Financial Data and Key Metrics Changes - The company achieved a net income of $21.9 million, translating to a diluted EPS of $1.13, with a return on average assets of 1.6% and return on average equity of 15.7% [9][12] - The net interest margin (NIM) increased to 4.11% from 4.07% in the previous quarter, indicating effective loan pricing and funding cost management [3][9] - Non-interest expenses decreased by $1.3 million compared to the prior quarter, leading to an efficiency ratio improvement from 60.3% to 56.4% [4][11] Business Line Data and Key Metrics Changes - Loan growth was strong, with an annualized growth rate of 4.9% in the third quarter, reflecting successful alignment of the acquired portfolio with the company's risk profile [3][7] - Fee income as a percentage of operating revenue remained stable at 20.8%, with non-interest income increasing to $13.4 million from $12.9 million in the previous quarter [4][10] - The loan portfolio reached nearly $4 billion with an average yield of 6.58%, and loan production during the quarter was $224 million [14][15] Market Data and Key Metrics Changes - The company experienced increased competition in both loan and deposit pricing, particularly in growth markets such as Baltimore, Lancaster, and Harrisburg [21][22] - The cost of deposits declined slightly, and the company adjusted deposit pricing downward to align with market rates [15][36] Company Strategy and Development Direction - The company is focused on maintaining credit quality while pursuing prudent growth, with a proactive approach to managing risk in its portfolio [5][8] - The management emphasized the importance of relationship banking, which allows for high engagement and local decision-making to meet client needs [7][22] - The company plans to continue investing in its future while managing expenses, with a target quarterly run rate around $36 million [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing successful execution of the merger with Kudor's Value as a key factor in current financial performance [4][17] - The company is aware of economic uncertainties and is focused on maintaining a solid foundation for future growth [8][12] - Management indicated that while NIM may face pressure from potential rate cuts, strategic pricing actions could help mitigate this impact [19][35] Other Important Information - The company redeemed $32.5 million of subordinated debt, which is expected to reduce interest expenses going forward [9][10] - The allowance coverage ratio was 1.21% at the end of the quarter, which management believes adequately addresses the risk of loss in the loan portfolio [12][13] Q&A Session Summary Question: What is the expected impact of Fed rate cuts on NIM? - Management indicated that while NIM may experience some downward pressure, competitive pricing and strategic actions could help maintain it within the 4.0% to 4.15% range [19][20] Question: Where is the competition in loan and deposit pricing coming from? - Competition varies by market, with larger competitors and those closer in size contributing to the competitive landscape [21][22] Question: Can you provide details on classified loans? - The largest classified loans total about $20 million, with some being in commercial real estate and other C&I credits [29][30] Question: What is the lending focus for next year? - The company plans to focus on commercial real estate and has recently hired additional talent in the C&I space to enhance its offerings [31][32] Question: What tools are available to mitigate NIM compression? - Management highlighted pricing adjustments on deposits and maintaining loan pricing as key strategies to offset potential NIM compression [35][36]

Financial Data and Key Metrics Changes - The company achieved a net income of $21.9 million, translating to a diluted EPS of $1.13, with a return on average assets of 1.6% and return on average equity of 15.7% [9][12] - The net interest margin (NIM) increased to 4.11% from 4.07% in the previous quarter, reflecting prudent loan pricing and effective management of funding costs [3][9] - Non-interest expenses decreased by $1.3 million compared to the prior quarter, leading to an efficiency ratio improvement from 60.3% to 56.4% [4][11] Business Line Data and Key Metrics Changes - Loan growth was strong, with an annualized growth rate of 4.9% in the third quarter, supported by a solid pipeline [3][7] - Fee income as a percentage of operating revenue remained stable at 20.8%, with non-interest income increasing to $13.4 million from $12.9 million in the previous quarter [4][11] - The loan portfolio reached nearly $4 billion with an average yield of 6.58%, and loan interest increased to $66.0 million from $63.2 million [13][14] Market Data and Key Metrics Changes - Deposits increased by $17 million, with a loan-to-deposit ratio of 88%, providing sufficient liquidity for loan funding [14][15] - The cost of deposits declined slightly, and the company adjusted deposit pricing downward to align with market rates [15][16] Company Strategy and Development Direction - The company is focused on maintaining credit quality while pursuing prudent growth, with a proactive approach to managing risk in its loan portfolio [5][8] - The successful execution of last year's merger is seen as a key factor in the company's strong financial performance, with optimism for future growth [4][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainties but expressed confidence in the bank's risk management strategies and credit quality [6][8] - The company anticipates potential NIM pressure due to expected Fed rate cuts but believes it can offset this through competitive pricing and strategic actions [19][35] Other Important Information - The company redeemed $32.5 million of subordinated debt, which is expected to reduce interest expenses going forward [9][10] - The allowance coverage ratio was 1.21%, indicating adequate risk coverage in the loan portfolio [12] Q&A Session Summary Question: NIM trajectory with potential Fed rate cuts - Management indicated that while NIM may experience some downward pressure, competitive pricing and strategic actions could help maintain current levels [19][23] Question: Competition in loan and deposit pricing - Management noted that competition varies by market, with different competitors impacting pricing dynamics [21][22] Question: Details on classified loans - The largest classified loans total approximately $20 million, with a mix of commercial real estate and other credits [29][30] Question: Lending focus for next year - The company plans to focus on commercial real estate and middle-market opportunities, leveraging newly hired talent [31][32] Question: Tools to mitigate NIM compression - Management highlighted pricing adjustments and competitive strategies as key tools to manage NIM amid rate cuts [35][36]

Financial Data and Key Metrics Changes - The company achieved a net income of $21.9 million, translating to diluted earnings per share (EPS) of $1.13, with a return on average assets of 1.6% and return on average equity of 15.7% [12][13] - The net interest margin (NIM) increased to 4.11% from 4.07% in the previous quarter, reflecting prudent loan pricing and effective management of funding costs [5][13] - Non-interest expenses decreased by $1.3 million compared to the prior quarter, contributing to an efficiency ratio improvement from 60.3% to 56.4% [6][16] Business Line Data and Key Metrics Changes - Loan growth was strong, with an annualized growth rate of 4.9% in the third quarter, supported by a solid pipeline and effective relationship banking model [5][9] - Fee income as a percentage of operating revenue remained stable at 20.8%, with non-interest income increasing to $13.4 million from $12.9 million in the previous quarter [6][15] - The company redeemed $32.5 million of subordinated debt, which is expected to reduce interest expenses going forward [13] Market Data and Key Metrics Changes - The company reported nominal net charge-offs and a decrease in classified loans by $1.7 million, indicating sound credit quality [10][17] - Non-accrual loans increased by $3.8 million, primarily due to one relationship in the commercial construction and development portfolio [10] - The loan-to-deposit ratio stood at 88%, providing sufficient liquidity to fund the loan pipeline [20] Company Strategy and Development Direction - The company is focused on maintaining credit quality while pursuing prudent growth, with a proactive approach to managing risk in its portfolio [11][17] - The relationship banking model is emphasized as a differentiator in the market, allowing for high engagement and local decision-making [9][35] - The company is optimistic about future growth opportunities, particularly in the middle market space, following recent talent acquisitions [48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainties but expressed confidence in the bank's risk management strategies and capital position [11][22] - The company anticipates potential NIM pressure due to expected rate cuts but believes it can offset this through competitive pricing and strategic actions [28][52] - Overall, management is optimistic about the company's performance and growth prospects in both the short and long term [23] Other Important Information - The company reported a tangible common equity (TCE) growth to 8.8%, with tangible book value per share returning to pre-merger levels [19] - The investment portfolio yield remains competitive at 4.67%, with net unrealized losses decreasing as market rates declined [22] Q&A Session Summary Question: NIM trajectory with potential Fed rate cuts - Management indicated that while NIM may face pressure from rate cuts, competitive pricing strategies could help maintain current levels [27][28] Question: Competition landscape for loans and deposits - Management noted that competition varies by market, with both larger and similarly sized competitors impacting pricing [31][34] Question: Details on classified loans - The largest classified credits total approximately $20 million, with a mix of commercial real estate and other credits [42][44] Question: Lending focus and mix for future growth - The company plans to leverage its capacity in commercial real estate while enhancing its middle market lending capabilities through new talent [48]

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Earnings Presentation Third Quarter 2025 October 22, 2025 Cautionary Note Regarding Forward Looking Statements | Non-GAAP Disclosures This presentation 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 ...

[Orrstown Financial Services, Inc. Third Quarter 2025 Results Overview](index=1&type=section&id=Orrstown%20Financial%20Services%2C%20Inc.%20Reports%20Third%20Quarter%202025%20Results) This report provides a comprehensive overview of Orrstown Financial Services, Inc.'s financial performance and key operational highlights for the third quarter of 2025 [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Orrstown Financial Services, Inc. reported record Q3 2025 earnings of **$21.9 million** and **$1.13 diluted EPS**, reflecting strong loan growth, increased fee income, and expense reduction | Metric | Q3 2025 (Ended Sep 30) | Q2 2025 (Ended Jun 30) | Q3 2024 (Ended Sep 30) | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Net Income | $21.9 million | $19.4 million | $(7.9) million | | Diluted EPS | $1.13 | $1.01 | $(0.41) | | Return on Average Assets | 1.60% | 1.45% | (0.57)% | | Return on Average Equity | 15.72% | 14.56% | (5.85)% | | Net Interest Margin (tax equivalent) | 4.11% | 4.07% | 4.14% | | Noninterest Income | $13.4 million | $12.9 million | $12.4 million | | Noninterest Expenses | $36.3 million | $37.6 million | $60.3 million | | Efficiency Ratio | 56.4% | 60.3% | 94.1% | | Tangible Common Equity | 8.8% | 8.3% | N/A | | Tangible Book Value per Common Share | $24.12 | $22.77 | $21.12 | | Cash Dividend per Common Share | $0.27 | N/A | N/A | - CEO Thomas R. Quinn, Jr. highlighted **record earnings** for Q3, driven by **strong loan growth**, **increased fee income**, and **continued expense reduction**[4](index=4&type=chunk) - Synergies from the prior year merger were evident in financial metrics and **sound capital ratios**, even after subordinated debt redemption[4](index=4&type=chunk) [Discussion of Results](index=3&type=section&id=DISCUSSION%20OF%20RESULTS) This section provides a detailed analysis of the company's balance sheet, income statement, and capital position for the reporting period [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet) The balance sheet for Q3 2025 showed growth in loans and investment securities, alongside an increase in deposits and borrowings, with active liquidity management including subordinated notes redemption [Loans](index=3&type=section&id=Loans) Loans held for investment increased by **$48.4 million** to **$4.0 billion** at September 30, 2025, driven by commercial loans and residential mortgages | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :------------------------ | :----------- | :----------- | :----------- | | Loans held for investment | $4.0 billion | $3.9 billion | +$48.4 million | | Commercial loans increase | N/A | N/A | +$38.2 million | | Residential mortgages increase | N/A | N/A | +$10.3 million | [Investment Securities](index=3&type=section&id=Investment%20Securities) Investment securities increased by **$5.0 million** to **$890.4 million**, with net unrealized losses declining by **$9.1 million** due to reduced market rates | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :-------------------------------- | :----------- | :----------- | :----------- | | Investment securities | $890.4 million | $885.4 million | +$5.0 million | | Net unrealized losses decline | N/A | N/A | -$9.1 million | | Overall duration | 4.4 years | 4.5 years | -0.1 years | [Deposits](index=3&type=section&id=Deposits) Total deposits increased by **$16.9 million** to **$4.5 billion**, primarily from money market and time deposits, raising the loan-to-deposit ratio to **88%** | Deposit Type | Change (Jun 30, 2025 to Sep 30, 2025) | | :-------------------------- | :------------------------------------ | | Total Deposits | +$16.9 million | | Money market deposits | +$64.0 million | | Time deposits | +$36.1 million | | Interest-bearing demand deposits | -$60.9 million | | Non-interest bearing demand deposits | -$16.7 million | | Saving deposits | -$5.6 million | | Loan-to-deposit ratio | 88% (up from 87%) | [Borrowings](index=3&type=section&id=Borrowings) The company redeemed **$32.5 million** in subordinated notes, while FHLB advances and other borrowings increased by **$72.9 million** to **$209.2 million** to support lending | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :------------------------------------ | :----------- | :----------- | :----------- | | Subordinated notes redeemed | $32.5 million | N/A | N/A | | Debt issuance costs amortized | $0.3 million | N/A | N/A | | FHLB advances and other borrowings | $209.2 million | $136.3 million | +$72.9 million | | Available alternative funding sources | ~$1.7 billion | ~$1.7 billion | Stable | [Income Statement Analysis](index=4&type=section&id=Income%20Statement) The income statement for Q3 2025 demonstrated strong performance with increased net interest income and noninterest income, coupled with a decrease in noninterest expenses, leading to a significant rise in net income and improved efficiency [Net Interest Income and Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income increased to **$51.0 million**, and net interest margin rose to **4.11%** in Q3 2025, driven by higher loan yields and positive purchase accounting marks | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :------------------------------------ | :------ | :------ | :----------- | | Net interest income | $51.0 million | $49.5 million | +$1.5 million | | Net interest margin (tax equivalent) | 4.11% | 4.07% | +0.04% | | Yield on loans increase | N/A | N/A | +6 basis points | | Cost of funds increase | N/A | N/A | +3 basis points | | Purchase accounting marks impact on NIM | +52 bps | +50 bps | +2 bps | [Provision for Credit Losses on Loans](index=4&type=section&id=Provision%20for%20Credit%20Losses%20on%20Loans) The allowance for credit losses (ACL) on loans slightly increased to **$48.1 million**, with provision expense rising to **$0.4 million**, while non-accrual loans increased to **$26.2 million** | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :-------------------------------- | :----------- | :----------- | :----------- | | Allowance for credit losses (ACL) | $48.1 million | $47.9 million | +$0.2 million | | ACL to total loans | 1.21% | 1.22% | -0.01% | | Provision expense | $0.4 million | $0.2 million | +$0.2 million | | Net charge-offs | $0.2 million | $0.1 million | +$0.1 million | | Classified loans | $64.1 million | $65.8 million | -$1.7 million | | Non-accrual loans | $26.2 million | $22.4 million | +$3.8 million | | Non-accrual loans to total loans | 0.66% | 0.57% | +0.09% | [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income increased by **$0.5 million** to **$13.4 million**, primarily due to higher service charges from increased interchange activity and swap fee income | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :-------------------------- | :------ | :------ | :----------- | | Total Noninterest income | $13.4 million | $12.9 million | +$0.5 million | | Service charges | $3.0 million | $2.6 million | +$0.4 million | | Swap fee income | $0.8 million | $0.7 million | +$0.1 million | | Mortgage banking activities | $0.5 million | $0.5 million | Stable | | Other income | $2.1 million | $2.4 million | -$0.3 million | [Noninterest Expenses](index=5&type=section&id=Noninterest%20Expenses) Noninterest expenses decreased by **$1.3 million** to **$36.3 million**, mainly due to the absence of merger-related expenses and reduced advertising costs | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :-------------------------------- | :------ | :------ | :----------- | | Total Noninterest expenses | $36.3 million | $37.6 million | -$1.3 million | | Merger-related expenses | $0 | $1.0 million | -$1.0 million | | Advertising and bank promotions | $0.2 million | $1.1 million | -$0.9 million | | Salaries and benefits | $21.4 million | $21.4 million | Stable | | Professional services expense | $1.7 million | $2.0 million | -$0.3 million | [Income Taxes](index=5&type=section&id=Income%20Taxes) The effective tax rate for Q3 2025 was **21.0%**, slightly down from **21.3%** in Q2 2025, aligning with the federal statutory rate | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :----------------- | :------ | :------ | :----------- | | Effective tax rate | 21.0% | 21.3% | -0.3% | [Capital Position](index=5&type=section&id=Capital) Shareholders' equity increased to **$571.9 million**, improving tangible book value per common share and the tangible common equity ratio, with all capital ratios remaining above regulatory minimums | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :------------------------------------ | :----------- | :----------- | :----------- | | Shareholders' equity | $571.9 million | $548.4 million | +$23.5 million | | Tangible book value per common share | $24.12 | $22.77 | +$1.35 | | Tangible common equity ratio | 8.8% | 8.3% | +0.5% | | Return on average tangible common equity | 19.7% | 18.4% | +1.3% | | Tier 1 common equity risk-based ratio | 11.1% | 10.9% | +0.2% | | Tier 1 risk-based capital ratio | 11.3% | 11.1% | +0.2% | | Total risk-based capital ratio | 13.1% | 13.3% | -0.2% | | Tier 1 leverage ratio | 9.3% | 9.0% | +0.3% | - The company's capital ratios remain above regulatory minimum levels to be deemed 'well capitalized,' and management believes capital is adequate to support inherent risks and growth requirements[29](index=29&type=chunk) [Financial Highlights (Unaudited)](index=7&type=section&id=FINANCIAL%20HIGHLIGHTS%20(Unaudited)) This section presents unaudited financial highlights, including profitability, period-end balances, and key ratios for various reporting periods [Profitability and Ratios (Three and Nine Months Ended September 30, 2025 & 2024)](index=7&type=section&id=Profitability%20and%20Ratios%20(Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202025%20%26%202024)) This section provides a consolidated overview of key profitability metrics and financial ratios for both the three and nine months ended September 30, 2025, compared to the same periods in 2024, highlighting significant improvements in net income, returns, and efficiency | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net interest income | $50,988 | $51,697 | $149,261 | $104,681 | | Provision for credit losses - loans | $396 | $14,115 | $51 | $15,348 | | Noninterest income | $13,382 | $12,386 | $37,921 | $26,188 | | Noninterest expenses | $36,297 | $60,299 | $112,087 | $105,407 | | Net income (loss) | $21,865 | $(7,903) | $59,364 | $8,366 | | Return on average assets | 1.60% | (0.57)% | 1.47% | 0.28% | | Return on average equity | 15.72% | (5.85)% | 14.77% | 3.10% | | Net interest margin | 4.11% | 4.14% | 4.06% | 3.88% | | Efficiency ratio | 56.4% | 94.1% | 59.9% | 80.5% | | Diluted EPS | $1.13 | $(0.41) | $3.07 | $0.62 | [Period-End Balances and Ratios (September 30, 2025 & December 31, 2024)](index=8&type=section&id=Period-End%20Balances%20and%20Ratios%20(September%2030%2C%202025%20%26%20December%2031%2C%202024)) This section presents key balance sheet items and credit quality and capital ratios at the end of September 30, 2025, compared to December 31, 2024, indicating overall asset growth, improved capital strength, and stable credit quality | Metric | Sep 30, 2025 | Dec 31, 2024 | | :------------------------------------ | :----------- | :----------- | | Total assets | $5,470,233 | $5,441,589 | | Loans, net of ACL | $3,931,631 | $3,882,525 | | Securities available for sale | $890,357 | $829,711 | | Total deposits | $4,533,560 | $4,623,096 | | FHLB advances and other borrowings | $241,719 | $141,227 | | Subordinated notes and trust preferred debt | $36,970 | $68,680 | | Shareholders' equity | $571,936 | $516,682 | | ACL 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% | | Total risk-based capital (Company) | 13.1% | 12.4% | | Tier 1 risk-based capital (Company) | 11.3% | 10.2% | | Tier 1 common equity risk-based capital (Company) | 11.1% | 10.0% | | Tier 1 leverage capital (Company) | 9.3% | 8.3% | | Book value per common share | $29.33 | $26.65 | [Consolidated Balance Sheets (Unaudited)](index=9&type=section&id=ORRSTOWN%20FINANCIAL%20SERVICES%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS%20(Unaudited)) The consolidated balance sheets provide a detailed breakdown of assets, liabilities, and shareholders' equity for Orrstown Financial Services, Inc. as of September 30, 2025, and December 31, 2024, showing an increase in total assets and shareholders' equity, alongside shifts in deposit and borrowing structures | (Dollars in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :------------------------------------------ | :----------- | :----------- | | **Assets:** | | | | Cash and cash equivalents | $184,146 | $248,874 | | Securities available for sale | $890,357 | $829,711 | | Loans, net | $3,931,631 | $3,882,525 | | Total assets | $5,470,233 | $5,441,589 | | **Liabilities:** | | | | Total deposits | $4,533,560 | $4,623,096 | | FHLB advances and other borrowings | $209,218 | $115,364 | | Subordinated notes and trust preferred debt | $36,970 | $68,680 | | Total liabilities | $4,898,297 | $4,924,907 | | **Shareholders' Equity:** | | | | Total shareholders' equity | $571,936 | $516,682 | | Total liabilities and shareholders' equity | $5,470,233 | $5,441,589 | [Condensed Consolidated Statements of Operations (Unaudited)](index=10&type=section&id=ORRSTOWN%20FINANCIAL%20SERVICES%2C%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(Unaudited)) The condensed consolidated statements of operations present the financial performance for the three and nine months ended September 30, 2025, and 2024, showing significant growth in net income, particularly for the nine-month period, driven by increased net interest income and controlled expenses | (Dollars in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | **Interest income:** | | | | | | Loans | $65,751 | $70,647 | $192,219 | $142,417 | | Total interest income | $77,122 | $82,987 | $227,474 | $168,918 | | **Interest expense:** | | | | | | Deposits | $22,639 | $28,603 | $69,754 | $57,384 | | 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 | | Total noninterest income | $13,382 | $12,386 | $37,921 | $26,188 | | Total noninterest expenses | $36,297 | $60,299 | $112,087 | $105,407 | | Income (loss) before income tax | $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 | | 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 | [Analysis of Net Interest Income (Unaudited)](index=12&type=section&id=ANALYSIS%20OF%20NET%20INTEREST%20INCOME) This section provides a detailed analysis of net interest income and margin, including average balances and interest rates over quarterly and nine-month periods [Average Balances and Interest Rates (Quarterly Trends)](index=12&type=section&id=Average%20Balances%20and%20Interest%20Rates%2C%20Taxable-Equivalent%20Basis%20(Unaudited)) This section provides a detailed breakdown of average balances, interest income/expense, and rates for interest-earning assets and interest-bearing liabilities over the past five quarters, highlighting the trends in net interest income and margin | (In thousands) | 9/30/2025 | 6/30/2025 | 3/31/2025 | 12/31/2024 | 9/30/2024 | | :------------------------------------ | :-------- | :-------- | :-------- | :--------- | :-------- | | **Average Interest Earning Assets:** | | | | | | | Loans | $3,979,044 | $3,894,978 | $3,909,694 | $3,961,269 | $3,989,259 | | Total interest earning assets | $4,987,171 | $4,935,203 | $4,978,167 | $5,009,894 | $5,023,424 | | **Average Interest Bearing Liabilities:** | | | | | | | Total interest bearing deposits | $3,612,211 | $3,647,104 | $3,717,444 | $3,794,566 | $3,852,708 | | Total interest bearing liabilities | $3,877,671 | $3,845,999 | $3,925,205 | $4,000,082 | $4,059,570 | | **Net Interest Income/Margin:** | | | | | | | Taxable equivalent net interest income | $51,557 | $50,064 | $49,203 | $51,010 | $52,134 | | Taxable equivalent net interest margin | 4.11% | 4.07% | 4.00% | 4.05% | 4.14% | | Net interest income | $50,988 | $49,512 | $48,761 | $50,573 | $51,697 | [Average Balances and Interest Rates (Nine Months Ended September 30, 2025 & 2024)](index=14&type=section&id=Average%20Balances%20and%20Interest%20Rates%2C%20Taxable-Equivalent%20Basis%20(Unaudited)%20(continued)) This section provides a comparative analysis of average balances and interest rates for interest-earning assets and interest-bearing liabilities for the nine months ended September 30, 2025, versus 2024, illustrating the year-over-year changes in net interest income and margin | (In thousands) | 9M 2025 | 9M 2024 | | :------------------------------------ | :------ | :------ | | **Average Interest Earning Assets:** | | | | Loans | $3,928,159 | $2,878,171 | | Total interest-earning assets | $4,966,880 | $3,649,088 | | **Average Interest Bearing Liabilities:** | | | | Total interest-bearing deposits | $3,658,534 | $2,776,848 | | Total interest-bearing liabilities | $3,882,783 | $2,959,937 | | **Net Interest Income/Margin:** | | | | Taxable-equivalent net interest income | $150,928 | $105,887 | | Taxable-equivalent net interest margin | 4.06% | 3.88% | | Net interest income | $149,261 | $104,681 | [Historical Trends in Quarterly Financial Data (Unaudited)](index=16&type=section&id=ORRSTOWN%20FINANCIAL%20SERVICES%2C%20INC.%20HISTORICAL%20TRENDS%20IN%20QUARTERLY%20FINANCIAL%20DATA%20(Unaudited)) This section presents historical trends in quarterly financial data, covering profitability, noninterest income and expenses, balance sheet items, and capital and credit quality measures [Quarterly Profitability and Ratios](index=16&type=section&id=Profitability%20for%20the%20quarter) This section presents a five-quarter trend of key profitability metrics and financial ratios, illustrating the company's performance trajectory, including net income, returns, net interest margin, and efficiency | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Net interest income | $50,988 | $49,512 | $48,761 | $50,573 | $51,697 | | Net income (loss) | $21,865 | $19,448 | $18,051 | $13,684 | $(7,903) | | Return on average assets | 1.60% | 1.45% | 1.35% | 1.00% | (0.57)% | | Return on average equity | 15.72% | 14.56% | 13.98% | 10.54% | (5.85)% | | Net interest margin | 4.11% | 4.07% | 4.00% | 4.05% | 4.14% | | Efficiency ratio | 56.4% | 60.3% | 63.2% | 69.4% | 94.1% | | Diluted EPS | $1.13 | $1.01 | $0.93 | $0.71 | $(0.41) | | Tangible book value | $24.12 | $22.77 | $21.99 | $21.19 | $21.12 | [Quarterly Noninterest Income and Expenses](index=17&type=section&id=Noninterest%20income%3A) This section details the quarterly trends in various noninterest income and expense categories over the past five quarters, showing the drivers of changes in fee income and operational costs | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | **Noninterest income:** | | | | | | | Service charges | $2,997 | $2,630 | $2,395 | $2,050 | $2,360 | | Wealth management income | $5,277 | $5,267 | $5,415 | $4,902 | $5,037 | | 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 | | Professional services | $1,703 | $2,016 | $1,826 | $1,591 | $1,119 | | Merger-related expenses | $0 | $968 | $1,649 | $3,887 | $16,977 | | Total noninterest expenses | $36,297 | $37,614 | $38,176 | $42,930 | $60,299 | [Quarterly Balance Sheet at Quarter End](index=18&type=section&id=Balance%20Sheet%20at%20quarter%20end%3A) This section provides a five-quarter trend of key balance sheet items at quarter-end, including cash, securities, loans by type, deposits, and borrowings, offering insights into asset and liability composition changes | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $5,470,233 | $5,387,645 | $5,441,586 | $5,441,589 | $5,470,589 | | Securities available for sale | $890,357 | $885,373 | $855,456 | $829,711 | $826,828 | | Total loans | $3,979,736 | $3,931,379 | $3,875,985 | $3,931,214 | $3,981,437 | | Net loans held for investment | $3,931,631 | $3,883,481 | $3,828,181 | $3,882,525 | $3,931,807 | | Total deposits | $4,533,560 | $4,516,625 | $4,633,716 | $4,623,096 | $4,650,853 | | FHLB advances and other borrowings | $241,719 | $166,381 | $123,480 | $141,227 | $137,310 | | Total shareholders' equity | $571,936 | $548,448 | $532,936 | $516,682 | $516,206 | [Quarterly Capital and Credit Quality Measures](index=19&type=section&id=Capital%20and%20credit%20quality%20measures%20%3A) This section provides a five-quarter trend of capital and credit quality ratios, including risk-based capital, leverage, allowance for credit losses, nonaccrual loans, and nonperforming assets, demonstrating the company's financial health and asset quality management | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total risk-based capital (Company) | 13.1% | 13.3% | 13.1% | 12.4% | 12.4% | | Tier 1 risk-based capital (Company) | 11.3% | 11.1% | 10.8% | 10.2% | 10.0% | | Tier 1 leverage capital (Company) | 9.3% | 9.0% | 8.6% | 8.3% | 8.0% | | 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% | | Net charge-offs | $189 | $115 | $331 | $3,002 | $269 | | Classified loans | $64,089 | $65,754 | $76,211 | $88,628 | $105,465 | | Total nonperforming assets | $26,191 | $22,423 | $22,865 | $24,249 | $27,065 | [Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations](index=20&type=section&id=Appendix%20A-%20Supplemental%20Reporting%20of%20Non-GAAP%20Measures%20and%20GAAP%20to%20Non-GAAP%20Reconciliations) This appendix explains non-GAAP financial measures like tangible book value and adjusted net income, providing reconciliations to GAAP for enhanced financial insight - Management uses non-GAAP financial information to help investors understand the effect of **non-recurring charges** on recent financial results; these measures are supplementary to GAAP and not substitutes[50](index=50&type=chunk)[52](index=52&type=chunk) | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Shareholders' equity (GAAP) | $571,936 | $548,448 | $532,936 | $516,682 | $516,206 | | Less: Goodwill | $69,751 | $69,751 | $68,106 | $68,106 | $70,655 | | Less: Other intangible assets | $40,338 | $42,748 | $45,230 | $47,765 | $46,144 | | Plus: 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 | | Book value per share (GAAP) | $29.33 | $28.07 | $27.32 | $26.65 | $26.65 | | Tangible book value per share (Non-GAAP) | $24.12 | $22.77 | $21.99 | $21.19 | $21.12 | | (In thousands) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Net income (loss) (GAAP) | $21,865 | $19,448 | $18,051 | $13,684 | $(7,903) | | Plus: Merger-related expenses | $0 | $968 | $1,649 | $3,887 | $16,977 | | Plus: Executive retirement expenses | $0 | $0 | $0 | $35 | $4,758 | | Plus: Provision for credit losses on non-PCD loans | $0 | $0 | $0 | $0 | $15,504 | | Plus: Provision for legal settlement | $0 | $0 | $0 | $478 | $0 | | Less: Related tax effect | $0 | $(221) | $(368) | $(1,386) | $(7,915) | | Adjusted net income (Non-GAAP) | $21,865 | $20,195 | $19,332 | $16,698 | $21,421 | | Return on average assets (GAAP) | 1.60% | 1.45% | 1.35% | 1.00% | (0.57)% | | Return on average assets, adjusted (Non-GAAP) | 1.60% | 1.51% | 1.45% | 1.22% | 1.55% | | Efficiency ratio (GAAP) | 56.4% | 60.3% | 63.2% | 69.4% | 94.1% | | Efficiency ratio, adjusted (Non-GAAP) | 56.4% | 58.7% | 60.5% | 62.3% | 60.2% | [Appendix B - Investment Portfolio Concentrations](index=24&type=section&id=Appendix%20B-%20Investment%20Portfolio%20Concentrations) This appendix summarizes the company's diversified investment security portfolio as of September 30, 2025, detailing concentrations, values, and credit ratings | Sector | Portfolio Mix | Amortized Book | Fair Value | Credit Enhancement | AAA | AA | A | BBB | BB | NR | | :-------------------------------- | :------------ | :------------- | :--------- | :----------------- | :-- | :-- | :- | :-- | :- | :-- | | Federal Family Education Loan ABS | 8% | $73,927 | $73,552 | 11% | —% | 47% | 33% | 7% | 13% | —% | | Municipal - General Obligation | 11% | $99,301 | $92,050 | N/A | 17% | 77% | 6% | —% | —% | —% | | Municipal - Revenue | 13% | $120,030 | $108,063 | N/A | —% | 82% | 12% | —% | —% | 6% | | Agency MBS | 20% | $177,918 | $178,485 | N/A | —% | 100% | —% | —% | —% | —% | | Agency CMO | 40% | $360,574 | $359,449 | N/A | —% | 100% | —% | —% | —% | —% | | U.S. Treasury securities | 2% | $20,033 | $18,803 | N/A | —% | 100% | —% | —% | —% | —% | | Corporate bonds | —% | $1,944 | $1,994 | N/A | —% | —% | 52% | 48% | —% | —% | | **Total** | **100%** | **$912,539** | **$890,136** | | **4%** | **85%** | **5%** | **1%** | **1%** | **4%** | [About the Company and Disclosures](index=25&type=section&id=About%20the%20Company) This section provides an overview of Orrstown Financial Services, Inc. and includes important cautionary notes regarding forward-looking statements [About the Company](index=25&type=section&id=About%20the%20Company) Orrstown Financial Services, Inc., with **$5.5 billion** in assets, is the parent company of Orrstown Bank, providing a broad range of consumer and business financial services across multiple counties in Pennsylvania and Maryland - Orrstown Financial Services, Inc. has **$5.5 billion in assets** and operates through its wholly-owned subsidiary, Orrstown Bank[58](index=58&type=chunk) - The company provides 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, including Baltimore City[58](index=58&type=chunk) - Orrstown Financial Services, Inc.'s common stock is traded on Nasdaq (**ORRF**)[58](index=58&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=25&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section serves as a cautionary note regarding forward-looking statements, emphasizing that such statements are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are not historical facts and are subject to **risks, assumptions, and uncertainties** that are difficult to predict[59](index=59&type=chunk) - Factors that could cause actual results to differ include **interest rate changes**, **general economic conditions**, **competition**, **changes in consumer behavior**, **regulatory changes**, **credit quality**, **inability to raise capital**, **market volatility**, **operational risks (e.g., cybersecurity)**, and **litigation expenses**[59](index=59&type=chunk) - The company disclaims any obligation to publicly update or review any forward-looking statement[60](index=60&type=chunk)

Core Insights - Orrstown Financial Services (ORRF) reported revenue of $64.37 million for Q3 2025, marking a year-over-year increase of 0.5% and a surprise of +2.01% over the Zacks Consensus Estimate of $63.1 million [1] - The earnings per share (EPS) for the same quarter was $1.13, compared to $1.11 a year ago, with an EPS surprise of +6.6% against the consensus estimate of $1.06 [1] Financial Performance Metrics - Efficiency ratio stood at 56.4%, slightly better than the three-analyst average estimate of 56.6% [4] - Average interest-earning assets were reported at $4.99 billion, exceeding the $4.97 billion average estimate [4] - Net interest margin was consistent at 4.1%, matching the three-analyst average estimate [4] - Total non-interest income reached $13.38 million, surpassing the three-analyst average estimate of $12.15 million [4] - Other income was reported at $2.1 million, slightly above the $2.02 million average estimate [4] - Interchange income was $1.62 million, exceeding the $1.22 million average estimate [4] - Service charges on deposit accounts totaled $3 million, higher than the two-analyst average estimate of $2.75 million [4] - Wealth management income was reported at $5.28 million, compared to the $5.07 million average estimate [4] - Net interest income was $50.99 million, slightly below the $51.28 million estimated by two analysts [4] Stock Performance - Shares of Orrstown have returned -5% over the past month, while the Zacks S&P 500 composite has increased by +1.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

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 e ...

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Orrstown Financial Services (ORRF) . This company, which is in the Zacks Banks - Northeast industry, shows potential for another earnings beat.This holding company for Orrstown Bank has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surpri ...

HARRISBURG, Pa., Oct. 15, 2025 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (NASDAQ: ORRF), the holding company of Orrstown Bank, announced today that it will report third quarter 2025 earnings at the close of business on Tuesday, October 21, 2025. Management will host a conference call and webcast to review the Company’s quarterly results on Wednesday, October 22, 2025, at 9:00 am ET. The conference call and webcast details are below: Earnings Release: Tuesday, October 21, 2025, After Market Close ...