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AC

ACNB CORP (ACNB)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong profitability with GAAP diluted EPS of $1.11 and total revenue of $39.64M, supported by margin expansion to 4.21% FTE and higher noninterest income; this came after a Q1 GAAP loss driven by acquisition-related items .
  • Versus Wall Street, ACNB posted a significant beat on S&P Global normalized EPS and revenue: EPS 1.25 vs 1.15 consensus; revenue $40.25M vs $38.85M consensus, aided by acquisition accretion ($2.2M), stronger mortgage gains, and insurance commissions; GAAP EPS was lower due to $1.9M merger costs *.
  • Loan growth was modest QoQ (+$19.6M), asset quality remained solid (NPLs 0.43%), and deposits dipped slightly due to a single large 1031 exchange withdrawal; TCE/TA improved to 9.65% .
  • Capital actions are supportive: quarterly dividend raised to $0.34 (+6.3% YoY) and a new repurchase authorization up to 314,000 shares (~3% of shares), providing positive stock-reaction catalysts .

What Went Well and What Went Wrong

What Went Well

  • Net interest income rose to $31.0M and FTE NIM expanded to 4.21% (up 14 bps QoQ, 39 bps YoY), reflecting acquisition accretion and improved earning asset yields .
  • Noninterest income increased to $8.68M, led by mortgage gains ($1.58M) and insurance commissions ($2.91M), demonstrating diversification via Traditions Mortgage and ACNB Insurance .
  • Management completed system conversion post-Traditions deal and emphasized diversified revenue streams and strong capital/liquidity, signaling operating execution and confidence: “successfully completed our system conversion… diversify our revenue streams with ACNB Insurance… Wealth Management… Traditions Mortgage” .

What Went Wrong

  • GAAP EPS ($1.11) was weighed down by $1.94M merger-related expenses; while far below Q2 2024 EPS ($1.32), normalized EPS beat consensus, highlighting ongoing acquisition-related noise in GAAP results .
  • Deposits fell $15.5M QoQ due to the withdrawal of a significant 1031 exchange deposit, partially offset by $20M brokered time deposits—underscoring sensitivity to large commercial flows .
  • NPLs remained elevated vs year-ago (0.43% vs 0.19%) due to a long-standing healthcare relationship and acquisition effects, a continuing watch item despite stable QoQ metrics .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Interest Income ($USD Millions)$20.96 $27.09 $31.01
Noninterest Income ($USD Millions)$6.43 $7.18 $8.68
Total Revenue (Non-GAAP denominator) ($USD Millions)$27.39 $34.01 $39.64
Diluted EPS (GAAP) ($)$1.32 $(0.03) $1.11
FTE Net Interest Margin (%)3.82 4.07 4.21
Efficiency Ratio (%)58.61 60.13 56.21
ROAA (%) annualized1.86 (0.04) 1.43
ROAE (%) annualized16.12 (0.31) 11.96

Estimate comparison (S&P Global):

MetricQ2 2025 ConsensusQ2 2025 Actual (SPGI)Beat/Miss
EPS ($)1.1525*1.2535*Bold beat: +0.101*
Revenue ($USD)38,851,330*40,245,000*Bold beat: +3.6%*

Values retrieved from S&P Global.*

Segment/line-of-business detail (income composition):

Noninterest Income Component ($USD Thousands)Q2 2024Q1 2025Q2 2025
Insurance Commissions2,747 2,147 2,908
Wealth Management1,069 1,060 1,090
Service Charges on Deposits1,021 1,094 1,179
Gain from Mortgage Loans Held for Sale34 855 1,575
ATM Debit Card Charges841 831 905
BOLI Earnings493 580 627
Other221 349 342
Total Noninterest Income6,427 7,184 8,682

Key KPIs and balance sheet:

KPIQ2 2024Q1 2025Q2 2025
Total Loans ($USD Millions)$1,679.6 $2,322.2 $2,341.8
Deposits ($USD Millions)$1,838.6 $2,540.0 $2,524.5
Non-performing Loans / Total Loans (%)0.19 0.43 0.43
Allowance for Credit Losses ($USD Millions)$17.16 $24.65 $24.35
Borrowings ($USD Millions)$304.3 $299.5 $298.4
Tangible Common Equity / Tangible Assets (%)9.84 9.33 9.65
Stockholders’ Equity ($USD Millions)$289.3 $386.9 $395.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ3 2025 (payable Sep 15, 2025)$0.32 (same quarter prior year) $0.34 Raised
Share Repurchase AuthorizationOpen (announced Jun 18, 2025)Prior plans superseded Up to 314,000 shares (~3% of outstanding) New authorization

No explicit quantitative guidance provided for revenue, margins, OpEx, OI&E, or tax rate in Q2 materials .

Earnings Call Themes & Trends

No earnings-call-transcript document was available in the corpus for Q2 2025. Analysis below reflects management commentary from press releases and 8‑K filings.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Acquisition IntegrationQ4: Announced Traditions acquisition; merger-related costs; pending closing . Q1: Closed on Feb 1; contributed $877.7M assets; $648.5M loans; $741.5M deposits; accretion and initial ACL builds .System conversion complete; margin and revenue uplift; focus on diversified streams (Insurance, Wealth, Mortgage) .Positive integration progress; accretion benefits materializing.
Margin TrajectoryQ4 FTE NIM 3.81% (+4 bps QoQ) . Q1 FTE NIM 4.07% (+26 bps QoQ) .FTE NIM 4.21% (+14 bps QoQ; +39 bps YoY) .Improving with accretion and asset yields.
Asset QualityQ4 NPLs 0.40%; increase due to healthcare relationship . Q1 NPLs 0.43% .NPLs 0.43%; annualized net charge-offs 0.01% .Stable QoQ; elevated vs prior year; watch list unchanged.
Deposits & FundingQ4 modest changes; brokered deposits issued; deposit mix shifts . Q1 deposits +$747.5M (acquisition), time deposits up .QoQ decrease due to a large 1031 exchange withdrawal; partial offset via $20M brokered time deposits .Mixed; idiosyncratic large-client flows.
Noninterest Income DiversificationQ4 seasonal softness in insurance/wealth . Q1 increases in mortgage gains and BOLI .Strong mortgage gains and insurance commissions lift .Strengthening, diversified sources contributing.
Macro/TariffsQ1: “uncertain economic headwinds… ongoing tariff turmoil” .Q2: “uncertain national economic challenges” focus on profitability .Cautious macro tone persists.
Capital ManagementQ4: Dividend steady; limited repurchases . Q1: Dividend to $0.34; repurchased 75,872 shares .Dividend $0.34; repurchased 71,592 shares; new 314k share buyback plan .Proactive capital returns increasing.

Management Commentary

  • “We have successfully completed our system conversion enabling all ACNB Bank customers to bank at any convenient location.” — James P. Helt, President & CEO .
  • “We are focused on… diversifying our revenue streams with ACNB Insurance Services, our Wealth Management teams and Traditions Mortgage… strong capital position, ample liquidity, superior asset quality metrics and our focus on profitability…” — Helt .
  • Q1 framing the integration and macro backdrop: “cautiously optimistic… in spite of the uncertain economic headwinds as a result of ongoing tariff turmoil… fully committed to the continued growth and profitability…” — Helt .

Q&A Highlights

No Q2 2025 earnings call transcript was found; thus, no Q&A details available in the document set [List: 0 transcripts].

Estimates Context

  • Bold beat: S&P Global normalized EPS 1.25 vs 1.15 consensus; normalized revenue $40.25M vs $38.85M consensus. Drivers included acquisition accounting accretion ($2.2M in Q2 vs $1.5M in Q1), higher yields on loans, and stronger noninterest income (mortgage gains; insurance commissions) *.
  • GAAP comparisons: EPS $1.11 reflects $1.94M merger-related expense in Q2; normalized EPS likely excludes these costs, explaining the divergence between GAAP and SPGI normalized actuals .
  • Model implications: Analysts may refine NIM trajectory (4.21%), noninterest contributions (mortgage/insurance), and lower merger charges into 2H; deposit cost trends and large-client flows (1031) should be incorporated .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin expansion is intact and accelerating (4.21% FTE; +14 bps QoQ, +39 bps YoY), with acquisition accretion and loan yields supporting spread; this is a key near-term driver of earnings power .
  • Diversified fee momentum (mortgage gains $1.58M; insurance commissions $2.91M) reduces reliance on spread income and enhances resilience into uncertain macro conditions .
  • Asset quality remains solid with low charge-offs (0.01%) and stable NPL ratio (0.43%); the healthcare relationship remains the primary watch item but is well-contained as of Q2 .
  • Deposit dynamics warrant monitoring: a single 1031 exchange withdrawal drove QoQ declines; management offset with brokered time deposits—watch cost of funds and sensitivity to large accounts .
  • Capital return is stepping up: dividend raised to $0.34 and new buyback authorization (314k shares) can underpin the stock and provide flexibility amid earnings normalization post-merger .
  • GAAP EPS is temporarily dampened by merger costs ($1.94M in Q2); normalized performance beat Street—expect cleaner comparability as integration costs subside .
  • Near-term trading: positive narrative around NIM and fee strength, plus capital return, are constructive catalysts; medium-term thesis hinges on sustained margin, stable credit, and realization of revenue synergies from Traditions .