ENB Financial Corp reports first quarter results

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ENB Financial Corp reported a 6.8% decrease in first quarter net income impacted by merger expenses following its acquisition of Cecil Bancorp.

The bank holding company for Ephrata National Bank, ENB reported net income for the first quarter of 2026 of $4,024,000, a $292,000 decrease from the $4,316,000 earned during the first quarter of 2025. Basic and diluted earnings per share for the first quarter of 2026 were $0.71 compared to $0.76 for the same period in 2025.

The corporation completed its acquisition of Cecil Bancorp on Feb. 1, impacting the corporation’s balance sheet and earnings for 2026. The fair value of the net assets acquired totaled $24,617,000, including net loans of $147,400,000 and deposits of $186,384,000.

According to a release, included in net income was $1,866,000 of merger and conversion-related expenses, net of taxes, for the three months ended March 31, 2026. Net income, adjusted for the merger and conversion related charges, was $5,890,000, and basic and diluted earnings per share totaled $1.03.

The corporation’s net interest income increased by $2,152,000, or 12.8%, for the three months ended March 31 of this year, compared to the same period in 2025. Interest income on loans increased by $3,089,000, or 16.0%, which was favorably impacted by the addition of Cecil’s loans.

As of March 31, 2026, the corporation had total assets of $2.42 billion, up 9.2%; gross loans of $1.65 billion, up 14.2%; total deposits of $2.07 billion, up 9.1%; and total stockholders’ equity of $163.4 million, up 20.7%, from balances at March 31, 2025.

The report stated that interest income on securities decreased by $884,000, or 15.4%, for the three months ended March 31, 2026, compared to the same period in 2025, due to both lower rates earned on securities as well as lower average balances. Interest expense on deposits declined, despite the addition of Cecil’s deposits, due to lower market interest rates and management’s strategy to lower the cost of funds, including pricing decisions and calling certain brokered deposits. Interest expense on borrowings increased principally due to higher levels of subordinated debt, with newly issued subordinated debt at a rate higher than previous issuances.

The corporation recorded a release of provision for credit losses of $22,000 in the first quarter of 2026, compared to a provision expense of $486,000 in the first quarter of 2025. The provision release recorded in 2026 was primarily related to favorable charge-off history, declines in the legacy Ephrata National Bank and acquired Cecil loan portfolios, offset by increased economic uncertainty considerations. The allowance for credit losses (ACL) as a percentage of total loans was 1.15% as of March 31, 1.11% as of December 31, 2025, and 1.15% as of March 31, 2025. The ACL balance on March 31, 2026, includes an allowance for the loans acquired through the Cecil acquisition.

The report noted that noninterest income increased by $1,053,000, or 31.7%, for the first quarter of 2026 compared to the first quarter in the prior year. Additional customers and accounts from the Cecil acquisition contributed to the growth in service fees and commissions. Trust and investment services income increased $193,000, or 22.3%, due to increased estate fees and additional wealth management accounts.

The corporation recorded a gain on security transactions of $32,000 for the first quarter of 2026, compared to a loss of $333,000 the first quarter of the prior year, per the release. Losses on security transactions in 2025 were due to strategic sales of investment securities to fund higher yielding loan growth.

Gains on the sale of mortgages increased by $73,000, or 16.6%, for the first quarter of 2026 compared to the same period in 2025, due to higher premiums earned on loans sold with servicing released and continued sales of permanent financing for construction loans originated in the prior year. Bank owned life insurance income increased $133,000, or 49.1%, in the first quarter of 2026 compared to 2025, as death benefits were received related to two former directors.

Total operating expenses increased by $3,965,000, or 27.7%, for the three months ended March 31, 2026, compared to the same period in 2025. The acquisition of Cecil led to increased operating expenses as four additional branches in Cecil County Maryland were added to the corporation’s retail network and incremental costs of maintaining two operating systems were required. The acquisition also resulted in merger and conversion-related expenses of $2,157,000 for the three months ended March 31, 2026, as professional services were incurred to complete the merger and employee severance payments were processed.

The corporation’s annualized return on average assets and return on average stockholders’ equity for the first quarter of 2026 decreased to 0.70% and 9.92%, respectively, from 0.80% and 13.03% for the first quarter of 2025. The declines in both ratios were primarily attributed to the non-recurring merger and conversion-related expenses’ impact on net income, per the report.