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ACNB Corporation Reports Record 2018 Financial Results With 122% Increase in Net Income

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January 31, 2019
ACNB Corporation (NASDAQ: ACNB), financial holding company for ACNB Bank and Russell Insurance Group, Inc., announced record financial results for the year ended December 31, 2018, with net income of $21,748,000. Compared to net income of $9,788,000 for the year ended December 31, 2017, this is an increase of $11,960,000, or 122.2%, over prior year-end results. Basic earnings per share were $3.09 and $1.50 for the year ended December 31, 2018 and 2017, respectively, which is an increase of $1.59 per share or 106.0%.    
The higher net income reported for 2018 was a result of merger-related expenses incurred in 2017, organic net revenue growth in 2018, as well as the additional revenues and cost efficiencies associated with the acquisition of New Windsor Bancorp, Inc. (New Windsor) on July 1, 2017. In addition, net income was aided by a lower effective tax rate due to the Tax Cuts and Jobs Act effective on January 1, 2018. 
For the three months ended December 31, 2018, the Corporation reported net income of $5,289,000. Compared to net income of $2,517,000 for the three months ended December 31, 2017, this is an increase of $2,772,000, or 110.1%, over comparable period results. Basic earnings per share were $0.75 and $0.36 for the three months ended December 31, 2018 and 2017, respectively, which is an increase of $0.39 per share or 108.3%. 
“ACNB Corporation’s financial results for 2018 were exceptional in comparison to 2017 and prior years. The primary driver of this significant increase in net income was the first full year of combined banking operations and positive momentum experienced following the acquisition of New Windsor in July 2017,” said James P. Helt, ACNB Corporation President & CEO. “Also contributing to the Corporation’s strong 2018 financial performance was enhanced revenue growth attributable to subsidiary activities through both ACNB Bank Wealth Management and Russell Insurance Group, Inc.” 
Mr. Helt continued, “Given our recent robust financial performance, ACNB Corporation has been recognized as one of the top performing bank stocks in the United States by S&P Global Market Intelligence, with a total return of 33.8% in 2018. This financial performance has directly contributed to the enhancement of long-term value for our shareholders, which continues to be a priority of ACNB Corporation’s management and board of directors.” 
Revenues 
Total revenues, defined as interest income plus noninterest income, for the year ended December 31, 2018, were $80,442,000, or a 22.0% increase over total revenues of $65,934,000 for 2017. Total interest income for 2018 was $64,494,000, or an increase of 24.5%, as compared to total interest income of $51,785,000 for the year ended December 31, 2017, due to both organic loan growth and inorganic loan growth resulting from the New Windsor acquisition.   
Loans 
Total loans outstanding were $1,302,465,000 at December 31, 2018. Year over year, loans outstanding increased by $58,295,000, or 4.7%, since December 31, 2017, primarily in the commercial portfolio, despite the generally slower economic conditions and continued intense competition during 2018 in the Corporation’s markets. As a result of loan growth and normal and anticipated credit losses in the loan portfolio, the provision for loan losses for 2018 was $1,620,000.  
Deposits 
Total deposits were $1,348,092,000 at December 31, 2018. Year over year, total deposits increased by $49,600,000, or 3.8%, since December 31, 2017, with significant growth in transaction accounts. To enhance future deposit growth, ACNB Bank introduced a new menu of personal checking accounts with value-added benefits in 2018.    
Net Interest Income and Margin 
Net interest income rose by $10,743,000 to $57,095,000 for the year ended December 31, 2018, an increase of 23.2% in comparison to the year ended December 31, 2017. The net interest margin for 2018 was 3.81%, compared to 3.51% for 2017. The increases in net interest income and net interest margin for 2018 were primarily due to the impact of the New Windsor acquisition and the related purchase accounting adjustments.  
Noninterest Income 
Noninterest income for 2018 was $15,948,000, an increase of $1,799,000, or 12.7%, over the prior year. The increase includes both revenue from fiduciary, investment management and brokerage activities and commissions from insurance sales, which grew 17.5% and 10.5%, respectively, from the year ended December 31, 2017, to the year ended December 31, 2018. 
Noninterest Expense 
Noninterest expense for 2018 was $44,703,000, an increase of $624,000, or 1.4%, over the prior year. The modest increase in noninterest expense is attributable to normal business operations, a growing community banking footprint, and management’s continued focus on expense control.    
Dividends 
Quarterly cash dividends paid to ACNB Corporation shareholders in 2018 totaled $6,261,000, or 
$0.89 per share---an increase of more than $1,000,000 over the prior year. In 2017, ACNB Corporation paid an $0.80 dividend per share for total dividends paid to shareholders in the amount of $5,233,000. A portion of the increase in total dividends paid to shareholders in 2018 was a result of new shares issued effective with the acquisition of New Windsor on July 1, 2017.  
About ACNB Corporation 
ACNB Corporation, headquartered in Gettysburg, PA, is the $1.6 billion financial holding company 
for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and Russell Insurance Group, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 22 community banking offices located in the four southcentral Pennsylvania counties of Adams, Cumberland, Franklin and York as well as loan offices in York, PA, and Hunt Valley, MD. In addition, NWSB Bank, a division of ACNB Bank, serves its marketplace via a network of seven community banking offices located in Carroll County, MD. 
The other wholly-owned subsidiary of ACNB Corporation is Russell Insurance Group, Inc., its insurance subsidiary. As a full-service agency with licenses in 44 states, Russell Insurance Group, Inc. offers a broad range of commercial and personal insurance lines through offices in Westminster, Germantown and Jarrettsville, MD. For more information regarding ACNB Corporation and its subsidiaries, please visit acnb.com. 


Contact:
Lynda L. Glass 
717.339.5085 
lglass@acnb.com