Orrstown Financial Services, Inc. Reports Third Quarter 2025 Results

Rhea-AI Summary

Orrstown Financial Services (NASDAQ: ORRF) reported third quarter 2025 results with net income $21.9M and diluted EPS $1.13 for the quarter ended September 30, 2025, up from $19.4M and $1.01 in Q2 2025. Return on average assets was 1.60% and return on average equity was 15.72%. Net interest margin (tax equivalent) was 4.11%. Loans grew by $48.4M to $4.0B and tangible book value per share rose to $24.12. The company redeemed $32.5M of subordinated notes on September 30, 2025 and declared a cash dividend of $0.27 per share payable November 12, 2025.

Positive

• Net income of $21.9M in Q3 2025 (up ~13% QoQ)
• Diluted EPS of $1.13 in Q3 2025 (up ~12% QoQ)
• Efficiency ratio improved to 56.4% from 60.3% in Q2 2025
• Loans increased by $48.4M to $4.0B (≈5% annualized)
• Tangible book value per share rose to $24.12 from $22.77

Negative

• Nonaccrual loans increased to $26.2M at Sept 30, 2025 from $22.4M at June 30, 2025
• FHLB advances and other borrowings increased to $209.2M at Sept 30, 2025 from $136.3M at June 30, 2025
• Redeemed $32.5M subordinated notes, triggering $0.3M accelerated debt issuance cost amortization

• Net income of $21.9 million, or $1.13 per diluted share, for the three months ended September 30, 2025 compared to net income of $19.4 million, or $1.01 per diluted share, for the three months ended June 30, 2025; excluding the impact of $1.0 million in merger-related expenses, net of taxes, net income and diluted earnings per share for the second quarter of 2025 were $20.2 million⁽¹⁾ and $1.04⁽¹⁾, respectively;
• Return on average assets was 1.60% and return on average equity was 15.72% for the three months ended September 30, 2025, compared to 1.45% and 14.56% for the return on average assets and return on average equity, respectively, for the three months ended June 30, 2025;
• Excluding the impact of the merger-related expenses referenced above, net of taxes, adjusted return on average assets and adjusted return on average equity were 1.51%⁽¹⁾ and 15.12%⁽¹⁾, respectively, for the three months ended June 30, 2025;
• Net interest margin, on a tax equivalent basis, was 4.11% in the third quarter of 2025 compared to 4.07% in the second quarter of 2025; the net accretion of purchase accounting marks positively impacted the margin by 52 basis points in the third quarter of 2025 compared to 50 basis points in the second quarter of 2025;
• Loans increased by $48.4 million, or approximately 5% annualized, from June 30, 2025 to September 30, 2025; classified loans decreased by $1.7 million from $65.8 million at June 30, 2025 to $64.1 million at September 30, 2025;
• Subordinated notes of $32.5 million were redeemed on September 30, 2025; as a result of the redemption, the Company amortized the remaining debt issuance costs of $0.3 million;
• Noninterest income increased by $0.5 million from $12.9 million for the three months ended June 30, 2025 to $13.4 million for the three months ended September 30, 2025;
• Noninterest expenses decreased by $1.3 million from $37.6 million for the three months ended June 30, 2025 to $36.3 million for the three months ended September 30, 2025; no merger-related expenses were incurred during the third quarter of 2025;
• Efficiency ratio decreased from 60.3% for the three months ended June 30, 2025 to 56.4% for the three months ended September 30, 2025;
• Tangible common equity increased to 8.8% at September 30, 2025 compared to 8.3% at June 30, 2025;
• Tangible book value per common share⁽¹⁾ increased to $24.12 per share at September 30, 2025 compared to $22.77 per share at June 30, 2025;
• The Board of Directors declared a cash dividend of $0.27 per common share, payable November 12, 2025, to shareholders of record as of November 5, 2025.

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

HARRISBURG, Pa., Oct. 21, 2025 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (the "Company") (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the periods ended September 30, 2025. Net income totaled $21.9 million for the three months ended September 30, 2025, compared to net income of $19.4 million for the three months ended June 30, 2025 and net loss of $7.9 million for the three months ended September 30, 2024. Diluted earnings per share was $1.13 for the three months ended September 30, 2025, compared to diluted earnings per share of $1.01 for the three months ended June 30, 2025 and diluted loss per share of $0.41 for the three months ended September 30, 2024. The Company did not incur merger-related expenses during the third quarter of 2025. For the second quarter of 2025, excluding the impact of merger-related expenses, net of taxes, net income and diluted earnings per share were $20.2 million⁽¹⁾ and $1.04⁽¹⁾, respectively. For the third quarter of 2024, excluding the impact from the non-recurring charges, net of taxes, net income and diluted earnings per share were $21.4 million⁽¹⁾ and $1.11⁽¹⁾, respectively.

“Orrstown generated another quarter of impressive earnings, demonstrating our continued momentum after a measured start to the year,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “Loan growth was strong, fee income increased again and expenses continue to decline. This all translated into our strongest quarter of earnings on record with diluted EPS of $1.13, return on assets of 1.60% and return on equity of nearly 16%. The synergies achieved since the prior year merger are clearly evident in our financial metrics. Our capital ratios remain sound even after redeeming subordinated debt during the third quarter. While we are proud of our recent accomplishments, we remain focused on structuring our balance sheet to facilitate success in a changing interest rate environment within a competitive landscape. We are mindful of some remaining economic uncertainty and its potential impact on the overall business environment. We therefore plan to continue to grow prudently while making appropriate strategic investments along the way.”

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

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment increased by $48.4 million and totaled $4.0 billion and $3.9 billion at September 30, 2025 and June 30, 2025, respectively. Commercial loans increased by $38.2 million, or approximately 5% annualized, and residential mortgages increased by $10.3 million, or approximately 5%, from June 30, 2025 to September 30, 2025.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $5.0 million to $890.4 million at September 30, 2025 from $885.4 million at June 30, 2025. During the third quarter of 2025, the Bank purchased $57.7 million of investment securities, which was partially offset by sales of $41.6 million and paydowns totaling $20.5 million. Net unrealized losses declined by $9.1 million for the three months ended September 30, 2025 due to reduced market rates. The overall duration of the Company's investment securities portfolio was 4.4 years at September 30, 2025 compared to 4.5 years at June 30, 2025. See Appendix B for a summary of the Bank's investment securities at September 30, 2025, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the third quarter of 2025, deposits increased by $16.9 million and totaled $4.5 billion at both September 30, 2025 and June 30, 2025. Money market deposits and time deposits increased by $64.0 million and $36.1 million, respectively, and interest-bearing demand deposits, non-interest bearing demand deposits and saving deposits decreased by $60.9 million, $16.7 million and $5.6 million, respectively, from June 30, 2025 to September 30, 2025. Money market deposits and time deposits were impacted by increases in brokered money market deposits of $40.0 million and brokered time deposits of $50.6 million. Continued run-off in higher yielding promotional balances partially offset these deposits. The decreases in the other categories were consistent with normal cyclical activity. The Bank's loan-to-deposit ratio increased to 88% at September 30, 2025 from 87% at June 30, 2025.

Borrowings

On September 30, 2025, the Company redeemed its $32.5 million outstanding 6.0% fixed-to-floating rate subordinated notes. During the three months ended September 30, 2025, the Company amortized the remaining debt issuance costs of $0.3 million as a result of the redemption.

The Company actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $209.2 million at September 30, 2025 compared to $136.3 million at June 30, 2025. The increase was due to higher utilization of overnight borrowings during the third quarter of 2025 as lending and investing activities increased. This increase was partially offset by the subordinated note redemption. 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 $1.7 billion at both September 30, 2025 and June 30, 2025.

Income Statement

Net Interest Income and Margin

Net interest income was $51.0 million for the three months ended September 30, 2025 compared to $49.5 million for the three months ended June 30, 2025. The net interest margin, on a tax equivalent basis, increased to 4.11% in the third quarter of 2025 from 4.07% in the second quarter of 2025. This increase is primarily the result of an increase of six basis points in the yield on loans from the three months ended June 30, 2025 to the three months ended September 30, 2025. This was partially offset by an increase of three basis points in the cost of funds between the same periods due to the accelerated amortization of debt issuance costs in the third quarter.

The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $5.8 million during the third quarter of 2025 compared to $5.2 million for the second quarter of 2025. This change was due primarily to higher accelerated accretion in the three months ended September 30, 2025 compared to the three months ended June 30, 2025.

Interest income on loans, on a tax equivalent basis, increased by $2.8 million to $66.0 million for the three months ended September 30, 2025 compared to $63.2 million for the three months ended June 30, 2025. Average loans increased by $84.1 million during the three months ended September 30, 2025 compared to the three months ended June 30, 2025. The accretion of purchase accounting marks on loans totaled $5.3 million during the third quarter of 2025 compared to $4.9 million during the second quarter of 2025.

Interest income on investment securities, on a tax equivalent basis, was $10.6 million for both the third and second quarters of 2025. Average investment securities increased by $2.3 million during the three months ended September 30, 2025 compared to the three months ended June 30, 2025.

Interest expense, on a tax equivalent basis, increased by $0.8 million to $26.1 million for the three months ended September 30, 2025 compared to $25.3 million for the three months ended June 30, 2025. Average FHLB advances and other borrowings increased by $65.8 million from $104.1 million for the three months ended June 30, 2025 to $168.9 million for the three months ended September 30, 2025. Subordinated notes were redeemed on September 30, 2025, which resulted in the accelerated amortization of the remaining debt issuance costs of $0.3 million, which reduced the net interest margin by two basis points. Borrowing costs increased by 25 basis points during the three months ended September 30, 2025. Average interest-bearing deposits decreased by $34.9 million during the three months ended September 30, 2025 compared to the three months ended June 30, 2025. The cost of interest-bearing deposits declined by two basis points from the second quarter of 2025 to the third quarter of 2025. In addition, interest expense includes $0.3 million and $0.4 million of amortization of purchase accounting marks on interest bearing liabilities for the three months ended September 30, 2025 and June 30, 2025, respectively.

Provision for Credit Losses on Loans

The allowance for credit losses ("ACL") on loans increased to $48.1 million at September 30, 2025 from $47.9 million at June 30, 2025. The ACL to total loans was 1.21% at September 30, 2025 compared to 1.22% at June 30, 2025. The Company recorded provision expense of $0.4 million for the three months ended September 30, 2025 compared to $0.2 million for the three months ended June 30, 2025. Net charge-offs were $0.2 million for the three months ended September 30, 2025 compared to $0.1 million for the three months ended June 30, 2025.

Classified loans decreased by $1.7 million to $64.1 million at September 30, 2025 from $65.8 million at June 30, 2025 due to repayments of $5.8 million, net downgrades of $4.3 million and charge offs of $0.3 million. Delinquent loans decreased by $0.4 million from $12.3 million at June 30, 2025 to $11.9 million at September 30, 2025. Non-accrual loans totaled $26.2 million at September 30, 2025 compared to $22.4 million at June 30, 2025 due to additions to nonaccrual status of $7.8 million primarily consisting of $4.7 million for one commercial construction and land development relationship, $1.3 million in owner-occupied commercial real estate loans and $1.1 million in residential mortgages, partially offset by repayments totaling $3.9 million. Nonaccrual loans to total loans increased to 0.66% at September 30, 2025 compared to 0.57% at June 30, 2025. Management believes the ACL to be adequate based on current asset quality metrics and economic forecasts.

Noninterest Income

Noninterest income increased by $0.5 million to $13.4 million for the three months ended September 30, 2025 from $12.9 million for the three months ended June 30, 2025.

Income from service charges was $3.0 million for the three months ended September 30, 2025 compared to $2.6 million for the three months ended June 30, 2025 based on increased interchange activity.

Swap fee income increased by $0.1 million to $0.8 million for the three months ended September 30, 2025 compared to $0.7 million for the three months ended June 30, 2025. Swap fee income will fluctuate based on market conditions and client demand.

Income from mortgage banking activities was $0.5 million for both the three months ended September 30, 2025 and June 30, 2025. The Bank sold 37 loans to the secondary market during the third quarter of 2025 compared to 47 loans during the second quarter of 2025. The impact of the reduction in loan sale activity was offset by gains from positive fair value adjustments resulting from the increase in the residential mortgage loan pipeline and declining market interest rates.

Other income decreased by $0.3 million to $2.1 million for the three months ended September 30, 2025 compared to $2.4 million for the three months ended June 30, 2025. During the second quarter of 2025, the Bank recorded $0.3 million in solar tax credits and a gain on the sale of other real estate owned of $0.1 million.

Noninterest Expenses

Noninterest expenses decreased by $1.3 million to $36.3 million in the three months ended September 30, 2025 from $37.6 million in the three months ended June 30, 2025.

For the three months ended September 30, 2025, the Company did not incur merger-related expenses compared to $1.0 million for the three months ended June 30, 2025.

Advertising and bank promotions expense decreased by $0.9 million from $1.1 million for the three months ended June 30, 2025 to $0.2 million for the three months ended September 30, 2025 due to $0.7 million in contributions to tax credit programs during the second quarter of 2025. Taxes other than income increased by $0.5 million in the three months ended September 30, 2025 compared to the three months ended June 30, 2025. This decrease reflects the tax impact of the contributions referenced above.

Salaries and benefits expense was $21.4 million for both the three months ended September 30, 2025 and June 30, 2025. The third quarter of 2025 reflects a full quarter impact from the increase in merit-based salaries that went into effect in May 2025 and third quarter contributions towards employee benefit expense that occur semi-annually. The second quarter of 2025 included $0.6 million of severance costs.

Professional services expense decreased by $0.3 million from $2.0 million for the three months ended June 30, 2025 to $1.7 million for the three months ended September 30, 2025. The third quarter of 2025 reflects a reduction in the level of third-party assistance to enhance daily functions and operational processes throughout the organization. While the Company will remain reliant on these services in the fourth quarter of 2025, the Company expects expenses related to these services to continue to decline.

Income Taxes

The Company's effective tax rate was 21.0% for the third quarter of 2025 compared to 21.3% for the second quarter of 2025. The second quarter rate reflected a year-to-date adjustment to align with the revised projection for the full year. The Company's effective tax rate for the three months ended September 30, 2025 is aligned with the 21% federal statutory rate primarily due to 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 partially offset by the benefit of tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

Capital

Shareholders’ equity totaled $571.9 million at September 30, 2025 compared to $548.4 million at June 30, 2025. The increase is due to net income of $21.9 million and other comprehensive income of $6.9 million, partially offset by dividend payments of $5.3 million.

Tangible book value per common share⁽¹⁾ increased to $24.12 per share at September 30, 2025 from $22.77 per share at June 30, 2025. The Company's tangible common equity ratio was 8.8% at September 30, 2025 compared to 8.3% at June 30, 2025. Return on average tangible common equity per common share⁽¹⁾ was 19.7% for the three months ended September 30, 2025 compared to 18.4% for the three months ended June 30, 2025.

Most of the Company's capital ratios increased during the three months ended September 30, 2025 due to earnings; however, total risk-based capital decreased due to impact of the redemption of subordinated notes. The Company's tier 1 common equity, tier 1 and total risk-based capital ratios were 11.1%, 11.3% and 13.1%, respectively, at September 30, 2025 compared to 10.9%, 11.1% and 13.3%, respectively, at June 30, 2025. The Company's Tier 1 leverage ratio increased to 9.3% at September 30, 2025 compared to 9.0% at June 30, 2025.

At September 30, 2025, 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

FINANCIAL HIGHLIGHTS (Unaudited)
	Three Months Ended								Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
(In thousands)		2025				2024				2025				2024
Profitability for the period:
Net interest income	$	50,988			$	51,697			$	149,261			$	104,681
Provision for credit losses - loans		396				14,115				51				15,348
Recovery of credit losses - unfunded loan commitments		—				(434	)			(100	)			(557	)
Noninterest income		13,382				12,386				37,921				26,188
Noninterest expenses		36,297				60,299				112,087				105,407
Income (loss) before income tax expense (benefit)		27,677				(9,897	)			75,144				10,671
Income tax expense (benefit)		5,812				(1,994	)			15,780				2,305
Net income (loss) available to common shareholders	$	21,865			$	(7,903	)		$	59,364			$	8,366
Financial ratios:
Return on average assets (1)		1.60	%		(0.57)%					1.47	%			0.28	%
Return on average assets, adjusted (1) (2) (3)	n/a					1.55	%			1.52	%			1.33	%
Return on average equity (1)		15.72	%		(5.85)%					14.77	%			3.10	%
Return on average equity, adjusted (1) (2) (3)	n/a					15.85	%			15.28	%			14.59	%
Net interest margin (1)		4.11	%			4.14	%			4.06	%			3.88	%
Efficiency ratio		56.4	%			94.1	%			59.9	%			80.5	%
Efficiency ratio, adjusted (2) (3)	n/a					60.2	%			58.5	%			62.6	%
Income (loss) per common share:
Basic	$	1.14			$	(0.41	)		$	3.09			$	0.63
Basic, adjusted (2) (3)	n/a				$	1.12			$	3.20			$	2.96
Diluted	$	1.13			$	(0.41	)		$	3.07			$	0.62
Diluted, adjusted (2) (3)	n/a				$	1.11			$	3.17			$	2.93
Average equity to average assets		10.18	%			9.75	%			9.94	%			9.13	%
(1) Annualized for the three and nine months ended September 30, 2025 and 2024.
(2) Ratio has been adjusted for the non-recurring charges for all periods presented prior to September 30, 2025.
(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.

FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
	September 30,				December 31,
(Dollars in thousands, except per share amounts)		2025				2024
At period-end:
Total assets	$	5,470,233			$	5,441,589
Loans, net of allowance for credit losses		3,931,631				3,882,525
Loans held-for-sale, at fair value		6,026				6,614
Securities available for sale, at fair value		890,357				829,711
Total deposits		4,533,560				4,623,096
FHLB advances and other borrowings and Securities sold under agreements to repurchase		241,719				141,227
Subordinated notes and trust preferred debt		36,970				68,680
Shareholders' equity		571,936				516,682
Credit quality and capital ratios (1):
Allowance for credit losses to total loans		1.21	%			1.24	%
Total nonaccrual loans to total loans		0.66	%			0.61	%
Nonperforming assets to total assets		0.48	%			0.45	%
Allowance for credit losses to nonaccrual loans		184	%			202	%
Total risk-based capital:
Orrstown Financial Services, Inc.		13.1	%			12.4	%
Orrstown Bank		12.9	%			12.4	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		11.3	%			10.2	%
Orrstown Bank		11.8	%			11.2	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		11.1	%			10.0	%
Orrstown Bank		11.8	%			11.2	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		9.3	%			8.3	%
Orrstown Bank		9.6	%			9.1	%
Book value per common share	$	29.33			$	26.65
(1) Capital ratios are estimated for the current period, 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)	September 30, 2025				December 31, 2024
Assets
Cash and due from banks	$	60,970			$	51,026
Interest-bearing deposits with banks		123,176				197,848
Cash and cash equivalents		184,146				248,874
Restricted investments in bank stocks		24,111				20,232
Securities available for sale (amortized cost of $912,760 and $864,920 at September 30, 2025 and December 31, 2024, respectively)		890,357				829,711
Loans held for sale, at fair value		6,026				6,614
Loans		3,979,736				3,931,214
Less: Allowance for credit losses		(48,105	)			(48,689	)
Net loans		3,931,631				3,882,525
Premises and equipment, net		51,312				50,217
Cash surrender value of life insurance		146,020				143,854
Goodwill		69,751				68,106
Other intangible assets, net		40,338				47,765
Accrued interest receivable		20,443				21,058
Deferred tax assets, net		34,100				42,647
Other assets		71,998				79,986
Total assets	$	5,470,233			$	5,441,589
Liabilities
Deposits:
Noninterest-bearing	$	901,557			$	894,176
Interest-bearing		3,632,003				3,728,920
Total deposits		4,533,560				4,623,096
Securities sold under agreements to repurchase and federal funds purchased		32,501				25,863
FHLB advances and other borrowings		209,218				115,364
Subordinated notes and trust preferred debt		36,970				68,680
Other liabilities		86,048				91,904
Total liabilities		4,898,297				4,924,907
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; 19,712,347 shares issued and 19,500,983 outstanding at September 30, 2025; 19,722,640 shares issued and 19,389,967 outstanding at December 31, 2024		1,026				1,027
Additional paid—in capital		423,624				423,274
Retained earnings		170,526				126,540
Accumulated other comprehensive loss		(17,538	)			(26,316	)
Treasury stock— 211,364 and 332,673 shares, at cost at September 30, 2025 and December 31, 2024, respectively		(5,702	)			(7,843	)
Total shareholders’ equity		571,936				516,682
Total liabilities and shareholders’ equity	$	5,470,233			$	5,441,589

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended							Nine Months Ended
		September 30,			September 30,				September 30,				September 30,
(Dollars in thousands, except per share amounts)			2025			2024				2025				2024
Interest income
Loans		$	65,751		$	70,647			$	192,219			$	142,417
Investment securities - taxable			9,367			9,005				27,717				18,588
Investment securities - tax-exempt			881			883				2,634				2,641
Short-term investments			1,123			2,452				4,904				5,272
Total interest income			77,122			82,987				227,474				168,918
Interest expense
Deposits			22,639			28,603				69,754				57,384
Securities sold under agreements to repurchase and federal funds purchased			107			96				297				148
FHLB advances and other borrowings			1,791			1,154				3,939				3,780
Subordinated notes and trust preferred debt			1,597			1,437				4,223				2,925
Total interest expense			26,134			31,290				78,213				64,237
Net interest income			50,988			51,697				149,261				104,681
Provision for credit losses - loans			396			14,115				51				15,348
Recovery of credit losses - unfunded loan commitments			—			(434	)			(100	)			(557	)
Net interest income after net recovery of credit losses			50,592			38,016				149,310				89,890
Noninterest income
Service charges			2,997			2,360				8,022				4,843
Interchange income			1,620			1,779				4,488				3,651
Swap fee income			816			505				1,879				1,079
Wealth management income			5,277			5,037				15,959				11,451
Mortgage banking activities			522			491				1,302				1,318
Investment securities gains			50			271				71				254
Other income			2,100			1,943				6,200				3,592
Total noninterest income			13,382			12,386				37,921				26,188
Noninterest expenses
Salaries and employee benefits			21,439			27,190				63,191				54,137
Occupancy, furniture and equipment			4,075			4,333				12,961				9,677
Data processing			1,116			2,046				3,005				4,548
Advertising and bank promotions			154			537				1,730				1,709
FDIC insurance			652			862				2,150				1,722
Professional services			1,703			1,119				5,545				2,551
Taxes other than income			828			503				2,065				1,046
Intangible asset amortization			2,410			2,464				7,417				2,904
Merger-related expenses			—			16,977				2,617				18,784
Restructuring expenses			—			257				91				257
Other operating expenses			3,920			4,011				11,315				8,072
Total noninterest expenses			36,297			60,299				112,087				105,407
Income (loss) before income tax expense (benefit)			27,677			(9,897	)			75,144				10,671
Income tax expense (benefit)			5,812			(1,994	)			15,780				2,305
Net income (loss)		$	21,865		$	(7,903	)		$	59,364			$	8,366
Share information:
Basic earnings (loss) per share		$	1.14		$	(0.41	)		$	3.09			$	0.63
Diluted earnings (loss) per share		$	1.13		$	(0.41	)		$	3.07			$	0.62
Dividends paid per share		$	0.27		$	0.23			$	0.79			$	0.63
Weighted average shares - basic			19,224			19,088				19,185				13,298
Weighted average shares - diluted			19,364			19,226				19,345				13,441

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Three Months Ended
	9/30/2025										6/30/2025										3/31/2025										12/31/2024										9/30/2024
				Taxable-				Taxable-						Taxable-				Taxable-						Taxable-				Taxable-						Taxable-				Taxable-						Taxable-				Taxable-
	Average			Equivalent				Equivalent			Average			Equivalent				Equivalent			Average			Equivalent				Equivalent			Average			Equivalent				Equivalent			Average			Equivalent				Equivalent
(In thousands)	Balance			Interest				Rate			Balance			Interest				Rate			Balance			Interest				Rate			Balance			Interest				Rate			Balance			Interest				Rate
Assets
Federal funds sold & interest-bearing bank balances	$	101,728		$	1,123			4.38	%		$	136,106		$	1,513			4.46	%		$	203,347		$	2,268			4.52	%		$	199,236		$	2,492			4.96	%		$	184,465		$	2,452			5.29	%
Investment securities(1)(2)		906,399			10,593			4.67				904,119			10,626			4.70				865,126			10,052			4.65				849,389			9,887			4.66				849,700			10,123			4.77
Loans(1)(3)(4)(5)		3,979,044			65,975			6.58				3,894,978			63,246			6.52				3,909,694			63,641			6.59				3,961,269			68,073			6.82				3,989,259			70,849			7.07
Total interest-earning assets		4,987,171			77,691			6.19				4,935,203			75,385			6.13				4,978,167			75,961			6.17				5,009,894			80,452			6.38				5,023,424			83,424			6.61
Other assets		433,659										439,569										447,530										454,271										491,719
Total assets	$	5,420,830									$	5,374,772									$	5,425,697									$	5,464,165									$	5,515,143
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	2,450,034			14,145			2.29			$	2,463,687			13,880			2.26			$	2,473,543			14,156			2.32			$	2,522,885			15,575			2.45			$	2,554,743			16,165			2.52
Savings deposits		264,761			164			0.25				269,309			165			0.25				273,313			165			0.25				272,718			166			0.24				283,337			148			0.21
Time deposits		897,416			8,330			3.68				914,108			8,810			3.87				970,588			9,939			4.15				998,963			11,109			4.41				1,014,628			12,290			4.82
Total interest-bearing deposits		3,612,211			22,639			2.49				3,647,104			22,855			2.51				3,717,444			24,260			2.65				3,794,566			26,850			2.81				3,852,708			28,603			2.95
Securities sold under agreements to repurchase and federal funds purchased		27,772			107			1.53				25,917			106			1.64				26,163			84			1.30				21,572			67			1.23				23,075			96			1.66
FHLB advances and other borrowings		168,939			1,791			4.21				104,068			1,030			3.97				112,859			1,118			4.02				115,373			1,165			4.01				115,388			1,154			3.98
Subordinated notes and trust preferred debt		68,749			1,597			9.21				68,910			1,330			7.74				68,739			1,296			7.65				68,571			1,360			7.88				68,399			1,437			8.36
Total interest-bearing liabilities		3,877,671			26,134			2.67				3,845,999			25,321			2.64				3,925,205			26,758			2.76				4,000,082			29,442			2.92				4,059,570			31,290			3.07
Noninterest-bearing demand deposits		902,128										904,031										887,726										849,999										807,886
Other liabilities		89,086										89,058										89,077										97,685										110,017
Total liabilities		4,868,885										4,839,088										4,902,008										4,947,766										4,977,473
Shareholders' equity		551,945										535,684										523,689										516,399										537,670
Total	$	5,420,830									$	5,374,772									$	5,425,697									$	5,464,165									$	5,515,143
Taxable-equivalent net interest income / net interest spread					51,557			3.52	%						50,064			3.49	%						49,203			3.41	%						51,010			3.46	%						52,134			3.55	%
Taxable-equivalent net interest margin								4.11	%									4.07	%									4.00	%									4.05	%									4.14	%
Taxable-equivalent adjustment					(569	)									(552	)									(442	)									(437	)									(437	)
Net interest income				$	50,988									$	49,512									$	48,761									$	50,573									$	51,697
Ratio of average interest-earning assets to average interest-bearing liabilities								129	%									128	%									127	%									125	%									124	%
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 accretion on purchase accounting marks of $5.3 million, $4.9 million, $6.6 million, $7.6 million, and $7.3 million for the three months ended September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024 and September 30, 2024, respectively.

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
(continued)
	Nine Months Ended
	September 30, 2025										September 30, 2024
				Taxable-				Taxable-						Taxable-				Taxable-
	Average			Equivalent				Equivalent			Average			Equivalent				Equivalent
(In thousands)	Balance			Interest				Rate			Balance			Interest				Rate
Assets
Federal funds sold & interest-bearing bank balances	$	146,688		$	4,904			4.47	%		$	134,136		$	5,272			5.25	%
Investment securities (1)(2)		892,033			31,379			4.69				636,781			21,931			4.60
Loans (1)(3)(4)(5)(6)		3,928,159			192,858			6.56				2,878,171			142,921			6.63
Total interest-earning assets		4,966,880			229,141			6.17				3,649,088			170,124			6.23
Other assets		440,153										298,334
Total assets	$	5,407,033									$	3,947,422
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	2,462,336			42,181			2.29			$	1,927,337			35,475			2.46
Savings deposits		268,966			494			0.25				206,552			432			0.28
Time deposits		927,232			27,079			3.90				642,959			21,477			4.46
Total interest-bearing deposits		3,658,534			69,754			2.55				2,776,848			57,384			2.76
Securities sold under agreements to repurchase and federal funds purchased		26,623			297			1.49				16,191			148			1.22
FHLB advances and other borrowings		128,827			3,939			4.09				122,604			3,780			4.12
Subordinated notes and trust preferred debt		68,799			4,223			8.21				44,294			2,925			8.82
Total interest-bearing liabilities		3,882,783			78,213			2.69				2,959,937			64,237			2.90
Noninterest-bearing demand deposits		898,015										550,407
Other liabilities		89,025										76,846
Total liabilities		4,869,823										3,587,190
Shareholders' equity		537,210										360,232
Total liabilities and shareholders' equity	$	5,407,033									$	3,947,422
Taxable-equivalent net interest income / net interest spread					150,928			3.47	%						105,887			3.33	%
Taxable-equivalent net interest margin								4.06	%									3.88	%
Taxable-equivalent adjustment					(1,667	)									(1,206	)
Net interest income				$	149,261									$	104,681
Ratio of average interest-earning assets to average interest-bearing liabilities								128	%									123	%

NOTES TO ANALYSIS OF NET INTEREST INCOME:
(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 for the nine months ended September 30, 2024.
(6) Interest income on loans includes accretion on purchase accounting marks of $16.7 million and $7.6 million for the nine months ended September 30, 2025 and 2024, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(In thousands)	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Profitability for the quarter:
Net interest income	$	50,988			$	49,512			$	48,761			$	50,573			$	51,697
Provision for (Recovery of) credit losses		396				109				(554	)			1,755				13,681
Noninterest income		13,382				12,915				11,624				11,247				12,386
Noninterest expenses		36,297				37,614				38,176				42,930				60,299
Income (loss) before income taxes		27,677				24,704				22,763				17,135				(9,897	)
Income tax expense (benefit)		5,812				5,256				4,712				3,451				(1,994	)
Net income (loss)	$	21,865			$	19,448			$	18,051			$	13,684			$	(7,903	)
Financial ratios:
Return on average assets (1)		1.60	%			1.45	%			1.35	%			1.00	%		(0.57)%
Return on average assets, adjusted (1)(2)(3)	n/a					1.51	%			1.45	%			1.22	%			1.55	%
Return on average equity (1)		15.72	%			14.56	%			13.98	%			10.54	%		(5.85)%
Return on average equity, adjusted (1)(2)(3)	n/a					15.12	%			14.97	%			12.86	%			15.85	%
Net interest margin (1)		4.11	%			4.07	%			4.00	%			4.05	%			4.14	%
Efficiency ratio		56.4	%			60.3	%			63.2	%			69.4	%			94.1	%
Efficiency ratio, adjusted (2)(3)	n/a					58.7	%			60.5	%			62.3	%			60.2	%
Per share information:
Income (loss) per common share:
Basic	$	1.14			$	1.01			$	0.94			$	0.72			$	(0.41	)
Basic, adjusted (2)(3)	n/a					1.05				1.01				0.87				1.12
Diluted		1.13				1.01				0.93				0.71				(0.41	)
Diluted, adjusted (2)(3)	n/a					1.04				1.00				0.87				1.11
Book value		29.33				28.07				27.32				26.65				26.65
Tangible book value(3)		24.12				22.77				21.99				21.19				21.12
Average tangible common equity(3)		19.70				18.43				17.91				13.62				(6.49	)
Cash dividends paid		0.27				0.26				0.26				0.23				0.23
Average basic shares		19,224				19,173				19,157				19,118				19,088
Average diluted shares		19,364				19,342				19,328				19,300				19,226
(1) Annualized.
(2) Ratio has been adjusted for non-recurring expenses for all periods presented prior to September 30, 2025.
(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)	September 30, 2025			June 30, 2025			March 31, 2025			December 31, 2024				September 30, 2024
Noninterest income:
Service charges	$	2,997		$	2,630		$	2,395		$	2,050			$	2,360
Interchange income		1,620			1,441			1,427			1,608				1,779
Swap fee income		816			669			394			597				505
Wealth management income		5,277			5,267			5,415			4,902				5,037
Mortgage banking activities		522			478			302			517				491
Other income		2,100			2,422			1,678			1,578				1,943
Investment securities gains (losses)		50			8			13			(5	)			271
Total noninterest income	$	13,382		$	12,915		$	11,624		$	11,247			$	12,386
Noninterest expenses:
Salaries and employee benefits	$	21,439		$	21,364		$	20,388		$	22,444			$	27,190
Occupancy, furniture and equipment		4,075			4,211			4,675			4,893				4,333
Data processing		1,116			965			924			1,540				2,046
Advertising and bank promotions		154			1,077			499			878				537
FDIC insurance		652			674			824			955				862
Professional services		1,703			2,016			1,826			1,591				1,119
Taxes other than income		828			295			942			(312	)			503
Intangible asset amortization		2,410			2,472			2,535			2,838				2,464
Provision for legal settlement		—			—			—			478				—
Merger-related expenses		—			968			1,649			3,887				16,977
Restructuring expenses		—			—			91			39				257
Other operating expenses		3,920			3,572			3,823			3,699				4,011
Total noninterest expenses	$	36,297		$	37,614		$	38,176		$	42,930			$	60,299

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Balance Sheet at quarter end:
Cash and cash equivalents	$	184,146			$	149,377			$	287,120			$	248,874			$	236,780
Restricted investments in bank stocks		24,111				21,204				19,693				20,232				20,247
Securities available for sale		890,357				885,373				855,456				829,711				826,828
Loans held for sale, at fair value		6,026				5,206				5,261				6,614				3,561
Loans:
Commercial real estate:
Owner occupied		629,481				622,315				617,854				633,567				622,726
Non-owner occupied		1,254,959				1,203,038				1,157,383				1,160,238				1,164,501
Multi-family		234,782				239,388				257,724				274,135				276,296
Non-owner occupied residential		163,138				165,479				168,354				179,512				190,786
Agricultural		118,596				124,291				134,916				125,156				129,486
Commercial and industrial		479,929				487,063				455,494				451,384				471,983
Acquisition and development:
1-4 family residential construction		41,141				38,490				40,621				47,432				56,383
Commercial and land development		195,158				198,889				227,434				241,424				262,317
Municipal		28,664				28,693				30,780				30,044				27,960
Total commercial loans		3,145,848				3,107,646				3,090,560				3,142,892				3,202,438
Residential mortgage:
First lien		476,006				469,569				464,642				460,297				451,195
Home equity – term		5,800				5,784				9,224				5,988				6,508
Home equity – lines of credit		311,458				305,968				295,820				303,561				303,165
Other - term(1)		23,737				25,384				—				—				—
Installment and other loans		16,887				17,028				15,739				18,476				18,131
Total loans		3,979,736				3,931,379				3,875,985				3,931,214				3,981,437
Allowance for credit losses		(48,105	)			(47,898	)			(47,804	)			(48,689	)			(49,630	)
Net loans held for investment		3,931,631				3,883,481				3,828,181				3,882,525				3,931,807
Goodwill		69,751				69,751				68,106				68,106				70,655
Other intangible assets, net		40,338				42,748				45,230				47,765				46,144
Total assets		5,470,233				5,387,645				5,441,586				5,441,589				5,470,589
Total deposits		4,533,560				4,516,625				4,633,716				4,623,096				4,650,853
FHLB advances and other borrowings and Securities sold under agreements to repurchase		241,719				166,381				123,480				141,227				137,310
Subordinated notes and trust preferred debt		36,970				69,021				68,850				68,680				68,510
Total shareholders' equity		571,936				548,448				532,936				516,682				516,206
(1) Other - term includes property assessed clean energy ("PACE") loans.

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Capital and credit quality measures(1):
Total risk-based capital:
Orrstown Financial Services, Inc.		13.1	%			13.3	%			13.1	%			12.4	%			12.4	%
Orrstown Bank		12.9	%			13.3	%			13.0	%			12.4	%			12.2	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		11.3	%			11.1	%			10.8	%			10.2	%			10.0	%
Orrstown Bank		11.8	%			12.1	%			11.9	%			11.2	%			11.0	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		11.1	%			10.9	%			10.6	%			10.0	%			9.8	%
Orrstown Bank		11.8	%			12.1	%			11.9	%			11.2	%			11.0	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		9.3	%			9.0	%			8.6	%			8.3	%			8.0	%
Orrstown Bank		9.6	%			9.8	%			9.5	%			9.1	%			8.8	%
Average equity to average assets		10.18	%			9.97	%			9.65	%			9.45	%			9.75	%
Allowance for credit losses to total loans		1.21	%			1.22	%			1.23	%			1.24	%			1.25	%
Total nonaccrual loans to total loans		0.66	%			0.57	%			0.59	%			0.61	%			0.68	%
Nonperforming assets to total assets		0.48	%			0.42	%			0.42	%			0.45	%			0.49	%
Allowance for credit losses to nonaccrual loans		184	%			214	%			210	%			202	%			184	%
Other information:
Net charge-offs	$	189			$	115			$	331			$	3,002			$	269
Classified loans		64,089				65,754				76,211				88,628				105,465
Nonperforming and other risk assets:
Nonaccrual loans		26,191				22,423				22,727				24,111				26,927
Other real estate owned		—				—				138				138				138
Total nonperforming assets		26,191				22,423				22,865				24,249				27,065
Financial difficulty modifications still accruing		1,245				5,759				5,127				4,897				9,497
Loans past due 90 days or more and still accruing		497				1,312				400				641				337
Total nonperforming and other risk assets	$	27,933			$	29,494			$	28,392			$	29,787			$	36,899
(1) Capital ratios are estimated for the current period, 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 $110.1 million and $115.9 million at September 30, 2025 and December 31, 2024, respectively. In addition, during the three months ended September 30, 2025, June 30, 2025, March, 31, 2025, December 31, 2024 and September 30, 2024, the Company incurred zero, $1.0 million, $1.6 million, $3.9 million, and $17.0 million in merger-related expenses, respectively. During the three months ended December 31, 2024 and September 30, 2024, the Company incurred other non-recurring charges totaling $0.5 million and $20.2 million, respectively.

Tangible book value per common share, tangible common equity and the impact of the non-recurring 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:

(In thousands)

Tangible Book Value per Common Share		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Shareholders' equity (most directly comparable GAAP-based measure)		$	571,936			$	548,448			$	532,936			$	516,682			$	516,206
Less: Goodwill			69,751				69,751				68,106				68,106				70,655
Other intangible assets			40,338				42,748				45,230				47,765				46,144
Related tax effect			(8,471	)			(8,977	)			(9,498	)			(10,031	)			(9,690	)
Tangible common equity (non-GAAP)		$	470,318			$	444,926			$	429,098			$	410,842			$	409,097
Common shares outstanding			19,501				19,536				19,510				19,390				19,373
Book value per share (most directly comparable GAAP-based measure)		$	29.33			$	28.07			$	27.32			$	26.65			$	26.65
Intangible assets per share			5.21				5.30				5.33				5.46				5.53
Tangible book value per share (non-GAAP)		$	24.12			$	22.77			$	21.99			$	21.19			$	21.12

Return on Average Common Equity		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Average shareholders' equity		$	551,945			$	535,684			$	523,689			$	516,399			$	537,670
Less: Average goodwill			69,751				68,126				68,106				71,477				36,034
Less: Average other intangible assets, gross			41,809				44,304				46,864				45,319				17,393
Average tangible equity		$	440,385			$	423,254			$	408,719			$	399,603			$	484,243
Return on average tangible equity			19.70	%			18.43	%			17.91	%			13.62	%		(6.49)%

(In thousands)	Three Months Ended																				Nine Months Ended
Adjusted Ratios for Non-recurring Charges	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				September 30, 2025					September 30, 2024
Net income (loss) (A) - most directly comparable GAAP-based measure	$	21,865			$	19,448			$	18,051			$	13,684			$	(7,903	)		$	59,364				$	8,366
Plus: Merger-related expenses (B)		—				968				1,649				3,887				16,977				2,617					18,784
Plus: Executive retirement expenses (B)		—				—				—				35				4,758				—					4,758
Plus: Provision for credit losses on non-PCD loans (B)		—				—				—				—				15,504				—					15,504
Plus: Provision for legal settlement (B)		—				—				—				478				—				—					—
Less: Related tax effect (C)		—				(221	)			(368	)			(1,386	)			(7,915	)			(589	)				(8,056	)
Adjusted net income (D=A+B-C) - Non-GAAP	$	21,865			$	20,195			$	19,332			$	16,698			$	21,421			$	61,392				$	39,356
Average assets (E)	$	5,420,830			$	5,374,772			$	5,425,697			$	5,464,165			$	5,515,143			$	5,407,033				$	3,947,422
Return on average assets (= A / E) - most directly comparable GAAP-based measure (1)		1.60	%			1.45	%			1.35	%			1.00	%		(0.57)%					1.47	%				0.28	%
Return on average assets, adjusted (= D / E) - Non-GAAP (1)		1.60	%			1.51	%			1.45	%			1.22	%			1.55	%			1.52	%				1.33	%
Average equity (F)	$	551,945			$	535,684			$	523,689			$	516,399			$	537,670			$	537,210				$	360,232
Return on average equity (= A / F) - most directly comparable GAAP-based measure (1)		15.72	%			14.56	%			13.98	%			10.54	%		(5.85)%					14.77	%				3.10	%
Return on average equity, adjusted (= D / F) - Non-GAAP (1)		15.72	%			15.12	%			14.97	%			12.86	%			15.85	%			15.28	%				14.59	%
Weighted average shares - basic (G) - most directly comparable GAAP-based measure		19,224				19,173				19,157				19,118				19,088				19,185					13,298
Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure	$	1.14			$	1.01			$	0.94			$	0.72			$	(0.41	)		$	3.09				$	0.63
Basic earnings per share, adjusted (= D / G) - Non-GAAP	$	1.14			$	1.05			$	1.01			$	0.87			$	1.12			$	3.20				$	2.96
Weighted average shares - diluted (H) - most directly comparable GAAP-based measure		19,364				19,342				19,328				19,300				19,226				19,345					13,441
Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure	$	1.13			$	1.01			$	0.93			$	0.71			$	(0.41	)		$	3.07				$	0.62
Diluted earnings per share, adjusted (= D / H) - Non-GAAP	$	1.13			$	1.04			$	1.00			$	0.87			$	1.11			$	3.17				$	2.93
continued
(1) Annualized

	Three Months Ended																				Nine Months Ended
	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				September 30, 2025					September 30, 2024
Noninterest expense (I) - most directly comparable GAAP-based measure	$	36,297			$	37,614			$	38,176			$	42,930			$	60,299			$	112,087				$	105,407
Less: Merger-related expenses (B)		—				(968	)			(1,649	)			(3,887	)			(16,977	)			(2,617	)				(18,784	)
Less: Executive retirement expenses (B)		—				—				—				(35	)			(4,758	)			—					(4,758	)
Less: Provision for legal settlement (B)		—				—				—				(478	)			—				—					—
Adjusted noninterest expense (J = I - B) - Non-GAAP	$	36,297			$	36,646			$	36,527			$	38,531			$	38,564			$	109,470				$	81,865
Net interest income (K)	$	50,988			$	49,512			$	48,761			$	50,573			$	51,697			$	149,261				$	104,681
Noninterest income (L)		13,382				12,915				11,624				11,247				12,386				37,921					26,188
Total operating income (M = K + L)	$	64,370			$	62,427			$	60,385			$	61,820			$	64,083			$	187,182				$	130,869
Efficiency ratio (= I / M) - most directly comparable GAAP-based measure		56.4	%			60.3	%			63.2	%			69.4	%			94.1	%			59.9	%				80.5	%
Efficiency ratio, adjusted (= J / M) - Non-GAAP		56.4	%			58.7	%			60.5	%			62.3	%			60.2	%			58.5	%				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 September 30, 2025:

(In thousands)

Sector	Portfolio Mix			Amortized Book			Fair Value			Credit Enhancement			AAA			AA			A			BBB			BB			NR			Collateral / Guarantee Type
Unsecured ABS	—	%		$	2,700		$	2,580		28	%		—	%		—	%		—	%		—	%		—	%		100	%		Unsecured Consumer Debt
Student Loan ABS	—				3,329			3,323		28			—			—			—			—			—			100			Seasoned Student Loans
Federal Family Education Loan ABS	8				73,927			73,552		11			—			47			33			7			13			—			Federal Family Education Loan (1)
PACE Loan ABS	—				1,714			1,574		7			100			—			—			—			—			—			PACE Loans (2)
Non-Agency CMBS	3				23,236			23,366		25			—			—			—			—			—			100
Non-Agency RMBS	3				22,169			21,179		16			100			—			—			—			—			—			Reverse Mortgages (3)
Municipal - General Obligation	11				99,301			92,050					17			77			6			—			—			—
Municipal - Revenue	13				120,030			108,063					—			82			12			—			—			6
SBA ReRemic (5)	—				1,734			1,717					—			100			—			—			—			—			SBA Guarantee (4)
Small Business Administration	—				3,930			4,001					—			100			—			—			—			—			SBA Guarantee (4)
Agency MBS	20				177,918			178,485					—			100			—			—			—			—			Residential Mortgages (4)
Agency CMO	40				360,574			359,449					—			100			—			—			—			—
U.S. Treasury securities	2				20,033			18,803					—			100			—			—			—			—			U.S. Government Guarantee (4)
Corporate bonds	—				1,944			1,994					—			—			52			48			—			—
	100	%		$	912,539		$	890,136					4	%		85	%		5	%		1	%		1	%		4	%
(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 $5.5 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 counties in Pennsylvania, Maryland, Delaware, Virginia and West Virginia within a 75-mile radius of the Company's executive and administrative offices as well as the District of Columbia. 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, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results to differ from those expressed or implied by the forward-looking statements include, but are not limited to, the following: interest rate changes or volatility; 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; 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, and evolving interpretations of, existing and future 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, 2024 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 were Orrstown Financial (ORRF) Q3 2025 earnings and EPS?

Orrstown reported net income $21.9M and diluted EPS $1.13 for Q3 2025 (quarter ended Sept 30, 2025).

When is the ORRF dividend declared for Q4 2025 and how much is it?

The Board declared a cash dividend of $0.27 per common share, payable Nov 12, 2025, to shareholders of record on Nov 5, 2025.

How much did Orrstown loans grow in Q3 2025 (ORRF)?

Loans held for investment increased by $48.4M to $4.0B at Sept 30, 2025, described as about a 5% annualized change.

How did ORRF's efficiency ratio and tangible book value change in Q3 2025?

Efficiency ratio improved to 56.4% from 60.3% in Q2 2025; tangible book value per share increased to $24.12 at Sept 30, 2025.

What was the impact of redeeming subordinated notes on ORRF's Q3 2025 results?

ORRF redeemed $32.5M of subordinated notes on Sept 30, 2025, which caused accelerated amortization of $0.3M debt issuance costs and trimmed net interest margin by ~2 basis points.

What happened to ORRF's asset quality in Q3 2025?

Classified loans declined slightly, but nonaccrual loans rose to $26.2M at Sept 30, 2025 (up from $22.4M at June 30, 2025); ACL to loans was 1.21%.