GETTYSBURG, Pa., Jan. 29, 2021 (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 December 31, 2020, with net income of $7,049,000. Compared to net income of $5,081,000 for the three months ended December 31, 2019, this is an increase of $1,968,000 or 38.7% over comparable period results, primarily due to higher net interest income. Basic earnings per share was $0.81 and $0.72 for the three months ended December 31, 2020 and 2019, respectively, which is an increase of $0.09 or 12.5%.
The Corporation reported net income of $18,394,000 for the year ended December 31, 2020. Compared to net income of $23,721,000 for the year ended December 31, 2019, this is a decrease of $5,327,000 or 22.5% below comparable period results. Basic earnings per share was $2.13 and $3.36 for the year ended December 31, 2020 and 2019, respectively, which is a decrease of $1.23 or 36.6%. These results were primarily attributable to one-time merger-related expenses of $5,965,000 and a higher provision for loan losses of $9,140,000 resulting mainly from the increased risk due to the COVID-19 pandemic as well as a previously-reported, large unanticipated charge-off of one loan relationship during the first quarter of 2020. Without the nonrecurring expenses related to the acquisition of FCBI, in conjunction with the corresponding tax impact at the marginal tax rate, net income (non-GAAP) would have been $23,033,000, or $2.67 basic earnings per share, for the year ended December 31, 2020.
“The COVID-19 pandemic continues to be a primary driver in how we do our business today---nearly a year after this national emergency changed how we interact in both our personal and professional lives. However, due to the unceasing dedication and hard work of our team members at ACNB Corporation’s subsidiaries of ACNB Bank and Russell Insurance Group, Inc., our organization continues to successfully navigate the many challenges encountered in serving our customers and communities during this ongoing health crisis,” said James P. Helt, ACNB Corporation President & Chief Executive Officer. “Operationally, ACNB Corporation has been diligent in its response to the changing impacts of the pandemic with necessary modifications in the community banking office network, as well as continual steps to reinforce systems to accommodate heightened customer demands for electronic services and to support the remote work environment for staff members. Financially, this pandemic has taken a toll on the economy with many businesses struggling after government actions were taken for the purpose of limiting the spread of the virus in both the Corporation’s Pennsylvania and Maryland markets. As of year-end 2020, however, the trend was overall positive with lessened volume of customer requests for loan modifications and deferrals since the initial requests at the onset of the pandemic. Plus, with the signing of the Coronavirus Response and Relief Supplemental Appropriations Act in late December 2020, there are now additional government stimulus programs providing economic aid to consumers and small businesses---including the reopening of the Paycheck Protection Program for first-time and second-time borrowers, in which ACNB Bank is again participating to assist business customers.”
Mr. Helt continued, “As we begin a new year, there is no doubt that there is still uncertainty ahead. At ACNB Corporation, as always, we continue to look forward and plan 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 been validated and reinforced 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 year ended December 31, 2020, were $93,002,000, or a 19.9% increase over total revenues of $77,587,000 for 2019. Total interest income for 2020 was $85,290,000, or an increase of 22.6%, as compared to total interest income of $69,558,000 for the year ended December 31, 2019.
Loans
Total loans outstanding were $1,637,784,000 at December 31, 2020. Year over year, loans outstanding increased by $365,183,000, or 28.7%, since December 31, 2019, 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. As a result primarily of the increased credit risk from COVID-19 as well as a previously-reported, large unanticipated charge-off of one loan relationship, combined with normal and anticipated credit losses in the portfolio, the provision for loan losses for 2020 was $9,140,000, an increase of $8,540,000 or 1,423.3% from prior year-end results.
Deposits
Total deposits were $2,185,525,000 at December 31, 2020. Year over year, total deposits increased by $773,265,000, or 54.8%, since December 31, 2019, 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 $13,650,000 to $73,068,000 for the year ended December 31, 2020, an increase of 23.0% in comparison to the year ended December 31, 2019. The net interest margin for 2020 was 3.35%, compared to 3.81% for 2019. Both net interest income and the net interest margin were impacted by lower market yields in 2020. The lower market yields negatively affected the net interest margin as new loans at lower rates replaced paydowns on existing loans at higher rates and variable rate loans reset to new current rates.
Noninterest Income
Noninterest income for 2020 was $19,934,000, an increase of $1,765,000 or 9.7% over the prior year ended December 31, 2019. The increase includes revenue from wealth management activities, which grew 8.2% in comparison to the year ended December 31, 2019, and reached $2,672,000 for 2020.
Noninterest Expense
Noninterest expense for 2020 was $61,160,000, an increase of $13,539,000 or 28.4% over the prior year ended December 31, 2019. Nonrecurring acquisition and integration expenses related to the acquisition of FCBI were $5,965,000 in 2020. Year over year, salaries and employee benefits expense for 2020 increased by $6,480,000 in comparison to the year ended December 31, 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 2020 totaled $8,685,000 in the aggregate, or $1.00 per share---an increase of $1,765,000 or 25.5% over the prior year. In 2019, ACNB Corporation paid a $0.98 dividend per share for total dividends paid to shareholders in the amount of $6,920,000. When comparing the year of 2020 to 2019, the increase in total dividends paid is also a result of the issuance of additional shares of common stock in connection with 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, the Bank had 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. Most recently, as of December 31, 2020, ACNB Bank has outstanding approvals for loan modifications and deferrals for 48 loans totaling $36,123,155 in principal balances, representing 2.39% 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 and subsequently by the Coronavirus Response and Relief Supplemental Appropriations Act. As of December 31, 2020, ACNB Bank closed and funded 1,440 loans totaling $160,857,603, resulting in approximately $6,100,000 in total fee income of which $2,875,000 was recognized through December 31, 2020, with the remainder to be recognized either over the life of the loan or until loan forgiveness occurs.
About ACNB Corporation
ACNB Corporation, headquartered in Gettysburg, PA, is the $2.6 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 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.
