ACNB Corporation Reports 2024 Second Quarter Financial Results

ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $11.3 million, or $1.32 diluted earnings per share, for the three months ended June 30, 2024 compared to net income of $9.5 million, or $1.12 diluted earnings per share, for the three months ended June 30, 2023. Compared to the three months ended March 31, 2024, net income and diluted earnings per share for the three months ended June 30, 2024 increased $4.5 million and $0.52, respectively. The financial results for the three month period ended June 30, 2024 were impacted by a $3.2 million reversal of the provision for credit losses and unfunded commitments.

2024 Second Quarter Highlights

• Return on average assets was 1.86% and return on average equity was 16.12% for the three months ended June 30, 2024.
• Fully taxable equivalent (“FTE”) net interest margin was 3.82% for the three months ended June 30, 2024 compared to 3.77% for the three months ended March 31, 2024 and 4.11% for the three months ended June 30, 2023. This marked the first linked quarter increase in FTE net interest margin after 4 consecutive quarterly declines.
• Total loans were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023.
• Total non-performing loans to total loans, net of unearned income, was 0.19% at June 30, 2024 compared to 0.24% at March 31, 2024 and 0.23% at June 30, 2023. Net charge-offs to average loans outstanding (annualized) were 0.00% for both the three months ended June 30, 2024 and the three months ended March 31, 2024 compared to 0.02% for the three months ended June 30, 2023.
• Total deposits were $1.84 billion at June 30, 2024, an increase of $3.4 million compared to March 31, 2024. This marked the first linked quarter increase in deposits after 9 consecutive quarterly declines. Total deposits decreased $125.2 million compared to June 30, 2023.
• The loan to deposit ratio was 91.35% at June 30, 2024 and the ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.
• Tangible common equity to tangible assets ratio1 of 9.84% at June 30, 2024 compared to 9.61% at March 31, 2024 and 8.75% at June 30, 2023. The net unrealized loss on the available for sale securities portfolio was $52.7 million at June 30, 2024 compared to a net unrealized loss of $53.0 million at March 31, 2024 and a net unrealized loss of $66.1 million at June 30, 2023.
• ACNB and ACNB Bank capital levels remain well in excess of ACNB’s internal minimums and those required to be categorized as a well-capitalized institution by our bank regulators. ACNB’s overall liquidity position remains strong and stable.

“We are pleased to announce strong results for the second quarter of 2024 which reflect our continued focus on profitability. In spite of the continued economic challenges to the financial services industry our team remains focused on executing our strategic plan centered on our shareholders, customers and our communities,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.

“We continued to experience strong loan demand through the first half of the year combined with stellar asset quality metrics. Our ongoing efforts to diversify our revenue streams with ACNB Insurance Services and our Wealth Management teams continue to show positive momentum. Our net interest margin improved during the quarter, our non-interest expenses were down quarter over quarter and as result we are pleased to report solid operating results both the quarter and year to date.”

Mr. Helt continued, “As we look forward to the remainder of 2024, we remain cautiously optimistic that our strong capital position, ample liquidity, superior asset quality metrics and our focus on profitability will enable us to deliver on our commitment to our many different stakeholders.”

Net Interest Income and Margin

Net interest income for the three months ended June 30, 2024 totaled $21.0 million, a decrease of $1.0 million, or 4.7%, compared to the three months ended June 30, 2023 due to a decrease in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 was 3.82%, a decrease of 29 basis points from 4.11% for the three months ended June 30, 2023. The decrease in FTE net interest margin was driven primarily by an increase in long-term borrowings and promotional time deposit balances and costs. Total average borrowings increased $198.6 million for the three months ended June 30, 2024 compared to the same period in June 30, 2023. The average rate paid on total borrowings was 4.48% for the three months ended June 30, 2024, an increase of 133 basis points from the three months ended June 30, 2023. Total average interest-bearing deposits decreased $99.8 million, or 6.9%, for the three months ended June 30, 2024 compared to June 30, 2023; however, average time deposit balances increased $38.4 million due to the ongoing promotions. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 66 basis points from the three months ended June 30, 2023.

Net interest income increased by $371 thousand, or 1.8%, for the three months ended June 30, 2024 compared to the three months ended March 31, 2024 driven by an increase in the FTE net interest margin over the same period. The FTE net interest margin for the three months ended June 30, 2024 increased 5 basis points from 3.77% for the three months ended March 31, 2024. The increase in FTE net interest margin was driven primarily by an increase in loan yields, the recognition of nonaccrual interest income related to a specific large relationship, and the stabilization of average interest-bearing and noninterest-bearing demand deposit balances during the quarter. The average yield on loans was 5.53% for the three months ended June 30, 2024, an increase of 16 basis points from the three months ended March 31, 2024. Excluding nonaccrual interest income related to the payoff of a specific large relationship, the FTE net interest margin was 3.79%. Total average interest-bearing deposits increased $11.0 million, or 0.8%, for the three months ended June 30, 2024 compared to the prior three months. The average rate paid on interest-bearing deposits was 0.79% for the three months ended June 30, 2024, an increase of 14 basis points from the three months ended March 31, 2024. Total average noninterest-bearing demand deposits decreased $1.3 million, or 0.3%, for the three months ended June 30, 2024 compared to the prior three months.

Noninterest Income

Noninterest income for the three months ended June 30, 2024 was $6.4 million, an increase of $233 thousand, or 3.8%, from the three months ended June 30, 2023. Insurance commissions for the three months ended June 30, 2024 were $2.7 million, a decrease of $93 thousand from the three months ended June 30, 2023 driven primarily by lower contingent income partially offset by organic growth and timing of policy renewals in the current quarter. Wealth management income for the three months ended June 30, 2024 was $1.1 million, an increase of $90 thousand from the three months ended June 30, 2023 driven primarily by market appreciation and new business generation. Net gains on sales or calls of investment securities for the three months ended June 30, 2023 was a loss of $546 thousand compared to none for the three months ended June 30, 2024. Gain on assets held for sale for the three months ended June 30, 2023 was a gain of $323 thousand compared to none for the three months ended June 30, 2024.

Compared to the three months ended March 31, 2024, noninterest income for the three months ended June 30, 2024 increased $760 thousand, or 13.4%, driven primarily by increases in insurance commissions, as a result of the timing of policy renewals and contingent commissions received. Additionally, wealth management income increased driven primarily by market appreciation and new business generation.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2024 was $16.4 million, an increase of $110 thousand, or 0.7%, from the three months ended June 30, 2023. The increase was driven primarily by increases in salaries and employee benefits. Salaries and employee benefits expense increased $602 thousand driven primarily by higher incentive payment accruals and higher base wages. Partially offsetting this increase was lower other operating expenses of $329 thousand, driven primarily by a reduction in third-party vendor costs and a reduction in limited partnership investment losses occurring in the three months ended June 30, 2023. In addition, professional services declined $72 thousand, due to recruiting expenses incurred in the same period of the prior year. Marketing and corporate relations declined $71 thousand, due to rebranding expenses in the same period of the prior year.

Noninterest expense for the three months ended June 30, 2024 decreased $1.3 million, or 7.2%, from the three months ended March 31, 2024. The decrease was across all expense categories. Salaries and employee benefits decreased $742 thousand driven primarily by decreases in equity compensation, lower health insurance costs due to lower claims and employer insurance refunds, and lower payroll taxes compared to the prior quarter. Equipment expense decreased $159 thousand driven primarily by lower purchases of office equipment compared to the prior quarter. Net occupancy decreased $139 thousand driven primarily by lower snow removal, building maintenance, and utilities expenses compared to the prior quarter. Other expenses decreased $89 thousand driven primarily by lower bank insurance costs and timing of charitable donations. Professional services decreased $87 thousand driven primarily by lower loan collection costs.

Loans and Asset Quality

Total loans outstanding were $1.68 billion at June 30, 2024, an increase of $14.6 million, or 0.9%, from March 31, 2024 and an increase of $105.8 million, or 6.7%, from June 30, 2023. The increase in both periods was driven primarily by growth in the commercial real estate portfolio in our core markets. Growth in the commercial real estate portfolio was spread throughout the footprint and across various property types. Despite the intense competition in the Corporation’s Market Areas, management continues to focus on asset quality and disciplined underwriting standards in the loan origination process. The commercial real estate portfolio grew $51.4 million, or 5.7%, in 2024. The collateral for these loans is primarily spread across Pennsylvania and Maryland.

Asset quality metrics continue to be stable. The provision for credit losses was a reversal of $3.0 million and the provision for unfunded commitments was a reversal of $259 thousand for the three months ended June 30, 2024 compared to a provision for credit losses of $223 thousand and the provision for unfunded commitments was a reversal of $151 thousand for the three months ended March 31, 2024. For the three months ended June 30, 2023, there was a reversal to the provision for credit losses of $273 thousand and a $121 thousand provision for unfunded commitments. The decrease in the provision for credit losses and unfunded commitments for the three months ended June 30, 2024 compared to the prior quarter and the same quarter of 2023 was driven primarily by updated estimates utilized as input assumptions within the Current Expected Credit Loss “CECL” model calculation. These estimates, which were based on more current information available as of June 30, 2024, drive input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. Non-performing loans were $3.1 million, or 0.19%, of total loans at June 30, 2024 compared to $3.9 million, or 0.24%, of total loans at March 31, 2024 and $3.7 million, or 0.23%, of total loans at June 30, 2023. The decrease in non-performing loans at June 30, 2024 compared to the prior quarter was the result of one relationship payoff and several unrelated paydowns. Annualized net charge-offs for the three months ended June 30, 2024 and March 31, 2024 were 0.00% of total average loans compared to 0.02% for the three months ended June 30, 2023.

Deposits and Borrowings

Deposits totaled $1.84 billion at June 30, 2024, an increase of $3.4 million, or 0.2%, since March 31, 2024 and a decrease of $125.2 million, or 6.4%, from June 30, 2023. Included in total deposits were $1.36 billion interest-bearing deposits at June 30, 2024 which increased $23.2 million, or 1.7%, from March 31, 2024 and decreased by $35.2 million, or 2.5%, from June 30, 2023. Total noninterest-bearing deposits were $479.7 million at June 30, 2024 compared to $499.6 million at March 31, 2024 and $569.7 million at June 30, 2023. The ratio of uninsured and non-collateralized deposits to total deposits was approximately 18.68% at ACNB Bank at June 30, 2024.

Total borrowings were $304.3 million at June 30, 2024, an increase of $31.7 million, or 11.6%, compared to March 31, 2024 and an increase of $171.6 million, or 129.3%, compared to June 30, 2023. The average rate on total borrowings was 4.48% for the three months ended June 30, 2024 compared to 4.38% for the three months ended March 31, 2024 and 3.15% for the three months ended June 30, 2023.

Stockholders’ Equity, Dividends and Share Repurchases

Total stockholders’ equity was $289.3 million at June 30, 2024 compared to $279.9 million at March 31, 2024 and $257.1 million at June 30, 2023. Tangible book value2 per share was $27.82, $26.70 and $23.83 at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

As announced on Form 8-K on July 24, 2024, the Board of Directors approved and declared a regular quarterly cash dividend of $0.32 per share of ACNB Corporation common stock payable on September 13, 2024, to shareholders of record as of August 30, 2024. This per share amount reflects a $0.04, or 14.3%, increase over the same quarter of 2023.

ACNB did not repurchase any shares of ACNB common stock during the three months ended June 30, 2024.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.46 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, 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 26 community banking offices and three loan offices located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 46 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, MD, and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.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 national, regional and 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: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; banking instability caused by bank failures and continuing financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; 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-term 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; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; 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; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; 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. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of the Corporation's consolidated financial statements when filed with the SEC. Accordingly, the financial information in this announcement is subject to change. 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 SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

ACNB #2024-10July 24, 2024

ACNB Corporation Financial HighlightsSelected Financial Data by Respective Quarter End(Unaudited)
(Dollars in thousands, except per share data)	June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
BALANCE SHEET DATA
Assets	$	2,457,753			$	2,414,288			$	2,418,847			$	2,388,522			$	2,378,151
Investment securities		483,868				490,626				517,221				501,063				518,093
Total loans, net of unearned income		1,679,600				1,664,980				1,627,988				1,615,966				1,573,817
Allowance for credit losses		(17,162)				(20,172	)			(19,969	)			(19,264	)			(19,148	)
Deposits		1,838,588				1,835,224				1,861,813				1,951,359				1,963,754
Allowance for unfunded commitments		1,310				1,569				1,719				1,962				2,132
Borrowings		304,286				272,605				252,174				153,388				132,703
Stockholders’ equity		289,331				279,920				277,461				255,638				257,069
INCOME STATEMENT DATA
Interest and dividend income	$	26,869			$	25,974			$	25,284			$	24,234			$	23,213
Interest expense		5,905				5,381				3,791				2,489				1,223
Net interest income		20,964				20,593				21,493				21,745				21,990
(Reversal of ) provision for credit losses		(2,990	)			223				786				250				(273	)
(Reversal of) provision for unfunded commitments		(259	)			(151	)			(242	)			(171	)			121
Net interest income after provisions for credit losses and unfunded commitments		24,213				20,521				20,949				21,666				22,142
Noninterest income		6,427				5,667				970				6,297				6,194
Noninterest expenses		16,391				17,662				17,173				16,336				16,281
Income before income taxes		14,249				8,526				4,746				11,627				12,055
Provision for income taxes		2,970				1,758				649				2,583				2,531
Net income	$	11,279			$	6,768			$	4,097			$	9,044			$	9,524
PROFITABILITY RATIOS
Total loans, net of unearned income to deposits		91.35	%			90.72	%			87.44	%			82.81	%			80.14	%
Return on average assets (annualized)		1.86				1.12				0.68				1.52				1.62
Return on average equity (annualized)		16.12				9.76				6.09				13.84				14.74
Efficiency ratio3		58.69				66.18				62.48				56.97				55.52
FTE Net interest margin		3.82				3.77				3.93				4.01				4.11
Yield on average earning assets		4.89				4.74				4.62				4.46				4.33
Yield on investment securities		2.65				2.70				2.36				2.24				2.24
Yield on total loans		5.53				5.37				5.29				5.16				5.05
Cost of funds		1.12				1.02				0.71				0.47				0.23
PER SHARE DATA
Diluted earnings per share	$	1.32			$	0.80			$	0.48			$	1.06			$	1.12
Cash dividends paid per share		0.32				0.30				0.30				0.28				0.28
Tangible book value per share3		27.82				26.70				26.44				23.80				23.83
Tangible book value per share3 (excluding AOCI)4		33.28				32.21				31.74				31.43				30.64
CAPITAL RATIOS5
Tier 1 leverage ratio		12.25	%			11.91	%			11.57	%			11.97	%			11.79	%
Common equity tier 1 ratio		15.78				15.40				15.16				15.30				15.38
Tier 1 risk based capital ratio		16.07				15.69				15.45				15.59				15.72
Total risk based capital ratio		17.86				17.68				17.41				17.49				17.67
CREDIT QUALITY
Net charge-offs to average loans outstanding (annualized)		0.00	%			0.00	%			0.02	%			0.03	%			0.02	%
Total non-performing loans to total loans, net of unearned income6		0.19				0.24				0.26				0.22				0.23
Total non-performing assets to total assets7		0.14				0.18				0.19				0.17				0.17
Allowance for credit losses to total loans, net of unearned income		1.02				1.21				1.23				1.19				1.22

Consolidated Balance Sheet(Unaudited)
(Dollars in thousands, except per share data)		June 30, 2024				March 31, 2024				December 31, 2023
ASSETS
Cash and due from banks		$	26,681				17,395			$	21,442
Interest-bearing deposits with banks			59,593				35,740				44,516
Total Cash and Cash Equivalents			86,274				53,135				65,958
Equity securities with readily determinable fair values			919				918				928
Investment securities available for sale, at estimated fair value			418,364				425,114				451,693
Investment securities held to maturity, at amortized cost (fair value $57,026, $58,084, and $59,057)			64,585				64,594				64,600
Loans held for sale			1,801				88				280
Total loans, net of unearned income			1,679,600				1,664,980				1,627,988
Less: Allowance for credit losses			(17,162	)			(20,172	)			(19,969	)
Loans, net			1,662,438				1,644,808				1,608,019
Premises and equipment, net			25,760				25,916				26,283
Right of use asset			2,278				2,447				2,615
Restricted investment in bank stocks			11,853				10,877				9,677
Investment in bank-owned life insurance			80,841				80,348				79,871
Investments in low-income housing partnerships			940				971				1,003
Goodwill			44,185				44,185				44,185
Intangible assets, net			8,446				8,761				9,082
Foreclosed assets held for resale			406				467				467
Other assets			48,663				51,659				54,186
Total Assets		$	2,457,753			$	2,414,288			$	2,418,847
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing		$	479,726			$	499,583			$	500,332
Interest-bearing			1,358,862				1,335,641				1,361,481
Total Deposits			1,838,588				1,835,224				1,861,813
Short-term borrowings			48,974				17,303				56,882
Long-term borrowings			255,312				255,302				195,292
Lease liability			2,278				2,447				2,615
Allowance for unfunded commitments			1,310				1,569				1,719
Other liabilities			21,960				22,523				23,065
Total Liabilities			2,168,422				2,134,368				2,141,386
Stockholders’ Equity:
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively			—				—				—
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,934,495, 8,928,441, and 8,896,119 shares issued; 8,545,629, 8,539,575, and 8,511,453 shares outstanding at June 30, 2024, March 31, 2024 and December 31, 2023, respectively			22,330				22,315				22,231
Treasury stock, at cost; 388,866, 388,866, and 384,666 shares at June 30, 2024, March 31, 2024 and December 31, 2023, respectively			(11,101	)			(11,101	)			(10,954	)
Additional paid-in capital			98,230				97,818				97,602
Retained earnings			226,271				217,712				213,491
Accumulated other comprehensive loss			(46,399	)			(46,824	)			(44,909	)
Total Stockholders’ Equity			289,331				279,920				277,461
Total Liabilities and Stockholders’ Equity		$	2,457,753			$	2,414,288			$	2,418,847

Consolidated Income Statements(Unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands, except per share data)		2024				2023				2024				2023
INTEREST AND DIVIDEND INCOME
Loans, including fees
Taxable	$	22,675			$	18,947			$	44,145			$	37,845
Tax-exempt		313				352				632				708
Investment securities:
Taxable		2,665				2,688				5,576				5,974
Tax-exempt		284				285				568				599
Dividends		248				51				488				92
Other		684				890				1,434				1,904
Total Interest and Dividend Income		26,869				23,213				52,843				47,122
INTEREST EXPENSE
Deposits		2,643				486				4,803				959
Short-term borrowings		304				108				643				125
Long-term borrowings		2,958				629				5,840				956
Total Interest Expense		5,905				1,223				11,286				2,040
Net Interest Income		20,964				21,990				41,557				45,082
Reversal of credit losses		(2,990	)			(273	)			(2,767	)			(176	)
(Reversal of) provision for unfunded commitments		(259	)			121				(410	)			397
Net Interest Income after Provisions for Credit Losses and Unfunded Commitments		24,213				22,142				44,734				44,861
NONINTEREST INCOME
Insurance commissions		2,747				2,840				4,862				4,742
Service charges on deposits		1,021				989				2,012				1,951
Wealth management		1,069				979				2,031				1,819
ATM debit card charges		841				834				1,660				1,657
Earnings on investment in bank-owned life insurance		493				484				970				926
Gain from mortgage loans held for sale		34				14				82				31
Net (losses) gains on sales or calls of investment securities		—				(546	)			69				(739	)
Net gains (losses) on equity securities		1				(15	)			(9	)			5
Gain on assets held for sale		—				323				—				323
Other		221				292				417				463
Total Noninterest Income		6,427				6,194				12,094				11,178
NONINTEREST EXPENSES
Salaries and employee benefits		10,426				9,824				21,594				20,266
Equipment		1,570				1,623				3,299				3,230
Net occupancy		991				1,002				2,121				2,039
Professional services		529				601				1,145				983
FDIC and regulatory		348				295				723				544
Other tax		356				305				726				642
Intangible assets amortization		315				360				636				720
Supplies and postage		183				198				374				404
Marketing and corporate relations		88				159				176				313
Other		1,585				1,914				3,259				3,422
Total Noninterest Expenses		16,391				16,281				34,053				32,563
Income Before Income Taxes		14,249				12,055				22,775				23,476
Provision for income taxes		2,970				2,531				4,728				4,929
Net Income	$	11,279			$	9,524			$	18,047			$	18,547
PER SHARE DATA
Basic earnings	$	1.32			$	1.12			$	2.12			$	2.18
Diluted earnings	$	1.32			$	1.12			$	2.12			$	2.17

Average Balances, Income and Expenses, Yields and Rates
		Three months ended											Three months ended											Three months ended											Three months ended											Three months ended
		June 30, 2024											March 31, 2024											December 31, 2023											September 30, 2023											June 30, 2023
(Dollars in thousands)		AverageBalance				Interest8				Yield/Rate			AverageBalance				Interest8				Yield/Rate			AverageBalance				Interest8				Yield/Rate			AverageBalance				Interest8				Yield/Rate			AverageBalance				Interest8				Yield/Rate
ASSETS
Loans:
Taxable		$	1,612,380			$	22,675			5.66	%		$	1,573,109			$	21,470			5.49	%		$	1,559,411			$	21,303			5.42	%		$	1,520,134			$	20,285			5.29	%			1,463,967				18,946			5.19	%
Tax-exempt			64,276				396			2.48				65,825				404			2.47				69,058				425			2.44				73,995				457			2.45				75,670				446			2.36
Total Loans9			1,676,656				23,071			5.53				1,638,934				21,874			5.37				1,628,469				21,728			5.29				1,594,129				20,742			5.16				1,539,637				19,392			5.05
Investment Securities:
Taxable			442,390				2,913			2.65				467,466				3,151			2.71				453,713				2,669			2.33				466,402				2,581			2.20				498,401				2,739			2.20
Tax-exempt			54,644				359			2.64				54,740				359			2.64				54,835				361			2.61				55,027				359			2.59				55,588				361			2.60
Total Investments10			497,034				3,272			2.65				522,206				3,510			2.70				508,548				3,030			2.36				521,429				2,940			2.24				553,989				3,100			2.24
Interest-bearing deposits with banks			50,851				684			5.41				54,156				750			5.57				50,225				691			5.46				53,324				723			5.38				71,040				890			5.03
Total Earning Assets			2,224,541				27,027			4.89				2,215,296				26,134			4.74				2,187,242				25,449			4.62				2,168,882				24,405			4.46				2,164,666				23,382			4.33
Cash and due from banks			21,041											20,540											21,578											23,783											22,215
Premises and equipment			25,903											26,102											25,983											25,980											26,420
Other assets			187,937											187,075											191,329											165,821											163,783
Allowance for credit losses			(20,124	)										(19,963	)										(19,232	)										(19,101	)										(19,458	)
Total Assets		$	2,439,298										$	2,429,050										$	2,406,900										$	2,365,365										$	2,357,626
LIABILITIES
Interest-bearing demand deposits		$	513,163			$	275			0.22	%		$	512,701			$	264			0.21	%		$	560,510			$	275			0.19	%		$	571,314			$	185			0.13	%		$	577,480			$	150			0.10	%
Money markets			248,191				613			0.99				248,297				536			0.87				274,226				707			1.02				245,899				312			0.50				261,560				100			0.15
Savings deposits			327,274				30			0.04				335,215				29			0.03				348,244				28			0.03				366,398				30			0.03				387,847				31			0.03
Time deposits			263,045				1,725			2.64				244,481				1,331			2.19				221,778				798			1.43				212,159				401			0.75				224,608				205			0.37
Total Interest-Bearing Deposits			1,351,673				2,643			0.79				1,340,694				2,160			0.65				1,404,758				1,808			0.51				1,395,770				928			0.26				1,451,495				486			0.13
Short-term borrowings			37,256				304			3.28				47,084				339			2.90				56,872				334			2.33				66,942				439			2.60				34,080				108			1.27
Long-term borrowings			255,305				2,958			4.66				248,701				2,882			4.66				137,026				1,649			4.77				94,554				1,122			4.71				59,901				629			4.21
Total Borrowings			292,561				3,262			4.48				295,785				3,221			4.38				193,898				1,983			4.06				161,496				1,561			3.83				93,981				737			3.15
Total Interest-Bearing Liabilities			1,644,234				5,905			1.44				1,636,479				5,381			1.32				1,598,656				3,791			0.94				1,557,266				2,489			0.63				1,545,476				1,223			0.32
Noninterest-bearing demand deposits			485,351											486,648											519,797											541,995											550,581
Other liabilities			28,348											26,904											21,648											6,820											2,330
Stockholders’ Equity			281,365											279,019											266,799											259,284											259,239
Total Liabilities and Stockholders’ Equity		$	2,439,298										$	2,429,050										$	2,406,900										$	2,365,365										$	2,357,626
Taxable Equivalent Net Interest Income							21,122											20,753											21,658											21,916											22,159
Taxable Equivalent Adjustment							(158	)										(160	)										(165	)										(171	)										(169	)
Net Interest Income						$	20,964										$	20,593										$	21,493										$	21,745										$	21,990
Cost of Funds										1.12	%										1.02	%										0.71	%										0.47	%										0.23	%
FTE Net Interest Margin										3.82	%										3.77	%										3.93	%										4.01	%										4.11	%

Average Balances, Income and Expenses, Yields and Rates
	Six Months Ended June 30, 2024											Six Months Ended June 30, 2023
(Dollars in thousands)	AverageBalance				Interest11				Yield/Rate			AverageBalance				Interest11			Yield/Rate
ASSETS
Loans:
Taxable	$	1,592,745			$	44,145			5.57	%		$	1,459,455			$	37,844		5.23	%
Tax-exempt		65,050				800			2.47				76,501				897		2.36
Total Loans12		1,657,795				44,945			5.45				1,535,956				38,741		5.09
Investment Securities:
Taxable		454,928				6,064			2.68				527,576				6,066		2.32
Tax-exempt		54,692				719			2.64				55,449				758		2.76
Total Investments13		509,620				6,783			2.68				583,025				6,824		2.36
Interest-bearing deposits with banks		52,504				1,434			5.49				80,958				1,904		4.74
Total Earning Assets		2,219,919				53,162			4.82				2,199,939				47,469		4.35
Cash and due from banks		20,790											30,189
Premises and equipment		26,051											26,637
Other assets		187,458											160,316
Allowance for credit losses		(20,044	)										(18,658	)
Total Assets	$	2,434,174										$	2,398,423
LIABILITIES
Interest-bearing demand deposits	$	512,932			$	540			0.21	%		$	584,686			$	331		0.11	%
Money markets		248,244				1,149			0.93				285,996				139		0.10
Savings deposits		331,244				58			0.04				395,590				64		0.03
Time deposits		253,763				3,056			2.42				246,536				425		0.35
Total Interest-Bearing Deposits		1,346,183				4,803			0.72				1,512,808				959		0.13
Short-term borrowings		42,170				643			3.07				34,834				125		0.72
Long-term borrowings		252,004				5,840			4.66				43,597				956		4.42
Total Borrowings		294,174				6,483			4.43				78,431				1,081		2.78
Total Interest-Bearing Liabilities		1,640,357				11,286			1.38				1,591,239				2,040		0.26
Noninterest-bearing demand deposits		485,999											554,340
Other liabilities		27,626											(2,303	)
Stockholders’ Equity		280,192											255,147
Total Liabilities and Stockholders’ Equity	$	2,434,174										$	2,398,423
Taxable Equivalent Net Interest Income						41,876
Taxable Equivalent Adjustment						(319	)
Net Interest Income					$	41,557
Cost of Funds									1.07	%									0.19	%
FTE Net Interest Margin									3.79	%									4.16	%

Non-GAAP Reconciliation

Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.

		Three Months Ended
(Dollars in thousands, except per share data)		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Tangible book value per share
Stockholders’ equity		$	289,331			$	279,920			$	277,461			$	255,638			$	257,069
Less: Goodwill and intangible assets			(52,631	)			(52,946	)			(53,267	)			(53,619	)			(53,797	)
Tangible common stockholders’ equity (numerator)		$	236,700			$	226,974			$	224,194			$	202,019			$	203,272
Shares outstanding, less unvested shares, end of period (denominator)			8,507,191				8,501,137				8,478,460				8,488,446				8,528,782
Tangible book value per share		$	27.82			$	26.70			$	26.44			$	23.80			$	23.83
Tangible book value per share (excluding AOCI)
Tangible common stockholders’ equity		$	236,700			$	226,974			$	224,194			$	202,019			$	203,272
Less: AOCI			(46,399	)			(46,824	)			(44,909	)			(64,767	)			(58,052	)
Tangible equity (excluding AOCI)		$	283,099			$	273,798			$	269,103			$	266,786			$	261,324
Tangible book value per share (excluding AOCI)		$	33.28			$	32.21			$	31.74			$	31.43			$	30.64
Tangible common equity to tangible assets (TCE/TA Ratio)
Tangible common stockholders’ equity (numerator)		$	236,700			$	226,974			$	224,194			$	202,019			$	203,272
Total assets		$	2,457,753			$	2,414,288			$	2,418,847			$	2,388,522			$	2,378,151
Less: Goodwill and intangible assets			(52,631	)			(52,946	)			(53,267	)			(53,619	)			(53,797	)
Total tangible assets (denominator)		$	2,405,122			$	2,361,342			$	2,365,580			$	2,334,903			$	2,324,354
Tangible common equity to tangible assets			9.84	%			9.61	%			9.48	%			8.65	%			8.75	%
Efficiency Ratio
Noninterest expense		$	16,391			$	17,662			$	17,173			$	16,336			$	16,281
Less: Intangible amortization			315				321				352				352				360
Less: Loss on MD Title Investment			—				—				—				—				142
Noninterest expense (numerator)		$	16,076			$	17,341			$	16,821			$	15,984			$	15,779
Net interest income		$	20,964			$	20,593			$	21,493			$	21,745			$	21,990
Plus: Total noninterest income			6,427				5,667				970				6,297				6,194
Less: Net gains (losses) on sales or calls of securities			—				69				(4,501	)			—				(546	)
Less: Net gains (losses) on equity securities			1				(10	)			40				(27	)			(15	)
Less: Gain on assets held for sale			—				—				—				14				323
Total revenue (denominator)		$	27,390			$	26,201			$	26,924			$	28,055			$	28,422
Efficiency ratio			58.69	%			66.18	%			62.48	%			56.97	%			55.52	%

1 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.2 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.3 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.4 Accumulated Other Comprehensive Income (Loss).5 Regulatory capital ratios as of June 30, 2024 are preliminary. 6 Non-performing Loans consists of loans on nonaccrual status and loans greater than ninety days past due and still accruing interest.7 Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.8 Income on interest-earning assets has been computed on a fully taxable equivalent (FTE) basis using the 21% federal income tax statutory rate.9 Average balances include non-accrual loans and are net of unearned income.10 Average balances of investment securities is computed at fair value.11 Income on interest-earning assets has been computed on a fully taxable equivalent basis (FTE) using the 21% federal income tax statutory rate.12 Average balances include non-accrual loans and are net of unearned income.13 Average balances of investment securities is computed at fair value.

Contact:	Jason H. Weber
	EVP/Treasurer &
	Chief Financial Officer
	717.339.5090
	[e-mail]