Core Viewpoint - ACNB Corporation has successfully completed the acquisition of Traditions Bancorp, enhancing its market presence and operational capabilities in Pennsylvania and Maryland [1][4]. Company Overview - ACNB Corporation is a financial holding company headquartered in Gettysburg, PA, with approximately $3.26 billion in assets, $2.04 billion in deposits, and $2.36 billion in loans as of December 31, 2024 [3][5]. - The company operates through its wholly-owned subsidiary, ACNB Bank, which has a network of 35 community banking offices [5]. Acquisition Details - The acquisition of Traditions Bancorp, effective February 1, 2025, involved merging Traditions into a subsidiary of ACNB Corporation and subsequently merging Traditions Bank into ACNB Bank [1]. - Traditions stockholders received 0.7300 shares of ACNB Corporation common stock for each share of Traditions common stock they owned at the closing date [1]. Leadership Changes - Three former directors from Traditions, Eugene J. Draganosky, Elizabeth F. Carson, and John M. Polli, have joined the Boards of Directors of ACNB Corporation and ACNB Bank, bringing extensive banking and business experience [2][4]. Strategic Goals - The merger aims to create a stronger community bank with a shared vision and customer-centric approach, expanding product offerings and enhancing mortgage operations under the name "Traditions Mortgage, A Division of ACNB Bank" [4]. - The acquisition positions ACNB Corporation for growth in the York and Lancaster County markets [4].

Core Viewpoint - ACNB reported quarterly earnings of $0.77 per share, missing the Zacks Consensus Estimate of $0.84 per share, but showing an increase from $0.48 per share a year ago, resulting in an earnings surprise of -8.33% [1] Financial Performance - ACNB posted revenues of $26.92 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.18%, compared to year-ago revenues of $22.46 million [2] - Over the last four quarters, the company has exceeded consensus revenue estimates three times [2] Stock Performance - ACNB shares have declined approximately 3.2% since the beginning of the year, while the S&P 500 has gained 3.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $31.8 million, and for the current fiscal year, it is $3.22 on revenues of $147.5 million [7] - The trend of estimate revisions for ACNB is mixed, which may change following the recent earnings report [6] Industry Context - The Banks - Southwest industry, to which ACNB belongs, is currently ranked in the top 6% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - ACNB Corporation reported net income of $6.6 million, or $0.77 diluted earnings per share, for Q4 2024, a 61.0% increase from $4.1 million, or $0.48 per share, in Q4 2023, but an 8.5% decrease from $7.2 million, or $0.84 per share, in Q3 2024 [1] - For the full year 2024, net income was $31.8 million, or $3.73 per diluted earnings per share, reflecting a slight increase of 0.5% compared to $31.6 million in 2023 [1] - The financial results were impacted by merger-related expenses of $885 thousand for Q4 2024 and $2.0 million for the full year due to the pending acquisition of Traditions Bancorp, Inc. [1] Net Interest Income and Margin - Net interest income for Q4 2024 was $21.1 million, a 0.8% increase from Q3 2024, driven by an increase in the FTE net interest margin to 3.81% [5] - For the full year 2024, net interest income totaled $83.6 million, a decrease of 5.3% from $88.3 million in 2023, primarily due to a decrease in the FTE net interest margin to 3.79% [6] Noninterest Income - Noninterest income for Q4 2024 was $5.8 million, a decrease of 15.1% from Q3 2024, mainly due to lower insurance commissions and wealth management income [7] - For the full year 2024, noninterest income, excluding net gains or losses on securities, increased by 4.1% to $24.7 million compared to 2023, driven by growth in wealth management and insurance commissions [8] Noninterest Expense - Noninterest expense for Q4 2024 was $18.4 million, a slight increase of 0.8% from Q3 2024, primarily due to higher equipment expenses related to the upcoming acquisition [9] - For the full year 2024, noninterest expense increased by 7.0% to $70.1 million, driven by merger-related expenses and higher salaries and employee benefits [10] Loans and Asset Quality - Total loans outstanding were $1.68 billion at December 31, 2024, a 3.4% increase from December 31, 2023, primarily due to growth in the commercial real estate portfolio [11] - Non-performing loans increased to $6.8 million, or 0.40% of total loans, at December 31, 2024, compared to 0.26% at the end of 2023, driven by a long-standing commercial relationship in the healthcare industry [13] Deposits and Borrowings - Total deposits were $1.79 billion at December 31, 2024, a slight increase of 0.1% from Q3 2024 but a decrease of 3.7% from December 31, 2023 [14] - Total borrowings decreased by 7.5% to $271.2 million at December 31, 2024, compared to Q3 2024, primarily due to a seasonal decrease in repurchase agreements [15] Stockholders' Equity - Total stockholders' equity was $303.3 million at December 31, 2024, a decrease from $306.8 million at September 30, 2024, but an increase from $277.5 million at December 31, 2023 [17] - Tangible book value per share was $29.51 at December 31, 2024, compared to $26.44 at the end of 2023 [17]

Financial Performance - ACNB Corporation reported net income of $6.6 million, or $0.77 diluted earnings per share, for Q4 2024, a 61.0% increase from $4.1 million, or $0.48 per share in Q4 2023[2]. - For the twelve months ended December 31, 2024, net income was $31.8 million, a slight increase of 0.5% compared to $31.6 million in 2023, impacted by $2.0 million in merger-related expenses[2]. - Net income for the fourth quarter of 2024 was $6,595 thousand, a decrease from $7,204 thousand in the third quarter of 2024[28]. - Net Income for the year ended December 31, 2024, was $31,846,000, compared to $31,688,000 for the previous year, reflecting a stable performance[33]. - Basic earnings per share rose to $0.78 in Q4 2024, up from $0.48 in Q4 2023, indicating improved profitability[33]. Asset and Loan Growth - Total loans outstanding were $1.68 billion at December 31, 2024, reflecting a 3.4% increase from $1.63 billion at December 31, 2023, driven by growth in the commercial real estate portfolio[15]. - Total loans rose to $1,668,508 thousand in 2024, up from $1,573,628 thousand in 2023, marking an increase of 6.0%[38]. - Total loans amounted to $1,676,928 thousand with an average yield of 5.61% for the quarter ending December 31, 2024, compared to $1,681,280 thousand and 5.56% in the previous quarter[34]. Income and Expenses - Noninterest income for the twelve months ended December 31, 2024 was $24.7 million, an increase of 4.1% from $23.7 million in 2023, driven by growth in wealth management income and insurance commissions[11]. - Total Noninterest Income increased significantly to $5,803,000 in Q4 2024 from $970,000 in Q4 2023, marking a substantial growth[33]. - Noninterest expense for the twelve months ended December 31, 2024 increased by 7.0% to $70.1 million, driven primarily by merger-related expenses and higher salaries[14]. - Total Noninterest Expenses increased to $18,388,000 in Q4 2024 from $17,173,000 in Q4 2023, showing a rise in operational costs[33]. Capital and Equity - Total stockholders' equity was $303.3 million at December 31, 2024, down from $306.8 million at September 30, 2024, but up from $277.5 million at December 31, 2023[22]. - Tangible book value per share was $29.51 at December 31, 2024, compared to $29.90 at September 30, 2024, and $26.44 at December 31, 2023[22]. - Stockholders' equity increased to $306,008 thousand from $297,473 thousand in the prior quarter[34]. - Tangible common equity to tangible assets ratio was 10.72% in December 2024, slightly up from 9.48% in December 2023, showing improved capital efficiency[39]. Efficiency and Ratios - The return on average assets was 1.31% and return on average equity was 10.94% for the twelve months ended December 31, 2024[3]. - The efficiency ratio increased to 63.83% from 60.56% in the previous quarter, indicating a decline in operational efficiency[28]. - Efficiency ratio for the fourth quarter of 2024 was 63.83%, compared to 62.48% in the same quarter of 2023, indicating a decrease in operational efficiency[39]. Borrowings and Deposits - Total average borrowings increased by 127.2% to $288.5 million for the twelve months ended December 31, 2024, compared to the same period in 2023[9]. - Total deposits reached $1.79 billion as of December 31, 2024, reflecting a slight increase of $1.2 million, or 0.1%, from September 30, 2024, but a decrease of $69.3 million, or 3.7%, from December 31, 2023[19]. - Total borrowings were $271.2 million at December 31, 2024, a decrease of $21.9 million, or 7.5%, from September 30, 2024, but an increase of $19.0 million, or 7.5%, from December 31, 2023[20]. Credit Quality - Non-performing loans increased to $6.8 million, or 0.40% of total loans, at December 31, 2024, compared to $4.2 million, or 0.26% at December 31, 2023[17]. - The allowance for credit losses was $17,280 thousand, slightly increased from $17,214 thousand in the previous quarter[30]. - The company experienced a reversal of credit losses amounting to $(2,437,000) for the year, compared to a provision of $860,000 in the previous year, indicating improved credit quality[33]. - Annualized net charge-offs for the three months ended December 31, 2024, were 0.04% of total average loans, up from 0.01% for the three months ended September 30, 2024[18].

Core Points - ACNB Corporation has received shareholder approvals for its acquisition of Traditions Bancorp, marking a significant step in the merger process [1][2] - The acquisition is expected to close on February 1, 2025, pending customary closing conditions [3] Company Overview - ACNB Corporation is a $2.42 billion financial holding company based in Gettysburg, PA, with subsidiaries including ACNB Bank and ACNB Insurance Services, Inc. [4] - Traditions Bancorp, Inc. is the holding company for Traditions Bank, which has assets of $859 million as of September 30, 2024 [5] Strategic Implications - The acquisition aims to leverage combined strengths, enhance innovation, and deliver greater value to customers and shareholders [3] - Both companies express confidence in the long-term potential of the partnership, aiming to build a stronger community bank [3]

Group 1: Acquisition Overview - ACNB Corp. has received regulatory approvals to acquire Traditions Bancorp and its subsidiary, Traditions Bank, with the deal announced in July [1] - The acquisition is an all-stock transaction valued at $73.5 million, with a termination fee of approximately 4% of the deal value [2] - The agreement stipulates that ACNB will issue 0.73 shares for each share of Traditions Bancorp's common stock, with the deal expected to close on February 1, 2025, pending approvals [3][4] Group 2: Strategic Rationale - ACNB anticipates cost savings of 35% on Traditions Bancorp's non-interest expenses, with 75% of these savings expected to be realized in 2025 [5] - The acquisition is projected to be accretive to earnings per share by 29.1% in 2025 and 29.6% in 2026, assuming successful execution of cost savings [5] - The tangible book value is expected to be diluted by approximately 9.2%, with an earn-back period of about 2.25 years [5] Group 3: Financial Projections and Growth - ACNB projects an average tangible common equity of roughly 15.4% and a 1% return on average assets, with an internal rate of return exceeding 15% [6] - The acquisition aligns with ACNB's strategic plan for inorganic growth and enhances potential for future organic growth, particularly through Traditions Bancorp's mortgage banking unit [6] - The deal will expand ACNB's branch footprint in Lancaster County and improve the deposit mix, while reducing commercial real estate loan concentration [7] Group 4: Market Performance - Year-to-date, ACNB shares have increased by 7.5%, compared to the industry's growth of 26% [8]

Core Viewpoint - ACNB Corporation has received all necessary regulatory approvals for its acquisition of Traditions Bancorp, Inc., with the transaction expected to close on February 1, 2025, pending shareholder approvals [1][2][3]. Group 1: Regulatory Approvals - The Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities have approved the applications related to the acquisition [2]. - The Federal Reserve Bank of Philadelphia granted ACNB a waiver concerning its merger application requirements [2]. Group 2: Shareholder Meetings - TRBK shareholders will vote on the proposed transaction at a special meeting scheduled for December 18, 2024 [3]. - ACNB shareholders will also vote on the issuance of shares of ACNB common stock in connection with the merger on the same date [3]. Group 3: Company Profiles - ACNB Corporation is a $2.42 billion financial holding company based in Gettysburg, PA, with subsidiaries including ACNB Bank and ACNB Insurance Services, Inc. [4]. - Traditions Bancorp, Inc. is the holding company for Traditions Bank, which has assets of $859 million as of September 30, 2024 [5].

Financial Performance - Net income for Q3 2024 was $7.2 million, a decrease of $1.8 million or 20.3% compared to $9.0 million in Q3 2023[111] - Diluted earnings per share for Q3 2024 were $0.84, down 20.8% from $1.06 in Q3 2023[111] - Net income for the three months ended September 30, 2024 was $7.2 million, a decrease of $1.8 million, or 20.3%, compared to $9.0 million for the same period in 2023[126] - Diluted earnings per share decreased by 20.8% to $0.84 for the three months ended September 30, 2024, down from $1.06 in the prior year[126] - Net income for the nine months ended September 30, 2024, was $25.3 million, a decrease of $2.3 million or 8.5% compared to the prior year[139] - Diluted earnings per share for the nine months ended September 30, 2024, were $2.96, reflecting an 8.4% decrease from $3.23 in the same period of the prior year[139] Interest Income and Expenses - Net interest income for Q3 2024 was $20.9 million, a decrease of $803 thousand or 3.7% from $21.7 million in Q3 2023[112] - The net interest margin decreased to 3.77% for Q3 2024 from 4.01% in Q3 2023, a decrease of 24 basis points[113] - Net interest income totaled $20.9 million for the three months ended September 30, 2024, a decrease of $803 thousand, or 3.7%, from $21.7 million in the same period of 2023[127] - The FTE net interest margin for the three months ended September 30, 2024 was 3.77%, a decrease of 24 basis points from 4.01% for the same period in the prior year[127] - Total interest expense increased by $3.8 million, or 153.1%, during the three months ended September 30, 2024 compared to the same period in the prior year[132] - Total interest income increased by $3.0 million, or 12.3%, during the three months ended September 30, 2024, compared to the same period in 2023[131] - FTE interest income on total loans increased by $2.8 million, or 13.3%, compared to the same period of 2023[131] - Total interest expense increased by $13.1 million, or 288.3%, during the nine months ended September 30, 2024, compared to the same period in the prior year[148] Noninterest Income and Expenses - Noninterest income for Q3 2024 was $6.8 million, an increase of $536 thousand or 8.5% from $6.3 million in Q3 2023[119] - Total noninterest income for the three months ended September 30, 2024, was $6.8 million, an increase of $536 thousand or 8.5% compared to the same period last year[134] - Wealth management income increased by $235 thousand or 24.7% to $1.2 million, driven by portfolio market appreciation and new business generation[135] - Noninterest expenses increased to $18.2 million, or 11.7%, for Q3 2024 compared to $16.3 million in Q3 2023[120] - Noninterest expenses totaled $18.2 million for the three months ended September 30, 2024, representing an 11.7% increase compared to the same period last year[138] - Salaries and employee benefits, the largest component of noninterest expenses, rose by $948 thousand or 9.4% to $11.0 million[140] - Total noninterest income was $18.9 million for the nine months ended September 30, 2024, an increase of $1.5 million, or 8.3%, compared to the same period in 2023[150] - Total noninterest expenses totaled $52.3 million during the nine months ended September 30, 2024, a 6.9% increase compared to the same period of 2023[154] Loans and Credit Quality - Average loans grew by $87.2 million or 5.5% for Q3 2024 compared to the same period in the prior year[115] - Non-performing loans were $6.6 million or 0.39% of total loans at September 30, 2024, up from $3.6 million or 0.22% at September 30, 2023[117] - The allowance for credit losses is based on management's evaluation of the loan portfolio and current risk characteristics[123] - Provisions for credit losses were $81 thousand for the three months ended September 30, 2024, compared to $250 thousand for the same period of the prior year[133] - The allowance for credit losses (ACL) was $17.2 million, or 1.03% of total loans, as of September 30, 2024, down from $20.0 million, or 1.23%, at December 31, 2023[164] - Total loans, net of unearned income, increased by $49.1 million, or 3.0%, from December 31, 2023 to September 30, 2024, driven by growth in the commercial real estate portfolio[161] Deposits and Borrowings - Average interest-bearing deposits decreased by $54.4 million or 3.9% for Q3 2024 compared to Q3 2023[116] - Total deposits decreased by $70.5 million, or 3.8%, to $1.79 billion as of September 30, 2024, primarily due to an outflow of municipal deposits[167] - Time deposits increased by $24.6 million, or 10.6%, due to ongoing deposit promotions during the first nine months of 2024[167] - The loan-to-deposit ratio was 93.62% at September 30, 2024, compared to 87.44% at December 31, 2023[167] - Short-term borrowings decreased by $19.1 million, or 33.6%, to $37.8 million as of September 30, 2024[170] - Long-term borrowings increased to $255.3 million at September 30, 2024, from $195.3 million at December 31, 2023[171] Capital and Equity - Total stockholders' equity rose to $306.8 million at September 30, 2024, compared to $277.5 million at December 31, 2023[172] - The dividend payout ratio for the first nine months of 2024 was 31.64%, up from 25.94% for the same period in 2023[172] - ACNB Corporation issued 16,590 shares under its Dividend Reinvestment and Stock Purchase Plan during the nine months ended September 30, 2024, generating proceeds of $597 thousand, compared to 16,580 shares and $543 thousand in the same period of 2023[173] - As of September 30, 2024, ACNB Corporation repurchased 67,908 shares under its new stock repurchase program, which allows for the repurchase of up to 255,575 shares, approximately 3% of outstanding shares[174] - ACNB Corporation's Tier 1 leverage capital ratio was 12.46% as of September 30, 2024, significantly above the minimum requirement of 4.0%[177] - ACNB Corporation's Common Equity Tier 1 capital ratio was 16.07% as of September 30, 2024, exceeding the minimum requirement of 4.5%[177] - ACNB Corporation's Total capital ratio stood at 18.15% as of September 30, 2024, well above the minimum requirement of 8.0%[177] Securities and Investments - Total investment securities decreased by 6.5% to $483.6 million at September 30, 2024, compared to $517.2 million at December 31, 2023[159] - At September 30, 2024, the securities balance included a net unrealized loss on AFS securities of $36.8 million on an amortized cost of $454.9 million[159] - Securities sold under repurchase agreements totaled approximately $37.8 million as of September 30, 2024, compared to $26.9 million at December 31, 2023[181] Commitments and Liquidity - ACNB's banking subsidiary had a borrowing capacity of approximately $920.1 million from the FHLB as of September 30, 2024, with $684.0 million available[179] - The liquidity management strategy includes monitoring projected cash inflows and outflows daily, ensuring sufficient funding sources for both short- and long-term cash requirements[183] - As of September 30, 2024, ACNB Corporation had unfunded outstanding commitments to extend credit of $363.6 million and outstanding standby letters of credit of $14.4 million[184]

Company Performance - ACNB reported quarterly earnings of $0.84 per share, missing the Zacks Consensus Estimate of $0.88 per share, and down from $1.06 per share a year ago, representing an earnings surprise of -4.55% [1] - The company posted revenues of $27.78 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.95%, but down from $28.04 million year-over-year [1] - Over the last four quarters, ACNB has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [1] Future Outlook - The immediate price movement of ACNB's stock will depend on management's commentary during the earnings call and the company's earnings outlook [2][3] - The current consensus EPS estimate for the coming quarter is $0.81 on revenues of $26.87 million, and for the current fiscal year, it is $3.30 on revenues of $107.24 million [4] Industry Context - The Banks - Southwest industry, to which ACNB belongs, is currently in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [5] - First Foundation, another company in the same industry, is expected to report a quarterly loss of $0.21 per share, reflecting a significant year-over-year decline of -520% [5]

Core Insights - ACNB Corporation reported a net income of $7.2 million, or $0.84 diluted earnings per share, for Q3 2024, a decrease from $9.0 million, or $1.06 per share in Q3 2023, and $11.3 million, or $1.32 per share in Q2 2024, impacted by $1.1 million in merger-related expenses due to the pending acquisition of Traditions Bancorp, Inc. [1][2] Financial Performance - Return on average assets was 1.17% and return on average equity was 9.63% for Q3 2024, with core return on average assets at 1.32% and core return on average equity at 10.81% [2]. - Fully taxable equivalent (FTE) net interest margin was 3.77% for Q3 2024, down from 4.01% in Q3 2023 and 3.82% in Q2 2024 [2][3]. - Noninterest income increased to $6.8 million, an 8.5% rise from Q3 2023, driven by wealth management and insurance commissions [4]. Asset Quality - Total loans outstanding were $1.68 billion at September 30, 2024, a slight decrease of 0.1% from Q2 2024 but an increase of 3.8% from Q3 2023 [7]. - Non-performing loans increased to $6.6 million, or 0.39% of total loans, compared to 0.19% in Q2 2024 and 0.22% in Q3 2023, primarily due to one commercial relationship in the healthcare sector [7][8]. Capital and Equity - Total stockholders' equity rose to $306.8 million at September 30, 2024, compared to $289.3 million at June 30, 2024, and $255.6 million at September 30, 2023 [9]. - Tangible book value per share increased to $29.90 from $27.82 in Q2 2024 and $23.80 in Q3 2023 [9]. Deposits and Borrowings - Total deposits were $1.79 billion, a decrease of 2.6% from Q2 2024 and 8.2% from Q3 2023 [8]. - Total borrowings decreased to $293.1 million, down 3.7% from Q2 2024 but up 91.1% from Q3 2023 [8].