Core Viewpoint - Orrstown Financial Services reported record annual net income for 2025, highlighting strong profitability and growth in fee income, while managing margin pressures from recent interest rate cuts [4][5][7]. Financial Performance - The company achieved a net income of $80.9 million for 2025, equating to $4.18 per diluted share, with a return on average equity of 14.76% and return on average assets of 1.49% [4][7]. - In the fourth quarter, net income was $21.5 million, or $1.11 per diluted share, with non-interest income representing 22% of operating revenue [3][4]. Interest Margin and Projections - The fourth-quarter net interest margin was reported at 4.00%, down from 4.11% in the previous quarter, attributed to lower purchase accounting accretion and reduced interest income from variable-rate loans [2][4]. - Management projects a net interest margin for 2026 in the range of 3.90% to 4.00%, with expectations for funding costs to begin declining in the first quarter of 2026 [1][6][8]. Fee Income and Growth Strategies - Fee income totaled $52.3 million, representing 21% of operating income, with a focus on expanding wealth management services [6][9]. - The company reported an increase in fourth-quarter fee income to $14.4 million from $13.4 million in the third quarter, driven by wealth management income and swap fees [9][11]. Loan and Deposit Trends - Orrstown experienced 4% loan growth in the fourth quarter, with management optimistic about achieving 5% or better growth in 2026 [13]. - Deposits were relatively flat, with a slight decline of $5 million, and the cost of deposits was reported at 1.98% for the quarter [14]. Credit Quality and Capital Position - Credit quality remained strong, with a provision expense of $0.1 million and net charge-offs of $0.5 million, while the allowance for credit losses ended at 1.19% of loans [15]. - The company announced a quarterly dividend increase to $0.30 per share, marking a 50% increase since the merger date [16]. Capital Management and Investments - The company repositioned its securities portfolio, purchasing $125 million of agency mortgage-backed securities, aimed at addressing asset sensitivity [17]. - Capital ratios increased quarter over quarter, and the bank remains well-capitalized, with ongoing monitoring of share repurchase opportunities [18].

Financial Data and Key Metrics Changes - Orrstown achieved a record annual net income of $80.9 million, or $4.18 per diluted share, with a return on average equity of 14.76% and a return on average assets of 1.49% [3] - For the fourth quarter, net income was $21.5 million, or $1.11 per diluted share, with a net interest margin of 4.00%, down from 4.11% in the previous quarter [10][11] - Fee income for the fourth quarter was $14.4 million, contributing to 22% of total revenues, marking the third consecutive quarter above 20% [5][12] Business Line Data and Key Metrics Changes - Loan growth was steady at 4% during the fourth quarter, with a balanced mix across commercial and real estate lending [7][16] - Non-interest income increased to $14.4 million in the fourth quarter from $13.4 million in the third quarter, driven by growth in wealth management and treasury management services [12][14] - The bank recorded minimal provision expense of $0.1 million and net charge-offs of $0.5 million, with classified loans decreasing by $5.7 million from the prior quarter [8][15] Market Data and Key Metrics Changes - Deposits were relatively flat, declining slightly by $5 million, with a loan-to-deposit ratio of 89% [17] - The cost of deposits was 1.98% for the fourth quarter, with expectations for reductions in funding costs starting in the first quarter of 2026 [11][17] Company Strategy and Development Direction - The company is focused on enhancing non-interest income and investing in talent to drive future growth, including the recent hiring of a Chief Wealth Officer [6][9] - There is a strong emphasis on building a middle-market commercial lending platform and expanding wealth management services in growth markets [40][41] - The company remains committed to organic growth rather than pursuing mergers and acquisitions, although capital build presents optionality for future opportunities [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong profitability and expects to continue building shareholder value through strong earnings and an attractive dividend [4][9] - The company anticipates a net interest margin in the range of 3.90%-4% for 2026, with a focus on managing funding costs [11][32] - Management remains optimistic about the future, citing a robust loan pipeline and the ability to responsibly grow the loan portfolio [8][20] Other Important Information - The board approved a quarterly dividend increase from $0.27 to $0.30 per share, marking the fourth increase in 18 months [9] - The investment portfolio is positioned to drive earnings growth, with recent purchases of $125 million in Agency MBS and CMOs [18][50] Q&A Session Summary Question: Increase in guidance for non-interest income and expenses - Management clarified that the increase reflects ongoing strategy to invest in talent to drive future earnings, not a change in strategy [24][25] Question: NIM trajectory for the year - Management indicated that core NIM should increase in Q1, with a projected decline of 2-3 basis points per quarter due to purchase accounting accretion [28][31] Question: Wealth management AUM and customer retention - Total AUM was over $3 billion, with no significant decline in the portfolio from Codorus Valley customers [37][38] Question: Focus areas for hiring - The company is focusing on building out the middle-market commercial lending platform and enhancing wealth management services [40] Question: Share buybacks and capital allocation - Management is monitoring share buyback opportunities but has not found the stock price favorable for repurchases [48] Question: Yields on recent securities purchases - The average yield on recent purchases was 4.92%, with expectations for continued benefits from the investment portfolio [50]

Financial Data and Key Metrics Changes - Orrstown achieved a record annual net income of $80.9 million, or $4.18 per diluted share, with a return on average equity of 14.76% and return on average assets of 1.49% [3] - For the fourth quarter, net income was $21.5 million, or $1.11 per diluted share, with a net interest margin of 4.00%, down from 4.11% in the previous quarter [10][11] - Fee income for the fourth quarter was $14.4 million, contributing to 22% of total revenues, marking the third consecutive quarter above 20% [5][12] Business Line Data and Key Metrics Changes - Loan growth was steady at 4% during the fourth quarter, with a balanced mix across commercial and real estate lending [7][16] - Non-interest income increased to $14.4 million in the fourth quarter from $13.4 million in the third quarter, driven by growth in wealth management and treasury management services [12][14] - The bank recorded minimal provision expense of $0.1 million and net charge-offs of $0.5 million, with classified loans decreasing by $5.7 million from the prior quarter [8][15] Market Data and Key Metrics Changes - Deposits were relatively flat, declining slightly by $5 million, with a loan-to-deposit ratio of 89% [17] - The cost of deposits was 1.98% for the fourth quarter, with expectations for reductions in funding costs starting in the first quarter of 2026 [11][17] Company Strategy and Development Direction - The company is focused on enhancing non-interest income and investing in talent to drive future growth, including the recent hiring of a Chief Wealth Officer [6][20] - There is a strong emphasis on building a middle-market commercial lending platform and expanding wealth management services in growth markets [40][43] - The company remains committed to organic growth rather than pursuing mergers and acquisitions, although capital build presents optionality for future opportunities [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong profitability and expects to continue building shareholder value through strong earnings and an attractive dividend [9][20] - The company anticipates a net interest margin in the range of 3.90%-4% for 2026, with a focus on managing funding costs and maintaining loan growth [11][32] - Management remains optimistic about the future, citing a robust loan pipeline and the ability to responsibly grow the loan portfolio [8][20] Other Important Information - The board approved a quarterly dividend increase from $0.27 to $0.30 per share, marking the fourth increase in 18 months [9] - The investment portfolio yield decreased to 4.58% due to declining rates, but the portfolio is positioned well for earnings growth [18] Q&A Session Summary Question: Increase in guidance for non-interest income and expenses - Management clarified that the increase reflects ongoing strategy to invest in talent to drive future earnings, not a change in strategy [24][25] Question: NIM trajectory for the year - Management indicated that core NIM is expected to increase in Q1, with a decline in purchase accounting accretion impacting future margins [28][31] Question: Wealth management AUM and customer retention - Total AUM was over $3 billion, with no significant decline in customer portfolios from Codorus Valley [37][38] Question: Focus areas for hiring - The company is focusing on building out the middle-market commercial lending platform and enhancing wealth management services [40] Question: Share buybacks and capital allocation - Management is monitoring share buyback opportunities but has not found the stock price favorable for repurchases [48] Question: Yields on recent securities purchases - The average yield on recent purchases was 4.92%, with expectations for continued benefits from the investment portfolio [50]

Financial Data and Key Metrics Changes - Orrstown achieved a record annual net income of $80.9 million, or $4.18 per diluted share, with a return on average equity of 14.76% and return on average assets of 1.49% [3] - For Q4 2025, net income was $21.5 million, or $1.11 per diluted share, with a net interest margin of 4.00%, down from 4.11% in Q3 [9][10] - Fee income for the quarter was $14.4 million, contributing to 22% of total revenues, marking the third consecutive quarter above 20% [5][11] Business Line Data and Key Metrics Changes - Loan growth was steady at 4% during Q4, with a balanced mix across commercial and real estate lending [6][15] - Non-interest income increased to $14.4 million in Q4 from $13.4 million in Q3, driven by growth in wealth management and treasury management services [11][12] - The bank recorded minimal provision expense of $0.1 million and net charge-offs of $0.5 million, with classified loans decreasing by $5.7 million from the prior quarter [7][14] Market Data and Key Metrics Changes - Deposits were relatively flat, declining slightly by $5 million, with a loan-to-deposit ratio of 89% [16] - The cost of deposits was 1.98% for Q4, with expectations for reductions in funding costs starting in Q1 2026 [16][10] Company Strategy and Development Direction - The company continues to focus on enhancing fee income and investing in talent, with recent hiring of a Chief Wealth Officer to drive growth in wealth management [5][6] - Orrstown is strategically investing in the middle-market commercial lending platform and expanding its presence in growth markets [38] - The company remains committed to organic growth, with M&A being a lower priority unless suitable opportunities arise [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong profitability and anticipates continued growth in loan production and fee income [19] - The company expects net interest margin to stabilize around 4% despite anticipated rate cuts in 2026 [10][31] - Management remains optimistic about the future, citing a robust loan pipeline and strong credit quality [7][19] Other Important Information - The board approved a quarterly dividend increase from $0.27 to $0.30 per share, marking a 50% increase since the merger date [8] - The investment portfolio yield decreased to 4.58% from 4.67% due to declining rates, but the portfolio is positioned well for earnings growth [17] Q&A Session Summary Question: What drove the increase in guidance for non-interest income and expenses? - Management clarified that the increase reflects ongoing strategy to invest in talent to drive future earnings, not a change in strategy [24][25] Question: Can you clarify the NIM trajectory for the year? - Management indicated that core NIM is expected to increase in Q1, with a decline in purchase accounting accretion of about 2-3 basis points each quarter [28][30] Question: What is the current AUM or AUA and success in onboarding Codorus Valley customers? - Total AUM was over $3 billion, with no significant decline in the portfolio from Codorus Valley customers [36][37] Question: What areas is the company focusing on for hiring? - The company is focusing on building out the middle-market commercial lending platform and enhancing wealth management in growth markets [38] Question: What is the current thinking around share buybacks? - Management is monitoring share buyback opportunities but has not found the current stock price favorable for repurchases [46] Question: What yields were achieved on recent securities purchases? - The average yield on recent purchases was 4.92%, with expectations for continued benefits from the investment portfolio [47]

Earnings Presentation Fourth Quarter 2025 January 28, 2026 Non-GAAP Disclosures In this presentation, we refer to tangible book value per share, fee income to operating revenue, adjusted net income, adjusted diluted EPS, adjusted ROAA, adjusted ROAE and the efficiency ratio, which are non-GAAP measures. For a reconciliation of these non-GAAP measures to GAAP results and our rationale for usage of non-GAAP measures, please refer to the GAAP to Non- GAAP reconciliation. 2 Financial Highlights Cautionary Note ...

Financial Performance - Net income for Q4 2025 was $21.5 million, or $1.11 per diluted share, compared to $21.9 million, or $1.13 per diluted share in Q3 2025[3] - For the year ended December 31, 2025, net income totaled $80.9 million, with diluted earnings per share of $4.18, compared to $22.1 million and $1.48 for 2024[3] - Basic earnings per share increased to $1.12 for Q4 2025, compared to $0.72 in Q4 2024, demonstrating significant growth in profitability[29] - Net income for the twelve months ended December 31, 2025, reached $80,855,000, significantly higher than $22,050,000 in 2024, marking a growth of 267.5%[33] - Net income for the quarter was $21,491 thousand, a significant increase from $13,684 thousand in the same quarter of the previous year, representing a growth of 56.8%[51] Income and Expenses - Noninterest income rose by $1.0 million to $14.4 million in Q4 2025, driven by growth in wealth management and swap fees[18] - Noninterest expenses increased by $1.1 million to $37.4 million in Q4 2025, primarily due to higher healthcare and professional service costs[20] - Total noninterest expenses decreased to $37,355,000 in Q4 2025 from $42,930,000 in Q4 2024, a reduction of 12.5%[33] - Adjusted noninterest expense for the twelve months ended December 31, 2025, was $146,825,000, compared to $120,396,000 in 2024, an increase of 22%[54] Asset and Loan Growth - Total loans increased by $41.0 million, or approximately 4% annualized, from Q3 2025 to Q4 2025, totaling $4.0 billion[5] - Total assets increased to $5.542 billion at December 31, 2025, compared to $5.442 billion at December 31, 2024, indicating growth in the asset base[30] - Total interest-earning assets increased to $4,995,061,000 in 2025 from $3,991,148,000 in 2024, reflecting a growth of approximately 25.2%[37] - Average balances of loans increased to $3,945,723,000 in 2025 from $3,150,425,000 in 2024, a growth of approximately 25.3%[37] Capital and Equity - Shareholders' equity increased to $591.5 million at December 31, 2025, up from $571.9 million at September 30, 2025, driven by net income of $21.5 million and other comprehensive income of $2.3 million[24] - The tangible book value per common share rose to $25.21 at December 31, 2025, compared to $24.12 at September 30, 2025, reflecting a stronger capital position[25] - The Company’s total risk-based capital ratio improved to 13.3% at December 31, 2025, compared to 12.4% at December 31, 2024, reflecting enhanced capital adequacy[30] Profitability Ratios - The return on average assets was 1.55% and return on average equity was 14.73% for Q4 2025, compared to 1.60% and 15.72% in Q3 2025[3] - The Company reported a return on average tangible common equity of 18.15% for Q4 2025, down from 19.70% in Q3 2025, attributed to an increase in average shareholders' equity[25] - Return on average tangible equity was 18.15% for the quarter ended December 31, 2025, compared to 13.62% a year earlier, indicating improved profitability[51] Dividend Information - The Board of Directors declared a cash dividend of $0.30 per common share, representing a $0.03 increase from the previous quarter[3] - Dividends paid per share increased to $0.27 in Q4 2025 from $0.23 in Q4 2024, reflecting a growth of 17.4%[34] Credit Quality - Classified loans decreased by $5.7 million to $58.4 million at December 31, 2025, while non-accrual loans increased to $28.0 million[17] - The allowance for credit losses to total loans ratio was 1.19% as of December 31, 2025, compared to 1.24% a year earlier, indicating improved credit quality[45] - The provision for credit losses on loans was $75,000 in Q4 2025, a significant decrease from $2,617,000 in Q4 2024[33] Market and Economic Factors - The company emphasizes that forward-looking statements are based on current expectations and are subject to risks and uncertainties that could lead to actual results differing materially from those anticipated[57] - Factors affecting future performance include interest rate changes, economic conditions, competition, and changes in consumer behavior[57] - The company warns that reliance on forward-looking statements should be limited, as they may not be updated publicly after the date made[58]

Core Insights - Orrstown Financial Services (ORRF) reported revenue of $64.92 million for the quarter ended December 2025, marking a year-over-year increase of 5% and exceeding the Zacks Consensus Estimate of $64.55 million by 0.58% [1] - The company's earnings per share (EPS) for the same period was $1.11, compared to $0.87 a year ago, representing an EPS surprise of 2.47% against the consensus estimate of $1.08 [1] Financial Metrics - The efficiency ratio was reported at 57.5%, higher than the three-analyst average estimate of 56.7% [4] - Average interest-earning assets amounted to $5.08 billion, slightly above the estimated $5.03 billion [4] - The net interest margin was recorded at 4%, compared to the average estimate of 4.1% [4] - Total non-interest income reached $14.39 million, exceeding the average estimate of $13.06 million [4] - Other income was reported at $2.17 million, above the average estimate of $1.99 million [4] - Interchange income was $1.55 million, below the average estimate of $1.8 million [4] - Service charges on deposit accounts totaled $3.23 million, surpassing the average estimate of $2.91 million [4] - Wealth management income was reported at $5.74 million, exceeding the average estimate of $5.17 million [4] - Net interest income was $50.53 million, below the average estimate of $51.55 million [4] Stock Performance - Shares of Orrstown have returned +0.9% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Orrstown Financial Services reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $1.08 per share, and showing an increase from $0.87 per share a year ago, resulting in an earnings surprise of +2.47% [1] - The company achieved revenues of $64.92 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.58%, and up from $61.82 million in the previous year [2] - Orrstown has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] 分组2 - The stock has gained approximately 1.8% since the beginning of the year, compared to the S&P 500's gain of 1.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.05 on revenues of $63.7 million, and for the current fiscal year, it is $4.41 on revenues of $260.45 million [7] 分组3 - The Zacks Industry Rank indicates that the Banks - Northeast sector is currently in the top 22% of over 250 Zacks industries, suggesting a favorable environment for performance [8] - The estimate revisions trend for Orrstown was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Core Insights - Orrstown Financial Services, Inc. reported a net income of $21.5 million for Q4 2025, a slight decrease from $21.9 million in Q3 2025, but a significant increase from $13.7 million in Q4 2024 [1][9] - For the full year 2025, net income reached $80.9 million, up from $22.1 million in 2024, with diluted earnings per share increasing to $4.18 from $1.48 [2][9] - The company achieved its highest annual net income in history, driven by strong margin performance and growth in noninterest income [3] Financial Performance - Net interest income for Q4 2025 was $50.5 million, slightly down from $51.0 million in Q3 2025, with a net interest margin of 4.00% compared to 4.11% in the previous quarter [10][9] - Noninterest income increased by $1.0 million to $14.4 million in Q4 2025, attributed to growth in wealth management and swap fee income [17][18] - Noninterest expenses rose to $37.4 million in Q4 2025 from $36.3 million in Q3 2025, primarily due to increased healthcare and professional service costs [19] Balance Sheet Highlights - Loans held for investment increased by $41.0 million to $4.0 billion as of December 31, 2025, with commercial loans growing by approximately 3% annualized [4] - Investment securities rose by $62.3 million to $952.7 million, with purchases of $124.9 million during Q4 2025 [5] - Total deposits decreased by $4.8 million to $4.5 billion, with a loan-to-deposit ratio of 89% [6] Credit Quality - The allowance for credit losses on loans decreased to $47.7 million, representing 1.19% of total loans [15][29] - Classified loans decreased by $5.7 million to $58.4 million, while non-accrual loans increased to $28.0 million [16] Capital and Ratios - Shareholders' equity increased to $591.5 million from $571.9 million, with a tangible common equity ratio of 9.0% [23][24] - The company's capital ratios improved, with tier 1 common equity at 11.5% and total risk-based capital at 13.3% as of December 31, 2025 [25][26]

Group 1 - Orrstown Financial Services, Inc. will report its fourth quarter 2025 earnings on January 27, 2026, after market close [1] - A conference call and webcast to discuss the quarterly results will take place on January 28, 2026, at 9:00 am ET [1] - The company has $5.5 billion in assets and provides a range of financial services across multiple counties in Pennsylvania and Maryland [4] Group 2 - Interested parties can access the conference call via a webcast link provided [2] - For those who prefer to listen by phone, several toll and toll-free numbers are available for participation [2] - An audio recording of the conference call will be accessible until February 4, 2026, through specified telephone numbers [3]