ACNB Corporation Reports $272,000 Net Loss in First Quarter of 2025

ACNB Corporation reported a net loss of $272,000 for the first quarter of 2025, a significant decline from the net income of $6.8 million recorded in the same period of 2024. This loss translates to a diluted loss per share of $0.03, compared to earnings of $0.80 per share a year earlier. The downturn in profitability was primarily attributed to merger-related expenses and a provision for credit losses associated with the recent acquisition of Traditions Bancorp, which closed on February 1, 2025. The provision for credit losses amounted to $6.0 million, reflecting the initial allowance for credit losses on acquired loans.

In terms of revenue, ACNB's net interest income increased to $27.1 million for the first quarter of 2025, up from $20.6 million in the prior year, driven largely by the acquisition. The net interest margin improved to 4.07%, a 30 basis point increase from 3.77% in the same quarter of 2024. The yield on average earning assets rose to 5.45%, reflecting a 71 basis point increase year-over-year, primarily due to the impact of acquisition accounting adjustments on loans. Average loans also saw a substantial increase of $499.3 million, largely due to the addition of Traditions' loan portfolio.

ACNB's total assets surged to $3.27 billion as of March 31, 2025, compared to $2.39 billion at the end of 2024, with the acquisition contributing $877.7 million in assets. The loan portfolio expanded significantly, with total loans net of unearned income reaching $2.32 billion, a 38% increase from the previous quarter. The increase was driven by strong growth in commercial real estate, residential mortgages, and commercial and industrial loans. The allowance for credit losses also rose to $24.6 million, or 1.06% of total loans, reflecting the initial provisions made for acquired loans.

On the operational front, ACNB's total deposits increased by 41.7% to $2.54 billion, bolstered by the acquisition of $741.5 million in deposits from Traditions. The bank's noninterest income also grew to $7.2 million, up from $5.7 million a year earlier, driven by increases in wealth management income and gains from mortgage loans held for sale. However, noninterest expenses rose sharply to $29.3 million, primarily due to merger-related costs and increased operational expenses following the acquisition.

Looking ahead, ACNB's management remains focused on integrating Traditions and leveraging the expanded asset base to drive future growth. The company anticipates that the acquisition will enhance its market presence and operational efficiencies, although it acknowledges the challenges posed by the current economic environment and potential impacts on credit quality.