Orrstown Financial Services, Inc. Reports Second Quarter 2024 Results and Increases Quarterly Dividend by $0.03 per Share

Core Insights - Orrstown Financial Services, Inc. completed a merger with Codorus Valley Bancorp, significantly increasing the company's size and scale, which is expected to enhance profitability and shareholder value [2][3] Financial Performance - For the three months ended June 30, 2024, net income was $7.7 million, down from $8.5 million in the previous quarter and $9.8 million in the same quarter last year [1][10] - Diluted earnings per share for the same period were $0.73, compared to $0.81 in the first quarter of 2024 and $0.94 in the second quarter of 2023 [1][10] - Excluding merger-related expenses, net income and diluted earnings per share were $8.7 million and $0.83, respectively, for the second quarter of 2024 [1][10] Balance Sheet Highlights - Loans held for investment increased by $44.5 million, or 8% annualized, from March 31, 2024, to June 30, 2024 [3] - Total assets reached approximately $3.2 billion as of June 30, 2024, up from $3.1 billion at the end of the previous quarter [11] - Nonaccrual loans decreased to $8.4 million, down from $12.9 million at March 31, 2024 [1][19] Income Statement Analysis - Net interest income for the second quarter of 2024 was $26.1 million, a slight decrease from $26.9 million in the first quarter [5][19] - The net interest margin decreased to 3.54% in the second quarter from 3.77% in the first quarter, impacted by higher funding costs [5][19] - Non-interest income increased by $0.6 million to $7.2 million for the three months ended June 30, 2024, compared to the previous quarter [1][19] Capital and Dividends - Shareholders' equity increased to $278.4 million at June 30, 2024, from $271.7 million at March 31, 2024, primarily due to net income [19] - The Board declared a cash dividend of $0.23 per common share, representing a 15% increase from the previous quarter [1][10] Loan and Deposit Trends - Total deposits remained stable at approximately $2.7 billion, with time deposits increasing by $32.5 million [4][19] - The loan-to-deposit ratio increased slightly to 87% at June 30, 2024, from 85% at March 31, 2024 [4][19] Merger-Related Insights - The merger with Codorus Valley Bancorp is expected to yield cost savings and integration benefits, with a timeline for completion by November 2024 [2][19] - Merger-related expenses totaled $1.1 million for the second quarter of 2024, an increase from $0.7 million in the first quarter [1][19]