GETTYSBURG, Pa, Oct. 28, 2020 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB), financial holding company for ACNB Bank and Russell Insurance Group, Inc., announced financial results for the three months ended September 30, 2020, with net income of $6,771,000. Compared to net income of $6,310,000 for the three months ended September 30, 2019, this is an increase of $461,000 or 7.3% over comparable period results, primarily due to higher net interest income. Basic earnings per share was $0.79 and $0.89 for the three months ended September 30, 2020 and 2019, respectively, which is a decrease of $0.10 or 11.2%.

The Corporation reported net income of $11,345,000 for the nine months ended September 30, 2020. Compared to net income of $18,640,000 for the nine months ended September 30, 2019, this is a decrease of $7,295,000 or 39.1% below comparable period results. Basic earnings per share was $1.32 and $2.64 for the nine months ended September 30, 2020 and 2019, respectively, which is a decrease of $1.32 or 50.0%. These results are primarily attributable to one-time merger-related expenses of $5,965,000 and a higher provision for loan losses of $8,100,000 as a result of a previously-reported, large unanticipated charge-off of one loan relationship during the first quarter of 2020 and the increased risk due to the COVID-19 pandemic. Without the nonrecurring expenses related to the acquisition of FCBI, as well as the corresponding tax impact at the marginal tax rate, net income (non-GAAP) would have been $15,918,000, or $1.85 basic earnings per share, for the nine months ended September 30, 2020.

“The year of 2020 has been unprecedented and challenging for the financial services industry due to the COVID-19 pandemic. ACNB Corporation is no exception, but proved resilient in responding to customer and community needs during this ongoing health crisis. This is only possible due to the steadfast commitment and dedication of the staff members at ACNB Corporation’s subsidiaries, ACNB Bank and Russell Insurance Group, Inc.,” said James P. Helt, ACNB Corporation President & Chief Executive Officer. “Financially, this pandemic has taken its toll on the economy with many businesses struggling and unemployment rates still elevated in the Corporation’s Pennsylvania and Maryland markets. However, customer requests for loan modifications and deferrals have improved, which is an encouraging sign.”

Mr. Helt continued, “As we approach the end of 2020, there is still uncertainty on the health, political and economic fronts. At ACNB Corporation, we are looking ahead to 2021 and planning for the future founded upon our vision to be the independent financial services provider of choice in the core markets served by building relationships and finding solutions. This vision has proven trustworthy in the past as ACNB Corporation faced difficult times and made hard decisions over the decades. This time is no different, as we take deliberate steps forward for the benefit of customers, employees, shareholders and the many communities served throughout our footprint.”

Revenues

Total revenues, defined as net interest income plus noninterest income, for the first three quarters of 2020 were $68,237,000, or a 16.9% increase over total revenues of $58,381,000 for the first three quarters of 2019. Total interest income for the first nine months of 2020 was $63,818,000, or an increase of 22.6%, as compared to total interest income of $52,037,000 for the first nine months of 2019.

Loans

Total loans outstanding were $1,700,883,000 at September 30, 2020. Loans outstanding increased by $428,282,000, or 33.7%, from December 31, 2019, and by $412,598,000, or 32.0%, from September 30, 2019 to September 30, 2020, including $329,312,000 in loans acquired through FCBI. Loan growth is largely attributable to the FCBI acquisition, net of selling new residential mortgages in the secondary market and early payoffs of loans, as well as active participation in the Small Business Administration’s Paycheck Protection Program. Year over year, organic loan growth is primarily in the commercial loan portfolio with a focus on asset quality and disciplined underwriting standards despite the intense competition in the Corporation’s market areas. As a result of the previously-reported, large unanticipated charge-off of one loan relationship and increased risk from COVID-19, combined with normal and anticipated credit losses in the portfolio, the provision for loan losses for the first nine months of 2020 was $8,100,000.

Deposits

Total deposits were $2,115,576,000 at September 30, 2020. Deposits increased by $703,316,000, or 49.8%, from December 31, 2019, and by $697,966,000, or 49.2%, from September 30, 2019 to September 30, 2020, including $374,058,000 in deposits acquired through FCBI. Year over year, organic deposit growth is largely attributable to PPP proceeds deposited to customer accounts and increased balances in a broad base of accounts from a lack of economic activity due to COVID-19.

Net Interest Income and Margin

Net interest income rose by $9,486,000 to $54,166,000 for the first nine months of 2020, which is an increase of 21.2% compared to the first nine months of 2019. The net interest margin for the first nine months of 2020 was 3.42%, compared to 3.87% for the same period of 2019. Both net interest income and the net interest margin were impacted by lower market yields in the first nine months of 2020. The lower market yields negatively affected the net interest margin as new loans replaced paydowns on existing loans and variable rate loans reset to new current rates.

Noninterest Income

Noninterest income for the first nine months of 2020 was $14,071,000, an increase of $370,000, or 2.7%, from the first nine months of 2019. The increase includes revenue from wealth management activities, which grew 7.7% from the first nine months of 2019 to the first nine months of 2020.

Noninterest Expense

Noninterest expense for the first nine months of 2020 was $46,222,000, an increase of $11,302,000, or 32.4%, from the same period in 2019. Nonrecurring acquisition and integration expenses related to the acquisition of FCBI were $5,965,000 for the first nine months of 2020. Salaries and employee benefits expense increased by $4,237,000 from the first nine months of 2019, which is primarily attributable to higher staffing levels from the FCBI acquisition and additional staff hired to support revenue generation across all business lines.

Dividends

Quarterly cash dividends paid to ACNB Corporation shareholders in the first nine months of 2020 totaled $6,509,000, or $0.75 per share. In the first nine months of 2019, ACNB Corporation paid $0.73 per share for total dividends paid to shareholders in the amount of $5,151,000. When comparing the first nine months of 2019 to the first nine months of 2020, the increase in total dividends paid is also a result of the addition of new shareholders from the FCBI acquisition in January 2020.

COVID-19 Pandemic

As previously reported, ACNB Corporation implemented numerous initiatives to support and protect employees and customers during the COVID-19 pandemic. These efforts continue as the organization responds to changes in the operating environment with varying levels of business activity in its regions of operation in Pennsylvania and Maryland. Current information and guidelines related to ACNB Bank’s ongoing COVID-19 initiatives and communications are available at acnb.com. As of June 30, 2020, ACNB Bank reported approved loan modifications and deferrals for 466 loans totaling $234,600,000 in principal balances, representing 13.5% of the total loan portfolio. As of September 30, 2020, ACNB Bank has outstanding approvals for loan modifications and deferrals for 65 loans totaling $64,800,000 in principal balances, representing 3.8% of the total loan portfolio.

Paycheck Protection Program

ACNB Corporation’s banking subsidiary, ACNB Bank, serves as an active participant in the PPP, as authorized initially by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As of September 30, 2020, ACNB Bank closed and funded 1,440 loans totaling $160,857,603, resulting in approximately $6,000,000 in fee income of which $1,411,000 was recognized through September 30, 2020, with the remainder to be recognized in upcoming quarters.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $2.5 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 21 community banking offices, located in the four southcentral Pennsylvania counties of Adams, Cumberland, Franklin and York, as well as loan offices in Lancaster and York, PA, and Hunt Valley, MD. As divisions of ACNB Bank operating in Maryland, FCB Bank and NWSB Bank serve the local marketplace with a network of five and seven community banking offices located in Frederick County and Carroll County, MD, respectively. Russell Insurance Group, Inc., the Corporation’s insurance subsidiary, is a full-service agency with licenses in 44 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster, Germantown and Jarrettsville, MD, and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit acnb.com.