Orrstown Financial Services, Inc. Reports First Quarter 2026 Results
Rhea-AI Summary
Orrstown Financial Services (NASDAQ: ORRF) reported first quarter 2026 net income of $21.8 million ($1.12 diluted EPS), up from $21.5 million in Q4 2025. Loans rose by $40.6 million and deposits increased by $98.7 million. Net interest margin was 3.90%. Tangible book value per share increased to $25.76. The Board declared a $0.30 per-share cash dividend payable May 12, 2026.
Noninterest income strengthened to $15.6 million, noninterest expense declined to $36.7 million, and capital ratios modestly improved.
Positive
- Net income rose to $21.8M for Q1 2026
- Loans increased by $40.6M to $4.1B
- Deposits grew by $98.7M to $4.6B
- Tangible book value per share increased to $25.76
- Total risk-based capital improved to 13.5%
Negative
- Net interest margin declined to 3.90%
- Net interest income fell by $1.5M quarter-over-quarter
- Provision expense rose to $0.7M from $0.1M
- Nonaccrual loans increased to $30.0M
News Market Reaction – ORRF
On the day this news was published, ORRF declined 4.82%, reflecting a moderate negative market reaction. Our momentum scanner triggered 9 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $36M from the company's valuation, bringing the market cap to $706.71M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
ORRF fell about 1.2% while close peers showed mixed moves (e.g., CAC down, EGBN up, MPB up, NBBK down). With no peers in the momentum scan, today’s action appears more stock-specific than sector-driven.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Oct 21 | Q3 2025 earnings | Positive | +4.4% | Stronger net income, higher EPS, loan growth and dividend declaration. |
| Apr 22 | Q1 2025 earnings | Positive | +2.5% | Higher net income, solid ROA/ROE, improved capital and dividend. |
| Jan 31 | Q4 2024 earnings | Positive | -0.7% | Return to profitability with cost saves despite merger-related charges. |
| Oct 22 | Q3 2024 earnings | Positive | +3.2% | Merger-driven balance sheet expansion and strong underlying earnings. |
| Apr 23 | Q1 2024 earnings | Positive | +1.4% | Outlined first-quarter results with a modestly positive share reaction. |
Earnings releases have generally been followed by positive price reactions, with only one negative move in the past five reported periods.
Over recent periods, Orrstown’s earnings reports have highlighted steady profitability, expanding tangible book value, and balance sheet growth following the Codorus Valley merger. Prior quarters featured rising net income, solid returns on assets and equity, and regular dividend declarations. Most earnings updates saw shares react positively, suggesting investors have typically rewarded consistent execution and capital build. Today’s first-quarter 2026 results, with higher net income, deposit growth, and stronger capital ratios, fit this pattern of incremental financial strengthening.
Historical Comparison
In the past two years, Orrstown’s earnings releases typically moved the stock about 2.14%, mostly higher, indicating that consistent financial results have often been rewarded.
Earnings updates show progression from merger integration and cost saves in 2024 to steadier profitability, loan growth, and rising capital and dividends through 2025 and into 2026.
Regulatory & Risk Context
Orrstown has an effective Form S-3 universal shelf allowing issuance of up to $200,000,000 in various securities over time for general corporate purposes, debt repayment, capital management, and potential acquisitions. No usage is recorded yet in the provided data.
Market Pulse Summary
This announcement reports higher net income and EPS, loan and deposit growth, and modestly stronger capital ratios, along with a maintained $0.30 dividend. Compared with past earnings, Orrstown continues to show consistent profitability and balance sheet expansion. Key watch points include the trajectory of the 3.90% net interest margin, credit quality metrics like nonaccrual loans, and any future use of the $200,000,000 universal shelf registration for capital or strategic actions.
Key Terms
net interest margin financial
available-for-sale financial
loan-to-deposit ratio financial
collateralized mortgage obligations financial
subordinated notes financial
allowance for credit losses financial
nonaccrual loans financial
tier 1 leverage ratio financial
AI-generated analysis. Not financial advice.
- Net income of
$21.8 million , or$1.12 per diluted share, for the three months ended March 31, 2026 compared to net income of$21.5 million , or$1.11 per diluted share, for the three months ended December 31, 2025; - Return on average assets was
1.59% and return on average equity was14.76% for the three months ended March 31, 2026, compared to1.55% and14.73% , respectively, for the three months ended December 31, 2025; - Net interest margin, on a tax equivalent basis, was
3.90% in the first quarter of 2026 compared to4.00% in the fourth quarter of 2025; - Total loans increased by
$40.6 million , or approximately4% annualized, from December 31, 2025 to March 31, 2026; - Deposits increased by
$98.7 million from December 31, 2025 to March 31, 2026; borrowings decreased by$68.0 million from December 31, 2025 to March 31, 2026; - Noninterest income increased by
$1.2 million from$14.4 million for the three months ended December 31, 2025 to$15.6 million for the three months ended March 31, 2026; - Noninterest expenses decreased by
$0.7 million from$37.4 million for the three months ended December 31, 2025 to$36.7 million for the three months ended March 31, 2026 due primarily to decreases in salaries and benefits expense and professional services expense; - Tangible common equity increased to
9.2% at March 31, 2026 from9.0% at December 31, 2025; total risk-based capital improved to13.5% at March 31, 2026 from13.3% at December 31, 2025; - Tangible book value per common share(1) increased to
$25.76 per share at March 31, 2026 from$25.21 per share at December 31, 2025 and - The Board of Directors declared a cash dividend of
$0.30 per common share, payable May 12, 2026, to shareholders of record as of May 5, 2026.
HARRISBURG, Pa., April 21, 2026 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (the "Company") (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the quarter ended March 31, 2026. Net income totaled
“Orrstown delivered strong results across the board in another successful quarter,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “Net income and diluted earnings per share increased quarter to quarter. Return on average assets and return on average equity continued to exceed peer multiples. Noninterest income again was a substantial component of our earnings. Noninterest expense declined as we continue to focus on creating efficiencies throughout the organization. The loan portfolio experienced growth across the whole footprint while maintaining a focus on quality. We believe that deposit growth, which accelerated during the second half of the quarter, will enable us to successfully manage our funding costs and maintain a healthy net interest margin in a competitive funding environment. Our credit metrics remain sound and our capital ratios are consistently building from earnings generation.”
Adam Metz, Senior Executive Vice President and Chief Operating Officer added “Having spent nearly a decade at Orrstown, I have seen first-hand the strength of our franchise, the power of our culture and the collective commitment the whole organization has to our clients and community. An incredibly talented team with common alignment to our core principles will continue to build upon the foundation already in place - driving growth, deepening client relationships, thoughtfully expanding fee‑based businesses, and continuing our unwavering commitment to sound risk management and long‑term shareholder value.”
(1) Non-GAAP measure. See Appendix A for additional information.
DISCUSSION OF RESULTS
Balance Sheet
Loans
Loans held for investment increased by
Investment Securities
Investment securities, all of which are classified as available-for-sale, decreased by
Deposits
During the first quarter of 2026, deposits increased by
Borrowings
The Company actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were
Income Statement
Net Interest Income and Margin
Net interest income was
Interest income on loans, on a tax equivalent basis, decreased by
Interest income on investment securities, on a tax equivalent basis, was
Interest expense, on a tax equivalent basis, decreased by
Provision for Credit Losses on Loans
The allowance for credit losses ("ACL") on loans decreased to
Classified loans decreased by
Noninterest Income
Noninterest income increased by
Income from life insurance increased by
Swap fee income increased by
Wealth management income was
Income from service charges decreased by
Other income decreased by
Noninterest Expenses
Noninterest expenses decreased by
Salaries and benefits expense decreased by
Professional services expense decreased by
Taxes other than income increased by
Income Taxes
The Company's effective tax rate was
Capital
Shareholders’ equity totaled
Tangible book value per common share(1) increased to
(1) Non-GAAP measure. See Appendix A for additional information.
The Company's capital ratios increased during the three months ended March 31, 2026 compared to the three months ended December 31, 2025 due to earnings. The Company's tier 1 common equity, tier 1 capital and total risk-based capital ratios were
At March 31, 2026, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.
| Investor Relations Contact: |
| Neelesh Kalani |
| Executive Vice President, Chief Financial Officer |
| Phone (717) 510-7097 |
| FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| (In thousands) | 2026 | 2025 | ||||||
| Profitability for the period: | ||||||||
| Net interest income | $ | 49,005 | $ | 48,761 | ||||
| Provision for (recovery of) credit losses - loans | 728 | (554 | ) | |||||
| Recovery of credit losses - unfunded loan commitments | (376 | ) | — | |||||
| Noninterest income | 15,577 | 11,624 | ||||||
| Noninterest expenses | 36,728 | 38,176 | ||||||
| Income before income tax expense | 27,502 | 22,763 | ||||||
| Income tax expense | 5,693 | 4,712 | ||||||
| Net income available to common shareholders | $ | 21,809 | $ | 18,051 | ||||
| Financial ratios: | ||||||||
| Return on average assets (1) | 1.59 | % | 1.35 | % | ||||
| Return on average assets, adjusted (1) (2) (3) | n/a | 1.45 | % | |||||
| Return on average equity (1) | 14.76 | % | 13.98 | % | ||||
| Return on average equity, adjusted (1) (2) (3) | n/a | 14.97 | % | |||||
| Net interest margin (1) | 3.90 | % | 4.00 | % | ||||
| Efficiency ratio | 56.9 | % | 63.2 | % | ||||
| Efficiency ratio, adjusted (2) (3) | n/a | 60.5 | % | |||||
| Income per common share: | ||||||||
| Basic | $ | 1.13 | $ | 0.94 | ||||
| Basic, adjusted (2) (3) | n/a | $ | 1.01 | |||||
| Diluted | $ | 1.12 | $ | 0.93 | ||||
| Diluted, adjusted (2) (3) | n/a | $ | 1.00 | |||||
| Average equity to average assets | 10.80 | % | 9.65 | % | ||||
| (1) Annualized for the three months ended March 31, 2026 and 2025. | ||||||||
| (2) Ratio has been adjusted for the non-recurring charges at March 31, 2025. There were no non-recurring charges for the three months ended March 31, 2026. | ||||||||
| (3) Non-GAAP based financial measure at March 31, 2025. 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. | ||||||||
| FINANCIAL HIGHLIGHTS (Unaudited) | |||||||
| (continued) | |||||||
| March 31, | December 31, | ||||||
| (Dollars in thousands, except per share amounts) | 2026 | 2025 | |||||
| At period-end: | |||||||
| Total assets | $ | 5,576,972 | $ | 5,542,255 | |||
| Loans, net of allowance for credit losses | 4,013,856 | 3,973,012 | |||||
| Loans held-for-sale, at fair value | 3,366 | 6,090 | |||||
| Securities available for sale, at fair value | 947,018 | 952,740 | |||||
| Total deposits | 4,627,424 | 4,528,774 | |||||
| FHLB advances and other borrowings and Securities sold under agreements to repurchase | 225,958 | 299,243 | |||||
| Subordinated notes and trust preferred debt | 37,274 | 37,122 | |||||
| Shareholders' equity | 603,184 | 591,535 | |||||
| Credit quality and capital ratios (1): | |||||||
| Allowance for credit losses to total loans | 1.17 | % | 1.19 | % | |||
| Total nonaccrual loans to total loans | 0.74 | % | 0.70 | % | |||
| Nonperforming assets to total assets | 0.56 | % | 0.51 | % | |||
| Allowance for credit losses to nonaccrual loans | 158 | % | 170 | % | |||
| Total risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 13.5 | % | 13.3 | % | |||
| Orrstown Bank | 13.6 | % | 13.3 | % | |||
| Tier 1 risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 12.0 | % | 11.7 | % | |||
| Orrstown Bank | 12.5 | % | 12.2 | % | |||
| Tier 1 common equity risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 11.8 | % | 11.5 | % | |||
| Orrstown Bank | 12.5 | % | 12.2 | % | |||
| Tier 1 leverage capital: | |||||||
| Orrstown Financial Services, Inc. | 9.7 | % | 9.5 | % | |||
| Orrstown Bank | 10.2 | % | 9.9 | % | |||
| Book value per common share | $ | 30.76 | $ | 30.32 | |||
| (1) Capital ratios are estimated for the current period, 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. At December 31, 2025, 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. At March 31, 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. | |||||||
| ORRSTOWN FINANCIAL SERVICES, INC. | |||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
| (Dollars in thousands, except per share amounts) | March 31, 2026 | December 31, 2025 | |||||
| Assets | |||||||
| Cash and due from banks | $ | 49,014 | $ | 42,083 | |||
| Interest-bearing deposits with banks | 112,122 | 107,691 | |||||
| Cash and cash equivalents | 161,136 | 149,774 | |||||
| Restricted investments in bank stocks | 23,984 | 26,717 | |||||
| Securities available for sale (amortized cost of | 947,018 | 952,740 | |||||
| Loans held for sale, at fair value | 3,366 | 6,090 | |||||
| Loans | 4,061,319 | 4,020,693 | |||||
| Less: Allowance for credit losses | (47,463 | ) | (47,681 | ) | |||
| Net loans | 4,013,856 | 3,973,012 | |||||
| Premises and equipment, net | 50,532 | 51,029 | |||||
| Cash surrender value of life insurance | 145,964 | 146,994 | |||||
| Goodwill | 69,751 | 69,751 | |||||
| Other intangible assets, net | 35,751 | 37,990 | |||||
| Accrued interest receivable | 21,176 | 21,473 | |||||
| Deferred tax assets, net | 32,802 | 33,931 | |||||
| Other assets | 71,636 | 72,754 | |||||
| Total assets | $ | 5,576,972 | $ | 5,542,255 | |||
| Liabilities | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 882,588 | $ | 870,906 | |||
| Interest-bearing | 3,744,836 | 3,657,868 | |||||
| Total deposits | 4,627,424 | 4,528,774 | |||||
| Securities sold under agreements to repurchase and federal funds purchased | 19,264 | 24,542 | |||||
| FHLB advances and other borrowings | 206,694 | 274,701 | |||||
| Subordinated notes and trust preferred debt | 37,274 | 37,122 | |||||
| Other liabilities | 83,132 | 85,581 | |||||
| Total liabilities | 4,973,788 | 4,950,720 | |||||
| Shareholders’ Equity | |||||||
| Preferred stock, | — | — | |||||
| Common stock, no par value— | 1,026 | 1,026 | |||||
| Additional paid—in capital | 422,663 | 424,596 | |||||
| Retained earnings | 202,704 | 186,752 | |||||
| Accumulated other comprehensive loss | (19,720 | ) | (15,201 | ) | |||
| Treasury stock— 100,201 and 204,420 shares, at cost at March 31, 2026 and December 31, 2025, respectively | (3,489 | ) | (5,638 | ) | |||
| Total shareholders’ equity | 603,184 | 591,535 | |||||
| Total liabilities and shareholders’ equity | $ | 5,576,972 | $ | 5,542,255 | |||
| ORRSTOWN FINANCIAL SERVICES, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| (Dollars in thousands, except per share amounts) | 2026 | 2025 | ||||||
| Interest income | ||||||||
| Loans | $ | 62,995 | $ | 63,432 | ||||
| Investment securities - taxable | 9,851 | 8,944 | ||||||
| Investment securities - tax-exempt | 881 | 875 | ||||||
| Short-term investments | 637 | 2,268 | ||||||
| Total interest income | 74,364 | 75,519 | ||||||
| Interest expense | ||||||||
| Deposits | 21,986 | 24,260 | ||||||
| Securities sold under agreements to repurchase and federal funds purchased | 97 | 84 | ||||||
| FHLB advances and other borrowings | 2,355 | 1,118 | ||||||
| Subordinated notes and trust preferred debt | 921 | 1,296 | ||||||
| Total interest expense | 25,359 | 26,758 | ||||||
| Net interest income | 49,005 | 48,761 | ||||||
| Provision for (recovery of) credit losses - loans | 728 | (554 | ) | |||||
| Recovery of credit losses - unfunded loan commitments | (376 | ) | — | |||||
| Net interest income after provision for (recovery of) credit losses | 48,653 | 49,315 | ||||||
| Noninterest income | ||||||||
| Service charges | 2,871 | 2,395 | ||||||
| Interchange income | 1,513 | 1,427 | ||||||
| Swap fee income | 1,339 | 394 | ||||||
| Wealth management income | 5,557 | 5,415 | ||||||
| Mortgage banking activities | 326 | 302 | ||||||
| Income from life insurance | 3,761 | 1,289 | ||||||
| Investment securities (losses) gains | (2 | ) | 13 | |||||
| Other income | 212 | 389 | ||||||
| Total noninterest income | 15,577 | 11,624 | ||||||
| Noninterest expenses | ||||||||
| Salaries and employee benefits | 21,157 | 20,388 | ||||||
| Occupancy, furniture and equipment | 4,221 | 4,675 | ||||||
| Data processing | 1,537 | 924 | ||||||
| Advertising and bank promotions | 683 | 499 | ||||||
| FDIC insurance | 549 | 824 | ||||||
| Professional services | 1,221 | 1,826 | ||||||
| Taxes other than income | 1,025 | 942 | ||||||
| Intangible asset amortization | 2,239 | 2,535 | ||||||
| Merger-related expenses | — | 1,649 | ||||||
| Restructuring expenses | — | 91 | ||||||
| Other operating expenses | 4,096 | 3,823 | ||||||
| Total noninterest expenses | 36,728 | 38,176 | ||||||
| Income before income tax expense | 27,502 | 22,763 | ||||||
| Income tax expense | 5,693 | 4,712 | ||||||
| Net income | $ | 21,809 | $ | 18,051 | ||||
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Share information: | ||||||||
| Basic earnings per share | $ | 1.13 | $ | 0.94 | ||||
| Diluted earnings per share | $ | 1.12 | $ | 0.93 | ||||
| Dividends paid per share | $ | 0.30 | $ | 0.26 | ||||
| Weighted average shares - basic | 19,274 | 19,157 | ||||||
| Weighted average shares - diluted | 19,410 | 19,328 | ||||||
| ANALYSIS OF NET INTEREST INCOME | |||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2026 | 12/31/2025 | 9/30/2025 | 6/30/2025 | 3/31/2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | ||||||||||||||||||||||||||||||||||||||||
| Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | |||||||||||||||||||||||||||||||||||
| (In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||||
| Federal funds sold & interest-bearing bank balances | $ | 70,086 | $ | 637 | 3.69 | % | $ | 103,886 | $ | 1,017 | 3.88 | % | $ | 101,728 | $ | 1,123 | 4.38 | % | $ | 136,106 | $ | 1,513 | 4.46 | % | $ | 203,347 | $ | 2,268 | 4.52 | % | |||||||||||||||||||
| Investment securities(1)(2) | 984,060 | 11,079 | 4.51 | 976,957 | 11,177 | 4.58 | 906,399 | 10,593 | 4.67 | 904,119 | 10,626 | 4.70 | 865,126 | 10,052 | 4.65 | ||||||||||||||||||||||||||||||||||
| Loans(1)(3)(4)(5) | 4,070,889 | 63,214 | 6.29 | 3,997,842 | 64,635 | 6.42 | 3,979,044 | 65,975 | 6.58 | 3,894,978 | 63,246 | 6.52 | 3,909,694 | 63,641 | 6.59 | ||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,125,035 | 74,930 | 5.91 | 5,078,685 | 76,829 | 6.01 | 4,987,171 | 77,691 | 6.19 | 4,935,203 | 75,385 | 6.13 | 4,978,167 | 75,961 | 6.17 | ||||||||||||||||||||||||||||||||||
| Other assets | 423,779 | 426,626 | 433,659 | 439,569 | 447,530 | ||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 5,548,814 | $ | 5,505,311 | $ | 5,420,830 | $ | 5,374,772 | $ | 5,425,697 | |||||||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 2,534,291 | 13,796 | 2.21 | $ | 2,471,895 | 14,078 | 2.26 | $ | 2,450,034 | 14,145 | 2.29 | $ | 2,463,687 | 13,880 | 2.26 | $ | 2,473,543 | 14,156 | 2.32 | |||||||||||||||||||||||||||||
| Savings deposits | 259,585 | 143 | 0.22 | 262,240 | 164 | 0.25 | 264,761 | 164 | 0.25 | 269,309 | 165 | 0.25 | 273,313 | 165 | 0.25 | ||||||||||||||||||||||||||||||||||
| Time deposits | 906,875 | 8,047 | 3.60 | 912,611 | 8,342 | 3.63 | 897,416 | 8,330 | 3.68 | 914,108 | 8,810 | 3.87 | 970,588 | 9,939 | 4.15 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,700,751 | 21,986 | 2.41 | 3,646,746 | 22,584 | 2.46 | 3,612,211 | 22,639 | 2.49 | 3,647,104 | 22,855 | 2.51 | 3,717,444 | 24,260 | 2.65 | ||||||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 23,674 | 97 | 1.66 | 27,348 | 105 | 1.52 | 27,772 | 107 | 1.53 | 25,917 | 106 | 1.64 | 26,163 | 84 | 1.30 | ||||||||||||||||||||||||||||||||||
| FHLB advances and other borrowings | 248,357 | 2,355 | 3.85 | 238,806 | 2,371 | 3.94 | 168,939 | 1,791 | 4.21 | 104,068 | 1,030 | 3.97 | 112,859 | 1,118 | 4.02 | ||||||||||||||||||||||||||||||||||
| Subordinated notes and trust preferred debt | 37,175 | 921 | 10.05 | 37,023 | 669 | 7.17 | 68,749 | 1,597 | 9.21 | 68,910 | 1,330 | 7.74 | 68,739 | 1,296 | 7.65 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 4,009,957 | 25,359 | 2.56 | 3,949,923 | 25,729 | 2.58 | 3,877,671 | 26,134 | 2.67 | 3,845,999 | 25,321 | 2.64 | 3,925,205 | 26,758 | 2.76 | ||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 850,415 | 882,552 | 902,128 | 904,031 | 887,726 | ||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 89,112 | 93,977 | 89,086 | 89,058 | 89,077 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 4,949,484 | 4,926,452 | 4,868,885 | 4,839,088 | 4,902,008 | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 599,330 | 578,859 | 551,945 | 535,684 | 523,689 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 5,548,814 | $ | 5,505,311 | $ | 5,420,830 | $ | 5,374,772 | $ | 5,425,697 | |||||||||||||||||||||||||||||||||||||||
| Taxable-equivalent net interest income / net interest spread | 49,571 | 3.35 | % | 51,100 | 3.43 | % | 51,557 | 3.52 | % | 50,064 | 3.49 | % | 49,203 | 3.41 | % | ||||||||||||||||||||||||||||||||||
| Taxable-equivalent net interest margin | 3.90 | % | 4.00 | % | 4.11 | % | 4.07 | % | 4.00 | % | |||||||||||||||||||||||||||||||||||||||
| Taxable-equivalent adjustment | (566 | ) | (569 | ) | (569 | ) | (552 | ) | (442 | ) | |||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 49,005 | $ | 50,531 | $ | 50,988 | $ | 49,512 | $ | 48,761 | |||||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 128 | % | 129 | % | 129 | % | 128 | % | 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 accretion on purchase accounting marks of | |||||||||||||||||||||||||||||||||||||||||||||||||
| ORRSTOWN FINANCIAL SERVICES, INC. | |||||||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (In thousands) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||
| Profitability for the quarter: | |||||||||||||||||||
| Net interest income | $ | 49,005 | $ | 50,531 | $ | 50,988 | $ | 49,512 | $ | 48,761 | |||||||||
| Provision for (recovery of) credit losses on loans and unfunded loan commitments | 352 | 75 | 396 | 109 | (554 | ) | |||||||||||||
| Noninterest income | 15,577 | 14,392 | 13,382 | 12,915 | 11,624 | ||||||||||||||
| Noninterest expenses | 36,728 | 37,355 | 36,297 | 37,614 | 38,176 | ||||||||||||||
| Income before income taxes | 27,502 | 27,493 | 27,677 | 24,704 | 22,763 | ||||||||||||||
| Income tax expense | 5,693 | 6,002 | 5,812 | 5,256 | 4,712 | ||||||||||||||
| Net income | $ | 21,809 | $ | 21,491 | $ | 21,865 | $ | 19,448 | $ | 18,051 | |||||||||
| Financial ratios: | |||||||||||||||||||
| Return on average assets (1) | 1.59 | % | 1.55 | % | 1.60 | % | 1.45 | % | 1.35 | % | |||||||||
| Return on average assets, adjusted (1)(2)(3) | n/a | n/a | n/a | 1.51 | % | 1.45 | % | ||||||||||||
| Return on average equity (1) | 14.76 | % | 14.73 | % | 15.72 | % | 14.56 | % | 13.98 | % | |||||||||
| Return on average equity, adjusted (1)(2)(3) | n/a | n/a | n/a | 15.12 | % | 14.97 | % | ||||||||||||
| Net interest margin (1) | 3.90 | % | 4.00 | % | 4.11 | % | 4.07 | % | 4.00 | % | |||||||||
| Efficiency ratio | 56.9 | % | 57.5 | % | 56.4 | % | 60.3 | % | 63.2 | % | |||||||||
| Efficiency ratio, adjusted (2)(3) | n/a | n/a | n/a | 58.7 | % | 60.5 | % | ||||||||||||
| Per share information: | |||||||||||||||||||
| Income per common share: | |||||||||||||||||||
| Basic | $ | 1.13 | $ | 1.12 | $ | 1.14 | $ | 1.01 | $ | 0.94 | |||||||||
| Basic, adjusted (2)(3) | n/a | n/a | n/a | 1.05 | 1.01 | ||||||||||||||
| Diluted | 1.12 | 1.11 | 1.13 | 1.01 | 0.93 | ||||||||||||||
| Diluted, adjusted (2)(3) | n/a | n/a | n/a | 1.04 | 1.00 | ||||||||||||||
| Book value | 30.76 | 30.32 | 29.33 | 28.07 | 27.32 | ||||||||||||||
| Tangible book value(3) | 25.76 | 25.21 | 24.12 | 22.77 | 21.99 | ||||||||||||||
| Average tangible common equity(3) | 17.96 | 18.15 | 19.70 | 18.43 | 17.91 | ||||||||||||||
| Cash dividends paid | 0.30 | 0.27 | 0.27 | 0.26 | 0.26 | ||||||||||||||
| Average basic shares | 19,274 | 19,251 | 19,224 | 19,173 | 19,157 | ||||||||||||||
| Average diluted shares | 19,410 | 19,384 | 19,364 | 19,342 | 19,328 | ||||||||||||||
| (1) Annualized. | |||||||||||||||||||
| (2) Ratio has been adjusted for non-recurring expenses for the three months ended June 30, 2025 and March 31, 2025. There were no non-recurring expenses for the three months ended March 31, 2026, December 31, 2025 and September 30, 2025. | |||||||||||||||||||
| (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, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||
| Noninterest income: | |||||||||||||||
| Service charges | $ | 2,871 | $ | 3,225 | $ | 2,997 | $ | 2,630 | $ | 2,395 | |||||
| Interchange income | 1,513 | 1,553 | 1,620 | 1,441 | 1,427 | ||||||||||
| Swap fee income | 1,339 | 1,112 | 816 | 669 | 394 | ||||||||||
| Wealth management income | 5,557 | 5,739 | 5,277 | 5,267 | 5,415 | ||||||||||
| Mortgage banking activities | 326 | 503 | 522 | 478 | 302 | ||||||||||
| Income from life insurance | 3,761 | 1,331 | 1,471 | 1,311 | 1,289 | ||||||||||
| Other income | 212 | 834 | 629 | 1,111 | 389 | ||||||||||
| Investment securities (losses) gains | (2 | ) | 95 | 50 | 8 | 13 | |||||||||
| Total noninterest income | $ | 15,577 | $ | 14,392 | $ | 13,382 | $ | 12,915 | $ | 11,624 | |||||
| Noninterest expenses: | |||||||||||||||
| Salaries and employee benefits | $ | 21,157 | $ | 21,980 | $ | 21,439 | $ | 21,364 | $ | 20,388 | |||||
| Occupancy, furniture and equipment | 4,221 | 4,017 | 4,075 | 4,211 | 4,675 | ||||||||||
| Data processing | 1,537 | 1,292 | 1,116 | 965 | 924 | ||||||||||
| Advertising and bank promotions | 683 | 561 | 154 | 1,077 | 499 | ||||||||||
| FDIC insurance | 549 | 683 | 652 | 674 | 824 | ||||||||||
| Professional services | 1,221 | 1,947 | 1,703 | 2,016 | 1,826 | ||||||||||
| Taxes other than income | 1,025 | 574 | 828 | 295 | 942 | ||||||||||
| Intangible asset amortization | 2,239 | 2,348 | 2,410 | 2,472 | 2,535 | ||||||||||
| Merger-related expenses | — | — | — | 968 | 1,649 | ||||||||||
| Restructuring expenses | — | — | — | — | 91 | ||||||||||
| Other operating expenses | 4,096 | 3,953 | 3,920 | 3,572 | 3,823 | ||||||||||
| Total noninterest expenses | $ | 36,728 | $ | 37,355 | $ | 36,297 | $ | 37,614 | $ | 38,176 | |||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (continued) | |||||||||||||||||||
| (In thousands) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||
| Balance Sheet at quarter end: | |||||||||||||||||||
| Cash and cash equivalents | $ | 161,136 | $ | 149,774 | $ | 184,146 | $ | 149,377 | $ | 287,120 | |||||||||
| Restricted investments in bank stocks | 23,984 | 26,717 | 24,111 | 21,204 | 19,693 | ||||||||||||||
| Securities available for sale | 947,018 | 952,740 | 890,357 | 885,373 | 855,456 | ||||||||||||||
| Loans held for sale, at fair value | 3,366 | 6,090 | 6,026 | 5,206 | 5,261 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||
| Owner occupied | 645,026 | 644,713 | 629,481 | 622,315 | 617,854 | ||||||||||||||
| Non-owner occupied | 1,322,251 | 1,260,198 | 1,254,959 | 1,203,038 | 1,157,383 | ||||||||||||||
| Multi-family | 216,658 | 236,703 | 234,782 | 239,388 | 257,724 | ||||||||||||||
| Non-owner occupied residential | 151,560 | 155,749 | 163,138 | 165,479 | 168,354 | ||||||||||||||
| Agricultural | 114,409 | 121,417 | 118,596 | 124,291 | 134,916 | ||||||||||||||
| Commercial and industrial | 481,815 | 489,371 | 479,929 | 487,063 | 455,494 | ||||||||||||||
| Acquisition and development: | |||||||||||||||||||
| 1-4 family residential construction | 46,355 | 41,489 | 41,141 | 38,490 | 40,621 | ||||||||||||||
| Commercial and land development | 198,957 | 198,234 | 195,158 | 198,889 | 227,434 | ||||||||||||||
| Municipal | 27,744 | 25,302 | 28,664 | 28,693 | 30,780 | ||||||||||||||
| Total commercial loans | 3,204,775 | 3,173,176 | 3,145,848 | 3,107,646 | 3,090,560 | ||||||||||||||
| Residential mortgage: | |||||||||||||||||||
| First lien | 484,022 | 478,870 | 476,006 | 469,569 | 464,642 | ||||||||||||||
| Home equity – term | 5,685 | 5,972 | 5,800 | 5,784 | 9,224 | ||||||||||||||
| Home equity – lines of credit | 327,141 | 321,438 | 311,458 | 305,968 | 295,820 | ||||||||||||||
| Other - term(1) | 22,442 | 22,906 | 23,737 | 25,384 | — | ||||||||||||||
| Installment and other loans | 17,254 | 18,331 | 16,887 | 17,028 | 15,739 | ||||||||||||||
| Total loans | 4,061,319 | 4,020,693 | 3,979,736 | 3,931,379 | 3,875,985 | ||||||||||||||
| Allowance for credit losses | (47,463 | ) | (47,681 | ) | (48,105 | ) | (47,898 | ) | (47,804 | ) | |||||||||
| Net loans held for investment | 4,013,856 | 3,973,012 | 3,931,631 | 3,883,481 | 3,828,181 | ||||||||||||||
| Goodwill | 69,751 | 69,751 | 69,751 | 69,751 | 68,106 | ||||||||||||||
| Other intangible assets, net | 35,751 | 37,990 | 40,338 | 42,748 | 45,230 | ||||||||||||||
| Total assets | 5,576,972 | 5,542,255 | 5,470,233 | 5,387,645 | 5,441,586 | ||||||||||||||
| Total deposits | 4,627,424 | 4,528,774 | 4,533,560 | 4,516,625 | 4,633,716 | ||||||||||||||
| FHLB advances and other borrowings and Securities sold under agreements to repurchase | 225,958 | 299,243 | 241,719 | 166,381 | 123,480 | ||||||||||||||
| Subordinated notes and trust preferred debt | 37,274 | 37,122 | 36,970 | 69,021 | 68,850 | ||||||||||||||
| Total shareholders' equity | 603,184 | 591,535 | 571,936 | 548,448 | 532,936 | ||||||||||||||
| (1) Other - term includes property assessed clean energy ("PACE") loans. | |||||||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (continued) | |||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Capital and credit quality measures(1): | |||||||||||||||||||
| Total risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 13.5 | % | 13.3 | % | 13.1 | % | 13.3 | % | 13.1 | % | |||||||||
| Orrstown Bank | 13.6 | % | 13.3 | % | 12.9 | % | 13.3 | % | 13.0 | % | |||||||||
| Tier 1 risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 12.0 | % | 11.7 | % | 11.3 | % | 11.1 | % | 10.8 | % | |||||||||
| Orrstown Bank | 12.5 | % | 12.2 | % | 11.8 | % | 12.1 | % | 11.9 | % | |||||||||
| Tier 1 common equity risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 11.8 | % | 11.5 | % | 11.1 | % | 10.9 | % | 10.6 | % | |||||||||
| Orrstown Bank | 12.5 | % | 12.2 | % | 11.8 | % | 12.1 | % | 11.9 | % | |||||||||
| Tier 1 leverage capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 9.7 | % | 9.5 | % | 9.3 | % | 9.0 | % | 8.6 | % | |||||||||
| Orrstown Bank | 10.2 | % | 9.9 | % | 9.6 | % | 9.8 | % | 9.5 | % | |||||||||
| Average equity to average assets | 10.80 | % | 10.51 | % | 10.18 | % | 9.97 | % | 9.65 | % | |||||||||
| Allowance for credit losses to total loans | 1.17 | % | 1.19 | % | 1.21 | % | 1.22 | % | 1.23 | % | |||||||||
| Total nonaccrual loans to total loans | 0.74 | % | 0.70 | % | 0.66 | % | 0.57 | % | 0.59 | % | |||||||||
| Nonperforming assets to total assets | 0.56 | % | 0.51 | % | 0.48 | % | 0.42 | % | 0.42 | % | |||||||||
| Allowance for credit losses to nonaccrual loans | 158 | % | 170 | % | 184 | % | 214 | % | 210 | % | |||||||||
| Other information: | |||||||||||||||||||
| Net charge-offs | $ | 946 | $ | 499 | $ | 189 | $ | 115 | $ | 331 | |||||||||
| Classified loans | 57,584 | 58,351 | 64,089 | 65,754 | 76,211 | ||||||||||||||
| Nonperforming and other risk assets: | |||||||||||||||||||
| Nonaccrual loans | 30,025 | 28,031 | 26,191 | 22,423 | 22,727 | ||||||||||||||
| Other real estate owned | 1,055 | — | — | — | 138 | ||||||||||||||
| Total nonperforming assets | 31,080 | 28,031 | 26,191 | 22,423 | 22,865 | ||||||||||||||
| Financial difficulty modifications still accruing | 949 | 1,253 | 1,245 | 5,759 | 5,127 | ||||||||||||||
| Loans past due 90 days or more and still accruing | 443 | 1,040 | 497 | 1,312 | 400 | ||||||||||||||
| Total nonperforming and other risk assets | $ | 32,472 | $ | 30,324 | $ | 27,933 | $ | 29,494 | $ | 28,392 | |||||||||
| (1) Capital ratios are estimated for the current period, 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, which concluded at December 31, 2025. At March 31, 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. | |||||||||||||||||||
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, tangible common equity 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:
(In thousands)
| Tangible Book Value per Common Share | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Shareholders' equity (most directly comparable GAAP-based measure) | $ | 603,184 | $ | 591,535 | $ | 571,936 | $ | 548,448 | $ | 532,936 | ||||||||||
| Less: Goodwill | 69,751 | 69,751 | 69,751 | 69,751 | 68,106 | |||||||||||||||
| Other intangible assets | 35,751 | 37,990 | 40,338 | 42,748 | 45,230 | |||||||||||||||
| Related tax effect | (7,508 | ) | (7,978 | ) | (8,471 | ) | (8,977 | ) | (9,498 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 505,190 | $ | 491,772 | $ | 470,318 | $ | 444,926 | $ | 429,098 | ||||||||||
| Common shares outstanding | 19,611 | 19,507 | 19,501 | 19,536 | 19,510 | |||||||||||||||
| Book value per share (most directly comparable GAAP-based measure) | $ | 30.76 | $ | 30.32 | $ | 29.33 | $ | 28.07 | $ | 27.32 | ||||||||||
| Intangible assets per share | 5.00 | 5.11 | 5.21 | 5.30 | 5.33 | |||||||||||||||
| Tangible book value per share (non-GAAP) | $ | 25.76 | $ | 25.21 | $ | 24.12 | $ | 22.77 | $ | 21.99 | ||||||||||
| Return on Average Common Equity | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Net Income | $ | 21,809 | $ | 21,491 | $ | 21,865 | $ | 19,448 | $ | 18,051 | ||||||||||
| Average shareholders' equity | $ | 599,330 | $ | 578,859 | $ | 551,945 | $ | 535,684 | $ | 523,689 | ||||||||||
| Less: Average goodwill | 69,751 | 69,751 | 69,751 | 68,126 | 68,106 | |||||||||||||||
| Less: Average other intangible assets, gross | 37,132 | 39,467 | 41,809 | 44,304 | 46,864 | |||||||||||||||
| Average tangible equity | $ | 492,447 | $ | 469,641 | $ | 440,385 | $ | 423,254 | $ | 408,719 | ||||||||||
| Return on average tangible equity (non-GAAP) (1) | 17.96 | % | 18.15 | % | 19.70 | % | 18.43 | % | 17.91 | % | ||||||||||
| (1) - Annualized | ||||||||||||||||||||
| (In thousands) | Three Months Ended | |||||||||||||||||||
| Adjusted Ratios for Non-recurring Charges | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Net income (A) - most directly comparable GAAP-based measure | $ | 21,809 | $ | 21,491 | $ | 21,865 | $ | 19,448 | $ | 18,051 | ||||||||||
| Plus: Merger-related expenses (B) | — | — | — | 968 | 1,649 | |||||||||||||||
| Less: Related tax effect (C) | — | — | — | (221 | ) | (368 | ) | |||||||||||||
| Adjusted net income (D=A+B-C) - Non-GAAP | $ | 21,809 | $ | 21,491 | $ | 21,865 | $ | 20,195 | $ | 19,332 | ||||||||||
| Average assets (E) | $ | 5,548,814 | $ | 5,505,311 | $ | 5,420,830 | $ | 5,374,772 | $ | 5,425,697 | ||||||||||
| Return on average assets (= A / E) - most directly comparable GAAP-based measure (1) | 1.59 | % | 1.55 | % | 1.60 | % | 1.45 | % | 1.35 | % | ||||||||||
| Return on average assets, adjusted (= D / E) - Non-GAAP (1) | n/a | n/a | n/a | 1.51 | % | 1.45 | % | |||||||||||||
| Average equity (F) | $ | 599,330 | $ | 578,859 | $ | 551,945 | $ | 535,684 | $ | 523,689 | ||||||||||
| Return on average equity (= A / F) - most directly comparable GAAP-based measure (1) | 14.76 | % | 14.73 | % | 15.72 | % | 14.56 | % | 13.98 | % | ||||||||||
| Return on average equity, adjusted (= D / F) - Non-GAAP (1) | n/a | 14.73 | % | 15.72 | % | 15.12 | % | 14.97 | % | |||||||||||
| Weighted average shares - basic (G) - most directly comparable GAAP-based measure | 19,274 | 19,251 | 19,224 | 19,173 | 19,157 | |||||||||||||||
| Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure | $ | 1.13 | $ | 1.12 | $ | 1.14 | $ | 1.01 | $ | 0.94 | ||||||||||
| Basic earnings per share, adjusted (= D / G) - Non-GAAP | n/a | n/a | n/a | $ | 1.05 | $ | 1.01 | |||||||||||||
| Weighted average shares - diluted (H) - most directly comparable GAAP-based measure | 19,410 | 19,384 | 19,364 | 19,342 | 19,328 | |||||||||||||||
| Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure | $ | 1.12 | $ | 1.11 | $ | 1.13 | $ | 1.01 | $ | 0.93 | ||||||||||
| Diluted earnings per share, adjusted (= D / H) - Non-GAAP | n/a | n/a | n/a | $ | 1.04 | $ | 1.00 | |||||||||||||
| Three Months Ended | ||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||||
| Noninterest expense (I) - most directly comparable GAAP-based measure | $ | 36,728 | $ | 37,355 | $ | 36,297 | $ | 37,614 | $ | 38,176 | ||||||||||
| Less: Merger-related expenses (B) | — | — | — | (968 | ) | (1,649 | ) | |||||||||||||
| Adjusted noninterest expense (J = I - B) - Non-GAAP | $ | 36,728 | $ | 37,355 | $ | 36,297 | $ | 36,646 | $ | 36,527 | ||||||||||
| Net interest income (K) | $ | 49,005 | $ | 50,531 | $ | 50,988 | $ | 49,512 | $ | 48,761 | ||||||||||
| Noninterest income (L) | 15,577 | 14,392 | 13,382 | 12,915 | 11,624 | |||||||||||||||
| Total operating income (M = K + L) | $ | 64,582 | $ | 64,923 | $ | 64,370 | $ | 62,427 | $ | 60,385 | ||||||||||
| Efficiency ratio (= I / M) - most directly comparable GAAP-based measure | 56.9 | % | 57.5 | % | 56.4 | % | 60.3 | % | 63.2 | % | ||||||||||
| Efficiency ratio, adjusted (= J / M) - Non-GAAP | n/a | n/a | n/a | 58.7 | % | 60.5 | % | |||||||||||||
| (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, 2026:
(In thousands)
| Sector | Portfolio Mix | Amortized Book | Fair Value | Credit Enhancement | AAA | AA | A | BBB | BB | NR | Collateral / Guarantee Type | ||||||||||||||||||||
| Unsecured ABS | — | % | $ | 2,455 | $ | 2,383 | 29 | % | — | % | — | % | — | % | — | % | — | % | 100 | % | Unsecured Consumer Debt | ||||||||||
| Student Loan ABS | — | 2,809 | 2,803 | 31 | — | — | — | — | — | 100 | Seasoned Student Loans | ||||||||||||||||||||
| Federal Family Education Loan ABS | 7 | 70,295 | 69,987 | 12 | — | 47 | 33 | 7 | 13 | — | Federal Family Education Loan(1) | ||||||||||||||||||||
| PACE Loan ABS | — | 1,634 | 1,494 | 7 | 100 | — | — | — | — | — | PACE Loans(2) | ||||||||||||||||||||
| Non-Agency CMBS | 3 | 27,043 | 27,051 | 29 | — | — | — | — | — | 100 | |||||||||||||||||||||
| Non-Agency RMBS | 4 | 35,718 | 34,599 | 16 | 93 | 7 | — | — | — | — | Reverse Mortgages(3) | ||||||||||||||||||||
| Municipal - General Obligation | 10 | 99,842 | 92,721 | 16 | 78 | 6 | — | — | — | ||||||||||||||||||||||
| Municipal - Revenue | 13 | 119,566 | 107,627 | — | 82 | 12 | — | — | 6 | ||||||||||||||||||||||
| SBA ReRemic (5) | — | 1,460 | 1,444 | — | 100 | — | — | — | — | SBA Guarantee(4) | |||||||||||||||||||||
| Small Business Administration | — | 2,821 | 2,884 | — | 100 | — | — | — | — | SBA Guarantee(4) | |||||||||||||||||||||
| Agency MBS | 25 | 242,363 | 240,315 | — | 100 | — | — | — | — | Residential Mortgages(4) | |||||||||||||||||||||
| Agency CMO | 36 | 350,010 | 347,290 | — | 100 | — | — | — | — | ||||||||||||||||||||||
| U.S. Treasury securities | 2 | 15,014 | 14,197 | — | 100 | — | — | — | — | U.S. Government Guarantee(4) | |||||||||||||||||||||
| Corporate bonds | — | 1,950 | 1,983 | — | — | 51 | 49 | — | — | ||||||||||||||||||||||
| 100 | % | $ | 972,980 | $ | 946,778 | 5 | % | 84 | % | 5 | % | 1 | % | 1 | % | 4 | % | ||||||||||||||
| (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, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results to differ from those expressed or implied by the forward-looking statements include, but are not limited to, the following: interest rate changes or volatility; 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; 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, and evolving interpretations of, existing and future 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, 2025 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.
