Core Viewpoint - ACNB Corporation has announced a new stock repurchase plan to buy back up to 314,000 shares, approximately 3.0% of its outstanding common stock, which will be funded by available capital [1] Company Overview - ACNB Corporation is an independent financial holding company with total assets of $3.27 billion, headquartered in Gettysburg, PA [2] - The company operates through its wholly-owned subsidiaries, including ACNB Bank and ACNB Insurance Services, Inc., providing banking and wealth management services across multiple locations [2] - ACNB Bank has a network of 33 community banking offices and one loan office in Pennsylvania and Maryland, while ACNB Insurance Services operates as a full-service insurance agency licensed in 46 states [2]

Group 1 - ACNB Corporation is the financial holding company for ACNB Bank located in Pennsylvania, which previously operated 27 community banking offices before acquiring Traditions Bancorp [1] - Traditions Bancorp was also headquartered in Pennsylvania, indicating a consolidation within the local banking sector [1] Group 2 - The investment group European Small Cap Ideas focuses on high-quality investment opportunities in the small-cap space, emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]

Core Viewpoint - ACNB has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system highlights the strong correlation between changes in earnings estimates and stock price movements, driven by institutional investors who adjust their valuations based on these estimates [3]. - Rising earnings estimates for ACNB suggest an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. Importance of Earnings Estimate Revisions - Empirical research supports the idea that tracking earnings estimate revisions can lead to rewarding investment decisions, with the Zacks Rank system effectively utilizing this data [5]. - 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 [6]. Specific Earnings Estimates for ACNB - For the fiscal year ending December 2025, ACNB is projected to earn $4.43 per share, reflecting an 18.8% increase from the previous year [7]. - Over the past three months, the Zacks Consensus Estimate for ACNB has risen by 3.4%, indicating a positive trend in earnings expectations [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings across its universe of over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [8]. - ACNB's upgrade to a Zacks Rank 1 places it in the top 5% of stocks covered by Zacks, suggesting a strong potential for market-beating returns in the near term [9].

Company Overview - ACNB is based in Gettysburg and operates in the Finance sector, with a year-to-date share price change of 10.47% [3] - The company currently pays a dividend of $0.32 per share, resulting in a dividend yield of 2.91%, which is significantly higher than the Banks - Southwest industry's yield of 1.16% and the S&P 500's yield of 1.52% [3] Dividend Information - ACNB's current annualized dividend of $1.28 represents a 1.6% increase from the previous year [4] - Over the past five years, ACNB has increased its dividend four times, achieving an average annual increase of 6.40% [4] - The company's current payout ratio is 32%, indicating that it pays out 32% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - Earnings growth for ACNB appears strong, with the Zacks Consensus Estimate for 2025 projected at $4.43 per share, reflecting an expected increase of 18.77% from the previous year [5] Investment Appeal - ACNB is considered an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [7]

Group 1 - CME Group is one of 858 individual stocks in the Finance sector and is ranked 6 in the Zacks Sector Rank [2] - CME Group currently has a Zacks Rank of 2 (Buy), indicating a favorable outlook for the stock [3] - The Zacks Consensus Estimate for CME's full-year earnings has increased by 6.9% in the past quarter, reflecting stronger analyst sentiment [4] Group 2 - CME Group has gained approximately 19% year-to-date, outperforming the average Finance sector gain of 6.3% [4] - CME Group is part of the Securities and Exchanges industry, which has seen a year-to-date gain of about 16.1%, indicating better performance compared to its industry peers [6] - Another Finance stock, ACNB, has also outperformed the sector with a year-to-date return of 10.5% and a Zacks Rank of 2 (Buy) [5][6]

Financial Performance - Net loss for the three months ended March 31, 2025 was $272 thousand compared to net income of $6.8 million for the same period of 2024, a decrease of $7.0 million [118]. - Noninterest income was $7.2 million for the three months ended March 31, 2025, an increase of $1.5 million from $5.7 million for the same period of 2024 [123]. - Noninterest expenses increased to $29.3 million for the three months ended March 31, 2025, compared to $17.7 million in the same period of 2024 [123]. - The Corporation recognized an income tax benefit of $277 thousand during the three months ended March 31, 2025, compared to a provision for income taxes of $1.8 million in the same period of 2024, attributed to a net loss from the Acquisition [135]. Interest Income and Margin - Net interest income increased to $27.1 million for the three months ended March 31, 2025, up $6.5 million from $20.6 million in the same period of 2024 [118]. - The net interest margin increased to 4.07% for the three months ended March 31, 2025, compared to 3.77% in the same period of 2024, an increase of 30 basis points [118]. - Total interest income increased by $10.3 million during the three months ended March 31, 2025, compared to the same period in 2024, driven by a $6.9 million increase from the average balance of interest-earning assets and a $3.4 million increase from the yield on interest-earning assets [128]. - Total interest expense rose by $3.8 million during the same period, with average interest-bearing deposits increasing by $421.8 million, leading to a cost of interest-bearing deposits of 1.38%, up 73 basis points from the previous year [129]. Loans and Credit Losses - Average loans increased by $499.3 million for the three months ended March 31, 2025, driven by the acquisition of Traditions [123]. - The provision for credit losses was $6.0 million for the three months ended March 31, 2025, compared to $223 thousand for the same period of 2024 [123]. - The allowance for credit losses was $24.6 million at March 31, 2025, up from $17.3 million at December 31, 2024 [123]. - Non-performing loans were $10.0 million, or 0.43% of total loans at March 31, 2025, compared to $6.8 million, or 0.40% at December 31, 2024 [123]. Assets and Deposits - Total assets reached $3.27 billion as of March 31, 2025, up from $2.39 billion at December 31, 2024, with the Acquisition contributing $877.7 million [137]. - Total deposits rose by $747.5 million, or 41.7%, to $2.54 billion as of March 31, 2025, primarily due to the Acquisition [152]. - Time deposits increased by $204.1 million, or 74.8%, with brokered deposits totaling $54.0 million at March 31, 2025 [152]. - Total loans increased to $2.14 billion with a yield of 6.08% for the three months ended March 31, 2025, compared to $1.64 billion and a yield of 5.37% in 2024 [127]. Equity and Capital Ratios - Total stockholders' equity rose to $386.9 million at March 31, 2025, compared to $303.3 million at December 31, 2024, primarily due to the issuance of 2,035,246 shares of common stock for $83.6 million to acquire Traditions [156]. - The Corporation's Tier 1 leverage capital ratio was 11.81% as of March 31, 2025, exceeding the minimum requirement of 4.00% [159]. - Total capital ratio for ACNB Corporation was 15.45% as of March 31, 2025, well above the minimum requirement of 8.00% [159]. - ACNB Corporation's Tier 1 Capital ratio was 13.86% as of March 31, 2025, exceeding the regulatory requirement of 6.00% [159]. Acquisition Impact - The provision for credit losses was $6.0 million for the three months ended March 31, 2025, compared to $223 thousand for the same period in 2024, reflecting the impact of the Acquisition [131]. - Noninterest expenses increased by $11.7 million to $29.3 million for the three months ended March 31, 2025, a 66.1% increase compared to the same period in 2024, largely due to merger-related costs from the Acquisition [134]. - The allowance for credit losses at the Acquisition date was $6.9 million, including $5.5 million for non-PCD loans [132]. - Nonaccrual loans increased by $2.2 million during the three months ended March 31, 2025, primarily due to the acquisition [150]. Liquidity Management - The Corporation's liquidity management includes monitoring projected cash inflows and outflows daily, ensuring sufficient funding sources for all material cash requirements [166]. - ACNB manages liquidity by monitoring projected cash inflows and outflows daily, ensuring sufficient funding sources for all material cash requirements [166]. - The parent company's main source of funding is the dividends received from its subsidiaries, which are subject to federal and state banking regulations [165]. - The Corporation had unfunded outstanding commitments to extend credit of $569.1 million and standby letters of credit of $25.2 million as of March 31, 2025 [167].

Core Viewpoint - ACNB is currently outperforming its peers in the Finance sector, with a year-to-date gain of approximately 6%, compared to the sector's average return of 1.2% [4]. Group 1: Company Performance - ACNB is ranked 1 (Strong Buy) in the Zacks Rank system, indicating strong analyst sentiment and an improving earnings outlook, with a 15.7% increase in the consensus estimate for full-year earnings over the past quarter [3]. - The stock has gained about 6% year-to-date, outperforming the average return of 1.2% for the Finance sector [4]. - ACNB is part of the Banks - Southwest industry, which is ranked 12 in the Zacks Industry Rank, while this industry has seen an average loss of 7.5% so far this year [5]. Group 2: Industry Comparison - The Finance group, which includes ACNB, is currently ranked 2 within the Zacks Sector Rank, which evaluates 16 different groups based on the average Zacks Rank of individual stocks [2]. - Balfour Beatty PLC Sponsored ADR, another Finance stock, has returned 15.3% year-to-date, indicating strong performance within the sector [4]. - The Real Estate - Operations industry, which includes Balfour Beatty, is ranked 89 and has experienced a decline of 4.8% since the beginning of the year [6].

Market Overview - U.S. stocks experienced a rebound due to optimism regarding easing trade tensions between the U.S. and China, following weeks of turmoil that led major indexes into correction territory [1][6] - President Trump announced a 90-day halt on reciprocal tariffs, providing temporary relief to investors, although concerns about the economy's health persist [2][4] - Market volatility is expected to continue as trade talks are still in the early stages and uncertainty remains regarding future tariffs [3][7] Dividend-Paying Stocks - In light of ongoing market uncertainty, investing in dividend-paying stocks is recommended as they tend to provide steady income and stability [3][8] - Three notable companies that have declared dividend increases are: - **Univest Financial Corporation (UVSP)**: Announced a dividend of $0.22 per share with a yield of 2.95% and a payout ratio of 34% [10] - **ACNB Corporation (ACNB)**: Declared a dividend of $0.34 per share with a yield of 3.07% and a payout ratio of 34% [13] - **QUALCOMM Incorporated (QCOM)**: Announced a dividend of $0.89 per share with a yield of 2.42% and a payout ratio of 38% [15]

Core Insights - ACNB Corporation reported a net loss of $272 thousand, or $0.03 diluted loss per share, for Q1 2025, a significant decline from a net income of $6.8 million, or $0.80 diluted earnings per share, in Q1 2024 [1][11][27] - The financial results were adversely affected by a provision for credit losses of $4.2 million and merger-related expenses totaling $6.2 million due to the acquisition of Traditions Bancorp, Inc. [2][6] Financial Performance - Net interest income for Q1 2025 was $27.1 million, an increase of $6.5 million from Q1 2024, driven primarily by the acquisition [12][13] - The fully taxable equivalent (FTE) net interest margin improved to 4.07%, up 30 basis points from Q1 2024 [12][13] - Noninterest income rose to $7.2 million, an increase of $1.5 million from Q1 2024, attributed to gains from mortgage loans and investment in bank-owned life insurance [15] Acquisition Details - ACNB completed the acquisition of Traditions Bancorp on February 1, 2025, valued at approximately $83.8 million, significantly expanding its market presence [6][13] - Traditions contributed $877.7 million in assets, $648.5 million in loans, and $741.5 million in deposits at the acquisition date [6][13] - The acquisition resulted in goodwill of $20.3 million and increased the allowance for credit losses to $24.6 million as of March 31, 2025 [9][21] Asset Quality and Loans - Total loans outstanding reached $2.32 billion, an increase of $639.3 million from December 31, 2024, primarily due to the acquisition [17] - Non-performing loans increased to $10.0 million, or 0.43% of total loans, reflecting challenges in a specific commercial relationship and the impact of the acquisition [18] Deposits and Borrowings - Total deposits increased to $2.54 billion, up $747.5 million from December 31, 2024, with significant contributions from interest-bearing deposits [19] - Total borrowings were $299.5 million, reflecting a $28.4 million increase from December 31, 2024, primarily for balance sheet management [20] Stockholders' Equity - Total stockholders' equity rose to $386.9 million as of March 31, 2025, compared to $303.3 million at December 31, 2024, driven by equity issued in the acquisition [21] - Tangible book value per share was $28.23, down from $29.51 at December 31, 2024 [21][28]

Financial Performance - ACNB Corporation reported a net loss of $272 thousand, or $0.03 diluted loss per share, for Q1 2025, compared to a net income of $6.8 million, or $0.80 diluted earnings per share, in Q1 2024[2]. - The company reported a net loss of $272,000 for Q1 2025, compared to a net income of $6,768,000 in Q1 2024[33]. - Basic and diluted loss per share for Q1 2025 was $(0.03), down from earnings of $0.80 per share in Q1 2024[33]. - The return on average assets (annualized) was (0.04)% for the quarter, down from 1.08% in the previous quarter, highlighting a decline in asset efficiency[28]. - The diluted (loss) earnings per share was $(0.03) for the quarter, compared to $0.77 in the previous quarter, indicating a significant drop in earnings per share[28]. Acquisition Impact - The acquisition of Traditions Bancorp, effective February 1, 2025, added $877.7 million in assets, $648.5 million in loans, and $741.5 million in deposits[4]. - Noninterest income for Q1 2025 was $7.2 million, an increase of $1.5 million from Q1 2024, primarily due to the acquisition[15]. - The increase in total deposits was primarily driven by the Acquisition[20]. Asset and Loan Growth - Total loans outstanding reached $2.32 billion at March 31, 2025, an increase of $639.3 million from December 31, 2024[18]. - Total loans, net of unearned income, increased to $2,322,209 thousand, up from $1,682,910 thousand at December 31, 2024, marking a growth of 38.1%[30]. - Total assets increased to $3,270,041 thousand as of March 31, 2025, up from $2,394,830 thousand at December 31, 2024, representing a growth of 36.5%[28]. Deposits and Borrowings - Total deposits reached $2.54 billion as of March 31, 2025, an increase of $747.5 million from December 31, 2024, and $704.8 million from March 31, 2024[20]. - Interest-bearing deposits amounted to $1.98 billion, increasing by $636.3 million from December 31, 2024, and $641.7 million from March 31, 2024[20]. - Total borrowings were $299.5 million at March 31, 2025, up by $28.4 million compared to December 31, 2024, and $26.9 million compared to March 31, 2024[21]. Equity and Book Value - Total stockholders' equity increased to $386.9 million at March 31, 2025, compared to $303.3 million at December 31, 2024, and $279.9 million at March 31, 2024[22]. - Tangible book value per share was $28.23 at March 31, 2025, down from $29.51 at December 31, 2024, and up from $26.70 at March 31, 2024[22]. - Tangible common equity to tangible assets ratio decreased to 9.33% from 10.72%, indicating a reduction of 1.39 percentage points[38]. Interest Income and Expenses - Net interest income rose to $27,090 thousand for the quarter ended March 31, 2025, compared to $21,112 thousand for the previous quarter, an increase of 28.4%[28]. - Total Interest and Dividend Income for Q1 2025 was $36,290,000, a 39.5% increase from $25,974,000 in Q1 2024[33]. - Total Noninterest Expenses increased to $29,335,000, a significant rise of 66.5% from $17,662,000 in Q1 2024, primarily due to merger-related costs of $8,031,000[33]. Credit Losses and Non-Performing Loans - The allowance for credit losses was $24.6 million at March 31, 2025, an increase of $7.4 million compared to December 31, 2024[18]. - Non-performing loans were $10.0 million, or 0.43% of total loans, at March 31, 2025, compared to $6.8 million, or 0.40%, at December 31, 2024[19]. - Provision for credit losses was $5,968,000, a substantial increase from $223,000 in the same quarter last year[33]. Dividends and Stock Repurchase - The Board of Directors declared a regular quarterly cash dividend of $0.34 per share for Q2 2025, reflecting a 6.3% increase over the same quarter of 2024[9]. - ACNB repurchased 75,872 shares of common stock during Q1 2025[9]. - ACNB repurchased 75,872 shares of common stock during the three months ended March 31, 2025[22]. Efficiency and Cost Management - The efficiency ratio improved to 60.13% for the quarter ended March 31, 2025, compared to 63.83% in the previous quarter, indicating better cost management[28]. - Noninterest expense increased by $11.7 million in Q1 2025 compared to Q1 2024, largely due to merger-related expenses totaling $8.0 million[17].