Orrstown Financial Services, Inc. Announces Execution of Strategic Repositioning

The estimated sale loss would reduce bank regulatory capital ratios, but Orrstown expects the capital impact to be recovered within two quarters.

Rhea-AI Summary

Orrstown Financial Services (NASDAQ: ORRF) sold securities with an amortized cost of $185.6 million to reposition part of its investment portfolio. Proceeds are being used to buy available-for-sale securities with an estimated weighted average yield of 5.20%, versus 3.13% for those sold.

The company estimates a $13.8 million pre-tax loss in fourth-quarter 2026 results and expects improved net income, net interest income, net interest margin and return on average assets in future periods. The estimated loss would reduce the Bank’s September 30, 2026 risk-based capital ratios by approximately 22 basis points and its leverage ratio by 20 basis points. All ratios would remain well above well-capitalized thresholds; the company expects recovery of the capital impact within two quarters.

4 points · 0 major

PositiveiHow this balance works

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Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

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0 major · 2 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.Replacement securities have an estimated weighted average yield of 5.20%, versus 3.13% for securities sold.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Orrstown expects future increases in net income, net interest income, net interest margin and return on average assets.
• Minor point. Forward-looking: it has not happened yet and may not happen.The sale will have only a nominal tangible book value impact; the loss was previously reflected in accumulated other comprehensive loss.
• Minor point. Forward-looking: it has not happened yet and may not happen.Bank capital ratios would remain well above well-capitalized thresholds; Orrstown expects capital-impact recovery within two quarters.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.The securities sale carries an estimated $13.8 million net pre-tax loss for fourth-quarter 2026 results. 1.6% of market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.The estimated loss would reduce September 30, 2026 capital ratios: approximately 22 basis points risk-based; 20 basis points leverage.

News Explained

Orrstown says the sale will have only a nominal effect on tangible book value because the loss was already reflected in accumulated other comprehensive loss.

Key Figures

AFS securities amortized cost: $185.6 million Weighted average yield: 3.13% Weighted average remaining life: 8.4 years +5 more

AFS securities amortized cost

$185.6 million

Securities sold

Weighted average yield

3.13%

AFS securities sold

Weighted average remaining life

8.4 years

AFS securities sold

Estimated weighted average yield

5.20%

Higher-yielding AFS securities to be purchased

Estimated pre-tax sale loss

$13.8 million

Expected in fourth-quarter 2026 financial results

Risk-based capital ratio impact

Approximately 22 basis points

Estimated reduction as of September 30, 2026

Leverage ratio impact

20 basis points

Estimated reduction as of September 30, 2026

Capital impact recovery

Within two quarters

Company expectation

Historical Context

1 past event · Latest: Oct 20

1 event

1. Oct 20

   Q3 earnings

   24h Move

   +1.9%

   Q3 report attributed lower equity primarily to investment-related comprehensive losses.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

available for sale, net interest margin, accumulated other comprehensive loss, tangible book value

4 terms

available for sale financial

"a portion of its available for sale (“AFS”) securities portfolio"

Available for sale describes investments, usually bonds or stocks, that a company intends to keep but may sell before they mature; they are reported at current market value on the balance sheet while any unrealized profit or loss is kept separate from regular earnings. For investors, this matters because changes in market value affect a company’s reported net worth and can become realized gains or losses when sold, similar to how the changing resale value of a collectible affects your net wealth even before you sell it.

net interest margin financial

"accretive to net income, net interest income, net interest margin"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

accumulated other comprehensive loss financial

"previously reflected in accumulated other comprehensive loss"

Accumulated other comprehensive loss is the running negative total of certain gains and losses that companies record outside their regular profit-and-loss statement, such as changes in the value of some investments, pension adjustments, or currency translation effects. It matters to investors because it reduces shareholders’ equity and reveals economic swings that haven’t affected reported net income yet — like a side ledger showing pending ups and downs that could influence future cash flow or balance-sheet strength.

tangible book value financial

"only a nominal impact on tangible book value"

Tangible book value is the accounting measure of a company’s net worth after removing intangible items like goodwill, patents and trademarks, leaving only physical and financial assets minus liabilities. For investors it offers a clearer view of the company’s hard-asset backing per share—like estimating the cash you could get by selling the furniture, machinery and cash in a house—helping gauge downside risk and whether a stock may be cheaply valued.

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HARRISBURG, Pa., Nov. 09, 2026 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (NASDAQ: ORRF) (the “Company”), the holding company of Orrstown Bank (the “Bank”), today announced the execution of a strategic repositioning of a portion of its available for sale (“AFS”) securities portfolio. The Company sold AFS securities with a total amortized cost of $185.6 million, a weighted average yield of 3.13%, and a weighted average remaining life of 8.4 years. Proceeds from the sale are being used to purchase higher-yielding AFS securities with an estimated weighted average yield of 5.20%.

The Company estimates the transactions will result in a net pre-tax loss on the sale of AFS securities of $13.8 million, which will be included in the Company’s financial results for the fourth quarter of 2026. The Company expects the strategic repositioning to be accretive to net income, net interest income, net interest margin, and return on average assets in future periods. The sale will have only a nominal impact on tangible book value, as the loss was previously reflected in accumulated other comprehensive loss.

The estimated pre-tax loss would reduce the Bank’s regulatory capital ratios as of September 30, 2026 by approximately 22 basis points for its risk-based capital ratios and 20 basis points for its leverage ratio, leaving all regulatory capital ratios well above well-capitalized thresholds. The Company expects the capital impact to be recovered within two quarters.

About Orrstown

With $5.7 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

For additional information, please contact:

	Neil Kalani
	EVP, Chief Financial Officer
	717-510-7097
	nkalani@orrstown.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What securities did Orrstown Financial Services sell in its portfolio repositioning?

Orrstown sold available-for-sale securities with a total amortized cost of $185.6 million, a weighted average yield of 3.13% and a weighted average remaining life of 8.4 years. Proceeds are being used to purchase higher-yielding available-for-sale securities.

Why will Orrstown’s securities sale have only a nominal impact on tangible book value?

The sale will have only a nominal impact on tangible book value because the loss was previously reflected in accumulated other comprehensive loss. The transactions are nevertheless estimated to produce a $13.8 million net pre-tax loss in fourth-quarter 2026 financial results.