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Orrstown Financial Services, Inc. Reports First Quarter 2024 Results

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Orrstown Financial Services, Inc. reported positive first-quarter 2024 results with net income of $8.5 million and diluted earnings per share of $0.81. The company saw improvements in various financial aspects, including a decrease in nonaccrual loans and an increase in deposit growth. The Board of Directors declared a cash dividend of $0.20 per common share. Despite merger-related expenses, net income and diluted earnings per share showed growth compared to the previous quarter.
Orrstown Financial Services, Inc. ha riportato risultati positivi per il primo trimestre del 2024, con un utile netto di 8,5 milioni di dollari e un utile diluito per azione di 0,81 dollari. La società ha registrato miglioramenti in vari aspetti finanziari, inclusa una riduzione dei prestiti non riscuotibili e un aumento nella crescita dei depositi. Il consiglio di amministrazione ha dichiarato un dividendo in contanti di 0,20 dollari per azione ordinaria. Nonostante le spese legate a fusioni, l'utile netto e l'utile diluito per azione hanno mostrato una crescita rispetto al trimestre precedente.
Orrstown Financial Services, Inc. reportó resultados positivos para el primer trimestre del 2024, con un ingreso neto de 8,5 millones de dólares y ganancias diluidas por acción de 0,81 dólares. La compañía observó mejoras en varios aspectos financieros, incluyendo una disminución en los préstamos no acumulativos y un aumento en el crecimiento de los depósitos. El consejo de directores declaró un dividendo en efectivo de 0,20 dólares por acción común. A pesar de los gastos relacionados con la fusión, el ingreso neto y las ganancias diluidas por acción mostraron crecimiento en comparación con el trimestre anterior.
Orrstown Financial Services, Inc.는 2024년 1분기에 긍정적인 결과를 보고했습니다. 순이익은 850만 달러이며 희석 주당 이익은 0.81달러였습니다. 회사는 부실 대출 감소와 예금 증가를 포함한 여러 재무 측면에서 개선을 보였습니다. 이사회는 보통주당 0.20달러의 현금 배당금을 선언했습니다. 합병 관련 비용에도 불구하고, 순이익과 희석 주당 이익은 전 분기에 비해 성장을 보였습니다.
Orrstown Financial Services, Inc. a rapporté des résultats positifs pour le premier trimestre de 2024, avec un bénéfice net de 8,5 millions de dollars et un bénéfice dilué par action de 0,81 dollar. La compagnie a constaté des améliorations dans divers aspects financiers, y compris une diminution des prêts non productifs et une augmentation de la croissance des dépôts. Le conseil d'administration a déclaré un dividende en espèces de 0,20 dollar par action ordinaire. Malgré les dépenses liées à la fusion, le bénéfice net et le bénéfice dilué par action ont montré une croissance par rapport au trimestre précédent.
Orrstown Financial Services, Inc. meldete positive Ergebnisse für das erste Quartal 2024 mit einem Nettogewinn von 8,5 Millionen Dollar und einem verwässerten Gewinn pro Aktie von 0,81 Dollar. Das Unternehmen verzeichnete Verbesserungen in verschiedenen finanziellen Aspekten, einschließlich einer Abnahme von notleidenden Krediten und einem Anstieg des Einlagenwachstums. Der Vorstand erklärte eine Bardividende von 0,20 Dollar pro Stammaktie. Trotz der mit der Fusion verbundenen Kosten zeigten der Nettogewinn und der verwässerte Gewinn pro Aktie im Vergleich zum vorherigen Quartal ein Wachstum.
Positive
  • Net income increased to $8.5 million for the first quarter of 2024 from $7.6 million in the previous quarter.
  • Diluted earnings per share rose to $0.81 for the first quarter of 2024 from $0.73 in the previous quarter.
  • Nonaccrual loans decreased to $12.9 million at March 31, 2024, from $25.5 million at December 31, 2023.
  • Deposit growth was $137.1 million during the first quarter of 2024 compared to $12.4 million in the previous quarter.
  • The Board of Directors declared a cash dividend of $0.20 per common share, payable on May 14, 2024.
  • Excluding merger-related expenses, net income and diluted earnings per share showed growth compared to the previous quarter.
Negative
  • None.

Reviewing Orrstown Financial Services, Inc.'s first quarter financials for 2024, several key indicators suggest a stable, albeit modest, financial performance. The net income has shown an uptick from $7.6 million ($0.73 per share) in the previous quarter to $8.5 million ($0.81 per share). This increase comes despite $0.7 million in expenses tied to a pending merger, which, when excluded, would represent even higher earnings of $9.2 million ($0.88 per share).

Investors should note the improvement in the net interest margin, which grew from 3.71% to 3.77%, reflecting a more efficient earning from the net interest-bearing assets. Return on average equity, a measure of financial profitability that gauges how well a company uses reinvested earnings to generate additional earnings, is robust at 12.79%, showing an increase from 12.21% the previous quarter. However, normalized for merger-related expenses, it remains nearly flat. This suggests that underlying profitability is stable.

Such performance metrics are important for investors seeking steady returns and dividend sustainability. The Board has declared a $0.20 per share dividend, which is a key consideration for income-focused investors. Overall, the company's capacity to maintain profitability and a decent dividend payout in the context of a merger indicates prudent management and a potentially resilient business model in a challenging economic environment.

The significant reduction in nonaccrual loans from $25.5 million to $12.9 million is a positive sign of credit risk management and asset quality improvement. Nonaccrual loans to total loans dropped from 1.11% to 0.56%, half of the prior rate, following the payoff of a sizable commercial real estate loan. This improvement impacts the bank's risk profile favorably and releasing provisions for credit losses which could be redeployed or used to improve the bottom line.

Deposit growth of $137.1 million is also commendable, suggesting customer confidence and solid liquidity management. A diversified deposit portfolio can cushion against market volatility and interest rate changes. The loan-to-deposit ratio has dropped to 85% from 90%, indicating reduced liquidity risk.

Orrstown Financial Services has shown resilience amid market fluctuations, as indicated by the steady deposit growth and a marginal increase in net interest margin. The competitive landscape for regional banks is fierce and strong deposit growth can provide a strategic advantage in terms of funding and lending capabilities. The merger with Codorus Valley Bancorp, Inc. could position Orrstown to leverage economies of scale and broaden its market presence.

Investors should be encouraged by the tangible book value per common share increase to $23.47 from $23.03, reflecting a stronger balance sheet. However, the context of a rising interest rate environment could present headwinds for such growth as borrowing costs could potentially increase and pressure margins.

  • Net income of $8.5 million and diluted earnings per share of $0.81 for the three months ended March 31, 2024 compared to net income of $7.6 million and diluted earnings per share of $0.73 for the three months ended December 31, 2023;
  • Excluding the impact of $0.7 million in expenses related to the pending merger of equals transaction with Codorus Valley Bancorp, Inc., net income and diluted earnings per share, respectively, were $9.2 million(1) and $0.88(1) for the first quarter of 2024 compared to net income and diluted earnings per share of $8.6 million(1) and $0.83(1), respectively, excluding the impact of $1.1 million in merger-related expenses recorded for the fourth quarter of 2023;
  • As a result of the payoff of a commercial real estate loan which totaled $13.4 million at December 31, 2023, nonaccrual loans decreased to $12.9 million at March 31, 2024 from $25.5 million at December 31, 2023; nonaccrual loans to total loans declined to 0.56% at March 31, 2024 from 1.11% at December 31, 2023;
  • Net interest margin, on a tax equivalent basis, was 3.77% in the first quarter of 2024 compared to 3.71% in the fourth quarter of 2023; during the three months ended March 31, 2024, the Bank recognized interest income previously applied to principal of $1.6 million from the loan payoff noted above;
  • Return on average equity for the three months ended March 31, 2024 was 12.79% compared to 12.21% for the three months ended December 31, 2023; excluding the aforementioned merger-related expenses in both periods, return on average equity was 13.79%(1) for the three months ended March 31, 2024 compared to 13.77%(1) for the three months ended December 31, 2023;
  • Deposit growth was $137.1 million during the first quarter of 2024 compared to $12.4 million during the fourth quarter of 2023;
  • Total risk-based capital was 13.4% at March 31, 2024 compared to 13.0% at December 31, 2023;
  • Tangible book value per common share(1) improved to $23.47 per share at March 31, 2024 compared to $23.03 per share at December 31, 2023;
  • The Board of Directors declared a cash dividend of $0.20 per common share, payable May 14, 2024, to shareholders of record as of May 7, 2024.

SHIPPENSBURG, Pa., April 23, 2024 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown" or the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months March 31, 2024. Net income totaled $8.5 million for the three months ended March 31, 2024, compared to $7.6 million for the three months ended December 31, 2023 and $9.2 million for the three months ended March 31, 2023. Diluted earnings per share totaled $0.81 for the three months ended March 31, 2024, compared to $0.73 for the three months ended December 31, 2023 and $0.87 for the three months ended March 31, 2023. Merger-related expenses totaled $0.7 million and $1.1 million for the three months ended March 31, 2024 and December 31, 2023, respectively. For the first quarter of 2024, excluding the impact from the merger-related expenses, net income and diluted earnings per share were $9.2 million(1) and $0.88(1), respectively. For the fourth quarter of 2023, excluding the impact from the merger-related expenses, net income and diluted earnings per share were $8.6 million(1) and $0.83(1), respectively.

(1) Non-GAAP measure. See Appendix A for additional information.

"We began this year with another solid quarter, highlighted by strong earnings. The successful workout of a large commercial real estate loan that entered non-accrual status at the end of 2022 aided our first quarter performance. Our team remains conscious of the current credit environment as we seek to limit risk while still taking steps to grow prudently. Excluding loan payoff activity that we initiated, we experienced modest loan growth and expect that to continue throughout the year. Orrstown's Wealth Management team is leading the way in generating strong fee income. As in prior years, expenses were higher in the first quarter and, excluding merger-related costs, are expected to normalize in the second quarter. Our liquidity position was bolstered by strong deposit growth, which included successful CD and money market production, as well as seasonal and short-term balances from which we expect some runoff,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment increased by $4.8 million from December 31, 2023 to March 31, 2024. The residential mortgage portfolio increased by $7.9 million in the three months ended March 31, 2024 from continued portfolio production. Commercial loans decreased by $2.3 million from December 31, 2023 to March 31, 2024; however, the balance at March 31, 2024 reflected the payoffs of a commercial real estate loan on nonaccrual status totaling $13.4 million and a special mention commercial loan totaling $7.2 million during the first quarter of 2024.

Loans held-for-sale decreased by $5.3 million to $0.5 million at March 31, 2024 from $5.8 million at December 31, 2023. During the first quarter of 2024, the Bank sold a portfolio of residential mortgage loans that had a book value, which approximated fair value, of $5.1 million at December 31, 2023.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $1.4 million to $514.9 million at March 31, 2024 compared to $513.5 million at December 31, 2023. During the first quarter of 2024, purchases of $21.8 million were partially offset by a call of a non-agency collateralized mortgage obligation ("CMO") totaling $10.0 million, paydowns of $8.1 million and an increase in net unrealized losses on investment securities of $1.8 million. The overall duration of the Company's investment securities portfolio was 4.4 years at March 31, 2024. See Appendix B for a summary of the Bank's investment securities at March 31, 2024, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the first quarter of 2024, deposits increased by $137.1 million totaling approximately $2.7 billion at March 31, 2024 compared to $2.6 billion at December 31, 2023. In the first quarter of 2024, interest-bearing demand deposits increased by $56.9 million, time deposits increased by $50.4 million and money market deposits increased by $48.7 million. These increases were partially offset by decreases in non-interest bearing deposits of $12.4 million and savings deposits of $6.5 million. The increase in interest-bearing demand deposits reflects some seasonal public funds activity in addition to balances that are believed to be short-term in nature. The increase in time deposits was attributable to promotional offerings of up to 18-month terms. The declines in noninterest-bearing deposits and savings deposits were primarily due to clients shifting to higher-yielding products within the Bank. At March 31, 2024, deposits that are uninsured and not collateralized totaled $413.5 million, or 15%, of total deposits compared to $442.7 million, or 17%, of total deposits at December 31, 2023. The Bank's loan-to-deposit ratio was lowered to 85% at March 31, 2024 compared to 90% at December 31, 2023 due to the increase in deposits during the first quarter of 2024.

Borrowings

The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings decreased by $22.5 million to $115.0 million at March 31, 2024 compared to $137.5 million at December 31, 2023. The Bank repaid overnight borrowings during the first quarter of 2024 based on available liquidity from deposits. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed in a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.0 billion at March 31, 2024.

Income Statement

Net Interest Income and Margin

Net interest income was $26.9 million for the three months ended March 31, 2024 compared to $26.0 million for the three months ended December 31, 2023. The net interest margin, on a tax equivalent basis, increased to 3.77% in the first quarter of 2024 from 3.71% in the fourth quarter of 2023. During the three months ended March 31, 2024, the Bank recognized interest income previously applied to principal of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status, which contributed 21 basis points to net interest margin. The net interest margin was negatively impacted by the increase in funding costs of 27 basis points due primarily to higher interest-bearing deposit balances. Also, the interest rate increased on the subordinated notes, which converted from a fixed rate to a floating rate on December 30, 2023. In addition, the net interest margin was lower by six basis points from excess cash compared to the fourth quarter of 2023.

Interest income on loans, on a tax equivalent basis, increased by $2.3 million to $36.4 million for the three months ended March 31, 2024 compared to $34.1 million for the three months ended December 31, 2023, which was primarily due to the aforementioned interest recovery.

Interest income on investment securities, on a tax equivalent basis, was $5.7 million for the first quarter of 2024 compared to $5.9 million in the fourth quarter of 2023. The decrease in interest income on investment securities was primarily caused by the call of one higher-yielding non-agency CMO of $10.0 million during the three months ended March 31, 2024 as well as accelerated discount accretion in the fourth quarter of 2023.

Interest expense, on a tax equivalent basis, increased by $1.8 million to $15.8 million for the three months ended March 31, 2024 compared to $14.0 million for the three months ended December 31, 2023 due primarily to higher average deposit balances and an increase in rates on deposits and the subordinated notes. Average interest-bearing deposits increased by $55.1 million during the three months ended March 31, 2024 compared to the three months ended December 31, 2023.

Provision for Credit Losses

The Company recorded a provision for credit losses of $0.3 million for the three months ended March 31, 2024 compared to $0.4 million for the three months ended December 31, 2023. The allowance for credit losses ("ACL") on loans increased to $29.2 million at March 31, 2024 from $28.7 million at December 31, 2023. The ACL was impacted primarily by a reduction in prepayment speed assumptions within the quantitative model due to current economic conditions partially offset by an improvement in the gross domestic product forecast. The ACL to total loans was 1.27% at March 31, 2024 compared to 1.25% at December 31, 2023. Net recoveries were less than $0.1 million for both the three months ended March 31, 2024 and December 31, 2023.

Special mention loans decreased by $8.2 million from $24.2 million at December 31, 2023 to $16.0 million at March 31, 2024 primarily due to repayments, including $7.2 million from one commercial client. Classified loans decreased by $6.0 million to $49.0 million at March 31, 2024 from $55.0 million at December 31, 2023. The decrease in classified loans was primarily due to repayments of $15.4 million, including the payoff of one commercial real estate loan totaling $13.4 million, partially offset by downgrades of $9.5 million, including one commercial relationship totaling $6.3 million. Non-accrual loans decreased by $12.6 million to $12.9 million at March 31, 2024 from $25.5 million at December 31, 2023 primarily due to the payoff of one commercial real estate loan totaling $13.4 million. Management believes the ACL to be adequate based on current asset quality metrics and economic conditions.

Management regularly analyzes the commercial real estate portfolio, which includes the review of occupancy, cash flows, expenses and expiring leases, as well as the location of the real estate. At March 31, 2024, the Company had $225.9 million in loans related to office space compared to $236.4 million at December 31, 2023. The weighted average loan-to-value ratio was 56% and the weighted average debt coverage ratio was 1.82x at March 31, 2024. Management believes that the office space portfolio is well-diversified and includes only limited exposure to properties located in major metro markets (approximately 2% of the total commercial real estate loan balance as of March 31, 2024).

Noninterest Income

Noninterest income increased by $0.1 million to $6.6 million in the three months ended March 31, 2024 compared to $6.5 million in the three months ended December 31, 2023.

For the three months ended March 31, 2024, mortgage banking income increased by $0.4 million compared to the fourth quarter of 2023. During the first quarter of 2024, residential mortgage sales totaled $14.7 million, including a portfolio of loans to another financial institution, compared to $3.7 million during the fourth quarter of 2023. Market conditions and elevated interest rates continued to hinder mortgage production.

Wealth management income increased by $0.2 million in the three months ended March 31, 2024 compared to the three months ended December 31, 2023 due to both new client generation and strong market conditions.

During the first quarter of 2024, the Company recorded swap fee income of $0.2 million compared to $0.6 million in the three months ended December 31, 2023. Swap fee income fluctuates based on market conditions and client demand.

Noninterest Expenses

Noninterest expenses increased by $0.1 million to $22.5 million in the three months ended March 31, 2024 from $22.4 million in the three months ended December 31, 2023.

Salaries and benefits expense increased by $1.0 million to $13.8 million for the three months ended March 31, 2024 compared to $12.8 million for the three months ended December 31, 2023. The increase is primarily attributable to an increase in employee benefit costs, including social security and unemployment taxes, which are typically higher at the beginning of the year, and increased incentive compensation associated with the prior year's performance.

Other operating expenses decreased by $0.6 million to $2.0 million during the first quarter of 2024 compared to $2.6 million during the fourth quarter of 2023 due to a decrease of $0.6 million in credit value adjustments on derivatives for the three months ended March 31, 2024 compared to the three months ended December 31, 2023.

For the three months ended March 31, 2024, merger-related expenses totaled $0.7 million, a decrease of $0.4 million, compared to $1.1 million for the three months ended December 31, 2023. The decrease is due to higher due diligence costs and professional fees incurred during the fourth quarter of 2023. The Company expects to incur additional merger-related expenses until the completion of the merger of equals.

Taxes other than income increased by $0.3 million to $0.5 million in the three months ended March 31, 2024 compared to $0.2 million in the three months ended December 31, 2023. The increase reflects the tax credits recognized on charitable contributions during the fourth quarter of 2023.

Income Taxes

The Company's effective tax rate for the first quarter of 2024 was 20.6% compared to 21.2% for the fourth quarter of 2023. The Company's effective tax rate for the three months ended March 31, 2024 is less than the 21% federal statutory rate primarily due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits, partially offset by the disallowed portion of interest expense against earnings in association with the Bank's tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") and the impact of nondeductible merger-related costs. The nondeductible merger-related costs increased the effective tax rate by 1.2% for the first quarter of 2024. The effective tax rate for the fourth quarter of 2023 was higher due to an increase in state taxes in addition to the disallowed portion of interest expense against earnings in association with the Bank's tax-exempt investments under the TEFRA. The nondeductible merger-related costs increased the effective tax rate by 1.4% for the fourth quarter of 2023. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

Capital

Shareholders’ equity totaled $271.7 million at March 31, 2024, an increase of $6.6 million from $265.1 million at December 31, 2023. The increase was primarily attributable to net income of $8.5 million, partially offset by dividends paid of $2.1 million. Other comprehensive losses totaled $0.2 million for the first quarter of 2024, which consisted of after-tax net unrealized losses on investment securities of $1.3 million partially offset by net unrealized gains on cash flow hedges of $1.1 million. The remaining activity is related to share-based compensation.

Tangible book value per share(1) increased to $23.47 per share at March 31, 2024 from $23.03 per share at December 31, 2023 due to the increase in shareholders' equity.

The Company's tangible common equity ratio decreased to 7.9% at March 31, 2024 from 8.0% at December 31, 2023, as total assets increased primarily due to the increase in deposits during the first quarter of 2024. The Company's total risk-based capital ratio was 13.4% at March 31, 2024 compared to 13.0% at December 31, 2023. The increase in the total risk-based capital ratio was partially due to the payoff of a commercial real estate loan on nonaccrual status, which reduced risk weighted assets by $20.0 million. The Company's Tier 1 leverage ratio was 8.9% at both March 31, 2024 and December 31, 2023. At March 31, 2024, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

(1) Non-GAAP measure. See Appendix A for additional information.

Investor Relations Contact:
Neelesh Kalani
Executive Vice President, Chief Financial Officer
Phone (717) 510-7097


ORRSTOWN FINANCIAL SERVICES, INC.    
FINANCIAL HIGHLIGHTS (Unaudited)    
     
     
  Three Months Ended
  March 31, March 31,
(Dollars in thousands)  2024   2023 
     
Profitability for the period:    
Net interest income $26,881  $26,294 
Provision for credit losses  298   729 
Noninterest income  6,630   6,078 
Noninterest expenses  22,469   20,255 
Income before income tax expense  10,744   11,388 
Income tax expense  2,213   2,232 
Net income available to common shareholders $8,531  $9,156 
     
Financial ratios:    
Return on average assets (1)  1.11%  1.27%
Return on average assets, adjusted (1) (2) (3)  1.19%  1.27%
Return on average equity (1)  12.79%  15.88%
Return on average equity, adjusted (1) (2) (3)  13.79%  15.88%
Net interest margin (1)  3.77%  3.94%
Efficiency ratio  67.0%  62.6%
Efficiency ratio, adjusted (2) (3)  65.0%  62.6%
Income per common share:    
Basic $0.82  $0.88 
Basic, adjusted (2) (3) $0.89  $0.88 
Diluted $0.81  $0.87 
Diluted, adjusted (2) (3) $0.88  $0.87 
     
Average equity to average assets  8.66%  7.97%
     
(1) Annualized for the three months ended March 31, 2024 and 2023.
(2) Ratio for the three months ended March 31, 2024 has been adjusted for merger-related costs.
(3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
 


ORRSTOWN FINANCIAL SERVICES, INC.   
FINANCIAL HIGHLIGHTS (Unaudited)   
(continued)   
 March 31, December 31,
(Dollars in thousands, except per share amounts) 2024   2023 
At period-end:   
Total assets$3,183,331  $3,064,240 
Total deposits 2,695,951   2,558,814 
Loans, net of allowance for credit losses 2,273,908   2,269,611 
Loans held-for-sale, at fair value 535   5,816 
Securities available for sale, at fair value 514,909   513,519 
Borrowings 127,099   147,285 
Subordinated notes 32,111   32,093 
Shareholders' equity 271,682   265,056 
    
Credit quality and capital ratios(1):   
Allowance for credit losses to total loans 1.27%  1.25%
Total nonaccrual loans to total loans 0.56%  1.11%
Nonperforming assets to total assets 0.40%  0.83%
Allowance for credit losses to nonaccrual loans 226%  112%
Total risk-based capital:   
Orrstown Financial Services, Inc. 13.4%  13.0%
Orrstown Bank 13.1%  12.8%
Tier 1 risk-based capital:   
Orrstown Financial Services, Inc. 11.2%  10.8%
Orrstown Bank 11.9%  11.6%
Tier 1 common equity risk-based capital:   
Orrstown Financial Services, Inc. 11.2%  10.8%
Orrstown Bank 11.9%  11.6%
Tier 1 leverage capital:   
Orrstown Financial Services, Inc. 9.0%  8.9%
Orrstown Bank 9.6%  9.5%
    
Book value per common share$25.38  $24.98 
    
(1) Capital ratios are estimated, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard.
 


ORRSTOWN FINANCIAL SERVICES, INC.   
CONSOLIDATED BALANCE SHEETS (Unaudited)   
    
(Dollars in thousands, except per share amounts)March 31, 2024 December 31, 2023
Assets   
Cash and due from banks$23,552  $32,586 
Interest-bearing deposits with banks 159,170   32,575 
Cash and cash equivalents 182,722   65,161 
Restricted investments in bank stocks 11,453   11,992 
Securities available for sale (amortized cost of $552,155 and $549,089 at March 31, 2024 and December 31, 2023, respectively) 514,909   513,519 
Loans held for sale, at fair value 535   5,816 
Loans 2,303,073   2,298,313 
Less: Allowance for credit losses (29,165)  (28,702)
Net loans 2,273,908   2,269,611 
Premises and equipment, net 28,952   29,393 
Cash surrender value of life insurance 73,656   73,204 
Goodwill 18,724   18,724 
Other intangible assets, net 2,189   2,414 
Accrued interest receivable 13,496   13,630 
Deferred tax assets, net 21,181   22,017 
Other assets 41,606   38,759 
Total assets$3,183,331  $3,064,240 
Liabilities   
Deposits:   
Noninterest-bearing$418,512  $430,959 
Interest-bearing 2,277,439   2,127,855 
Total deposits 2,695,951   2,558,814 
Securities sold under agreements to repurchase and federal funds purchased 12,099   9,785 
FHLB advances and other borrowings 115,000   137,500 
Subordinated notes 32,111   32,093 
Accrued interest and other liabilities 56,488   60,992 
Total liabilities 2,911,649   2,799,184 
Shareholders’ Equity   
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding —   — 
Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 11,203,221 shares issued and 10,705,077 outstanding at March 31, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023 583   583 
Additional paid—in capital 187,267   189,027 
Retained earnings 124,075   117,667 
Accumulated other comprehensive losses (28,668)  (28,476)
Treasury stock— 498,144 and 592,209 shares, at cost at March 31, 2024 and December 31, 2023, respectively (11,575)  (13,745)
Total shareholders’ equity 271,682   265,056 
Total liabilities and shareholders’ equity$3,183,331  $3,064,240 
        


ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
   Three Months Ended
   March 31, March 31,
(In thousands)   2024   2023 
Interest income     
Loans  $36,233  $28,744 
Investment securities - taxable   4,584   4,370 
Investment securities - tax-exempt   877   865 
Short-term investments   956   298 
Total interest income   42,650   34,277 
Interest expense     
Deposits   13,516   6,202 
Securities sold under agreements to repurchase and federal funds purchased   25   25 
FHLB advances and other borrowings   1,474   1,252 
Subordinated notes   754   504 
Total interest expense   15,769   7,983 
Net interest income   26,881   26,294 
Provision for credit losses   298   729 
Net interest income after provision for credit losses   26,583   25,565 
Noninterest income     
Service charges   1,200   1,157 
Interchange income   911   965 
Swap fee income   199   — 
Wealth management income   3,102   2,747 
Mortgage banking activities   458   478 
Investment securities losses   (5)  (8)
Other income   765   739 
Total noninterest income   6,630   6,078 
Noninterest expenses     
Salaries and employee benefits   13,752   12,196 
Occupancy, furniture and equipment   2,639   2,333 
Data processing   1,265   1,217 
Advertising and bank promotions   398   405 
FDIC insurance   441   504 
Professional services   631   734 
Taxes other than income   494   457 
Intangible asset amortization   225   250 
Merger-related expenses   672   — 
Other operating expenses   1,952   2,159 
Total noninterest expenses   22,469   20,255 
Income before income tax expense   10,744   11,388 
Income tax expense   2,213   2,232 
Net income  $8,531  $9,156 
          
Share information:         
Basic earnings per share  $0.82  $0.88 
Diluted earnings per share  $0.81  $0.87 
Dividends paid per share  $0.20  $0.20 
Weighted average shares - basic   10,349   10,385 
Weighted average shares - diluted   10,482   10,496 
          


ORRSTOWN FINANCIAL SERVICES, INC.    
ANALYSIS OF NET INTEREST INCOME    
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)  
 Three Months Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
   Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-
(Dollars in thousands)Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent
Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets                             
Federal funds sold & interest-bearing bank balances$74,523 $956  5.16% $37,873 $460  4.82% $57,778 $633  4.35% $37,895 $418  4.42% $29,599 $298  4.07%
Investment securities (1)(2) 519,851  5,694  4.39   508,891  5,890  4.63   521,234  5,548  4.26   526,225  5,510  4.19   525,685  5,465  4.18 
Loans (1)(3)(4)(5) 2,308,103  36,382  6.34   2,286,678  34,055  5.91   2,256,727  32,878  5.78   2,233,312  31,329  5.63   2,180,224  28,844  5.36 
Total interest-earning assets 2,902,477  43,032  5.96   2,833,442  40,405  5.67   2,835,739  39,059  5.47   2,797,432  37,257  5.34   2,735,508  34,607  5.12 
Other assets 196,295      204,382      200,447      191,983      197,620    
Total assets$3,098,772     $3,037,824     $3,036,186     $2,989,415     $2,933,128    
Liabilities and Shareholders' Equity                        
Interest-bearing demand deposits$1,570,622  9,192  2.35  $1,543,575  8,333  2.14  $1,541,728  7,476  1.92  $1,511,468  6,273  1.66  $1,503,421  4,862  1.31 
Savings deposits 170,005  144  0.34   178,351  153  0.34   190,817  164  0.34   204,584  135  0.26   219,408  133  0.25 
Time deposits 428,443  4,180  3.92   392,085  3,632  3.67   357,194  2,942  3.27   326,034  2,200  2.71   275,880  1,207  1.78 
Total interest-bearing deposits 2,169,070  13,516  2.51   2,114,011  12,118  2.27   2,089,739  10,582  2.01   2,042,086  8,608  1.69   1,998,709  6,202  1.26 
Securities sold under agreements to repurchase and federal funds purchased 12,010  25  0.85   13,874  30  0.85   15,006  31  0.83   13,685  28  0.82   13,868  25  0.72 
FHLB advances and other borrowings 137,505  1,474  4.31   127,843  1,358  4.21   128,131  1,354  4.19   132,094  1,386  4.21   106,434  1,252  4.77 
Subordinated notes 32,100  754  9.45   32,083  504  6.29   32,066  505  6.29   32,049  504  6.29   32,033  504  6.29 
Total interest-bearing liabilities 2,350,685  15,769  2.70   2,287,811  14,010  2.43   2,264,942  12,472  2.19   2,219,914  10,526  1.90   2,151,044  7,983  1.50 
Noninterest-bearing demand deposits 417,469      441,695      468,628      476,123      495,562    
Other liabilities 62,329      59,876      54,353      50,851      52,630    
Total liabilities 2,830,483      2,789,382      2,787,923      2,746,888      2,699,236    
Shareholders' equity 268,289      248,442      248,263      242,527      233,892    
Total$3,098,772     $3,037,824     $3,036,186     $2,989,415     $2,933,128    
Taxable-equivalent net interest income / net interest spread   27,263  3.26%    26,395  3.24%    26,587  3.29%    26,731  3.44%    26,624  3.62%
Taxable-equivalent net interest margin    3.77%     3.71%     3.73%     3.83%     3.94%
Taxable-equivalent adjustment   (382)      (377)      (368)      (356)      (330)  
Net interest income  $26,881      $26,018      $26,219      $26,375      $26,294   
Ratio of average interest-earning assets to average interest-bearing liabilities    123%     124%     125%     126%     127%
                              
                              
NOTES:                             
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
(2) Average balance of investment securities is computed at fair value.
(3) Average balances include nonaccrual loans.
(4) Interest income on loans includes prepayment and late fees, where applicable.
(5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024.
 


ORRSTOWN FINANCIAL SERVICES, INC.    
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)    
          
(In thousands)March 31,
2024		 December 31,
2023		 September 30,
2023		 June 30,
2023		 March 31,
2023
Profitability for the quarter:         
Net interest income$26,881  $26,018  $26,219  $26,375  $26,294 
Provision for credit losses 298   418   136   399   729 
Noninterest income 6,630   6,491   5,925   7,158   6,078 
Noninterest expenses 22,469   22,392   20,447   20,749   20,255 
Income before income taxes 10,744   9,699   11,561   12,385   11,388 
Income tax expense 2,213   2,056   2,535   2,547   2,232 
Net income$8,531  $7,643  $9,026  $9,838  $9,156 
          
Financial ratios:         
Return on average assets(1) 1.11%  1.00%  1.18%  1.32%  1.27%
Return on average assets, adjusted(1)(2)(3) 1.19%  1.13%  1.18%  1.32%  1.27%
Return on average equity(1) 12.79%  12.21%  14.42%  16.27%  15.88%
Return on average equity, adjusted(1)(2)(3) 13.79%  13.77%  14.42%  16.27%  15.88%
Net interest margin(1) 3.77%  3.71%  3.73%  3.83%  3.94%
Efficiency ratio 67.0%  68.9%  63.6%  61.9%  62.6%
Efficiency ratio, adjusted(2)(3) 65.0%  65.6%  63.6%  61.9%  62.6%
          
Per share information:         
Income per common share:         
Basic$0.82  $0.74  $0.87  $0.95  $0.88 
Basic, adjusted(2)(3) 0.89   0.84   0.87   0.95   0.88 
Diluted 0.81   0.73   0.87   0.94   0.87 
Diluted, adjusted(2)(3) 0.88   0.83   0.87   0.94   0.87 
Book value 25.38   24.98   22.90   23.15   22.46 
Tangible book value 23.47   23.03   20.94   21.19   20.50 
Cash dividends paid 0.20   0.20   0.20   0.20   0.20 
          
Average basic shares 10,349   10,321   10,319   10,336   10,385 
Average diluted shares 10,482   10,419   10,405   10,421   10,496 
 
(1) Annualized.
(2) Ratio has been adjusted for the merger-related costs for the three months ended March 31, 2024 and December 31, 2023.
(3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
 


ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)         
          
(In thousands)March 31,
2024		 December 31,
2023		 September 30,
2023		 June 30,
2023		 March 31,
2023
Noninterest income:         
Service charges$1,200  $1,198  $1,260  $1,251  $1,157 
Interchange income 911   952   963   993   965 
Swap fee income 199   588   255   196   — 
Wealth management income 3,102   2,945   2,826   2,822   2,747 
Mortgage banking activities 458   143   (142)  112   478 
Other income 765   704   761   1,786   739 
Investment securities (losses) gains (5)  (39)  2   (2)  (8)
Total noninterest income$6,630  $6,491  $5,925  $7,158  $6,078 
          
Noninterest expenses:         
Salaries and employee benefits$13,752  $12,848  $12,885  $13,054  $12,196 
Occupancy, furniture and equipment 2,639   2,534   2,460   2,266   2,333 
Data processing 1,265   1,247   1,248   1,201   1,217 
Advertising and bank promotions 398   501   332   919   405 
FDIC insurance 441   460   477   519   504 
Professional services 631   702   965   504   734 
Taxes other than income 494   203   387   3   457 
Intangible asset amortization 225   236   228   239   250 
Merger-related expenses 672   1,059   —   —   — 
Other operating expenses 1,952   2,602   1,465   2,044   2,159 
Total noninterest expenses$22,469  $22,392  $20,447  $20,749  $20,255 
          


ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)         
          
(In thousands)March 31,
2024		 December 31,
2023		 September 30,
2023		 June 30,
2023		 March 31,
2023
Balance Sheet at quarter end:         
Cash and cash equivalents$182,722  $65,161  $94,939  $76,318  $98,323 
Restricted investments in bank stocks 11,453   11,992   12,987   12,602   12,869 
Securities available for sale 514,909   513,519   495,162   508,612   520,232 
Loans held for sale, at fair value 535   5,816   6,448   6,450   7,341 
Loans:         
Commercial real estate:         
Owner occupied 364,280   373,757   376,350   366,439   339,371 
Non-owner occupied 707,871   694,638   630,514   626,140   603,396 
Multi-family 147,773   150,675   143,437   145,257   144,053 
Non-owner occupied residential 91,858   95,040   100,391   105,504   106,390 
Commercial and industrial 365,524   367,085   374,190   379,905   380,683 
Acquisition and development:         
1-4 family residential construction 22,277   24,516   25,642   20,461   20,941 
Commercial and land development 118,010   115,249   153,279   143,177   174,556 
Municipal 10,925   9,812   10,334   10,638   11,329 
Total commercial loans 1,828,518   1,830,772   1,814,137   1,797,521   1,780,719 
Residential mortgage:         
First lien 270,748   266,239   248,335   235,813   227,031 
Home equity – term 4,966   5,078   5,223   5,228   5,371 
Home equity – lines of credit 189,966   186,450   188,736   185,099   183,340 
Installment and other loans 8,875   9,774   10,405   10,756   11,040 
Total loans 2,303,073   2,298,313   2,266,836   2,234,417   2,207,501 
Allowance for credit losses (29,165)  (28,702)  (28,278)  (28,383)  (28,364)
Net loans held-for-investment 2,273,908   2,269,611   2,238,558   2,206,034   2,179,137 
Goodwill 18,724   18,724   18,724   18,724   18,724 
Other intangible assets, net 2,189   2,414   2,650   2,589   2,828 
Total assets 3,183,331   3,064,240   3,054,435   3,008,197   3,011,548 
Total deposits 2,695,951   2,558,814   2,546,435   2,522,861   2,515,626 
Borrowings 127,099   147,285   175,241   152,229   176,315 
Subordinated notes 32,111   32,093   32,076   32,059   32,042 
Total shareholders' equity 271,682   265,056   243,080   245,641   240,161 
                    


ORRSTOWN FINANCIAL SERVICES, INC.        
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)      
(continued)         
 March 31,
2024		 December 31,
2023		 September 30,
2023		 June 30,
2023		 March 31,
2023
Capital and credit quality measures(1):         
Total risk-based capital:         
Orrstown Financial Services, Inc 13.4%  13.0%  13.0%  13.0%  12.8%
Orrstown Bank 13.1%  12.8%  12.5%  12.5%  12.4%
Tier 1 risk-based capital:         
Orrstown Financial Services, Inc 11.2%  10.8%  10.6%  10.5%  10.4%
Orrstown Bank 11.9%  11.6%  11.4%  11.4%  11.2%
Tier 1 common equity risk-based capital:         
Orrstown Financial Services, Inc 11.2%  10.8%  10.6%  10.5%  10.4%
Orrstown Bank 11.9%  11.6%  11.4%  11.4%  11.2%
Tier 1 leverage capital:         
Orrstown Financial Services, Inc 9.0%  8.9%  8.7%  8.6%  8.5%
Orrstown Bank 9.6%  9.5%  9.3%  9.3%  9.2%
          
Average equity to average assets 8.66%  8.18%  8.18%  8.11%  7.97%
Allowance for credit losses to total loans 1.27%  1.25%  1.25%  1.27%  1.28%
Total nonaccrual loans to total loans 0.56%  1.11%  0.98%  0.94%  0.96%
Nonperforming assets to total assets 0.40%  0.83%  0.73%  0.70%  0.71%
Allowance for credit losses to nonaccrual loans 226%  112%  127%  135%  134%
          
Other information:         
Net (recoveries) charge-offs$(42) $(6) $241  $380  $(34)
Classified loans 48,997   55,030   33,593   26,347   34,024 
Nonperforming and other risk assets:         
Nonaccrual loans 12,886   25,527   22,324   21,062   21,246 
Other real estate owned —   —   —   —   85 
Total nonperforming assets 12,886   25,527   22,324   21,062   21,331 
Financial difficulty modifications still accruing —   9   —   —   — 
Loans past due 90 days or more and still accruing 99   66   277   539   28 
Total nonperforming and other risk assets$12,985  $25,602  $22,601  $21,601  $21,359 
 
(1) Capital ratios are estimated, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard.
 

Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges.

As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $20.9 million and $21.1 million at March 31, 2024 and December 31, 2023, respectively. In addition, during the three ended March 31, 2024 and December 31, 2023, the Company incurred $0.7 million and $1.1 million in merger-related expenses, respectively.

Tangible book value per common share and the impact of the merger-related expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following tables present the computation of each non-GAAP based measure:

(dollars and shares in thousands)

Tangible Book Value per Common Share March 31,
2024		 December 31,
2023		 September 30,
2023		 June 30,
2023		 March 31,
2023
Shareholders' equity (most directly comparable GAAP-based measure) $271,682  $265,056  $243,080  $245,641  $240,161 
Less: Goodwill  18,724   18,724   18,724   18,724   18,724 
Other intangible assets  2,189   2,414   2,650   2,589   2,828 
Related tax effect  (460)  (507)  (557)  (544)  (594)
Tangible common equity (non-GAAP) $251,229  $244,425  $222,263  $224,872  $219,203 
           
Common shares outstanding  10,705   10,612   10,613   10,611   10,692 
           
Book value per share (most directly comparable GAAP-based measure) $25.38  $24.98  $22.90  $23.15  $22.46 
Intangible assets per share  1.91   1.95   1.96   1.96   1.96 
Tangible book value per share (non-GAAP) $23.47  $23.03  $20.94  $21.19  $20.50 
           


(dollars and shares in thousands)Three Months Ended
Adjusted Ratios for Merger-Related ExpensesMarch 31,
2024		 December 31,
2023		 March 31,
2023
Net income (A) - most directly comparable GAAP-based measure$8,531  $7,643  $9,156 
Plus: Merger-related expenses (B) 672   1,059   — 
Less: Related tax effect (C) (1)  (79)  — 
Adjusted net income (D=A+B-C) - Non-GAAP$9,202  $8,623  $9,156 
      
Average assets (E)$3,098,772  $3,037,824  $2,933,128 
Return on average assets (= A / E) - most directly comparable GAAP-based measure(1) 1.11%  1.00%  1.27%
Return on average assets, adjusted (= D / E) - Non-GAAP(1) 1.19%  1.13%  1.27%
      
Average equity (F)$268,289  $248,442  $233,892 
Return on average equity (= A / F) - most directly comparable GAAP-based measure(1) 12.79%  12.21%  15.88%
Return on average equity, adjusted (= D / F) - Non-GAAP(1) 13.79%  13.77%  15.88%
      
Weighted average shares - basic (G) - most directly comparable GAAP-based measure 10,349   10,321   10,385 
Basic earnings per share (= A / G) - most directly comparable GAAP-based measure$0.82  $0.74  $0.88 
Basic earnings per share, adjusted (= D / G) - Non-GAAP$0.89  $0.84  $0.88 
      
Weighted average shares - diluted (H) - most directly comparable GAAP-based measure 10,482   10,419   10,496 
Diluted earnings per share (= A / H) - most directly comparable GAAP-based measure$0.81  $0.73  $0.87 
Diluted earnings per share, adjusted (= D / H) - Non-GAAP$0.88  $0.83  $0.87 
      
Noninterest expense (I) - most directly comparable GAAP-based measure$22,469  $22,392  $20,255 
Less: Merger-related expenses (B) (672)  (1,059)  — 
Adjusted noninterest expense (J = I - B) - Non-GAAP$21,797  $21,333  $20,255 
            
Net interest income (K)$26,881  $26,018  $26,294 
Noninterest income (L) 6,630   6,491   6,078 
Total operating income (M = K + L)$33,511  $32,509  $32,372 
            
Efficiency ratio (= I / M) - most directly comparable GAAP-based measure 67.0%  68.9%  62.6%
Efficiency ratio, adjusted (= J / M) - Non-GAAP 65.0%  65.6%  62.6%
      
(1) Annualized     
      

Appendix B- Investment Portfolio Concentrations

The following table summarizes the credit ratings and collateral associated with the Company's investment security portfolio, excluding equity securities, at March 31, 2024:

(dollars in thousands)

SectorPortfolio Mix Amortized Book Fair Value Credit Enhancement AAA AA A BBB NR Collateral / Guarantee Type
Unsecured ABS1% $3,512 $3,200 27% —% —% —% —% 100% Unsecured Consumer Debt
Student Loan ABS1   5,043  4,939 27  —  —  —  —  100  Seasoned Student Loans
Federal Family Education Loan ABS17   94,553  93,677 9  7  80  —  13  —  Federal Family Education Loan (1)
PACE Loan ABS—   2,277  1,973 6  100  —  —  —  —  PACE Loans (2)
Non-Agency CMBS3   17,208  17,247 29  —  —  —  —  100   
Non-Agency RMBS3   17,539  14,314 20  100  —  —  —  —  Reverse Mortgages (3)
Municipal - General Obligation18   102,033  93,384   10  83  7  —  —   
Municipal - Revenue22   119,088  107,483   —  82  12  —  6   
SBA ReRemic (5)1   3,293  3,260   —  100  —  —  —  SBA Guarantee (4)
Small Business Administration1   7,786  8,243   —  100  —  —  —  SBA Guarantee (4)
Agency MBS29   159,649  149,400   —  100  —  —  —  Residential Mortgages (4)
U.S. Treasury securities4   20,054  17,669   —  100  —  —  —  U.S. Government Guarantee (4)
 100% $552,035 $514,789   7% 81% 4% 2% 6%  
                    
(1) 97% guaranteed by U.S. government
(2) PACE acronym represents Property Assessed Clean Energy loans
(3) Non-agency reverse mortgages with current structural credit enhancements
(4) Guaranteed by U.S. government or U.S. government agencies
(5) SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits
                    
Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor's, Moody's, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor's rates U.S. government obligations at AA+.
 

About the Company

With $3.2 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, 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. 

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company's management with respect to, among other things, future events and the Company's financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company's industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, successful merger and acquisition activity and cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company's strategic growth plan due to changes in current or future market conditions; changes in interest rates; failure to complete the merger with Codorus Valley Bancorp, Inc. or unexpected delays related to the merger or either party's inability to satisfy closing conditions required to complete the merger; certain restrictions during the pendency of the proposed transactions with Codorus Valley Bancorp, Inc. that may impact the parties' abilities to pursue certain business opportunities or strategic transactions; the diversion of management's attention from ongoing business operations and opportunities; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.

The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company's behalf may issue.

The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.

 


FAQ

What was Orrstown Financial Services, Inc.'s net income for the first quarter of 2024?

Orrstown Financial Services, Inc. reported a net income of $8.5 million for the first quarter of 2024.

How did diluted earnings per share change in the first quarter of 2024 compared to the previous quarter?

Diluted earnings per share increased to $0.81 for the first quarter of 2024 from $0.73 in the previous quarter.

What was the percentage of nonaccrual loans to total loans at March 31, 2024?

Nonaccrual loans to total loans declined to 0.56% at March 31, 2024, from 1.11% at December 31, 2023.

How much was the deposit growth in the first quarter of 2024 compared to the previous quarter?

Deposit growth was $137.1 million during the first quarter of 2024 compared to $12.4 million in the previous quarter.

What was the cash dividend declared by the Board of Directors for Orrstown Financial Services, Inc.?

The Board of Directors declared a cash dividend of $0.20 per common share, payable on May 14, 2024.

How did net income and diluted earnings per share change when excluding merger-related expenses?

Excluding merger-related expenses, net income and diluted earnings per share showed growth compared to the previous quarter.

Stock ORRF logo
Orrstown Financial Services Inc

NASDAQ:ORRF

ORRF Rankings

#3487 Ranked by Market Cap
#3513 Ranked by Stock Gains
#1114 Ranked by Dividends

ORRF Latest News

Jan 23, 2024
Orrstown Financial Services, Inc. Reports Fourth Quarter 2023 Results and Record Earnings for Full Year 2023
Dec 12, 2023
Orrstown Financial Services, Inc. and Codorus Valley Bancorp, Inc. Announce a Merger of Equals to Create a Premier Pennsylvania and Maryland Community Banking Franchise
Oct 24, 2023
Orrstown Financial Services, Inc. Reports Earnings for the Third Quarter 2023
Jul 25, 2023
Orrstown Financial Services, Inc. Reports Earnings for the Second Quarter 2023
May 12, 2023
The Juniata Valley Bank and Orrstown Bank Announce Completion of the Sale of Orrstown’s Path Valley Branch Location to Juniata

ORRF Stock Data

284.74M
9.81M
4.93%
49.8%
1.15%
Commercial Banking
Finance and Insurance
Link
United States of America
SHIPPENSBURG

About ORRF

welcome to orrstown. it's personal here. with more than $1.2 billion in assets, orrstown financial services, inc. and its wholly-owned subsidiary, orrstown bank, provide a full range of consumer and business financial services through twenty banking offices and two remote service facilities located in cumberland, franklin and perry counties, pennsylvania and washington county, maryland. orrstown financial services, inc.’s stock is traded on nasdaq under the symbol orrf. equal housing lender; member fdic.