491
Accumulated other comprehensive loss		(41,668	)			(33,835	)			(44,909	)
Total Stockholders’ Equity		303,273				306,755				277,461
Total Liabilities and Stockholders’ Equity	$	2,394,830			$	2,420,914			$	2,418,847

Consolidated Income Statements(Unaudited)
	Three Months Ended December 31,								Years Ended December 31,
(Dollars in thousands, except per share data)		2024				2023				2024				2023
INTEREST AND DIVIDEND INCOME
Loans, including fees
Taxable	$	23,294			$	21,303			$	90,547			$	79,433
Tax-exempt		289				336				1,232				1,405
Investment securities:
Taxable		2,555				2,534				10,748				10,985
Tax-exempt		284				285				1,136				1,168
Dividends		231				135				970				331
Other		728				691				2,832				3,318
Total Interest and Dividend Income		27,381				25,284				107,465				96,640
INTEREST EXPENSE
Deposits		3,279				1,808				11,194				3,695
Short-term borrowings		12				334				859				898
Long-term borrowings		2,978				1,649				11,801				3,727
Total Interest Expense		6,269				3,791				23,854				8,320
Net Interest Income		21,112				21,493				83,611				88,320
Provision for (reversal of) credit losses		249				786				(2,437	)			860
Provision for (reversal of) unfunded commitments		44				(242	)			(326	)			(16	)
Net Interest Income after Provisions for (Reversal of) Credit Losses and Unfunded Commitments		20,819				20,949				86,374				87,476
NONINTEREST INCOME
Insurance commissions		2,105				1,948				9,754				9,319
Wealth management		1,007				872				4,226				3,644
Service charges on deposits		1,084				1,007				4,144				3,958
ATM debit card charges		815				846				3,303				3,348
Earnings on investment in bank-owned life insurance		506				479				1,979				1,878
Gain from mortgage loans held for sale		107				25				301				56
Net (losses) gains on sales or calls of investment securities		—				(4,501	)			69				(5,240	)
Net (losses) gains on equity securities		(28	)			40				(9	)			18
Gain on assets held for sale		—				—				—				337
Other		207				254				963				1,127
Total Noninterest Income		5,803				970				24,730				18,445
NONINTEREST EXPENSES
Salaries and employee benefits		10,318				10,596				42,929				40,931
Equipment		2,324				1,730				7,321				6,514
Net occupancy		1,096				927				4,162				3,908
Professional services		586				720				2,140				2,320
Other tax		360				304				1,446				1,269
FDIC and regulatory		337				456				1,425				1,388
Intangible assets amortization		304				352				1,244				1,424
Merger-related		885				—				2,045				—
Other		2,178				2,088				7,973				8,318
Total Noninterest Expenses		18,388				17,173				70,685				66,072
Income Before Income Taxes		8,234				4,746				40,419				39,849
Provision for income taxes		1,639				649				8,573				8,161
Net Income	$	6,595			$	4,097			$	31,846			$	31,688
PER SHARE DATA
Basic earnings	$	0.78			$	0.48			$	3.75			$	3.72
Diluted earnings	$	0.77			$	0.48			$	3.73			$	3.71
Weighted average shares basic		8,511,253				8,477,525				8,503,473				8,507,803
Weighted average shares diluted		8,549,691				8,510,548				8,536,965				8,536,125

Average Balances, Income and Expenses, Yields and Rates
	Three months ended											Three months ended											Three months ended											Three months ended											Three months ended
	December 31, 2024											September 30, 2024											June 30, 2024											March 31, 2024											December 31, 2023
(Dollars in thousands)	AverageBalance				Interest7				Yield/Rate			AverageBalance				Interest7				Yield/Rate			AverageBalance				Interest7				Yield/Rate			AverageBalance				Interest7				Yield/Rate			AverageBalance				Interest7				Yield/Rate
ASSETS
Loans:
Taxable	$	1,619,245			$	23,294			5.72	%		$	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	%
Tax-exempt		57,683				366			2.52				62,401				394			2.51				64,276				396			2.48				65,825				404			2.47				69,058				425			2.44
Total Loans8		1,676,928				23,660			5.61				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
Investment Securities:
Taxable		431,338				2,786			2.57				441,135				2,868			2.59				442,390				2,913			2.65				467,466				3,151			2.71				453,713				2,669			2.33
Tax-exempt		54,453				359			2.62				54,549				359			2.62				54,644				359			2.64				54,740				359			2.64				54,835				361			2.61
Total Investments9		485,791				3,145			2.58				495,684				3,227			2.59				497,034				3,272			2.65				522,206				3,510			2.70				508,548				3,030			2.36
Interest-bearing deposits with banks		60,104				728			4.82				48,794				670			5.46				50,851				684			5.41				54,156				750			5.57				50,225				691			5.46
Total Earning Assets		2,222,823				27,533			4.93				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
Cash and due from banks		20,413											21,684											21,041											20,540											21,578
Premises and equipment		25,679											25,716											25,903											26,102											25,983
Other assets		181,180											184,105											187,937											187,075											191,329
Allowance for credit losses		(17,153	)										(17,147	)										(20,124	)										(19,963	)										(19,232	)
Total Assets	$	2,432,942										$	2,440,116										$	2,439,298										$	2,429,050										$	2,406,900
LIABILITIES
Interest-bearing demand deposits	$	519,833			$	511			0.39	%		$	518,368			$	552			0.42	%		$	513,163			$	275			0.22	%		$	512,701			$	264			0.21	%		$	560,510			$	275			0.19	%
Money markets		251,781				747			1.18				246,653				692			1.12				248,191				613			0.99				248,297				536			0.87				274,226				707			1.02
Savings deposits		315,512				34			0.04				318,291				26			0.03				327,274				30			0.04				335,215				29			0.03				348,244				28			0.03
Time deposits		268,559				1,987			2.94				258,053				1,842			2.84				263,045				1,725			2.64				244,481				1,331			2.19				221,778				798			1.43
Total Interest-Bearing Deposits		1,355,685				3,279			0.96				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
Short-term borrowings		23,087				12			0.21				38,666				204			2.10				37,256				304			3.28				47,084				339			2.90				56,872				334			2.33
Long-term borrowings		255,326				2,978			4.64				255,316				2,983			4.65				255,305				2,958			4.66				248,701				2,882			4.66				137,026				1,649			4.77
Total Borrowings		278,413				2,990			4.27				293,982				3,187			4.31				292,561				3,262			4.48				295,785				3,221			4.38				193,898				1,983			4.06
Total Interest-Bearing Liabilities		1,634,098				6,269			1.53				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
Noninterest-bearing demand deposits		464,949											477,350											485,351											486,648											519,797
Other liabilities		27,887											29,946											28,348											26,904											21,648
Stockholders’ Equity		306,008											297,473											281,365											279,019											266,799
Total Liabilities and Stockholders’ Equity	$	2,432,942										$	2,440,116										$	2,439,298										$	2,429,050										$	2,406,900
Taxable Equivalent Net Interest Income						21,264											21,100											21,122											20,753											21,658
Taxable Equivalent Adjustment						(152	)										(158	)										(158	)										(160	)										(165	)
Net Interest Income					$	21,112										$	20,942										$	20,964										$	20,593										$	21,493
Cost of Funds									1.19	%										1.19	%										1.12	%										1.02	%										0.71	%
FTE Net Interest Margin									3.81	%										3.77	%										3.82	%										3.77	%										3.93	%

Average Balances, Income and Expenses, Yields and Rates
	Year Ended December 31, 2024												Year Ended December 31, 2023
(Dollars in thousands)	AverageBalance				Interest10				Yield/Rate				AverageBalance				Interest10				Yield/Rate
ASSETS
Loans:
Taxable	$	1,605,976			$	90,547			5.64		%		$	1,499,635			$	79,433			5.30		%
Tax-exempt		62,532				1,559			2.49					73,993				1,778			2.40
Total Loans11		1,668,508				92,106			5.52					1,573,628				81,211			5.16
Investment Securities:
Taxable		445,531				11,718			2.63					491,208				11,316			2.30
Tax-exempt		54,596				1,438			2.63					57,670				1,478			2.56
Total Investments12		500,127				13,156			2.63					548,878				12,794			2.33
Interest-bearing deposits with banks		53,482				2,832			5.30					66,246				3,318			5.01
Total Earning Assets		2,222,117				108,094			4.86					2,188,752				97,323			4.45
Cash and due from banks		20,920												30,684
Premises and equipment		25,873												26,582
Other assets		185,037												165,175
Allowance for credit losses		(18,589	)											(18,915	)
Total Assets	$	2,435,358											$	2,392,278
LIABILITIES
Interest-bearing demand deposits	$	516,033			$	1,603			0.31		%		$	569,357			$	757			0.13		%
Money markets		248,733				2,588			1.04					283,918				1,192			0.42
Savings deposits		324,034				118			0.04					377,498				122			0.03
Time deposits		258,560				6,885			2.66					230,431				1,624			0.70
Total Interest-Bearing Deposits		1,347,360				11,194			0.83					1,461,204				3,695			0.25
Short-term borrowings		36,492				859			2.35					49,433				898			1.82
Long-term borrowings		253,671				11,801			4.65					78,262				3,727			4.76
Total Borrowings		290,163				12,660			4.36					127,695				4,625			3.62
Total Interest-Bearing Liabilities		1,637,523				23,854			1.46					1,588,899				8,320			0.52
Noninterest-bearing demand deposits		478,534												543,843
Other liabilities		28,276												442
Stockholders’ Equity		291,025												259,094
Total Liabilities and Stockholders’ Equity	$	2,435,358											$	2,392,278
Taxable Equivalent Net Interest Income						84,240												89,003
Taxable Equivalent Adjustment						(629	)											(683	)
Net Interest Income					$	83,611											$	88,320
Cost of Funds									1.13		%										0.39		%
FTE Net Interest Margin									3.79		%										4.07		%

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)	December 31, 2024					September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023
Tangible book value per share
Stockholders’ equity	$	303,273				$	306,755				$	289,331				$	279,920				$	277,461
Less: Goodwill and intangible assets		(52,023	)				(52,327	)				(52,631	)				(52,946	)				(53,267	)
Tangible common stockholders’ equity (numerator)	$	251,250				$	254,428				$	236,700				$	226,974				$	224,194
Shares outstanding, less unvested shares, end of period (denominator)		8,515,347					8,510,187					8,507,191					8,501,137					8,478,460
Tangible book value per share	$	29.51				$	29.90				$	27.82				$	26.70				$	26.44
Tangible common equity to tangible assets (TCE/TA Ratio)
Tangible common stockholders’ equity (numerator)	$	251,250				$	254,428				$	236,700				$	226,974				$	224,194
Total assets	$	2,394,830				$	2,420,914				$	2,457,753				$	2,414,288				$	2,418,847
Less: Goodwill and intangible assets		(52,023	)				(52,327	)				(52,631	)				(52,946	)				(53,267	)
Total tangible assets (denominator)	$	2,342,807				$	2,368,587				$	2,405,122				$	2,361,342				$	2,365,580
Tangible common equity to tangible assets		10.72		%			10.74		%			9.84		%			9.61		%			9.48		%
Efficiency Ratio
Noninterest expense	$	18,388				$	18,244				$	16,391				$	17,662				$	17,173
Less: Intangible amortization		304					304					315					321					352
Less: Merger-related expense		885					1,137					23					—					—
Noninterest expense (numerator)	$	17,199				$	16,803				$	16,053				$	17,341				$	16,821
Net interest income	$	21,112				$	20,942				$	20,964				$	20,593				$	21,493
Plus: Total noninterest income		5,803					6,833					6,427					5,667					970
Less: Net gains (losses) on sales or calls of securities		—					—					—					69					(4,501	)
Less: Net (losses) gains on equity securities		(28	)				28					1					(10	)				40
Total revenue (denominator)	$	26,943				$	27,747				$	27,390				$	26,201				$	26,924
Efficiency ratio		63.83		%			60.56		%			58.61		%			66.18		%			62.48		%

1  Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.2  Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.3  Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.4  Regulatory capital ratios as of December 31, 2024 are preliminary. 5  Non-performing Loans consists of loans on nonaccrual status and loans greater than 90 days past due and still accruing interest.6  Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.7  Income on interest-earning assets has been computed on a fully taxable equivalent (FTE) basis using the 21% federal income tax statutory rate.8  Average balances include non-accrual loans and are net of unearned income.9  Average balances of investment securities is computed at fair value.10  Income on interest-earning assets has been computed on a fully taxable equivalent basis (FTE) using the 21% federal income tax statutory rate.11  Average balances include non-accrual loans and are net of unearned income.12  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