ACNB CORP (ACNB)

CIK: 0000715579. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-12.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=715579. Latest filing source: 0001628280-26-017229.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000715579.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000715579.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-031924.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the significant changes in the financial condition, results of operations, comprehensive income, capital resources, and liquidity presented in its accompanying Consolidated Financial Statements for ACNB Corporation, a financial holding company. Please read this discussion in conjunction with the Consolidated Financial Statements and disclosures included herein. Current performance does not guarantee, assure or indicate similar performance in the future.

Forward-Looking Statements

In addition to historical information, this Form 10-Q 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, noninterest 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; legislative and regulatory changes; banking system instability caused by failures and 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 or any similar 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; 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; and, trade and tariff uncertainties and volatility. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustments to, or disclosure in, the Consolidated Financial Statements. 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 the Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

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Executive Overview

ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 33 community banking offices and two loan production offices. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.

The primary source of the Corporation’s revenues is net interest income derived from interest earned on loans and investments, less deposit and borrowing funding costs. Revenues are influenced by general economic factors, including market interest rates, the economies of the markets served, stock market conditions, as well as competitive forces within the markets. The Corporation also generates revenue through commissions and fees earned on various services and financial products offered to its customers and through gains on sales of assets, such as loans, investments and properties. The Corporation incurs expenses to generate the revenue through provision for credit losses, noninterest expense and income taxes. The Corporation’s overall strategy is to increase loan growth in its local markets, while maintaining a reasonable funding base by offering competitive deposit products and services.

Financial results for the three months ended March 31, 2025 were impacted by two discrete items that were related to the Acquisition of Traditions Bancorp, Inc. which was completed on February 1, 2025: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million. Financial results for the three months ended March 31, 2025 include ACNB’s standalone results for the month of January 2025.

The following table presents a summary of the Corporation’s earnings and selected performance and asset quality ratios:

Three Months Ended March 31,

(Dollars in thousands, except per share data)

2026

2025

Net income (loss)

$

13,703 

$

(272)

Diluted earnings (loss) per share

$

1.32 

$

(0.03)

Cash dividends declared

$

0.38 

$

0.32 

Return on average assets (annualized)

1.71 

%

(0.04)

%

Return on average equity (annualized)

12.97 

%

(0.31)

%

Net interest margin1

4.46 

%

4.07 

%

Non-performing loans to total loans, net of unearned income2

0.41 

%

0.43 

%

Non-performing assets to total assets3

0.29 

%

0.32 

%

Net (recoveries) charge-offs to average loans outstanding (annualized)

(0.00)

%

0.01 

%

Allowance for credit losses to total loans, net of unearned income

1.01 

%

1.06 

%

__________________________________________________________________

1 Income on interest-earning assets has been computed on a FTE basis using the 21% federal income tax statutory rate.

2 Non-performing loans consists of loans on nonaccrual status and loans greater than 90 days past due and still accruing interest.

3 Non-performing assets consists of non-performing loans and foreclosed assets held for resale.

Summary Financial Results

•Net Interest Income — Net interest income was $32.5 million for the three months ended March 31, 2026 compared to $27.1 million for the same period of 2025, an increase of $5.4 million. The increase in net interest income was driven primarily by the balance sheet restructuring completed during the three months ended December 31, 2025, the Acquisition, and new loans and securities funded during the quarter at higher rates than those that paid off or matured.

◦Net Interest Margin — FTE net interest margin increased to 4.46% for the three months ended March 31, 2026 compared to 4.07% in the same period of 2025, an increase of 39 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.9 million for the three months ended March 31, 2026 compared to $1.5 million for the same period of 2025

◦Loan Growth — Average loans increased $208.6 million for the three months ended March 31, 2026, compared to the same period of 2025, driven primarily by the Acquisition and, to a lesser extent, organic growth

◦Deposit Growth — Average interest-bearing deposits increased $151.8 million for the three months ended March 31, 2026 compared to the same period of 2025, driven primarily by the Acquisition and, to a lesser extent, promotional incentives on commercial checking accounts

30

◦Yield on Average Earning Assets — For the three months ended March 31, 2026, the yield on average earning assets was 5.78%, an increase of 33 bps compared to the same period of 2025

◦Rate on Average Interest-bearing Liabilities — For the three months ended March 31, 2026, the rate on average interest-bearing liabilities was 1.77%, a decrease of 4 bps compared to the same period of 2025

•Asset Quality — The allowance for credit losses was $23.6 million at March 31, 2026, compared to $23.7 million at December 31, 2025

◦The decrease was driven primarily by a reversal of the provision for credit losses of $76 thousand for the three months ended March 31, 2026 driven primarily by the movement of construction loans for completed projects, which are a higher loss rate segment, to lower loss rate segments within the loan portfolio, primarily commercial real estate, as well as paydowns of loans with a specific reserve, partially offset by loan growth

◦Annualized net recoveries for the three months ended March 31, 2026 were 0.00% of total average loans outstanding, compared to net charge-offs of 0.01% for the same period of 2025

◦Non-performing loans were $9.6 million, or 0.41%, of total loans at March 31, 2026 compared to $10.0 million, or 0.43%, of total loans at March 31, 2025. The decrease was driven primarily by paydowns of loans

•Noninterest income — Noninterest income was $8.3 million for the three months ended March 31, 2026, an increas

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-03-12. Report date: 2025-12-31.

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the significant changes in the financial condition, results of operations, capital resources, and liquidity presented in its accompanying Consolidated Financial Statements for ACNB Corporation, a financial holding company. Please read this discussion in conjunction with the Consolidated Financial Statements and disclosures included herein. Current performance does not guarantee, assure or indicate similar performance in the future.

Discussion of the earliest of the three years covered by the Consolidated Financial Statements presented in this report has been omitted as that disclosure is included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 in Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within that report.

EXECUTIVE OVERVIEW

ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 33 community banking offices. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.

The primary source of the Corporation’s revenues is net interest income derived from interest earned on loans and investments, less deposit and borrowing funding costs. Revenues are influenced by general economic factors, including market interest rates, the economies of the markets served, stock market conditions, as well as competitive forces within the markets. The Corporation also generates revenue through commissions and fees earned on various services and financial products offered to its customers and through gains on sales of assets, such as loans, investments and properties. The Corporation incurs expenses to generate the revenue through provision for credit losses, noninterest expense and income taxes. The Corporation’s overall strategy is to increase loan growth in its local markets, while maintaining a reasonable funding base by offering competitive deposit products and services.

ACNB reported earnings of $37.1 million in 2025 impacted by three discrete items: $8.3 million merger-related expenses, net of tax impact, a provision for credit losses on non-PCD loans of $4.2 million, net of tax impact, both incurred as a result of the Acquisition, and a $2.8 million loss on sales of investment securities, net of tax impact, incurred as a result of the repositioning of the investment securities portfolio.

Traditions Acquisition

ACNB closed the Acquisition of Traditions effective February 1, 2025. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. See Note 2 — “Business Combination” in the Notes to Consolidated Financial Statements under Part II, Item 8 — “Financial Statements and Supplementary Data,” for more information.

Investment Securities Portfolio Repositioning

ACNB completed a repositioning of the investment securities portfolio by selling $74.6 million in book value of available for sale investment securities for an after-tax loss of $2.8 million as announced on Form 8-K on December 5, 2025. For additional information see “Investment Securities” in the Financial Condition section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Table of Contents

The following table presents a summary of the Corporation’s earnings and selected performance and asset quality ratios for the years ended December 31:

(Dollars in thousands, except per share data)

2025

2024

2023

Net income

$

37,051 

$

31,846 

$

31,688 

Diluted earnings per share

$

3.60 

$

3.73 

$

3.71 

Cash dividends declared

$

1.38 

$

1.26 

$

1.14 

Return on average assets

1.16 

%

1.31 

%

1.32 

%

Return on average equity

9.44 

%

10.94 

%

12.23 

%

Net interest margin 1

4.23 

%

3.79 

%

4.07 

%

Non-performing loans to total loans, net of unearned income

0.46 

%

0.40 

%

0.26 

%

Non-performing assets to total assets

0.33 

%

0.30 

%

0.19 

%

Net charge-offs to average loans outstanding

0.01 

%

0.02 

%

0.02 

%

Allowance for credit losses to total loans, net of unearned income

1.02 

%

1.03 

%

1.23 

%

________________________________________

1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

Summary Financial Results for the year ended December 31, 2025

•Net Interest Income — Net interest income was $123.1 million in 2025 compared to $83.6 million for the same period of 2024, an increase of $39.5 million. The increase in net interest income and growth in average loans and deposits was driven primarily by the Acquisition.

◦Net Interest Margin — The Corporation’s FTE net interest margin increased to 4.23% in 2025 compared to 3.79% for the same period of 2024, an increase of 44 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $7.7 million for the year ended December 31, 2025.

◦Yield on Average Interest-earning Assets — ACNB experienced an increase of 75 bps in the yield on average interest-earning assets to 5.61% compared to the same period of 2024.

◦Loan Growth — Average loans grew $635.8 million compared to the same period of 2024.

◦Deposit Growth — Average interest-bearing deposits increased $542.1 million compared to the same period of 2024.

•Asset Quality — The ACL was $23.7 million at December 31, 2025 compared to $17.3 million at December 31, 2024. The increase was driven primarily by an initial ACL of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.

◦The provision for credit losses was $5.3 million and the provision for unfunded commitments was a reversal of $532 thousand for the year ended December 31, 2025 compared to the reversal of $2.4 million provision for credit losses and the reversal of $326 thousand for unfunded commitments for the same period of 2024.

◦Non-performing loans were $10.7 million, or 0.46% of total loans at December 31, 2025 compared to $6.8 million, or 0.40% of total loans for the same period of 2024. The increase was driven primarily by the Acquisition and, to a lesser extent, three unrelated relationships in the commercial real estate and residential mortgage portfolios.

◦Net charge-offs for the year ended December 31, 2025 were 0.01% of total average loans compared to 0.02% for the same period of 2024.

•Noninterest income — Excluding net (losses) gains on sales or calls of securities, noninterest income was $32.1 million for the year ended December 31, 2025, an increase of $7.5 million from the same period of 2024. The increase was driven primarily by a $5.0 million increase in gain from mortgage loans held for sale, a $697 thousand increase in service charges on deposits and $614 thousand higher earnings on investment in bank-owned life insurance, which were driven primarily by the Acquisition.

•Noninterest expenses — Noninterest expenses totaled $100.5 million, an increase of $29.8 million in 2025 compared to $70.7 million in 2024. The increase was driven primarily by the Acquisition.

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Table of Contents

A more thorough discussion of the Corporation’s results of operations and financial condition is included in the following pages.

CRITICAL ACCOUNTING ESTIMATES

The accounting policies that the Corporation’s management deems to be most important to the presentation of its financial condition and results of operations, because they require management’s most difficult, subjective or complex judgment, often result in the need to make estimates about the effect of such matters which are inherently uncertain. The following accounting policies are deemed to be critical by management:

Allowance for Credit Losses — The ACL represents an amount which, in management’s judgment, is adequate to absorb expected credit losses on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions and prepayment experience. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (reversal of) credit losses, which is recorded as a current period operating expense.

Determination of an appropriate ACL is inherently complex and requires the use of significant and highly subjective estimates. The reasonableness of the ACL is reviewed quarterly by management.

Management believes it uses relevant information available to make determinations about the ACL and that it has established the existing allowance in accordance with GAAP. However, the determination of the ACL requires significant judgment, and estimates of expected credit losses in the loan portfolio can vary from the amounts actually observed. While management uses available information to recognize expected credit losses, future additions to the ACL may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes in the interest rate environment which may directly impact prepayment and curtailment rate assumption, and changes in the financial condition of borrowers. As of December 31, 2025, the Company believes that its ACL was adequate.

Business Combinations — The Company is required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values in an acquisition. The difference between consideration paid and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to determine the fair value of such items in accordance with ASC 820, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The ACL for PCD loans is recognized as a component of acquisition accounting. The ACL for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations.

The determination of fair values in accordance with ASC 820 is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. In addition, we engaged third party specialists to assist in the development of fair values. Preliminary estimates of fair values may be adjusted for a period of time subsequent to the acquisition date if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments recorded during this period are recognized in the current reporting period. Management uses various valuation methodologies to estimate the fair value of these assets and liabilities, and often involves a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans, deposits, identifiable intangible assets, and certain other assets and liabilities.

Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements. As of December 31, 2025, the Company believes that the fair value of the assets acquired, liabilities assumed, consideration paid, and any non-controlling interests of the acquired business at fair value at the acquisition date was appropriately determined in accordance with GAAP.

RESULTS OF OPERATIONS

Net income for the year ended December 31, 2025 was $37.1 million, an increase of $5.2 million, or 16.3%, compared to net income of $31.8 million for the same period of 2024. Diluted earnings per share were $3.60 and $3.73 for the years ended December 31, 2025 and 2024, respectively.

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Table of Contents

Net Interest Income

The primary source of ACNB’s traditional banking revenue is net interest income, which represents the difference between interest income on earning assets and interest expense on liabilities used to fund those assets. Earning assets include loans, securities, and interest-bearing deposits with banks. Interest-bearing liabilities include deposits and borrowings. Net interest income is affected by changes in interest rates, volume of interest-bearing assets and liabilities, and the composition of those assets and liabilities. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 7a — “Quantitative and Qualitative Disclosures About Market Risk”.

34

Table of Contents

The following table provides a comparative average Consolidated Statement of Condition and net interest income analysis for the years ended December 31. Interest income and yields are presented on a FTE basis. The discussion following this table is based on these tax equivalent amounts.

2025

2024

2023

(Dollars in thousands)

Average

Balance

Interest 1

Yield/

Rate

Average

Balance

Interest 1

Yield/

Rate

Average

Balance

Interest 1

Yield/

Rate

ASSETS

Loans:

Taxable

$

2,245,727 

$

142,485 

6.34 

%

$

1,605,976 

$

90,547 

5.64 

%

$

1,499,635 

$

79,433 

5.30 

%

Tax-exempt

58,552 

1,615 

2.76 

62,532 

1,559 

2.49 

73,993 

1,778 

2.40 

Total Loans 2

2,304,279 

144,100 

6.25 

1,668,508 

92,106 

5.52 

1,573,628 

81,211 

5.16 

Investment Securities:

Taxable

474,424 

14,494 

3.06 

445,531 

11,718 

2.63 

491,208 

11,316 

2.30 

Tax-exempt

54,148 

1,454 

2.69 

54,596 

1,438 

2.63 

57,670 

1,478 

2.56 

Total Investments 3

528,572 

15,948 

3.02 

500,127 

13,156 

2.63 

548,878 

12,794 

2.33 

Interest-bearing deposits with banks

89,034 

3,808 

4.28 

53,482 

2,832 

5.30 

66,246 

3,318 

5.01 

Total Earning Assets

2,921,885 

163,856 

5.61 

2,222,117 

108,094 

4.86 

2,188,752 

97,323 

4.45 

Cash and due from banks

24,672 

20,920 

30,684 

Premises and equipment

31,188 

25,873 

26,582 

Other assets

244,251 

185,037 

165,175 

Allowance for credit losses

(23,141)

(18,589)

(18,915)

Total Assets

$

3,198,855 

$

2,435,358 

$

2,392,278 

LIABILITIES

Interest-bearing demand deposits

$

609,263 

$

2,153 

0.35 

%

$

516,033 

$

1,603 

0.31 

%

$

569,357 

$

757 

0.13 

%

Money markets

496,820 

9,542 

1.92 

248,733 

2,588 

1.04 

283,918 

1,192 

0.42 

Savings deposits

334,956 

107 

0.03 

324,034 

118 

0.04 

377,498 

122 

0.03 

Time deposits

448,398 

14,897 

3.32 

258,560 

6,885 

2.66 

230,431 

1,624 

0.70 

Total Interest-Bearing Deposits

1,889,437 

26,699 

1.41 

1,347,360 

11,194 

0.83 

1,461,204 

3,695 

0.25 

Short-term borrowings

55,862 

1,639 

2.93 

36,492 

859 

2.35 

49,433 

898 

1.82 

Long-term borrowings

255,901 

11,784 

4.60 

253,671 

11,801 

4.65 

78,262 

3,727 

4.76 

Total Borrowings

311,763 

13,423 

4.31 

290,163 

12,660 

4.36 

127,695 

4,625 

3.62 

Total Interest-Bearing Liabilities

2,201,200 

40,122 

1.82 

1,637,523 

23,854 

1.46 

1,588,899 

8,320 

0.52 

Noninterest-bearing demand deposits

566,057 

478,534 

543,843 

Other liabilities

39,153 

28,276 

442 

Stockholders’ Equity

392,445 

291,025 

259,094 

Total Liabilities and Stockholders’ Equity

$

3,198,855 

$

2,435,358 

$

2,392,278 

Taxable Equivalent Net Interest Income

123,734 

84,240 

89,003 

Taxable Equivalent Adjustment

(644)

(629)

(683)

Net Interest Income

$

123,090 

$

83,611 

$

88,320 

Cost of Funds

1.45 

%

1.13 

%

0.39 

%

FTE Net Interest Margin

4.23 

%

3.79 

%

4.07 

%

________________________________________

1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

2 Average balances include non-accrual loans and are net of unearned income.

3 Average balance of investment securities is computed at fair value.

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FTE net interest income totaled $123.7 million for the year ended December 31, 2025 compared to $84.2 million for the same period of 2024, an increase of $39.5 million, or 46.9%. The FTE net interest margin for 2025 was 4.23%, an increase of 44 bps from 3.79% for the same period of 2024. The increases in FTE interest income, interest expense and the increases to average interest-earning assets and liabilities were driven primarily by the Acquisition.

The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates:

2025 versus 2024

2024 versus 2023

(In thousands)

Volume

Yield/Rate 1

Net

Volume

Yield/Rate 1

Net

INTEREST EARNING ASSETS

Loans

Taxable

$

36,082 

$

15,856 

$

51,938 

$

5,636 

$

5,478 

$

11,114 

Tax-exempt

(99)

155 

56 

(275)

56 

(219)

Total Loans 2

35,983 

16,011 

51,994 

5,361 

5,534 

10,895 

Investment Securities

Taxable

760 

2,016 

2,776 

(1,051)

1,453 

402 

Tax-exempt

(12)

28 

16 

(79)

39 

(40)

Total Investment Securities 3

748 

2,044 

2,792 

(1,130)

1,492 

362 

Interest-bearing deposits with banks

1,884 

(908)

976 

(639)

153 

(486)

Total Interest Income

$

38,615 

$

17,147 

$

55,762 

$

3,592 

$

7,179 

$

10,771 

INTEREST-BEARING LIABILITIES

Interest-bearing demand deposits

$

289 

$

261 

$

550 

$

(69)

$

915 

$

846 

Money markets

2,580 

4,374 

6,954 

(148)

1,544 

1,396 

Savings deposits

4 

(15)

(11)

(16)

12 

(4)

Time deposits

5,050 

2,962 

8,012 

197 

5,064 

5,261 

Total Interest-Bearing Deposits

7,923 

7,582 

15,505 

(36)

7,535 

7,499 

Short-term borrowings

455 

325 

780 

(236)

197 

(39)

Long-term borrowings

104 

(121)

(17)

8,349 

(275)

8,074 

Total Borrowings

559 

204 

763 

8,113 

(78)

8,035 

Total Interest Expense

8,482 

7,786 

16,268 

8,077 

7,457 

15,534 

Change in Net Interest Income

$

30,133 

$

9,361 

$

39,494 

$

(4,485)

$

(278)

$

(4,763)

________________________________________

1 The effect of changing volume and rate, which cannot be segregated, has been allocated entirely to the rate column.

2 Based on average balances and includes non-accrual loans and are net of unearned income.

3 Average balance of investment securities is computed at fair value.

FTE total interest income increased $55.8 million during 2025 compared to the same period of 2024. ACNB experienced a $38.6 million increase in interest income attributable to growth of average interest earning assets and a $17.1 million increase in the yield on interest earning assets. The average yield on interest-earning assets was 5.61% for 2025, an increase of 75 bps from the same period of 2024. FTE interest income on loans increased $52.0 million compared to the same period of 2024 due to growth in average loans and an increase in the yield on loans. Average loans increased $635.8 million while the yield increased 73 bps.

Total interest expense increased $16.3 million during 2025 compared to the same period of 2024. The increase was primarily due to a $542.1 million increase in average interest-bearing deposits and higher rates on interest-bearing deposits. The average rate paid on interest-bearing deposits was 1.41%, an increase of 58 bps during 2025. The largest increases in rates were in money markets and time deposits which increased 88 and 66 bps, respectively.

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Provision for Credit Losses and Unfunded Commitments

For the year ended December 31, 2025, the provision for credit losses was $5.3 million and the provision for unfunded commitments was a reversal of $532 thousand, compared to reversals of the provisions for credit losses and unfunded commitments of $2.4 million and $326 thousand, respectively, for the same period of 2024. In 2025, ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The reversal of the provision for unfunded commitments was impacted by the incorporation of post-COVID data which resulted in lower loss rates utilized within the Bank’s ACL model. During 2024, the Corporation revised estimates driven by a realignment of the peer group used for the CECL allowance process, an update to loss driver factors from third-party data, and an update to the application of prepayment and curtailment rate studies since implementation of CECL on January 1, 2023. These estimates, which were based on more current information available as of June 30, 2024, drove input assumptions which are used in the determination of the Corporation’s allowance for credit losses and the reserve for unfunded commitments. These updated estimates were the primary drivers for the reversal of the provision for credit losses and unfunded commitments in 2024.

The determination of the provisions was a result of the analysis of the adequacy of the allowances for credit losses and unfunded commitments calculations. Each quarter, the Corporation assesses risks and reserves required compared with the balances in the allowance for credit losses and unfunded commitments. Nonaccrual loans increased $2.0 million during 2025 driven primarily by the Acquisition and, to a lesser extent, by three unrelated lending relationships in the commercial real estate and residential mortgage portfolios. For additional discussion of the provision and the associated loans, please refer to the Asset Quality section of this Management’s Discussion and Analysis.

Noninterest Income

$ Variance

% Variance

$ Variance

% Variance

(In thousands)

2025

2024

2023

2025 vs. 2024

2024 vs. 2023

NONINTEREST INCOME

Insurance commissions

$

9,482 

$

9,754 

$

9,319 

$

(272)

(2.8)

%

$

435 

4.7 

%

Gain from mortgage loans held for sale

5,266 

301 

56 

4,965 

N/M

245 

N/M

Service charges on deposits

4,841 

4,144 

3,958 

697 

16.8 

186 

4.7 

Wealth management

4,475 

4,226 

3,644 

249 

5.9 

582 

16.0 

ATM debit card charges

3,563 

3,303 

3,348 

260 

7.9 

(45)

(1.3)

Earnings on investment in bank-owned life insurance

2,593 

1,979 

1,878 

614 

31.0 

101 

5.4 

Gain on life insurance proceeds

285 

— 

— 

285 

100.0 

— 

— 

Net (losses) gains on sales or calls of investment securities

(3,535)

69 

(5,240)

(3,604)

N/M

5,309 

101.3

Net gains (losses) on equity securities

30 

(9)

18 

39 

N/M

(27)

(150.0)

Gain on assets held for sale

— 

— 

337 

— 

— 

(337)

(100.0)

Other

1,609 

963 

1,127 

646 

67.1 

(164)

(14.6)

Total Noninterest Income

$

28,609 

$

24,730 

$

18,445 

$

3,879 

15.7 

%

$

6,285 

34.1 

%

As announced on Form 8-K on December 5, 2025, ACNB completed a repositioning of the investment securities portfolio by selling $74.6 million in book value of AFS investment securities, consisting of lower-yielding agency debt securities, for a pre-tax loss of $3.6 million. Total noninterest income, excluding net (losses) gains on sales or calls of investment securities, totaled $32.1 million in 2025 compared to $24.7 million in the same period of 2024, a $7.5 million increase. The majority of increases were driven primarily by the Acquisition and changes to customer products. The more significant fluctuations in noninterest income that were not a direct result of the Acquisition are explained below:

•Earnings on investment in bank-owned life insurance increased driven primarily by the Acquisition and the purchase of new policies.

•Gain on life insurance proceeds were the result of a death benefit received on a life insurance policy.

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Noninterest Expenses

$ Variance

% Variance

$ Variance

% Variance

(In thousands)

2025

2024

2023

2025 vs. 2024

2024 vs. 2023

NONINTEREST EXPENSES

Salaries and employee benefits

$

52,779 

$

42,929 

$

40,931 

$

9,850 

22.9 

%

$

1,998 

4.9 

%

Equipment

9,477 

7,321 

6,514 

2,156 

29.4 

807 

12.4 

Net occupancy

5,177 

4,162 

3,908 

1,015 

24.4 

254 

6.5 

Professional services

2,660 

2,140 

2,320 

520 

24.3 

(180)

(7.8)

Other tax

1,847 

1,446 

1,269 

401 

27.7 

177 

13.9 

FDIC and regulatory

1,751 

1,425 

1,388 

326 

22.9 

37 

2.7 

Intangible assets amortization

4,257 

1,244 

1,424 

3,013 

N/M

(180)

(12.6)

Merger-related

10,718 

2,045 

— 

8,673 

N/M

2,045 

100.0 

Other

11,849 

7,973 

8,318 

3,876 

48.6 

(345)

(4.1)

Total Noninterest Expenses

$

100,515 

$

70,685 

$

66,072 

$

29,830 

42.2 

%

$

4,613 

7.0 

%

Noninterest expenses increased $29.8 million in 2025 compared to the same period of 2024, driven primarily by the Acquisition. The more significant fluctuations in noninterest expenses that were not a direct result of the Acquisition are explained below:

•Salaries and employee benefits, the largest component of noninterest expenses, increased driven primarily by an increased number of employees attributable to the Acquisition, merit increases and higher mortgage commissions.

•Equipment increased $2.2 million driven primarily by the Acquisition and the implementation of additional products into our core processing system.

•Other increased $3.9 million driven primarily by the Acquisition, higher internet banking services and contributions.

•Merger-related, which include legal, external audit, loan review and advisory fees, occurred due to the Acquisition.

Income Taxes

The Corporation recognized income taxes of $9.4 million during 2025 compared to $8.6 million during 2024. The provision for income taxes reflects an ETR of 20.2% for 2025 and 21.2% for 2024. The variances from the federal statutory rate of 21% are generally due to tax-free income, which includes, but not limited to, interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, the impact of non-tax deductible expenses such as certain merger-related costs and state taxes. Note 15 — “Income Taxes”, to the Consolidated Financial Statements under Part II, Item 8 — “Financial Statements and Supplementary Data,” includes a reconciliation of the federal statutory tax rate to the Corporation’s ETR, which measures income tax expense as a percentage of pretax income.

FINANCIAL CONDITION

Total assets were $3.23 billion at December 31, 2025 compared to $2.39 billion at December 31, 2024. The Acquisition contributed $877.7 million to total assets.

Investment Securities

ACNB uses investment securities to manage interest rate risk, provide collateral for certain funding products, provide liquidity and generate interest and dividend income. These securities provide the appropriate characteristics with respect to credit quality, yield and maturity relative to the management of the overall Consolidated Statement of Condition.

In December of 2025, ACNB completed a repositioning of the investment securities portfolio by selling $74.6 million in book value of AFS investment securities, consisting of lower-yielding agency investment securities, for an after-tax loss of $2.8 million. The investment securities sold had an average book yield of approximately 1.13% with a weighted-average remaining life of approximately 2.0 years. Net proceeds of $71.1 million from the sale were used to purchase higher-yielding investment securities that were all classified as AFS. The investment securities purchased consisted of $25.3 million of agency multi-family investment securities, $22.9 million agency collateralized mortgage obligation securities and $22.9 million agency mortgage-backed securities. The repositioning is estimated to improve interest income on the investment securities portfolio by

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approximately $2.6 million over the next 12 months. ACNB expects to recover the $2.8 million after-tax loss on the sale of investment securities in approximately 1.4 years.

The table below presents the carrying amount of investment securities:

Increase (Decrease)

(In thousands)

December 31, 2025

December 31, 2024

$

%

Available for Sale

U.S. Government and agencies

$

59,352 

$

143,193 

$

(83,841)

(58.6)

%

Collateralized mortgage obligations

74,030 

35,654 

38,376 

107.6 

Residential mortgage-backed securities

173,688 

138,540 

35,148 

25.4 

Commercial mortgage-backed securities

122,209 

60,785 

61,424 

101.1 

State and municipal

8,450 

— 

8,450 

100.0 

Corporate bonds

29,165 

15,803 

13,362 

84.6 

Total AFS Investment Securities

$

466,894 

$

393,975 

$

72,919 

18.5 

%

Held to Maturity

State and municipal

$

62,200 

$

62,838 

$

(638)

(1.0)

%

Residential mortgage-backed securities

1,088 

1,740 

(652)

(37.5)

Total HTM Investment Securities

$

63,288 

$

64,578 

$

(1,290)

(2.0)

%

At December 31, 2025, the investment securities balance included a net unrealized loss on AFS investment securities of $19.5 million, net of taxes, at an amortized cost of $491.1 million compared to a net unrealized loss of $38.2 million, net of taxes, at an amortized cost of $441.6 million at December 31, 2024. The changes in fair value are deemed to be related solely to changes in market interest rates and not related to credit deterioration.

At December 31, 2025, the securities balance included HTM investment securities with an amortized cost of $63.3 million and a fair value of $57.5 million as compared to an amortized cost of $64.6 million and a fair value of $56.9 million at December 31, 2024. The Corporation's ACL on its HTM investment securities was de minimis.

The Corporation does not own investments consisting of pools of Alt-A or subprime mortgages, private label mortgage-backed securities, or trust preferred investments.

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Table of Contents

The following table discloses investment securities at the scheduled maturity date and weighted average yield at amortized cost at December 31, 2025. Mortgage-backed securities are allocated based upon scheduled maturities. Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties. Therefore, the stated yield may not be recognized in future periods. Additionally, residential mortgage-backed securities, which are collateralized by residential mortgage loans, typically prepay at a rate faster than the stated maturity. See “Note 4 — Investment Securities” for additional details.

Maturing

1 Year or Less

Over 1 - 5 Years

Over 5 - 10 Years

Over 10 Years

or No Maturity

Total

(Dollars in thousands)

Amortized

Cost

Weighted

Average

Yield1

Amortized

Cost

Weighted

Average

Yield1

Amortized

Cost

Weighted

Average

Yield1

Amortized

Cost

Weighted

Average

Yield1

Amortized

Cost

Weighted

Average

Yield 1

Available for Sale

U.S. Government and agencies

$

2,730 

0.78 

%

$

43,605 

1.06 

%

$

19,235 

1.27 

%

$

— 

— 

%

$

65,570 

1.11 

%

Collateralized mortgage obligations

— 

— 

47 

2.22 

230 

2.53 

75,705 

3.96 

75,982 

3.95 

Residential mortgage-backed securities

— 

— 

1,224 

2.33 

17,073 

1.84 

167,906 

2.92 

186,203 

2.81 

Commercial mortgage-backed securities

381 

2.96 

27,007 

4.83 

35,450 

4.74 

62,158 

3.90 

124,996 

4.34 

State and municipal

— 

— 

— 

— 

— 

— 

8,499 

5.23 

8,499 

5.23 

Corporate bonds

— 

— 

17,271 

4.83 

12,600 

4.75 

— 

— 

29,871 

4.80 

Total

$

3,111 

1.04 

%

$

89,154 

2.95 

%

$

84,588 

3.36 

%

$

314,268 

3.42 

%

$

491,121 

3.31 

%

Held to Maturity

State and municipal

$

400 

1.27 

%

$

5,652 

1.85 

%

$

36,357 

2.43 

%

$

19,791 

2.46 

%

$

62,200 

2.38 

%

Residential mortgage-backed securities

— 

— 

882 

2.04 

206 

2.50 

— 

— 

1,088 

2.13 

Total

$

400 

1.27 

%

$

6,534 

1.88 

%

$

36,563 

2.43 

%

$

19,791 

2.46 

%

$

63,288 

2.38 

%

________________________________________

1 Weighted Average Yield has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

The fair value of CRA Mutual Fund equity security has a readily determinable fair value of $949 thousand at December 31, 2025 with no stated maturity.

Loans

The following table presents the composition of the loan portfolio as follows:

Increase

(In thousands)

December 31, 2025

December 31, 2024

$

%

Commercial real estate

$

1,273,813 

$

969,514 

$

304,299 

31.4 

%

Residential mortgage

599,051 

401,950 

197,101 

49.0 

Commercial and industrial

205,452 

140,906 

64,546 

45.8 

Home equity lines of credit

127,341 

85,685 

41,656 

48.6 

Real estate construction

116,680 

76,773 

39,907 

52.0 

Consumer

10,140 

9,318 

822 

8.8 

Gross loans

2,332,477 

1,684,146 

648,331 

38.5 

Unearned income

(1,963)

(1,236)

727 

58.8 

Total Loans, Net of Unearned Income

$

2,330,514 

$

1,682,910 

$

647,604 

38.5 

%

The increase in total loans, net of unearned income, was driven primarily by $648.5 million in loans purchased at the Acquisition date. Total acquisition accounting adjustments on loans were $18.2 million at December 31, 2025. The majority of the loan acquisition accounting adjustments are expected to accrete back through as income as loans pay off or mature. Growth in the portfolio was spread throughout ACNB’s geographic footprint and across various property types. The collateral for the loans is primarily spread across the Bank’s Market Area. Despite the intense competition in these areas, management continues to focus on asset quality and disciplined underwriting standards in the loan origination process. ACNB does not have a

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significant concentration of credit risk with any single borrower, industry or geographic location. Most of the Corporation’s lending activities are with customers located within the Bank’s Market Area.

The commercial real estate portfolio grew $304.3 million in 2025. The collateral for these loans is primarily spread across Pennsylvania and Maryland, 65.8% and 32.1%, respectively, at December 31, 2025 compared to 56.0% and 42.1%, respectively, at December 31, 2024. Less than 3% of the portfolio is for real estate in Urban areas such as Baltimore, Maryland and Philadelphia, Pennsylvania. The largest sectors of the commercial real estate portfolio are retail and mixed-use commercial rental units, office complexes, apartment complexes and hotels, motels and bed and breakfast entities. Non-owner occupied commercial real estate represented 65.4% of the commercial real estate portfolio at December 31, 2025, compared to 62.3% at December 31, 2024. Non-owner occupied commercial real estate borrowers are geographically dispersed throughout ACNB’s Market Area and are leasing commercial properties to a varied group of tenants including medical offices, retail space, and other commercial purpose facilities. Because of the varied nature of the tenants in aggregate, management believes that these loans present an acceptable risk when compared to commercial loans in general.

The following chart details the percentage of the various segments included in the portfolio:

______________________________________________________________

1 Constitutes over 40 loan categories that do not fit into the categories presented above

The concentration of non-owner occupied commercial real estate, construction, and multi-family was 239.0% of total risk-based capital of the Bank as of December 31, 2025 compared to 207.0% of total risk-based capital of the Bank as of December 31, 2024. The increase was primarily a result of the Acquisition.

Residential real estate mortgages totaled $599.1 million, an increase of $197.1 million, or 49.0%, in 2025. Included in the residential real estate mortgages are $221.1 million of commercial loans primarily for investment properties and $61.3 million of consumer loans secured by residential real estate mortgages. Total residential real estate mortgages include $50.7 million in junior liens. Junior liens inherently have more credit risk by virtue of the fact that another financial institution may have a senior security position in the case of foreclosure liquidation of collateral to extinguish the debt.

Commercial and industrial loans totaled $205.5 million, an increase of $64.5 million, or 45.8% in 2025. This segment includes loans to school districts, municipalities (including townships) and essential purpose authorities. In many cases, these loans are obtained through a bid process that includes other local and regional banks and are especially subject to refinancing in certain rate environments.

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Table of Contents

The following table presents the maturity schedule of the loan portfolio, segmented based on the underlying collateral, at December 31, 2025. Loans with variable rates or floating interest rates include adjustable-rate instruments that may have a remaining period of fixed rate interest, and in some instances, multiple years of a fixed rate interest period.

LOANS MATURING

(In thousands)

Due in One Year or Less

Due After One Year to Five Years

Due After Five Years to Fifteen Years

Due After Fifteen Years

Total

Loans with predetermined

    (fixed) interest rates

Commercial real estate

$

36,949 

$

114,376 

$

19,541 

$

445 

$

171,311 

Residential mortgage

6,515 

27,647 

86,934 

90,769 

211,865 

Commercial and industrial

5,000 

61,433 

4,542 

— 

70,975 

Home equity lines of credit

— 

94 

29 

229 

352 

Real estate construction

11,603 

12,669 

1,040 

28,485 

53,797 

Consumer

259 

3,644 

1,825 

36 

5,764 

Total predetermined (fixed) interest rates

60,326 

219,863 

113,911 

119,964 

514,064 

Loans with variable or

    floating interest rates

Commercial real estate

35,978 

129,584 

458,602 

478,338 

1,102,502 

Residential mortgage

5,702 

8,574 

73,233 

299,677 

387,186 

Commercial and industrial

54,961 

16,985 

44,140 

18,391 

134,477 

Home equity lines of credit

14,821 

20,538 

22,985 

68,645 

126,989 

Real estate construction

17,681 

17,952 

6,476 

20,774 

62,883 

Consumer

450 

854 

1,187 

1,885 

4,376 

Total variable or floating interest rates

129,593 

194,487 

606,623 

887,710 

1,818,413 

Total fixed and floating interest rates

$

189,919 

$

414,350 

$

720,534 

$

1,007,674 

$

2,332,477 

Asset Quality

The ACNB loan portfolio is subject to varying degrees of credit risk. Credit risk is mitigated through prudent and disciplined underwriting standards, ongoing credit review, and monitoring and reporting asset quality measures. Additionally, loan portfolio diversification, limiting exposure to a single industry or borrower, and requiring collateral also reduces ACNB’s credit risk. ACNB’s commercial, consumer and residential mortgage loans are principally to borrowers in ACNB’s Market Area. As the majority of ACNB’s loans are located in this area, a substantial portion of the debtor’s ability to honor the obligation may be affected by the level of economic activity in the Market Area.

The accrual of interest on residential mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in the process of collection. Consumer loans (consisting of home equity lines of credit and consumer loan categories) are typically charged off no later than 120 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. ACNB occasionally returns nonaccrual loans to performing status when the borrower brings the loan current and performs in accordance with contractual terms for a reasonable period of time.

For loans to borrowers with commercial purposes, an internal risk rating process is used to monitor credit quality. For a complete description of the Corporation’s risk ratings, refer to the “Allowance for Credit Losses” section within Note 1 — “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8 — “Financial Statements and Supplementary Data”.

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The following table sets forth the Corporation’s nonperforming assets as of December 31:

(Dollars in thousands)

2025

2024

Nonaccrual loans

$

7,867 

$

5,871 

Greater than or equal to 90 days past due and accruing

2,854 

941 

Total Nonperforming Loans

10,721 

6,812 

Foreclosed assets

19 

438 

Total Nonperforming Assets

$

10,740 

$

7,250 

Ratios:

Nonperforming loans to total loans

0.46 

%

0.40 

%

Nonperforming assets to total assets

0.33 

0.30 

Allowance for credit losses to nonperforming loans

220.80 

253.67 

Nonaccrual loans increased $2.0 million driven primarily by the Acquisition and, to a lesser extent, by three unrelated relationships in the commercial real estate and residential mortgage portfolios. All nonaccrual loans are to borrowers located within ACNB’s Market Area and were originated by ACNB’s banking subsidiary or were part of the Acquisition and were originated by Traditions’ banking subsidiary.

Additional information on nonaccrual loans by collateral type at December 31 is as follows:

(Dollars in thousands)

Number of

Credit

Relationships

Balance

Current Specific

Loss Allocations

Current Year

Charge-Offs

Location

Originated

2025

Commercial real estate

10 

$

3,961 

$

— 

$

— 

In market

2006-2024

Business assets

5 

1,971 

259 

— 

In market

2009-2023

Residential real estate

6 

1,935 

131 

— 

In market

2019-2022

Total

21 

$

7,867 

$

390 

$

— 

2024

Commercial real estate

6 

$

3,564 

$

138 

$

— 

In market

2006-2022

Business assets

4 

2,307 

569 

— 

In market

2009-2023

Total

10 

$

5,871 

$

707 

$

— 

Foreclosed assets held for resale consist of the fair value of real estate acquired through foreclosure on real estate loan collateral or the acceptance of ownership of real estate in lieu of the foreclosure process. Fair values are based on appraisals that consider the sales prices of similar properties in the proximate vicinity less estimated selling costs. Foreclosed assets held for resale totaled $19 thousand, consisting of one property, at December 31, 2025 compared to two properties totaling $438 thousand at December 31, 2024.

Allowance for Credit Losses

In 2023, the Corporation adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, universally referred to as CECL which replaced the prior incurred loss methodology. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including loans, HTM securities and purchased financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. It also applies to OBS credit exposures such as loan commitments, standby letters of credit, financial guarantees and other similar instruments.

ACNB maintains the ACL at a level believed to be adequate by management to absorb current expected losses in the loan portfolio, and it is funded through a provision for credit losses charged to earnings.

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A summary of ACNB’s activity in the ACL as of December 31:

(Dollars in thousands)

2025

2024

2023

Beginning balance

$

17,280 

$

19,969 

$

17,861 

Impact of CECL adoption

— 

— 

1,618 

Allowance established for acquired PCD loans

1,464 

— 

— 

Provision for (reversal of) credit losses

5,262 

(2,437)

860 

Loans charged-off:

Commercial and industrial

14 

138 

110 

Commercial real estate

32 

— 

— 

Residential mortgage

19 

— 

— 

Consumer

358 

218 

396 

Total Loans Charged-Off

423 

356 

506 

Recoveries:

Commercial and industrial

15 

26 

64 

Consumer

74 

78 

72 

Total Recoveries

89 

104 

136 

Net charge-offs

334 

252 

370 

Ending balance

$

23,672 

$

17,280 

$

19,969 

Ratios:

Net charge-offs to average loans

0.01 

%

0.02 

%

0.02 

%

Allowance for credit losses to total loans

1.02 

%

1.03 

%

1.23 

%

The increase in the ACL for the year ended December 31, 2025 compared to the prior year was driven primarily by the higher provision for credit losses during 2025 related to the Acquisition. Total internally risk rated loans were $1.80 billion as of December 31, 2025 with a related ACL of $19.0 million.

The allocation of the ACL as of December 31:

2025

2024

(In thousands)

Amount

Percent of Loan

Type to Total Loans

Amount

Percent of Loan

Type to Total Loans

Commercial real estate

$

13,259 

54.6 

%

$

10,578 

57.6 

%

Residential mortgage

5,386 

25.7 

2,976 

23.9 

Commercial and industrial

1,800 

8.8 

1,416 

8.4 

Home equity lines of credit

482 

5.5 

294 

5.1 

Real estate construction

2,588 

5.0 

1,918 

4.5 

Consumer

157 

0.4 

98 

0.5 

Total

$

23,672 

100.0 

%

$

17,280 

100.0 

%

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Deposits

The following table presents ending deposits, by type, as of December 31:

Increase

(In thousands)

2025

2024

$

%

Noninterest-bearing demand deposits

$

553,855 

$

451,503 

$

102,352 

22.7 

%

Interest-bearing demand deposits

623,620 

505,096 

118,524 

23.5 

Money market

485,808 

251,667 

234,141 

93.0 

Savings

333,973 

311,207 

22,766 

7.3 

Total demand and savings

1,997,256 

1,519,473 

477,783 

31.4 

Time

452,929 

273,028 

179,901 

65.9 

Total Deposits

$

2,450,185 

$

1,792,501 

$

657,684 

36.7 

%

The Bank relies on deposits as a primary source of funds for lending activities. The Bank’s deposit pricing function employs a disciplined approach based upon liquidity needs and alternative funding rates, but also strives to price deposits to be competitive with relevant local competition, including local government investment trusts, credit unions and larger regional banks.

The increase in deposits from December 31, 2024 to December 31, 2025 was driven primarily by the Acquisition. ACNB acquired $741.5 million in deposits at the Acquisition date. Total demand and savings deposits increased $477.8 million and time deposits increased $179.9 million. Included in time deposits was $59.1 million in brokered time deposits issued by the Bank. Total deposits as of December 31, 2025 were comprised of approximately 61% consumer deposits and 39% commercial deposits, compared to approximately 63% consumer deposits and 37% commercial deposits as of December 31, 2024. The loan-to-deposit ratio was 95.12% at December 31, 2025 compared to 93.89% at December 31, 2024.

Included in total deposits at December 31, 2025 were municipal deposits totaling $119.3 million, or 4.9%, of total deposits compared to $111.0 million, or 6.2%, of total deposits at December 31, 2024. Uninsured and non-collateralized deposits to total Bank deposits was 17.7% compared to 16.3% at December 31, 2025 and 2024, respectively. As of December 31, 2025, cash on hand, the fair value of unencumbered investment securities and collateralized borrowing capacities at the FHLB and the Federal Reserve discount window at the Bank were 342.7% of uninsured and non-collateralized Bank deposits. At December 31, 2025 deposits from the 20 largest depositors, excluding internal accounts, of the Bank totaled $177.2 million, or 7.2%, of total Bank deposits compared to $143.4 million, or 7.9%, of total Bank deposits at December 31, 2024. See Note 10 — “Deposits”, to the Consolidated Financial Statements under Part II, Item 8 — “Financial Statements and Supplementary Data,” for more information.

Borrowings

The Corporation’s borrowings as of December 31:

Increase

(In thousands)

2025

2024

$

%

Securities sold under repurchase agreements

$

16,129 

$

15,826 

$

303 

1.9 

%

Short-term FHLB advances

45,000 

— 

45,000 

100.0 

Federal funds purchased

3,611 

— 

3,611 

100.0 

Total Short-Term Borrowings

64,740 

15,826 

48,914 

309.1 

Long-term FHLB advances

235,000 

235,000 

— 

— 

Trust preferred subordinated debt1

5,376 

5,333 

43 

0.8 

Subordinated debt

15,000 

15,000 

— 

— 

Total Long-Term Borrowings

255,376 

255,333 

43 

— 

Total Borrowings

$

320,116 

$

271,159 

$

48,957 

18.1 

%

______________________________________

1Net of purchase accounting fair value mark.

Short-term borrowings are comprised primarily of securities sold under agreements to repurchase, short-term borrowings from the FHLB and federal funds purchased. Fluctuations in securities sold under agreements to repurchase balances are due to normal changes in the cash flow position of ACNB’s commercial and local government customer base. Agreements to

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repurchase accounts are within the commercial and local government customer base and have attributes similar to core deposits. Investment securities are pledged in sufficient amounts to collateralize these agreements. Short-term FHLB borrowings are used for general balance sheet management.

Long-term borrowings consist of longer-term advances from the FHLB, trust preferred subordinated debt and subordinated debt. Further borrowings will be used when necessary for a variety of risk management and funding purposes. Please refer to the Liquidity discussion below for more information on the Corporation’s ability to borrow.

Capital

ACNB’s capital management strategies have been developed to provide an appropriate rate of return relative to management’s identification and management of risk, in the opinion of management, to stockholders, while maintaining levels above its internal minimums and “well capitalized” regulatory position in relationship to its risk exposure. Total stockholders’ equity was $420.0 million at December 31, 2025 compared to $303.3 million at December 31, 2024. Stockholders’ equity increased primarily due to the $83.6 million issuance of common stock to acquire Traditions, net income of $37.1 million and a $18.6 million change in unrealized gains in AFS investment securities partially offset by $14.4 million in cash dividends paid to ACNB Corporation stockholders and $11.2 million of common stock repurchases.

ACNB has a Dividend Reinvestment and Stock Purchase Plan that provides registered holders of ACNB common stock with a convenient way to purchase additional shares of common stock by permitting participants in the plan to automatically reinvest cash dividends on all or a portion of the shares owned and to make quarterly voluntary cash payments under the terms of the plan. Participation in the plan is voluntary, and there are eligibility requirements to participate in the plan. During the year ended December 31, 2025, 15,419 shares were issued under this plan. Proceeds from the plan are used for general corporate purposes.

On June 18, 2025, the Corporation announced that the Board of Directors approved a plan to repurchase, in open market transactions at prevailing market prices, up to 314,000 shares, or approximately 3%, of the outstanding shares of ACNB’s common stock. This common stock repurchase program replaced and superseded any and all earlier announced repurchase plans. There were 116,929 shares purchased under this plan during 2025.

On October 24, 2022, the Corporation announced that the Board of Directors approved on October 18, 2022 a new plan to repurchase, in open market and privately negotiated transactions, up to 255,575, or approximately 3%, of the outstanding shares of the Corporation’s common stock. There were 215,372 treasury shares purchased under this plan through June 30, 2025. The plan was replaced by the plan announced on June 18, 2025.

Regulatory Capital Requirements

The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain OBS items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Minimum regulatory capital requirements established by Basel III rules require the Corporation and the Bank to:

•Meet a minimum Tier 1 leverage capital ratio of 4.0% of average assets;

•Meet a minimum Common Equity Tier 1 capital ratio of 4.5% of risk-weighted assets;

•Meet a minimum Tier 1 capital ratio of 6.0% of risk-weighted assets;

•Meet a minimum Total capital ratio of 8.0% of risk-weighted assets;

•Maintain a “capital conservation buffer” of 2.5% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonus; and,

•Comply with the definition of capital to improve the ability of regulatory capital instruments to absorb losses.

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ACNB considers the capital ratios of the banking subsidiary to be the relevant measurement of capital adequacy. The banking subsidiary’s capital ratios are as follows:

2025

2024

To be Well

Capitalized under

Prompt Corrective

Action Regulations

Tier 1 leverage ratio (to average assets)

10.92 

%

12.03 

%

5.00 

%

Common Tier 1 capital (to risk-weighted assets)

14.32 

%

16.03 

%

6.50 

%

Tier 1 risk-based capital ratio (to risk-weighted assets)

14.32 

%

16.03 

%

8.00 

%

Total risk-based capital ratio (to risk-weighted assets)

15.30 

%

17.02 

%

10.00 

%

Quantitative measures established by regulation to ensure capital adequacy require ACNB to maintain minimum amounts and ratios of total and Tier 1 capital to average and risk adjusted assets. Management believes, as of December 31, 2025 and 2024, that ACNB’s banking subsidiary met all minimum capital adequacy requirements to which it is subject and is categorized as “well capitalized” for regulatory purposes. There are no subsequent conditions or events that management believes have changed the banking subsidiary’s category.

For further information on the actual and required capital amounts and ratios, please refer to Note 16 — “Regulatory Matters” in the Notes to Consolidated Financial Statements.

Liquidity

Effective liquidity management ensures the cash flow requirements of depositors and borrowers as well as the operating cash needs of ACNB are met. ACNB’s funds are available from a variety of sources, including assets that are readily convertible such as interest-bearing deposits with banks, maturities and repayments from the securities portfolio, scheduled repayments of loans receivable, the core deposit base, the ability to raise brokered deposits, and the ability to borrow from the FHLB, Federal Reserve Discount Window and unsecured Federal Funds line providers.

At December 31, 2025, ACNB’s banking subsidiary could borrow $1.29 billion from the FHLB of which $1.01 billion was available. At December 31, 2025, ACNB’s banking subsidiary could borrow $57.0 million from the Discount Window, of which the full amount was available. The underlying collateral at the Discount Window is made up of eligible loan collateral held in a joint-custody account under the Bank’s name.

ACNB’s banking subsidiary maintains several unsecured Fed Funds lines with correspondent banks. As of December 31, 2025, Fed Funds line capacity at the banking subsidiary was $192.0 million, of which the full amount was available. ACNB maintains a $5.0 million unsecured line of credit with a correspondent bank, all of which was available for borrowing at December 31, 2025. The Corporation also executed a guaranty for a note related to a $1.5 million commercial line of credit from a local bank, with customary terms and conditions for such a line, for ACNB Insurance Services, the borrower and wholly-owned subsidiary of ACNB Corporation. The commercial line of credit is for general working capital needs as they arise by ACNB Insurance Services.

Another source of liquidity is securities sold under repurchase agreements to customers of the Bank totaling $16.1 million and $15.8 million at December 31, 2025 and 2024, respectively. These agreements vary in balance according to the cash flow needs of customers and competing accounts at other financial organizations.

The liquidity of the parent company also represents an important aspect of liquidity management. The parent company’s cash outflows consist principally of dividends to stockholders, common stock repurchases and corporate expenses. The main source of funding for the parent company is the dividends it receives from its subsidiaries. Federal and state banking regulations place certain legal restrictions and other practicable safety and soundness restrictions on dividends paid to the parent company from the subsidiary bank. For a discussion of ACNB’s dividend restrictions, please refer to Item 1 — “Business” and Note 16 — “Regulatory Matters” in the Notes to Consolidated Financial Statements.

ACNB manages liquidity by monitoring projected cash inflows and outflows on a daily basis, and believes it has sufficient funding sources to maintain sufficient liquidity under varying degrees of business conditions for liquidity and capital resource requirements for all material short- and long-term cash requirements from known contractual and other obligations.

Off-Balance Sheet Arrangements

The Corporation is party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and, to a lesser extent, standby letters of credit. At December 31, 2025 the Corporation had unfunded outstanding commitments to extend credit of $566.8 million and

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outstanding standby letters of credit of $24.4 million. Because these commitments generally have fixed expiration dates and many will expire without being drawn upon, the total commitment level does not necessarily represent future cash requirements. Please refer to Note 17 — “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for a discussion of the nature, business purpose, and importance of the Corporation’s OBS arrangements.

New Accounting Pronouncements

See Note 1 — “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements for a summary of these new accounting pronouncements not yet adopted.