Orrstown Q2 Earnings Jump 8%, Boosts Dividend as Profits Hit $19.4M

Q: What were Orrstown Financial's (ORRF) earnings per share in Q2 2025?

ORRF reported $1.01 per diluted share in Q2 2025, or $1.04 adjusted excluding merger-related expenses, compared to $0.93 in Q1 2025.

Q: How much did Orrstown Financial (ORRF) increase its dividend in Q2 2025?

ORRF increased its quarterly dividend by $0.01 to $0.27 per share , payable August 12, 2025, representing a 35% increase since the Codorus Valley merger.

Q: What was ORRF's loan growth in Q2 2025?

Loans increased by $55.4 million , or 6% annualized, including commercial loans growth of $16.1 million and residential mortgages increase of $37.9 million.

Q: What was ORRF's net interest margin in Q2 2025?

The net interest margin was 4.07% in Q2 2025, an increase from 4.00% in Q1 2025, primarily due to lower cost of funds.

Q: How did Orrstown's deposit base change in Q2 2025?

Total deposits decreased by $117.1 million to $4.5 billion, with declines across time deposits ($58.0M), money market deposits ($35.8M), and other deposit categories.

Orrstown Financial Services, Inc. Reports Second Quarter 2025 Results and Announces Dividend Increase

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Insights

Orrstown's Q2 results show improved profitability, margin expansion, and a dividend increase while merger integration nears completion.

Orrstown Financial Services posted solid Q2 2025 results with $19.4 million in net income ($1.01 per diluted share), up from $18.1 million ($0.93) in Q1 2025. Excluding merger-related expenses, adjusted earnings reached $20.2 million ($1.04 per share).

The net interest margin expanded to 4.07% from 4.00% in Q1, primarily driven by declining funding costs. This 7 basis point improvement occurred despite reduced loan yield accretion from purchase accounting marks, showing underlying margin strength. The bank benefited from $5.2 million of purchase accounting accretion during the quarter.

Loan growth was 6% annualized, with the portfolio increasing by $55.4 million to reach $3.9 billion. While commercial loans grew modestly at 2% annualized, residential mortgages showed stronger growth. The loan mix was enhanced by a $25.4 million PACE loan purchase.

Credit quality improved with classified loans decreasing by $10.4 million to $65.8 million. Non-accrual loans remained stable at $22.4 million, representing just 0.57% of total loans, down from 0.59% in Q1.

Deposit costs decreased by 14 basis points quarter-over-quarter, contributing to the margin expansion despite $117.1 million in deposit runoff. The loan-to-deposit ratio increased to 87% from 84%, still reflecting a healthy liquidity position with $1.7 billion in available funding sources.

The efficiency ratio improved to 60.3% from 63.2% in Q1, and adjusted for merger expenses, reached 58.7%. This reflects operational improvements as merger integration concludes, though $0.6 million in severance charges indicates continued efficiency efforts.

In a shareholder-friendly move, the board approved a $0.01 dividend increase to $0.27 per share and authorized a share repurchase program for up to 500,000 shares. Tangible book value per share grew to $22.77, up 3.5% from $21.99 in March.

With the one-year anniversary of the Codorus Valley merger, management indicates merger-related expenses are largely behind them, positioning the bank for improved efficiency and growth as they shift focus from integration to execution.

07/22/2025 - 04:12 PM

Net income of $19.4 million, or $1.01 per diluted share, for the three months ended June 30, 2025 compared to net income of $18.1 million, or $0.93 per diluted share, for the three months ended March 31, 2025; the second quarter of 2025 included $1.0 million in merger-related expenses compared to $1.6 million in merger-related expenses for the first quarter of 2025;
Excluding the impact of the merger-related expenses referenced above, net of taxes, net income and diluted earnings per share were $20.2 million⁽¹⁾ and $1.04⁽¹⁾, respectively, for the second quarter of 2025 compared to $19.3 million⁽¹⁾ and $1.00⁽¹⁾, respectively, for the first quarter of 2025;
Net interest margin, on a tax equivalent basis, was 4.07% in the second quarter of 2025 compared to 4.00% in the first quarter of 2025; the net accretion of purchase accounting marks positively impacted the margin by 50 basis points in the second quarter of 2025;
Return on average assets was 1.45% and return on average equity was 14.56% for the three months ended June 30, 2025, compared to 1.35% and 13.98% for the return on average assets and return on average equity, respectively, for the three months ended March 31, 2025;
Excluding the impact of the merger-related expenses referenced above, net of taxes, adjusted return on average assets was 1.51%⁽¹⁾ and adjusted return on average equity was 15.12%⁽¹⁾ for the three months ended June 30, 2025 compared to 1.45%⁽¹⁾ and 14.97%⁽¹⁾, respectively, for the three months ended March 31, 2025;
Loans increased by $55.4 million, or 6% annualized, from March 31, 2025 to June 30, 2025; classified loans decreased by $10.4 million from $76.2 million at March 31, 2025 to $65.8 million at June 30, 2025;
Noninterest income increased by $1.3 million from $11.6 million for the three months ended March 31, 2025 to $12.9 million for the three months ended June 30, 2025;
Noninterest expense decreased by $0.6 million from $38.2 million for the three months ended March 31, 2025 to $37.6 million for the three months ended June 30, 2025, reflecting a decline in merger-related expenses during the second quarter of 2025; merger-related costs are not expected to be meaningful going forward; the second quarter of 2025 also included $0.6 million of severance charges in salaries and employee benefits expense;
Efficiency ratio decreased from 63.2% for the three months ended March 31, 2025 to 60.3% for the three months ended June 30, 2025; excluding the impact of the merger-related expenses, the efficiency ratio was 58.7%⁽¹⁾ for the three months ended June 30, 2025 compared to 60.5%⁽¹⁾ for the three months ended March 31, 2025;
Tangible common equity increased to 8.3% at June 30, 2025 compared to 7.9% at March 31, 2025;
Tangible book value per common share⁽¹⁾ increased to $22.77 per share at June 30, 2025 compared to $21.99 per share at March 31, 2025;
The Board of Directors authorized a share repurchase program on June 20, 2025, through which the Company could repurchase up to 500,000 shares of its common stock;
The Board of Directors declared a cash dividend of $0.27 per common share, payable August听12, 2025, to shareholders of record as of August听5, 2025; this represents a $0.01 per share increase in the Company's quarter cash dividend; the dividend has increased by 35% since the closing of the merger with Codorus Valley Bancorp.

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

HARRISBURG, Pa., July 22, 2025 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (NASDAQ: ORRF), the parent company of Orrstown Bank (the 鈥淏ank鈥�), announced earnings for the periods ended June 30, 2025. Net income totaled $19.4 million for the three months ended June 30, 2025, compared to net income of $18.1 million for the three months ended March 31, 2025 and net income of $7.7 million for the three months ended June 30, 2024. Diluted earnings per share was $1.01 for the three months ended June 30, 2025, compared to diluted earnings per share of $0.93 for the three months ended March 31, 2025 and diluted earnings per share of $0.73 for the three months ended June 30, 2024. 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 first quarter of 2025, excluding the impact of merger-related expenses, net of taxes, net income and diluted earnings per share were $19.3 million⁽¹⁾and $1.00⁽¹⁾, respectively. For the second quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $8.7 million⁽¹⁾ and $0.83⁽¹⁾, respectively.

鈥淎t the one-year mark after the merger with Codorus Valley Bancorp, we are very pleased to have achieved metrics near top of peers, with significant upside opportunities in front of us,鈥� said Thomas R. Quinn, Jr., President and Chief Executive Officer. 鈥淚n the second quarter, we experienced positive traction on loan production. While commercial loan growth was lower than expected, our pipeline remains strong as we head into the third quarter. We remain prudent with our lending decisions and will not compromise on credit quality. Net interest margin improved in the quarter with good momentum going into the remainder of the year. While expenses remain slightly elevated, we do not anticipate any further meaningful merger-related expenses and continue to implement process improvements that will enhance efficiency and facilitate future growth. We believe that our strong credit metrics and capital generation have positioned us well for the future.鈥�

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

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment increased by $55.4 million and totaled $3.9 billion at both June 30, 2025 and March 31, 2025. Commercial loans increased by $16.1 million, or 2% annualized, and residential mortgages increased by $37.9 million from March 31, 2025 to June 30, 2025. The increase in loans included a purchase of property assessed clean energy ("PACE") loans totaling $25.4 million.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $29.9 million to $885.4 million at June 30, 2025 from $855.5 million at March 31, 2025. During the second quarter of 2025, the Bank purchased $50.1 million of investment securities, which was partially offset by paydowns totaling $20.4 million. The overall duration of the Company's investment securities portfolio was 4.5 years at June 30, 2025 compared to 4.3 years at March 31, 2025. See Appendix B for a summary of the Bank's investment securities at June 30, 2025, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the second quarter of 2025, deposits decreased by $117.1 million and totaled $4.5 billion at June 30, 2025 compared to $4.6 billion March 31, 2025. Time deposits, money market deposits, non-interest bearing demand deposits, saving deposits and interest-bearing demand deposits decreased by $58.0 million, $35.8 million, $13.9 million, $6.2 million and $3.2 million, respectively, from March 31, 2025 to June 30, 2025. The declines in time deposits and money market deposits are due to continued run-off in higher yielding promotional balances. The decreases in the other categories were consistent with normal cyclical activity. As a result of the decrease in total deposits, the Bank's loan-to-deposit ratio increased to 87% at June 30, 2025 from 84% at March 31, 2025.

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 were $136.3 million at June 30, 2025 compared to $100.3 million at March 31, 2025. The increase was due to higher utilization of overnight borrowings during the second quarter of 2025 as deposit balances declined and lending and investing activities increased. 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 June 30, 2025.

Income Statement

Net Interest Income and Margin

Net interest income was $49.5 million for the three months ended June 30, 2025 compared to $48.8 million for the three months ended March 31, 2025. The net interest margin, on a tax equivalent basis, increased to 4.07% in the second quarter of 2025 from 4.00% in the first quarter of 2025. This increase is primarily the result of the cost of funds declining by 12 basis points from the first quarter of 2025 to the second quarter of 2025. This was partially offset by a decrease of seven basis points in the yield on loans from the three months ended March 31, 2025 to the three months ended June 30, 2025. This decrease was due to a reduction in accelerated accretion on acquired loans over that period. The second quarter 2025 net interest margin reflects the full impact of deposit rate reductions implemented in the prior quarter as well as the runoff of higher rate time deposits and money market balances.

The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $5.2 million during the second quarter of 2025 compared to $6.9 million for the first quarter of 2025. This change was due primarily to lower accelerated accretion in the three months ended June 30, 2025.

Interest income on loans, on a tax equivalent basis, decreased by $0.4 million to $63.2 million for the three months ended June 30, 2025 compared to $63.6 million for the three months ended March 31, 2025. Average loans decreased by $14.7 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025. The accretion of purchase accounting marks on loans totaled $4.9 million during the second quarter of 2025 compared to $6.6 million during the first quarter of 2025.

Interest income on investment securities, on a tax equivalent basis, was $10.6 million for the second quarter of 2025 compared to $10.1 million in the first quarter of 2025, an increase of $0.5 million. Average investment securities increased by $39.0 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025 primarily due to the aforementioned purchases.

Interest expense, on a tax equivalent basis, decreased by $1.5 million to $25.3 million for the three months ended June 30, 2025 compared to $26.8 million for the three months ended March 31, 2025. Average interest-bearing deposits decreased by $70.3 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025. The cost of interest-bearing deposits declined by 14 basis points from the first quarter of 2025 to the second quarter of 2025. In addition, interest expense includes $0.4 million and $0.6 million of amortization of purchase accounting marks on interest bearing liabilities for the three months ended June 30, 2025 and March 31, 2025, respectively.

Provision for Credit Losses on Loans

The allowance for credit losses ("ACL") on loans increased to $47.9 million at June 30, 2025 from $47.8 million at March 31, 2025. The ACL to total loans was 1.22% at June 30, 2025 compared to 1.23% at March 31, 2025. The Company recorded provision expense of $0.2 million for the three months ended June 30, 2025 compared to a recovery in the provision for credit losses on loans of $0.6 million for the three months ended March 31, 2025 . Net charge-offs were $0.1 million for the three months ended June 30, 2025 compared to $0.3 million for the three months ended March 31, 2025.

Classified loans decreased by $10.4 million to $65.8 million at June 30, 2025 from $76.2 million at March 31, 2025 due to net upgrades and loan repayments. Non-accrual loans totaled $22.4 million at June 30, 2025 compared to $22.7 million at March 31, 2025. Nonaccrual loans to total loans decreased to 0.57% at June 30, 2025 compared to 0.59% at March 31, 2025. Management believes the ACL to be adequate based on current asset quality metrics and economic forecasts.

Noninterest Income

Noninterest income increased by $1.3 million to $12.9 million for the three months ended June 30, 2025 from $11.6 million for the three months ended March 31, 2025.

Swap fee income increased by $0.3 million to $0.7 million for the three months ended June 30, 2025 compared to $0.4 million for the three months ended March 31, 2025. Swap fee income will fluctuate based on market conditions and client demand.

Income from service charges was $2.6 million for the three months ended June 30, 2025 compared to $2.4 million for the three months ended March 31, 2025 based on increased cash management services activity.

Income from mortgage banking activities increased by $0.2 million from $0.3 million in the three months ended March 31, 2025 to $0.5 million in the three months ended June 30, 2025. The first quarter of 2025 included a decrease of $0.2 million in the fair value of mortgage servicing rights.

Wealth management income decreased by $0.2 million to $5.2 million for the three months ended June 30, 2025 compared to $5.4 million for the three months ended March 31, 2025.

Other income increased by $0.7 million to $2.4 million for the three months ended June 30, 2025 compared to $1.7 million for the three months ended March 31, 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 $0.6 million to $37.6 million in the three months ended June 30, 2025 from $38.2 million in the three months ended March 31, 2025.

For the three months ended June 30, 2025, merger-related expenses totaled $1.0 million, a decrease of $0.6 million, compared to $1.6 million for the three months ended March 31, 2025. The merger-related costs incurred in the second quarter of 2025 primarily included software conversion costs. The Company does not expect to incur meaningful merger-related expenses going forward.

Salaries and benefits expense increased by $1.0 million to $21.4 million for the three months ended June 30, 2025 compared to $20.4 million for the three months ended March 31, 2025. The increase during the second quarter of 2025 includes $0.6 million of severance costs, the impact of merit salary increases in May and the impact of one extra day in the quarter.

Occupancy, furniture and equipment expenses decreased by $0.5 million to $4.2 million for the three months ended June 30, 2025 from $4.7 million for the three months ended March 31, 2025 primarily due to the seasonal expenses incurred during the first quarter of 2025.

Professional services expense increased by $0.2 million from the three months ended March 31, 2025 to the three months ended June 30, 2025. During the quarter, the Company continued to utilize an elevated level of third-party assistance to enhance daily functions and operational processes throughout the organization. While the Company will remain reliant on these services into the second half of 2025, the Company expects expenses related to these services to decline beginning in the third quarter of 2025.

Advertising and bank promotions expense increased by $0.6 million to $1.1 million in the three months ended June 30, 2025 from $0.5 million in the three months ended March 31, 2025 due to $0.7 million in contributions to tax credit programs during the second quarter of 2025. Taxes other than income decreased by $0.6 million in the three months ended June 30, 2025 compared to the three months ended March 31, 2025. This decrease reflects the tax impact of the contributions referenced above.

Income Taxes

The Company's effective tax rate was 21.3% for the second quarter of 2025 compared to 20.7% for the first quarter of 2025. The Company's effective tax rate for the three months ended June 30, 2025 is greater than 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鈥� equity totaled $548.4 million at June 30, 2025 compared to $532.9 million at March 31, 2025. The increase is due to net income of $19.4 million and share-based compensation activity of $1.6 million, partially offset by dividend payments of $5.1 million and other comprehensive losses of $0.5 million.

Tangible book value per common share⁽¹⁾ increased to $22.77 per share at June 30, 2025 from $21.99 per share at March 31, 2025. The Company's tangible common equity ratio was 8.3% at June 30, 2025 compared to 7.9% at March 31, 2025. Average tangible common equity per common share⁽¹⁾was $18.43 at June 30, 2025 compared to $17.91 at March 31, 2025.

The Company's capital ratios increased during the three months ended June 30, 2025 due primarily to earnings. The Company's tier 1 common equity, tier 1 and total risk-based capital ratios were 10.9%, 11.1% and 13.3%, respectively, at June 30, 2025 compared to 10.6%, 10.8% and 13.1%, respectively, at March 31, 2025. The Company's Tier 1 leverage ratio increased to 9.0% at June 30, 2025 compared to 8.6% at March 31, 2025.

At June 30, 2025, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed 鈥渨ell capitalized鈥� 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.

The Board of Directors authorized a share repurchase program on June 20, 2025, through which the Company could repurchase up to 500,000 shares of its common stock. The Company repurchased 2,134 common shares during the second quarter of 2025.

⁽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)

听

Three Months Ended

听

Six Months Ended

听

June 30,

听

June 30,

听

June 30,

听

June 30,

(In thousands)

听

2025

听

2024

听

2025

听

2024

听

Profitability for the period:

听

Net interest income

49,512

听

26,103

听

98,273

听

52,984

听

Provision for (Recovery of) credit losses - loans

听

209

听

812

听

(345

)

听

1,233

听

Recovery of credit losses - unfunded loan commitments

听

(100

)

听

鈥�

听

(100

)

听

(123

)

Noninterest income

听

12,915

听

7,172

听

24,539

听

13,802

听

Noninterest expenses

听

37,614

听

22,639

听

75,790

听

45,108

听

Income before income tax expense

听

24,704

听

9,824

听

47,467

听

20,568

听

Income tax expense

听

5,256

听

2,086

听

9,968

听

4,299

听

Net income available to common shareholders

19,448

听

7,738

听

37,499

听

16,269

听

Financial ratios:

听

Return on average assets听⁽¹⁾

听

1.45

听

0.97

听

1.40

听

1.04

Return on average assets, adjusted听^{(1) (2) (3)}

听

1.51

听

1.09

听

1.48

听

1.14

Return on average equity听⁽¹⁾

听

14.56

听

11.41

听

14.28

听

12.09

Return on average equity, adjusted听^{(1) (2) (3)}

听

15.12

听

12.88

听

15.05

听

13.33

Net interest margin听⁽¹⁾

听

4.07

听

3.54

听

4.04

听

3.65

Efficiency ratio

听

60.3

听

68.0

听

61.7

听

67.5

Efficiency ratio, adjusted ^{(2) (3)}

听

58.7

听

64.6

听

59.6

听

64.8

Income per common share:

听

Basic

1.01

听

0.74

听

1.96

听

1.57

听

Basic, adjusted ^{(2) (3)}

1.05

听

0.84

听

2.06

听

1.73

听

Diluted

1.01

听

0.73

听

1.94

听

1.55

听

Diluted, adjusted ^{(2) (3)}

1.04

听

0.83

听

2.04

听

1.71

听

Average equity to average assets

听

9.97

听

8.50

听

9.81

听

8.58

听

⁽¹⁾ Annualized for the three and six months ended June 30, 2025 and 2024.

⁽²⁾ Ratio has been adjusted for the non-recurring charges for all periods presented.

⁽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)	听			听	听
(continued)	听			听	听
听	June 30,			听	December 31,
(Dollars in thousands, except per share amounts)	听	2025	听	听	听	2024	听
At period-end:	听			听	听
Total assets	$	5,387,645	听	听	$	5,441,589	听
Loans, net of allowance for credit losses	听	3,883,481	听	听	听	3,882,525	听
Loans held-for-sale, at fair value	听	5,206	听	听	听	6,614	听
Securities available for sale, at fair value	听	885,373	听	听	听	829,711	听
Total deposits	听	4,516,625	听	听	听	4,623,096	听
FHLB advances and other borrowings and Securities sold under agreements to repurchase	听	166,381	听	听	听	141,227	听
Subordinated notes and trust preferred debt	听	69,021	听	听	听	68,680	听
Shareholders' equity	听	548,448	听	听	听	516,682	听
听	听			听	听
Credit quality and capital ratios听⁽¹⁾:	听			听	听
Allowance for credit losses to total loans	听	1.22	%	听	听	1.24	%
Total nonaccrual loans to total loans	听	0.57	%	听	听	0.61	%
Nonperforming assets to total assets	听	0.42	%	听	听	0.45	%
Allowance for credit losses to nonaccrual loans	听	214	%	听	听	202	%
Total risk-based capital:	听			听	听
Orrstown Financial Services, Inc.	听	13.3	%	听	听	12.4	%
Orrstown Bank	听	13.3	%	听	听	12.4	%
Tier 1 risk-based capital:	听			听	听
Orrstown Financial Services, Inc.	听	11.1	%	听	听	10.2	%
Orrstown Bank	听	12.1	%	听	听	11.2	%
Tier 1 common equity risk-based capital:	听			听	听
Orrstown Financial Services, Inc.	听	10.9	%	听	听	10.0	%
Orrstown Bank	听	12.1	%	听	听	11.2	%
Tier 1 leverage capital:	听			听	听
Orrstown Financial Services, Inc.	听	9.0	%	听	听	8.3	%
Orrstown Bank	听	9.8	%	听	听	9.1	%
听	听			听	听
Book value per common share	$	28.07	听	听	$	26.65	听
听	听			听	听
⁽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.	听			听	听
CONSOLIDATED BALANCE SHEETS (Unaudited)	听			听	听
听	听			听	听
(Dollars in thousands, except per share amounts)	June 30, 2025			听	December 31, 2024
Assets	听			听	听
Cash and due from banks	$	54,335	听	听	$	51,026	听
Interest-bearing deposits with banks	听	95,042	听	听	听	197,848	听
Cash and cash equivalents	听	149,377	听	听	听	248,874	听
Restricted investments in bank stocks	听	21,204	听	听	听	20,232	听
Securities available for sale (amortized cost of $916,830 and $864,920 at June听30, 2025 and December听31, 2024, respectively)	听	885,373	听	听	听	829,711	听
Loans held for sale, at fair value	听	5,206	听	听	听	6,614	听
Loans	听	3,931,379	听	听	听	3,931,214	听
Less: Allowance for credit losses	听	(47,898	)	听	听	(48,689	)
Net loans	听	3,883,481	听	听	听	3,882,525	听
Premises and equipment, net	听	51,703	听	听	听	50,217	听
Cash surrender value of life insurance	听	145,760	听	听	听	143,854	听
Goodwill	听	69,751	听	听	听	68,106	听
Other intangible assets, net	听	42,748	听	听	听	47,765	听
Accrued interest receivable	听	19,958	听	听	听	21,058	听
Deferred tax assets, net	听	36,683	听	听	听	42,647	听
Other assets	听	76,401	听	听	听	79,986	听
Total assets	$	5,387,645	听	听	$	5,441,589	听
听	听			听	听
Liabilities	听			听	听
Deposits:	听			听	听
Noninterest-bearing	$	918,263	听	听	$	894,176	听
Interest-bearing	听	3,598,362	听	听	听	3,728,920	听
Total deposits	听	4,516,625	听	听	听	4,623,096	听
Securities sold under agreements to repurchase and federal funds purchased	听	30,047	听	听	听	25,863	听
FHLB advances and other borrowings	听	136,334	听	听	听	115,364	听
Subordinated notes and trust preferred debt	听	69,021	听	听	听	68,680	听
Other liabilities	听	87,170	听	听	听	91,904	听
Total liabilities	听	4,839,197	听	听	听	4,924,907	听
听	听			听	听
Shareholders鈥� Equity	听			听	听
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding	听	鈥�	听	听	听	鈥�	听
Common stock, no par value鈥�$0.05205 stated value per share; 50,000,000 shares authorized; 19,713,126 shares issued and 19,535,835 outstanding at June听30, 2025; 19,722,640 shares issued and 19,389,967 outstanding at December听31, 2024	听	1,026	听	听	听	1,027	听
Additional paid鈥攊n capital	听	422,349	听	听	听	423,274	听
Retained earnings	听	153,923	听	听	听	126,540	听
Accumulated other comprehensive loss	听	(24,479	)	听	听	(26,316	)
Treasury stock鈥� 177,291 and 332,673 shares, at cost at June听30, 2025 and December听31, 2024, respectively	听	(4,371	)	听	听	(7,843	)
Total shareholders鈥� equity	听	548,448	听	听	听	516,682	听
Total liabilities and shareholders鈥� equity	$	5,387,645	听	听	$	5,441,589	听

ORRSTOWN FINANCIAL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

听

Three Months Ended

听

Six Months Ended

听

June 30,

听

June 30,

听

June 30,

听

June 30,

(Dollars in thousands, except per share amounts)

听

2025

听

2024

听

2025

听

2024

听

Interest income

听

Loans

听

63,036

听

35,537

听

126,468

听

71,770

听

Investment securities - taxable

听

9,406

听

4,999

听

18,350

听

9,583

听

Investment securities - tax-exempt

听

878

听

881

听

1,753

听

1,758

听

Short-term investments

听

1,513

听

1,864

听

3,781

听

2,820

听

Total interest income

听

74,833

听

43,281

听

150,352

听

85,931

听

Interest expense

听

Deposits

听

22,855

听

15,265

听

47,115

听

28,781

听

Securities sold under agreements to repurchase and federal funds purchased

听

106

听

190

听

FHLB advances and other borrowings

听

1,030

听

1,152

听

2,148

听

2,626

听

Subordinated notes and trust preferred debt

听

1,330

听

734

听

2,626

听

1,488

听

Total interest expense

听

25,321

听

17,178

听

52,079

听

32,947

听

Net interest income

听

49,512

听

26,103

听

98,273

听

52,984

听

Provision for (Recovery of) credit losses - loans

听

209

听

812

听

(345

)

听

1,233

听

Recovery of credit losses - unfunded loan commitments

听

(100

)

听

鈥�

听

(100

)

听

(123

)

Net interest income after provision for (recovery of) credit losses

听

49,403

听

25,291

听

98,718

听

51,874

听

Noninterest income

听

Service charges

听

2,630

听

1,283

听

5,025

听

2,483

听

Interchange income

听

1,441

听

961

听

2,868

听

1,872

听

Swap fee income

听

669

听

375

听

1,063

听

574

听

Wealth management income

听

5,267

听

3,312

听

10,682

听

6,414

听

Mortgage banking activities

听

478

听

369

听

780

听

827

听

Investment securities gains (losses)

听

(12

)

听

(17

)

Other income

听

2,422

听

884

听

4,100

听

1,649

听

Total noninterest income

听

12,915

听

7,172

听

24,539

听

13,802

听

Noninterest expenses

听

Salaries and employee benefits

听

21,364

听

13,195

听

41,752

听

26,947

听

Occupancy, furniture and equipment

听

4,211

听

2,705

听

8,886

听

5,344

听

Data processing

听

965

听

1,237

听

1,889

听

2,502

听

Advertising and bank promotions

听

1,077

听

774

听

1,576

听

1,172

听

FDIC insurance

听

674

听

419

听

1,498

听

860

听

Professional services

听

2,016

听

801

听

3,842

听

1,432

听

Taxes other than income

听

295

听

1,237

听

543

听

Intangible asset amortization

听

2,472

听

215

听

5,007

听

440

听

Merger-related expenses

听

968

听

1,135

听

2,617

听

1,807

听

Restructuring expenses

听

鈥�

听

鈥�

听

鈥�

听

Other operating expenses

听

3,572

听

2,109

听

7,395

听

4,061

听

Total noninterest expenses

听

37,614

听

22,639

听

75,790

听

45,108

听

Income before income tax expense

听

24,704

听

9,824

听

47,467

听

20,568

听

Income tax expense

听

5,256

听

2,086

听

9,968

听

4,299

听

Net income

听

19,448

听

7,738

听

37,499

听

16,269

听

Three Months Ended

听

Six Months Ended

听

June 30,

听

June 30,

听

June 30,

听

June 30,

听

2025

听

2024

听

2025

听

2024

听

Share information:

听

Basic earnings per share

听

1.01

听

0.74

听

1.96

听

1.57

听

Diluted earnings per share

听

1.01

听

0.73

听

1.94

听

1.55

听

Dividends paid per share

听

0.26

听

0.20

听

0.52

听

0.40

听

Weighted average shares - basic

听

19,173

听

10,393

听

19,165

听

10,371

听

Weighted average shares - diluted

听

19,342

听

10,553

听

19,335

听

10,517

听

ANALYSIS OF NET INTEREST INCOME

听

Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)

听

Three Months Ended

听

6/30/2025

听

3/31/2025

听

12/31/2024

听

9/30/2024

听

6/30/2024

(In thousands)

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

Average

听

Equivalent

听

Equivalent

听

Average

听

Equivalent

听

Equivalent

听

Average

听

Equivalent

听

Equivalent

听

Average

听

Equivalent

听

Equivalent

听

Average

听

Equivalent

听

Equivalent

Balance

听

Interest

听

Rate

听

Balance

听

Interest

听

Rate

听

Balance

听

Interest

听

Rate

听

Balance

听

Interest

听

Rate

听

Balance

听

Interest

听

Rate

Assets

听

Federal funds sold & interest-bearing bank balances

136,106

听

1,513

听

4.46%

听

203,347

听

2,268

听

4.52%

听

199,236

听

2,492

听

4.96%

听

184,465

听

2,452

听

5.29%

听

142,868

听

1,864

听

5.25%

Investment securities ⁽¹⁾⁽²⁾

听

904,119

听

10,626

听

4.70

听

865,126

听

10,052

听

4.65

听

849,389

听

9,887

听

4.66

听

849,700

听

10,123

听

4.77

听

538,451

听

6,114

听

4.54

Loans^(1)(3)(4)(5)

听

3,894,979

听

63,246

听

6.52

听

3,909,694

听

63,641

听

6.59

听

3,961,269

听

68,073

听

6.82

听

3,989,259

听

70,849

听

7.07

听

2,324,942

听

35,690

听

6.17

Total interest-earning assets

听

4,935,203

听

75,385

听

6.13

听

4,978,167

听

75,961

听

6.17

听

5,009,894

听

80,452

听

6.38

听

5,023,424

听

83,424

听

6.61

听

3,006,261

听

43,668

听

5.84

Other assets

听

439,569

听

447,530

听

454,271

听

491,719

听

204,863

听

Total assets

5,374,772

听

5,425,697

听

5,464,165

听

5,515,143

听

3,211,124

听

Liabilities and Shareholders' Equity

听

Interest-bearing demand deposits

2,463,687

听

13,880

听

2.26

听

2,473,543

听

14,156

听

2.32

听

2,522,885

听

15,575

听

2.45

听

2,554,743

听

16,165

听

2.52

听

1,649,753

听

10,118

听

2.47

Savings deposits

听

269,309

听

165

听

0.25

听

273,313

听

165

听

0.25

听

272,718

听

166

听

0.24

听

283,337

听

148

听

0.21

听

165,467

听

140

听

0.34

Time deposits

听

914,108

听

8,810

听

3.87

听

970,588

听

9,939

听

4.15

听

998,963

听

11,109

听

4.41

听

1,014,628

听

12,290

听

4.82

听

481,721

听

5,007

听

4.18

Total interest-bearing deposits

听

3,647,104

听

22,855

听

2.51

听

3,717,444

听

24,260

听

2.65

听

3,794,566

听

26,850

听

2.81

听

3,852,708

听

28,603

听

2.95

听

2,296,941

听

15,265

听

2.67

Securities sold under agreements to repurchase and federal funds purchased

听

25,917

听

106

听

1.64

听

26,163

听

1.30

听

21,572

听

1.23

听

23,075

听

1.66

听

13,412

听

0.81

FHLB advances and other borrowings

听

104,068

听

1,030

听

3.97

听

112,859

听

1,118

听

4.02

听

115,373

听

1,165

听

4.01

听

115,388

听

1,154

听

3.98

听

115,000

听

1,152

听

4.03

Subordinated notes and trust preferred debt

听

68,910

听

1,330

听

7.74

听

68,739

听

1,296

听

7.65

听

68,571

听

1,360

听

7.88

听

68,399

听

1,437

听

8.36

听

32,118

听

734

听

9.19

Total interest-bearing liabilities

听

3,845,999

听

25,321

听

2.64

听

3,925,205

听

26,758

听

2.76

听

4,000,082

听

29,442

听

2.92

听

4,059,570

听

31,290

听

3.07

听

2,457,471

听

17,178

听

2.81

Noninterest-bearing demand deposits

听

904,031

听

887,726

听

849,999

听

807,886

听

423,037

听

Other liabilities

听

89,058

听

89,077

听

97,685

听

110,017

听

57,828

听

Total liabilities

听

4,839,088

听

4,902,008

听

4,947,766

听

4,977,473

听

2,938,336

听

Shareholders' equity

听

535,684

听

523,689

听

516,399

听

537,670

听

272,788

听

Total

5,374,772

听

5,425,697

听

锟斤拷

听

5,464,165

听

5,515,143

听

3,211,124

听

Taxable-equivalent net interest income / net interest spread

听

50,064

听

3.49%

听

49,203

听

3.41%

听

51,010

听

3.46%

听

52,134

听

3.55%

听

26,490

听

3.02%

Taxable-equivalent net interest margin

听

4.07%

听

4.00%

听

4.05%

听

4.14%

听

3.54%

Taxable-equivalent adjustment

听

(552

)

听

(442

)

听

(437

)

听

(437

)

听

(387

)

听

Net interest income

听

49,512

听

48,761

听

50,573

听

51,697

听

26,103

听

Ratio of average interest-earning assets to average interest-bearing liabilities

听

128%

听

127%

听

125%

听

124%

听

122%

听

NOTES:

听

⁽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 $4.9 million, $6.6 million, $7.6 million, $7.3 million and $0.2 million for the three months ended June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, respectively.

ANALYSIS OF NET INTEREST INCOME

听

Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)

听

(continued)

听

Six Months Ended

听

June 30, 2025

听

June 30, 2024

听

Taxable-

听

Taxable-

听

Taxable-

听

Taxable-

听

Average

听

Equivalent

听

Equivalent

听

Average

听

Equivalent

听

Equivalent

(In thousands)

Balance

听

Interest

听

Rate

听

Balance

听

Interest

听

Rate

Assets

听

Federal funds sold & interest-bearing bank balances

169,541

听

3,781

听

4.50

听

108,695

听

2,820

听

5.22

Investment securities ⁽¹⁾⁽²⁾

听

884,730

听

20,787

听

4.70

听

529,151

听

11,808

听

4.47

听

Loans ^{(1)(3)(4)(5)(6)}

听

3,902,295

听

126,883

听

6.56

听

2,316,522

听

72,072

听

6.25

听

Total interest-earning assets

听

4,956,566

听

151,451

听

6.15

听

2,954,368

听

86,700

听

5.90

听

Other assets

听

443,528

听

200,580

听

Total assets

5,400,094

听

3,154,948

听

Liabilities and Shareholders' Equity

听

Interest-bearing demand deposits

2,468,589

听

28,036

听

2.29

听

1,610,188

听

19,310

听

2.41

听

Savings deposits

听

271,104

听

330

听

0.25

听

167,736

听

284

听

0.34

听

Time deposits

听

942,387

听

18,749

听

4.01

听

455,082

听

9,187

听

4.06

听

Total interest-bearing deposits

听

3,682,080

听

47,115

听

2.58

听

2,233,006

听

28,781

听

2.59

听

Securities sold under agreements to repurchase and federal funds purchased

听

26,039

听

190

听

1.47

听

12,711

听

0.83

听

FHLB advances and other borrowings

听

108,439

听

2,148

听

3.99

听

126,253

听

2,626

听

4.18

听

Subordinated notes and trust preferred debt

听

68,825

听

2,626

听

7.69

听

32,109

听

1,488

听

9.32

听

Total interest-bearing liabilities

听

3,885,383

听

52,079

听

2.70

听

2,404,079

听

32,947

听

2.76

听

Noninterest-bearing demand deposits

听

895,924

听

420,253

听

Other liabilities

听

89,067

听

60,078

听

Total liabilities

听

4,870,374

听

2,884,410

听

Shareholders' equity

听

529,720

听

270,538

听

Total liabilities and shareholders' equity

5,400,094

听

3,154,948

听

Taxable-equivalent net interest income / net interest spread

听

99,372

听

3.45

听

53,753

听

3.14

Taxable-equivalent net interest margin

听

4.04

听

3.65

Taxable-equivalent adjustment

听

(1,099

)

听

(769

)

听

Net interest income

听

98,273

听

52,984

听

Ratio of average interest-earning assets to average interest-bearing liabilities

听

128

听

123

听

NOTES TO ANALYSIS OF NET INTEREST INCOME:	听	听	听	听	听	听	听	听
⁽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 six months ended June 30, 2024.
⁽⁶⁾ Interest income on loans includes accretion on purchase accounting marks of $11.5 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.

听

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

听

(In thousands)

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Profitability for the quarter:

听

Net interest income

49,512

听

48,761

听

50,573

听

51,697

听

26,103

听

Provision for (Recovery of) credit losses

听

109

听

(554

)

听

1,755

听

13,681

听

812

听

Noninterest income

听

12,915

听

11,624

听

11,247

听

12,386

听

7,172

听

Noninterest expenses

听

37,614

听

38,176

听

42,930

听

60,299

听

22,639

听

Income (loss) before income taxes

听

24,704

听

22,763

听

17,135

听

(9,897

)

听

9,824

听

Income tax expense (benefit)

听

5,256

听

4,712

听

3,451

听

(1,994

)

听

2,086

听

Net income (loss)

19,448

听

18,051

听

13,684

听

(7,903

)

听

7,738

听

Financial ratios:

听

Return on average assets听⁽¹⁾

听

1.45

听

1.35

听

1.00

听

(0.57)%

听

0.97

Return on average assets, adjusted听^(1)(2)(3)

听

1.51

听

1.45

听

1.22

听

1.55

听

1.09

Return on average equity听⁽¹⁾

听

14.56

听

13.98

听

10.54

听

(5.85)%

听

11.41

Return on average equity, adjusted听^(1)(2)(3)

听

15.12

听

14.97

听

12.86

听

15.85

听

12.88

Net interest margin听⁽¹⁾

听

4.07

听

4.00

听

4.05

听

4.14

听

3.54

Efficiency ratio

听

60.3

听

63.2

听

69.4

听

94.1

听

68.0

Efficiency ratio, adjusted⁽²⁾⁽³⁾

听

58.7

听

60.5

听

62.3

听

60.2

听

64.6

听

Per share information:

听

Income (loss) per common share:

听

Basic

1.01

听

0.94

听

0.72

听

(0.41

)

听

0.74

听

Basic, adjusted ⁽²⁾⁽³⁾

听

1.05

听

1.01

听

0.87

听

1.12

听

0.84

听

Diluted

听

1.01

听

0.93

听

0.71

听

(0.41

)

听

0.73

听

Diluted, adjusted ⁽²⁾⁽³⁾

听

1.04

听

1.00

听

0.87

听

1.11

听

0.83

听

Book value

听

28.07

听

27.32

听

26.65

听

26.65

听

25.97

听

Tangible book value⁽³⁾

听

22.77

听

21.99

听

21.19

听

21.12

听

24.08

听

Average tangible common equity⁽³⁾

听

18.43

听

17.91

听

13.62

听

(6.49

)

听

12.35

听

Cash dividends paid

听

0.26

听

0.26

听

0.23

听

0.23

听

0.20

听

Average basic shares

听

19,172

听

19,157

听

19,118

听

19,088

听

10,393

听

Average diluted shares

听

19,342

听

19,328

听

19,300

听

19,226

听

10,553

听

⁽¹⁾ Annualized.

⁽²⁾ Ratio has been adjusted for non-recurring expenses for all periods presented.

听

ORRSTOWN FINANCIAL SERVICES, INC.

听

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

听

(continued)

听

(In thousands)

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Noninterest income:

听

Service charges

2,630

听

2,395

听

2,050

听

2,360

听

1,283

听

Interchange income

听

1,441

听

1,427

听

1,608

听

1,779

听

961

听

Swap fee income

听

669

听

394

听

597

听

505

听

375

听

Wealth management income

听

5,267

听

5,415

听

4,902

听

5,037

听

3,312

听

Mortgage banking activities

听

478

听

302

听

517

听

491

听

369

听

Other income

听

2,422

听

1,678

听

1,578

听

1,943

听

884

听

Investment securities gains (losses)

听

)

听

271

听

(12

)

Total noninterest income

12,915

听

11,624

听

11,247

听

12,386

听

7,172

听

Noninterest expenses:

听

Salaries and employee benefits

21,364

听

20,388

听

22,444

听

27,190

听

13,195

听

Occupancy, furniture and equipment

听

4,211

听

4,675

听

4,893

听

4,333

听

2,705

听

Data processing

听

965

听

924

听

1,540

听

2,046

听

1,237

听

Advertising and bank promotions

听

1,077

听

499

听

878

听

537

听

774

听

FDIC insurance

听

674

听

824

听

955

听

862

听

419

听

Professional services

听

2,016

听

1,826

听

1,591

听

1,119

听

801

听

Taxes other than income

听

295

听

942

听

(312

)

听

503

听

Intangible asset amortization

听

2,472

听

2,535

听

2,838

听

2,464

听

215

听

Provision for legal settlement

听

鈥�

听

鈥�

听

478

听

鈥�

听

鈥�

听

Merger-related expenses

听

968

听

1,649

听

3,887

听

16,977

听

1,135

听

Restructuring expenses

听

鈥�

听

257

听

鈥�

听

Other operating expenses

听

3,572

听

3,823

听

3,699

听

4,011

听

2,109

听

Total noninterest expenses

37,614

听

38,176

听

42,930

听

60,299

听

22,639

听

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

听

(continued)

听

(In thousands)

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Balance Sheet at quarter end:

听

Cash and cash equivalents

149,377

听

287,120

听

248,874

听

236,780

听

132,509

听

Restricted investments in bank stocks

听

21,204

听

19,693

听

20,232

听

20,247

听

11,147

听

Securities available for sale

听

885,373

听

855,456

听

829,711

听

826,828

听

529,082

听

Loans held for sale, at fair value

听

5,206

听

5,261

听

6,614

听

3,561

听

1,562

听

Loans:

听

Commercial real estate:

听

Owner occupied

听

622,315

听

617,854

听

633,567

听

622,726

听

371,301

听

Non-owner occupied

听

1,203,038

听

1,157,383

听

1,160,238

听

1,164,501

听

710,477

听

Multi-family

听

239,388

听

257,724

听

274,135

听

276,296

听

151,542

听

Non-owner occupied residential

听

163,018

听

168,354

听

179,512

听

190,786

听

89,156

听

Agricultural

听

124,291

听

134,916

听

125,156

听

129,486

听

25,551

听

Commercial and industrial

听

487,063

听

455,494

听

451,384

听

471,983

听

349,425

听

Acquisition and development:

听

1-4 family residential construction

听

38,490

听

40,621

听

47,432

听

56,383

听

32,439

听

Commercial and land development

听

198,889

听

227,434

听

241,424

听

262,317

听

129,883

听

Municipal

听

28,693

听

30,780

听

30,044

听

27,960

听

10,594

听

Total commercial loans

听

3,105,185

听

3,090,560

听

3,142,892

听

3,202,438

听

1,870,368

听

Residential mortgage:

听

First lien

听

472,030

听

464,642

听

460,297

听

451,195

听

271,153

听

Home equity 鈥� term

听

5,784

听

9,224

听

5,988

听

6,508

听

4,633

听

Home equity 鈥� lines of credit

听

305,968

听

295,820

听

303,561

听

303,165

听

192,736

听

Other - term⁽¹⁾

听

25,384

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

Installment and other loans

听

17,028

听

15,739

听

18,476

听

18,131

听

8,713

听

Total loans

听

3,931,379

听

3,875,985

听

3,931,214

听

3,981,437

听

2,347,603

听

Allowance for credit losses

听

(47,898

)

听

(47,804

)

听

(48,689

)

听

(49,630

)

听

(29,864

)

Net loans held for investment

听

3,883,481

听

3,828,181

听

3,882,525

听

3,931,807

听

2,317,739

听

Goodwill

听

69,751

听

68,106

听

68,106

听

70,655

听

18,724

听

Other intangible assets, net

听

42,748

听

45,230

听

47,765

听

46,144

听

1,974

听

Total assets

听

5,387,645

听

5,441,586

听

5,441,589

听

5,470,589

听

3,198,782

听

Total deposits

听

4,516,625

听

4,633,716

听

4,623,096

听

4,650,853

听

2,702,884

听

FHLB advances and other borrowings and Securities sold under agreements to repurchase

听

166,381

听

123,480

听

141,227

听

137,310

听

129,625

听

Subordinated notes and trust preferred debt

听

69,021

听

68,850

听

68,680

听

68,510

听

32,128

听

Total shareholders' equity

听

548,448

听

532,936

听

516,682

听

516,206

听

278,376

听

⁽¹⁾ Other - term includes property assessed clean energy ("PACE") loans.

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

听

(continued)

听

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Capital and credit quality measures⁽¹⁾:

听

Total risk-based capital:

听

Orrstown Financial Services, Inc.

听

13.3

听

13.1

听

12.4

听

12.4

听

13.3

Orrstown Bank

听

13.3

听

13.0

听

12.4

听

12.2

听

13.1

Tier 1 risk-based capital:

听

Orrstown Financial Services, Inc.

听

11.1

听

10.8

听

10.2

听

10.0

听

11.1

Orrstown Bank

听

12.1

听

11.9

听

11.2

听

11.0

听

12.0

Tier 1 common equity risk-based capital:

听

Orrstown Financial Services, Inc.

听

10.9

听

10.6

听

10.0

听

9.8

听

11.1

Orrstown Bank

听

12.1

听

11.9

听

11.2

听

11.0

听

12.0

Tier 1 leverage capital:

听

Orrstown Financial Services, Inc.

听

9.0

听

8.6

听

8.3

听

8.0

听

8.9

Orrstown Bank

听

9.8

听

9.5

听

9.1

听

8.8

听

9.5

听

Average equity to average assets

听

9.97

听

9.65

听

9.45

听

9.75

听

8.50

Allowance for credit losses to total loans

听

1.22

听

1.23

听

1.24

听

1.25

听

1.27

Total nonaccrual loans to total loans

听

0.57

听

0.59

听

0.61

听

0.68

听

0.36

Nonperforming assets to total assets

听

0.42

听

0.42

听

0.45

听

0.49

听

0.26

Allowance for credit losses to nonaccrual loans

听

214

听

210

听

202

听

184

听

357

听

Other information:

听

Net charge-offs

115

听

331

听

3,002

听

269

听

113

听

Classified loans

听

65,754

听

76,211

听

88,628

听

105,465

听

48,722

听

Nonperforming and other risk assets:

听

Nonaccrual loans

听

22,423

听

22,727

听

24,111

听

26,927

听

8,363

听

Other real estate owned

听

鈥�

听

138

听

138

听

138

听

鈥�

听

Total nonperforming assets

听

22,423

听

22,865

听

24,249

听

27,065

听

8,363

听

Financial difficulty modifications still accruing

听

5,759

听

5,127

听

4,897

听

9,497

听

鈥�

听

Loans past due 90 days or more and still accruing

听

1,312

听

400

听

641

听

337

听

187

听

Total nonperforming and other risk assets

29,494

听

28,392

听

29,787

听

36,899

听

8,550

听

(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 鈥渘on-GAAP鈥� 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 $112.5 million and $115.9 million at June听30, 2025 and December听31, 2024, respectively. In addition, during the three months ended June听30, 2025, March, 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, the Company incurred $1.0 million, $1.6 million, $3.9 million, $17.0 million and $1.1 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

听

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Shareholders' equity (most directly comparable GAAP-based measure)

听

548,448

听

532,936

听

516,682

听

516,206

听

278,376

听

Less: Goodwill

听

69,751

听

68,106

听

68,106

听

70,655

听

18,724

听

Other intangible assets

听

42,748

听

45,230

听

47,765

听

46,144

听

1,974

听

Related tax effect

听

(8,977

)

听

(9,498

)

听

(10,031

)

听

(9,690

)

听

(415

)

Tangible common equity (non-GAAP)

听

444,926

听

429,098

听

410,842

听

409,097

听

258,093

听

Common shares outstanding

听

19,536

听

19,510

听

19,390

听

19,373

听

10,720

听

Book value per share (most directly comparable GAAP-based measure)

听

28.07

听

27.32

听

26.65

听

26.65

听

25.97

听

Intangible assets per share

听

5.30

听

5.33

听

5.46

听

5.53

听

1.89

听

Tangible book value per share (non-GAAP)

听

22.77

听

21.99

听

21.19

听

21.12

听

24.08

听

Return on Average Common Equity

听

June 30,
2025

听

March 31,
2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

Average shareholders' equity

听

535,684

听

523,689

听

516,399

听

537,670

听

272,788

听

Less: Average goodwill

听

68,126

听

68,106

听

71,477

听

36,034

听

18,724

听

Less: Average other intangible assets, gross

听

44,304

听

46,864

听

45,319

听

17,393

听

2,105

听

Average tangible equity

听

423,254

听

408,719

听

399,603

听

484,243

听

251,959

听

Return on average tangible equity

听

18.43

听

17.91

听

13.62

听

(6.49)%

听

12.35

听

(In thousands)

Three Months Ended

听

Six Months Ended

Adjusted Ratios for Non-recurring Charges

June 30,
2025

听

March 31, 2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

听

June 30,
2025

听

June 30,
2024

Net income (loss) (A) - most directly comparable GAAP-based measure

19,448

听

18,051

听

13,684

听

(7,903

)

听

7,738

听

37,499

听

16,269

听

Plus: Merger-related expenses (B)

听

968

听

1,649

听

3,887

听

16,977

听

1,135

听

2,617

听

1,807

听

Plus: Executive retirement expenses (B)

听

鈥�

听

鈥�

听

4,758

听

鈥�

听

鈥�

听

鈥�

听

Plus: Provision for credit losses on non-PCD loans (B)

听

鈥�

听

鈥�

听

鈥�

听

15,504

听

鈥�

听

鈥�

听

鈥�

听

Plus: Provision for legal settlement (B)

听

鈥�

听

鈥�

听

478

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

Less: Related tax effect (C)

听

(221

)

听

(368

)

听

(1,386

)

听

(7,915

)

听

(139

)

听

(590

)

听

(140

)

Adjusted net income (D=A+B-C) - Non-GAAP

20,195

听

19,332

听

16,698

听

21,421

听

8,734

听

39,526

听

17,936

听

Average assets (E)

5,374,772

听

5,425,697

听

5,464,165

听

5,515,143

听

3,211,124

听

5,400,094

听

3,154,948

听

Return on average assets (= A / E) - most directly comparable GAAP-based measure ⁽¹⁾

听

1.45

听

1.35

听

1.00

听

(0.57)%

听

0.97

听

1.40

听

1.04

Return on average assets, adjusted (= D / E) - Non-GAAP ⁽¹⁾

听

1.51

听

1.45

听

1.22

听

1.55

听

1.09

听

1.48

听

1.14

听

Average equity (F)

535,684

听

523,689

听

516,399

听

537,670

听

272,788

听

529,720

听

270,538

听

Return on average equity (= A / F) - most directly comparable GAAP-based measure ⁽¹⁾

听

14.56

听

13.98

听

10.54

听

(5.85)%

听

11.41

听

14.28

听

12.09

Return on average equity, adjusted (= D / F) - Non-GAAP ⁽¹⁾

听

15.12

听

14.97

听

12.86

听

15.85

听

12.88

听

15.05

听

13.33

听

Weighted average shares - basic (G) - most directly comparable GAAP-based measure

听

19,173

听

19,157

听

19,118

听

19,088

听

10,393

听

19,165

听

10,371

听

Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure

1.01

听

0.94

听

0.72

听

(0.41

)

听

0.74

听

1.96

听

1.57

听

Basic earnings per share, adjusted (= D / G) - Non-GAAP

1.05

听

1.01

听

0.87

听

1.12

听

0.84

听

2.06

听

1.73

听

Weighted average shares - diluted (H) - most directly comparable GAAP-based measure

听

19,342

听

19,328

听

19,300

听

19,226

听

10,553

听

19,335

听

10,517

听

Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure

1.01

听

0.93

听

0.71

听

(0.41

)

听

0.73

听

1.94

听

1.55

听

Diluted earnings per share, adjusted (= D / H) - Non-GAAP

1.04

听

1.00

听

0.87

听

1.11

听

0.83

听

2.04

听

1.71

听

(1) Annualized

听

Three Months Ended

听

Six Months Ended

听

June 30,
2025

听

March 31, 2025

听

December 31,
2024

听

September 30,
2024

听

June 30,
2024

听

June 30,
2025

听

June 30,
2024

Noninterest expense (I) - most directly comparable GAAP-based measure

37,614

听

38,176

听

42,930

听

60,299

听

22,639

听

75,790

听

45,108

听

Less: Merger-related expenses (B)

听

(968

)

听

(1,649

)

听

(3,887

)

听

(16,977

)

听

(1,135

)

听

(2,617

)

听

(1,807

)

Less: Executive retirement expenses (B)

听

鈥�

听

鈥�

听

(35

)

听

(4,758

)

听

鈥�

听

鈥�

听

鈥�

听

Less: Provision for legal settlement (B)

听

鈥�

听

鈥�

听

(478

)

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

Adjusted noninterest expense (J = I - B) - Non-GAAP

36,646

听

36,527

听

38,531

听

38,564

听

21,504

听

73,173

听

43,301

听

Net interest income (K)

49,512

听

48,761

听

50,573

听

51,697

听

26,103

听

98,273

听

52,984

听

Noninterest income (L)

听

12,915

听

11,624

听

11,247

听

12,386

听

7,172

听

24,539

听

13,802

听

Total operating income (M = K + L)

62,427

听

60,385

听

61,820

听

64,083

听

33,275

听

122,812

听

66,786

听

Efficiency ratio (= I / M) - most directly comparable GAAP-based measure

听

60.3

听

63.2

听

69.4

听

94.1

听

68.0

听

61.7

听

67.5

Efficiency ratio, adjusted (= J / M) - Non-GAAP

听

58.7

听

60.5

听

62.3

听

60.2

听

64.6

听

59.6

听

64.8

听

(1) Annualized

听

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 June听30, 2025:

(In thousands)

Sector

Portfolio Mix

听

Amortized Book

听

Fair Value

听

Credit Enhancement

听

AAA

听

BBB

听

Collateral / Guarantee Type

Unsecured ABS

鈥�

听

2,827

听

2,673

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

100

听

Unsecured Consumer Debt

Student Loan ABS

鈥�

听

3,577

听

3,576

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

100

听

Seasoned Student Loans

Federal Family Education Loan ABS

听

75,724

听

74,828

听

鈥�

听

鈥�

听

Federal Family Education Loan ⁽¹⁾

PACE Loan ABS

鈥�

听

1,912

听

1,702

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

PACE Loans ⁽²⁾

Non-Agency CMBS

听

24,012

听

24,027

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

100

听

Non-Agency RMBS

听

15,936

听

14,596

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

Reverse Mortgages ⁽³⁾

Municipal - General Obligation

听

100,035

听

90,241

听

鈥�

听

鈥�

听

鈥�

听

Municipal - Revenue

听

120,446

听

105,710

听

鈥�

听

鈥�

听

鈥�

听

SBA ReRemic ⁽⁵⁾

鈥�

听

1,904

听

1,890

听

鈥�

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

SBA Guarantee ⁽⁴⁾

Small Business Administration

听

5,156

听

5,275

听

鈥�

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

SBA Guarantee ⁽⁴⁾

Agency MBS

听

198,876

听

197,965

听

鈥�

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

Residential Mortgages ⁽⁴⁾

Agency CMO

听

344,233

听

342,057

听

鈥�

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

U.S. Treasury securities

听

20,036

听

18,641

听

鈥�

听

100

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

U.S. Government Guarantee ⁽⁴⁾

Corporate bonds

鈥�

听

1,941

听

1,977

听

鈥�

听

鈥�

听

鈥�

听

鈥�

听

100

听

916,615

听

885,158

听

⁽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 AG真人官方 Estate Mortgage Investment Conduits

听

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 $5.4 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鈥檚 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.鈥檚 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 鈥渇orward-looking statements鈥� 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 鈥渕ay,鈥� 鈥渟hould,鈥� 鈥渃ould,鈥� 鈥減redict,鈥� 鈥減otential,鈥� 鈥渂elieve,鈥� 鈥渨ill likely result,鈥� 鈥渆xpect,鈥� 鈥渃ontinue,鈥� 鈥渨ill,鈥� 鈥渁nticipate,鈥� 鈥渟eek,鈥� 鈥渆stimate,鈥� 鈥渋ntend,鈥� 鈥減lan,鈥� 鈥減roject,鈥� 鈥渇orecast,鈥� 鈥済oal,鈥� 鈥渢arget,鈥� 鈥渨ould鈥� and 鈥渙utlook,鈥� 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鈥檚 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鈥檚 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; the possibility that the anticipated benefits of the merger with Codorus Valley Bancorp are not realized when expected or at all; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December听31, 2024 under the sections titled 鈥淩isk Factors鈥� and 鈥淢anagement鈥檚 Discussion and Analysis of Financial Condition and Results of Operations鈥� 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鈥檚 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's (ORRF) earnings per share in Q2 2025?

ORRF reported $1.01 per diluted share in Q2 2025, or $1.04 adjusted excluding merger-related expenses, compared to $0.93 in Q1 2025.

How much did Orrstown Financial (ORRF) increase its dividend in Q2 2025?

ORRF increased its quarterly dividend by $0.01 to $0.27 per share, payable August 12, 2025, representing a 35% increase since the Codorus Valley merger.

What was ORRF's loan growth in Q2 2025?

Loans increased by $55.4 million, or 6% annualized, including commercial loans growth of $16.1 million and residential mortgages increase of $37.9 million.

What is Orrstown Financial's (ORRF) new share repurchase program?

The Board authorized a share repurchase program on June 20, 2025, allowing the company to repurchase up to 500,000 shares of its common stock.

What was ORRF's net interest margin in Q2 2025?

The net interest margin was 4.07% in Q2 2025, an increase from 4.00% in Q1 2025, primarily due to lower cost of funds.

How did Orrstown's deposit base change in Q2 2025?

Total deposits decreased by $117.1 million to $4.5 billion, with declines across time deposits ($58.0M), money market deposits ($35.8M), and other deposit categories.

AG真人官方

Orrstown Financial Services, Inc. Reports Second Quarter 2025 Results and Announces Dividend Increase

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What were Orrstown Financial's (ORRF) earnings per share in Q2 2025?

How much did Orrstown Financial (ORRF) increase its dividend in Q2 2025?

What was ORRF's loan growth in Q2 2025?

What is Orrstown Financial's (ORRF) new share repurchase program?

What was ORRF's net interest margin in Q2 2025?

How did Orrstown's deposit base change in Q2 2025?

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Orrstown Financial Services, Inc. Reports Second Quarter 2025 Results and Announces Dividend Increase

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FAQ

What were Orrstown Financial's (ORRF) earnings per share in Q2 2025?

How much did Orrstown Financial (ORRF) increase its dividend in Q2 2025?

What was ORRF's loan growth in Q2 2025?

What is Orrstown Financial's (ORRF) new share repurchase program?

What was ORRF's net interest margin in Q2 2025?

How did Orrstown's deposit base change in Q2 2025?

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