Orrstown Financial Services, Inc. Reports First Quarter 2024 Results
- Net income increased to $8.5 million for the first quarter of 2024 from $7.6 million in the previous quarter.
- Diluted earnings per share rose to $0.81 for the first quarter of 2024 from $0.73 in the previous quarter.
- Nonaccrual loans decreased to $12.9 million at March 31, 2024, from $25.5 million at December 31, 2023.
- Deposit growth was $137.1 million during the first quarter of 2024 compared to $12.4 million in the previous quarter.
- The Board of Directors declared a cash dividend of $0.20 per common share, payable on May 14, 2024.
- Excluding merger-related expenses, net income and diluted earnings per share showed growth compared to the previous quarter.
- None.
Insights
Reviewing Orrstown Financial Services, Inc.'s first quarter financials for 2024, several key indicators suggest a stable, albeit modest, financial performance. The net income has shown an uptick from $7.6 million (
Investors should note the improvement in the net interest margin, which grew from 3.71% to 3.77%, reflecting a more efficient earning from the net interest-bearing assets. Return on average equity, a measure of financial profitability that gauges how well a company uses reinvested earnings to generate additional earnings, is robust at 12.79%, showing an increase from 12.21% the previous quarter. However, normalized for merger-related expenses, it remains nearly flat. This suggests that underlying profitability is stable.
Such performance metrics are important for investors seeking steady returns and dividend sustainability. The Board has declared a
The significant reduction in nonaccrual loans from $25.5 million to $12.9 million is a positive sign of credit risk management and asset quality improvement. Nonaccrual loans to total loans dropped from 1.11% to 0.56%, half of the prior rate, following the payoff of a sizable commercial real estate loan. This improvement impacts the bank's risk profile favorably and releasing provisions for credit losses which could be redeployed or used to improve the bottom line.
Deposit growth of $137.1 million is also commendable, suggesting customer confidence and solid liquidity management. A diversified deposit portfolio can cushion against market volatility and interest rate changes. The loan-to-deposit ratio has dropped to 85% from 90%, indicating reduced liquidity risk.
Orrstown Financial Services has shown resilience amid market fluctuations, as indicated by the steady deposit growth and a marginal increase in net interest margin. The competitive landscape for regional banks is fierce and strong deposit growth can provide a strategic advantage in terms of funding and lending capabilities. The merger with Codorus Valley Bancorp, Inc. could position Orrstown to leverage economies of scale and broaden its market presence.
Investors should be encouraged by the tangible book value per common share increase to
- Net income of
$8.5 million and diluted earnings per share of$0.81 for the three months ended March 31, 2024 compared to net income of$7.6 million and diluted earnings per share of$0.73 for the three months ended December 31, 2023; - Excluding the impact of
$0.7 million in expenses related to the pending merger of equals transaction with Codorus Valley Bancorp, Inc., net income and diluted earnings per share, respectively, were$9.2 million (1) and$0.88 (1) for the first quarter of 2024 compared to net income and diluted earnings per share of$8.6 million (1) and$0.83 (1), respectively, excluding the impact of$1.1 million in merger-related expenses recorded for the fourth quarter of 2023; - As a result of the payoff of a commercial real estate loan which totaled
$13.4 million at December 31, 2023, nonaccrual loans decreased to$12.9 million at March 31, 2024 from$25.5 million at December 31, 2023; nonaccrual loans to total loans declined to0.56% at March 31, 2024 from1.11% at December 31, 2023; - Net interest margin, on a tax equivalent basis, was
3.77% in the first quarter of 2024 compared to3.71% in the fourth quarter of 2023; during the three months ended March 31, 2024, the Bank recognized interest income previously applied to principal of$1.6 million from the loan payoff noted above; - Return on average equity for the three months ended March 31, 2024 was
12.79% compared to12.21% for the three months ended December 31, 2023; excluding the aforementioned merger-related expenses in both periods, return on average equity was13.79% (1) for the three months ended March 31, 2024 compared to13.77% (1) for the three months ended December 31, 2023; - Deposit growth was
$137.1 million during the first quarter of 2024 compared to$12.4 million during the fourth quarter of 2023; - Total risk-based capital was
13.4% at March 31, 2024 compared to13.0% at December 31, 2023; - Tangible book value per common share(1) improved to
$23.47 per share at March 31, 2024 compared to$23.03 per share at December 31, 2023; - The Board of Directors declared a cash dividend of
$0.20 per common share, payable May 14, 2024, to shareholders of record as of May 7, 2024.
SHIPPENSBURG, Pa., April 23, 2024 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown" or the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months March 31, 2024. Net income totaled
(1) Non-GAAP measure. See Appendix A for additional information.
"We began this year with another solid quarter, highlighted by strong earnings. The successful workout of a large commercial real estate loan that entered non-accrual status at the end of 2022 aided our first quarter performance. Our team remains conscious of the current credit environment as we seek to limit risk while still taking steps to grow prudently. Excluding loan payoff activity that we initiated, we experienced modest loan growth and expect that to continue throughout the year. Orrstown's Wealth Management team is leading the way in generating strong fee income. As in prior years, expenses were higher in the first quarter and, excluding merger-related costs, are expected to normalize in the second quarter. Our liquidity position was bolstered by strong deposit growth, which included successful CD and money market production, as well as seasonal and short-term balances from which we expect some runoff,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.
DISCUSSION OF RESULTS
Balance Sheet
Loans
Loans held for investment increased by
Loans held-for-sale decreased by
Investment Securities
Investment securities, all of which are classified as available-for-sale, increased by
Deposits
During the first quarter of 2024, deposits increased by
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 decreased by
Income Statement
Net Interest Income and Margin
Net interest income was
Interest income on loans, on a tax equivalent basis, increased by
Interest income on investment securities, on a tax equivalent basis, was
Interest expense, on a tax equivalent basis, increased by
Provision for Credit Losses
The Company recorded a provision for credit losses of
Special mention loans decreased by
Management regularly analyzes the commercial real estate portfolio, which includes the review of occupancy, cash flows, expenses and expiring leases, as well as the location of the real estate. At March 31, 2024, the Company had
Noninterest Income
Noninterest income increased by
For the three months ended March 31, 2024, mortgage banking income increased by
Wealth management income increased by
During the first quarter of 2024, the Company recorded swap fee income of
Noninterest Expenses
Noninterest expenses increased by
Salaries and benefits expense increased by
Other operating expenses decreased by
For the three months ended March 31, 2024, merger-related expenses totaled
Taxes other than income increased by
Income Taxes
The Company's effective tax rate for the first quarter of 2024 was
Capital
Shareholders’ equity totaled
Tangible book value per share(1) increased to
The Company's tangible common equity ratio decreased to
(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 |
ORRSTOWN FINANCIAL SERVICES, INC. | ||||||||
FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
(Dollars in thousands) | 2024 | 2023 | ||||||
Profitability for the period: | ||||||||
Net interest income | $ | 26,881 | $ | 26,294 | ||||
Provision for credit losses | 298 | 729 | ||||||
Noninterest income | 6,630 | 6,078 | ||||||
Noninterest expenses | 22,469 | 20,255 | ||||||
Income before income tax expense | 10,744 | 11,388 | ||||||
Income tax expense | 2,213 | 2,232 | ||||||
Net income available to common shareholders | $ | 8,531 | $ | 9,156 | ||||
Financial ratios: | ||||||||
Return on average assets (1) | 1.11 | % | 1.27 | % | ||||
Return on average assets, adjusted (1) (2) (3) | 1.19 | % | 1.27 | % | ||||
Return on average equity (1) | 12.79 | % | 15.88 | % | ||||
Return on average equity, adjusted (1) (2) (3) | 13.79 | % | 15.88 | % | ||||
Net interest margin (1) | 3.77 | % | 3.94 | % | ||||
Efficiency ratio | 67.0 | % | 62.6 | % | ||||
Efficiency ratio, adjusted (2) (3) | 65.0 | % | 62.6 | % | ||||
Income per common share: | ||||||||
Basic | $ | 0.82 | $ | 0.88 | ||||
Basic, adjusted (2) (3) | $ | 0.89 | $ | 0.88 | ||||
Diluted | $ | 0.81 | $ | 0.87 | ||||
Diluted, adjusted (2) (3) | $ | 0.88 | $ | 0.87 | ||||
Average equity to average assets | 8.66 | % | 7.97 | % | ||||
(1) Annualized for the three months ended March 31, 2024 and 2023. | ||||||||
(2) Ratio for the three months ended March 31, 2024 has been adjusted for merger-related costs. | ||||||||
(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. | ||||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||
FINANCIAL HIGHLIGHTS (Unaudited) | |||||||
(continued) | |||||||
March 31, | December 31, | ||||||
(Dollars in thousands, except per share amounts) | 2024 | 2023 | |||||
At period-end: | |||||||
Total assets | $ | 3,183,331 | $ | 3,064,240 | |||
Total deposits | 2,695,951 | 2,558,814 | |||||
Loans, net of allowance for credit losses | 2,273,908 | 2,269,611 | |||||
Loans held-for-sale, at fair value | 535 | 5,816 | |||||
Securities available for sale, at fair value | 514,909 | 513,519 | |||||
Borrowings | 127,099 | 147,285 | |||||
Subordinated notes | 32,111 | 32,093 | |||||
Shareholders' equity | 271,682 | 265,056 | |||||
Credit quality and capital ratios(1): | |||||||
Allowance for credit losses to total loans | 1.27 | % | 1.25 | % | |||
Total nonaccrual loans to total loans | 0.56 | % | 1.11 | % | |||
Nonperforming assets to total assets | 0.40 | % | 0.83 | % | |||
Allowance for credit losses to nonaccrual loans | 226 | % | 112 | % | |||
Total risk-based capital: | |||||||
Orrstown Financial Services, Inc. | 13.4 | % | 13.0 | % | |||
Orrstown Bank | 13.1 | % | 12.8 | % | |||
Tier 1 risk-based capital: | |||||||
Orrstown Financial Services, Inc. | 11.2 | % | 10.8 | % | |||
Orrstown Bank | 11.9 | % | 11.6 | % | |||
Tier 1 common equity risk-based capital: | |||||||
Orrstown Financial Services, Inc. | 11.2 | % | 10.8 | % | |||
Orrstown Bank | 11.9 | % | 11.6 | % | |||
Tier 1 leverage capital: | |||||||
Orrstown Financial Services, Inc. | 9.0 | % | 8.9 | % | |||
Orrstown Bank | 9.6 | % | 9.5 | % | |||
Book value per common share | $ | 25.38 | $ | 24.98 | |||
(1) Capital ratios are estimated, 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. | |||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
(Dollars in thousands, except per share amounts) | March 31, 2024 | December 31, 2023 | |||||
Assets | |||||||
Cash and due from banks | $ | 23,552 | $ | 32,586 | |||
Interest-bearing deposits with banks | 159,170 | 32,575 | |||||
Cash and cash equivalents | 182,722 | 65,161 | |||||
Restricted investments in bank stocks | 11,453 | 11,992 | |||||
Securities available for sale (amortized cost of | 514,909 | 513,519 | |||||
Loans held for sale, at fair value | 535 | 5,816 | |||||
Loans | 2,303,073 | 2,298,313 | |||||
Less: Allowance for credit losses | (29,165 | ) | (28,702 | ) | |||
Net loans | 2,273,908 | 2,269,611 | |||||
Premises and equipment, net | 28,952 | 29,393 | |||||
Cash surrender value of life insurance | 73,656 | 73,204 | |||||
Goodwill | 18,724 | 18,724 | |||||
Other intangible assets, net | 2,189 | 2,414 | |||||
Accrued interest receivable | 13,496 | 13,630 | |||||
Deferred tax assets, net | 21,181 | 22,017 | |||||
Other assets | 41,606 | 38,759 | |||||
Total assets | $ | 3,183,331 | $ | 3,064,240 | |||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 418,512 | $ | 430,959 | |||
Interest-bearing | 2,277,439 | 2,127,855 | |||||
Total deposits | 2,695,951 | 2,558,814 | |||||
Securities sold under agreements to repurchase and federal funds purchased | 12,099 | 9,785 | |||||
FHLB advances and other borrowings | 115,000 | 137,500 | |||||
Subordinated notes | 32,111 | 32,093 | |||||
Accrued interest and other liabilities | 56,488 | 60,992 | |||||
Total liabilities | 2,911,649 | 2,799,184 | |||||
Shareholders’ Equity | |||||||
Preferred stock, | — | — | |||||
Common stock, no par value— | 583 | 583 | |||||
Additional paid—in capital | 187,267 | 189,027 | |||||
Retained earnings | 124,075 | 117,667 | |||||
Accumulated other comprehensive losses | (28,668 | ) | (28,476 | ) | |||
Treasury stock— 498,144 and 592,209 shares, at cost at March 31, 2024 and December 31, 2023, respectively | (11,575 | ) | (13,745 | ) | |||
Total shareholders’ equity | 271,682 | 265,056 | |||||
Total liabilities and shareholders’ equity | $ | 3,183,331 | $ | 3,064,240 | |||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
(In thousands) | 2024 | 2023 | |||||||
Interest income | |||||||||
Loans | $ | 36,233 | $ | 28,744 | |||||
Investment securities - taxable | 4,584 | 4,370 | |||||||
Investment securities - tax-exempt | 877 | 865 | |||||||
Short-term investments | 956 | 298 | |||||||
Total interest income | 42,650 | 34,277 | |||||||
Interest expense | |||||||||
Deposits | 13,516 | 6,202 | |||||||
Securities sold under agreements to repurchase and federal funds purchased | 25 | 25 | |||||||
FHLB advances and other borrowings | 1,474 | 1,252 | |||||||
Subordinated notes | 754 | 504 | |||||||
Total interest expense | 15,769 | 7,983 | |||||||
Net interest income | 26,881 | 26,294 | |||||||
Provision for credit losses | 298 | 729 | |||||||
Net interest income after provision for credit losses | 26,583 | 25,565 | |||||||
Noninterest income | |||||||||
Service charges | 1,200 | 1,157 | |||||||
Interchange income | 911 | 965 | |||||||
Swap fee income | 199 | — | |||||||
Wealth management income | 3,102 | 2,747 | |||||||
Mortgage banking activities | 458 | 478 | |||||||
Investment securities losses | (5 | ) | (8 | ) | |||||
Other income | 765 | 739 | |||||||
Total noninterest income | 6,630 | 6,078 | |||||||
Noninterest expenses | |||||||||
Salaries and employee benefits | 13,752 | 12,196 | |||||||
Occupancy, furniture and equipment | 2,639 | 2,333 | |||||||
Data processing | 1,265 | 1,217 | |||||||
Advertising and bank promotions | 398 | 405 | |||||||
FDIC insurance | 441 | 504 | |||||||
Professional services | 631 | 734 | |||||||
Taxes other than income | 494 | 457 | |||||||
Intangible asset amortization | 225 | 250 | |||||||
Merger-related expenses | 672 | — | |||||||
Other operating expenses | 1,952 | 2,159 | |||||||
Total noninterest expenses | 22,469 | 20,255 | |||||||
Income before income tax expense | 10,744 | 11,388 | |||||||
Income tax expense | 2,213 | 2,232 | |||||||
Net income | $ | 8,531 | $ | 9,156 | |||||
Share information: | |||||||||
Basic earnings per share | $ | 0.82 | $ | 0.88 | |||||
Diluted earnings per share | $ | 0.81 | $ | 0.87 | |||||
Dividends paid per share | $ | 0.20 | $ | 0.20 | |||||
Weighted average shares - basic | 10,349 | 10,385 | |||||||
Weighted average shares - diluted | 10,482 | 10,496 | |||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||
ANALYSIS OF NET INTEREST INCOME | |||||||||||||||||||||||||||||||||||||||||||||||||
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||||||||||||||||||||||||||||||||
Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | ||||||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold & interest-bearing bank balances | $ | 74,523 | $ | 956 | 5.16 | % | $ | 37,873 | $ | 460 | 4.82 | % | $ | 57,778 | $ | 633 | 4.35 | % | $ | 37,895 | $ | 418 | 4.42 | % | $ | 29,599 | $ | 298 | 4.07 | % | |||||||||||||||||||
Investment securities (1)(2) | 519,851 | 5,694 | 4.39 | 508,891 | 5,890 | 4.63 | 521,234 | 5,548 | 4.26 | 526,225 | 5,510 | 4.19 | 525,685 | 5,465 | 4.18 | ||||||||||||||||||||||||||||||||||
Loans (1)(3)(4)(5) | 2,308,103 | 36,382 | 6.34 | 2,286,678 | 34,055 | 5.91 | 2,256,727 | 32,878 | 5.78 | 2,233,312 | 31,329 | 5.63 | 2,180,224 | 28,844 | 5.36 | ||||||||||||||||||||||||||||||||||
Total interest-earning assets | 2,902,477 | 43,032 | 5.96 | 2,833,442 | 40,405 | 5.67 | 2,835,739 | 39,059 | 5.47 | 2,797,432 | 37,257 | 5.34 | 2,735,508 | 34,607 | 5.12 | ||||||||||||||||||||||||||||||||||
Other assets | 196,295 | 204,382 | 200,447 | 191,983 | 197,620 | ||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 3,098,772 | $ | 3,037,824 | $ | 3,036,186 | $ | 2,989,415 | $ | 2,933,128 | |||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,570,622 | 9,192 | 2.35 | $ | 1,543,575 | 8,333 | 2.14 | $ | 1,541,728 | 7,476 | 1.92 | $ | 1,511,468 | 6,273 | 1.66 | $ | 1,503,421 | 4,862 | 1.31 | |||||||||||||||||||||||||||||
Savings deposits | 170,005 | 144 | 0.34 | 178,351 | 153 | 0.34 | 190,817 | 164 | 0.34 | 204,584 | 135 | 0.26 | 219,408 | 133 | 0.25 | ||||||||||||||||||||||||||||||||||
Time deposits | 428,443 | 4,180 | 3.92 | 392,085 | 3,632 | 3.67 | 357,194 | 2,942 | 3.27 | 326,034 | 2,200 | 2.71 | 275,880 | 1,207 | 1.78 | ||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 2,169,070 | 13,516 | 2.51 | 2,114,011 | 12,118 | 2.27 | 2,089,739 | 10,582 | 2.01 | 2,042,086 | 8,608 | 1.69 | 1,998,709 | 6,202 | 1.26 | ||||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 12,010 | 25 | 0.85 | 13,874 | 30 | 0.85 | 15,006 | 31 | 0.83 | 13,685 | 28 | 0.82 | 13,868 | 25 | 0.72 | ||||||||||||||||||||||||||||||||||
FHLB advances and other borrowings | 137,505 | 1,474 | 4.31 | 127,843 | 1,358 | 4.21 | 128,131 | 1,354 | 4.19 | 132,094 | 1,386 | 4.21 | 106,434 | 1,252 | 4.77 | ||||||||||||||||||||||||||||||||||
Subordinated notes | 32,100 | 754 | 9.45 | 32,083 | 504 | 6.29 | 32,066 | 505 | 6.29 | 32,049 | 504 | 6.29 | 32,033 | 504 | 6.29 | ||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 2,350,685 | 15,769 | 2.70 | 2,287,811 | 14,010 | 2.43 | 2,264,942 | 12,472 | 2.19 | 2,219,914 | 10,526 | 1.90 | 2,151,044 | 7,983 | 1.50 | ||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 417,469 | 441,695 | 468,628 | 476,123 | 495,562 | ||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 62,329 | 59,876 | 54,353 | 50,851 | 52,630 | ||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 2,830,483 | 2,789,382 | 2,787,923 | 2,746,888 | 2,699,236 | ||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | 268,289 | 248,442 | 248,263 | 242,527 | 233,892 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,098,772 | $ | 3,037,824 | $ | 3,036,186 | $ | 2,989,415 | $ | 2,933,128 | |||||||||||||||||||||||||||||||||||||||
Taxable-equivalent net interest income / net interest spread | 27,263 | 3.26 | % | 26,395 | 3.24 | % | 26,587 | 3.29 | % | 26,731 | 3.44 | % | 26,624 | 3.62 | % | ||||||||||||||||||||||||||||||||||
Taxable-equivalent net interest margin | 3.77 | % | 3.71 | % | 3.73 | % | 3.83 | % | 3.94 | % | |||||||||||||||||||||||||||||||||||||||
Taxable-equivalent adjustment | (382 | ) | (377 | ) | (368 | ) | (356 | ) | (330 | ) | |||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 26,881 | $ | 26,018 | $ | 26,219 | $ | 26,375 | $ | 26,294 | |||||||||||||||||||||||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 123 | % | 124 | % | 125 | % | 126 | % | 127 | % | |||||||||||||||||||||||||||||||||||||||
NOTES: | |||||||||||||||||||||||||||||||||||||||||||||||||
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a | |||||||||||||||||||||||||||||||||||||||||||||||||
(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 | |||||||||||||||||||||||||||||||||||||||||||||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
(In thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||||
Profitability for the quarter: | |||||||||||||||||||
Net interest income | $ | 26,881 | $ | 26,018 | $ | 26,219 | $ | 26,375 | $ | 26,294 | |||||||||
Provision for credit losses | 298 | 418 | 136 | 399 | 729 | ||||||||||||||
Noninterest income | 6,630 | 6,491 | 5,925 | 7,158 | 6,078 | ||||||||||||||
Noninterest expenses | 22,469 | 22,392 | 20,447 | 20,749 | 20,255 | ||||||||||||||
Income before income taxes | 10,744 | 9,699 | 11,561 | 12,385 | 11,388 | ||||||||||||||
Income tax expense | 2,213 | 2,056 | 2,535 | 2,547 | 2,232 | ||||||||||||||
Net income | $ | 8,531 | $ | 7,643 | $ | 9,026 | $ | 9,838 | $ | 9,156 | |||||||||
Financial ratios: | |||||||||||||||||||
Return on average assets(1) | 1.11 | % | 1.00 | % | 1.18 | % | 1.32 | % | 1.27 | % | |||||||||
Return on average assets, adjusted(1)(2)(3) | 1.19 | % | 1.13 | % | 1.18 | % | 1.32 | % | 1.27 | % | |||||||||
Return on average equity(1) | 12.79 | % | 12.21 | % | 14.42 | % | 16.27 | % | 15.88 | % | |||||||||
Return on average equity, adjusted(1)(2)(3) | 13.79 | % | 13.77 | % | 14.42 | % | 16.27 | % | 15.88 | % | |||||||||
Net interest margin(1) | 3.77 | % | 3.71 | % | 3.73 | % | 3.83 | % | 3.94 | % | |||||||||
Efficiency ratio | 67.0 | % | 68.9 | % | 63.6 | % | 61.9 | % | 62.6 | % | |||||||||
Efficiency ratio, adjusted(2)(3) | 65.0 | % | 65.6 | % | 63.6 | % | 61.9 | % | 62.6 | % | |||||||||
Per share information: | |||||||||||||||||||
Income per common share: | |||||||||||||||||||
Basic | $ | 0.82 | $ | 0.74 | $ | 0.87 | $ | 0.95 | $ | 0.88 | |||||||||
Basic, adjusted(2)(3) | 0.89 | 0.84 | 0.87 | 0.95 | 0.88 | ||||||||||||||
Diluted | 0.81 | 0.73 | 0.87 | 0.94 | 0.87 | ||||||||||||||
Diluted, adjusted(2)(3) | 0.88 | 0.83 | 0.87 | 0.94 | 0.87 | ||||||||||||||
Book value | 25.38 | 24.98 | 22.90 | 23.15 | 22.46 | ||||||||||||||
Tangible book value | 23.47 | 23.03 | 20.94 | 21.19 | 20.50 | ||||||||||||||
Cash dividends paid | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | ||||||||||||||
Average basic shares | 10,349 | 10,321 | 10,319 | 10,336 | 10,385 | ||||||||||||||
Average diluted shares | 10,482 | 10,419 | 10,405 | 10,421 | 10,496 | ||||||||||||||
(1) Annualized. | |||||||||||||||||||
(2) Ratio has been adjusted for the merger-related costs for the three months ended March 31, 2024 and December 31, 2023. | |||||||||||||||||||
(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. | |||||||||||||||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
(continued) | |||||||||||||||||||
(In thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges | $ | 1,200 | $ | 1,198 | $ | 1,260 | $ | 1,251 | $ | 1,157 | |||||||||
Interchange income | 911 | 952 | 963 | 993 | 965 | ||||||||||||||
Swap fee income | 199 | 588 | 255 | 196 | — | ||||||||||||||
Wealth management income | 3,102 | 2,945 | 2,826 | 2,822 | 2,747 | ||||||||||||||
Mortgage banking activities | 458 | 143 | (142 | ) | 112 | 478 | |||||||||||||
Other income | 765 | 704 | 761 | 1,786 | 739 | ||||||||||||||
Investment securities (losses) gains | (5 | ) | (39 | ) | 2 | (2 | ) | (8 | ) | ||||||||||
Total noninterest income | $ | 6,630 | $ | 6,491 | $ | 5,925 | $ | 7,158 | $ | 6,078 | |||||||||
Noninterest expenses: | |||||||||||||||||||
Salaries and employee benefits | $ | 13,752 | $ | 12,848 | $ | 12,885 | $ | 13,054 | $ | 12,196 | |||||||||
Occupancy, furniture and equipment | 2,639 | 2,534 | 2,460 | 2,266 | 2,333 | ||||||||||||||
Data processing | 1,265 | 1,247 | 1,248 | 1,201 | 1,217 | ||||||||||||||
Advertising and bank promotions | 398 | 501 | 332 | 919 | 405 | ||||||||||||||
FDIC insurance | 441 | 460 | 477 | 519 | 504 | ||||||||||||||
Professional services | 631 | 702 | 965 | 504 | 734 | ||||||||||||||
Taxes other than income | 494 | 203 | 387 | 3 | 457 | ||||||||||||||
Intangible asset amortization | 225 | 236 | 228 | 239 | 250 | ||||||||||||||
Merger-related expenses | 672 | 1,059 | — | — | — | ||||||||||||||
Other operating expenses | 1,952 | 2,602 | 1,465 | 2,044 | 2,159 | ||||||||||||||
Total noninterest expenses | $ | 22,469 | $ | 22,392 | $ | 20,447 | $ | 20,749 | $ | 20,255 | |||||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
(continued) | |||||||||||||||||||
(In thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||||
Balance Sheet at quarter end: | |||||||||||||||||||
Cash and cash equivalents | $ | 182,722 | $ | 65,161 | $ | 94,939 | $ | 76,318 | $ | 98,323 | |||||||||
Restricted investments in bank stocks | 11,453 | 11,992 | 12,987 | 12,602 | 12,869 | ||||||||||||||
Securities available for sale | 514,909 | 513,519 | 495,162 | 508,612 | 520,232 | ||||||||||||||
Loans held for sale, at fair value | 535 | 5,816 | 6,448 | 6,450 | 7,341 | ||||||||||||||
Loans: | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||
Owner occupied | 364,280 | 373,757 | 376,350 | 366,439 | 339,371 | ||||||||||||||
Non-owner occupied | 707,871 | 694,638 | 630,514 | 626,140 | 603,396 | ||||||||||||||
Multi-family | 147,773 | 150,675 | 143,437 | 145,257 | 144,053 | ||||||||||||||
Non-owner occupied residential | 91,858 | 95,040 | 100,391 | 105,504 | 106,390 | ||||||||||||||
Commercial and industrial | 365,524 | 367,085 | 374,190 | 379,905 | 380,683 | ||||||||||||||
Acquisition and development: | |||||||||||||||||||
1-4 family residential construction | 22,277 | 24,516 | 25,642 | 20,461 | 20,941 | ||||||||||||||
Commercial and land development | 118,010 | 115,249 | 153,279 | 143,177 | 174,556 | ||||||||||||||
Municipal | 10,925 | 9,812 | 10,334 | 10,638 | 11,329 | ||||||||||||||
Total commercial loans | 1,828,518 | 1,830,772 | 1,814,137 | 1,797,521 | 1,780,719 | ||||||||||||||
Residential mortgage: | |||||||||||||||||||
First lien | 270,748 | 266,239 | 248,335 | 235,813 | 227,031 | ||||||||||||||
Home equity – term | 4,966 | 5,078 | 5,223 | 5,228 | 5,371 | ||||||||||||||
Home equity – lines of credit | 189,966 | 186,450 | 188,736 | 185,099 | 183,340 | ||||||||||||||
Installment and other loans | 8,875 | 9,774 | 10,405 | 10,756 | 11,040 | ||||||||||||||
Total loans | 2,303,073 | 2,298,313 | 2,266,836 | 2,234,417 | 2,207,501 | ||||||||||||||
Allowance for credit losses | (29,165 | ) | (28,702 | ) | (28,278 | ) | (28,383 | ) | (28,364 | ) | |||||||||
Net loans held-for-investment | 2,273,908 | 2,269,611 | 2,238,558 | 2,206,034 | 2,179,137 | ||||||||||||||
Goodwill | 18,724 | 18,724 | 18,724 | 18,724 | 18,724 | ||||||||||||||
Other intangible assets, net | 2,189 | 2,414 | 2,650 | 2,589 | 2,828 | ||||||||||||||
Total assets | 3,183,331 | 3,064,240 | 3,054,435 | 3,008,197 | 3,011,548 | ||||||||||||||
Total deposits | 2,695,951 | 2,558,814 | 2,546,435 | 2,522,861 | 2,515,626 | ||||||||||||||
Borrowings | 127,099 | 147,285 | 175,241 | 152,229 | 176,315 | ||||||||||||||
Subordinated notes | 32,111 | 32,093 | 32,076 | 32,059 | 32,042 | ||||||||||||||
Total shareholders' equity | 271,682 | 265,056 | 243,080 | 245,641 | 240,161 | ||||||||||||||
ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
(continued) | |||||||||||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
Capital and credit quality measures(1): | |||||||||||||||||||
Total risk-based capital: | |||||||||||||||||||
Orrstown Financial Services, Inc | 13.4 | % | 13.0 | % | 13.0 | % | 13.0 | % | 12.8 | % | |||||||||
Orrstown Bank | 13.1 | % | 12.8 | % | 12.5 | % | 12.5 | % | 12.4 | % | |||||||||
Tier 1 risk-based capital: | |||||||||||||||||||
Orrstown Financial Services, Inc | 11.2 | % | 10.8 | % | 10.6 | % | 10.5 | % | 10.4 | % | |||||||||
Orrstown Bank | 11.9 | % | 11.6 | % | 11.4 | % | 11.4 | % | 11.2 | % | |||||||||
Tier 1 common equity risk-based capital: | |||||||||||||||||||
Orrstown Financial Services, Inc | 11.2 | % | 10.8 | % | 10.6 | % | 10.5 | % | 10.4 | % | |||||||||
Orrstown Bank | 11.9 | % | 11.6 | % | 11.4 | % | 11.4 | % | 11.2 | % | |||||||||
Tier 1 leverage capital: | |||||||||||||||||||
Orrstown Financial Services, Inc | 9.0 | % | 8.9 | % | 8.7 | % | 8.6 | % | 8.5 | % | |||||||||
Orrstown Bank | 9.6 | % | 9.5 | % | 9.3 | % | 9.3 | % | 9.2 | % | |||||||||
Average equity to average assets | 8.66 | % | 8.18 | % | 8.18 | % | 8.11 | % | 7.97 | % | |||||||||
Allowance for credit losses to total loans | 1.27 | % | 1.25 | % | 1.25 | % | 1.27 | % | 1.28 | % | |||||||||
Total nonaccrual loans to total loans | 0.56 | % | 1.11 | % | 0.98 | % | 0.94 | % | 0.96 | % | |||||||||
Nonperforming assets to total assets | 0.40 | % | 0.83 | % | 0.73 | % | 0.70 | % | 0.71 | % | |||||||||
Allowance for credit losses to nonaccrual loans | 226 | % | 112 | % | 127 | % | 135 | % | 134 | % | |||||||||
Other information: | |||||||||||||||||||
Net (recoveries) charge-offs | $ | (42 | ) | $ | (6 | ) | $ | 241 | $ | 380 | $ | (34 | ) | ||||||
Classified loans | 48,997 | 55,030 | 33,593 | 26,347 | 34,024 | ||||||||||||||
Nonperforming and other risk assets: | |||||||||||||||||||
Nonaccrual loans | 12,886 | 25,527 | 22,324 | 21,062 | 21,246 | ||||||||||||||
Other real estate owned | — | — | — | — | 85 | ||||||||||||||
Total nonperforming assets | 12,886 | 25,527 | 22,324 | 21,062 | 21,331 | ||||||||||||||
Financial difficulty modifications still accruing | — | 9 | — | — | — | ||||||||||||||
Loans past due 90 days or more and still accruing | 99 | 66 | 277 | 539 | 28 | ||||||||||||||
Total nonperforming and other risk assets | $ | 12,985 | $ | 25,602 | $ | 22,601 | $ | 21,601 | $ | 21,359 | |||||||||
(1) Capital ratios are estimated, 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 “non-GAAP” 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
Tangible book value per common share and the impact of the merger-related 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:
(dollars and shares in thousands)
Tangible Book Value per Common Share | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
Shareholders' equity (most directly comparable GAAP-based measure) | $ | 271,682 | $ | 265,056 | $ | 243,080 | $ | 245,641 | $ | 240,161 | ||||||||||
Less: Goodwill | 18,724 | 18,724 | 18,724 | 18,724 | 18,724 | |||||||||||||||
Other intangible assets | 2,189 | 2,414 | 2,650 | 2,589 | 2,828 | |||||||||||||||
Related tax effect | (460 | ) | (507 | ) | (557 | ) | (544 | ) | (594 | ) | ||||||||||
Tangible common equity (non-GAAP) | $ | 251,229 | $ | 244,425 | $ | 222,263 | $ | 224,872 | $ | 219,203 | ||||||||||
Common shares outstanding | 10,705 | 10,612 | 10,613 | 10,611 | 10,692 | |||||||||||||||
Book value per share (most directly comparable GAAP-based measure) | $ | 25.38 | $ | 24.98 | $ | 22.90 | $ | 23.15 | $ | 22.46 | ||||||||||
Intangible assets per share | 1.91 | 1.95 | 1.96 | 1.96 | 1.96 | |||||||||||||||
Tangible book value per share (non-GAAP) | $ | 23.47 | $ | 23.03 | $ | 20.94 | $ | 21.19 | $ | 20.50 | ||||||||||
(dollars and shares in thousands) | Three Months Ended | ||||||||||
Adjusted Ratios for Merger-Related Expenses | March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||
Net income (A) - most directly comparable GAAP-based measure | $ | 8,531 | $ | 7,643 | $ | 9,156 | |||||
Plus: Merger-related expenses (B) | 672 | 1,059 | — | ||||||||
Less: Related tax effect (C) | (1 | ) | (79 | ) | — | ||||||
Adjusted net income (D=A+B-C) - Non-GAAP | $ | 9,202 | $ | 8,623 | $ | 9,156 | |||||
Average assets (E) | $ | 3,098,772 | $ | 3,037,824 | $ | 2,933,128 | |||||
Return on average assets (= A / E) - most directly comparable GAAP-based measure(1) | 1.11 | % | 1.00 | % | 1.27 | % | |||||
Return on average assets, adjusted (= D / E) - Non-GAAP(1) | 1.19 | % | 1.13 | % | 1.27 | % | |||||
Average equity (F) | $ | 268,289 | $ | 248,442 | $ | 233,892 | |||||
Return on average equity (= A / F) - most directly comparable GAAP-based measure(1) | 12.79 | % | 12.21 | % | 15.88 | % | |||||
Return on average equity, adjusted (= D / F) - Non-GAAP(1) | 13.79 | % | 13.77 | % | 15.88 | % | |||||
Weighted average shares - basic (G) - most directly comparable GAAP-based measure | 10,349 | 10,321 | 10,385 | ||||||||
Basic earnings per share (= A / G) - most directly comparable GAAP-based measure | $ | 0.82 | $ | 0.74 | $ | 0.88 | |||||
Basic earnings per share, adjusted (= D / G) - Non-GAAP | $ | 0.89 | $ | 0.84 | $ | 0.88 | |||||
Weighted average shares - diluted (H) - most directly comparable GAAP-based measure | 10,482 | 10,419 | 10,496 | ||||||||
Diluted earnings per share (= A / H) - most directly comparable GAAP-based measure | $ | 0.81 | $ | 0.73 | $ | 0.87 | |||||
Diluted earnings per share, adjusted (= D / H) - Non-GAAP | $ | 0.88 | $ | 0.83 | $ | 0.87 | |||||
Noninterest expense (I) - most directly comparable GAAP-based measure | $ | 22,469 | $ | 22,392 | $ | 20,255 | |||||
Less: Merger-related expenses (B) | (672 | ) | (1,059 | ) | — | ||||||
Adjusted noninterest expense (J = I - B) - Non-GAAP | $ | 21,797 | $ | 21,333 | $ | 20,255 | |||||
Net interest income (K) | $ | 26,881 | $ | 26,018 | $ | 26,294 | |||||
Noninterest income (L) | 6,630 | 6,491 | 6,078 | ||||||||
Total operating income (M = K + L) | $ | 33,511 | $ | 32,509 | $ | 32,372 | |||||
Efficiency ratio (= I / M) - most directly comparable GAAP-based measure | 67.0 | % | 68.9 | % | 62.6 | % | |||||
Efficiency ratio, adjusted (= J / M) - Non-GAAP | 65.0 | % | 65.6 | % | 62.6 | % | |||||
(1) Annualized | |||||||||||
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 March 31, 2024:
(dollars in thousands)
Sector | Portfolio Mix | Amortized Book | Fair Value | Credit Enhancement | AAA | AA | A | BBB | NR | Collateral / Guarantee Type | ||||||||||||||||||
Unsecured ABS | 1 | % | $ | 3,512 | $ | 3,200 | 27 | % | — | % | — | % | — | % | — | % | 100 | % | Unsecured Consumer Debt | |||||||||
Student Loan ABS | 1 | 5,043 | 4,939 | 27 | — | — | — | — | 100 | Seasoned Student Loans | ||||||||||||||||||
Federal Family Education Loan ABS | 17 | 94,553 | 93,677 | 9 | 7 | 80 | — | 13 | — | Federal Family Education Loan (1) | ||||||||||||||||||
PACE Loan ABS | — | 2,277 | 1,973 | 6 | 100 | — | — | — | — | PACE Loans (2) | ||||||||||||||||||
Non-Agency CMBS | 3 | 17,208 | 17,247 | 29 | — | — | — | — | 100 | |||||||||||||||||||
Non-Agency RMBS | 3 | 17,539 | 14,314 | 20 | 100 | — | — | — | — | Reverse Mortgages (3) | ||||||||||||||||||
Municipal - General Obligation | 18 | 102,033 | 93,384 | 10 | 83 | 7 | — | — | ||||||||||||||||||||
Municipal - Revenue | 22 | 119,088 | 107,483 | — | 82 | 12 | — | 6 | ||||||||||||||||||||
SBA ReRemic (5) | 1 | 3,293 | 3,260 | — | 100 | — | — | — | SBA Guarantee (4) | |||||||||||||||||||
Small Business Administration | 1 | 7,786 | 8,243 | — | 100 | — | — | — | SBA Guarantee (4) | |||||||||||||||||||
Agency MBS | 29 | 159,649 | 149,400 | — | 100 | — | — | — | Residential Mortgages (4) | |||||||||||||||||||
U.S. Treasury securities | 4 | 20,054 | 17,669 | — | 100 | — | — | — | U.S. Government Guarantee (4) | |||||||||||||||||||
100 | % | $ | 552,035 | $ | 514,789 | 7 | % | 81 | % | 4 | % | 2 | % | 6 | % | |||||||||||||
(1) | ||||||||||||||||||||||||||||
(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 Real Estate Mortgage Investment Conduits | ||||||||||||||||||||||||||||
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
Cautionary Note Regarding Forward-Looking Statements
This press release 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 the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” 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’s 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, successful merger and acquisition activity and cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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's strategic growth plan due to changes in current or future market conditions; changes in interest rates; failure to complete the merger with Codorus Valley Bancorp, Inc. or unexpected delays related to the merger or either party's inability to satisfy closing conditions required to complete the merger; certain restrictions during the pendency of the proposed transactions with Codorus Valley Bancorp, Inc. that may impact the parties' abilities to pursue certain business opportunities or strategic transactions; the diversion of management's attention from ongoing business operations and opportunities; 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 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; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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’s 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 was Orrstown Financial Services, Inc.'s net income for the first quarter of 2024?
How did diluted earnings per share change in the first quarter of 2024 compared to the previous quarter?
What was the percentage of nonaccrual loans to total loans at March 31, 2024?
How much was the deposit growth in the first quarter of 2024 compared to the previous quarter?
What was the cash dividend declared by the Board of Directors for Orrstown Financial Services, Inc.?