Financial Performance - Net income for the three months ended September 30, 2025, was $14.9 million, an increase of $7.7 million compared to $7.2 million for the same period in 2024[128]. - Net income for the nine months ended September 30, 2025, was $26.2 million, or $2.56 diluted earnings per share, compared to $25.3 million, or $2.96 diluted earnings per share for the same period in 2024[140]. - Noninterest income was $8.4 million for the three months ended September 30, 2025, an increase of $1.6 million compared to the same period in 2024[126]. - Noninterest income totaled $24.3 million for the nine months ended September 30, 2025, compared to $18.9 million for the same period in 2024, reflecting a 28.3% increase[150]. Interest Income and Expenses - Net interest income increased to $32.1 million for the three months ended September 30, 2025, compared to $20.9 million for the same period in 2024, reflecting an increase of $11.2 million[121]. - Net interest income totaled $90.2 million for the nine months ended September 30, 2025, an increase of $27.7 million from $62.5 million for the same period in 2024[141]. - Total FTE interest income increased by $15.3 million for the three months ended September 30, 2025, compared to the same period in 2024, driven by a $10.7 million increase in average interest-earning assets and a $4.5 million increase in yield[134]. - Total interest expense rose by $4.1 million during the three months ended September 30, 2025, with average interest-bearing deposits increasing by $575.6 million[135]. - Total interest expense rose by $12.5 million during the nine months ended September 30, 2025, driven by a $537.6 million increase in average interest-bearing deposits[147]. Asset and Loan Growth - Average loans increased by $675.4 million for the three months ended September 30, 2025, compared to the same period in 2024[126]. - Average loans increased by $618.5 million, contributing $26.1 million to the increase in FTE interest income, while the yield on total loans increased by 74 basis points, contributing $11.8 million[146]. - Total assets increased to $3.17 billion as of September 30, 2025, compared to $2.44 billion for the same period in 2024[144]. - Total loans, net of unearned income, increased by $653.7 million, or 38.8%, from December 31, 2024, driven primarily by $648.5 million in loans purchased at the Acquisition date[159]. Credit Quality - The allowance for credit losses was $23.7 million at September 30, 2025, up from $17.3 million at December 31, 2024[126]. - Non-performing loans were $10.0 million, or 0.43% of total loans, at September 30, 2025, compared to $6.6 million, or 0.39%, at September 30, 2024[126]. - The provision for credit losses for the nine months ended September 30, 2025, was $5.2 million, compared to a reversal of $2.7 million for the same period in 2024[126]. - The provision for credit losses was $5.2 million for the nine months ended September 30, 2025, compared to reversals of $2.7 million for the same period in 2024[149]. Expenses and Acquisitions - Noninterest expenses were $22.4 million for the three months ended September 30, 2025, an increase of $4.1 million compared to the same period in 2024[126]. - Total noninterest expenses increased by $24.8 million, or 47.4%, during the nine months ended September 30, 2025, driven primarily by the Acquisition[151]. - Salaries and employee benefits increased by $7.1 million, or 21.9%, during the nine months ended September 30, 2025, primarily due to the Acquisition[151]. - Merger-related expenses included $10.1 million for the nine months ended September 30, 2025, reflecting costs associated with the Acquisition[151]. Capital and Equity - Total stockholders' equity rose to $408.6 million at September 30, 2025, compared to $303.3 million at December 31, 2024, driven primarily by the issuance of 2,035,246 shares of common stock valued at $83.6 million for the acquisition of Traditions[175]. - The Corporation recognized income taxes of $7.0 million for the nine months ended September 30, 2025, reflecting an effective tax rate (ETR) of 21.1%, down from 21.5% in the same period of 2024[152]. - The capital ratios as of September 30, 2025, indicate that ACNB Corporation's Tier 1 leverage capital ratio was 11.22%, significantly above the minimum requirement of 4.00%[178]. - Common Equity Tier 1 capital ratio for ACNB Corporation was 14.45%, exceeding the minimum requirement of 4.50%[178]. Deposits and Borrowings - Total deposits increased by $673.4 million, or 37.6%, to $2.47 billion at September 30, 2025, primarily due to the Acquisition[171]. - Short-term borrowings increased to $80.5 million as of September 30, 2025, up from $15.8 million at December 31, 2024, representing a growth of 408.2%[173]. - Long-term borrowings remained stable at $255.4 million as of September 30, 2025, compared to $255.3 million at December 31, 2024[174]. - ACNB's banking subsidiary had a borrowing capacity of approximately $1.29 billion from the FHLB, with $1.01 billion available as of September 30, 2025[181]. Investment and Securities - Total investment securities rose by 14.6% to $526.6 million at September 30, 2025, compared to $459.5 million at December 31, 2024[155]. - Securities sold under repurchase agreements increased to approximately $27.1 million at September 30, 2025, compared to $15.8 million at December 31, 2024, reflecting a growth of 71.4%[183].

Core Viewpoint - ACNB has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which have a strong correlation with near-term stock price movements [4][6]. - ACNB's earnings per share (EPS) for the fiscal year ending December 2025 is projected to be $4.99, showing no year-over-year change, but the Zacks Consensus Estimate has increased by 7% over the past three months [8]. Investment Implications - The upgrade reflects an improvement in ACNB's underlying business, suggesting that investors may push the stock price higher due to this positive trend [5][10]. - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9].

Core Insights - ACNB reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.20 per share, and showing a significant increase from $0.84 per share a year ago, resulting in an earnings surprise of +18.33% [1] - The company achieved revenues of $40.55 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.64% and up from $27.77 million year-over-year [2] - ACNB shares have increased approximately 11.5% year-to-date, compared to the S&P 500's gain of 13.9% [3] Earnings Outlook - The future performance of ACNB's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $39.38 million, and for the current fiscal year, it is $4.67 on revenues of $153.03 million [7] Industry Context - The Zacks Industry Rank places the Banks - Southwest sector in the top 24% of over 250 Zacks industries, indicating a favorable environment for stock performance [8] - Another company in the same industry, Prosperity Bancshares, is expected to report quarterly earnings of $1.45 per share, reflecting a year-over-year increase of +8.2% [9]

Core Insights - ACNB Corporation reported a net income of $14.9 million, or $1.42 diluted earnings per share, for Q3 2025, a significant increase from $7.2 million, or $0.84 per share, in Q3 2024 and $11.6 million, or $1.11 per share, in Q2 2025 [1][4]. Financial Performance - The acquisition of Traditions Bancorp, completed on February 1, 2025, impacted ACNB's financial results, making comparisons to prior periods less direct [3]. - Net interest income for Q3 2025 was $32.1 million, up $1.1 million from Q2 2025 and $11.2 million from Q3 2024, with a net interest margin of 4.27%, reflecting increases from both previous quarters [6][10]. - Noninterest income for Q3 2025 was $8.4 million, a decrease from Q2 2025 but an increase from Q3 2024, driven by various factors including insurance commissions and service charges [8]. Asset Quality and Loans - Total loans outstanding were $2.34 billion at the end of Q3 2025, a decrease from Q2 2025 but an increase of $659.5 million from Q3 2024, with a loan yield of 6.29% [10][11]. - The allowance for credit losses was $23.7 million, showing a decrease from Q2 2025 but an increase from Q3 2024 [11]. Deposits and Borrowings - Total deposits were $2.47 billion at the end of Q3 2025, a decrease from Q2 2025 but an increase of $674.6 million from Q3 2024, with noninterest-bearing deposits increasing significantly [12]. - Total borrowings increased to $335.8 million, driven by short-term borrowings [13]. Stockholders' Equity - Total stockholders' equity rose to $408.6 million at the end of Q3 2025, up from $395.2 million in Q2 2025 and $306.8 million in Q3 2024, primarily due to net income and unrealized gains [14].

Executive Summary This section provides a high-level overview of ACNB Corporation's strong Q3 2025 financial performance, including record profitability and strategic insights from the CEO [Q3 2025 Financial Highlights](index=1&type=section&id=Q3%202025%20Financial%20Highlights) ACNB Corporation reported record Q3 2025 net income and diluted EPS, with improved net interest margin and stable asset quality, significantly impacted by the Traditions Bancorp acquisition **Q3 2025 Key Financial Performance:** | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (in millions) | $14.9 | $11.6 | $7.2 | | Diluted EPS | $1.42 | $1.11 | $0.84 | | FTE Net Interest Margin | 4.27% | 4.21% | 3.77% | | Return on Average Assets | 1.80% | N/A | N/A | | Return on Average Equity | 14.66% | N/A | N/A | - Total non-performing loans to total loans, net of unearned income, was **0.43%** at September 30, 2025, **stable** compared to June 30, 2025, but up from **0.39%** at September 30, 2024[5](index=5&type=chunk) - The Board of Directors **approved** a regular quarterly cash dividend of **$0.38 per share** for the fourth quarter, an **11.8% increase** over the prior quarter and an **18.8% increase** over the same period of 2024[5](index=5&type=chunk) - ACNB **repurchased** **61,586 shares** of common stock in open market transactions for the three months ended September 30, 2025[6](index=6&type=chunk) - Financial results for the first three quarters of 2025 were **impacted by** the **acquisition of Traditions Bancorp, Inc.** on February 1, 2025, **making direct comparisons to prior reported periods potentially not comparable**[6](index=6&type=chunk) [CEO's Statement](index=3&type=section&id=CEO%27s%20Statement) CEO James P. Helt highlighted record profitability, stable asset quality, and active capital management, crediting community banking and the Traditions Bank integration - **ACNB Corporation** reported **strong profitability** and **record** quarterly net income for **Q3 2025**, reflecting **commitment to community banking** and **successful integration of Traditions Bank**[7](index=7&type=chunk) - The quarter featured **stable asset quality** metrics, **increased profitability**, and **active capital management** strategies, including **share repurchases** and a **strong dividend**[8](index=8&type=chunk) - Management aims to finish the year **strong** by managing economic cycles and **diversifying revenue streams** through ACNB Insurance Services, ACNB Wealth Management, and Traditions Mortgage for **long-term shareholder growth**[8](index=8&type=chunk) Financial Performance Analysis This section analyzes ACNB Corporation's financial performance, focusing on net interest income, noninterest income, and noninterest expense trends [Net Interest Income and Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income significantly increased YoY and moderately QoQ, driven by higher earning assets and improved FTE net interest margin, influenced by lower deposit costs from the Traditions acquisition **Net Interest Income & Margin Trends:** | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :---------------------- | :------ | :------ | :------ | | Net Interest Income (in millions) | $32.1 | $31.0 | $20.9 | | FTE Net Interest Margin | 4.27% | 4.21% | 3.77% | - The **increase** in **FTE net interest margin** from **Q2 2025** was **primarily due to** a **7 basis points decrease** in the cost of interest-bearing deposits, resulting from **lower rates** on **higher cost deposits** and **reduced balances** from the **Traditions Acquisition**[10](index=10&type=chunk) - Total average earning assets **increased by** **$28.5 million** **quarter-over-quarter**, and total average noninterest-bearing demand deposits **increased by** **$30.5 million** **quarter-over-quarter**[10](index=10&type=chunk) - **Year-over-year**, total average loans **increased by** **$675.4 million**, with the yield on total loans **rising by** **73 basis points** to **6.29%** for **Q3 2025**[11](index=11&type=chunk) [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income slightly decreased QoQ but notably increased YoY, driven by lower insurance commissions and higher gains from mortgage loans and service charges, partially due to the acquisition **Noninterest Income (in thousands):** | Category | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total Noninterest Income | $8,411 | $8,682 | $6,833 | | Insurance commissions | $2,545 | $2,908 | $2,787 | | Gain from mortgage loans held for sale | $1,463 | $1,575 | $112 | | Service charges on deposits | $1,286 | $1,179 | $1,048 | - The **decrease** in insurance commissions **QoQ** was **primarily due to** **lower contingent commission income**, and **YoY due to timing of policy renewals** and a **$121 thousand decrease** from one customer's policy cancellation[13](index=13&type=chunk) - Service charges on deposits **increased YoY primarily due to** the **Traditions Acquisition** and an **increase** in **overall customer activity**[13](index=13&type=chunk) [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) Noninterest expense significantly decreased QoQ due to lower merger-related costs and salaries, but increased YoY due to acquisition-related personnel and operational expenses **Noninterest Expense (in thousands):** | Category | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total Noninterest Expenses | $22,361 | $25,366 | $18,244 | | Merger-related expenses | $169 | $1,900 | $1,100 | | Salaries and employee benefits | $13,191 | $13,693 | $11,017 | | Intangible assets amortization | $1,129 | $1,141 | $304 | - Salaries and employee benefits **decreased QoQ primarily due to** a **higher employee vacancy rate**, **lower incentive compensation**, **lower overtime**, conversion-related expenses, and **lower health insurance expense**[14](index=14&type=chunk) - Salaries and employee benefits **increased YoY primarily due to** **additional employees attributable to the Acquisition**, merit increases, and **higher mortgage commissions**[14](index=14&type=chunk) - Intangible assets amortization **increased by** **$825 thousand YoY** as a **direct result** of the **Traditions Acquisition**[15](index=15&type=chunk) Balance Sheet and Asset Quality This section examines ACNB Corporation's balance sheet, focusing on loans, asset quality, deposits, borrowings, and stockholders' equity [Loans and Asset Quality](index=6&type=section&id=Loans%20and%20Asset%20Quality) Total loans and asset quality metrics showed stability QoQ and significant growth YoY, primarily due to the Traditions acquisition **Loans and Asset Quality (in thousands):** | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | | Total loans outstanding | $2,336,605 | $2,341,816 | $1,677,112 | | Allowance for credit losses | $23,660 | $24,353 | $17,214 | | Total non-performing loans to total loans | 0.43% | 0.43% | 0.39% | - The **YoY increase** in total loans was spread across all loan categories and was **driven primarily by the Traditions Acquisition**[17](index=17&type=chunk) - The **QoQ decrease** in allowance for credit losses was **driven primarily by the movement of construction loans to lower loss rate segments** and the **paydowns of loans with a specific reserve**[17](index=17&type=chunk) [Deposits and Borrowings](index=7&type=section&id=Deposits%20and%20Borrowings) Total deposits decreased QoQ but significantly increased YoY, largely due to the Traditions acquisition, while borrowings also increased **Deposits and Borrowings (in thousands):** | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | | Total Deposits | $2,465,896 | $2,524,541 | $1,791,317 | | Total Interest-Bearing Deposits | $1,884,199 | $1,956,240 | $1,327,816 | | Noninterest-Bearing Deposits | $581,697 | $568,301 | $463,501 | | Total Borrowings | $335,833 | $298,395 | $293,091 | - The **QoQ decreases** in money market and time deposits were **driven primarily by lower balances of higher cost deposits from the Acquisition** and a **net decline of $20.0 million** of short-term brokered deposits[18](index=18&type=chunk) - The **overall increase** in total deposits compared to September 30, 2024, was **driven primarily by the Traditions Acquisition**[18](index=18&type=chunk) - Total borrowings **increased QoQ primarily due to** an **increase** in short-term borrowings, including a **three-month FHLB borrowing of $25.0 million**[19](index=19&type=chunk) [Stockholders' Equity](index=7&type=section&id=Stockholders%27%20Equity) Total stockholders' equity increased QoQ and YoY, driven by net income, unrealized gains, and common stock issued in the Traditions acquisition **Stockholders' Equity (in thousands):** | Metric | Sept 30, 2025 | June 30, 2025 | Sept 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | | Total Stockholders' Equity | $408,642 | $395,151 | $306,755 | | Tangible book value per share | $30.87 | $29.30 | $29.90 | - The **QoQ increase** in stockholders' equity was **driven primarily by net income of $14.9 million** and a **$4.3 million change in unrealized gains** in available-for-sale investment securities, **partially offset by $3.5 million in dividends paid** and **$2.7 million in common stock repurchased**[21](index=21&type=chunk) - The **YoY increase** in stockholders' equity was **driven primarily by the common stock equity issued in the Traditions Acquisition**[21](index=21&type=chunk) Company Overview ACNB Corporation is a $3.25 billion financial holding company operating through ACNB Bank and ACNB Insurance Services, providing diverse financial services - **ACNB Corporation** is an **independent $3.25 billion financial holding company** headquartered in Gettysburg, PA[22](index=22&type=chunk) - Its **wholly-owned subsidiaries** include **ACNB Bank** (with operating divisions **Traditions Bank** and Traditions Mortgage) and **ACNB Insurance Services, Inc.**[22](index=22&type=chunk) - **ACNB Bank** provides banking and wealth management services through **33 community banking offices** and one loan office in Pennsylvania and Maryland, while **ACNB Insurance Services, Inc.** is a **full-service insurance agency** licensed in **46 states**[22](index=22&type=chunk) Forward-Looking Statements This section cautions that forward-looking statements are subject to risks and uncertainties, advising readers to review SEC filings for comprehensive risk factors - The press release contains **forward-looking statements**, which are **subject to certain risks and uncertainties** such as national, regional, and local economic conditions, competitive factors, and regulatory limitations[24](index=24&type=chunk) - **Actual results may differ materially** from those projected due to factors including inflation, banking instability, governmental policies, new laws, accounting policy changes, business strategy ineffectiveness, and acquisition integration difficulties[24](index=24&type=chunk) - Readers are **cautioned not to place undue reliance** on these **forward-looking statements** and are encouraged to **review risk factors** described in the Corporation's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC[25](index=25&type=chunk) Financial Tables This section provides detailed financial tables, including selected data, consolidated statements, and average balances, offering comprehensive insights into ACNB Corporation's performance [Selected Financial Data by Respective Quarter End](index=11&type=section&id=Selected%20Financial%20Data%20by%20Respective%20Quarter%20End) This table presents key financial data, including balance sheet, income statement, profitability, per share, capital, and credit quality metrics for the past five quarters, highlighting the Traditions acquisition's impact **Selected Financial Data by Respective Quarter End (Dollars in thousands, except per share data):** | (Dollars in thousands, except per share data) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | | :------------------------------------------ | :----------------- | :------------ | :------------- | :---------------- | :----------------- | | **BALANCE SHEET DATA** | | | | | | | Total assets | $ 3,250,838 | $ 3,259,528 | $ 3,270,041 | $ 2,394,830 | $ 2,420,914 | | Total loans, net of unearned income | 2,336,605 | 2,341,816 | 2,322,209 | 1,682,910 | 1,677,112 | | Deposits | 2,465,896 | 2,524,541 | 2,540,009 | 1,792,501 | 1,791,317 | | Stockholders' equity | 408,642 | 395,151 | 386,883 | 303,273 | 306,755 | | **INCOME STATEMENT DATA** | | | | | | | Net interest income | 32,137 | 31,012 | 27,090 | 21,112 | 20,942 | | Noninterest income | 8,411 | 8,682 | 7,184 | 5,803 | 6,833 | | Noninterest expenses | 22,361 | 25,366 | 29,335 | 18,388 | 18,244 | | Net income (loss) | $ 14,870 | $ 11,648 | $ (272) | $ 6,595 | $ 7,204 | | **PROFITABILITY RATIOS** | | | | | | | Return on average assets (annualized) | 1.80 % | 1.43 % | (0.04) % | 1.08 % | 1.17 % | | Return on average equity (annualized) | 14.66 | 11.96 | (0.31) | 8.57 | 9.63 | | FTE Net interest margin | 4.27 | 4.21 | 4.07 | 3.81 | 3.77 | | **PER SHARE DATA** | | | | | | | Diluted earnings (loss) per share | $ 1.42 | $ 1.11 | $ (0.03) | $ 0.77 | $ 0.84 | | Tangible book value per share | 30.87 | 29.30 | 28.23 | 29.51 | 29.90 | | **CREDIT QUALITY** | | | | | | | Total non-performing loans to total loans | 0.43 % | 0.43 % | 0.43 % | 0.40 % | 0.39 % | [Consolidated Statements of Condition](index=13&type=section&id=Consolidated%20Statements%20of%20Condition) This table presents consolidated balance sheets for ACNB Corporation, detailing assets, liabilities, and stockholders' equity, showing significant YoY growth largely due to the Traditions acquisition **Consolidated Statements of Condition (Dollars in thousands):** | (Dollars in thousands, except per share data) | September 30, 2025 | June 30. 2025 | September 30, 2024 | | :------------------------------------------ | :----------------- | :------------ | :----------------- | | **ASSETS** | | | | | Total Cash and Cash Equivalents | $ 102,139 | $ 103,109 | $ 58,092 | | Investment securities available for sale | 462,217 | 455,317 | 418,079 | | Loans, net | 2,312,945 | 2,317,463 | 1,659,898 | | Goodwill | 64,449 | 64,449 | 44,185 | | Intangible assets, net | 23,565 | 24,694 | 8,142 | | Total Assets | $ 3,250,838 | $ 3,259,528 | $ 2,420,914 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | | Noninterest-bearing Deposits | $ 581,697 | $ 568,301 | $ 463,501 | | Interest-bearing Deposits | 1,884,199 | 1,956,240 | 1,327,816 | | Total Deposits | 2,465,896 | 2,524,541 | 1,791,317 | | Short-term borrowings | 80,468 | 43,041 | 37,769 | | Long-term borrowings | 255,354 | 255,322 | 255,365 | | Total Liabilities | 2,842,196 | 2,864,377 | 2,114,159 | | Total Stockholders' Equity | 408,642 | 395,151 | 306,755 | | Total Liabilities and Stockholders' Equity | $ 3,250,838 | $ 3,259,528 | $ 2,420,914 | [Consolidated Income Statements](index=15&type=section&id=Consolidated%20Income%20Statements) This table presents consolidated income statements, showing substantial increases in interest income, net interest income, and net income, largely influenced by the Traditions acquisition **Consolidated Income Statements (Dollars in thousands, except per share data):** | (Dollars in thousands, except per share data) | Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | **INTEREST AND DIVIDEND INCOME** | | | | | | Total Interest and Dividend Income | $ 42,490 | $ 27,241 | $ 120,356 | $ 80,084 | | **INTEREST EXPENSE** | | | | | | Total Interest Expense | 10,353 | 6,299 | 30,117 | 17,585 | | Net Interest Income | 32,137 | 20,942 | 90,239 | 62,499 | | **NONINTEREST INCOME** | | | | | | Total Noninterest Income | 8,411 | 6,833 | 24,277 | 18,927 | | **NONINTEREST EXPENSES** | | | | | | Total Noninterest Expenses | 22,361 | 18,244 | 77,062 | 52,297 | | Income Before Income Taxes | 18,916 | 9,410 | 33,277 | 32,185 | | Income tax expense | 4,046 | 2,206 | 7,031 | 6,934 | | Net Income | $ 14,870 | $ 7,204 | $ 26,246 | $ 25,251 | | **PER SHARE DATA** | | | | | | Diluted earnings | $ 1.42 | $ 0.84 | $ 2.56 | $ 2.96 | [Average Balances, Income and Expenses, Yields and Rates (Quarterly)](index=17&type=section&id=Average%20Balances%2C%20Income%20and%20Expenses%2C%20Yields%20and%20Rates%20%28Quarterly%29) This table details average balances, income, expenses, yields, and rates for earning assets and interest-bearing liabilities across five quarters, illustrating trends in yields, deposit costs, and FTE net interest margin **Average Balances, Income and Expenses, Yields and Rates (Quarterly, Dollars in thousands):** | (Dollars in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | | :--------------------- | :----------------- | :------------ | :------------- | :---------------- | :----------------- | | **ASSETS** | | | | | | | Total Loans | $ 2,356,641 | $ 2,355,332 | $ 2,138,200 | $ 1,676,928 | $ 1,681,280 | | Yield on total loans | 6.29 % | 6.29 % | 6.08 % | 5.61 % | 5.56 % | | Total Earning Assets | 2,998,405 | 2,969,874 | 2,714,026 | 2,222,823 | 2,225,758 | | Yield on average earning assets | 5.64 % | 5.64 % | 5.45 % | 4.93 % | 4.90 % | | **LIABILITIES** | | | | | | | Total Interest-Bearing Deposits | 1,916,928 | 1,965,483 | 1,762,490 | 1,355,685 | 1,341,365 | | Rate on interest-bearing deposits | 1.42 % | 1.49 % | 1.38 % | 0.96 % | 0.92 % | | Total Borrowings | 325,747 | 299,862 | 296,279 | 278,413 | 293,982 | | Rate on total borrowings | 4.24 % | 4.39 % | 4.39 % | 4.27 % | 4.31 % | | Total Interest-Bearing Liabilities | 2,242,675 | 2,265,345 | 2,058,769 | 1,634,098 | 1,635,347 | | Rate on interest-bearing liabilities | 1.83 % | 1.87 % | 1.81 % | 1.53 % | 1.53 % | | Cost of Funds | 1.45 % | 1.50 % | 1.45 % | 1.19 % | 1.19 % | | FTE Net Interest Margin | 4.27 % | 4.21 % | 4.07 % | 3.81 % | 3.77 % | [Average Balances, Income and Expenses, Yields and Rates (Nine Months)](index=19&type=section&id=Average%20Balances%2C%20Income%20and%20Expenses%2C%20Yields%20and%20Rates%20%28Nine%20Months%29) This table compares average balances, income, expenses, yields, and rates for earning assets and interest-bearing liabilities for the nine months ended September 30, 2025 and 2024, demonstrating YoY growth in earning assets and increased cost of funds **Average Balances, Income and Expenses, Yields and Rates (Nine Months, Dollars in thousands):** | (Dollars in thousands) | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | | :--------------------- | :----------------------------------- | :----------------------------------- | | **ASSETS** | | | | Total Loans | $ 2,284,141 | $ 1,665,681 | | Yield on total loans | 6.23 % | 5.49 % | | Total Earning Assets | 2,895,093 | 2,221,880 | | Yield on average earning assets | 5.58 % | 4.84 % | | **LIABILITIES** | | | | Total Interest-Bearing Deposits | 1,882,199 | 1,344,565 | | Rate on interest-bearing deposits | 1.43 % | 0.79 % | | Total Borrowings | 307,404 | 294,109 | | Rate on total borrowings | 4.33 % | 4.39 % | | Total Interest-Bearing Liabilities | 2,189,603 | 1,638,674 | | Rate on interest-bearing liabilities | 1.84 % | 1.43 % | | Cost of Funds | 1.47 % | 1.11 % | | FTE Net Interest Margin | 4.19 % | 3.79 % | [Loan and Deposit Detail by Type](index=21&type=section&id=Loan%20and%20Deposit%20Detail%20by%20Type) This table details gross loans and total deposits by type, comparing balances across periods and highlighting changes in categories, with YoY growth largely attributed to the acquisition **Loan and Deposit Detail by Type (Dollars in thousands):** | (Dollars in thousands) | September 30, 2025 | June 30, 2025 | September 30, 2024 | September 2025 vs. June 2025 | September 2025 vs. September 2024 | | :--------------------- | :----------------- | :------------ | :----------------- | :--------------------------- | :-------------------------------- | | **Loans** | | | | | | | Commercial real estate | $ 1,263,896 | $ 1,254,733 | $ 957,904 | $ 9,163 | $ 305,992 | | Residential mortgage | 593,283 | 594,889 | 397,994 | (1,606) | 195,289 | | Commercial and industrial | 218,364 | 226,276 | 152,148 | (7,912) | 66,216 | | Home equity lines of credit | 125,839 | 122,546 | 84,316 | 3,293 | 41,523 | | Real estate construction | 126,451 | 135,023 | 75,953 | (8,572) | 50,498 | | Consumer | 10,144 | 10,253 | 9,773 | (109) | 371 | | Gross loans | 2,337,977 | 2,343,720 | 1,678,088 | (5,743) | 659,889 | | Total loans, net of unearned income | $ 2,336,605 | $ 2,341,816 | $ 1,677,112 | $ (5,211) | $ 659,493 | | **Deposits** | | | | | | | Noninterest-bearing demand deposits | $ 581,697 | $ 568,301 | $ 463,501 | $ 13,396 | $ 118,196 | | Interest-bearing demand deposits | 614,130 | 604,854 | 509,930 | 9,276 | 104,200 | | Money market | 493,430 | 531,738 | 249,197 | (38,308) | 244,233 | | Savings | 330,200 | 339,179 | 311,958 | (8,979) | 18,242 | | Total demand and savings | 2,019,457 | 2,044,072 | 1,534,586 | (24,615) | 484,871 | | Time | 446,439 | 480,469 | 256,731 | (34,030) | 189,708 | | Total deposits | $ 2,465,896 | $ 2,524,541 | $ 1,791,317 | $ (58,645) | $ 674,579 | Non-GAAP Reconciliation This section reconciles non-GAAP financial measures like tangible book value per share, TCE/TA Ratio, and efficiency ratio to GAAP, offering additional insights into financial condition and performance for industry comparisons - **Non-GAAP financial measures** are provided to offer **useful and comparative information** for **assessing trends** in the Corporation's financial condition, **frequently used by analysts and investors**[47](index=47&type=chunk) **Non-GAAP Reconciliation (Dollars in thousands, except per share data):** | (Dollars in thousands, except per share data) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | | :------------------------------------------ | :----------------- | :------------ | :------------- | :---------------- | :----------------- | | **Tangible book value per share** | | | | | | | Tangible book value per share | $ 30.87 | $ 29.30 | $ 28.23 | $ 29.51 | $ 29.90 | | **Tangible common equity to tangible assets (TCE/TA Ratio)** | | | | | | | Tangible common equity to tangible assets | 10.14 % | 9.65 % | 9.33 % | 10.72 % | 10.74 % | | **Efficiency Ratio** | | | | | | | Efficiency ratio | 51.96 % | 56.21 % | 60.13 % | 63.83 % | 60.56 % |

Company Overview - ACNB is headquartered in Gettysburg and operates in the Finance sector, with a stock price change of 9.26% since the start of the year [3] - The company currently pays a dividend of $0.34 per share, resulting in a dividend yield of 3.13%, which is significantly higher than the Banks - Southwest industry's yield of 1.16% and the S&P 500's yield of 1.51% [3] Dividend Performance - The current annualized dividend of ACNB is $1.36, reflecting a 7.9% increase from the previous year [4] - Over the past 5 years, ACNB has increased its dividend 4 times on a year-over-year basis, averaging an annual increase of 7.02% [4] - The company's current payout ratio is 36%, indicating that it pays out 36% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate for ACNB's earnings is $4.67 per share, representing a year-over-year growth rate of 25.20% [5] - The company is positioned to provide solid earnings growth, which is crucial for future dividend growth [5] Investment Considerations - ACNB is viewed as a compelling investment opportunity due to its attractive dividend yield and strong Zacks Rank of 2 (Buy) [6] - The company is noted for being a more established player in the market, which is typical for firms that offer dividends, contrasting with tech start-ups that rarely provide dividends [6]

Group 1 - ACNB Corporation is expected to benefit from the acquisition of Traditions Bancorp in the second half of the year [1] - The acquisition has positively impacted the loan balance and net interest margin, which are anticipated to drive growth [1]

Group 1 - Main Street Capital (MAIN) is outperforming its peers in the Finance sector with a year-to-date gain of approximately 13.8%, compared to the sector's average return of 10.6% [4] - The Finance group ranks 2 within the Zacks Sector Rank, indicating strong performance among its 869 companies [2] - MAIN has a Zacks Rank of 2 (Buy), reflecting improving earnings estimates, with a 1.2% increase in the consensus estimate for full-year earnings over the past 90 days [3] Group 2 - Main Street Capital belongs to the Financial - SBIC & Commercial Industry, which has 37 stocks and currently ranks 199 in the Zacks Industry Rank, with this group losing about 5.5% year-to-date [5] - Another Finance stock, ACNB, has also outperformed the sector with a year-to-date increase of 11.9% and has a Zacks Rank of 2 (Buy) [4][5] - The Banks - Southwest industry, which includes ACNB, has 19 stocks and is ranked 31, with a year-to-date increase of 2.1% [6]

[Part I – Financial Information](index=5&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents ACNB Corporation's unaudited consolidated financial statements, reflecting significant asset, loan, and deposit growth primarily from the Traditions Bancorp acquisition, with Q2 2025 net income at **$11.6 million** and six-month net income at **$11.4 million**, impacted by merger expenses [Consolidated Statements of Condition (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Condition%20(Unaudited)) Total assets significantly increased to **$3.26 billion** at June 30, 2025, primarily due to the Traditions Bancorp acquisition, driving growth in loans, deposits, and goodwill | (Dollars in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,259,528** | **$2,394,830** | | Total Cash and Cash Equivalents | $103,109 | $47,262 | | Loans, net | $2,317,463 | $1,665,630 | | Goodwill | $64,449 | $44,185 | | **Total Liabilities** | **$2,864,377** | **$2,091,557** | | Total Deposits | $2,524,541 | $1,792,501 | | **Total Stockholders' Equity** | **$395,151** | **$303,273** | [Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)) Net income for Q2 2025 was **$11.6 million**, a slight increase, while six-month net income decreased to **$11.4 million** due to **$10.0 million** in merger expenses and a **$5.7 million** provision for credit losses | (Dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $31,012 | $20,964 | $58,102 | $41,557 | | Provision for credit losses | ($228) | ($2,990) | $5,740 | ($2,767) | | Total Noninterest Income | $8,682 | $6,427 | $15,866 | $12,094 | | Total Noninterest Expenses | $25,366 | $16,391 | $54,701 | $34,053 | | Merger-related Expenses | $1,943 | $23 | $9,974 | $23 | | **Net Income** | **$11,648** | **$11,279** | **$11,376** | **$18,047** | Per Share Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | $1.11 | $1.32 | $1.12 | $2.12 | | $1.11 | $1.32 | $1.12 | $2.12 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures, highlighting the **Traditions Bancorp acquisition** on February 1, 2025, which significantly impacted financial statements, including investment securities, loans, credit losses, and goodwill - Effective February 1, 2025, ACNB closed the acquisition of Traditions Bancorp, Inc. for **$83.8 million**, issuing **2,035,246 shares** of common stock[18](index=18&type=chunk)[29](index=29&type=chunk) - The acquisition resulted in recording **$20.3 million** in goodwill and **$18.9 million** in core deposit intangibles[32](index=32&type=chunk)[38](index=38&type=chunk) - During Q1 2025, the company changed its accounting policy for loans held for sale to fair value to better reflect mortgage banking activities[22](index=22&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance and condition, highlighting the **Traditions Bancorp acquisition** as the primary driver of balance sheet growth and the **$11.4 million** six-month net income, impacted by credit loss provisions and merger expenses - The acquisition of Traditions Bancorp, effective February 1, 2025, contributed **$877.7 million** in assets, **$648.5 million** in loans, and **$741.5 million** in deposits[119](index=119&type=chunk) - Financial results for the six months ended June 30, 2025, were significantly impacted by a **$4.2 million** (net of taxes) provision for credit losses on non-PCD loans and **$7.8 million** (net of taxes) in merger-related expenses[119](index=119&type=chunk) Performance Ratios (Annualized) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | | 0.74% | 1.49% | | 6.11% | 12.95% | | 4.14% | 3.79% | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 2025 net income slightly increased to **$11.6 million**, driven by higher net interest income, while six-month net income decreased to **$11.4 million** due to a **$5.7 million** provision for credit losses and **$10.0 million** in merger expenses - Q2 2025 vs Q2 2024: Net interest income increased by **$10.0 million** to **$31.0 million**, with FTE net interest margin expanding by **39 bps** to **4.21%**, including a **$2.2 million** accretion impact[128](index=128&type=chunk) - Six Months 2025 vs 2024: Net interest income increased by **$16.5 million** to **$58.1 million**, with FTE net interest margin expanding by **35 bps** to **4.14%**, including a **$3.7 million** accretion impact[143](index=143&type=chunk) - For the six months ended June 30, 2025, the provision for credit losses was **$5.7 million**, primarily due to establishing a **$5.5 million** allowance for acquired non-PCD loans, contrasting with a **$2.8 million** reversal in 2024[149](index=149&type=chunk)[150](index=150&type=chunk) [Financial Condition](index=49&type=section&id=FINANCIAL%20CONDITION) Total assets reached **$3.26 billion** at June 30, 2025, a significant increase driven by the Traditions acquisition, with loans growing to **$2.34 billion** and deposits to **$2.52 billion**, while capital ratios remained strong | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total loans, net of unearned income | $2,341,816 | $1,682,910 | | Total deposits | $2,524,541 | $1,792,501 | | Total stockholders' equity | $395,151 | $303,273 | - The allowance for credit losses (ACL) increased to **$24.4 million** at June 30, 2025, from **$17.3 million** at year-end 2024, primarily due to an initial ACL of **$5.5 million** for non-PCD loans and **$1.5 million** for accruing PCD loans from the acquisition[166](index=166&type=chunk) - The ratio of uninsured and non-collateralized Bank deposits to total Bank deposits was **20.3%** at June 30, 2025, with available liquidity sources at **297.9%** of these uninsured deposits[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) ACNB manages interest rate risk through ALCO, with a **100 bps rate decrease** projected to reduce net interest income by **0.7%** and economic value of equity by **4.0%**, remaining within policy limits 12-Month Earnings at Risk (Net Interest Income Sensitivity) | Change in Market Interest Rates (bps) | % Change in NII (June 30, 2025) | Policy Limits | | :--- | :--- | :--- | | (200) | (0.7)% | (10.0)% | | (100) | (0.7)% | (5.0)% | | 100 | 0.3% | (5.0)% | | 200 | (0.2)% | (10.0)% | Value at Risk (Economic Value of Equity Sensitivity) | Change in Market Interest Rates (bps) | % Change in Market Value (June 30, 2025) | Policy Limits | | :--- | :--- | :--- | | (200) | (11.6)% | (35.0)% | | (100) | (4.0)% | (20.0)% | | 100 | (0.1)% | (20.0)% | | 200 | (2.3)% | (35.0)% | [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting, with no material changes to internal control over financial reporting during Q2 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the Corporation's disclosure controls and procedures are effective as of the end of the period covered by the report[201](index=201&type=chunk) - No material changes were made to the Corporation's internal control over financial reporting during the three months ended June 30, 2025[203](index=203&type=chunk) [Part II – Other Information](index=57&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2025, ACNB Corporation was not party to any material pending legal proceedings, with no expected material adverse effects from routine litigation - There were no material pending legal proceedings, other than ordinary routine litigation, as of June 30, 2025[205](index=205&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 10-K, except for a new risk concerning the adverse impact of changes in trade policies and tariffs on business and asset quality - A new risk factor was added concerning the adverse impact of changes to trade policies and tariffs on the business and its customers, which could negatively affect asset quality and financial performance[206](index=206&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board approved a new plan on June 18, 2025, to repurchase up to **314,000 shares**, superseding prior plans, with **71,592 shares** repurchased during Q2 2025 under the previous plan - On June 18, 2025, the Board of Directors approved a new plan to repurchase up to **314,000 shares** of common stock, replacing all earlier plans[209](index=209&type=chunk) Common Stock Purchases - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 68,256 | $39.43 | | May 1 - May 31, 2025 | 760 | $40.99 | | June 1 - June 30, 2025 | 2,576 | $40.95 | | **Total Q2 2025** | **71,592** | | [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading agreement during the three months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading agreement during the second quarter of 2025[213](index=213&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, compensation plans, and CEO/CFO certifications - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and various agreements related to acquisitions, compensation, and debt[214](index=214&type=chunk)[216](index=216&type=chunk)

Core Insights - Acnb reported Q2 2025 GAAP revenue of $39.7 million, exceeding analyst estimates of $38.85 million, but diluted earnings per share (EPS) of $1.11 fell short of the expected $1.15 and declined from $1.32 in the same period last year [1][2][5] Financial Performance - GAAP revenue increased by 44.9% year-over-year from $27.4 million in Q2 2024 to $39.83 million in Q2 2025 [2] - Net interest income rose to $31.0 million, a 47.6% increase from $21.0 million in Q2 2024 [2][5] - Noninterest income grew to $8.7 million, up 35.1% from $6.4 million in Q2 2024 [2][5] - The efficiency ratio improved to 56.21%, down from 58.61% in Q2 2024, indicating better expense management [2][6] Business Overview - Acnb operates a community-focused banking model with 33 offices and a loan center, providing personal and business banking services, along with insurance and wealth management [3] - The recent strategy emphasizes growth through acquisition, particularly the integration of Traditions Bancorp, focusing on cost efficiencies and expanding revenue sources [4] Integration and Costs - The acquisition of Traditions Bancorp contributed an additional $662.2 million in loans and $686.0 million in deposits compared to Q2 2024 [5] - Merger-related costs were reported at $1.9 million, lower than Q1 but still above historical levels, with increased salaries and equipment costs due to new business lines [6] Credit Quality and Capital Position - The allowance for credit losses was $24.4 million, representing 1.04% of total loans, with non-performing loans increasing to $10.1 million, or 0.43% of loans [7] - The capital position remains strong, with a tier 1 leverage ratio of 10.97% and tangible common equity to assets at 9.65% as of June 30, 2025 [7] Shareholder Returns - The company repurchased 71,592 shares and authorized an additional buyback of up to 3.0% of common shares, with a quarterly dividend increase of 6.3% to $0.34 per share [8][9] Future Outlook - Management did not provide specific financial guidance but expressed confidence in capital strength and profitability, highlighting diversified revenue streams as a buffer against economic changes [10][11]