ACNB Corporation Reports 2019 Second Quarter Financial Results

Highlights

• Net income for the three months ended June 30, 2019, totaled $6,466,000, which is an increase of $959,000 or 17.4% over comparable period results for the three months ended June 30, 2018.
• Net income for the six months ended June 30, 2019, totaled $12,330,000, which is an increase of $1,910,000 or 18.3% over comparable period results for the six months ended June 30, 2018.  
• As publicly announced on July 2, 2019, geographic expansion efforts are underway for ACNB Corporation through the acquisition of Frederick County Bancorp, Inc., headquartered in Frederick, Maryland, and its wholly-owned subsidiary, Frederick County Bank.
• Geographic expansion commenced in Lancaster County, Pennsylvania, with the opening of the Lancaster Loan Office in May 2019.
• Net interest income for the six months ended June 30, 2019, totaled $29,635,000.
• Total loans outstanding were $1,279,264,000 at June 30, 2019.  
• Total deposits were $1,377,277,000 at June 30, 2019.  
• Quarterly cash dividends paid to ACNB Corporation shareholders in the first half of 2019 totaled $3,383,000 or $0.48 per share. It was recently announced the cash dividend declared for the third quarter of 2019 is $0.25 per share for the second consecutive quarter.

GETTYSBURG, Pa., July 30, 2019 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB), financial holding company for ACNB Bank and Russell Insurance Group, Inc., announced financial results for the three months ended June 30, 2019, with net income of $6,466,000. Compared to net income of $5,507,000 for the three months ended June 30, 2018, this is an increase of $959,000 or 17.4% over comparable period results. Basic earnings per share was $0.92 and $0.78 for the three months ended June 30, 2019 and 2018, respectively, which is an increase of $0.14 or 17.9%.

The Corporation reported net income of $12,330,000 for the six months ended June 30, 2019. Compared to net income of $10,420,000 for the six months ended June 30, 2018, this is an increase of $1,910,000 or 18.3% over comparable period results. Basic earnings per share was $1.75 and $1.48 for the six months ended June 30, 2019 and 2018, respectively, which is an increase of $0.27 or 18.2%.

“ACNB Corporation’s strong earnings performance for the first half of 2019 was primarily the result of improved net interest income and attentive expense management,” said James P. Helt, ACNB Corporation President & CEO. “In working with customers, we continually strive to build relationships and find solutions as the keystone of ACNB Corporation’s strategic vision.”

“Solid banking and insurance operations have produced both current and future benefits for ACNB Corporation and its shareholders,” he continued. “Geographic expansion initiatives, including the opening of the Lancaster Loan Office in May 2019, and the anticipated acquisition of Frederick County Bancorp, Inc. and its wholly-owned subsidiary, Frederick County Bank, in the fourth quarter of 2019 or first quarter of 2020 further this vision.”

Revenues
Total revenues, defined as net interest income plus noninterest income, for the first two quarters of 2019 were $38,395,000, or a 7.6% increase over total revenues of $35,682,000 for the first two quarters of 2018. Total interest income for the first half of 2019 was $34,340,000, or an increase of 10.4%, as compared to total interest income of $31,119,000 for the first half of 2018.

Loans
Total loans outstanding were $1,279,264,000 at June 30, 2019. Loans outstanding decreased by $23,201,000, or 1.8%, due to seasonality and early payoffs since December 31, 2018, and increased by $32,466,000, or 2.6%, from June 30, 2018 to June 30, 2019. Year over year, loan growth is primarily in the commercial loan portfolio with a focus on asset quality and disciplined underwriting standards despite the intense competition in the Corporation’s market areas. As a result of normal and anticipated credit losses in the portfolio, the provision for loan losses for the first half of 2019 was $275,000. 

Deposits
Total deposits were $1,377,277,000 at June 30, 2019. Deposits increased by $29,185,000, or 2.2%, from December 31, 2018, and by $43,302,000, or 3.3%, from June 30, 2018 to June 30, 2019. Year over year, deposit growth is a function of pricing and the level of deposits held by existing and new customers, especially in the segment of municipal depositors.

Net Interest Income and Margin
Net interest income rose by $1,982,000 to $29,635,000 for the first six months of 2019, which is an increase of 7.2% compared to the first six months of 2018. The net interest margin for the first half of 2019 was 3.91%, compared to 3.78% for the same period of 2018. Both net interest income and the net interest margin were positively impacted by the organic growth in loans experienced from June 30, 2018 to June 30, 2019.

Noninterest Income
Noninterest income for the first six months of 2019 was $8,760,000, an increase of $731,000, or 9.1%, from the first six months of 2018. The increase includes both revenue from wealth management activities and insurance sales commissions, which grew 5.3% and 11.2%, respectively, from the first half of 2018 to the first half of 2019.

Noninterest Expense
Noninterest expense for the first six months of 2019 was $22,946,000, an increase of $709,000, or 3.2%, from the same period in 2018. The increase in noninterest expense is attributable to normal business operations and a growing community banking footprint, both balanced by management’s continued focus on expense control.

Dividends
Quarterly cash dividends paid to ACNB Corporation shareholders in the first half of 2019 totaled $3,383,000, or $0.48 per share. In the first half of 2018, ACNB Corporation paid $0.43 per share for total dividends paid to shareholders in the amount of $3,023,000.

About ACNB Corporation
ACNB Corporation, headquartered in Gettysburg, PA, is the $1.7 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and Russell Insurance Group, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 22 community banking offices, located in the four southcentral Pennsylvania counties of Adams, Cumberland, Franklin and York, as well as loan offices in Lancaster and York, PA, and Hunt Valley, MD. As a division of ACNB Bank, NWSB Bank serves its marketplace via a network of seven community banking offices located in Carroll County, MD. Russell Insurance Group, Inc., the Corporation’s insurance subsidiary, is a full-service agency with licenses in 44 states. The agency offers a broad range of property and casualty and group life and health insurance serving individual and commercial clients through office locations in Westminster, Germantown and Jarrettsville, MD. For more information regarding ACNB Corporation and its subsidiaries, please visit acnb.com.

SAFE HARBOR AND FORWARD-LOOKING STATEMENTS - Should there be a material subsequent event prior to the filing of the Quarterly Report on Form 10-Q with the Securities and Exchange Commission, the financial information reported in this press release is subject to change to reflect the subsequent event. In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: the effects of governmental and fiscal policies, as well as legislative and regulatory changes; the effects of new laws and regulations, specifically the impact of the Tax Cuts and Jobs Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act; impacts of the capital and liquidity requirements of the Basel III standards; the effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short- and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; the effects of economic conditions on current customers, specifically the effect of the economy on loan customers’ ability to repay loans; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; the effects of technology changes; volatilities in the securities markets; the effect of general economic conditions and more specifically in the Corporation’s market area; the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism; disruption of credit and equity markets; the ability to manage current levels of impaired assets; the loss of certain key officers; the ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the Securities and Exchange Commission, including the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K.