Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

______________

Date of Report (Date of earliest event reported): July 27, 2023

ACNB Corporation

(Exact name of Registrant as specified in its charter)

Pennsylvania

1-35015

23-2233457

(State or other

jurisdiction of

incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)


16 Lincoln Square, Gettysburg, PA						17325
(Address of principal executive offices)						(Zip Code)


			717.334.3161
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:


Title Of Each Class	Trading Symbol(s)	Name Of Each Exchange On Which Registered
Common Stock, $2.50 par value per share	ACNB	The NASDAQ Stock Market, LLC

CURRENT REPORT ON FORM 8-K

ITEM 2.02 Results of Operations and Financial Condition

ACNB Corporation released financial results for the three and six months ended June 30, 2023, as more fully described in the attached press release dated July 27, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information furnished under this Item 2.02 of this Current Report on Form 8-K shall not be deemed to be filed for purposes of the Securities Exchange Act of 1934.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number Description

99.1 ACNB Corporation Press Release dated July 27 , 202 3 .

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.


		ACNB CORPORATION (Registrant)

Dated:	July 27, 2023	/s/ Kevin J. Hayes
		Kevin J. Hayes
		Senior Vice President/
		General Counsel, Secretary & Chief Governance Officer

Exhibit 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE

Contact:

Jason H. Weber

EVP/Treasurer &

Chief Financial Officer

717.339.5090

jweber@acnb.com

ACNB CORPORATION REPORTS

2023 SECOND QUARTER FINANCIAL RESULTS

GETTYSBURG, PA, July 27, 2023 --- ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced financial results for the quarter ended June 30, 2023 with net income of $9.5 million, an increase of $0.9 million or 10.36%, compared to net income of $8.6 million for the three months ended June 30, 2022. For the three months ended June 30, 2023 and 2022, basic and diluted earnings per share were $1.12 and $0.99, respectively, which is an increase of $0.13 per share, or 13.13%. Compared to the prior quarter, net income increased $0.5 million, or 5.55%, and basic and diluted earnings per share increased $0.06 per share, or 5.66%.

2023 Second Quarter Highlights

•Return on average assets was 1.62% and return on average equity was 14.74%.

•Fully taxable equivalent (“FTE”) net interest margin was 4.11% compared to 4.22% for the prior quarter and 3.15% for the comparable quarter last year.

•Efficiency ratio1 was 55.52% compared to 56.36% for the prior quarter and 56.16% from the comparable quarter last year.

•Total loans outstanding were $1.57 billion at June 30, 2023, an increase of $42.2 million, or 2.75%, from March 31, 2023 and an increase of $64.0 million, or 4.24% from June 30, 2022.

•Total non-performing loans to loans held-for-investment was 0.23% compared to 0.25% for the prior quarter and 0.35% for the comparable quarter of last year. Net charge-offs to average loans (annualized) was 0.02% compared to 0.02% for the prior quarter and 0.01% for the comparable quarter last year.

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July 27, 2023

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•Loan to deposit ratio of 80.1%. The ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.1% at ACNB Bank.

•Tangible common equity to tangible assets ratio1 of 8.75% compared to 8.56% for the prior quarter and 7.30% for the comparable quarter last year. The net unrealized loss on the available for sale securities portfolio was $66.1 million at June 30, 2023 compared to a net unrealized loss of $57.6 million at March 31, 2023 and a net unrealized loss of $43.5 million at June 30, 2022.

1 - Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.

“As the second quarter of 2023 came to a close, the financial services industry has been challenged with considerable market uncertainty and turmoil over the past six months. However, ACNB Corporation has continued to focus on fundamental community banking principles as we live our vision every day to build relationships and find solutions for our customers in the communities we serve. As a result of this steadfast commitment to our shareholders, customers and employees, we are pleased to share our June 30, 2023 operating results,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.

“Our financial performance, strong capital base, superior asset quality metrics and our continued robust risk management practices have well positioned ACNB Corporation to meet the demands facing our industry and our customers. We are pleased to see meaningful loan growth during the second quarter and remain optimistic for the remainder of the year in spite of continued higher interest rates. Superior asset quality metrics remain a key strength of the Corporation, and is the result of tremendous teamwork by our lending and credit teams, as well as working closely with our borrowers to understand and meet their unique needs and financial goals.”

Mr. Helt continued, “ACNB Corporation has made the strategic decision to restrain deposit rates as a result of our elevated funding levels coming out of the pandemic. At the end of the second quarter, our level of uninsured and non-collateralized deposits was approximately 18% of total deposits and total deposits were approximately 8.4% higher than pre-pandemic deposit levels as of March 31, 2020 --- even with the recent deposit outflows.”

“As we look to the second half of the year, ACNB Corporation’s strategic focus remains constant in seeking opportunities for both organic and inorganic growth to ensure the continued success of the banking

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July 27, 2023

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subsidiary of ACNB Bank and the insurance subsidiary of ACNB Insurance Services, Inc. as we strive to enhance long-term shareholder value.”

Net Interest Income and Margin

Net interest income for the three months ended June 30, 2023 totaled $22.0 million, an increase of $2.2 million, or 11.04%, over comparable quarter last year. The FTE net interest margin was 4.11%, an increase of 96 basis points from 3.15% for the comparable quarter last year. Paycheck Protection Program (“PPP”) fees and purchase accounting accretion for the three months ended June 30, 2023 totaled $250 thousand compared to $1.0 million for the comparable quarter last year. There were no PPP fees for the three months ended June 30, 2023 compared to $482 thousand for the comparable quarter last year. Higher FTE net interest margin and net interest income were attributable to higher interest rates and a shift into higher-yielding assets.

Compared to the prior quarter, net interest income decreased $1.1 million, or 4.77%, driven primarily by an increase in short term and long term borrowings to fund loan growth and deposit outflows. The FTE net interest margin decreased 11 basis points as earning asset yields decreased slightly while funding costs increased. PPP Fees and purchase accounting accretion for the three months ended June 30, 2023 totaled $250 thousand compared to $374 thousand for the prior quarter. There were no PPP fees for the three months ended June 30, 2023 compared to $8 thousand for the prior quarter.

The average rate paid on interest bearing deposits was 0.13% for the three months ended June 30, 2023, an increase of 1 basis point from the prior quarter and a decrease of 2 basis points from the comparable quarter last year. The average rate paid on total borrowings was 3.15% for the three months ended June 30, 2023, an increase of 100 basis points from the prior quarter and an increase of 136 basis points from the comparable quarter last year. The average yield on earning assets was 4.33% for the three months ended June 30, 2023, a decrease of 4 basis points from the prior quarter and an increase of 104 basis points from the comparable quarter last year. Compared to the prior quarter, the average yield on earning assets declined primarily due to the sale of

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

Page 4 of 14

higher-yielding securities, lower loan origination yields, lower purchase accounting accretion and higher net deferred expenses for new loan originations.

Noninterest Income

Noninterest income for the three months ended June 30, 2023 was $6.2 million, an increase of $118 thousand, or 1.94%, from the comparable quarter last year. The increase was driven primarily by increased income from fiduciary, investment management and brokerage activities of $163 thousand due to strong market returns and new business generation and an increase in earnings on investment in bank-owned life insurance of $121 thousand due to increasing net yields and additional purchases in the third quarter of 2022 partially offset by lower income from mortgage loans held for sale of $131 thousand.

Compared to the prior quarter, noninterest income increased $1.2 million, or 24.28%, driven primarily by an increase in commissions from insurance sales of $938 thousand due to seasonally stronger commissions and an increase in contingent commissions for income received during the three months ended June 30, 2023 for contingent commissions earned in 2022. Income from fiduciary, investment management and brokerage activities increased $139 thousand due to strong market returns and new business generation. During the three months ended June 30, 2023, three previously closed community banking offices were sold for a gain of $323 thousand, which is reflected in other income.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2023 was $16.3 million, an increase of $1.3 million, or 8.50%, from the comparable quarter last year. The increase was driven primarily by increases in salaries and employee benefits, professional services and other operating expenses. Salaries and employee benefits expense was $9.8 million for the three months ended June 30, 2023 compared to $9.3 million for the comparable quarter last year. The increase in salaries and employee benefits expense was driven primarily by a general increase in base wages. Professional services expense was $601 thousand for the three months ended June 30, 2023 compared to $430 thousand for the comparable quarter last year. The increase in professional

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July 27, 2023

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services expense was driven primarily by additional expenses related to employee recruiting, legal and consulting services for various projects within the organization. Other operating expense was $1.9 million for the three months ended June 30, 2023 compared to $1.5 million for the comparable quarter last year. The increase in other operating expenses was driven primarily by a loss of $142 thousand as a result of writing off an investment in a title agency as well as a mark-to-market loss of $83 thousand related to a Small Business Investment Company (“SBIC”) fund.

Equipment expense was $1.6 million for the three months ended June 30, 2023 compared to $1.5 million for the comparable quarter last year. The increase in equipment expense was attributable to expenses related to ACNB Bank’s core processing system as well as ongoing expenses related to the new loan origination system that was implemented in late 2022. Marketing and corporate relations expense was $159 thousand for the three months ended June 30, 2023 compared to $67 thousand for the comparable quarter last year. The increase was driven by $72 thousand in expenses related to the rebranding of ACNB Bank’s Maryland banking divisions.

Compared to the prior quarter, noninterest expense decreased $1 thousand, or 0.01%, driven primarily by lower salary and employee benefits expense offset by an increase in professional services and other operating expenses. Salaries and employee benefits expense was $9.8 million for the three months ended June 30, 2023 compared to $10.4 million for the prior quarter. The decrease in salaries and employee benefits expense was driven primarily by a decrease of $276 thousand in the extended leave reserve and a decrease of $241 thousand in stock-based compensation. Professional services expense was $601 thousand for the three months ended June 30, 2023 compared to $382 thousand for the prior quarter. The increase in professional services expense was driven primarily by additional expenses related to employee recruiting, collection fees and consulting services for various projects within the organization. Other operating expense was $1.9 million for the three months ended June 30, 2023 compared to $1.5 million for the prior quarter. The increase in other operating was driven primarily by a loss of $142 thousand as result of writing off an investment in a title company as well as a mark-to-market loss of $83 thousand related to an SBIC fund.

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

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Loans and Asset Quality

Total loans outstanding were $1.57 billion at June 30, 2023, an increase of $42.2 million, or 2.75%, from March 31, 2023 and an increase of $64.0 million, or 4.24%, from June 30, 2022. The increase in both periods was driven mainly by growth in the commercial loan portfolio.

Asset quality metrics continue to be stable. The provision for credit losses was $(273) thousand and the provision for unfunded commitments was $121 thousand for the three months ended June 30, 2023 compared to a provision for credit losses of $97 thousand and a provision for unfunded commitments of $276 thousand for the prior quarter. Non-performing loans were $3.7 million, or 0.23%, of total loans at June 30, 2023 compared to $3.8 million, or 0.25%, of total loans at March 31, 2023 and $5.2 million, or 0.35%, of total loans at June 30, 2022. Annualized net charge-offs for the three months ended June 30, 2023 were 0.02% of total average loans compared to 0.02% for the prior quarter and 0.01% for the comparable quarter last year.

Deposits

Total deposits were $2.0 billion at June 30, 2023. Deposits decreased by $92.1 million, or 4.48%, since March 31, 2023 and decreased by $400.0 million, or 16.92%, from June 30, 2022. Given ACNB’s funding level, management made a strategic decision to restrain deposit rates and thereby moderate deposit costs in 2022 and into 2023 despite an increase in market interest rates and an increase in rates by competitors. As a result, total deposits declined during both periods as customers began to seek higher yielding alternative deposit and investment products.

Total interest bearing deposits were $1.4 billion at June 30, 2023. Interest bearing deposits decreased by $67.4 million, or 4.61%, from March 31, 2023 and decreased by $385.8 million, or 21.68%, from June 30, 2022. Total non-interest bearing deposits were $569.7 million at June 30, 2023. Non-interest bearing deposits decreased by $24.6 million, or 4.14%, from March 31, 2023 and decreased by $14.2 million, or 2.43%, from June 30, 2022.

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

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Stockholders’ Equity, Dividends and Share Repurchases

Total stockholders’ equity was $257.1 million at June 30, 2023 compared to $255.8 million at March 31, 2023 and $247.0 million at June 30, 2022. Book value per share was $28.69, $30.02 and $30.14 at June 30, 2022, March 31, 2023 and June 30, 2023, respectively.

Similar to the prior quarter, ACNB paid a quarterly cash dividend of $2.4 million, or $0.28 per common share for the three months ended June 30, 2023 compared to $2.3 million, or $0.26 per common share for the comparable quarter last year. In addition, ACNB did not repurchase any shares of ACNB common stock during the three months ended June 30, 2023 compared to 850 shares of ACNB common stock during the prior quarter at a cost of $29 thousand and 88,225 shares of ACNB common stock during the comparable quarter last year at a cost of $2.9 million.

ACNB Corporation Update

As previously announced, on July 26, 2023, ACNB Corporation declared the regular quarterly cash dividend for the third quarter of 2023 in the amount of $0.28 per common share, payable on September 15, 2023, to shareholders of record as of September 1, 2023. This quarterly cash dividend declared of $0.28 per common share is an increase of $0.02, or 7.7%, per common share compared to the third quarter of 2022.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.4 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 44 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

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July 27, 2023

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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; the continuing banking instability caused by the recent 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. 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 #2023-15

July 27, 2023

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

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ACNB Corporation Financial Highlights

Selected Financial Data by Respective Quarter End

(Unaudited)


Dollars in thousands, except per share data	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
BALANCE SHEET DATA
Assets	$	2,378,151		$	2,410,933		$	2,525,507		$	2,654,153		$	2,683,162
Securities	$	518,093		$	568,232		$	620,250		$	571,796		$	598,088
Loans, total	$	1,573,817		$	1,531,626		$	1,538,610		$	1,527,128		$	1,509,792
Allowance for credit losses	$	19,148		$	19,485		$	17,861		$	17,952		$	18,943
Deposits	$	1,963,754		$	2,055,822		$	2,198,975		$	2,336,213		$	2,363,773
Allowance for unfunded commitments	$	2,132		$	2,011		$	92		$	92		$	92
Borrowings	$	132,703		$	76,294		$	62,954		$	65,691		$	53,609
Stockholders’ equity	$	257,069		$	255,841		$	245,042		$	232,370		$	247,032
INCOME STATEMENT DATA
Interest income	$	23,213		$	23,909		$	24,894		$	23,382		$	20,696
Interest expense	1,223			817			846			862			892
Net interest income	21,990			23,092			24,048			22,520			19,804
Provision for credit losses	(273)			97			—			—			—
Provision for unfunded commitments	121			276			—			—			—
Net interest income after provisions for credit losses and unfunded commitments	22,142			22,719			24,048			22,520			19,804
Other income	6,194			4,984			5,423			5,849			6,076
Other expenses	16,281			16,282			16,673			15,320			15,006
Income before income taxes	12,055			11,421			12,798			13,049			10,874
Provision for income taxes	2,531			2,398			2,599			2,725			2,244
Net income	$	9,524		$	9,023		$	10,199		$	10,324		$	8,630
PROFITABILITY RATIOS
Loans held-for-investment to deposits	80.14		%	74.50		%	69.97		%	65.37		%	63.87		%
Return on average assets (annualized)	1.62		%	1.50		%	1.56		%	1.51		%	1.28		%
Return on average equity (annualized)	14.74		%	14.58		%	17.10		%	17.06		%	13.69		%
Efficiency ratio1	55.52		%	56.36		%	55.66		%	52.45		%	56.16		%
FTE Net interest margin	4.11		%	4.22		%	4.03		%	3.60		%	3.15		%
Yield on average earning assets	4.33		%	4.37		%	4.17		%	3.74		%	3.29		%
Yield on securities	2.24		%	2.46		%	2.30		%	2.05		%	2.00		%
Yield on loans	5.05		%	5.12		%	4.97		%	4.75		%	4.53		%
Cost of funds	0.23		%	0.15		%	0.14		%	0.14		%	0.15		%
Noninterest income to total revenue	21.98		%	17.75		%	18.40		%	20.62		%	23.48		%
PER SHARE DATA
Diluted earnings per share	$	1.12		$	1.06		$	1.20		$	1.20		$	0.99
Cash dividends paid per share	$	0.28		$	0.28		$	0.28		$	0.26		$	0.26
Tangible book value per share1	$	23.83		$	23.66		$	22.41		$	20.86		$	22.27
Tangible book value per share (ex-AOCI)1	$	30.64		$	29.76		$	29.23		$	28.23		$	27.32
CAPITAL RATIOS2
Tier 1 leverage ratio	11.79		%	11.09		%	9.91		%	9.33		%	8.87		%
Common equity tier 1 ratio	15.38		%	15.21		%	15.00		%	14.74		%	14.63		%
Tier 1 risk based capital ratio	15.72		%	15.56		%	15.36		%	15.10		%	15.01		%
Total risk based capital ratio	17.67		%	17.56		%	17.32		%	17.11		%	17.13		%
CREDIT QUALITY
Net charge-offs to average loans outstanding (annualized)	0.02		%	0.02		%	0.02		%	0.26		%	0.01		%
Total non-performing loans to loans held-for-investment3	0.23		%	0.25		%	0.25		%	0.26		%	0.35		%
Total non-performing assets to total assets4	0.17		%	0.18		%	0.17		%	0.16		%	0.19		%
Allowance for credit losses to loans held-for-investment	1.22		%	1.27		%	1.16		%	1.18		%	1.25		%

1 Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.

2 Capital ratios for March and September are estimated due to the Corporation being a smaller reporting company. June 30, 2023 capital ratios are not finalized and are estimates.

3 Non-performing Loans consists of loans on nonaccrual status and loans greater than ninety days past due and still accruing interest.

4 Non-performing Assets consists of Non-performing Loans and Other Real Estate Owned (OREO).

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Press Release/2023 Second Quarter Financial Results

July 27, 2023

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Consolidated Balance Sheets

(Unaudited)


Dollars in thousands, except per share data	June 30, 2023		March 31, 2023		December 31, 2022
ASSETS
Cash and due from banks	$	24,898	$	24,833	$	40,067
Interest bearing deposits with banks	59,145		89,233		128,094
Total Cash and Cash Equivalents	84,043		114,066		168,161
Equity securities with readily determinable fair values	915		1,328		1,719
Debt securities available for sale	452,252		501,944		553,554
Securities held to maturity, fair value $58,133; $59,998; $58,078	64,926		64,960		64,977
Loans held for sale	—		167		123
Loans, net of allowance for loan losses $19,148; $19,485; $17,861	1,554,669		1,512,141		1,520,749
Assets held for sale	1,418		3,393		3,393
Premises and equipment, net	26,145		26,588		27,053
Right of use assets	2,952		2,994		3,162
Restricted investment in bank stocks	4,877		2,552		1,629
Investment in bank-owned life insurance	78,919		78,435		77,993
Investments in low-income housing partnerships	1,066		1,097		1,129
Goodwill	44,185		44,185		44,185
Intangible assets, net	9,612		9,972		10,332
Foreclosed assets held for resale	467		474		474
Other assets	51,705		46,637		46,874
Total Assets	2,378,151		2,410,933		2,525,507

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing transaction accounts	569,729		594,355		595,049
Interest bearing transactions accounts	1,394,025		1,461,467		1,603,926
Total Deposits	1,963,754		2,055,822		2,198,975
Short-term borrowings	51,703		30,294		41,954
Long-term borrowings	81,000		46,000		21,000
Lease liabilities	2,952		2,994		3,162
Allowance for unfunded commitments	2,132		2,011		92
Other liabilities	19,541		17,971		15,282
Total Liabilities	2,121,082		2,155,092		2,280,465

STOCKHOLDERS’ EQUITY
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding	—		—		—
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,888,732, 8,883,206, and 8,838,720 shares issued; 8,564,282, 8,523,256, and 8,515,120 shares outstanding	22,212		22,198		22,086
Treasury stock, at cost; 324,450, 324,450, and 323,600 shares	(8,956)		(8,956)		(8,927)
Additional paid-in capital	96,586		96,415		96,022
Retained earnings	205,279		198,144		193,873
Accumulated other comprehensive loss	(58,052)		(51,960)		(58,012)
Total Stockholders’ Equity	257,069		255,841		245,042

Total Liabilities and Stockholders’ Equity	$	2,378,151	$	2,410,933	$	2,525,507

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

Page 11 of 14

Consolidated Income Statements

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in thousands, except per share data	2023		2022		2023		2022
INTEREST AND DIVIDEND INCOME
Loans, including fees
Taxable	$	18,947	$	16,414	$	37,845	$	32,200
Tax-exempt	352		356		708		660
Securities:
Taxable	2,688		2,722		5,974		4,272
Tax-exempt	285		289		599		429
Dividends	51		24		92		59
Other	890		891		1,904		1,153
Total Interest Income	23,213		20,696		47,122		38,773
INTEREST EXPENSE
Deposits	486		646		959		1,384
Short-term borrowings	108		20		125		37
Long-term borrowings	629		226		956		495
Total Interest Expense	1,223		892		2,040		1,916
Net Interest Income	21,990		19,804		45,082		36,857
Reversal of Credit Losses	(273)		—		(176)		—
Provision for Unfunded Commitments	121		—		397		—
Net Interest Income after Provisions for (Reversal of) Credit Losses and Unfunded Commitments	22,142		19,804		44,861		36,857
OTHER INCOME
Commissions from insurance sales	2,840		2,808		4,742		4,008
Service charges on deposit accounts	989		1,006		1,951		1,964
Income from fiduciary, investment management and brokerage activities	979		816		1,819		1,626
Income from mortgage loans held for sale	14		145		31		426
Earnings on investment in bank-owned life insurance	484		363		926		690

Net losses on sales or calls of securities	(546)		—		(739)		—
Net (losses) gains on equity securities	(15)		(148)		5		(257)
Gain on assets held for sale	323		—		323		—

Service charges on ATM and debit card transactions	834		865		1,657		1,618
Other	292		221		463		460
Total Other Income	6,194		6,076		11,178		10,535
OTHER EXPENSES
Salaries and employee benefits	9,824		9,314		20,266		16,873
Net occupancy	1,002		939		2,039		2,098
Equipment	1,623		1,527		3,230		3,045
Other tax	305		402		642		818
Professional services	601		430		983		739
Supplies and postage	198		195		404		376
Marketing and corporate relations	159		67		313		170
FDIC and regulatory	295		264		544		535

Intangible assets amortization	360		389		720		698

Other operating	1,914		1,479		3,422		2,936
Total Other Expenses	16,281		15,006		32,563		28,288
Income before Income Taxes	12,055		10,874		23,476		19,104
PROVISION FOR INCOME TAXES	2,531		2,244		4,929		3,875
Net Income	$	9,524	$	8,630	$	18,547	$	15,229
PER SHARE DATA
Basic earnings	$	1.12	$	0.99	$	2.18	$	1.75
Diluted earnings	$	1.12	$	0.99	$	2.17	$	1.75

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

Page 12 of 14

Average Balances, Income and Expenses, Yields and Rates


	Three months ended June 30, 2023						Three months ended June 30, 2022						Six months ended June 30, 2023						Six months ended June 30, 2022
Dollars in thousands	Average Balance		Interest5		Yield/ Rate		Average Balance		Interest5		Yield/ Rate		Average Balance		Interest5		Yield/ Rate		Average Balance		Interest5		Yield/ Rate
ASSETS
Interest bearing deposits with banks	$	71,040	$	890	5.03	%	$	426,169	$	891	0.84	%	$	80,958	$	1,904	4.74	%	$	538,632	$	1,153	0.43	%
Investments (Tax-exempt)	55,588		361		2.60	%	30,054		366		4.88	%	55,449		758		2.76	%	30,280		543		3.62	%
Investments (Taxable)	498,401		2,739		2.20	%	593,903		2,745		1.85	%	527,576		6,066		2.32	%	516,678		4,331		1.69	%
Total Investments	553,989		3,100		2.24	%	623,957		3,111		2.00	%	583,025		6,824		2.36	%	546,958		4,874		1.80	%

Loans (Tax-exempt)	75,670		446		2.36	%	81,656		451		2.22	%	76,501		897		2.36	%	76,949		835		2.19	%
Loans (Taxable)	1,463,967		18,946		5.19	%	1,411,584		16,413		4.66	%	1,459,455		37,844		5.23	%	1,406,082		32,200		4.62	%
Total Loans	1,539,637		19,392		5.05	%	1,493,240		16,864		4.53	%	1,535,956		38,741		5.09	%	1,483,031		33,035		4.49	%

Total Earning Assets	2,164,666		23,382		4.33	%	2,543,366		20,866		3.29	%	2,199,939		47,469		4.35	%	2,568,621		39,062		3.07	%

Total Assets	$	2,357,626					$	2,703,149					$	2,398,423					$	2,735,853

LIABILITIES
Interest bearing demand deposits	$	577,480					$	635,556					$	584,686					$	594,097
Money markets	261,560						348,919						285,996						344,097
Savings deposits	387,847						411,610						395,590						406,841
Time deposits	224,608						388,733						246,536						442,879
Total Interest Bearing Deposits	1,451,495		486		0.13	%	1,784,818		646		0.15	%	1,512,808		959		0.13	%	1,787,914		1,384		0.16	%
Short-term borrowings	34,080		108		1.27	%	30,808		20		0.26	%	34,834		125		0.72	%	4,967		37		1.50	%
Long-term borrowings	59,901		629		4.21	%	24,175		226		3.75	%	43,597		956		4.42	%	56,991		495		1.75	%
Total borrowings	93,981		737		3.15	%	54,983		246		1.79	%	78,431		1,081		2.78	%	61,958		532		1.73	%
Total Interest Bearing Liabilities	1,545,476		1,223		0.32	%	1,839,801		892		0.19	%	1,591,239		2,040		0.26	%	1,849,872		1,916		0.21	%
Non-interest bearing demand deposits	550,581						611,179						554,340						621,248
Cost of Funds					0.23	%					0.15	%					0.19	%					0.16	%
FTE Net Interest Margin					4.11	%					3.15	%					4.16	%					2.92	%
Stockholders’ Equity	259,239						252,933						255,147						259,798

5 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

Page 13 of 14


	Three months ended June 30, 2023						Three months ended March 31, 2023						Three months ended December 31, 2022						Three months ended September 30, 2022						Three months ended June 30, 2022
Dollars in thousands	Average Balance		Interest6		Yield/ Rate		Average Balance		Interest6		Yield/ Rate		Average Balance		Interest6		Yield/ Rate		Average Balance		Interest6		Yield/ Rate		Average Balance		Interest6		Yield/ Rate
ASSETS
Interest bearing deposits with banks	$	71,040	$	890	5.03	%	$	90,987	$	1,014	4.52	%	$	268,911	$	2,473	3.65	%	$	368,265	$	2,130	2.29	%	$	426,169	$	891	0.84	%
Investments (Tax-exempt)	55,588		361		2.60	%	55,589		397		2.90	%	42,987		666		6.15	%	27,519		239		3.45	%	30,054		366		4.88	%
Investments (Taxable)	498,401		2,739		2.20	%	557,377		3,327		2.42	%	542,137		2,722		1.99	%	571,282		2,850		1.98	%	593,903		2,745		1.85	%
Total Investments	553,989		3,100		2.24	%	612,966		3,724		2.46	%	585,124		3,388		2.30	%	598,801		3,089		2.05	%	623,957		3,111		2.00	%

Loans (Tax-exempt)	75,670		446		2.36	%	77,341		451		2.36	%	78,274		446		2.26	%	80,604		425		2.09	%	81,656		451		2.22	%
Loans (Taxable)	1,463,967		18,946		5.19	%	1,454,934		18,898		5.27	%	1,459,830		18,821		5.11	%	1,440,646		17,789		4.90	%	1,411,584		16,413		4.66	%
Total Loans	1,539,637		19,392		5.05	%	1,532,275		19,349		5.12	%	1,538,104		19,267		4.97	%	1,521,250		18,214		4.75	%	1,493,240		16,864		4.53	%

Total Earning Assets	2,164,666		23,382		4.33	%	2,236,228		24,087		4.37	%	2,392,139		25,128		4.17	%	2,488,316		23,433		3.74	%	2,543,366		20,866		3.29	%

Total Assets	$	2,357,626					$	2,439,219					$	2,598,000					$	2,709,482					$	2,703,149

LIABILITIES
Interest bearing demand deposits	$	577,480					$	591,972					$	653,369					$	640,903					$	635,556
Money markets	261,560						298,584						328,808						342,002						348,919
Savings deposits	387,847						403,419						408,285						417,290						411,610
Time deposits	224,608						268,708						318,115						360,114						388,733
Total Interest Bearing Deposits	1,451,495		486		0.13	%	1,562,683		473		0.12	%	1,708,577		572		0.13	%	1,760,309		605		0.14	%	1,784,818		646		0.15	%

Short-term borrowings	34,080		108		1.27	%	35,596		17		0.19	%	41,257		17		0.16	%	38,017		23		0.24	%	30,808		20		0.26	%
Long-term borrowings	59,901		629		4.21	%	29,211		327		4.54	%	22,350		257		4.56	%	23,875		234		3.89	%	24,175		226		3.75	%
Total borrowings	93,981		737		3.15	%	64,807		344		2.15	%	63,607		274		1.71	%	61,892		257		1.65	%	54,983		246		1.79	%

Total Interest Bearing Liabilities	1,545,476		1,223		0.32	%	1,627,490		817		0.20	%	1,772,184		846		0.19	%	1,822,201		862		0.19	%	1,839,801		892		0.19	%
Non-interest bearing demand deposits	550,581						557,546						586,092						597,884						611,179
Cost of Funds					0.23	%					0.15	%					0.14	%					0.14	%					0.15	%
FTE Net Interest Margin					4.11	%					4.22	%					4.03	%					3.60	%					3.15	%
Stockholders’ Equity	259,239						251,054						236,674						240,026						252,933

6 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

ACNB Corporation

Press Release/2023 Second Quarter Financial Results

July 27, 2023

Page 14 of 14

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, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Tangible book value per share
Stockholders’ equity	$	257,069		$	255,841		$	245,042		$	232,370		$	247,032
Less: Goodwill and intangible assets	(53,797)			(54,157)			(54,517)			(54,916)			(55,310)
Tangible common stockholders’ equity (numerator)	$	203,272		$	201,684		$	190,525		$	177,454		$	191,722
Shares outstanding, less unvested shares, end of period (denominator)	8,528,782			8,523,256			8,501,752			8,505,843			8,610,667
Tangible book value per share	$	23.83		$	23.66		$	22.41		$	20.86		$	22.27
Tangible book value per share (ex-AOCI)
Tangible common stockholders’ equity	$	203,272		$	201,684		$	190,525		$	177,454		$	191,722
Less: AOCI	(58,052)			(51,960)			(58,012)			(62,690)			(43,526)
Tangible equity (ex-AOCI)	$	261,324		$	253,644		$	248,537		$	240,144		$	235,248
Tangible book value per share (ex-AOCI)	$	30.64		$	29.76		$	29.23		$	28.23		$	27.32











Tangible common equity to tangible assets (TCE/TA Ratio)
Tangible common stockholders’ equity (numerator)	$	203,272		$	201,684		$	190,525		$	177,454		$	191,722
Total assets	$	2,378,151		$	2,410,933		$	2,525,507		$	2,654,153		$	2,683,162
Less: Goodwill and intangible assets	(53,797)			(54,157)			(54,517)			(54,916)			(55,310)
Total tangible assets (denominator)	$	2,324,354		$	2,356,776		$	2,470,990		$	2,599,237		$	2,627,852
Tangible common equity to tangible assets	8.75		%	8.56		%	7.71		%	6.83		%	7.30		%
Efficiency Ratio
Non-interest expense	$	16,281		$	16,282		$	16,673		$	15,320		$	15,006
Less: Intangible amortization	(360)			(360)			(399)			(395)			(389)
Less: Loss on MD Title Investment	$	(142)		$	—		$	—		$	—		$	—
Non-interest expense (numerator)	$	15,779		$	15,922		$	16,274		$	14,925		$	14,617
Net interest income	$	21,990		$	23,092		$	24,048		$	22,520		$	19,804
Plus: Total non-interest income	6,194			4,984			5,423			5,849			6,076
Less: Net gains (losses) on sales or calls of securities	(546)			(193)			(234)			—			—
Less: Net gains (losses) on equity securities	(15)			20			46			(88)			(148)
Less: Gain on assets held for sale	323			—			—			—			—
Less: Net gains on sale of low income housing partnership	—			—			421			—			—
Total revenue (denominator)	$	28,422		$	28,249		$	29,238		$	28,457		$	26,028
Efficiency ratio	55.52		%	56.36		%	55.66		%	52.45		%	56.16		%

Cover	Jul. 27, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 27, 2023
Entity Registrant Name	ACNB Corporation
Entity Incorporation, State or Country Code	PA
Entity File Number	1-35015
Entity Tax Identification Number	23-2233457
Entity Address, Address Line One	16 Lincoln Square
Entity Address, City or Town	Gettysburg
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17325
City Area Code	717
Local Phone Number	334.3161
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, $2.50 par value per share
Trading Symbol	ACNB
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity Central Index Key	0000715579