Orrstown Financial expects $13.8M Q4 pre-tax loss
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Form Type
8-K
Rhea-AI Filing Summary
Orrstown Financial Services, Inc. (ORRF) sold available-for-sale securities with an amortized cost of $185.6 million, a weighted average yield of 3.13% and a weighted average remaining life of 8.4 years. Proceeds are being used to buy higher-yielding available-for-sale securities with an estimated weighted average yield of 5.20%.
The company estimates a $13.8 million pre-tax loss in fourth-quarter 2026 results. The sale is expected to have only a nominal impact on tangible book value because the loss was previously reflected in accumulated other comprehensive loss. The estimated loss would reduce the Bank’s regulatory capital ratios as of September 30, 2026 by approximately 22 basis points for risk-based capital ratios and 20 basis points for the leverage ratio; all ratios would remain well above well-capitalized thresholds. Orrstown expects the capital impact to be recovered within two quarters and expects the repositioning to be accretive to net income, net interest income, net interest margin and return on average assets in future periods.
8-K Event Classification
2 items: 8.01, 9.01
2 items
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Amortized cost of securities sold: $185.6 million
Weighted average yield of securities sold: 3.13%
Weighted average remaining life: 8.4 years
+5 more
8 metrics
Amortized cost of securities sold
$185.6 million
Available-for-sale portfolio repositioning
Weighted average yield of securities sold
3.13%
Securities sold in the repositioning
Weighted average remaining life
8.4 years
Securities sold in the repositioning
Estimated replacement-securities yield
5.20%
Estimated weighted average yield of higher-yielding securities being purchased
Estimated pre-tax loss
$13.8 million
Expected in fourth-quarter 2026 results
Risk-based capital ratio reduction
Approximately 22 basis points
Estimated effect on the Bank’s ratios as of September 30, 2026
Leverage ratio reduction
20 basis points
Estimated effect on the Bank’s ratio as of September 30, 2026
Expected capital-impact recovery
Within two quarters
Orrstown’s estimate following the repositioning
Key Terms
available for sale securities, amortized cost, weighted average remaining life, accumulated other comprehensive loss, +2 more
6 terms
available for sale securities financial
"securities available for sale (AFS) portfolio"
Available-for-sale securities are bonds or stocks a company owns that it does not plan to trade frequently or hold until they mature, but might sell before maturity; their market value is tracked over time and changes are recorded separately from regular profits until they are sold. Investors watch these holdings because swings in their market value affect a company’s reported assets and equity and can signal future cash from sales, much like items in a household that are kept for occasional sale and can change in resale value.
amortized cost financial
"total amortized cost of $185.6 million"
Amortized cost is an accounting method that shows the value of a loan or bond on a company’s books by starting with what was paid and then gradually adjusting that amount as principal is repaid and any extra fees or discounts are spread out over time. Think of it like tracking the remaining balance on a mortgage after each scheduled payment. For investors, it matters because it determines the reported value and earned interest of debt holdings, affecting income, balance sheet strength, and comparisons between companies.
weighted average remaining life financial
"weighted average remaining life of 8.4 years"
accumulated other comprehensive loss financial
"previously reflected in accumulated other comprehensive loss"
Accumulated other comprehensive loss is the running negative total of certain gains and losses that companies record outside their regular profit-and-loss statement, such as changes in the value of some investments, pension adjustments, or currency translation effects. It matters to investors because it reduces shareholders’ equity and reveals economic swings that haven’t affected reported net income yet — like a side ledger showing pending ups and downs that could influence future cash flow or balance-sheet strength.
risk-based capital ratios regulatory
"22 basis points for its risk-based capital ratios"
A risk-based capital ratio measures how much financial cushion a company holds relative to the risks in its assets and business activities; assets that are riskier require more capital, so the ratio adjusts the cushion to reflect actual exposure. Investors use it like checking the sturdiness of a safety net — a higher ratio means a company is better positioned to absorb losses and less likely to need emergency funding or face regulatory action, making its shares or bonds generally less risky.
well-capitalized thresholds regulatory
"well above well-capitalized thresholds"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How large was ORRF’s securities portfolio repositioning?
Orrstown sold available-for-sale securities with an amortized cost of $185.6 million, a weighted average yield of 3.13% and a weighted average remaining life of 8.4 years. The replacement securities have an estimated weighted average yield of 5.20%.
How will ORRF’s securities sale affect its capital ratios?
The estimated loss would reduce the Bank’s regulatory capital ratios as of September 30, 2026 by approximately 22 basis points for risk-based capital ratios and 20 basis points for the leverage ratio. All ratios would remain well above well-capitalized thresholds, and Orrstown expects the capital impact to be recovered within two quarters.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). | |||||
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| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
| Emerging growth company | |||||
| ☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ||||
Item 8.01 Other Events
On November 9, 2026, Orrstown Financial Services, Inc. (the "Company”) issued a press release announcing the execution of a strategic repositioning of a portion of its securities available-for-sale ("AFS") portfolio (the “Portfolio Repositioning”), which is attached as Exhibit 99 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is furnished as part of this Current Report on Form 8-K:
| Exhibit No. | Description | |||||||
| 99 | Press Release dated November 9, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |||||||
| SIGNATURES | |||||||||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. | |||||||||||
| ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||
| Date: November 13, 2026 | By: | /s/ Neelesh Kalani | |||||||||
Neelesh Kalani Executive Vice President and Chief Financial Officer (Duly Authorized Representative) | |||||||||||
Exhibit 99
Orrstown Financial Services, Inc. Announces
Execution of Strategic Repositioning
HARRISBURG, PA, November 9, 2026 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (NASDAQ: ORRF) (the “Company”), the holding company of Orrstown Bank (the “Bank”), today announced the execution of a strategic repositioning of a portion of its available for sale (“AFS”) securities portfolio. The Company sold AFS securities with a total amortized cost of $185.6 million, a weighted average yield of 3.13%, and a weighted average remaining life of 8.4 years. Proceeds from the sale are being used to purchase higher-yielding AFS securities with an estimated weighted average yield of 5.20%.
The Company estimates the transactions will result in a net pre-tax loss on the sale of AFS securities of $13.8 million, which will be included in the Company’s financial results for the fourth quarter of 2026. The Company expects the strategic repositioning to be accretive to net income, net interest income, net interest margin, and return on average assets in future periods. The sale will have only a nominal impact on tangible book value, as the loss was previously reflected in accumulated other comprehensive loss.
The estimated pre-tax loss would reduce the Bank’s regulatory capital ratios as of September 30, 2026 by approximately 22 basis points for its risk-based capital ratios and 20 basis points for its leverage ratio, leaving all regulatory capital ratios well above well-capitalized thresholds. The Company expects the capital impact to be recovered within two quarters.
About Orrstown
With $5.7 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.
For additional information, please contact:
Neil Kalani
EVP, Chief Financial Officer
717-510-7097
nkalani@orrstown.com