• ACNB Corporation Reports Fourth Quarter and 2023 Financial Results

    Source: Nasdaq GlobeNewswire / 25 Jan 2024 09:00:03   America/New_York

    GETTYSBURG, Pa., Jan. 25, 2024 (GLOBE NEWSWIRE) -- ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced net income of $4.1 million, or $0.48 per diluted earnings per share, for the three months ended December 31, 2023 compared to net income of $10.2 million, or $1.20 per diluted earnings per share, for the three months ended December 31, 2022. Compared to the three months ended September 30, 2023, net income and diluted earnings per share for the three months ended December 31, 2023 decreased $4.9 million and $0.58, respectively. The Corporation reported net income of $31.7 million, or $3.71 per diluted earnings per share, for the twelve months ended December 31, 2023, a decrease of $4.1 million compared to the twelve months ended December 31, 2022. The financial results for both the three and twelve month periods ended December 31, 2023 were impacted by the repositioning of the investment securities portfolio as announced on Form 8-K on December 15, 2023. ACNB completed a repositioning of the investment securities portfolio by selling approximately $51.1 million in book value of available for sale investment securities for an after-tax loss of approximately $3.5 million.

    2023 Highlights

    • Return on average assets was 1.32% and return on average equity was 12.23% for the twelve months ended December 31, 2023.
    • Excluding the impact of the repositioning of the investment securities portfolio, return on average assets was 1.47%1 and return on average equity was 13.57%1 for the twelve months ended December 31, 2023.
    • Fully taxable equivalent (“FTE”) net interest margin was 4.07% for the twelve months ended December 31, 2023 compared to 3.36% for the twelve months ended December 31, 2022.
    • Efficiency ratio1 was 57.78% for the twelve months ended December 31, 2023 compared to 55.81% for the twelve months ended December 31, 2022.
    • Total loans were $1.63 billion at December 31, 2023, an increase of $12.0 million, or 0.7%, from September 30, 2023 and an increase of $89.4 million, or 5.8%, from December 31, 2022.
    • Total non-performing loans to loans held-for-investment was 0.26% at December 31, 2023 compared to 0.22% at September 30, 2023 and 0.25% at December 31, 2022. Net charge-offs to average loans (annualized) were 0.02% for the three months ended December 31, 2023 compared to 0.03% for the three months ended September 30, 2023 and 0.02% for the three months ended December 31, 2022.
    • The loan to deposit ratio was 87.44% at December 31, 2023 and the ratio of uninsured and non-collateralized deposits to total deposits was approximately 17.3% at ACNB Bank at December 31, 2023.
    • Tangible common equity to tangible assets ratio1 of 9.48% at December 31, 2023 compared to 8.65% at September 30, 2023 and 7.71% at December 31, 2022. The net unrealized loss on the available for sale securities portfolio was $50.2 million at December 31, 2023 compared to a net unrealized loss of $75.2 million at September 30, 2023 and a net unrealized loss of $64.1 million at December 31, 2022.
    • ACNB and ACNB Bank capital levels remain well in excess of ACNB’s internal minimums and those required to be categorized as well-capitalized by our bank regulators. ACNB’s overall liquidity position remains strong and stable.

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

    “The financial services industry was challenged in 2023 with considerable market uncertainty and turmoil. However, ACNB Corporation continued to focus on fundamental community banking principals and we are pleased to share our positive operating results. As a result of our steadfast commitment to our shareholders, customers, and employees, our financial performance during the year has positioned ACNB Corporation to meet the future demands facing our industry and our customers,” said James P. Helt, ACNB Corporation President & Chief Executive Officer.

    “We began 2023 with our rebranding efforts and the concept of One Together, One Team, One Brand. The goal of brand realignment is for ACNB Corporation and its subsidiaries to operate cohesively under one name and one brand to effectively serve the financial needs of customers throughout the organization’s footprint in southcentral Pennsylvania and central Maryland. Through this dedicated effort, ACNB Corporation, ACNB Bank and ACNB Insurance Services, Inc. now provide brand recognition and impact for customers, shareholders, and communities served alike. Additionally, we experienced meaningful loan growth in 2023 led by our Commercial Lending teams. Our capital base, superior asset quality metrics and continued robust risk management practices remain key strengths of the Corporation. These corporate strengths provided us the opportunity at the end of 2023 to reposition our investment securities portfolio to improve our future interest income by approximately $1.9 million over the next 12 months.”

    Mr. Helt continued, “We look forward to a successful 2024 by continuing to execute our strategy of remaining an independent financial services provider of choice in the communities served by building relationships and finding solutions for our customers. As always, ACNB Corporation’s Management and Board of Directors are focused on the challenges and opportunities that lie ahead and we are committed to continued growth and profitability for the Corporation.”

    Net Interest Income and Margin

    Net interest income for the three months ended December 31, 2023 totaled $21.5 million, a decrease of $252 thousand, or 1.2%, compared to the three months ended September 30, 2023. The decline in net interest income was driven primarily by an increase in the cost of deposits and an increase in borrowings. The FTE net interest margin was 3.93%, a decrease of 8 basis points from 4.01% for the three months ended September 30, 2023. The average rate paid on interest-bearing deposits was 0.51% for the three months ended December 31, 2023, an increase of 25 basis points from the three months ended September 30, 2023. The average rate paid on total borrowings was 4.06% for the three months ended December 31, 2023, an increase of 23 basis points from the three months ended September 30, 2023. The average yield on interest-earning assets was 4.62% for the three months ended December 31, 2023, an increase of 16 basis points from the three months ended September 30, 2023.

    Net interest income for the twelve months ended December 31, 2023 totaled $88.3 million, an increase of $4.9 million, or 5.9%, over the twelve months ended December 31, 2022. The increase in net interest income was driven primarily by higher interest rates. Paycheck Protection Program (“PPP”) fees and purchase accounting accretion for the twelve months ended December 31, 2023 totaled $1.2 million compared to $3.8 million for the twelve months ended December 31, 2022. The FTE net interest margin was 4.07% for the twelve months ended December 31, 2023, an increase of 71 basis points from 3.36% for the twelve months ended December 31, 2022. The average rate paid on interest-bearing deposits was 0.25% for the twelve months ended December 31, 2023, an increase of 10 basis points from the twelve months ended December 31, 2022. The average rate paid on total borrowings was 3.62% for the twelve months ended December 31, 2023, an increase of 187 basis points from the twelve months ended December 31, 2022. The average yield on interest-earning assets was 4.45% for the twelve months ended December 31, 2023, an increase of 95 basis points from the twelve months ended December 31, 2022.

    Noninterest Income

    Noninterest income for the three months ended December 31, 2023 was $970 thousand, a decrease of $5.3 million, or 84.6%, from the three months ended September 30, 2023. For the twelve months ended December 31, 2023, noninterest income was $18.4 million, a decrease of $3.4 million, or 15.4%, compared to the twelve months ended December 31, 2022. The decrease in both periods was driven primarily by the repositioning of the investment securities portfolio which generated a $4.5 million pre-tax loss on the sale of investment securities.

    Insurance commissions for the three months ended December 31, 2023 was $1.9 million, a decrease of $681 thousand from the three months ended September 30, 2023 due to seasonality in annual policy renewals. Insurance commissions for the twelve months ended December 31, 2023 was $9.3 million, an increase of $1.0 million from the twelve months ended December 31, 2022 driven primarily by higher contingent income, organic growth and the full year contribution from the acquisition of the business and assets of the Hockley & O’Donnell Insurance Agency in early 2022. Wealth management income for the twelve months ended December 31, 2023 was $3.6 million, an increase of $484 thousand from the twelve months ended December 31, 2022 driven primarily by strong market returns, greater sales activity and new business generation. Earnings on investment in bank-owned life insurance for the twelve months ended December 31, 2023 was $1.9 million, an increase of $346 thousand from the twelve months ended December 31, 2022 driven primarily by additional purchases during the three months ended September 30, 2022.

    Noninterest Expense

    Noninterest expense for the three months ended December 31, 2023 was $17.2 million, an increase of $837 thousand, or 5.1%, from the three months ended September 30, 2023. The increase was driven primarily by increases in salaries and employee benefits, equipment, professional services and FDIC and regulatory expenses. Salaries and employee benefits expense increased $527 thousand driven primarily by an increase in incentive compensation, an increase in employment taxes and an increase in expense due to loan originations. Equipment expense increased $176 thousand driven primarily by increases in core processing and annual maintenance expenses and purchases of additional equipment. Professional services increased $103 thousand primarily as a result of increased loan review and consulting expenses. The $68 thousand increase in FDIC and regulatory was the result of a higher FDIC assessment due to changes in the composition of ACNB’s balance sheet.

    For the twelve months ended December 31, 2023, noninterest expense was $66.1 million compared to $60.3 million for the year ended December 31, 2022. The $5.8 million, or 9.6%, increase was primarily driven by increases in salaries and employee benefits, professional services, marketing and corporate relations, FDIC and regulatory and other expenses. Salaries and employee benefits increased $5.0 million in the comparable period, driven primarily by an increase to incentive compensation, partly due to a partial reversal of incentive compensation in 2022, an increase in stock-based compensation, a general increase in base wages and commissions, due in part to the full year impact of the acquisition of the business and assets of the Hockley & O’Donnell Insurance Agency, an increase in pension expense, a partial reversal of expenses in 2022 related to loan originations, and an increase in ACNB Bank’s supplemental executive retirement plan and split dollar life insurance expenses. Professional services increased $234 thousand driven primarily by an increase in recruiting, external audit and consulting expenses. Marketing and corporate relations increased $313 thousand driven primarily by an increase of $283 thousand related to the rebranding of ACNB Bank’s Maryland banking locations. FDIC and regulatory expense increased $260 thousand as a result of a higher FDIC assessment due to changes in the composition of ACNB bank’s balance sheet. Other expense increased $744 thousand driven primarily by the write-off of an investment in a partnership, an increase in director expenses, a mark-to-market loss on an SBIC fund and internet banking expenses.

    Loans and Asset Quality

    Total loans outstanding were $1.63 billion at December 31, 2023, an increase of $12.0 million, or 0.7%, from September 30, 2023 and an increase of $89.4 million, or 5.8%, from December 31, 2022. The increase in both periods was driven primarily by growth in the commercial loan portfolio in our core markets.

    Asset quality metrics continue to be stable. The provision for credit losses was $786 thousand and the provision for unfunded commitments was a reversal of $242 thousand for the three months ended December 31, 2023 compared to a provision for credit losses of $250 thousand and the provision for unfunded commitments was a reversal of $171 thousand for three months ended September 30, 2023 and no provision for credit losses or unfunded commitments for the three months ended December 31, 2022. Non-performing loans were $4.2 million, or 0.26%, of total loans at December 31, 2023 compared to $3.6 million, or 0.22%, of total loans at September 30, 2023 and $3.9 million, or 0.25%, of total loans at December 31, 2022. The increase in the provision for credit losses for the three months ended December 31, 2023 and non-performing loans at December 31, 2023 compared to the prior quarter was driven by one commercial and industrial relationship and was not indicative of a general weakness in the overall loan portfolio. Annualized net charge-offs for the three months ended December 31, 2023 were 0.02% of total average loans compared to 0.03% for the three months ended September 30, 2023 and 0.02% for three months ended December 31, 2022.

    Deposits and Borrowings

    Total deposits were $1.86 billion at December 31, 2023. Deposits decreased by $89.5 million, or 4.6%, since September 30, 2023 and decreased by $337.2 million, or 15.3%, from December 31, 2022. The decrease of $89.5 million compared to September 30, 2023 was driven by an outflow of municipal deposits of $41.7 million and a replacement of $30.0 million of brokered deposits with long-term borrowings. During the twelve months ended December 31, 2023, ACNB Bank restrained deposit rates for the better part of the year despite an increase in market interest rates and an increase in rates by competitors. As a result, total deposits declined during 2023 as customers sought higher yielding alternative deposit and investment products.

    Total borrowings were $252.2 million at December 31, 2023, an increase of $98.8 million compared to September 30, 2023. The increase in borrowings was driven primarily by the outflow of municipal deposits and replacement of brokered deposits. Total borrowings increased $189.2 million from December 31, 2022 to December 31, 2023 to fund loan growth and deposit outflows during that period. The average rate on total long-term borrowings was 4.77% for the three months ended December 31, 2023 compared to 4.71% for the three months ended September 30, 2023 and 4.56% for the three months ended December 31, 2022. For the twelve months ended December 31, 2023, the average rate on total long-term borrowings was 4.76% compared to 3.97% for the twelve months ended December 31, 2022.

    Stockholders’ Equity, Dividends and Share Repurchases

    Total stockholders’ equity was $277.5 million at December 31, 2023 compared to $255.6 million at September 30, 2023 and $245.0 million at December 31, 2022. Tangible book value1 per share was $26.44, $23.80 and $22.41 at December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

    On January 23, 2024, the Board of Directors approved and declared a regular quarterly cash dividend of $0.30 per share of ACNB Corporation common stock payable on March 15, 2024, to shareholders of record as of March 1, 2024. This per share amount reflects a $0.02, or 7.1%, increase over the same quarter of 2023.

    ACNB repurchased 13,838 shares of ACNB common stock during the three months ended December 31, 2023 at a cost of $452 thousand. For the twelve months ended December 31, 2023, ACNB repurchased 61,066 shares of ACNB common stock at a cost of $2.0 million.

    About ACNB Corporation

    ACNB Corporation, headquartered in Gettysburg, PA, is the $2.42 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 26 community banking offices and three loan offices located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 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 and Jarrettsville, MD, and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.acnb.com.

    SAFE HARBOR AND FORWARD-LOOKING STATEMENTS - Should there be a material subsequent event prior to the filing of the Annual Report on Form 10-K with the Securities and Exchange Commission, the financial information reported in this press release is subject to change to reflect the subsequent event. In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties, and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; banking instability caused by bank failures and continuing financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

    ACNB #2024-3
    January 25, 2024

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


    ACNB Corporation Financial Highlights
    Selected Financial Data by Respective Quarter End
    (Unaudited)
    (Dollars in thousands, except per share data)December 31,
    2023
     September 30,
    2023
     June 30,
    2023
     March 31,
    2023
     December 31,
    2022
    BALANCE SHEET DATA         
    Assets$2,418,847  $2,388,522  $2,378,151  $2,410,933  $2,525,507 
    Securities 517,221   501,063   518,093   568,232   620,250 
    Total loans 1,627,988   1,615,966   1,573,817   1,531,626   1,538,610 
    Allowance for credit losses (19,969)  (19,264)  (19,148)  (19,485)  (17,861)
    Deposits 1,861,813   1,951,359   1,963,754   2,055,822   2,198,975 
    Allowance for unfunded commitments 1,719   1,962   2,132   2,011   92 
    Borrowings 252,174   153,388   132,703   76,294   62,954 
    Stockholders’ equity 277,461   255,638   257,069   255,841   245,042 
    INCOME STATEMENT DATA         
    Interest income$25,284  $24,234  $23,213  $23,909  $24,894 
    Interest expense 3,791   2,489   1,223   817   846 
    Net interest income 21,493   21,745   21,990   23,092   24,048 
    Provision for (reversal of ) credit losses 786   250   (273)  97    
    (Reversal of) provision for unfunded commitments (242)  (171)  121   276    
    Net interest income after provisions for credit losses and unfunded commitments 20,949   21,666   22,142   22,719   24,048 
    Noninterest income 970   6,297   6,194   4,984   5,423 
    Noninterest expenses 17,173   16,336   16,281   16,282   16,673 
    Income before income taxes 4,746   11,627   12,055   11,421   12,798 
    Provision for income taxes 649   2,583   2,531   2,398   2,599 
    Net income$4,097  $9,044  $9,524  $9,023  $10,199 
    PROFITABILITY RATIOS         
    Total loans held-for-investment to deposits 87.44%  82.81%  80.14%  74.50%  69.97%
    Return on average assets (annualized) 0.68%  1.52%  1.62%  1.50%  1.56%
    Return on average equity (annualized) 6.09%  13.84%  14.74%  14.58%  17.10%
    Efficiency ratio2 62.48%  56.97%  55.52%  56.36%  55.66%
    FTE Net interest margin 3.93%  4.01%  4.11%  4.22%  4.03%
    Yield on average earning assets 4.62%  4.46%  4.33%  4.37%  4.17%
    Yield on investment securities 2.36%  2.24%  2.24%  2.46%  2.30%
    Yield on total loans 5.29%  5.16%  5.05%  5.12%  4.97%
    Cost of funds 0.71%  0.47%  0.23%  0.15%  0.14%
    PER SHARE DATA         
    Diluted earnings per share$0.48  $1.06  $1.12  $1.06  $1.20 
    Cash dividends paid per share 0.30   0.28   0.28   0.28   0.28 
    Tangible book value per share2 26.44   23.80   23.83   23.66   22.41 
    Tangible book value per share2 (excluding AOCI)3 31.74   31.43   30.64   29.76   29.23 
    CAPITAL RATIOS4         
    Tier 1 leverage ratio 11.57%  11.97%  11.79%  11.09%  9.91%
    Common equity tier 1 ratio 15.16%  15.30%  15.38%  15.21%  15.00%
    Tier 1 risk based capital ratio 15.45%  15.59%  15.72%  15.56%  15.36%
    Total risk based capital ratio 17.41%  17.49%  17.67%  17.56%  17.32%
    CREDIT QUALITY         
    Net charge-offs to average loans outstanding (annualized) 0.02%  0.03%  0.02%  0.02%  0.02%
    Total non-performing loans to loans held-for-investment5 0.26%  0.22%  0.23%  0.25%  0.25%
    Total non-performing assets to total assets6 0.19%  0.17%  0.17%  0.18%  0.17%
    Allowance for credit losses to loans held-for-investment 1.23%  1.19%  1.22%  1.27%  1.16%
                        

    2 Non-GAAP financial measure. Please refer to the calculation on the pages titled “Non-GAAP Reconciliation” at the end of this document.
    3 Accumulated Other Comprehensive Income (Loss).
    4 Regulatory capital ratios as of December 31, 2023 are preliminary.
    5 Non-performing Loans consists of loans on nonaccrual status and loans greater than ninety days past due and still accruing interest.
    6 Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.


    Consolidated Balance Sheets
    (Unaudited)
    (Dollars in thousands, except per share data) December 31, 2023 September 30, 2023 December 31, 2022
    ASSETS      
    Cash and due from banks $21,442  $22,786  $40,067 
    Interest-bearing deposits with banks  44,516   41,255   128,094 
    Total Cash and Cash Equivalents  65,958   64,041   168,161 
    Equity securities with readily determinable fair values  928   888   1,719 
    Investment securities available for sale, at estimated fair value  451,693   435,559   553,554 
    Investment securities held to maturity, at amortized cost  64,600   64,616   64,977 
    Loans held for sale  280      123 
    Total loans  1,627,988   1,615,966   1,538,610 
    Less: Allowance for credit losses  (19,969)  (19,264)  (17,861)
    Loans, net  1,608,019   1,596,702   1,520,749 
    Assets held for sale        3,393 
    Premises and equipment, net  26,283   25,740   27,053 
    Right of use asset  2,615   2,784   3,162 
    Restricted investment in bank stocks  9,677   5,477   1,629 
    Investment in bank-owned life insurance  79,871   79,391   77,993 
    Investments in low-income housing partnerships  1,003   1,034   1,129 
    Goodwill  44,185   44,185   44,185 
    Intangible assets, net  9,082   9,434   10,332 
    Foreclosed assets held for resale  467   467   474 
    Other assets  54,186   58,204   46,874 
       Total Assets $2,418,847  $2,388,522  $2,525,507 
           
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Deposits:      
    Noninterest-bearing $500,332  $565,530  $595,049 
    Interest-bearing  1,361,481   1,385,829   1,603,926 
       Total Deposits  1,861,813   1,951,359   2,198,975 
    Short-term borrowings  56,882   33,106   41,954 
    Long-term borrowings  195,292   120,282   21,000 
    Lease liability  2,615   2,784   3,162 
    Allowance for unfunded commitments  1,719   1,962   92 
    Other liabilities  23,065   23,391   15,282 
       Total Liabilities  2,141,386   2,132,884   2,280,465 
           
    Stockholders’ Equity:      
    Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding         
    Common stock, $2.50 par value; 20,000,000 shares authorized; 8,896,119, 8,892,374, and 8,838,720 shares issued; 8,511,453, 8,521,546, and 8,515,120 shares outstanding  22,231   22,224   22,086 
    Treasury stock, at cost; 384,666, 370,828, and 323,600 shares  (10,954)  (10,502)  (8,927)
    Additional paid-in capital  97,602   96,744   96,022 
    Retained earnings  213,491   211,939   193,873 
    Accumulated other comprehensive loss  (44,909)  (64,767)  (58,012)
       Total Stockholders’ Equity  277,461   255,638   245,042 
       Total Liabilities and Stockholders’ Equity $2,418,847  $2,388,522  $2,525,507 


    Consolidated Income Statements
    (Unaudited)
      Three months ended
    December 31,
     Years Ended
    December 31,
    (Dollars in thousands, except per share data)  2023   2022   2023   2022 
    INTEREST AND DIVIDEND INCOME        
    Loans, including fees        
    Taxable $21,303  $18,820  $79,433  $68,898 
    Tax-exempt  336   353   1,405   1,348 
    Securities:        
    Taxable  2,534   2,697   10,985   9,799 
    Tax-exempt  285   526   1,168   1,144 
    Dividends  135   25   331   104 
    Other  691   2,473   3,318   5,756 
    Total Interest and Dividend Income  25,284   24,894   96,640   87,049 
    INTEREST EXPENSE        
    Deposits  1,808   572   3,695   2,561 
    Short-term borrowings  334   17   898   77 
    Long-term borrowings  1,649   257   3,727   986 
    Total Interest Expense  3,791   846   8,320   3,624 
    Net Interest Income  21,493   24,048   88,320   83,425 
    Provision for credit losses  786      860    
    Reversal of provision for unfunded commitments  (242)     (16)   
    Net Interest Income after Provisions for Credit Losses and Unfunded Commitments  20,949   24,048   87,476   83,425 
    NONINTEREST INCOME        
    Insurance commissions  1,948   1,870   9,319   8,307 
    Service charges on deposits  1,007   1,020   3,958   4,066 
    Wealth management  872   711   3,644   3,160 
    ATM debit card charges  846   867   3,348   3,322 
    Gain from mortgage loans held for sale  25   19   56   487 
    Earnings on investment in bank-owned life insurance  479   480   1,878   1,532 
    Net losses on sales or calls of securities  (4,501)  (234)  (5,240)  (234)
    Net gains (losses) on equity securities  40   46   18   (298)
    Net gain on sale of low-income housing partnership     421      421 
    Gain on assets held for sale        337    
    Other  254   223   1,127   1,044 
    Total Noninterest Income  970   5,423   18,445   21,807 
    NONINTEREST EXPENSES        
    Salaries and employee benefits  10,596   9,786   40,931   35,979 
    Net occupancy  927   978   3,908   4,076 
    Equipment  1,730   2,046   6,514   6,612 
    Other tax  304   403   1,269   1,632 
    Professional services  720   758   2,320   2,086 
    Supplies and postage  175   193   808   823 
    Marketing and corporate relations  140   72   612   299 
    FDIC and regulatory  456   330   1,388   1,128 
    Intangible assets amortization  352   399   1,424   1,492 
    Other  1,773   1,708   6,898   6,154 
    Total Noninterest Expenses  17,173   16,673   66,072   60,281 
    Income Before Income Taxes  4,746   12,798   39,849   44,951 
    Provision for income taxes  649   2,599   8,161   9,199 
    Net Income $4,097  $10,199  $31,688  $35,752 
    PER SHARE DATA        
    Basic earnings $0.48  $1.20  $3.72  $4.15 
    Diluted earnings $0.48  $1.20  $3.71  $4.15 


    Average Balances, Income and Expenses, Yields and Rates
      Three months ended December 31, 2023 Three months ended September 30, 2023 Three months ended
    June 30, 2023
     Three months ended
    March 31, 2023
     Three months ended December 31, 2022
    (Dollars in thousands) Average
    Balance
     Interest7 Yield/
    Rate
     Average
    Balance
     Interest7 Yield/
    Rate
     Average
    Balance
     Interest7 Yield/
    Rate
     Average
    Balance
     Interest7 Yield/
    Rate
     Average
    Balance
     Interest7 Yield/
    Rate
    ASSETS                              
    Loans:                              
    Taxable $1,559,411 $21,303 5.42% $1,520,134 $20,285 5.29% $1,463,967 $18,946 5.19% $1,454,934 $18,898 5.27% $1,459,830 $18,821 5.11%
    Tax-exempt  69,058  425 2.44%  73,995  457 2.45%  75,670  446 2.36%  77,341  451 2.36%  78,274  446 2.26%
    Total Loans  1,628,469  21,728 5.29%  1,594,129  20,742 5.16%  1,539,637  19,392 5.05%  1,532,275  19,349 5.12%  1,538,104  19,267 4.97%
                                   
    Investment Securities:                              
    Taxable  453,713  2,669 2.33%  466,402  2,581 2.20%  498,401  2,739 2.20%  557,377  3,327 2.42%  542,137  2,722 1.99%
    Tax-exempt  54,835  361 2.61%  55,027  359 2.59%  55,588  361 2.60%  55,589  397 2.90%  42,987  666 6.15%
    Total Investments  508,548  3,030 2.36%  521,429  2,940 2.24%  553,989  3,100 2.24%  612,966  3,724 2.46%  585,124  3,388 2.30%
                                   
    Interest-bearing deposits with banks  50,225  691 5.46%  53,324  723 5.38%  71,040  890 5.03%  90,987  1,014 4.52%  268,911  2,473 3.65%
                                   
    Total Earning Assets  2,187,242  25,449 4.62%  2,168,882  24,405 4.46%  2,164,666  23,382 4.33%  2,236,228  24,087 4.37%  2,392,139  25,128 4.17%
                                   
    Total Assets $2,406,900     $2,365,365     $2,357,626     $2,439,219     $2,598,000    
                                   
    LIABILITIES                              
    Interest-bearing demand deposits $560,510 $275 0.19% $571,314 $185 0.13% $577,480 $150 0.10% $591,972 $146 0.10% $653,369 $192 0.12%
    Money markets  274,226  707 1.02%  245,899  312 0.50%  261,560  100 0.15%  298,584  73 0.10%  328,808  85 0.10%
    Savings deposits  348,244  28 0.03%  366,398  30 0.03%  387,847  31 0.03%  403,419  33 0.03%  408,285  41 0.04%
    Time deposits  221,778  798 1.43%  212,159  401 0.75%  224,608  205 0.37%  268,708  221 0.33%  318,115  254 0.32%
    Total Interest-Bearing Deposits  1,404,758  1,808 0.51%  1,395,770  928 0.26%  1,451,495  486 0.13%  1,562,683  473 0.12%  1,708,577  572 0.13%
                                   
    Short-term borrowings  56,872  334 2.33%  66,942  439 2.60%  34,080  108 1.27%  35,596  17 0.19%  41,257  17 0.16%
    Long-term borrowings  137,026  1,649 4.77%  94,554  1,122 4.71%  59,901  629 4.21%  29,211  327 4.54%  22,350  257 4.56%
    Total borrowings  193,898  1,983 4.06%  161,496  1,561 3.83%  93,981  737 3.15%  64,807  344 2.15%  63,607  274 1.71%
                                   
    Total Interest-Bearing Liabilities  1,598,656  3,791 0.94%  1,557,266  2,489 0.63%  1,545,476  1,223 0.32%  1,627,490  817 0.20%  1,772,184  846 0.19%
    Noninterest-bearing demand deposits  519,797      541,995      550,581      557,546      586,092    
    Cost of Funds     0.71%     0.47%     0.23%     0.15%     0.14%
    FTE Net Interest Margin     3.93%     4.01%     4.11%     4.22%     4.03%
    Stockholders’ Equity  266,799      259,284      259,239      251,054      236,674    
     

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


      Year Ended
    December 31, 2023
     Year Ended
    December 31, 2022
    (Dollars in thousands) Average
    Balance
     Interest8 Yield/
    Rate
     Average
    Balance
     Interest8 Yield/
    Rate
    ASSETS            
    Loans:            
    Taxable $1,499,635 $79,433 5.30% $1,428,150 $68,898 4.82%
    Tax-exempt  73,993  1,778 2.40%  78,204  1,706 2.18%
    Total Loans  1,573,628  81,211 5.16%  1,506,354  70,604 4.69%
                 
    Investment Securities:            
    Taxable  491,208  11,316 2.30%  516,126  9,799 1.90%
    Tax-exempt  57,670  1,478 2.56%  53,242  1,448 2.72%
    Total Investments  548,878  12,794 2.33%  569,368  11,247 1.98%
                 
    Interest-bearing deposits with banks  66,246  3,318 5.01%  427,706  5,860 1.37%
                 
    Total Earning Assets  2,188,752  97,323 4.45%  2,503,428  87,711 3.50%
                 
    Total Assets $2,392,278     $2,720,957    
                 
    LIABILITIES            
    Interest-bearing demand deposits $569,357 $757 0.13% $600,366 $749 0.12%
    Money markets  283,918  1,192 0.42%  346,498  342 0.10%
    Savings deposits  377,498  122 0.03%  409,839  167 0.04%
    Time deposits  230,431  1,624 0.70%  370,766  1,303 0.35%
    Total Interest-Bearing Deposits  1,461,204  3,695 0.25%  1,727,469  2,561 0.15%
    Short-term borrowings  49,433  898 1.82%  35,882  77 0.21%
    Long-term borrowings  78,262  3,727 4.76%  24,814  986 3.97%
    Total borrowings  127,695  4,625 3.62%  60,696  1,063 1.75%
    Total Interest-Bearing Liabilities  1,588,899  8,320 0.52%  1,788,165  3,624 0.20%
    Noninterest-bearing demand deposits  543,843      609,622    
    Cost of Funds     0.39%     0.15%
    FTE Net Interest Margin     4.07%     3.36%
    Stockholders’ Equity  259,094      249,074    
     

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


    Non-GAAP Reconciliation

    Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.

       Three Months Ended
    (Dollars in thousands, except per share data) December 31,
    2023

     September 30,
    2023

     June 30,
    2023

     March 31,
    2023

     December 31,
    2022
    Tangible book value per share              
    Stockholders’ equity $277,461  $255,638  $257,069  $255,841  $245,042 
    Less: Goodwill and intangible assets (53,267) (53,619) (53,797) (54,157)  (54,517)
    Tangible common stockholders’ equity (numerator) $224,194  $202,019  $203,272  $201,684  $190,525 
    Shares outstanding, less unvested shares, end of period (denominator) 8,478,460  8,488,446  8,528,782  8,523,406   8,501,752 
    Tangible book value per share $26.44  $23.80  $23.83  $23.66  $22.41 
    Tangible book value per share (excluding AOCI)              
    Tangible common stockholders’ equity $224,194  $202,019  $203,272  $201,684  $190,525 
    Less: AOCI (44,909) (64,767) (58,052) (51,960)  (58,012)
    Tangible equity (excluding AOCI) $269,103  $266,786  $261,324  $253,644  $248,537 
    Tangible book value per share (excluding AOCI) $31.74  $31.43  $30.64  $29.76  $29.23 
    Tangible common equity to tangible assets (TCE/TA Ratio)              
    Tangible common stockholders’ equity (numerator) $224,194  $202,019  $203,272  $201,684  $190,525 
    Total assets $2,418,847  $2,388,522  $2,378,151  $2,410,933  $2,525,507 
    Less: Goodwill and intangible assets (53,267) (53,619) (53,797) (54,157)  (54,517)
    Total tangible assets (denominator) $2,365,580  $2,334,903  $2,324,354  $2,356,776  $2,470,990 
    Tangible common equity to tangible assets 9.48% 8.65% 8.75% 8.56%  7.71%
    Efficiency Ratio              
    Noninterest expense $17,173  $16,336  $16,281  $16,282  $16,673 
    Less: Intangible amortization 352  352  360  360   399 
    Less: Loss on MD Title Investment     142      
    Numerator $16,821  $15,984  $15,779  $15,922  $16,274 
    Net interest income $21,493  $21,745  $21,990  $23,092  $24,048 
    Plus: Total noninterest income 970  6,297  6,194  4,984   5,423 
    Less: Net losses on sales or calls of securities (4,501)   (546) (193)  (234)
    Less: Net gains (losses) on equity securities 40  (27) (15) 20   46 
    Less: Gain on assets held for sale   14  323      
    Less: Net gains on sale of low income housing partnership          421 
    Denominator $26,924  $28,055  $28,422  $28,249  $29,238 
    Efficiency ratio 62.48% 56.97% 55.52% 56.36%  55.66%


    Non-GAAP Reconciliation

    Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.

    (Dollars in thousands) Year Ended
    December 31, 2023
     Year Ended
    December 31, 2022
    Efficiency Ratio    
    Noninterest expense $66,072  $60,281 
    Less: Intangible amortization  1,424   1,492 
    Less: Loss on MD Title Investment  142    
    Noninterest expense (numerator) $64,506  $58,789 
    Net interest income $88,320  $83,425 
    Plus: Total noninterest income  18,445   21,807 
    Less: Net losses on sales or calls of securities  (5,240)  (234)
    Less: Net gains (losses) on equity securities  18   (298)
    Less: Gain on assets held for sale  337    
    Less: Net gains on sale of low income housing partnership     421 
    Total revenue (denominator) $111,650  $105,343 
    Efficiency ratio  57.78%  55.81%


    (Dollars in thousands) Three Months Ended December 31, 2023 Year Ended
    December 31, 2023
    Return on average assets (excluding the repositioning)    
    Net income $4,097  $31,688 
    Less: Loss on repositioning of investment securities portfolio, net of tax effect  (3,479)  (3,479)
    Net income, excluding repositioning (numerator) $7,576  $35,167 
    Average assets (denominator) $2,406,900  $2,392,278 
    Return on average assets (excluding the repositioning)  1.25%  1.47%
         
    Return on average equity (excluding the repositioning)    
    Net income, excluding repositioning (numerator) $7,576  $35,167 
    Average equity (denominator) $266,799  $259,094 
    Return on average equity (excluding the repositioning)  11.27%  13.57%

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