Market Overview

ACNB Corporation Reports Record Second Quarter 2018 Earnings


ACNB Corporation (NASDAQ:ACNB) today announced record financial results
for the six months ended June 30, 2018, with net income of $10,420,000.
Compared to net income of $5,359,000 for the six months ended June 30,
2017, this is an increase of $5,061,000 or 94% over comparable period
results. Basic earnings per share was $1.48 and $0.88 for the six months
ended June 30, 2018 and 2017, respectively, which is an increase of 68%.

"ACNB Corporation's financial results for the first half of 2018 were
strong, again validating the success of the organization's initiatives
and focus on prudent growth through both organic and inorganic
strategies. This month marks the one-year anniversary of the acquisition
of New Windsor Bancorp, Inc. and the expansion of community banking
operations in the northern Maryland market," said James P. Helt, ACNB
Corporation President & CEO. "Building on our base in Maryland, ACNB
Corporation and ACNB Bank continue to experience positive momentum in
2018 with geographic expansion through the hiring of experienced
commercial lenders serving the Maryland counties of Baltimore and

"Additionally, on June 20, Central Penn Business Journal named
ACNB Corporation to its 22nd annual list of the Top 50 Fastest Growing
Companies in Central Pennsylvania. This is the first time ACNB
Corporation has achieved this recognition, which is a testament to the
contributions of many at our subsidiaries of ACNB Bank and Russell
Insurance Group, Inc.," he continued.


Total revenues for the first two quarters of 2018 were $39,148,000, or a
39% increase over total revenues of $28,105,000 for the first two
quarters of 2017. Total interest income for the first half of 2018 was
$31,119,000, or an increase of 45%, as compared to total interest income
of $21,495,000 for the first half of 2017.


Total loans outstanding were $1,246,798,000 at June 30, 2018. Loans
outstanding increased slightly by $2,628,000, or less than 1%, since
December 31, 2017, and increased by $277,123,000, or 29%, from June 30,
2017 to June 30, 2018. The increase from June 30, 2017 was primarily due
to the fair value of loans acquired from New Windsor Bancorp, Inc. (New
Windsor) of $263,450,000 and the balance was the net increase of new
loans after payoffs and paydowns. Organic loan growth, which excludes
the loans acquired through New Windsor, was $13,673,000, or 1%, from
June 30, 2017 to June 30, 2018. As a result of normal and anticipated
credit losses in the portfolio, the provision for loan losses for the
first two quarters of 2018 was $570,000.


Total deposits were $1,333,975,000 at June 30, 2018. Deposits increased
by $35,483,000, or 3%, from December 31, 2017, and $333,821,000, or 33%,
from June 30, 2017 to June 30, 2018. Organic deposit growth, which
excludes the deposits acquired through New Windsor of $293,333,000, was
$40,488,000, or 4%, from June 30, 2017 to June 30, 2018.

Net Interest Income and Margin

Net interest income rose by $8,356,000 to $27,653,000 for the first six
months of 2018, which is an increase of 43% compared to the first six
months of 2017. The net interest margin for the first half of 2018 was
3.81%, compared to 3.38% for the same period of 2017. The increases in
net interest income and net interest margin for the first six months of
2018 were mainly due to the impact of the New Windsor acquisition and
related purchase accounting adjustments.

Noninterest Income

Noninterest income for the first six months of 2018 was $8,029,000, an
increase of $1,419,000, or 21%, from the first six months of 2017. The
increase includes both revenue from fiduciary, investment management and
brokerage activities and commissions from insurance sales, which grew
23% and 7%, respectively, from the first half of 2017 to the first half
of 2018.

Noninterest Expense

Noninterest expense for the first six months of 2018 was $22,237,000, an
increase of $3,603,000, or 19%, from the same period in 2017. Of this
increased amount, salaries and employee benefits expense rose by
$1,628,000 from the first six months of 2017 to the first six months of
2018, primarily attributable to higher staffing levels resulting from
the New Windsor acquisition and additional staff hired to support
revenue generation across all business lines.


Quarterly cash dividends paid to ACNB Corporation shareholders in the
first half of 2018 totaled $3,023,000, or $0.43 per share. In the first
half of 2017, ACNB Corporation paid a $0.40 dividend per share for total
dividends paid to shareholders in the amount of $2,426,000. A portion of
the increase in total dividends paid to shareholders in the first half
of 2018 was a result of new shares issued effective with the acquisition
of New Windsor effective July 1, 2017. In addition, for the second
quarter of 2018, there was a 15% increase in the quarterly dividend
amount paid from $0.20 to $0.23 per share.

ACNB Corporation Strategic Initiatives

Speaking on behalf of ACNB Corporation, President & CEO James P. Helt
stated, "The results for the first six months of 2018 indicate that our
strategic initiatives are bearing fruit for our shareholders. These
initiatives are ongoing as we continue our efforts to enhance our
product lines for customers to position the company for the dynamic
changes in the financial services industry. We believe that we have the
management breadth and depth, products and services, delivery channels,
and financial foundation that will allow ACNB Corporation and its
subsidiaries to continue to deliver sound results and enhanced value for
our shareholders, while meeting the challenges of a continuously
changing business environment. We believe we are positioned for
long-term success."

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $1.6 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. In addition, NWSB Bank, a division of ACNB Bank, serves its
marketplace via a network of seven community banking offices located in
Carroll County, MD. The other wholly-owned subsidiary of ACNB
Corporation is Russell Insurance Group, Inc., its insurance subsidiary.
Russell Insurance Group, Inc., a full-service agency with licenses in 44
states, offers a broad range of commercial and personal insurance lines
through offices in Westminster, Carroll County, and Germantown,
Montgomery County, MD. For more information regarding ACNB Corporation
and its subsidiaries, please visit

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 new 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 deterioration and the prolonged economic malaise 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.



Financial Highlights


Unaudited Consolidated Condensed Statements of Income

Dollars in thousands, except per share data


Three Months Ended June 30,

  Six Months Ended June 30,
2018   2017   2018   2017
Interest income $


$ 10,962 $ 31,119 $ 21,495
Interest expense   1,773     1,131   3,466       2,198
Net interest income 14,091 9,831 27,653 19,297
Provision for loan losses   320       570      
Net interest income after provision for loan losses 13,771 9,831 27,083 19,297
Other income 4,317 3,528 8,029 6,610
Merger-related expenses 208 370
Other expenses   11,251     9,426   22,237       18,264
Income before income taxes 6,837 3,725 12,875 7,273
Provision for income taxes   1,330     1,003   2,455       1,914
Net income $ 5,507   $ 2,722   $ 10,420       $ 5,359
Basic earnings per share $ 0.78   $ 0.45   $ 1.48       $ 0.88

Unaudited Selected Financial Data

Dollars in thousands, except per share data

June 30, 2018 June 30, 2017 December 31, 2017
Assets $ 1,623,342 $ 1,261,936 $ 1,595,432
Securities $ 194,085 $ 183,807 $ 203,880
Loans, total $ 1,246,798 $ 969,675 $ 1,244,170
Allowance for loan losses $ 13,143 $ 14,148 $ 13,976
Deposits $ 1,333,975 $ 1,000,154 $ 1,298,492
Borrowings $ 116,234 $ 126,687 $ 131,508
Stockholders' equity $ 160,307 $ 123,844 $ 153,966
Basic earnings per share $ 1.48 $ 0.88 $ 1.50
Cash dividends paid per share $ 0.43 $ 0.40 $ 0.80
Book value per share $ 22.77 $ 20.38 $ 21.92
Number of common shares outstanding 7,038,768 6,076,899 7,023,658
Return on average assets 1.31 % 0.87 % 0.69 %
Return on average equity 13.49 % 8.86 % 7.12 %
Non-performing loans to total loans 0.49 % 0.94 % 0.63 %
Net charge-offs to average loans outstanding 0.11 % 0.00 % 0.02 %
Allowance for loan losses to total loans 1.05 % 1.46 % 1.12 %
Allowance for loan losses to non-performing loans 213.22 % 155.46 % 177.77 %

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