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AC

ACNB CORP (ACNB)·Q3 2025 Earnings Summary

Executive Summary

  • Record net income of $14.9M and diluted EPS of $1.42, up 29% q/q and 69% y/y; FTE net interest margin expanded to 4.27% and efficiency ratio improved to 51.96% .
  • EPS beat consensus by $0.24 (+20.3%); total revenue exceeded consensus by ~$0.71M (+1.8%); both driven by lower deposit costs, stable asset quality, and operating leverage post-Traditions integration (EPS consensus $1.18*, revenue consensus $39.83M*) *.
  • Noninterest expense fell $3.0M q/q as merger-related costs tapered; deposit mix improved with reduced higher-cost money market/time balances, though total deposits declined $58.6M q/q .
  • Capital returns accelerated: repurchased 61,586 shares and raised the quarterly dividend 11.8% to $0.38 for Q4 2025, a visible positive catalyst for shareholder yield .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and operating leverage: FTE NIM rose to 4.27% (+6bps q/q), with cost of interest-bearing deposits down 7bps; efficiency ratio improved to 51.96% .
  • Stable credit metrics: nonperforming loans steady at 0.43% of loans; net charge-offs remained low at 0.02% annualized .
  • Management execution and integration: “record quarterly net income” and the acquisition “is meeting our expectations operationally, financially and culturally,” underscoring post-close synergy realization .

What Went Wrong

  • Sequential deposit decline: total deposits fell $58.6M q/q, driven by lower balances of higher-cost money market/time and a net decline of $20.0M short-term brokered deposits .
  • Modest loan contraction: total loans decreased $5.2M q/q, with declines in residential mortgage, C&I, construction, and consumer partially offset by CRE and HELOC growth .
  • Noninterest income down q/q by $271K, primarily from lower contingent insurance commissions and timing effects; equipment expense rebate helped, but insurance commissions fell $363K q/q .

Financial Results

MetricQ3 2024Q4 2024Q1 2025Q2 2025Q3 2025
Total revenue (NII + noninterest) ($USD Thousands)27,747 26,943 34,006 39,638 40,539
Net interest income ($USD Thousands)20,942 21,112 27,090 31,012 32,137
Noninterest income ($USD Thousands)6,833 5,803 7,184 8,682 8,411
Net income ($USD Thousands)7,204 6,595 (272) 11,648 14,870
Diluted EPS ($)0.84 0.77 (0.03) 1.11 1.42
Margins & RatiosQ3 2024Q4 2024Q1 2025Q2 2025Q3 2025
FTE Net interest margin (%)3.77 3.81 4.07 4.21 4.27
Efficiency ratio (%)60.56 63.83 60.13 56.21 51.96
ROAA (annualized, %)1.17 1.08 (0.04) 1.43 1.80
ROAE (annualized, %)9.63 8.57 (0.31) 11.96 14.66
Cost of funds (%)1.19 1.19 1.45 1.50 1.45
Loan Detail ($USD Thousands)Q3 2024Q2 2025Q3 2025
Commercial real estate957,904 1,254,733 1,263,896
Residential mortgage397,994 594,889 593,283
Commercial & industrial152,148 226,276 218,364
Home equity lines of credit84,316 122,546 125,839
Real estate construction75,953 135,023 126,451
Consumer9,773 10,253 10,144
Total loans, net of unearned1,677,112 2,341,816 2,336,605
Deposit Detail ($USD Thousands)Q3 2024Q2 2025Q3 2025
Noninterest-bearing demand463,501 568,301 581,697
Interest-bearing demand509,930 604,854 614,130
Money market249,197 531,738 493,430
Savings311,958 339,179 330,200
Time deposits256,731 480,469 446,439
Total deposits1,791,317 2,524,541 2,465,896
KPIsQ3 2024Q2 2025Q3 2025
Total nonperforming loans / total loans (%)0.39 0.43 0.43
Total nonperforming assets / total assets (%)0.29 0.31 0.31
Allowance for credit losses / loans (%)1.03 1.04 1.01
Net charge-offs to avg loans (annualized, %)0.01 0.01 0.02
Tangible common equity to tangible assets (%)10.74 9.65 10.14
Tangible book value per share ($)29.90 29.30 30.87

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly cash dividend per shareQ4 2025$0.34 $0.38 Raised
Revenue, margins, OpEx, tax rateN/ANo formal guidance disclosedNo formal guidance disclosedMaintained (no guidance)

Earnings Call Themes & Trends

Note: No earnings call transcript was available for Q3 2025; themes below reflect management commentary from press releases.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Acquisition integrationQ1: Closed Traditions; discrete charges from PCD provision and merger costs; expanded footprint . Q2: First full quarter combined; systems conversion completed .Integration “meeting our expectations operationally, financially and culturally”; record net income .Positive execution; synergy realization.
Asset qualityQ1: NPLs 0.43% due to a healthcare relationship and acquisition effects . Q2: NPLs steady at 0.43% .NPLs 0.43%; net charge-offs 0.02% annualized .Stable/benign.
NIM and funding costsQ1: NIM 4.07% (+26bps q/q) . Q2: NIM 4.21% (+14bps q/q) .NIM 4.27%; 7bps lower deposit cost from acquired higher-cost deposits running down .Improving mix-driven margin tailwind.
Capital returnsQ1: Repurchased 75,872 shares; dividend $0.34 . Q2: Repurchased 71,592 shares .Repurchased 61,586 shares; dividend raised to $0.38 for Q4 .Ongoing buybacks and dividend growth.
Macro toneQ1: “cautiously optimistic” amid “tariff turmoil” . Q2: “uncertain national economic challenges” .“Finish the year strong… managing through the economic cycles” .Cautious, execution-focused.

Management Commentary

  • “We are excited to report strong profitability and record quarterly net income for the third quarter of 2025… The Acquisition is meeting our expectations operationally, financially and culturally.” — James P. Helt, President & CEO .
  • “This quarter represented continued stable asset quality metrics, increased profitability and active capital management strategies including open market share repurchases and a strong dividend.” .
  • On year-end focus: “We now look to finish the year strong… continue to diversify our revenue streams with ACNB Insurance Services, ACNB Wealth Management and Traditions Mortgage.” .

Q&A Highlights

No Q3 2025 earnings call transcript was available, so Q&A highlights and guidance clarifications could not be assessed from a call record [ListDocuments: earnings-call-transcript returned 0].

Estimates Context

MetricConsensus (Q3 2025)Actual (Q3 2025)Surprise
EPS ($)1.18*1.42 +$0.24 / +20.3%*
Revenue ($USD)39,826,670*40,539,000 +$712,330 / +1.8%*
EPS - # of estimates4*——
Revenue - # of estimates3*——

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Strong beat-and-raise quarter: EPS materially ahead of consensus with continued NIM expansion and improved efficiency, signaling durable post-acquisition operating leverage *.
  • Credit remains benign despite portfolio growth; stable NPL ratio and low charge-offs support risk-adjusted earnings quality .
  • Funding mix optimization is underway: deliberate runoff of higher-cost acquired deposits reduced deposit costs and aided margin; watch near-term deposit trends given $58.6M q/q decline .
  • Shareholder returns accelerating: buybacks plus an 11.8% dividend increase to $0.38 support total yield and may attract income-focused investors .
  • Integration synergy tailwinds from Traditions (insurance, wealth, mortgage) broaden fee income, partially offsetting quarter-to-quarter variability in contingent commissions .
  • Near-term trading: positive sentiment from beats and capital return; monitor deposit flows and swap/borrowing activity for funding cost trajectory .
  • Medium-term thesis: community banking model with improved scale and diversified revenues, stable credit, and disciplined capital management positions ACNB for continued ROE expansion .