v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
ACNB is exposed to certain risks arising from both its business operations and economic conditions. ACNB manages market risk, including interest rate risk, primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage interest rate risk that arise from business operations.
All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Condition. Until a derivative is settled, favorable changes in fair values result in unrealized gains that are recognized as assets, while unfavorable changes result in unrealized losses that are recognized as liabilities.
The Company may enter into a risk participation agreement with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed. This type of derivative is referred to as sold credit protection. In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Company has provided a loan structured with a derivative, the Company may purchase an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as purchased credit protection.
The following table presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Consolidated Statements of Condition:
June 30, 2026Consolidated Statements of Condition
Location		December 31, 2025
(In thousands)Notional
Amount		Asset (Liability)
Fair Value		Notional
Amount		Asset
(Liability)
Fair Value
Derivatives not designated as hedging instruments:
Interest rate lock commitments:
Assets$61,018 $1,687 Other Assets$58,114 $1,540 
Liabilities— — Other Liabilities— — 
Forward commitments:
Assets10,949 3 Other Assets8,223 4 
Liabilities21,750 (74)Other Liabilities23,881 (105)
Interest rate derivatives with customers:
Assets— — Other Assets5,917 91 
Liabilities54,630 (3,880)Other Liabilities49,849 (3,476)
Interest rate derivatives with dealer counterparties:
Assets54,630 3,880 Other Assets49,849 3,476 
Liabilities— — Other Liabilities5,917 (91)
Risk participations:
Sold credit protection7,000 (65)Other Liabilities— — 
Derivatives designated as hedging instruments:
Interest rate derivatives used in cash flow hedges:
Assets45,000 407 Other Assets20,000 48 
Liabilities45,000 (60)Other Liabilities25,000 (144)
The following table presents a summary of the fair value gains and losses on derivative financial instruments for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,Consolidated Statements of Income Classification
(In thousands)2026202520262025
Interest rate lock commitments$30 $283 $147 $543 Gain from mortgage loans HFS
Forward commitments(218)(74)31 (89)Gain from mortgage loans HFS
The following table presents the effect of fair value and cash flow hedge accounting on AOCI for the periods presented:
(In thousands)Amount of Gain Recognized in OCI on DerivativeAmount of Gain Recognized in OCI Included ComponentAmount of Gain (Loss) Recognized in OCI Excluded ComponentLocation of Gain (Loss) Recognized from AOCI into IncomeAmount of Gain Reclassified from OCI into IncomeAmount of Gain Reclassified from AOCI into Income Included ComponentAmount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
Three Months Ended June 30, 2026
Interest rate derivatives$231 $231 $— Interest Expense$22 $22 $— 
Three Months Ended June 30, 2025
Interest rate derivatives— — — Interest Expense— — — 
Six Months Ended June 30, 2026
Interest rate derivatives526 526 — Interest Expense53 53 — 
Six Months Ended June 30, 2025
Interest rate derivatives— — — Interest Expense— — — 
The following table presents the effect of fair value and cash flow hedge accounting on the Consolidated Statements of Income for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2026202520262025
Total amounts of expense line items presented in the consolidated statements of income in which the effects of fair value or cash flow hedges are recorded$22 $— $53 $— 
The effects of fair value or cash flow hedging:
Amount of gain reclassified from AOCI into income22 — 53 — 
Amount of gain reclassified from AOCI into
income - included component		22 — 53 — 
Amount of gain (loss) reclassified from AOCI into income - excluded component— — — — 
During the next 12 months, the Company estimates that an additional $248 thousand will be reclassified as a reduction to interest expense.