ACNB 10-K & 10-Q changes, risk factors and insider trading
Acnb Corp. · Nasdaq · State Commercial Banks · CIK 715579 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “CHANGES TO TRADE POLICIES AND TARIFFS CAN HAVE AN ADVERSE IMPACT ON OUR BUSINESS AND OUR CUSTOMERS.”
Removed heading “RISKS RELATING TO THE MERGER OF TRADITIONS BANCORP, INC. INTO ACNB CORPORATION”
Removed heading “ACQUISITIONS MAY DISRUPT ACNB’S BUSINESS AND DILUTE STOCKHOLDER VALUE.”
Removed heading “ACNB INCURRED AND WILL CONTINUE TO INCUR SIGNIFICANT TRANSACTION AND MERGER-RELATED COSTS IN CONNECTION WITH THE MERGER.”
Removed heading “THE MERGER MAY DISTRACT ACNB’S MANAGEMENT TEAM FROM THEIR OTHER RESPONSIBILITIES.”
Removed heading “POST-MERGER INTEGRATION AND CHANGE OF ACNB’S HISTORICAL BUSINESS MODEL MAY FAIL TO ACHIEVE EXPECTED RESULTS.”
Removed heading “ACNB MAY FAIL TO REALIZE THE COST SAVINGS IT EXPECTS TO ACHIEVE FROM THE MERGER.”
Removed heading “COMBINING ACNB AND TRADITIONS MAY BE MORE DIFFICULT, COSTLY, OR TIME-CONSUMING THAN EXPECTED.”
Largest changes
Increasingly, financial transactions are processed electronically, both by ACNB and its customers, via online, mobile, and cloud technologies. Operational systems are progressively becoming cloud-based. Conducting business in this environment depends on secure transmission and storage of data in digital form as well as procedures and systems to prevent or ensure the resiliency against system failures, interruptions or breaches in security. As a result, ACNB is exposed to the risk of cyber-attacks in the normal course of business, which may be perpetrated against ACNB, or its third-party service providers and its customers. Further, ACNB may face unknown or contingent liabilities arising from cybersecurity incidents or data breaches that previously occurred at companies it acquires. Such incidents may not have been discovered, disclosed, or if previously discovered fully remediated before closing, and the acquired company’s representations, warranties, and indemnities may be limited in scope, duration, or recoverability. As a result, ACNB could incur costs or liabilities after an acquisition relating to regulatory investigations, litigation, remediation efforts, reputational harm, or customer and partner claims, which could adversely affect its business, financial condition, and results of operations.see in full comparison
“ACNB regularly evaluates opportunities to acquire and invest in banks and in other complementary businesses. As a result, ACNB may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on ACNB’s operating results and financial condition, including short- and long-term liquidity and capital structure. ACNB’s acquisition activities could be material to ACNB. For example, ACNB could issue additional shares of common stock in a purchase transaction, which could dilute current stockholders’ ownership interest. …”see in full comparison
“Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve. Our customers-particularly local businesses engaged in agriculture, manufacturing, and retail-may face higher costs for imported goods and materials, reduced export demand, and supply chain disruptions due to increased tariffs. These challenges could lead to lower revenues, reduced profitability, and potential layoffs, all of which may impair our customers’ ability to meet their financial obligations. …”see in full comparison
“CHANGES TO TRADE POLICIES AND TARIFFS CAN HAVE AN ADVERSE IMPACT ON OUR BUSINESS AND OUR CUSTOMERS.”see in full comparison
“ACNB INCURRED AND WILL CONTINUE TO INCUR SIGNIFICANT TRANSACTION AND MERGER-RELATED COSTS IN CONNECTION WITH THE MERGER.”see in full comparison
“POST-MERGER INTEGRATION AND CHANGE OF ACNB’S HISTORICAL BUSINESS MODEL MAY FAIL TO ACHIEVE EXPECTED RESULTS.”see in full comparison
Full comparison: every changed paragraph (32)
As of December 31, 2024,2025, approximately 71%68% of ACNB’s loan portfolio consisted of commercial and industrial, construction, and commercial real estate loans.loans, commercial and industrial and construction. These types of loans are generally viewed as having more risk of default than residential real estate loans or consumer loans. These types of loans are also typically larger than residential real estate loans and consumer loans. Because ACNB’s loan portfolio contains a significant number of commercial andreal industrial,estate, construction,commercial and commercialindustrial realand estateconstruction loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in non-performing loans. An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses, and an increase in loan charge-offs, all of which could have a material adverse effect on ACNB’s financial condition and results of operations.
Increasingly, financial transactions are processed electronically, both by ACNB and its customers, via online, mobile, and cloud technologies. Operational systems are progressively becoming cloud-based. Conducting business in this environment depends on secure transmission and storage of data in digital form as well as procedures and systems to prevent or ensure the resiliency against system failures, interruptions or breaches in security. As a result, ACNB is exposed to the risk of cyber-attacks in the normal course of business, which may be perpetrated against ACNB, or its third-party service providers and its customers. Further, ACNB may face unknown or contingent liabilities arising from cybersecurity incidents or data breaches that previously occurred at companies it acquires. Such incidents may not have been discovered, disclosed, or if previously discovered fully remediated before closing, and the acquired company’s representations, warranties, and indemnities may be limited in scope, duration, or recoverability. As a result, ACNB could incur costs or liabilities after an acquisition relating to regulatory investigations, litigation, remediation efforts, reputational harm, or customer and partner claims, which could adversely affect its business, financial condition, and results of operations.
ACNB’s success depends primarily on the general economic conditions of the Commonwealth of Pennsylvania, the State of Maryland, and the specific local markets in which ACNB operates. Unlike larger national or other regional banks that are more geographically diversified, ACNB provides banking and financial services to customers primarily in the southcentralSouth-central Pennsylvania and northernNorthern Maryland region of the country. The local economic conditions in these areas have a significant impact on the demand for ACNB’s products and services, as well as the ability of ACNB’s customers to repay loans, the value of the collateral securing the loans, and the stability of ACNB’s deposit funding sources. A significant decline in general economic conditions caused by inflation, recession, acts of terrorism, outbreak of hostilities or other international or domestic occurrences and instability, unemployment, changes in securities markets, epidemics and pandemics (such as COVID-19) and governmental responses thereto, or other factors could impact these local economic conditions and, in turn, have a material adverse effect on ACNB’s financial condition and results of operations.
The capital and credit markets may experience extreme volatility and disruption. In the past, in some cases, the markets have exerted downward pressure on stock prices, security prices, and credit capacity for certain issuers without regard to those issuers’ underlying financial strength. In addition, other conditions and factors that could materially adversely affect ACNB’s liquidity and funding including a lack of market or customer confidence in, or negative news about, ACNB or the financial services industry generally which also may result in a loss of deposits and/or negatively affect ACNB’s ability to access the capital markets; the loss of customer deposits to alternative investments; counterparty availability; interest rate fluctuations; general economic conditions; and the legal, regulatory, accounting and tax environments governing ACNB’s funding transactions. Many of the above conditions and factors may be caused by events over which ACNB has little or no control. There can be no assurance that significant disruption and volatility in the financial markets will not occur in the future. Further, ACNB’s customers may be adversely impacted by such conditions, which could have a negative impact on ACNB’s business, financial condition and results of operations.
general economic conditions; and the legal, regulatory, accounting and tax environments governing ACNB’s funding transactions. Many of the above conditions and factors may be caused by events over which ACNB has little or no control. There can be no assurance that significant disruption and volatility in the financial markets will not occur in the future. Further, ACNB’s customers may be adversely impacted by such conditions, which could have a negative impact on ACNB’s business, financial condition and results of operations.
•Geographic and industry loan concentrations.concentrations
•The quality of ACNB’s loan portfolio may decline.decline
In the past, poor economic conditions and the resulting bank failures have increased andand, in the futurefuture, may increase the costs of the FDIC and adversely impacted its Deposit Insurance Fund. Any additional bank failures may prompt the FDIC to increase its premiums or to issue special assessments. ACNB is generally unable to control the amount of premiums or special assessments that its banking subsidiary is required to pay for FDIC insurance. Any future changes in the calculation or assessment of FDIC insurance premiums may have a material adverse effect on ACNB’s financial condition and results of operations.
THE INCREASING USE OF SOCIAL MEDIA PLATFORMS PRESENTS NEW RISKS AND CHALLENGES AND THE INABILITY OR FAILURE TO RECOGNIZE, RESPOND TO, AND EFFECTIVELY MANAGE THE ACCELERATED IMPACT OF SOCIAL MEDIA COULD MATERIALLY ADVERSELY IMPACT ACNB’S BUSINESS.
There has been a marked increase in theThe use of social media platforms, including weblogs (blogs), social media websites, and other forms of internet-based communications which allowallows individuals access to a broad audience of consumers and other interested persons. Social media practices in the banking industry are continually evolving, which creates uncertainty and risk of noncompliance with regulations applicable to ACNB’s business. Consumers value readily-available information concerning businesses and their goods and services, and often act on such information without further investigation and without regard to its accuracy. Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. Information posted on such platforms at any time may be adverse to ACNB’s interests and/or may be inaccurate. The dissemination of information online could harm ACNB’s business, prospects, financial condition, and results of operations, regardless of the information’s accuracy. The harm may be immediate without affording ACNB an opportunity for redress or correction.
CHANGES TO TRADE POLICIES AND TARIFFS CAN HAVE AN ADVERSE IMPACT ON OUR BUSINESS AND OUR CUSTOMERS.
Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve. Our customers-particularly local businesses engaged in agriculture, manufacturing, and retail-may face higher costs for imported goods and materials, reduced export demand, and supply chain disruptions due to increased tariffs. These challenges could lead to lower revenues, reduced profitability, and potential layoffs, all of which may impair our customers’ ability to meet their financial obligations. Furthermore, prolonged trade tensions and economic uncertainty could lead to market volatility, declining asset values, and weakened consumer confidence. If our customers experience financial stress, we could see an increase in loan delinquencies and credit losses, negatively affecting our asset quality and overall financial performance. Additionally, any decline in local economic activity could reduce loan demand, deposit growth, and fee income, which are critical to our long-term success. While we actively monitor economic and policy developments, we cannot predict the outcome of trade negotiations or the full impact of tariffs and trade restrictions on our business, customers, and the broader economy. Any adverse effects from tariffs or a trade war could materially and negatively impact our financial condition, results of operations, and future growth prospects.
RISKS RELATING TO THE MERGER OF TRADITIONS BANCORP, INC. INTO ACNB CORPORATION
ACQUISITIONS MAY DISRUPT ACNB’S BUSINESS AND DILUTE STOCKHOLDER VALUE.
ACNB regularly evaluates opportunities to acquire and invest in banks and in other complementary businesses. As a result, ACNB may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on ACNB’s operating results and financial condition, including short- and long-term liquidity and capital structure. ACNB’s acquisition activities could be material to ACNB. For example, ACNB could issue additional shares of common stock in a purchase transaction, which could dilute current stockholders’ ownership interest. These activities could require ACNB to use a substantial amount of cash, other liquid assets, and/or incur debt. In addition, if goodwill recorded in connection with ACNB’s prior or potential future acquisitions were determined to be impaired, then ACNB would be required to recognize a charge against its earnings, which could materially and adversely affect ACNB’s results of operations during the period in which the impairment was recognized. Any potential charges for impairment related to goodwill would not impact cash flow, tangible capital or liquidity but would decrease stockholders’ equity.
ACNB’s acquisition activities could involve a number of additional risks, including the risks of:
•Incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions;
•Using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to the target institution or its assets;
•The time and expense required to integrate the operations and personnel of the combined businesses;
•Creating an adverse short-term effect on ACNB’s results of operations; and,
•Losing key employees and customers as a result of an acquisition that is poorly received.
ACNB may not be successful in overcoming these risks or any other problems encountered in connection with potential acquisitions. ACNB’s inability to overcome these risks could have an adverse effect on ACNB’s ability to achieve its business strategy and maintain its market value.
ACNB INCURRED AND WILL CONTINUE TO INCUR SIGNIFICANT TRANSACTION AND MERGER-RELATED COSTS IN CONNECTION WITH THE MERGER.
ACNB incurred and expects to continue to incur costs associated with combining the operations of the two companies. ACNB is formulating and executing on detailed integration plans to deliver planned synergies. Additional unanticipated costs may be incurred in the integration of the businesses of ACNB and Traditions. Although ACNB expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.
THE MERGER MAY DISTRACT ACNB’S MANAGEMENT TEAM FROM THEIR OTHER RESPONSIBILITIES.
The merger could cause the management of ACNB to focus their time and energies on matters related to the merger that otherwise would be directed to the Corporation’s business and operations. Any such distraction on the part of management, if significant, could affect management’s ability to service existing business, develop new business, and adversely affect the combined company’s business and earnings following the merger.
POST-MERGER INTEGRATION AND CHANGE OF ACNB’S HISTORICAL BUSINESS MODEL MAY FAIL TO ACHIEVE EXPECTED RESULTS.
The success of the transaction depends heavily on a smooth integration and post-merger operations of the combined company. Benefits of the transaction to shareholders may not be realized if the post-merger integration is not well executed or well received by each company’s historical customers.
ACNB MAY FAIL TO REALIZE THE COST SAVINGS IT EXPECTS TO ACHIEVE FROM THE MERGER.
The success of the merger will depend, in part, on ACNB’s ability to realize the estimated cost savings from combining the businesses of ACNB and Traditions. While ACNB believes that the cost savings estimates are achievable, it is possible that the potential cost savings could be more difficult to achieve than ACNB anticipates. ACNB’s cost savings estimates also depend on its ability to combine the businesses of ACNB and Traditions in a manner that permits those cost savings to be realized. If ACNB’s estimates are incorrect or it is unable to combine the two companies successfully, the anticipated cost savings may not be realized fully or at all, or may take longer to realize than expected.
COMBINING ACNB AND TRADITIONS MAY BE MORE DIFFICULT, COSTLY, OR TIME-CONSUMING THAN EXPECTED.
ACNB and Traditions have operated and, until the completion of the merger, will continue to operate independently. The integration process could result in the loss of key employees, disruption of each company’s ongoing business, and inconsistencies in standards, controls, procedures and policies that adversely affect either company’s ability to maintain relationships with customers and employees or achieve the anticipated benefits of the merger. As with any merger of financial institutions, there also may be disruptions that cause ACNB and Traditions to lose customers or cause customers to withdraw their deposits from ACNB or Traditions, or have other unintended consequences, that could have a material adverse effect on ACNB’s financial condition and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “Investment Securities”
Largest changes
“Business Combinations — The Company is required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values in an acquisition. The difference between consideration paid and the net fair value of assets acquired is recorded as goodwill. …”see in full comparison
“Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements. As of December 31, 2025, the Company believes that the fair value of the assets acquired, liabilities assumed, consideration paid, and any non-controlling interests of the acquired business at fair value at the acquisition date was appropriately determined in accordance with GAAP.”see in full comparison
“On January 1, 2023, the Corporation adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, universally referred to as CECL. ASU 2016-13 applies to all financial instruments carried at amortized cost, including HTM securities, and makes targeted improvements to the accounting for credit losses on AFS securities. In addition, Topic 326 amends the accounting for credit losses on certain other debt securities. …”see in full comparison
“For the year ended December 31, 2025, the provision for credit losses was $5.3 million and the provision for unfunded commitments was a reversal of $532 thousand, compared to reversals of the provisions for credit losses and unfunded commitments of $2.4 million and $326 thousand, respectively, for the same period of 2024. …”see in full comparison
“The determination of fair values in accordance with ASC 820 is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. In addition, we engaged third party specialists to assist in the development of fair values. …”see in full comparison
Full comparison: every changed paragraph (103)
Discussion of the earliest of the three years covered by the Consolidated Financial Statements presented in this report has been omitted as that disclosure is included in the Corporation'sCorporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 20232024 in Item 7.7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within that report.
ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 2733 community banking offices. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville,Westminster, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.
The primary source of the Corporation’s revenues is net interest income derived from interest earned on loans and investments, less deposit and borrowing funding costs. Revenues are influenced by general economic factors, including market interest rates, the economyeconomies of the markets served, stock market conditions, as well as competitive forces within the markets. The Corporation also generates revenue through commissions and fees earned on various services and financial products offered to its customers and through gains on sales of assets, such as loans, investments and properties. The Corporation incurs expenses to generate the revenue through provision for credit losses, noninterest expense and income taxes. The Corporation’s overall strategy is to increase loan growth in its local markets, while maintaining a reasonable funding base by offering competitive deposit products and services.
ACNB reported earnings of $37.1 million in 2025 impacted by three discrete items: $8.3 million merger-related expenses, net of tax impact, a provision for credit losses on non-PCD loans of $4.2 million, net of tax impact, both incurred as a result of the Acquisition, and a $2.8 million loss on sales of investment securities, net of tax impact, incurred as a result of the repositioning of the investment securities portfolio.
ACNB closed the Acquisition of Traditions effective February 1, 2025. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. See Note 2 — “Business Combination” in the Notes to Consolidated Financial Statements under Part II, Item 8 — “Financial Statements and Supplementary Data,” for more information.
Investment Securities Portfolio Repositioning
ACNB completed a repositioning of the investment securities portfolio by selling $74.6 million in book value of available for sale investment securities for an after-tax loss of $2.8 million as announced on Form 8-K on December 5, 2025. For additional information see “Investment Securities” in the Financial Condition section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The Corporation’s overall strategy is to increase loan growth in its local markets, while maintaining a reasonable funding base by offering competitive deposit products and services. ACNB reported earnings of $31.8 million in 2024 impacted by $1.6 million merger-related expenses, net of tax impact, incurred as a result of the acquisition of Traditions. In addition, the financial results for the year ended December 31, 2024 were impacted by a $2.8 million reversal of the provisions for credit losses and unfunded commitments.
On July 23, 2024, ACNB entered into an agreement and plan of reorganization to acquire Traditions Bancorp, Inc. and its banking subsidiary Traditions Bank, a Pennsylvania state-chartered community bank headquartered in York, Pennsylvania which operated eight community banking offices located in South Central Pennsylvania. The Traditions Acquisition was closed effective February 1, 2025.
As of December 31, 2024 and 2023, Traditions had total assets of $870.1 million and $840.1 million, respectively, total loans of $674.4 million and $668.8 million, respectively, and total deposits of $749.3 million and $731.1 million, respectively. Common shares outstanding totaled 2,788,164 and 2,736,544 at December 31, 2024 and 2023, respectively.
•Net Income — Net income was $31.8 million, a $158 thousand, or 0.5%, increase compared to $31.7 million for the same period in 2023. The 2024 financial results were impacted by $2.0 million in merger-related expenses related to the Traditions Acquisition offset by a $2.8 million reversal of the provisions for credit losses and unfunded commitments. The 2023 financial results were impacted by an after-tax loss of approximately $3.5 million on the repositioning of the investment securities portfolio.
•Net Interest Income — Net interest income was $83.6$123.1 million in 20242025 compared to $88.3$83.6 million infor 2023,the asame decreaseperiod of $4.72024, million,an orincrease 5.3%,of $39.5 million. The increase in net interest income and growth in average loans and deposits was driven primarily by athe higher cost of funds and an increase in long-term borrowings.Acquisition.
◦Net Interest Margin — The Corporation’s FTE net interest margin decreasedincreased to 4.23% in 2025 compared to 3.79% infor 2024the comparedsame to 4.07% in 2023, a decreaseperiod of 282024, basisan points.increase of 44 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $7.7 million for the year ended December 31, 2025.
◦Yield on Average Interest-earning Assets — 4.86%ACNB for 2024,experienced an increase of 4175 basisbps pointsin the yield on average interest-earning assets to 5.61% compared to the same period of 2023.2024.
◦Loan Growth — Average loans grew $94.9$635.8 million, or 6.0%,million compared to the same period of 2023. The growth was largely driven by increases in commercial real estate and residential mortgages.2024.
◦Deposit Growth — Average interest-bearing deposits increased $542.1 million compared to the same period of 2024.
•Asset Quality — The ACL was $23.7 million at December 31, 2025 compared to $17.3 million at December 31, 2024. The increase was driven primarily by an initial ACL of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.
◦Deposit Decline — Average interest-bearing deposits decreased $113.8 million, or 7.8%, compared to the same period of 2023. The overall decrease in average interest-bearing deposits was partially offset by a $28.1 million, or 12.2%, increase in time deposits as a result of ongoing promotions and brokered time deposits issued by the Bank. During the same period, average noninterest-bearing deposits decreased $65.3 million, or 12.0%.
•Asset Quality — Asset quality metrics continue to be stable despite increases in non-performing loans during the year. ◦The provision for credit losses was a reversal of $2.4$5.3 million and the provision for unfunded commitments was a reversal of $326$532 thousand for the year ended December 31, 20242025 compared to the $860reversal thousandof $2.4 million provision for credit losses and the reversal of $16$326 thousand for unfunded commitments for the yearsame endedperiod Decemberof 31, 2023.2024.
◦Non-performing loans were $10.7 million, or 0.46% of total loans at December 31, 2025 compared to $6.8 million, or 0.40% of total loans for the same period of 2024. The increase was driven primarily by the Acquisition and, to a lesser extent, three unrelated relationships in the commercial real estate and residential mortgage portfolios.
◦Non-performing loans were $6.8 million, or 0.40% of total loans at December 31, 2024 compared to $4.2 million, or 0.26% of total loans at December 31, 2023. The increase in non-performing loans at December 31, 2024 compared to the prior year was primarily the result of one long-standing commercial relationship in the healthcare industry comprised of both owner-occupied commercial real estate and commercial and industrial loans.
◦Annualized netNet charge-offs for the year ended December 31, 20242025 were 0.04%0.01% of total average loans compared to 0.02% for the yearsame endedperiod Decemberof 31, 2023.2024.
•Noninterest income — Excluding net (losses) gains on sales or calls of securities, noninterest income was $32.1 million for the year ended December 31, 2025, an increase of $7.5 million from the same period of 2024. The increase was driven primarily by a $5.0 million increase in gain from mortgage loans held for sale, a $697 thousand increase in service charges on deposits and $614 thousand higher earnings on investment in bank-owned life insurance, which were driven primarily by the Acquisition.
•Noninterest income — Noninterest income was $24.7 million and $18.4 million in 2024 and 2023, respectively. The increase was driven primarily by the net loss on sales of securities as a result of the repositioning of the investment securities portfolio in 2023. In addition, higher wealth management income, insurance commissions and gain from mortgage loans held for sale in 2024 compared to 2023 contributed to the increase.
•Noninterest expenses — Noninterest expenses totaled $70.7$100.5 million, an increase of $4.6$29.8 million, or 7.0%,million in 20242025 compared to $66.1$70.7 million in 2023.2024. The increase was driven primarily by merger-related,the salary and employee benefits and equipment expenses.Acquisition.
CRITICAL ACCOUNTING POLICIESESTIMATES
The accounting policies that the Corporation’s management deems to be most important to the presentation of its financial condition and results of operations, because they require management’s most difficult, subjective or complex judgment, often result in the need to make estimates about the effect of such matters which are inherently uncertain. The following accounting estimatepolicies isare deemed to be critical by management:
Allowance for Credit Losses -— The ACL represents an amount which, in management’s judgment, is adequate to absorb expected credit losses on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions and prepayment experience. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (reversal of) credit losses, which is recorded as a current period operating expense.
Management believes it uses relevant information available to make determinations about the ACL and that it has established the existing allowance in accordance with GAAP. However, the determination of the ACL requires significant judgment, and estimates of expected credit losses in the loan portfolio can vary from the amounts actually observed. While management uses available information to recognize expected credit losses, future additions to the ACL may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes in the interest rate environment which may directly impact prepayment and curtailment rate assumption, and changes in the financial condition of borrowers. As of December 31, 2025, the Company believes that its ACL was adequate.
Business Combinations — The Company is required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values in an acquisition. The difference between consideration paid and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to determine the fair value of such items in accordance with ASC 820, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The ACL for PCD loans is recognized as a component of acquisition accounting. The ACL for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations.
The determination of fair values in accordance with ASC 820 is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. In addition, we engaged third party specialists to assist in the development of fair values. Preliminary estimates of fair values may be adjusted for a period of time subsequent to the acquisition date if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments recorded during this period are recognized in the current reporting period. Management uses various valuation methodologies to estimate the fair value of these assets and liabilities, and often involves a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans, deposits, identifiable intangible assets, and certain other assets and liabilities.
Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements. As of December 31, 2025, the Company believes that the fair value of the assets acquired, liabilities assumed, consideration paid, and any non-controlling interests of the acquired business at fair value at the acquisition date was appropriately determined in accordance with GAAP.
Net income for the year ended December 31, 20242025 was $31.8$37.1 million, an increase of $158$5.2 thousand,million, or 0.5%,16.3%, compared to net income of $31.7$31.8 million for the same period of 2023.2024. Diluted earnings per share were $3.60 and $3.73 for the years ended December 31, 20242025 and 2023 were $3.73 and $3.71,2024, respectively.
The primary source of ACNB’s traditional banking revenue is net interest income, which represents the difference between interest income on earning assets and interest expense on liabilities used to fund those assets. Earning assets include loans, securities, and interest-bearing deposits with banks. Interest-bearing liabilities include deposits and borrowings. Net interest income is affected by changes in interest rates, volume of interest-bearing assets and liabilities, and the composition of those assets and liabilities. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 7a,7a — “Quantitative and Qualitative Disclosures About Market Risk”.
FTE net interest income totaled $84.2$123.7 million for the year ended December 31, 20242025 compared to $89.0$84.2 million for the same period of 2023,2024, aan decreaseincrease of $4.8$39.5 million, or 5.4%. The decrease was driven primarily by higher deposit costs, primarily in the form of special product offerings, and an increase in long-term borrowings.46.9%. The FTE net interest margin for 20242025 was 3.79%,4.23%, aan decreaseincrease of 2844 basis pointsbps from 4.07%3.79% for the same period of 2023.2024. The increases in FTE interest income, interest expense and the increases to average interest-earning assets and liabilities were driven primarily by the Acquisition.
FTE total interest income increased $10.8$55.8 million, or 11.1%,million during 20242025 compared to 2023.the same period of 2024. ACNB experienced a $7.2$38.6 million increase in interest income dueattributable to angrowth increaseof in the yield onaverage interest earning assets and a $3.6$17.1 million increase attributablein tothe growthyield ofon interest earning assets. The average yield on interest-earning assets was 4.86%5.61% for 2024,2025, an increase of 4175 basis pointsbps from 2023.the same period of 2024. FTE interest income on loans increased $10.9$52.0 million, or 13.4%,million compared to 2023the same period of 2024 due to growth in average loans and an increase in the yield andon loanloans. growth.Average Theloans increased $635.8 million while the yield increased 3673 basis points while average loans increased $94.9 million, or 6.0%. FTE interest income on investment securities increased $362 thousand, or 2.8%, due to an increase in the yield partially offset by a lower volume of investment securities. The higher FTE interest income on loans and investment securities was partially offset by a decrease in interest income from interest-bearing deposits with banks of $486 thousand, or 14.6%.bps.
Total interest expense increased $15.5$16.3 million, or 186.7%,million during 20242025 compared to 2023.the same period of 2024. The increase was primarily due to a higher$542.1 cost of funds and anmillion increase in long-termaverage borrowings.interest-bearing deposits and higher rates on interest-bearing deposits. The average rate paid on interest-bearing deposits was 0.83%,1.41%, an increase of 58 basis pointsbps during 2024.2025. The largest increases in rates were in money markets and time deposits and money markets which increased 19688 and 6266 basis points,bps, respectively. The average rate paid on total borrowings was 4.36% during 2024, an increase of 74 basis points compared to 2023. Total average borrowings increased $162.5 million, or 127.2%, during 2024 compared to 2023 and were used primarily to fund loan growth and deposit outflows during 2024.
For the year ended December 31, 2025, the provision for credit losses was $5.3 million and the provision for unfunded commitments was a reversal of $532 thousand, compared to reversals of the provisions for credit losses and unfunded commitments of $2.4 million and $326 thousand, respectively, for the same period of 2024. In 2025, ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The reversal of the provision for unfunded commitments was impacted by the incorporation of post-COVID data which resulted in lower loss rates utilized within the Bank’s ACL model. During 2024, the Corporation revised estimates driven by a realignment of the peer group used for the CECL allowance process, an update to loss driver factors from third-party data, and an update to the application of prepayment and curtailment rate studies since implementation of CECL on January 1, 2023. These estimates, which were based on more current information available as of June 30, 2024, drove input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. These updated estimates were the primary drivers for the reversal of the provision for credit losses and unfunded commitments in 2024.
For the year ended December 31, 2024, there were reversals to the provisions for credit losses and unfunded commitments of $2.4 million and $326 thousand, respectively, compared to a provision for credit losses of $860 thousand and a $16 thousand reversal to the provision for unfunded commitments for the year ended December 31, 2023. The decrease in the provisions for credit losses and unfunded commitments for the year ended December 31, 2024 compared to the prior year was driven primarily by updated estimates utilized as input assumptions within the CECL model calculation. These estimates, which were based on more current information available during 2024, drive input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments.
The determination of the provisions was a result of the analysis of the adequacy of the allowances for credit losses and unfunded commitments calculations. Each quarter, the Corporation assesses risks and reserves required compared with the balances in the allowance for credit losses and unfunded commitments. Nonaccrual loans increased $2.9$2.0 million during 20242025 driven primarily by the resultAcquisition ofand, oneto long-standinga commerciallesser relationshipextent, by three unrelated lending relationships in the healthcare industry, comprised of both owner-occupied commercial real estate and commercialresidential andmortgage industrial loans. This relationship is adequately secured and did not impact the allowances for credit losses.portfolios. For additional discussion of the provision and the associated loans, please refer to the Asset Quality section of this Management’s Discussion and Analysis.
TotalAs noninterest income, excluding net gains (losses)announced on salesForm or8-K calls of investment securities, totaled $24.7 million in 2024 compared to $23.7 million in 2023, a $976 thousand, or 4.1% increase. Onon December 15,5, 2023,2025, ACNB completed a repositioning of the investment securities portfolio by selling $51.1$74.6 million in book value of AFS debtinvestment securities, consisting of lower-yielding agency debt securities, for ana estimated after-taxpre-tax loss of $3.5$3.6 million. Total noninterest income, excluding net (losses) gains on sales or calls of investment securities, totaled $32.1 million in 2025 compared to $24.7 million in the same period of 2024, a $7.5 million increase. The majority of increases were driven primarily by the Acquisition and changes to customer products. The more significant fluctuations in noninterest income that were not a direct result of the Acquisition are explained below:
•Earnings on investment in bank-owned life insurance increased driven primarily by the Acquisition and the purchase of new policies.
•Gain on life insurance proceeds were the result of a death benefit received on a life insurance policy.
•Insurance commissions in 2024 increased $435 thousand, or 4.7%, compared to 2023 driven primarily by growth in commissions on policy renewals and new business.
•Wealth management income for 2024 increased $582 thousand, or 16.0%, compared to 2023 driven primarily by portfolio market appreciation, estate income and new business generation.
•Gain from mortgage loans held for sale increased $245 thousand as a result of a higher volume of mortgage loans sold.
•There were no gains on assets held for sale in 2024 compared to $337 thousand in 2023 due to the sale of three community banking offices during 2023.
Noninterest expenses increased to $70.7$29.8 million in 20242025 compared to $66.1the millionsame inperiod 2023,of a2024, $4.6driven million,primarily orby 7.0%,the increase.Acquisition. The more significant fluctuations in noninterest expenses bythat categorywere not a direct result of the Acquisition are explained below:
•Salaries and employee benefits, the largest component of noninterest expenses, increased 4.9% in 2024 compared to 2023, driven primarily by higheran employeeincreased healthnumber insuranceof expenseemployees attributable to the Acquisition, merit increases and higher basemortgage wages.commissions.
•Equipment increased $2.2 million driven primarily by the Acquisition and the implementation of additional products into our core processing system.
•Equipment increased $807 thousand, or 12.4%, driven primarily by higher core processing and software maintenance expenses coupled with incremental purchases of office equipment related to the Traditions Acquisition of $355 thousand.
•Net occupancyOther increased $254$3.9 thousand, or 6.5%,million driven primarily by the Acquisition, higher leaseinternet expensebanking services and general maintenance.contributions.
•Other tax increased $177 thousand, or 13.9%, driven primarily by an increase in PA shares taxes. PA shares tax is an equity based tax and increased due to a higher equity base compared to 2023.
•Professional services decreased $180 thousand, or 7.8%, driven primarily by a decrease in consulting expenses.
•Merger-related expenses,Merger-related, which include legal, external auditing,audit, loan review and advisory fees, occurred due to the Traditions Acquisition.
Provision for Income Taxes
The Corporation recognized income taxes of $9.4 million during 2025 compared to $8.6 million during 2024 compared to $8.2 million during 2023.2024. The provision for income taxes reflects an ETR of 20.2% for 2025 and 21.2% for 2024 and 20.5% for 2023.2024. The variances from the federal statutory rate of 21% are generally due to tax-free income, which includesincludes, but not limited to, interest income on tax-free loans,loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, and the impact of non-tax deductible expenses such as certain merger-related costs incurredand duringstate 2024.taxes. Note 1315 — “Income Taxes”, to the Consolidated Financial Statements under Part II, Item 8,8 — “Financial Statements and Supplementary Data,” includes a reconciliation of the federal statutory tax rate to the Corporation’s ETR, which measures income tax expense as a percentage of pretax income.
Total assets were $3.23 billion at December 31, 2025 compared to $2.39 billion at December 31, 2024. The Acquisition contributed $877.7 million to total assets.
Investment Securities
Total assets were $2.39 billion at December 31, 2024 compared to $2.42 billion at December 31, 2023, a decrease of 1.0%. The decrease was driven primarily by a reduction in cash and cash equivalents of $18.7 million and investment securities of $57.7 million partially offset by loan growth.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Six months ended June 30, 2026 compared to six months ended June 30, 2025”
New heading “Net Interest Income”
New heading “Provision for Credit Losses and Unfunded Commitments”
New heading “Noninterest Income”
New heading “Noninterest Expenses”
New heading “Assets Held for Sale”
Largest changes
“Six months ended June 30, 2026 compared to six months ended June 30, 2025”see in full comparison
•Net Interest Income — Net interest income wassee in full comparison$32.5$34.0 million for the three months endedMarchJune31,30, 2026 compared to$27.1$31.0 million for the same period of 2025, an increase of$5.4$3.0 million. For the six months ended June 30, 2026, net interest income was $66.5 million compared to $58.1 million for the same period of 2025. The increase in net interest income was driven primarily bytheloanbalance sheet restructuring completed during the three months ended December 31, 2025, the Acquisition, andgrowth, new loans and investment securities funded during the quarter at higher rates than those that paid off ormatured.matured, and the continued benefit of lower funding costs. In addition, the yield on investment securities during the six months ended June 30, 2026 compared to the same period in the prior year was impacted by a repositioning of the investment securities portfolio completed during the three months ended December 31, 2025.
Full comparison: every changed paragraph (100)
The following is management’s discussion and analysis of the significant changes in the financial condition, results of operations, comprehensive income, capital resources,resources and liquidity presented in its accompanying Consolidated Financial Statements for ACNB Corporation, a financial holding company. Please read this discussion in conjunction with the Consolidated Financial Statements and disclosures included herein. Current performance does not guarantee, assure or indicate similar performance in the future.
The primary source of the Corporation’s revenues is net interest income derived from interest earned on loans and investments, less deposit and borrowing funding costs. Revenues are influenced by general economic factors, including market interest rates, the economies of the markets served, stock market conditions, as well as competitive forces within the markets. The Corporation also generates revenue through commissions and fees earned on various services and financial products offered to its customers and through gains on sales of assets,assets such as loans, investments and properties. The Corporation incurs expenses to generate the revenue through provision for credit losses, noninterest expense and income taxes. The Corporation’s overall strategy is to increase loan growth in its local markets,markets while maintaining a reasonable funding base by offering competitive deposit products and services.
Financial results for the threesix months ended MarchJune 31,30, 2025 were impacted by two discrete items that were related to the Acquisition of Traditions Bancorp, Inc. which was completed on February 1, 2025: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses,expenses totaling $7.8 million, net of taxes, totaling $6.2 million.taxes. Financial results for the threesix months ended MarchJune 31,30, 2025 include ACNB’s standalone results for the month of January 2025.
•Net Interest Income — Net interest income was $32.5$34.0 million for the three months ended MarchJune 31,30, 2026 compared to $27.1$31.0 million for the same period of 2025, an increase of $5.4$3.0 million. For the six months ended June 30, 2026, net interest income was $66.5 million compared to $58.1 million for the same period of 2025. The increase in net interest income was driven primarily by theloan balance sheet restructuring completed during the three months ended December 31, 2025, the Acquisition, andgrowth, new loans and investment securities funded during the quarter at higher rates than those that paid off or matured.matured, and the continued benefit of lower funding costs. In addition, the yield on investment securities during the six months ended June 30, 2026 compared to the same period in the prior year was impacted by a repositioning of the investment securities portfolio completed during the three months ended December 31, 2025.
◦Net Interest Margin — FTE net interest margin increased to 4.56% for the three months ended June 30, 2026 compared to 4.21% in the same period of 2025, an increase of 35 bps. FTE net interest margin increased to 4.51% for the six months ended June 30, 2026 compared to 4.14% in the same period of 2025, an increase of 37 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.8 million and $2.2 million for the three months ended June 30, 2026 and 2025, respectively, and $3.6 million and $3.7 million for the six months ended June 30, 2026 and 2025, respectively.
◦Loan Growth — Average loans increased $46.0 million for the three months ended June 30, 2026, compared to the same period of 2025, driven primarily by organic growth in the commercial real estate portfolio and increased $126.9 million for the six months ended June 30, 2026, compared to the same period of 2025 driven primarily by organic growth in the commercial real estate portfolio and the Acquisition.
◦Deposit Growth — Average noninterest-bearing deposits increased $20.1 million and $30.8 million for the three and six months ended June 30, 2026, respectively, compared to same periods of 2025 driven primarily by promotional incentives on commercial checking accounts and the Acquisition. Average interest-bearing deposits decreased $14.0 million, for three months ended June 30, 2026 primarily as a result of attrition of higher cost money market deposits from the Acquisition. Average interest-bearing deposits increased $68.5 million for the six months ended June 30, 2026 compared to the same period of 2025 driven primarily by the timing of the Acquisition.
◦Yield on Average Earning Assets — For the three and six months ended June 30, 2026, the yields on average earning assets were 5.86% and 5.82%, respectively, an increase of 22 and 27 bps compared to the same periods of 2025.
◦Rate on Average Interest-bearing Liabilities — For the three and six months ended June 30, 2026, the rates on average interest-bearing liabilities were 1.73% and 1.75%, respectively, a decrease of 14 and 9 bps, respectively, compared to the same periods of 2025.
•Asset Quality — The allowance for credit losses was $24.0 million at June 30, 2026, compared to $23.7 million at December 31, 2025. The increase was driven primarily by loan growth.
◦Annualized net charge-offs to total average loans outstanding for the three and six months ended June 30, 2026 were 0.03% and 0.01%, respectively, compared to 0.01% for both of the same periods of 2025.
◦Non-performing loans were $9.8 million, or 0.41%, of total loans at June 30, 2026 compared to $10.1 million, or 0.43%, of total loans at June 30, 2025. The decrease was driven primarily by charge-offs, the movement of several loans to foreclosed assets held for resale and paydowns.
◦Net Interest Margin — FTE net interest margin increased to 4.46% for the three months ended March 31, 2026 compared to 4.07% in the same period of 2025, an increase of 39 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.9 million for the three months ended March 31, 2026 compared to $1.5 million for the same period of 2025 ◦Loan Growth — Average loans increased $208.6 million for the three months ended March 31, 2026, compared to the same period of 2025, driven primarily by the Acquisition and, to a lesser extent, organic growth ◦Deposit Growth — Average interest-bearing deposits increased $151.8 million for the three months ended March 31, 2026 compared to the same period of 2025, driven primarily by the Acquisition and, to a lesser extent, promotional incentives on commercial checking accounts ◦Yield on Average Earning Assets — For the three months ended March 31, 2026, the yield on average earning assets was 5.78%, an increase of 33 bps compared to the same period of 2025 ◦Rate on Average Interest-bearing Liabilities — For the three months ended March 31, 2026, the rate on average interest-bearing liabilities was 1.77%, a decrease of 4 bps compared to the same period of 2025
•Asset Quality — The allowance for credit losses was $23.6 million at March 31, 2026, compared to $23.7 million at December 31, 2025 ◦The decrease was driven primarily by a reversal of the provision for credit losses of $76 thousand for the three months ended March 31, 2026 driven primarily by the movement of construction loans for completed projects, which are a higher loss rate segment, to lower loss rate segments within the loan portfolio, primarily commercial real estate, as well as paydowns of loans with a specific reserve, partially offset by loan growth ◦Annualized net recoveries for the three months ended March 31, 2026 were 0.00% of total average loans outstanding, compared to net charge-offs of 0.01% for the same period of 2025 ◦Non-performing loans were $9.6 million, or 0.41%, of total loans at March 31, 2026 compared to $10.0 million, or 0.43%, of total loans at March 31, 2025. The decrease was driven primarily by paydowns of loans
•Noninterest income — Noninterest income was $8.3$8.8 million and $17.1 million for the three and six months ended MarchJune 31,30, 2026, respectively, an increase of $1.1$136 millionthousand and $1.2 million, respectively, for the same periodperiods of 2025. The increase for the three months ended MarchJune 31,30, 2026 was driven primarily by thehigher Acquisition.wealth management income and higher earnings on investment in bank-owned life insurance, partially offset by lower other income due to lower credit card processing and letter of credit fees. In addition to the impact of the Acquisition, the increase for the threesix months ended MarchJune 31,30, 2026 compared to the same period of 2025 was also driven primarily by ahigher wealth management income, gain on anassets assetHFS held for sale,and earnings on investment in bank-owned life insurance, other, and wealth managementinsurance.
•Noninterest expenses — Noninterest expense was $23.6$23.1 million and $46.7 million for the three and six months ended MarchJune 31,30, 2026, a decrease of $5.7$2.2 million and $8.0 million for the same periodperiods of 2025.2025, respectively. The decrease was driven primarily by merger-related expenses due to the Acquisition during the three and six months ended MarchJune 31,30, 2025 A more thorough discussion of the Corporation’s results of operations and financial condition is included in the following pages.2025.
A more thorough discussion of the Corporation’s results of operations and financial condition is included in the following pages.
The accounting policies that the Corporation’s management deems to be most important to the portrayal of its financial condition and results of operations,operations because they require management’s most difficult, subjective or complex judgment,judgment often result in the need to make estimates about the effect of such matters which are inherently uncertain. The following accounting estimate is deemed to be critical by management:
Management believes it uses relevant information available to make determinations about the ACL and that it has established the existing allowance in accordance with GAAP. However, the determination of the ACL requires significant judgment, and estimates of expected credit losses in the loan portfolio can vary from the amounts actually observed. While management uses available information to recognize expected credit losses, future additions to the ACL may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes in the interest rate environment which may directly impact prepayment and curtailment rate assumption, and changes in the financial condition of borrowers. As of MarchJune 31,30, 2026, the Company believes that its ACL was adequate.
Three months ended MarchJune 31,30, 2026 compared to three months ended MarchJune 31,30, 2025
Net income for the three months ended MarchJune 31,30, 2026 was $13.7$15.2 million, or $1.32$1.49 diluted earnings per share, compared to net lossincome of $272$11.6 thousand,million, or $0.03$1.11 diluted lossearnings per share for the same period of 2025, an increase of $14.0$3.6 million, or $1.35$0.38 diluted earnings per share. The financial results for the three months ended MarchJune 31,30, 2025 were impacted by two discrete items that were related to the Acquisition: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2$1.5 million. Financial results for the three months ended March 31, 2025 include ACNB’s standalone results for the month of January 2025.
Net interest income totaled $32.5$34.0 million for the three months ended MarchJune 31,30, 2026 compared to $27.1$31.0 million for the same period of 2025, an increase of $5.4$3.0 million. The FTE net interest margin for the three months ended MarchJune 31,30, 2026 was 4.46%,4.56%, a 3935 bps increase from 4.07%4.21% for the same period of 2025. The increase in net interest income and FTE net interest margin was driven primarily by theloan repositioning of the investment securities portfolio as announced on Form 8-K on December 5, 2025, the Acquisition, andgrowth, new loans and investment securities funded at higher rates than those that paid off or matured.matured and the continued benefit of lower funding costs. In addition, the repositioning of the investment securities portfolio completed during the three months ended December 31, 2025 contributed to higher yields. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.9$1.8 million and $2.2 million for the three months ended MarchJune 31,30, 2026.2026 and 2025, respectively. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 3, “Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report on Form 10-Q.
3 Average balance of investment securities is computed at fair value.
The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for the three months ended MarchJune 31,30, 2026 compared to the same period of 2025:
3 Average balance of investment securities is computed at fair value.
Total FTE interest income increased $6.0$2.1 million during the three months ended MarchJune 31,30, 2026 compared to the same period of 2025, driven primarily by higher average balances of interest earning assets due to the timing of the Acquisition and, to a lesser extent, organic growth. Also contributing to the increase was an increase in yield of interest earning assets, which was driven primarily by the repositioning of the investment securities portfolio, as well as new loans and investment securities funded at higher rates than those that paid off or matured. Also contributing to the increase was growth of $46.0 million in average loan balances primarily in the commercial real estate portfolio.
Total interest expense increaseddecreased $517$881 thousand during the three months ended MarchJune 31,30, 2026 compared to the same period of 2025, driven primarily by higherlower average balances and costs of interest-bearing deposits, primarily a result of attrition of higher cost money market and time deposits due tofrom the timingAcquisition, ofas thewell Acquisition. Partially offsetting this increase in volume wereas lower ratesaverage paid on interest-bearing deposits.borrowings.
The provision for credit losses was $554 thousand for the three months ended June 30, 2026 compared to a reversal of $228 thousand for the same period of 2025, and was driven primarily by loan growth. The reversal of the provision for unfunded commitments was $107 thousand for the three months ended June 30, 2026 compared to a reversal of $354 thousand for the same period of 2025. The Corporation assesses risks and reserves required compared with the balances in the ACL and unfunded commitments on a quarterly basis.
The provisions for credit losses and unfunded commitments were reversals of $76 thousand and $13 thousand, respectively, for the three months ended March 31, 2026 compared to a provision for credit losses of $6.0 million and a reversal of the provision for unfunded commitments of $480 thousand for the same period of 2025. The reversal of the provision for credit losses for the three months ended March 31, 2026 was driven primarily by the paydowns of loans with a specific reserve and the movement of construction loans for completed projects, which are a higher loss rate segment, to lower loss rate segments within the loan portfolio, primarily commercial real estate, partially offset by loan growth. The provision for credit losses for the three months ended March 31, 2025 was driven primarily by the Acquisition. The Corporation assesses risks and reserves required compared with the balances in the ACL and unfunded commitments quarterly.
The more significant variations by category:
Total noninterest income was $8.3 million for the three months ended March 31, 2026 compared to $7.2 million for the same period of 2025. The increase was driven primarily by the Acquisition. The more significant variations by category that were not solely a direct result of the Acquisition are explained below:
•The increase in earnings on investment in bank-owned life insurance was driven primarily by the purchase of new policies in the third quarter of 2025 and the Acquisition
•The increase in wealth management was driven primarily by growth of fee-based assets under management/administration growth due to new business generation and positive market impacts
•The increase in gain on assets held for sale was the result of a sale of a building previously used by ACNB Insurance Services
•Gain on life insurance proceeds for the three months ended March 31, 2026 and the same period of 2025 was the result of death benefits paid on life insurance policies
•The increase in otherearnings on investment in bank-owned life insurance was driven primarily by athe gainpurchase onof anew loanpolicies participationin the fourth quarter of 2025
•The decrease in other was primarily attributable to lower credit card processing and letter of credit fees
The more significant fluctuations by category:
•The decrease in intangible assets amortization was the result of normal attrition
Noninterest expenses decreased $5.7 million for the three months ended March 31, 2026 compared to the same period of 2025 driven primarily by the Acquisition. The more significant variations by category that were not solely a direct result of the Acquisition are explained below:
•The increase in salariesother and employee benefits, the largest component of noninterest expenses,tax was driven primarily by anasset increasedgrowth number of employees attributabledue to the Acquisition and merit increases
•The decrease in merger-related was driven by the lack of Acquisition-related expenses in the current period
•The decrease in other was driven primarily by the write-off of stale conversion related items in the prior year
Income Taxes
The Corporation recognized income tax expense of $4.0 million during the three months ended June 30, 2026 compared to $3.3 million during the same period of 2025. The provision for income taxes reflects a combined Federal and State ETR of 21.0% and 21.9% for the three months ended June 30, 2026 and 2025, respectively. The variances from the federal statutory rate of 21% are generally due to tax-free income, which includes, but not limited to, interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits and the impact of non-tax deductible expenses such as certain merger-related costs and state taxes.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
Net income for the six months ended June 30, 2026 was $28.9 million, or $2.81 diluted earnings per share, compared to net income of $11.4 million, or $1.12 diluted earnings per share for the same period of 2025, an increase of $17.5 million and $1.69 diluted earnings per share. The increase in net income for the six months ended June 30, 2026 was driven primarily by higher net interest income and the impact of two discrete items for the six months ended June 30, 2025 that were related to the Acquisition: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses totaling $7.8 million, net of taxes. Financial results for the six months ended June 30, 2025 include ACNB’s standalone results for the month of January 2025.
Net Interest Income
Net interest income totaled $66.5 million for the six months ended June 30, 2026 compared to $58.1 million for the same period of 2025, an increase of $8.4 million. The FTE net interest margin for the six months ended June 30, 2026 was 4.51%, a 37 bps increase from 4.14% for the same period of 2025. The increases were driven primarily by loan growth, new loans and investment securities funded at higher rates than those that paid off or matured, and the continued benefit of lower funding costs. In addition, the yield on investment securities was impacted by a repositioning of the investment securities portfolio completed during the three months ended December 31, 2025. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $3.6 million and $3.7 million for the six months ended June 30, 2026 and 2025, respectively.
The following table provides a comparative average balance sheet and net interest income analysis for the periods presented. The discussion following this table is based on these taxable-equivalent amounts.
1 Income on interest-earning assets has been computed on a FTE basis using the 21% federal income tax statutory rate.
2 Average balances include non-accrual loans and are net of unearned income.
The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for the six months ended June 30, 2026 compared to the same period of 2025:
1 The effect of changing volume and rate, which cannot be segregated, has been allocated entirely to the rate column.
2 Based on average balances and includes non-accrual loans and are net of unearned income.
Total FTE interest income increased $8.1 million during the six months ended June 30, 2026 compared to the same period of 2025 driven primarily by loan growth and new loans and investment securities funded at higher rates than those that paid off or matured. The loan growth was concentrated primarily in the commercial real estate portfolio. The repositioning of the investment securities portfolio completed during the three months ended December 31, 2025 contributed to higher yields on the investment securities portfolio.
Total interest expense decreased $364 thousand during the six months ended June 30, 2026 compared to the same period of 2025 driven primarily by lower average costs of interest-bearing deposits, primarily a result of attrition of higher cost money market and time deposits from the Acquisition, as well as lower average borrowings. The average cost of interest-bearing deposits was 1.36% for the six months ended June 30, 2026, a decrease of 8 bps compared to the same period of 2025.
Provision for Credit Losses and Unfunded Commitments
The provision for credit losses was $478 thousand for the six months ended June 30, 2026 compared to $5.7 million for the same period of 2025. The 2025 provision expense was primarily driven by a provision for credit losses of $5.5 million for acquired non-PCD loans, and the provision for 2026 was driven primarily by organic loan growth. The provision for unfunded commitments was a reversal of $120 thousand compared to a reversal of $834 thousand for the same period of 2025. The reversal of the provision for unfunded commitments for the six months ended June 30, 2025 was impacted by the incorporation of post-COVID data which resulted in lower loss rates utilized within the Bank’s ACL model. The Corporation assesses risks and reserves required compared with the balances in the ACL and unfunded commitments on a quarterly basis.
Noninterest Income
ACNB insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 4 shares, about $250) and open-market sales in 1 filing (1 insider, 1 trade date, 1,500 shares, about $96.5K). Net open-market shares: -1,496 (purchases minus sales); net value about -$96.3K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-15 | Newell Donna M |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Carson Elizabeth F. |
Grant/award | 158 | $65.29 | $10.3K |
| 2026-09-15 | Chiaruttini Alexandra C |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Stock Alan J |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Elsner Frank Iii |
Grant/award | 158 | $65.29 | $10.3K |
| 2026-09-15 | Elsner Frank Iii |
Open-market purchase | 4 | $65.29 | $250 |
| 2026-09-15 | Lott James J |
Grant/award | 158 | $65.29 | $10.3K |
| 2026-09-15 | Herring Todd L |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Seibel Donald Arthur Jr |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Chaney Kimberly S |
Grant/award | 158 | $65.29 | $10.3K |
| 2026-09-15 | Polli John M. |
Grant/award | 211 | $65.29 | $13.8K |
| 2026-09-15 | Draganosky Eugene J. |
Grant/award | 158 | $65.29 | $10.3K |
| 2026-08-07 | Seibel Donald Arthur Jr |
Open-market sale | 1,500 | $64.35 | $96.5K |
| 2026-06-15 | Carson Elizabeth F. |
Grant/award | 182 | $56.51 | $10.3K |
| 2026-06-15 | Seibel Donald Arthur Jr |
Grant/award | 243 | $56.51 | $13.8K |
| 2026-06-15 | Elsner Frank Iii |
Grant/award | 4 | $56.51 | $250 |
| 2026-06-15 | Elsner Frank Iii |
Grant/award | 182 | $56.51 | $10.3K |
| 2026-06-15 | Newell Donna M |
Grant/award | 243 | $56.51 | $13.8K |
| 2026-06-15 | Herring Todd L |
Grant/award | 243 | $56.51 | $13.8K |
| 2026-06-15 | Lott James J |
Grant/award | 182 | $56.51 | $10.3K |
| 2026-06-15 | Polli John M. |
Grant/award | 243 | $56.51 | $13.8K |
| 2026-06-15 | Chiaruttini Alexandra C |
Grant/award | 243 | $56.51 | $13.8K |
| 2026-06-15 | Chaney Kimberly S |
Grant/award | 182 | $56.51 | $10.3K |
| 2026-06-15 | Draganosky Eugene J. |
Grant/award | 182 | $56.51 | $10.3K |
| 2026-06-15 | Stock Alan J |
Grant/award | 243 | $56.51 | $13.8K |
Well-known investors holding ACNB (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 98,822 | $5.9M | 0.0% | Added 156% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 42,927 | $2.5M | 0.0% | Reduced 6% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 37,944 | $2.3M | 0.0% | Added 309% |
| Millennium Management (Israel Englander) | 2026-06-30 | 24,512 | $1.5M | 0.0% | Added 22% |
| Renaissance Technologies | 2026-06-30 | 24,356 | $1.4M | 0.0% | Reduced 1% |
| D. E. Shaw & Co. | 2026-06-30 | 7,371 | $437.7K | 0.0% | Added 18% |