Orrstown Financial Services, Inc. Reports Third Quarter 2022 Results

Source: Nasdaq GlobeNewswire / 18 Oct 2022 16:03:41 America/New_York

Net income of $5.4 million and diluted earnings per share of $0.52 for the quarter ended September 30, 2022 compared to net income of $8.9 million and diluted earnings per share of $0.83 for the quarter ended June 30, 2022;
Excluding the impact from the previously announced restructuring charge of $3.2 million, net income and diluted earnings per share were $7.9 million and $0.75⁽¹⁾ for the third quarter of 2022, respectively;
Net interest income increased to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022 despite a decline of $1.4 million in Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loan income over the same period;
Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022; net interest margin has increased for five consecutive quarters; strong margin momentum continues as a result of loan growth and the rising interest rate environment;
Third quarter commercial loan growth, excluding SBA PPP loans, was $57.7 million, or 14% annualized;
Deposits grew by $27.2 million, or 4% annualized, during the third quarter of 2022;
Noninterest income of $6.1 million in the third quarter of 2022 compared to $7.2 million in the second quarter of 2022; significant increases in mortgage rates caused a decrease in the fair value of residential mortgages held-for-sale; also contributing to the decline was a reduction in secondary market activity;
Noninterest expenses increased by $4.6 million to $23.4 million in the third quarter of 2022 from $18.8 million in the second quarter of 2022; excluding the impact from the restructuring charge, noninterest expenses increased to $20.3 million⁽¹⁾ during the third quarter of 2022; salaries and benefits increased during the third quarter of 2022 due primarily to the impact of wage pressures and incentive compensation, but are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter;
Provision for loan losses of $1.5 million in the third quarter of 2022 compared to $1.8 million in the second quarter of 2022;
The Board of Directors declared a cash dividend of $0.19 per common share, payable November 7, 2022, to shareholders of record as of October 31, 2022;
Strategic initiatives were previously announced to drive long-term growth and improve operating efficiencies through branch closures and staffing model adjustments, which resulted in a pre-tax restructuring charge of $3.2 million during the third quarter of 2022.

SHIPPENSBURG, Pa., Oct. 18, 2022 (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 ended September 30, 2022. Net income totaled $5.4 million for the three months ended September 30, 2022, compared with $8.9 million for the three months ended June 30, 2022 and $7.2 million for the three months ended September 30, 2021. Diluted earnings per share totaled $0.52 for the three months ended September 30, 2022, compared with $0.83 for the three months ended June 30, 2022 and $0.65 for the three months ended September 30, 2021. Excluding the impact from the restructuring charge, net income and diluted earnings per share were $7.9 million and $0.75, respectively, for the third quarter of 2022⁽¹⁾.

“Late in the third quarter, we announced initiatives designed to focus the organization on the rapidly changing banking environment and improve operating efficiencies. These initiatives included the closing of five branch locations and staffing model adjustments. We intend to utilize a portion of the savings generated from these initiatives to make additional investments in technology to further optimize the Bank's digital banking experience and address ongoing wage pressures. We expect that these initiatives will generate meaningful efficiencies in 2023 and forward to drive Orrstown’s long-term growth,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.

⁽¹⁾ Non-GAAP measures. See Appendix A for additional information.

“As expected, these initiatives negatively affected our third quarter results. However, we believe that our core operating results remained strong and expect to continue to benefit from the current interest rate environment. Net interest margin has expanded for several quarters and commercial and consumer loan growth continued during the quarter. Our asset quality metrics compare favorably to historical measurements. While our mortgage banking operations have been negatively impacted by rapid interest rate increases, we continue to focus on strengthening other fee income sources. For example, our wealth management team has sustained its level of income generation despite a significant downturn in the equity markets. The diversification of revenue sources will be critical going forward. We remain focused on enhancing our earnings power through measured growth in an economic environment that is expected to be challenging.”

DISCUSSION OF RESULTS

Balance Sheet

Loans

Excluding SBA PPP loans, total loans increased by $83.5 million from June 30, 2022 to September 30, 2022, or 17% annualized. SBA PPP loans, net of deferred fees and costs, declined by $13.2 million to $17.0 million at September 30, 2022 from $30.2 million at June 30, 2022 due to forgiveness activity. Net deferred SBA PPP fees of $0.3 million remain at September 30, 2022. Commercial loans, excluding SBA PPP loans, increased by $57.7 million, or 14% annualized, from June 30, 2022 to September 30, 2022. Loans held for investment, which includes SBA PPP loans, increased by $70.3 million from June 30, 2022 to September 30, 2022, or 14% annualized, due to net commercial and consumer loan growth.

The first lien residential mortgage portfolio grew by $18.2 million, or 36% annualized, in the three months ended September 30, 2022 from jumbo and adjustable-rate mortgage production. Home equity lines of credit increased by $9.0 million, or 21% annualized, in the three months ended September 30, 2022.

Investment Securities

Investment securities decreased by $9.1 million to $510.1 million at September 30, 2022 compared to $519.2 million at June 30, 2022. During the third quarter of 2022, the Bank purchased mortgage-backed securities totaling $10.1 million and asset-backed securities totaling $8.0 million. These purchases were more than offset by an increase in net unrealized losses of $17.3 million, which resulted from market interest rate increases, and normal paydown activity of $9.0 million. See Appendix B for a summary of the Bank's investment securities at September 30, 2022, highlighting the concentrations, credit ratings and credit enhancement levels of the investment securities portfolio at such date.

Deposits

Deposits increased by $27.2 million, or 4% annualized, totaling approximately $2.5 billion at both September 30, 2022 and June 30, 2022. This increase resulted primarily from seasonality of public fund balances as well as retail deposit generation partially offset by certificate of deposit runoff. In the third quarter of 2022, interest-bearing demand deposits increased by $49.0 million, or 21% annualized. There were decreases in certificates of deposits of $12.1 million, or 18% annualized, non-interest-bearing demand deposits of $7.2 million, or 5% annualized, and money market and savings deposits of $2.5 million, or 1% annualized. The Bank's loan-to-deposit ratio was 83% at September 30, 2022, an increase of 2% from June 30, 2022 due to loan growth.

Income Statement

Net Interest Income and Margin

Net interest income increased by $1.4 million to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022. Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022. The increase in net interest margin was a result of further deployment of cash into loans and investments as well as the impact of the rising interest rates on the loan and investment securities portfolios, partially offset by the increase in the cost of funds.

Interest income on loans, for the three months ended September 30, 2022, increased by $1.1 million to $23.2 million compared to $22.1 million for the three months ended June 30, 2022. Loan growth and higher interest rates were the primary drivers of this increase. Interest income on loans for the three months ended September 30, 2022 included prepayment fee income of $0.1 million, a decrease of $0.3 million, from the three months ended June 30, 2022. Similarly, accretion on acquired loans decreased by $0.3 million to $0.1 million for the three months ended September 30, 2022 compared to the three months ended June 30, 2022 due to fewer payoffs and declining prepayment speed assumptions.

Interest income recognized on SBA PPP loans totaled $0.5 million in the three months ended September 30, 2022 compared to $1.9 million in the three months ended June 30, 2022. The SBA PPP loan portfolio averaged $25.0 million in the three months ended September 30, 2022 compared to $72.5 million in the three months ended June 30, 2022, which reflects continued forgiveness from the SBA.

Interest income on investment securities increased by $1.0 million to $4.4 million in the three months ended September 30, 2022 from $3.4 million for the second quarter of 2022. The increase reflects the impact from rising interest rates on investments for which resets occur at various frequencies and the additional yield generated from investments purchased at the end of the second quarter and into the third quarter of 2022.

Average cash and cash equivalents decreased from $131.4 million in the three months ended June 30, 2022 to $38.1 million in the three months ended September 30, 2022. The decrease reflects the deployment of excess cash balances into loans and investment securities.

Provision for Loan Losses

The Company recorded a provision for loan losses of $1.5 million for the three months ended September 30, 2022 compared to $1.8 million for the three months ended June 30, 2022 primarily due to increases in both commercial and consumer loans during the third quarter of 2022. Net charge-offs were $70 thousand for the three months ended September 30, 2022 compared to net charge-offs of $4 thousand for the three months ended June 30, 2022. The allowance for loan losses totaled $24.7 million at September 30, 2022, compared with $23.3 million at June 30, 2022, and the allowance for loan losses to total loans increased to 1.18% at September 30, 2022 from 1.15% from June 30, 2022.

Asset quality metrics in the third quarter of 2022 compare favorably to historical measurements. The ratio of nonperforming loans to gross loans improved to 0.25% at September 30, 2022, a decrease of 0.02%, from 0.27% at June 30, 2022. Classified loans remained consistent at $19.6 million at both September 30, 2022 and June 30, 2022. Criticized loans increased from $34.1 million at June 30, 2022 to $54.9 million at September 30, 2022 primarily due to downgrades for one borrower within Acquisition and Development and the other borrower within the Commercial and Industrial loan categories. The ratio of the allowance for loan losses to nonaccrual loans increased to 466% at September 30, 2022 from 432% at June 30, 2022. Management believes the allowance for loan losses to be adequate based on current asset quality metrics and economic conditions.

Noninterest Income

Noninterest income totaled $6.1 million in the three months ended September 30, 2022 compared with $7.2 million in the three months ended June 30, 2022.

Mortgage banking income decreased by $1.5 million from income of $0.5 million in the second quarter of 2022 to a loss of $1.0 million in the third quarter of 2022. Market conditions, including rapidly increasing mortgage interest rates and low housing inventory, caused a significant decline in the fair value of the held-for-sale mortgages. In addition, construction has been prolonged in part due to supply chain challenges, which have delayed the marketability of mortgages for sale. The impact was a fair value reduction of $1.4 million in the three months ended September 30, 2022. The difficult mortgage market also slowed residential mortgage loan production, thereby causing corresponding reductions in the residential mortgage loan pipeline and secondary market sales during the three months ended September 30, 2022. Mortgage loans sold totaled $12.7 million in the third quarter of 2022 compared with $22.9 million in the second quarter of 2022.

Swap fee income decreased by $0.6 million to $0.2 million for the three months ended September 30, 2022 compared to $0.8 million for the three months ended June 30, 2022. Swap fee income fluctuates based on market conditions and client demand.

Other income increased by $0.9 million to $1.1 million for the three months ended September 30, 2022 from $0.2 million during the three months ended June 30, 2022. The third quarter of 2022 included income from distributions on investments in non-housing limited partnerships totaling $1.0 million.

Noninterest Expenses

Noninterest expenses increased by $4.6 million to $23.4 million in the three months ended September 30, 2022 from $18.8 million in the three months ended June 30, 2022. During the third quarter of 2022, the Company announced that five branch locations would be closing and staffing model adjustments would be made to drive long-term growth and improve operating efficiencies in 2023 and forward. As a result of these initiatives, the Company recorded a pre-tax restructuring charge of $3.2 million, which consisted of building and fixed asset write-offs of $1.9 million and early retirement/severance costs of $1.3 million.

Salaries and benefits expense increased by $1.4 million to $12.7 million in the three months ended September 30, 2022 from $11.3 million in the three months ended June 30, 2022 due to the filling of several vacancies, higher healthcare costs and merit-based salary and incentive compensation increases. These expenses are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter.

Advertising and bank promotions expense decreased by $0.6 million to $0.3 million in the three months ended September 30, 2022 from $0.9 million for the three months ended June 30, 2022 due to $0.5 million in contributions to the Pennsylvania Educational Improvement Tax Credit Program during the second quarter of 2022. Taxes other than income increased by $0.4 million to $0.5 million in the three months ended September 30, 2022. This increase reflects the tax credits recognized on these contributions during the second quarter of 2022.

Income Taxes

The Company's effective tax rate for the second quarter of 2022 was 17.6% compared with 17.4% for the second quarter of 2022. The Company's effective tax rate for the three months ended September 30, 2022 is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies, as well as tax credits. The effective tax rate for the nine months ended September 30, 2022 is 18.2%.

Capital

Shareholders’ equity totaled $227.6 million at September 30, 2022, a decrease of $9.9 million from $237.5 million at June 30, 2022. The decrease was primarily attributable to a reduction of $14.1 million in accumulated other comprehensive income as unrealized losses on available-for-sale securities increased from higher market interest rates and dividends paid of $2.0 million, partially offset by net income of $5.4 million for the three months ended September 30, 2022. Tangible book value per share⁽¹⁾ decreased from $20.23 per share at June 30, 2022 to $19.30 per share at September 30, 2022 primarily as a result of the decrease in shareholders' equity.

The Company's tangible common equity ratio decreased to 7.3% at September 30, 2022 from 7.7% at June 30, 2022 primarily due to a decrease in tangible equity from the increase in unrealized losses on available-for-sale securities. The Company's total risk-based capital ratio decreased to 13.2% at September 30, 2022 from 13.5% at June 30, 2022 due to deployment of cash into commercial loans and an increase in deferred tax assets resulting primarily from the increase in unrealized losses on available-for-sale securities, both resulting in increases to risk weighted assets. The Company's Tier 1 leverage ratio increased to 8.8% at September 30, 2022 from 8.5% at June 30, 2022 primarily due to the impact of the decrease in average assets caused by the decrease in average deposits over that period.

The Board of Directors approved a quarterly dividend of $0.19 per share, payable on November 7, 2022, to shareholders of record as of October 31, 2022. The dividend payout ratio totaled 37% for the three months ended September 30, 2022 compared to 23% for the three months ended June 30, 2022. The increase is partially attributable to the impact of the restructuring charge. At this time, the Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

⁽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						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars in thousands)		2022			2021			2022			2021

Profitability for the period:
Net interest income	$	25,455		$	20,620		$	72,146		$	64,376
Provision for loan losses		1,500			365			3,575			(10	)
Noninterest income		6,058			7,651			20,726			21,859
Noninterest expenses		23,412			19,035			61,570			53,851
Income before income taxes		6,601			8,871			27,727			32,394
Income tax expense		1,159			1,679			5,046			6,219
Net income available to common shareholders	$	5,442		$	7,192		$	22,681		$	26,175

Financial ratios:
Return on average assets⁽¹⁾		0.77	%		0.98	%		1.07	%		1.21	%
Return on average assets, adjusted^{(1) (2) (3)}		1.12	%		0.98	%		1.19	%		1.21	%
Return on average equity⁽¹⁾		8.93	%		10.69	%		12.03	%		13.49	%
Return on average equity, adjusted^{(1) (2) (3)}		13.02	%		10.69	%		13.35	%		13.49	%
Net interest margin⁽¹⁾		3.92	%		3.03	%		3.70	%		3.21	%
Efficiency ratio		74.3	%		67.3	%		66.3	%		62.4	%
Efficiency ratio, adjusted^{(2) (3)}		64.3	%		67.3	%		62.9	%		62.4	%
Income per common share:
Basic	$	0.52		$	0.66		$	2.14		$	2.38
Basic, adjusted^{(2) (3)}	$	0.77		$	0.66		$	2.37		$	2.38
Diluted	$	0.52		$	0.65		$	2.11		$	2.36
Diluted, adjusted^{(2) (3)}	$	0.75		$	0.65		$	2.34		$	2.36

Average equity to average assets		8.59	%		9.20	%		8.90	%		8.96	%

⁽¹⁾Annualized.
⁽²⁾ Ratio has been adjusted for restructuring expenses.
⁽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)
	September 30,			December 31,
		2022			2021
At period-end:
Total assets	$	2,849,362		$	2,834,565
Total deposits		2,505,853			2,464,929
Loans, net of allowance for loan losses		2,063,218			1,958,806
Loans held-for-sale, at fair value		10,175			8,868
Securities available for sale		503,596			472,438
Borrowings		22,632			25,197
Subordinated notes		32,010			31,963
Shareholders' equity		227,648			271,656

Credit quality and capital ratios⁽¹⁾:
Allowance for loan losses to total loans		1.18	%		1.07	%
Total nonaccrual loans to total loans		0.25	%		0.33	%
Nonperforming assets to total assets		0.19	%		0.23	%
Allowance for loan losses to nonaccrual loans		466	%		328	%
Total risk-based capital:
Orrstown Financial Services, Inc.		13.2	%		15.0	%
Orrstown Bank		12.9	%		14.0	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		10.7	%		12.2	%
Orrstown Bank		11.8	%		12.9	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.7	%		12.2	%
Orrstown Bank		11.8	%		12.9	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		8.8	%		8.5	%
Orrstown Bank		9.6	%		8.9	%

Book value per common share	$	21.30		$	24.29

⁽¹⁾ Capital ratios are estimated, subject to regulatory filings

ORRSTOWN FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands, except per share amounts)	September 30, 2022			December 31, 2021
Assets
Cash and due from banks	$	34,481		$	21,217
Interest-bearing deposits with banks		32,446			187,493
Cash and cash equivalents		66,927			208,710
Restricted investments in bank stocks		6,469			7,252
Securities available for sale (amortized cost of $558,056 and $466,806 at September 30, 2022 and December 31, 2021, respectively)		503,596			472,438
Loans held for sale, at fair value		10,175			8,868
Loans		2,087,927			1,979,986
Less: Allowance for loan losses		(24,709	)		(21,180	)
Net loans		2,063,218			1,958,806
Premises and equipment, net		31,457			34,045
Cash surrender value of life insurance		71,332			70,217
Goodwill		18,724			18,724
Other intangible assets, net		3,338			4,183
Accrued interest receivable		9,212			8,234
Deferred tax assets, net		24,145			11,648
Other assets		40,769			31,440
Total assets	$	2,849,362		$	2,834,565
Liabilities
Deposits:
Noninterest-bearing	$	562,024		$	553,238
Interest-bearing		1,943,829			1,911,691
Total deposits		2,505,853			2,464,929
Securities sold under agreements to repurchase		21,065			23,301
FHLB advances and other		1,567			1,896
Subordinated notes		32,010			31,963
Accrued interest and other liabilities		61,219			40,820
Total liabilities		2,621,714			2,562,909
Shareholders’ Equity
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding		—			—
Common stock, no par value—$0.05205 stated value per share 50,000,000 shares authorized; 11,236,558 shares issued and 10,686,064 outstanding at September 30, 2022; 11,258,167 shares issued and 11,183,050 outstanding at December 31, 2021		585			586
Additional paid—in capital		188,730			189,689
Retained earnings		95,137			78,700
Accumulated other comprehensive (loss) income		(43,468	)		4,449
Treasury stock— 550,494 and 75,117 shares, at cost at September 30, 2022 and December 31, 2021, respectively		(13,336	)		(1,768	)
Total shareholders’ equity		227,648			271,656
Total liabilities and shareholders’ equity	$	2,849,362		$	2,834,565

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended					Nine Months Ended
	September 30,			September 30,		September 30,			September 30,
(In thousands)		2022			2021		2022			2021
Interest income
Loans	$	23,152		$	19,890	$	66,548		$	62,724
Investment securities - taxable		2,907			1,514		6,462			5,007
Investment securities - tax-exempt		1,160			652		3,013			1,790
Short-term investments		200			135		536			255
Total interest income		27,419			22,191		76,559			69,776
Interest expense
Deposits		1,372			937		2,758			3,410
Securities sold under agreements to repurchase		10			8		24			25
FHLB advances and other		78			123		121			458
Subordinated notes		504			503		1,510			1,507
Total interest expense		1,964			1,571		4,413			5,400
Net interest income		25,455			20,620		72,146			64,376
Provision for loan losses		1,500			365		3,575			(10	)
Net interest income after provision for loan losses		23,955			20,255		68,571			64,386
Noninterest income
Service charges		1,216			993		3,483			2,758
Interchange income		1,014			1,030		3,059			3,049
Swap fee income		197			67		1,935			135
Wealth management income		2,953			2,917		8,716			8,570
Mortgage banking activities		(1,014	)		1,333		205			4,684
Investment securities (losses) gains		(14	)		479		(163	)		635
Other income		1,706			832		3,491			2,028
Total noninterest income		6,058			7,651		20,726			21,859
Noninterest expenses
Salaries and employee benefits		12,705			11,498		35,354			31,907
Occupancy, furniture and equipment		2,380			2,374		7,370			7,292
Data processing		1,192			990		3,410			3,041
Advertising and bank promotions		278			735		1,514			1,434
FDIC insurance		294			218		767			570
Professional services		887			562		2,417			1,862
Taxes other than income		488			16		1,160			929
Intangible asset amortization		272			314		845			972
Restructuring expenses		3,155			—		3,155			—
Other operating expenses		1,761			2,328		5,578			5,844
Total noninterest expenses		23,412			19,035		61,570			53,851
Income before income tax expense		6,601			8,871		27,727			32,394
Income tax expense		1,159			1,679		5,046			6,219
Net income	$	5,442		$	7,192	$	22,681		$	26,175

Share information:
Basic earnings per share	$	0.52		$	0.66	$	2.14		$	2.38
Diluted earnings per share	$	0.52		$	0.65	$	2.11		$	2.36
Weighted average shares - basic		10,369			10,979		10,611			10,976
Weighted average shares - diluted		10,529			11,122		10,758			11,103

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Three Months Ended
	9/30/2022							6/30/2022							3/31/2022							12/31/2021							9/30/2021
			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
(Dollars 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	$	38,068	$	200		2.08	%	$	131,449	$	235		0.72	%	$	199,788	$	101		0.20	%	$	250,336	$	98		0.16	%	$	347,242	$	135		0.15	%
Investment securities ⁽¹⁾		528,988		4,377		3.31			523,940		3,388		2.59			472,195		2,512		2.13			477,217		2,506		2.08			464,417		2,339		2.00
Loans^(1)(2)(3)		2,051,707		23,219		4.49			2,008,283		22,090		4.41			1,974,804		21,429		4.39			1,975,014		21,559		4.33			1,919,926		19,945		4.12
Total interest-earning assets		2,618,763		27,796		4.22			2,663,672		25,713		3.87			2,646,787		24,042		3.67			2,702,567		24,163		3.55			2,731,585		22,419		3.26
Other assets		196,277							192,561							184,300							187,622							195,089
Total	$	2,815,040						$	2,856,233						$	2,831,087						$	2,890,189						$	2,926,674
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	1,379,082		912		0.26		$	1,420,051		301		0.09		$	1,398,182		256		0.07		$	1,430,845		273		0.08		$	1,411,243		286		0.08
Savings deposits		237,462		90		0.15			236,916		63		0.11			227,676		57		0.10			215,957		55		0.10			209,112		53		0.10
Time deposits		265,015		370		0.55			275,408		337		0.49			298,618		372		0.51			313,148		461		0.58			349,215		598		0.68
Total interest-bearing deposits		1,881,559		1,372		0.29			1,932,375		701		0.15			1,924,476		685		0.14			1,959,950		789		0.16			1,969,570		937		0.19
Securities sold under agreements to repurchase		23,480		10		0.18			24,045		7		0.11			23,530		7		0.12			24,069		7		0.12			23,578		8		0.13
FHLB advances and other		10,394		78		3.02			1,741		21		4.74			1,850		22		4.74			1,956		23		4.70			45,071		123		1.09
Subordinated notes		32,000		504		6.29			31,985		503		6.29			31,969		503		6.29			31,954		503		6.29			31,938		503		6.29
Total interest-bearing liabilities		1,947,433		1,964		0.40			1,990,146		1,232		0.25			1,981,825		1,217		0.25			2,017,929		1,322		0.26			2,070,157		1,571		0.30
Noninterest-bearing demand deposits		575,777							572,171							540,139							559,882							548,923
Other		49,964							47,190							40,919							42,380							38,409
Total Liabilities		2,573,174							2,609,507							2,562,883							2,620,191							2,657,489
Shareholders' Equity		241,866							246,726							268,204							269,998							269,185
Total	$	2,815,040						$	2,856,233						$	2,831,087						$	2,890,189						$	2,926,674
Taxable-equivalent net interest income / net interest spread				25,832		3.82	%				24,481		3.62	%				22,825		3.42	%				22,841		3.29	%				20,848		2.96	%
Taxable-equivalent net interest margin						3.92	%						3.68	%						3.49	%						3.35	%						3.03	%
Taxable-equivalent adjustment				(377	)						(363	)						(252	)						(243	)						(228	)
Net interest income			$	25,455						$	24,118						$	22,573						$	22,598						$	20,620
Ratio of average interest-earning assets to average interest-bearing liabilities						134	%						134	%						134	%						134	%						132	%


NOTES:
⁽¹⁾Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾Average balances include nonaccrual loans.
⁽³⁾Interest income on loans includes prepayment and late fees, where applicable

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Nine Months Ended
	September 30, 2022							September 30, 2021
			Taxable-			Taxable-				Taxable-			Taxable-
	Average		Equivalent			Equivalent		Average		Equivalent			Equivalent
(Dollars in thousands)	Balance		Interest			Rate		Balance		Interest			Rate
Assets
Federal funds sold & interest-bearing bank balances	$	122,509	$	536		0.59	%	$	261,697	$	255		0.13	%
Investment securities ⁽¹⁾		508,582		10,276		2.70			456,919		7,272		2.13
Loans ^(1)(2)(3)		2,011,881		66,738		4.43			1,988,834		62,895		4.23
Total interest-earning assets		2,642,972		77,550		3.92			2,707,450		70,422		3.48
Other assets		191,090							188,924
Total	$	2,834,062						$	2,896,374
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	1,399,035		1,470		0.14		$	1,380,241		1,014		0.10
Savings deposits		234,054		209		0.12			197,792		149		0.10
Time deposits		279,557		1,079		0.52			376,142		2,247		0.80
Total interest-bearing deposits		1,912,646		2,758		0.19			1,954,175		3,410		0.23
Securities sold under agreements to repurchase		23,685		24		0.14			22,490		25		0.15
FHLB advances and other		4,693		121		3.44			53,608		458		1.14
Subordinated notes		31,985		1,510		6.29			31,924		1,507		6.29
Total interest-bearing liabilities		1,973,009		4,413		0.30			2,062,197		5,400		0.35
Noninterest-bearing demand deposits		562,826							537,247
Other		46,058							37,413
Total Liabilities		2,581,893							2,636,857
Shareholders' Equity		252,169							259,517
Total	$	2,834,062						$	2,896,374
Taxable-equivalent net interest income / net interest spread				73,137		3.62	%				65,022		3.13	%
Taxable-equivalent net interest margin						3.70	%						3.21	%
Taxable-equivalent adjustment				(991	)						(646	)
Net interest income			$	72,146						$	64,376
Ratio of average interest-earning assets to average interest-bearing liabilities						134	%						131	%

NOTES TO ANALYSIS OF NET INTEREST INCOME:
⁽¹⁾ Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾ Average balances include nonaccrual loans.
⁽³⁾ Interest income on loans includes prepayment and late fees, where applicable

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands)	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Profitability for the quarter:
Net interest income	$	25,455		$	24,118		$	22,573		$	22,598		$	20,620
Provision for loan losses		1,500			1,775			300			1,100			365
Noninterest income		6,058			7,194			7,474			7,293			7,651
Noninterest expenses		23,412			18,794			19,364			20,290			19,035
Income before income taxes		6,601			10,743			10,383			8,501			8,871
Income tax expense		1,159			1,872			2,015			1,795			1,679
Net income	$	5,442		$	8,871		$	8,368		$	6,706		$	7,192

Financial ratios:
Return on average assets⁽¹⁾		0.77	%		1.25	%		1.20	%		0.93	%		0.98	%
Return on average equity⁽¹⁾		8.93	%		14.42	%		12.65	%		9.93	%		10.69	%
Net interest margin⁽¹⁾		3.92	%		3.68	%		3.49	%		3.35	%		3.03	%
Efficiency ratio		74.3	%		60.0	%		64.4	%		67.9	%		67.3	%

Per share information:
Income per common share:
Basic	$	0.52		$	0.84		$	0.77		$	0.61		$	0.66
Diluted		0.52			0.83			0.76			0.60			0.65
Book value		21.30			22.25			23.00			24.29			23.97
Tangible book value⁽²⁾		19.30			20.23			21.03			22.32			21.98
Cash dividends paid		0.19			0.19			0.19			0.19			0.19

Average basic shares		10,369			10,610			10,860			10,939			10,979
Average diluted shares		10,529			10,744			11,007			11,113			11,122

⁽¹⁾ Annualized.
⁽²⁾ 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)
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021		September 30, 2021
Noninterest income:
Service charges	$	1,216		$	1,194		$	1,073		$	935	$	993
Interchange income		1,014			1,064			981			1,080		1,030
Swap fee income		197			785			953			158		67
Wealth management income		2,953			2,894			2,869			2,897		2,917
Mortgage banking activities		(1,014	)		498			721			1,225		1,333
Other income		1,706			762			1,023			995		832
Investment securities (losses) gains		(14	)		(3	)		(146	)		3		479
Total noninterest income	$	6,058		$	7,194		$	7,474		$	7,293	$	7,651

Noninterest expenses:
Salaries and employee benefits	$	12,705		$	11,312		$	11,337		$	12,095	$	11,498
Occupancy, furniture and equipment		2,380			2,423			2,567			2,554		2,374
Data processing		1,192			1,165			1,053			1,020		990
Advertising and bank promotions		278			881			355			744		735
FDIC insurance		294			190			283			246		218
Professional services		887			722			808			693		562
Taxes other than income		488			108			564			392		16
Intangible asset amortization		272			281			292			303		314
Restructuring expenses		3,155			—			—			—		—
Other operating expenses		1,761			1,712			2,105			2,243		2,328
Total noninterest expenses	$	23,412		$	18,794		$	19,364		$	20,290	$	19,035

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Balance Sheet at quarter end:
Cash and cash equivalents	$	66,927		$	111,906		$	214,238		$	208,710		$	311,415
Restricted investments in bank stocks		6,469			6,500			6,791			7,252			7,051
Securities available for sale		503,596			512,698			529,730			472,438			445,018
Loans held for sale, at fair value		10,175			7,824			7,403			8,868			6,412
Loans:
Commercial real estate:
Owner occupied		313,125			287,825			256,526			238,668			196,585
Non-owner occupied		573,605			559,309			558,999			551,783			509,703
Multi-family		114,561			116,110			93,158			93,255			112,002
Non-owner occupied residential		105,267			109,141			102,269			106,112			100,088
Commercial and industrial⁽¹⁾		378,574			379,729			443,170			485,728			540,205
Acquisition and development:
1-4 family residential construction		20,810			22,650			15,115			12,279			12,246
Commercial and land development		148,512			134,947			105,204			93,925			71,784
Municipal		12,683			12,957			14,626			14,989			13,631
Total commercial loans		1,667,137			1,622,668			1,589,067			1,596,739			1,556,244
Residential mortgage:
First lien		220,970			202,787			203,231			198,831			203,360
Home equity – term		5,869			5,996			5,820			6,081			7,079
Home equity – lines of credit		180,267			171,269			164,818			160,705			154,004
Installment and other loans		13,684			14,909			15,371			17,630			19,077
Total loans		2,087,927			2,017,629			1,978,307			1,979,986			1,939,764
Allowance for loan losses		(24,709	)		(23,279	)		(21,508	)		(21,180	)		(19,965	)
Net loans held-for-investment		2,063,218			1,994,350			1,956,799			1,958,806			1,919,799
Goodwill		18,724			18,724			18,724			18,724			18,724
Other intangible assets, net		3,338			3,610			3,891			4,183			4,486
Total assets		2,849,362			2,824,201			2,900,537			2,834,565			2,870,182
Total deposits		2,505,853			2,478,616			2,545,992			2,464,929			2,502,108
Borrowings		22,632			25,965			26,412			25,197			29,598
Subordinated notes		32,010			31,994			31,978			31,963			31,948
Total shareholders' equity		227,648			237,527			254,804			271,656			268,569

⁽¹⁾ This balance includes $17.0 million, $30.2 million, $122.5 million, $189.9 million and $259.9 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Capital and credit quality measures ⁽¹⁾:
Total risk-based capital:
Orrstown Financial Services, Inc		13.2	%		13.5	%		14.3	%		15.0	%		15.6	%
Orrstown Bank		12.9	%		13.3	%		13.8	%		14.0	%		14.7	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc		10.7	%		10.9	%		11.7	%		12.2	%		12.8	%
Orrstown Bank		11.8	%		12.2	%		12.7	%		12.9	%		13.5	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc		10.7	%		10.9	%		11.7	%		12.2	%		12.8	%
Orrstown Bank		11.8	%		12.2	%		12.7	%		12.9	%		13.5	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc		8.8	%		8.5	%		8.8	%		8.5	%		8.3	%
Orrstown Bank		9.6	%		9.5	%		9.5	%		8.9	%		8.7	%

Average equity to average assets		8.59	%		8.64	%		9.47	%		9.34	%		9.20	%
Allowance for loan losses to total loans		1.18	%		1.15	%		1.09	%		1.07	%		1.03	%
Total nonaccrual loans to total loans		0.25	%		0.27	%		0.28	%		0.33	%		0.47	%
Nonperforming assets to total assets		0.19	%		0.19	%		0.19	%		0.23	%		0.32	%
Allowance for loan losses to nonaccrual loans		466	%		432	%		390	%		328	%		219	%

Other information:
Net charge-offs (recoveries)	$	70		$	4		$	(28	)	$	(115	)	$	(219	)
Classified loans		19,576			19,682			23,421			23,050			26,910
Nonperforming and other risk assets:
Nonaccrual loans		5,303			5,387			5,510			6,449			9,116
Other real estate owned		—			—			—			—			—
Total nonperforming assets		5,303			5,387			5,510			6,449			9,116
Restructured loans still accruing		689			568			575			804			839
Loans past due 90 days or more and still accruing⁽²⁾		232			322			238			1,201			362
Total nonperforming and other risk assets	$	6,224		$	6,277		$	6,323		$	8,454		$	10,317

(1) Capital ratios are estimated, subject to regulatory filings.

(2) Includes $0.2 million, $0.3 million, $0.2 million, $0.3 million and $0.4 million of purchased credit impaired loans at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively. As of December 31, 2021, there was one loan for $0.9 million, which was in the process of collection and guaranteed by the SBA, and was subsequently collected during the first quarter of 2022.

Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets, which totaled $22.1 million and $22.9 million at September 30, 2022 and December 31, 2021, respectively. Additionally, the Company incurred $3.2 million in restructuring charges during the three months ended September 30, 2022.

Management believes providing certain “non-GAAP” financial information will assist investors in their understanding of the effect of acquisition activity on reported results, particularly to overcome comparability issues related to the influence of intangibles (principally goodwill) created in acquisitions. Management also 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 associated with increasing operating efficiencies for the long-term.

Tangible book value per common share and adjusted net income and associated ratios from the restructuring charge, 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	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Shareholders' equity	$	227,648		$	237,527		$	254,804		$	271,656		$	268,569
Less: Goodwill		18,724			18,724			18,724			18,724			18,724
Other intangible assets		3,338			3,610			3,891			4,183			4,486
Related tax effect		(701	)		(758	)		(817	)		(878	)		(942	)
Tangible common equity (non-GAAP)	$	206,287		$	215,951		$	233,006		$	249,627		$	246,301

Common shares outstanding		10,686			10,676			11,079			11,183			11,205

Book value per share (most directly comparable GAAP based measure)	$	21.30		$	22.25		$	23.00		$	24.29		$	23.97
Intangible assets per share		2.00			2.02			1.97			1.97			1.99
Tangible book value per share (non-GAAP)	$	19.30		$	20.23		$	21.03		$	22.32		$	21.98

(dollars and shares in thousands)	September 30, 2022
Adjusted Ratios for Restructuring Charges	Three Months Ended			Nine Months Ended
Net income (A)	$	5,442		$	22,681
Plus: Restructuring expenses (B)		3,155			3,155
Less: Related tax effect (C)		(663	)		(663	)
Adjusted net income (D=A+B-C)	$	7,934		$	25,173

Average assets (E)	$	2,815,040		$	2,834,062
Return on average assets⁽¹⁾(= A / E)		0.77	%		1.07	%
Return on average assets, adjusted⁽¹⁾(= D / E)		1.12	%		1.19	%

Average equity (F)	$	241,866		$	252,169
Return on average equity⁽¹⁾(= A / F)		8.93	%		12.03	%
Return on average equity, adjusted⁽¹⁾(= D / F)		13.02	%		13.35	%

Weighted average shares - basic (G)		10,369			10,611
Basic earnings per share (= A / G)	$	0.52		$	2.14
Basic earnings per share, adjusted (= D / G)	$	0.77		$	2.37

Weighted average shares - diluted (H)		10,529			10,758
Diluted earnings per share (= A / H)	$	0.52		$	2.11
Diluted earnings per share, adjusted (= D / H)	$	0.75		$	2.34

Noninterest expense (I)	$	23,412		$	61,570
Less: Restructuring expenses (B)		(3,155	)		(3,155	)
Adjusted noninterest expense (J = I - B)	$	20,257		$	58,415

Net interest income (K)	$	25,455		$	72,146
Noninterest income (L)		6,058			20,726
Total operating income (M = K + L)	$	31,513		$	92,872

Efficiency ratio (= I / M)		74.3	%		66.3	%
Efficiency ratio, adjusted (= J / M)		64.3	%		62.9	%

(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 September 30, 2022:

(dollars in thousands)

Sector	Portfolio Mix		Amortized Book		Fair Value		Credit Enhancement		AAA		AA		A		BBB		NR		Collateral Type
Unsecured ABS	1	%	$	5,230	$	4,731	28	%	—	%	—	%	—	%	—	%	100	%	Unsecured Consumer Debt
Student Loan ABS	1			7,284		7,079	26		—		—		—		—		100		Seasoned Student Loans
Federal Family Education Loan ABS	18			99,582		97,456	8		87		13		—		—		—		Federal Family Education Loan ⁽¹⁾
PACE Loan ABS	—			2,777		2,542	6		100		—		—		—		—		PACE Loans ⁽⁴⁾
Non-Agency CMBS	2			10,047		10,045	18		—		—		—		—		100		Commercial Real Estate
Non-Agency RMBS	3			17,012		15,116	13		100		—		—		—		—		Reverse Mortgages ⁽²⁾
Municipal - General Obligation	22			122,576		107,870			5		90		5		—		—
Municipal - Revenue	24			132,026		112,166			—		83		12		—		5
SBA ReRemic ⁽⁵⁾	1			5,840		5,737			—		100		—		—		—		SBA Guarantee ⁽³⁾
Agency MBS	24			135,223		123,353			—		100		—		—		—		Residential Mortgages ⁽³⁾
U.S. Treasury securities	4			20,074		17,115			—		100		—		—		—
Bank CDs	—			249		249			—		—		—		—		100		FDIC Insured CD
	100	%	$	557,920	$	503,459			20	%	71	%	4	%	—	%	5	%

⁽¹⁾ Minimum of 18% guaranteed by U.S. government
⁽²⁾ Reverse mortgages fund over time and credit enhancement is estimated based on prior experience
⁽³⁾ 75% guaranteed by U.S. government agencies
⁽⁴⁾ PACE acronym represents Property Assessed Clean Energy loans
⁽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 $2.8 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Howard, Kent and Washington Counties, Maryland, as well as Baltimore City, Maryland. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

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 and projections about 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. Forward-looking statements are statements that include projections, predictions, expectations, estimates or beliefs about events or results or otherwise are not statements of historical factors, many of which, by their nature, are inherently uncertain and beyond the Company's control, and include, but are not limited to, statements related to new business development, new loan opportunities, growth in the balance sheet and fee-based revenue lines of business, merger and acquisition activity, reducing risk assets and mitigating losses in the future. 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 mitigate losses in the future. In addition to risks and uncertainties related to the COVID-19 pandemic (including those related to variants) and resulting governmental and societal responses, factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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; the integration of the Company's strategic acquisitions; the inability to fully achieve expected savings, efficiencies or synergies from mergers and acquisitions and cost savings initiatives, or taking longer than estimated for such savings, efficiencies and synergies to be realized; changes in laws and regulations; interest rate movements; 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 pending litigation and legal proceedings; the failure of the SBA to honor its guarantee of loans issued under the SBA PPP; the timing of the repayment of SBA PPP loans and the impact it has on fee recognition; our ability to convert new relationships gained through the SBA PPP efforts to full banking relationships; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2021, and our Quarterly Reports on Form 10-Q under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings made with the SEC. The statements are valid only as of the date hereof and we disclaim any obligation to update this information. 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 does not undertake 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.

Orrstown Financial Services, Inc. Reports Third Quarter 2022 Results

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