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

Core Viewpoint Orrstown Financial Services, Inc. reported strong financial performance for the second quarter of 2025, with significant increases in net income and earnings per share compared to previous quarters, driven by improved net interest margins and effective management of expenses and credit quality. Financial Performance - Net income for the three months ended June 30, 2025, was $19.4 million, up from $18.1 million in the previous quarter and $7.7 million in the same quarter last year [1][8] - Diluted earnings per share increased to $1.01 from $0.93 in the first quarter of 2025 and $0.73 in the second quarter of 2024 [1][8] - Excluding merger-related expenses, net income was $20.2 million and diluted earnings per share was $1.04 for the second quarter of 2025 [1][8] Balance Sheet Highlights - Loans held for investment rose by $55.4 million to $3.9 billion from March 31, 2025 [3] - Investment securities increased by $29.9 million to $885.4 million [4] - Total deposits decreased by $117.1 million to $4.5 billion, leading to an increase in the loan-to-deposit ratio to 87% [5] Income Statement Insights - Net interest income was $49.5 million, up from $48.8 million in the previous quarter [7] - The net interest margin improved to 4.07% from 4.00% in the first quarter of 2025, primarily due to a decline in the cost of funds [7][9] - Noninterest income increased by $1.3 million to $12.9 million [16] Credit Quality and Provisions - The allowance for credit losses on loans increased slightly to $47.9 million, with a provision expense of $0.2 million for the quarter [14] - Classified loans decreased by $10.4 million to $65.8 million, indicating improved asset quality [15] Noninterest Expenses - Noninterest expenses decreased by $0.6 million to $37.6 million, reflecting a decline in merger-related expenses [19][20] - Salaries and benefits expense increased by $1.0 million, including severance costs and merit salary increases [21] Capital and Shareholder Returns - Shareholders' equity rose to $548.4 million from $532.9 million, driven by net income and share-based compensation [26] - The Board of Directors declared a cash dividend of $0.27 per share, a 35% increase since the merger with Codorus Valley Bancorp [8][30]