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AC

ACNB CORP (ACNB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 GAAP results swung to a net loss of $0.272M and diluted EPS of $(0.03), driven by acquisition-related non-recurring items: a $4.2M net-of-tax provision on non‑PCD loans and $6.2M net-of-tax merger expenses tied to the Traditions Bancorp deal .
  • Total revenue (company-defined for efficiency ratio purposes) was $34.01M, with FTE net interest margin rising to 4.07% from 3.81% in Q4 2024 and 3.77% in Q1 2024; acquisition accounting accretion added $1.5M to NII .
  • Balance sheet expanded materially on the acquisition: loans reached $2.32B and deposits $2.54B at 3/31/25, up from $1.68B and $1.79B respectively at 12/31/24; TCE/TA was 9.33% .
  • The Board raised the quarterly dividend to $0.34 (from $0.32), marking the fifth straight annual increase; 75,872 shares were repurchased in Q1 .
  • Versus S&P Global consensus: EPS of $(0.03) was a significant miss vs $0.93*, while company-reported total revenue of $34.01M exceeded consensus $32.65M*; EPS miss was explained by one-time acquisition charges and credit provisioning .
    *Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Margin expansion: FTE net interest margin improved to 4.07% (vs 3.81% in Q4 and 3.77% in Q1 2024), aided by acquisition accretion of $1.5M and higher loan yields .
  • Strategic growth: Closed Traditions Bancorp acquisition on Feb 1, 2025; contributed $877.7M in assets, $648.5M loans, $741.5M deposits on day 1, expanding presence in York/Lancaster and mortgage capabilities ("Traditions Bank, A Division of ACNB Bank") .
  • Management tone: “The quarter represents a solid start to a new year and exciting opportunities for our future,” and “we are cautiously optimistic…in spite of ongoing tariff turmoil” — signaling confidence in integration and core franchise .

What Went Wrong

  • Non-recurring expense burden: Merger-related expenses surged to $8.0M in Q1 (vs $885K in Q4), driving an operating loss; intangible amortization also increased with acquired intangibles .
  • Credit provisioning: Provision for credit losses rose to $6.0M (including $5.5M initial ACL for non‑PCD), reflecting purchase accounting and credit build on acquired portfolios .
  • Asset quality headwinds: NPLs increased to $10.0M (0.43%) vs 0.40% in Q4 and 0.24% in Q1 2024, driven by one long-standing healthcare relationship and the acquisition .

Financial Results

Income Statement Summary and Margins

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Net Interest Income ($M)$20.593 $20.942 $21.112 $27.090
Noninterest Income ($M)$5.667 $6.833 $5.803 $7.184
Total Revenue ($M, company-defined)$26.201 $27.747 $26.943 $34.006
Noninterest Expense ($M)$17.662 $18.244 $18.388 $29.335
Net Income (Loss) ($M)$6.768 $7.204 $6.595 $(0.272)
Diluted EPS ($)$0.80 $0.84 $0.77 $(0.03)
FTE Net Interest Margin (%)3.77% 3.77% 3.81% 4.07%
Efficiency Ratio (%)66.18% 60.56% 63.83% 60.13%

EPS and Revenue vs S&P Global Consensus

MetricQ1 2024Q4 2024Q1 2025
EPS – Actual ($)$0.80 $0.77 $(0.03)
EPS – Consensus ($)$0.795*$0.855*$0.9275*
Result vs ConsensusIn line/slight missMiss vs GAAPMiss (one-time items)
Revenue – Actual ($M)$26.201 $26.943 $34.006
Revenue – Consensus ($M)$26.139*$26.400*$32.653*
Result vs ConsensusIn lineIn line/slight beatBeat
*Values retrieved from S&P Global.

Balance Sheet and Credit KPIs

KPIQ1 2024Q3 2024Q4 2024Q1 2025
Loans, Net of Unearned ($M)$1,664.980 $1,677.112 $1,682.910 $2,322.209
Deposits ($M)$1,835.224 $1,791.317 $1,792.501 $2,540.009
NPLs / Loans (%)0.24% 0.39% 0.40% 0.43%
ACL / Loans (%)1.21% 1.03% 1.03% 1.06%
Annualized Net Charge-offs (%)0.00% 0.01% 0.04% 0.01%
Tangible Book Value/Share ($)$26.70 $29.90 $29.51 $28.23
TCE / TA (%)9.61% 10.74% 10.72% 9.33%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ2 2025$0.32 (Q1 2025 paid) $0.34 (declared; payable Jun 13) Raised
Revenue/Margins/OpEx/Tax Rate2025Not providedNot providedMaintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document catalog; analysis reflects press releases and 8‑K materials [ListDocuments results].

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Acquisition/IntegrationAnnounced Traditions deal; highlighted strategic rationale Pending close; merger-related expenses in quarter Closed Feb 1; contributed $877.7M assets; accretion benefits; new directors added Integration executed; footprint expanded
Margin DynamicsNIM 3.77%; pressure from higher cost of funds and borrowings NIM improved to 3.81% q/q; promotional rates moderated NIM up to 4.07%; accretion added $1.5M Improving
Asset QualityNPLs up to 0.39% on healthcare relationship NPLs 0.40%; stable charge-offs NPLs 0.43%; acquisition plus same healthcare exposure Slight deterioration
Deposits & FundingDeposits down vs prior year; brokered time deposits used Issued brokered deposits; seasonal shifts Deposits up strongly with acquisition; continued brokered utilization Strong growth; mix shift
Macro/TariffsNot emphasizedNot emphasized“Cautiously optimistic…ongoing tariff turmoil” Emerging headwind commentary

Management Commentary

  • “The quarter represents a solid start to a new year and exciting opportunities for our future.” — James P. Helt, President & CEO .
  • “We are pleased and excited to welcome Traditions…We believe this combination…substantially enhance[s] our presence in York and Lancaster counties.” — James P. Helt .
  • “We are cautiously optimistic for the remainder of 2025 in spite of the uncertain economic headwinds as a result of ongoing tariff turmoil.” — James P. Helt .
  • Acquisition details: $83.8M transaction value; goodwill of $20.3M; core deposit intangible of $18.3M; loan fair value adjustments $24.5M; time deposit FV adjustments $226K .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available; no Q&A remarks found in the document set [ListDocuments results].
  • Clarifications provided in the press release: initial ACL setup for acquired loans ($5.5M non‑PCD via provision; $1.5M PCD via basis adjustment) and noted accretion effects on NII/NIM .

Estimates Context

  • EPS: Q1 2025 GAAP EPS of $(0.03) materially missed S&P Global consensus $0.9275*, due to $4.2M net-of-tax provision on non‑PCD loans and $6.2M net-of-tax merger expenses related to Traditions .
  • Revenue: Company-reported total revenue $34.01M exceeded S&P Global consensus $32.65M*, supported by higher NII and accretion; noninterest income rose to $7.18M on stronger mortgage gain and BOLI earnings .
  • Prior quarters: Q4 2024 GAAP EPS was $0.77 vs consensus $0.855*, reflecting merger-related expenses; Q1 2024 GAAP EPS of $0.80 was near consensus $0.795* .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • One-time acquisition and provisioning items masked strong underlying margin expansion; expect EPS normalization as merger costs roll off and accretion persists .
  • Balance sheet scale-up and market expansion (York/Lancaster) position ACNB for organic growth in loans/deposits; mortgage platform broadened (“Traditions Mortgage, A Division of ACNB Bank”) .
  • Credit profile warrants monitoring: NPLs edged up to 0.43% (healthcare relationship and acquisition); ACL/Loans at 1.06% provides coverage buffer .
  • Dividend increase to $0.34 underscores capital confidence amidst integration; repurchases continued (75,872 shares) .
  • Trading implications: near-term volatility likely as investors parse GAAP EPS impact of one-offs vs core margin improvement; revenue beat and NIM expansion are positive catalysts .
  • Medium-term thesis: accretion from fair value marks and broader footprint should enhance NII; watch funding mix (brokered/time deposits) and cost of funds trajectory .
  • Estimate calibration: Street likely to adjust EPS models to exclude discrete acquisition costs while factoring accretion and amortization of CDIs and loan/deposit marks .