ACNB ACNB Corporation

ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $6.8 million, or $0.80 per diluted earnings per share, for the three months ended March 31, 2024 compared to net income of $9.0 million, or $1.06 per diluted earnings per share, for the three months ended March 31, 2023. Compared to the three months ended December 31, 2023, net income and diluted earnings per share for the three months ended March 31, 2024 increased $2.7 million and $0.32, respectively. The financial results for the three month period ended December 31, 2023 were impacted by the repositioning of the investment securities portfolio as announced on Form 8-K on December 15, 2023.

2024 First Quarter Highlights

• Return on average assets was 1.12% and return on average equity was 9.76% for the three months ended March 31, 2024.
• Fully taxable equivalent (“FTE”) net interest margin was 3.77% for the three months ended March 31, 2024 compared to 3.93% for the three months ended December 31, 2023 and 4.22% for the three months ended March 31, 2023.
• Total loans were $1.66 billion at March 31, 2024, an increase of $37.0 million, or 2.3%, from December 31, 2023 and an increase of $133.4 million, or 8.7%, from March 31, 2023.
• Total nonperforming loans to total loans, net of unearned income, was 0.24% at March 31, 2024 compared to 0.26% at December 31, 2023 and 0.25% at March 31, 2023. Net charge-offs to average loans outstanding (annualized) were 0.00% for the three months ended March 31, 2024 compared to 0.02% for both the three months ended December 31, 2023 and the three months ended March 31, 2023.
• The loan to deposit ratio was 90.72% at March 31, 2024 and the ratio of uninsured and non-collateralized deposits to total deposits was approximately 17.76% at ACNB Bank at March 31, 2024.
• Tangible common equity to tangible assets ratio1 of 9.61% at March 31, 2024 compared to 9.48% at December 31, 2023 and 8.56% at March 31, 2023. The net unrealized loss on the available for sale securities portfolio was $53.0 million at March 31, 2024 compared to a net unrealized loss of $50.2 million at December 31, 2023 and a net unrealized loss of $57.6 million at March 31, 2023.
• ACNB and ACNB Bank capital levels remain well in excess of ACNB’s internal minimums and those required to be categorized as well-capitalized by our bank regulators. ACNB’s overall liquidity position remains strong and stable.

1 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.

“The economic and financial services industry uncertainties have continued to present challenges as we begin 2024. However, ACNB Corporation continues to focus on executing our strategic plan. As a result, we are pleased to share our first quarter operating results. The quarter represents a solid start to the new year and reflects our continued commitment to our shareholders, customers and employees to be the financial service provider of choice in the communities we serve by building relationships and finding solutions,” said James P. Helt, ACNB Corporation President & Chief Executive Officer.

“We experienced strong loan demand during the quarter and continue to experience stellar asset quality due to the hard work and diligence of our entire lending team. Our initiatives to diversify our revenue streams with ACNB Insurance Services and our Wealth Management teams continue to show positive momentum. In addition, our capital position remains very strong and provides the Corporation with a foundation of strength and security.”

“As a result of these ongoing strategic efforts, we were pleased to provide a 14.2% increase in the cash dividend paid to our shareholders in the second quarter of 2024 over the second quarter of 2023. The $0.32 per share second quarter of 2024 quarterly cash dividend also represents a 6.6% increase over the $0.30 per share paid in the first quarter of 2024. This additional return to our shareholders combined with our share repurchase program, reflects our commitment to provide our shareholders with a solid return on their investment in the Corporation.”

Mr. Helt continued, “We remain positive for the remainder of 2024 in spite of continued inflationary pressures and the resulting economic impacts. We are not only focused on the challenges, but also the opportunities that lie ahead and are fully committed to continued growth and profitability for ACNB Corporation.”

Net Interest Income and Margin

Net interest income for the three months ended March 31, 2024 totaled $20.6 million, a decrease of $2.5 million, or 10.8%, compared to the three months ended March 31, 2023. The decrease in net interest income was driven primarily by an increase in the cost of deposits and an increase in borrowings. The FTE net interest margin was 3.77%, a decrease of 45 basis points from 4.22% for the three months ended March 31, 2023. The average rate paid on interest-bearing deposits was 0.65% for the three months ended March 31, 2024, an increase of 53 basis points from the three months ended March 31, 2023. The average rate paid on total borrowings was 4.38% for the three months ended March 31, 2024, an increase of 223 basis points from the three months ended March 31, 2023. The average FTE yield on interest-earning assets increased 37 basis points from 4.37% for the three months ended March 31, 2023 to 4.74% for the three months ended March 31, 2024.

The FTE net interest margin was 3.77%, a decrease of 16 basis points from 3.93% for the three months ended December 31, 2023. The average rate paid on interest-bearing deposits was 0.65% for the three months ended March 31, 2024, an increase of 14 basis points from the three months ended December 31, 2023. The average rate paid on total borrowings was 4.38% for the three months ended March 31, 2024, an increase of 32 basis points from the three months ended December 31, 2023. The average FTE yield on interest-earning assets was 4.74% for the three months ended March 31, 2024, an increase of 12 basis points from the three months ended December 31, 2023.

Noninterest Income

Noninterest income for the three months ended March 31, 2024 was $5.7 million, an increase of $683 thousand, or 13.7%, from the three months ended March 31, 2023. Insurance commissions for the three months ended March 31, 2024 were $2.1 million, an increase of $213 thousand from the three months ended March 31, 2023 driven primarily by organic growth and timing of commissions. Wealth management income for the three months ended March 31, 2024 was $962 thousand, an increase of $122 thousand from the three months ended March 31, 2023 driven primarily by market appreciation and new business generation. For the three months ended March 31, 2024, net gains on sales or calls of investment securities were $69 thousand compared to a loss of $193 thousand for the three months ended March 31, 2023, an increase of $262 thousand.

Compared to the three months ended December 31, 2023, noninterest income for the three months ended March 31, 2024 increased $4.7 million, or 484.2%, driven primarily by the repositioning of the investment securities portfolio which generated a $4.5 million pre-tax loss on the sale of investment securities for the three months ended December 31, 2023.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2024 was $17.7 million, an increase of $1.4 million, or 8.5%, from the three months ended March 31, 2023. The increase was driven primarily by increases in salaries and employee benefits, professional services, other expenses, FDIC and regulatory expenses, and equipment. Salaries and employee benefits expense increased $726 thousand driven primarily by higher health insurance costs and base wages. Professional services increased $234 thousand driven primarily by higher maintenance expenses related to a foreclosed asset held for resale and as a result of recruiting expenses for talent acquisition. Other expenses increased $166 thousand driven primarily by higher directors fees and operating losses. The $126 thousand increase in FDIC and regulatory was the result of a higher FDIC assessment due to changes in the composition of ACNB’s balance sheet. Equipment expense increased $122 thousand driven primarily by purchases of office equipment.

Noninterest expense for the three months ended March 31, 2024 increased $489 thousand, or 2.8%, from the three months ended December 31, 2023. The increase was driven primarily by increases in salaries and employee benefits and net occupancy partially offset by decreases in professional services and other expenses. Salaries and employee benefits increased $572 thousand driven primarily by increases to stock-based compensation and health insurance costs. Net occupancy increased $203 thousand driven primarily by higher snow removal costs, building maintenance and utilities. Professional services decreased $104 thousand as the prior quarter had higher loan review and consulting expenses. Other expenses decreased $99 thousand driven primarily by a lower mark-to-market loss on an SBIC fund compared to the prior quarter and timing of FDIC assessment expense.

Loans and Asset Quality

Total loans outstanding were $1.66 billion at March 31, 2024, an increase of $37.0 million, or 2.3%, from December 31, 2023 and an increase of $133.4 million, or 8.7%, from March 31, 2023. The increase in both periods was driven primarily by growth in the commercial loan portfolio in our core markets.

Asset quality metrics continue to be stable. The provision for credit losses was $223 thousand and the provision for unfunded commitments was a reversal of $151 thousand for the three months ended March 31, 2024 compared to a provision for credit losses of $786 thousand and the provision for unfunded commitments was a reversal of $242 thousand for three months ended December 31, 2023 and a provision for credit losses of $97 thousand and a $276 thousand provision for unfunded commitments for the three months ended March 31, 2023. Non-performing loans were $3.9 million, or 0.24%, of total loans at March 31, 2024 compared to $4.2 million, or 0.26%, of total loans at December 31, 2023 and $3.8 million, or 0.25%, of total loans at March 31, 2023. The decrease in the provision for credit losses for the three months ended March 31, 2024 compared to the prior quarter was due to a specific reserve on one commercial and industrial relationship which was recorded during the three months ended December 31, 2023. The decrease in non-performing loans at March 31, 2024 compared to the prior quarter was the result of several payoffs. Annualized net charge-offs for the three months ended March 31, 2024 were 0.00% of total average loans compared to 0.02% for both the three months ended December 31, 2023 and March 31, 2023.

Deposits and Borrowings

Deposits totaled $1.84 billion at March 31, 2024, decreasing $26.6 million, or 1.4%, since December 31, 2023 and $220.6 million, or 10.7%, from March 31, 2023. The decrease of $26.6 million compared to December 31, 2023 was driven primarily by an outflow of municipal deposits. Included in total deposits were $1.34 billion interest-bearing deposits which decreased by $25.8 million, or 1.9%, from December 31, 2023 and by $125.8 million, or 8.6%, from March 31, 2023. Total non-interest bearing deposits were $499.6 million at March 31, 2024. Noninterest bearing deposits decreased by $749 thousand, or 0.1%, from December 31, 2023 and decreased by $94.8 million, or 15.9% from March 31, 2023.

Total borrowings were $272.6 million at March 31, 2024, an increase of $20.4 million, or 8.1%, compared to December 31, 2023. The increase in borrowings was driven primarily by the outflow of municipal deposits and to fund loan growth. The average rate on total borrowings was 4.38% for the three months ended March 31, 2024 compared to 4.06% for the three months ended December 31, 2023 and 2.15% for the three months ended March 31, 2023.

Stockholders’ Equity, Dividends and Share Repurchases

Total stockholders’ equity was $279.9 million at March 31, 2024 compared to $277.5 million at December 31, 2023 and $255.8 million at March 31, 2023. Tangible book value2 per share was $26.70, $26.44 and $23.66 at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

As announced on Form 8-K on April 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 June 14, 2024, to shareholders of record as of May 31, 2024. This per share amount reflects a $0.04, or 14.2%, increase over the same quarter of 2023.

ACNB repurchased 4,200 shares of ACNB common stock during the three months ended March 31, 2024 at a cost of $147 thousand.

2 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.41 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 #2024-10 April 25, 2024 

Contact:	Jason H. Weber
	EVP/Treasurer &
	Chief Financial Officer
	717.339.5090
	jweber@acnb.com

ACNB Corporation Financial Highlights Selected Financial Data by Respective Quarter End (Unaudited)
(Dollars in thousands, except per share data)	March 31, 2024				December 31, 2023				September 30,2023				June 30, 2023				March 31, 2023
BALANCE SHEET DATA
Assets	$	2,414,288			$	2,418,847			$	2,388,522			$	2,378,151			$	2,410,933
Securities		490,626				517,221				501,063				518,093				568,232
Total loans, net of unearned income		1,664,980				1,627,988				1,615,966				1,573,817				1,531,626
Allowance for credit losses		(20,172	)			(19,969	)			(19,264	)			(19,148	)			(19,485	)
Deposits		1,835,224				1,861,813				1,951,359				1,963,754				2,055,822
Allowance for unfunded commitments		1,569				1,719				1,962				2,132				2,011
Borrowings		272,605				252,174				153,388				132,703				76,294
Stockholders’ equity		279,920				277,461				255,638				257,069				255,841
INCOME STATEMENT DATA
Interest and dividend income	$	25,974			$	25,284			$	24,234			$	23,213			$	23,909
Interest expense		5,381				3,791				2,489				1,223				817
Net interest income		20,593				21,493				21,745				21,990				23,092
Provision for (reversal of) credit losses		223				786				250				(273	)			97
(Reversal of) provision for unfunded commitments		(151	)			(242	)			(171	)			121				276
Net interest income after provisions for credit losses and unfunded commitments		20,521				20,949				21,666				22,142				22,719
Noninterest income		5,667				970				6,297				6,194				4,984
Noninterest expenses		17,662				17,173				16,336				16,281				16,282
Income before income taxes		8,526				4,746				11,627				12,055				11,421
Provision for income taxes		1,758				649				2,583				2,531				2,398
Net income	$	6,768			$	4,097			$	9,044			$	9,524			$	9,023
PROFITABILITY RATIOS
Total loans, net of unearned income to deposits		90.72	%			87.44	%			82.81	%			80.14	%			74.50	%
Return on average assets (annualized)		1.12				0.68				1.52				1.62				1.50
Return on average equity (annualized)		9.76				6.09				13.84				14.74				14.58
Efficiency ratio3		66.18				62.48				56.97				55.52				56.36
FTE Net interest margin		3.77				3.93				4.01				4.11				4.22
Yield on average earning assets		4.74				4.62				4.46				4.33				4.37
Yield on investment securities		2.70				2.36				2.24				2.24				2.46
Yield on total loans		5.37				5.29				5.16				5.05				5.12
Cost of funds		1.02				0.71				0.47				0.23				0.15
PER SHARE DATA
Diluted earnings per share	$	0.80			$	0.48			$	1.06			$	1.12			$	1.06
Cash dividends paid per share		0.30				0.30				0.28				0.28				0.28
Tangible book value per share3		26.70				26.44				23.80				23.83				23.66
Tangible book value per share3 (excluding AOCI)4		32.21				31.74				31.43				30.64				29.76
CAPITAL RATIOS5
Tier 1 leverage ratio		11.91	%			11.57	%			11.97	%			11.79	%			11.09	%
Common equity tier 1 ratio		15.40				15.16				15.30				15.38				15.21
Tier 1 risk based capital ratio		15.69				15.45				15.59				15.72				15.56
Total risk based capital ratio		17.68				17.41				17.49				17.67				17.56
CREDIT QUALITY
Net charge-offs to average loans outstanding (annualized)		0.00	%			0.02	%			0.03	%			0.02	%			0.02	%
Total non-performing loans to total loans, net of unearned income 6		0.24				0.26				0.22				0.23				0.25
Total non-performing assets to total assets7		0.18				0.19				0.17				0.17				0.18
Allowance for credit losses to total loans, net of unearned income		1.21				1.23				1.19				1.22				1.27

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 March 31, 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.

Consolidated Balance Sheet (Unaudited)
(Dollars in thousands, except per share data)		March 31, 2024				December 31, 2023				September 30, 2023
ASSETS
Cash and due from banks		$	17,395			$	21,442			$	22,786
Interest-bearing deposits with banks			35,740				44,516				41,255
Total Cash and Cash Equivalents			53,135				65,958				64,041
Equity securities with readily determinable fair values			918				928				888
Investment securities available for sale, at estimated fair value			425,114				451,693				435,559
Investment securities held to maturity, at amortized cost (fair value $58,084, $59,057, and $53,843)			64,594				64,600				64,616
Loans held for sale			88				280				—
Total loans, net of unearned income			1,664,980				1,627,988				1,615,966
Less: Allowance for credit losses			(20,172	)			(19,969	)			(19,264	)
Loans, net			1,644,808				1,608,019				1,596,702
Premises and equipment, net			25,916				26,283				25,740
Right of use asset			2,447				2,615				2,784
Restricted investment in bank stocks			10,877				9,677				5,477
Investment in bank-owned life insurance			80,348				79,871				79,391
Investments in low-income housing partnerships			971				1,003				1,034
Goodwill			44,185				44,185				44,185
Intangible assets, net			8,761				9,082				9,434
Foreclosed assets held for resale			467				467				467
Other assets			51,659				54,186				58,204
Total Assets		$	2,414,288			$	2,418,847			$	2,388,522
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing		$	499,583			$	500,332			$	565,530
Interest-bearing			1,335,641				1,361,481				1,385,829
Total Deposits			1,835,224				1,861,813				1,951,359
Short-term borrowings			17,303				56,882				33,106
Long-term borrowings			255,302				195,292				120,282
Lease liability			2,447				2,615				2,784
Allowance for unfunded commitments			1,569				1,719				1,962
Other liabilities			22,523				23,065				23,391
Total Liabilities			2,134,368				2,141,386				2,132,884
Stockholders’ Equity:
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at March 31, 2024, December 31, 2023 and September 30, 2023, respectively			—				—				—
Common stock, $2.50 par value; 20,000,000 shares authorized; 8,928,441, 8,896,119, and 8,892,374 shares issued; 8,539,575, 8,511,453, and 8,521,546 shares outstanding at March 31, 2024, December 31, 2023 and September 30, 2023, respectively			22,315				22,231				22,224
Treasury stock, at cost; 388,866, 384,666, and 370,828 shares at March 31, 2024, December 31, 2023 and September 30, 2023, respectively			(11,101	)			(10,954	)			(10,502	)
Additional paid-in capital			97,818				97,602				96,744
Retained earnings			217,712				213,491				211,939
Accumulated other comprehensive loss			(46,824	)			(44,909	)			(64,767	)
Total Stockholders’ Equity			279,920				277,461				255,638
Total Liabilities and Stockholders’ Equity		$	2,414,288			$	2,418,847			$	2,388,522

Consolidated Income Statements (Unaudited)
	Three Months Ended March 31,
(Dollars in thousands, except per share data)		2024				2023
INTEREST AND DIVIDEND INCOME
Loans, including fees
Taxable	$	21,470			$	18,898
Tax-exempt		319				356
Securities:
Taxable		2,911				3,286
Tax-exempt		284				314
Dividends		240				41
Other		750				1,014
Total Interest and Dividend Income		25,974				23,909
INTEREST EXPENSE
Deposits		2,160				473
Short-term borrowings		339				17
Long-term borrowings		2,882				327
Total Interest Expense		5,381				817
Net Interest Income		20,593				23,092
Provision for credit losses		223				97
(Reversal of) provision for unfunded commitments		(151	)			276
Net Interest Income after Provisions for Credit Losses and Unfunded Commitments		20,521				22,719
NONINTEREST INCOME
Insurance commissions		2,115				1,902
Service charges on deposits		991				962
Wealth management		962				840
ATM debit card charges		819				823
Earnings on investment in bank-owned life insurance		477				442
Gain from mortgage loans held for sale		48				17
Net gains (losses) on sales or calls of investment securities		69				(193	)
Net (losses) gains on equity securities		(10	)			20
Other		196				171
Total Noninterest Income		5,667				4,984
NONINTEREST EXPENSES
Salaries and employee benefits		11,168				10,442
Equipment		1,729				1,607
Net occupancy		1,130				1,037
Professional services		616				382
FDIC and regulatory		375				249
Other tax		370				337
Intangible assets amortization		321				360
Supplies and postage		191				206
Marketing and corporate relations		88				154
Other		1,674				1,508
Total Noninterest Expenses		17,662				16,282
Income Before Income Taxes		8,526				11,421
Provision for income taxes		1,758				2,398
Net Income	$	6,768			$	9,023
PER SHARE DATA
Basic and diluted earnings	$	0.80			$	1.06

Average Balances, Income and Expenses, Yields and Rates
		Three months ended											Three months ended											Three months ended											Three months ended											Three months ended
		March 31, 2024											December 31, 2023											September 30, 2023											June 30, 2023											March 31, 2023
(Dollars in thousands)		Average Balance				Interest8				Yield/ Rate			Average Balance				Interest8				Yield/ Rate			Average Balance				Interest8				Yield/ Rate			Average Balance				Interest8				Yield/ Rate			Average Balance				Interest8				Yield/ Rate
ASSETS
Loans:
Taxable		$	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	%			1,454,934				18,898			5.27	%
Tax-exempt			65,825				404			2.47	%			69,058				425			2.44	%			73,995				457			2.45	%			75,670				446			2.36	%			77,341				451			2.36	%
Total Loans9			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	%			1,532,275				19,349			5.12	%
Investment Securities:
Taxable			467,466				3,151			2.71	%			453,713				2,669			2.33	%			466,402				2,581			2.20	%			498,401				2,739			2.20	%			557,377				3,327			2.42	%
Tax-exempt			54,740				359			2.64	%			54,835				361			2.61	%			55,027				359			2.59	%			55,588				361			2.60	%			55,589				397			2.90	%
Total Investments10			522,206				3,510			2.70	%			508,548				3,030			2.36	%			521,429				2,940			2.24	%			553,989				3,100			2.24	%			612,966				3,724			2.46	%
Interest-bearing deposits with banks			54,156				750			5.57	%			50,225				691			5.46	%			53,324				723			5.38	%			71,040				890			5.03	%			90,987				1,014			4.52	%
Total Earning Assets			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	%			2,236,228				24,087			4.37	%
Cash and due from banks			20,540											21,578											23,783											22,215											21,151
Premises and equipment			26,102											25,983											25,980											26,420											26,885
Other assets			187,075											191,329											165,821											163,783											172,804
Allowance for credit losses			(19,963	)										(19,232	)										(19,101	)										(19,458	)										(17,849	)
Total Assets		$	2,429,050										$	2,406,900										$	2,365,365										$	2,357,626										$	2,439,219
LIABILITIES
Interest-bearing demand deposits		$	512,701			$	264			0.21	%		$	560,510			$	275			0.19	%		$	571,314			$	185			0.13	%		$	577,480			$	150			0.10	%		$	591,972			$	146			0.10	%
Money markets			248,297				536			0.87	%			274,226				707			1.02	%			245,899				312			0.50	%			261,560				100			0.15	%			298,584				73			0.10	%
Savings deposits			335,215				29			0.03	%			348,244				28			0.03	%			366,398				30			0.03	%			387,847				31			0.03	%			403,419				33			0.03	%
Time deposits			244,481				1,331			2.19	%			221,778				798			1.43	%			212,159				401			0.75	%			224,608				205			0.37	%			268,708				221			0.33	%
Total Interest-Bearing Deposits			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	%			1,562,683				473			0.12	%
Short-term borrowings			47,084				339			2.90	%			56,872				334			2.33	%			66,942				439			2.60	%			34,080				108			1.27	%			35,596				17			0.19	%
Long-term borrowings			248,701				2,882			4.66	%			137,026				1,649			4.77	%			94,554				1,122			4.71	%			59,901				629			4.21	%			29,211				327			4.54	%
Total Borrowings			295,785				3,221			4.38	%			193,898				1,983			4.06	%			161,496				1,561			3.83	%			93,981				737			3.15	%			64,807				344			2.15	%
Total Interest-Bearing Liabilities		$	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	%		$	1,627,490			$	817			0.20	%
Noninterest-bearing demand deposits			486,648											519,797											541,995											550,581											557,546
Other liabilities			26,904											21,648											6,820											2,330											3,129
Stockholders’ Equity			279,019											266,799											259,284											259,239											251,054
Total Liabilities and Stockholders’ Equity		$	2,429,050										$	2,406,900										$	2,365,365										$	2,357,626										$	2,439,219
Taxable Equivalent Net Interest Income							20,753											21,658											21,916											22,159											23,270
Taxable Equivalent Adjustment							(160	)										(165	)										(171	)										(169	)										(178	)
Net Interest Income						$	20,593										$	21,493										$	21,745										$	21,990										$	23,092
Cost of Funds										1.02	%										0.71	%										0.47	%										0.23	%										0.15	%
FTE Net Interest Margin										3.77	%										3.93	%										4.01	%										4.11	%										4.22	%

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.

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)		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Tangible book value per share
Stockholders’ equity		$	279,920			$	277,461			$	255,638			$	257,069			$	255,841
Less: Goodwill and intangible assets		(52,946		)		(53,267		)		(53,619		)		(53,797		)		(54,157		)
Tangible common stockholders’ equity (numerator)		$	226,974			$	224,194			$	202,019			$	203,272			$	201,684
Shares outstanding, less unvested shares, end of period (denominator)		8,501,137				8,478,460				8,488,446				8,528,782				8,523,406
Tangible book value per share		$	26.70			$	26.44			$	23.80			$	23.83			$	23.66
Tangible book value per share (excluding AOCI)
Tangible common stockholders’ equity		$	226,974			$	224,194			$	202,019			$	203,272			$	201,684
Less: AOCI		(46,824		)		(44,909		)		(64,767		)		(58,052		)		(51,960		)
Tangible equity (excluding AOCI)		$	273,798			$	269,103			$	266,786			$	261,324			$	253,644
Tangible book value per share (excluding AOCI)		$	32.21			$	31.74			$	31.43			$	30.64			$	29.76
Tangible common equity to tangible assets (TCE/TA Ratio)
Tangible common stockholders’ equity (numerator)		$	226,974			$	224,194			$	202,019			$	203,272			$	201,684
Total assets		$	2,414,288			$	2,418,847			$	2,388,522			$	2,378,151			$	2,410,933
Less: Goodwill and intangible assets		(52,946		)		(53,267		)		(53,619		)		(53,797		)		(54,157		)
Total tangible assets (denominator)		$	2,361,342			$	2,365,580			$	2,334,903			$	2,324,354			$	2,356,776
Tangible common equity to tangible assets		9.61%				9.48		%		8.65		%		8.75		%		8.56		%
Efficiency Ratio
Noninterest expense		$	17,662			$	17,173			$	16,336			$	16,281			$	16,282
Less: Intangible amortization		321				352				352				360				360
Less: Loss on MD Title Investment		—				—				—				142				—
Numerator		$	17,341			$	16,821			$	15,984			$	15,779			$	15,922
Net interest income		$	20,593			$	21,493			$	21,745			$	21,990			$	23,092
Plus: Total noninterest income		5,667				970				6,297				6,194				4,984
Less: Net gains (losses) on sales or calls of securities		69				(4,501		)		—				(546		)		(193		)
Less: Net (losses) gains on equity securities		(10		)		40				(27		)		(15		)		20
Less: Gain on assets held for sale		—				—				14				323				—
Denominator		$	26,201			$	26,924			$	28,055			$	28,422			$	28,249
Efficiency ratio		66.18%				62.48%				56.97%				55.52%				56.36%