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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 24, 2023
ORRSTOWN FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania001-3429223-2530374
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
77 East King Street,P. O. Box 250Shippensburg,Pennsylvania17257
(Address of Principal Executive Offices)(Zip Code)
Registrant’s Telephone Number, Including Area Code:(717)532-6114
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, no par valueORRFNasdaq Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐Emerging growth company
☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02    Results of Operations and Financial Condition
On October 24, 2023, Orrstown Financial Services, Inc. (the “Company”) issued a press release to report earnings for the quarter ended September 30, 2023.
A copy of the press release is furnished with this Form 8-K as Exhibit 99, and is incorporated herein in its entirety by reference.
Item 7.01    Regulation FD
The Board of Directors of the Company declared a cash dividend of $0.20 per common share, payable November 14, 2023 to shareholders of record as of November 7, 2023.
Item 9.01    Financial Statements and Exhibits
(d)    Exhibits
The following exhibit is furnished as part of this Current Report on Form 8-K:
Exhibit No.Description
99
104Cover Page Interactive Data File (embedded within the inline XBRL document)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
ORRSTOWN FINANCIAL SERVICES, INC.
Date: October 24, 2023By:/s/ Neelesh Kalani
Neelesh Kalani
Executive Vice President and Chief Financial Officer
(Duly Authorized Representative)



Exhibit 99
orrflogo2019a.jpg
FOR IMMEDIATE RELEASE:                 
Orrstown Financial Services, Inc. Reports Earnings for the Third Quarter 2023

•Net income of $9.0 million and diluted earnings per share of $0.87 for the three months ended September 30, 2023 compared to net income of $9.8 million and diluted earnings per share of $0.94 for the three months ended June 30, 2023;
•Net interest margin, on a tax equivalent basis, was 3.73% in the third quarter of 2023 as compared to 3.83% in the second quarter of 2023;
•Return on average assets of 1.18% and return on average equity of 14.42% for the third quarter of 2023 compared to return on average assets of 1.32% and return on average equity of 16.27% during the second quarter of 2023;
•Third quarter total loan growth was $32.4 million, or 6% annualized; year-to-date total loan growth was $115.6 million, or 7% annualized;
•Third quarter deposit growth was $23.6 million; deposits that are uninsured and not collateralized were 15% of total deposits at September 30, 2023 compared to 16% of total deposits at June 30, 2023;
•Non-interest expenses decreased by $0.3 million from $20.7 million for the three months ended June 30, 2023 to $20.4 million for the three months ended September 30, 2023;
•Non-interest income decreased by $1.3 million to $5.9 million for the three months ended September 30, 2023 from $7.2 million for the three months ended June 30, 2023; this was almost entirely due to the $1.2 million gain on the sale of the Bank's Path Valley branch in the second quarter of 2023;
•Tangible common equity(1) ratio declined from 7.5% at June 30, 2023 to 7.3% at September 30, 2023 reflecting an increase of $11.2 million, net of taxes, in net unrealized losses on investment securities;
•The Board of Directors declared a cash dividend of $0.20 per common share, payable November 14, 2023, to shareholders of record as of November 7, 2023.

(1) Non-GAAP measure. See Appendix A for additional information.
SHIPPENSBURG, PA (October 24, 2023) -- 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, 2023. Net income totaled $9.0 million for the three months ended September 30, 2023, compared to $9.8 million for the three months ended June 30, 2023 and a net loss of $4.8 million for the three months ended September 30, 2022, which included a restructuring charge for branch closures and other expense savings initiatives and a provision for legal settlement totaling $12.8 million, net of tax. Diluted earnings per share totaled $0.87 for the three months ended September 30, 2023, compared to $0.94 for the three months ended June 30, 2023 and diluted loss per share of $0.47 for the three months ended September 30, 2022.
“We are pleased with our third quarter results as Orrstown continues to generate strong earnings in a challenging environment. We remain focused on delivering strong earnings and building our long-term capital base through prudent balance sheet growth. While net interest margin compression has continued, the impact of higher funding costs has been controlled through disciplined loan and deposit pricing during the nine months ended September 30, 2023. Deposits continue to grow modestly as a result of our relationship-based approach. The Bank has diversified sources of non-interest income, which have allowed us to offset the impact of a difficult wealth and mortgage market. We believe we are well-positioned for future growth," commented Thomas R. Quinn, Jr., President and Chief Executive Officer.

1

DISCUSSION OF RESULTS
Balance Sheet
Loans
Loans held for investment, which includes SBA PPP loans of $6.2 million at September 30, 2023, increased by $32.4 million from June 30, 2023 to September 30, 2023, or 6% annualized. Commercial loans, excluding SBA PPP loan forgiveness activity, increased by $17.7 million, or 4% annualized, from June 30, 2023 to September 30, 2023. The residential mortgage portfolio increased by $16.2 million, or 15% annualized, in the three months ended September 30, 2023 as there has been increased production of adjustable-rate mortgages, which have been retained in portfolio.
Investment Securities
Investment securities, which are all available-for-sale, decreased by $13.4 million to $495.2 million at September 30, 2023 compared to $508.6 million at June 30, 2023. During the third quarter of 2023, net purchases totaled $10.0 million, net unrealized losses increased by $14.4 million and paydowns were $7.8 million. The increase in net unrealized losses was primarily due to higher market interest rates. The overall duration of the Company's investment securities portfolio is 4.7 years at September 30, 2023. The Company has sufficient access to liquidity such that management does not believe it would be necessary to sell any of its investment securities at a loss to offset any unexpected deposit outflows. See Appendix B for a summary of the Bank's investment securities at September 30, 2023, highlighting their concentrations, credit ratings and credit enhancement levels.
Deposits
Deposits increased by $23.6 million, totaling approximately $2.5 billion at both September 30, 2023 and June 30, 2023. In the third quarter of 2023, time deposits increased by $31.4 million, or 36% annualized, money market deposits rose by $22.7 million, or 18% annualized, and interest-bearing demand deposits increased by $14.2 million, or 6% annualized. These increases were partially offset by decreases in noninterest-bearing demand deposits of $30.4 million, or 26% annualized, and savings deposits of $14.3 million, or 29% annualized. The increase in time deposits was attributable to promotional offerings of up to 18-month terms. The declines in the noninterest-bearing and savings deposit categories were primarily the result of clients seeking higher-yielding products, including reciprocal deposits, with the Bank. At September 30, 2023, deposits that are uninsured and not collateralized totaled $387.5 million, or 15%, of total deposits compared to $409.1 million, or 16%, of total deposits at June 30, 2023. The Bank's loan-to-deposit ratio was 89% at both September 30, 2023 and June 30, 2023.
Borrowings
The Bank actively manages its liquidity position through its various sources of funding to meet the credit needs of its clients. FHLB advances and other borrowings increased by $20.5 million to $157.2 million at September 30, 2023 compared to $136.7 million at June 30, 2023. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed on a timely basis. The Bank had available alternative funding sources, such as the FHLB advances and other wholesale options, of approximately $1.0 billion at September 30, 2023.
2

Income Statement
Net Interest Income and Margin
Net interest income was $26.2 million for the three months ended September 30, 2023 compared to $26.4 million for the three months ended June 30, 2023. The net interest margin, on a tax equivalent basis, declined to 3.73% in the third quarter of 2023 from 3.83% in the second quarter of 2023. Net interest margin decreased primarily because funding costs continued to increase at a pace faster than assets repriced.
Interest income on loans increased by $1.7 million to $32.9 million for the three months ended September 30, 2023 compared to $31.2 million for the three months ended June 30, 2023. Loan growth and higher interest rates were the primary drivers of this increase. Interest income on loans for the three months ended September 30, 2023 included prepayment fee income of $0.4 million, an increase of $0.2 million from the three months ended June 30, 2023, which resulted in an increase of two basis points in net interest margin.
Interest income on investment securities was $5.5 million for the three months ended September 30, 2023 compared to $5.4 million in the second quarter of 2023. The investment portfolio continues to benefit from increasing yields on adjustable-rate securities.
Interest expense increased by $2.0 million to $12.5 million for the three months ended September 30, 2023 compared to $10.5 million for the three months ended June 30, 2023 due primarily to increasing deposit and borrowing rates for both existing and new balances. In addition, average interest-bearing deposits increased by $47.7 million; whereas, average borrowed funds decreased by $2.6 million during the three months ended September 30, 2023.
Provision for Credit Losses
The Company recorded a provision for credit losses of $0.1 million for the three months ended September 30, 2023 compared to $0.4 million for the three months ended June 30, 2023. The allowance for credit losses decreased by $0.1 million to $28.3 million at September 30, 2023 compared to $28.4 million at June 30, 2023. Although there was loan growth of $32.4 million during the third quarter of 2023, the allowance for credit losses was impacted by improvements in the macroeconomic conditions within the forecasted loss rate model. The allowance for credit losses to total loans was 1.25% at September 30, 2023 compared to 1.27% at June 30, 2023. Net charge-offs were $0.2 million for the three months ended September 30, 2023 compared to net charge-offs of $0.4 million for the three months ended June 30, 2023. Special mention loans decreased by $13.7 million from $45.5 million at June 30, 2023 to $31.8 million at September 30, 2023 due to repayments of $10.2 million and upgrades of $3.5 million. Classified loans increased by $7.3 million to $33.6 million at September 30, 2023 from $26.3 at June 30, 2023. The increase in classified loans was primarily due to downgrades to two commercial loans, within the owner-occupied and commercial and industrial loan classes, to one client totaling $6.3 million. The increase in classified loans was partially offset by repayments within this category. Non-accrual loans increased by $1.2 million to $22.3 million at September 30, 2023 from $21.1 million at June 30, 2023 primarily due to one loan in the owner-occupied loan class. Management believes the allowance for credit losses to be adequate based on current asset quality metrics and economic conditions.
Management regularly analyzes the commercial real estate portfolio, which includes the review of occupancy, cash flows, expenses and expiring leases, as well as the location of the real estate. At September 30, 2023, the Company had $244.7 million in loans related to office space, which had a weighted average loan-to-value ratio of 57% and a weighted average debt coverage ratio of 1.62x, compared to $236.7 million at June 30, 2023. Management believes that the office space portfolio is well-diversified and includes only limited exposure to properties located in major metro markets (approximately 3% of the total commercial real estate loan balance as of September 30, 2023).
Noninterest Income
Noninterest income decreased by $1.3 million to $5.9 million in the three months ended September 30, 2023 compared to $7.2 million in the three months ended June 30, 2023.
Other income in the three months ended June 30, 2023 includes a gain of $1.2 million from the sale of the Bank's Path Valley branch.
Mortgage banking income decreased by $0.2 million from income of $0.1 million in the second quarter of 2023 to a loss of $0.1 million in the third quarter of 2023. During the three months ended September 30, 2023, mortgage interest rates increased significantly, which resulted in a decline to the fair value mark of the Bank's held-for-sale loans of $0.4 million compared to a decrease in the fair value market of $0.1 million during the three months ended June 30, 2023. Market
3

conditions and elevated interest rates continued to hinder mortgage production during the third quarter of 2023. Most mortgage production remains in adjustable-rate products, which are held in portfolio.
During the third quarter of 2023, the Company recorded swap fee income of $0.3 million compared to $0.2 million in the three months ended June 30, 2023. Swap fee income fluctuates based on market conditions and client demand.
Noninterest Expenses
Noninterest expenses decreased by $0.3 million to $20.4 million in the three months ended September 30, 2023 from $20.7 million in the three months ended June 30, 2023.
Salaries and benefits expense decreased by $0.2 million to $12.9 million for the three months ended September 30, 2023 compared to $13.1 million for the three months ended June 30, 2023. The decrease was attributed primarily to employee severance costs of $0.5 million during the second quarter of 2023 and a decline of $0.1 million in healthcare costs, partially offset by increases in merit-based salaries and incentive compensation of $0.5 million. The increase in merit-based salaries was a result of merit increases during the second quarter of 2023, the filling of vacancies and an additional day in the third quarter of 2023 compared to the second quarter of 2023, which impacts the accrual.
Advertising and bank promotions expense decreased by $0.6 million to $0.3 million in the three months ended September 30, 2023 from $0.9 million for the three months ended June 30, 2023 due to $0.5 million in contributions to tax credit programs during the second quarter of 2023. Taxes other than income increased by $0.3 million to $0.4 million in the three months ended September 30, 2023 compared to less than $0.1 million in the three months ended June 30, 2023. This increase reflects the tax credits recognized on the contributions during the second quarter of 2023.
Professional services expense increased by $0.5 million to $1.0 million in the three months ended September 30, 2023 from $0.5 million in the three months ended June 30, 2023 due primarily to an increase in consulting costs to support technology improvements and compliance enhancements.
Other operating expenses decreased by $0.5 million to $1.5 million during the third quarter of 2023 compared to $2.0 million during the second quarter of 2023. This decrease included a reduction of $0.3 million in credit value adjustments on derivatives for the three months ended September 30, 2023 compared to the three months ended June 30, 2023. The remaining fluctuation is attributable to normal business operations.
Income Taxes
The Company's effective tax rate for the third quarter of 2023 was 21.9% compared to 20.6% for the second quarter of 2023. The Company's effective tax rate for the three months ended September 30, 2023 is greater than the 21% federal statutory rate primarily due to an increase in state taxes in addition to the disallowed portion of interest expense against earnings in association with the Bank's tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982, partially offset by tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits. The effective tax rate was 20.7% for the nine-months ended September 30, 2023 compared to 15.7% for the nine months ended September 30, 2022. The lower effective tax rate for the nine months ended September 30, 2022 was partially caused by the impact of the restructuring charge for branch closures and other expense savings initiatives and a provision for legal settlement during the third quarter of 2022. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.
Capital
Shareholders’ equity totaled $243.1 million at September 30, 2023, a decrease of $2.5 million from $245.6 million at June 30, 2023. The decrease was primarily attributable to other comprehensive losses of $10.1 million and dividends paid of $2.1 million partially offset by net income of $9.0 million. Other comprehensive losses increased during the third quarter of 2023 due to after-tax declines from $11.2 million in net unrealized losses on investment securities partially offset by net unrealized gains on cash flow hedges of $1.1 million.
Tangible book value per share(1) decreased to $20.94 per share at September 30, 2023 from $21.19 per share at June 30, 2023 due to the decrease in shareholders' equity.



(1) Non-GAAP measure. See Appendix A for additional information.
4

The Company's tangible common equity ratio decreased to 7.3% at September 30, 2023 from 7.5% at June 30, 2023 primarily due to a decrease in tangible equity from net unrealized losses on investment securities and an increase in total tangible assets. The Company's total risk-based capital ratio was 13.0% at both September 30, 2023 and June 30, 2023. The Company's Tier 1 leverage ratio increased from 8.6% at June 30, 2023 to 8.7% at September 30, 2023. At September 30, 2023, 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.
The Board of Directors approved a cash dividend of $0.20 per share, payable on November 14, 2023, to shareholders of record as of November 7, 2023.


Investor Relations Contact:
Neelesh Kalani
Executive Vice President, Chief Financial Officer
Phone (717) 510-7097


5


ORRSTOWN FINANCIAL SERVICES, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
Nine Months Ended
September 30,September 30,September 30,September 30,
(Dollars in thousands)2023202220232022
Profitability for the period:
Net interest income$26,219 $25,455 $78,888 $72,146 
Provision for credit losses136 1,500 1,264 3,575 
Noninterest income5,925 6,058 19,161 20,726 
Noninterest expenses20,447 36,412 61,451 74,570 
Income (loss) before income tax expense (benefit)
11,561 (6,399)35,334 14,727 
Income tax expense (benefit)2,535 (1,571)7,314 2,316 
Net income (loss) available to common shareholders$9,026 $(4,828)$28,020 $12,411 
Financial ratios:
Return on average assets (1)
1.18 %(0.68)%1.25 %0.59 %
Return on average assets, adjusted (1) (2) (3)
1.18 %1.12 %1.25 %1.19 %
Return on average equity (1)
14.42 %(7.92)%15.51 %6.58 %
Return on average equity, adjusted (1) (2) (3)
14.42 %13.02 %15.51 %13.35 %
Net interest margin (1)
3.73 %3.92 %3.83 %3.70 %
Efficiency ratio63.6 %115.5 %62.7 %80.3 %
Efficiency ratio, adjusted (2) (3)
63.6 %64.3 %62.7 %62.9 %
Income (loss) per common share:
Basic$0.87 $(0.47)$2.71 $1.17 
Basic, adjusted (2) (3)
$0.87 $0.77 $2.71 $2.37 
Diluted$0.87 $(0.47)$2.68 $1.16 
Diluted, adjusted (2) (3)
$0.87 $0.75 $2.68 $2.34 
Average equity to average assets8.18 %8.59 %8.09 %8.90 %
(1) Annualized.
(2) Ratio for the three and nine months ended September 30, 2022 has been adjusted for the restructuring charge and provision for legal settlement.
(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.

6

ORRSTOWN FINANCIAL SERVICES, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
September 30,December 31,
(Dollars in thousands, except per share amounts)20232022
At period-end:
Total assets$3,054,435 $2,922,408 
Total deposits2,546,435 2,476,246 
Loans, net of allowance for credit losses2,238,558 2,126,054 
Loans held-for-sale, at fair value6,448 10,880 
Securities available for sale, at fair value495,162 513,728 
Borrowings175,241 123,390 
Subordinated notes32,076 32,026 
Shareholders' equity243,080 228,896 
Credit quality and capital ratios (1):
Allowance for credit losses to total loans1.25 %1.17 %
Total nonaccrual loans to total loans0.98 %0.96 %
Nonperforming assets to total assets0.73 %0.70 %
Allowance for credit losses to nonaccrual loans127 %122 %
Total risk-based capital:
Orrstown Financial Services, Inc.13.0 %12.7 %
Orrstown Bank12.5 %12.3 %
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.10.6 %10.3 %
Orrstown Bank11.4 %11.2 %
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.10.6 %10.3 %
Orrstown Bank11.4 %11.2 %
Tier 1 leverage capital:
Orrstown Financial Services, Inc.8.7 %8.5 %
Orrstown Bank9.3 %9.2 %
Book value per common share$22.90 $21.45 
(1) Capital ratios are estimated, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. In the first year of adoption 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.






7

ORRSTOWN FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands, except per share amounts)September 30, 2023December 31, 2022
Assets
Cash and due from banks$34,728 $28,477 
Interest-bearing deposits with banks60,211 32,346 
Cash and cash equivalents94,939 60,823 
Restricted investments in bank stocks12,987 10,642 
Securities available for sale (amortized cost of $553,222 and $563,278 at September 30, 2023 and December 31, 2022, respectively)
495,162 513,728 
Loans held for sale, at fair value6,448 10,880 
Loans2,266,836 2,151,232 
Less: Allowance for credit losses(28,278)(25,178)
Net loans2,238,558 2,126,054 
Premises and equipment, net29,385 29,328 
Cash surrender value of life insurance72,754 71,760 
Goodwill18,724 18,724 
Other intangible assets, net2,650 3,078 
Accrued interest receivable12,212 11,027 
Deferred tax assets, net25,500 24,031 
Other assets45,116 42,333 
Total assets$3,054,435 $2,922,408 
Liabilities
Deposits:
Noninterest-bearing$435,488 $494,131 
Interest-bearing2,110,947 1,950,807 
Deposits held for assumption in connection with sale of bank branch— 31,307 
Total deposits2,546,435 2,476,246 
Securities sold under agreements to repurchase and federal funds purchased17,991 17,251 
FHLB advances and other borrowings157,250 106,139 
Subordinated notes32,076 32,026 
Accrued interest and other liabilities57,603 61,850 
Total liabilities2,811,355 2,693,512 
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; 11,206,480 shares issued and 10,613,271 outstanding at September 30, 2023; 11,229,242 shares issued and 10,671,413 outstanding at December 31, 2022
583 584 
Additional paid—in capital188,458 189,264 
Retained earnings112,144 92,473 
Accumulated other comprehensive losses(44,343)(39,913)
Treasury stock— 593,209 and 557,829 shares, at cost at September 30, 2023 and December 31, 2022, respectively
(13,762)(13,512)
Total shareholders’ equity243,080 228,896 
Total liabilities and shareholders’ equity$3,054,435 $2,922,408 




8

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)2023202220232022
Interest income
Loans$32,738 $23,152 $92,685 $66,548 
Investment securities - taxable4,459 2,907 13,244 6,462 
Investment securities - tax-exempt861 1,160 2,591 3,013 
Short-term investments633 200 1,349 536 
Total interest income38,691 27,419 109,869 76,559 
Interest expense
Deposits10,582 1,372 25,392 2,758 
Securities sold under agreements to repurchase and federal funds purchased31 10 84 24 
FHLB advances and other borrowings1,354 78 3,992 121 
Subordinated notes505 504 1,513 1,510 
Total interest expense12,472 1,964 30,981 4,413 
Net interest income26,219 25,455 78,888 72,146 
Provision for credit losses136 1,500 1,264 3,575 
Net interest income after provision for credit losses26,083 23,955 77,624 68,571 
Noninterest income
Service charges1,260 1,216 3,668 3,483 
Interchange income963 1,014 2,921 3,059 
Swap fee income255 197 451 1,935 
Wealth management income2,826 2,953 8,395 8,716 
Mortgage banking activities(142)(1,014)448 205 
Investment securities gains (losses)2 (14)(8)(163)
Other income761 1,706 3,286 3,491 
Total noninterest income5,925 6,058 19,161 20,726 
Noninterest expenses
Salaries and employee benefits12,885 12,705 38,135 35,354 
Occupancy, furniture and equipment2,460 2,380 7,059 7,370 
Data processing1,248 1,192 3,666 3,410 
Advertising and bank promotions332 278 1,656 1,514 
FDIC insurance477 294 1,500 767 
Professional services965 887 2,203 2,417 
Taxes other than income387 488 847 1,160 
Intangible asset amortization228 272 717 845 
Other operating expenses1,465 1,761 5,668 5,578 
Total noninterest expenses20,447 36,412 61,451 74,570 
Income (loss) before income tax expense (benefit)
11,561 (6,399)35,334 14,727 
Income tax expense (benefit)2,535 (1,571)7,314 2,316 
Net income (loss)$9,026 $(4,828)$28,020 $12,411 
Share information:
Basic earnings (loss) per share$0.87 $(0.47)$2.71 $1.17 
Diluted earnings (loss) per share$0.87 $(0.47)$2.68 $1.16 
Weighted average shares - basic10,319 10,369 10,346 10,611 
Weighted average shares - diluted10,405 10,529 10,440 10,758 
9

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
Three Months Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Taxable-Taxable-Taxable-Taxable-Taxable-Taxable-Taxable-Taxable-Taxable-Taxable-
AverageEquivalentEquivalentAverageEquivalentEquivalentAverageEquivalentEquivalentAverageEquivalentEquivalentAverageEquivalentEquivalent
(Dollars in thousands)BalanceInterestRateBalanceInterestRateBalanceInterestRateBalanceInterestRateBalanceInterestRate
Assets
Federal funds sold & interest-bearing bank balances$57,778 $633 4.35 %$37,895 $418 4.42 %$29,599 $298 4.07 %$28,419 $238 3.31 %$38,068 $200 2.08 %
Investment securities (1)
521,234 5,548 4.26 526,225 5,510 4.19 525,685 5,465 4.18 512,779 5,170 4.03 528,988 4,377 3.31 
Loans (1)(2)(3)
2,256,727 32,878 5.78 2,233,312 31,329 5.63 2,180,224 28,844 5.36 2,133,052 27,061 5.04 2,051,707 23,219 4.49 
Total interest-earning assets2,835,739 39,059 5.47 2,797,432 37,257 5.34 2,735,508 34,607 5.12 2,674,250 32,469 4.83 2,618,763 27,796 4.22 
Other assets200,447 191,983 197,620 202,384 196,277 
Total assets$3,036,186 $2,989,415 $2,933,128 $2,876,634 $2,815,040 
Liabilities and Shareholders' Equity
Interest-bearing demand deposits$1,541,728 7,476 1.92 $1,511,468 6,273 1.66 $1,503,421 4,862 1.31 $1,459,109 2,838 0.77 $1,379,082 912 0.26 
Savings deposits190,817 164 0.34 204,584 135 0.26 219,408 133 0.25 228,521 132 0.23 237,462 90 0.15 
Time deposits357,194 2,942 3.27 326,034 2,200 2.71 275,880 1,207 1.78 254,637 609 0.95 265,015 370 0.55 
Total interest-bearing deposits2,089,739 10,582 2.01 2,042,086 8,608 1.69 1,998,709 6,202 1.26 1,942,267 3,579 0.73 1,881,559 1,372 0.29 
Securities sold under agreements to repurchase and federal funds purchased15,006 31 0.83 13,685 28 0.82 13,868 25 0.72 18,211 20 0.46 23,480 10 0.18 
FHLB advances and other borrowings128,131 1,354 4.19 132,094 1,386 4.21 106,434 1,252 4.77 48,276 509 4.21 10,394 78 3.02 
Subordinated notes32,066 505 6.29 32,049 504 6.29 32,033 504 6.29 32,016 503 6.29 32,000 504 6.29 
Total interest-bearing liabilities2,264,942 12,472 2.19 2,219,914 10,526 1.90 2,151,044 7,983 1.50 2,040,770 4,611 0.90 1,947,433 1,964 0.40 
Noninterest-bearing demand deposits468,628 476,123 495,562 540,275 575,777 
Other liabilities54,353 50,851 52,630 74,602 49,964 
Total liabilities2,787,923 2,746,888 2,699,236 2,655,647 2,573,174 
Shareholders' equity248,263 242,527 233,892 220,987 241,866 
Total$3,036,186 $2,989,415 $2,933,128 $2,876,634 $2,815,040 
Taxable-equivalent net interest income / net interest spread26,587 3.29 %26,731 3.44 %26,624 3.62 %27,858 3.93 %25,832 3.82 %
Taxable-equivalent net interest margin3.73 %3.83 %3.94 %4.14 %3.92 %
Taxable-equivalent adjustment(368)(356)(330)(374)(377)
Net interest income$26,219 $26,375 $26,294 $27,484 $25,455 
Ratio of average interest-earning assets to average interest-bearing liabilities125 %126 %127 %131 %134 %
10

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.

11

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
(continued)
Nine Months Ended
September 30, 2023September 30, 2022
Taxable-Taxable-Taxable-Taxable-
AverageEquivalentEquivalentAverageEquivalentEquivalent
(Dollars in thousands)BalanceInterestRateBalanceInterestRate
Assets
Federal funds sold & interest-bearing bank balances$41,861 $1,349 4.31 %$122,509 $536 0.59 %
Investment securities (1)
524,365 16,523 4.21 508,582 10,276 2.70 
Loans (1)(2)(3)
2,223,701 93,051 5.59 2,011,881 66,738 4.43 
Total interest-earning assets2,789,927 110,923 5.31 2,642,972 77,550 3.92 
Other assets196,694 191,090 
Total assets$2,986,621 $2,834,062 
Liabilities and Shareholders' Equity
Interest-bearing demand deposits$1,519,013 18,611 1.64 $1,399,035 1,470 0.14 
Savings deposits204,832 431 0.28 234,054 209 0.12 
Time deposits 320,000 6,350 2.65 279,557 1,079 0.52 
Total interest-bearing deposits2,043,845 25,392 1.66 1,912,646 2,758 0.19 
Securities sold under agreements to repurchase and federal funds purchased14,190 84 0.79 23,685 24 0.14 
FHLB advances and other122,300 3,992 4.36 4,693 121 3.44 
Subordinated notes32,049 1,513 6.29 31,985 1,510 6.29 
Total interest-bearing liabilities2,212,384 30,981 1.87 1,973,009 4,413 0.30 
Noninterest-bearing demand deposits480,006 562,826 
Other liabilities52,618 46,058 
Total liabilities2,745,008 2,581,893 
Shareholders' equity241,613 252,169 
Total liabilities and shareholders' equity$2,986,621 $2,834,062 
Taxable-equivalent net interest income / net interest spread79,942 3.44 %73,137 3.62 %
Taxable-equivalent net interest margin3.83 %3.70 %
Taxable-equivalent adjustment(1,054)(991)
Net interest income$78,888 $72,146 
Ratio of average interest-earning assets to average interest-bearing liabilities126 %134 %
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.
12

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(In thousands)September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022		September 30,
2022
Profitability for the quarter:
Net interest income$26,219 $26,375 $26,294 $27,484 $25,455 
Provision for credit losses136 399 729 585 1,500 
Noninterest income5,925 7,158 6,078 6,226 6,058 
Noninterest expenses20,447 20,749 20,255 21,236 36,412 
Income (loss) before income taxes11,561 12,385 11,388 11,889 (6,399)
Income tax expense (benefit) 2,535 2,547 2,232 2,263 (1,571)
Net income (loss)$9,026 $9,838 $9,156 $9,626 $(4,828)
Financial ratios:
Return on average assets (1)
1.18 %1.32 %1.27 %1.33 %(0.68)%
Return on average assets, adjusted (1)(2)(3)
1.18 %1.32 %1.27 %1.33 %1.12 %
Return on average equity (1)
14.42 %16.27 %15.88 %17.28 %(7.92)%
Return on average equity, adjusted (1)(2)(3)
14.42 %16.27 %15.88 %17.28 %13.02 %
Net interest margin (1)
3.73 %3.83 %3.94 %4.14 %3.92 %
Efficiency ratio63.6 %61.9 %62.6 %63.0 %115.5 %
Efficiency ratio, adjusted (2)(3)
63.6 %61.9 %62.6 %63.0 %64.3 %
Per share information:
Income (loss) per common share:
Basic$0.87 $0.95 $0.88 $0.93 $(0.47)
Basic, adjusted (2)(3)
0.87 0.95 0.88 0.93 0.77 
Diluted0.87 0.94 0.87 0.91 (0.47)
Diluted, adjusted (2)(3)
0.87 0.94 0.87 0.91 0.75 
Book value22.90 23.15 22.46 21.45 20.34 
Tangible book value20.94 21.19 20.50 19.47 18.34 
Cash dividends paid0.20 0.20 0.20 0.19 0.19 
Average basic shares10,319 10,336 10,385 10,382 10,369 
Average diluted shares10,405 10,421 10,496 10,550 10,529 
(1) Annualized.
(2) Ratio has been adjusted for the restructuring charge and provision for legal settlement for the three months ended September 30, 2022.
(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.
13

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022		September 30,
2022
Noninterest income:
Service charges$1,260 $1,251 $1,157 $1,131 $1,216 
Interchange income963 993 965 996 1,014 
Swap fee income255 196 — 697 197 
Wealth management income2,826 2,822 2,747 2,535 2,953 
Mortgage banking activities(142)112 478 202 (1,014)
Other income761 1,786 739 662 1,706 
Investment securities gains (losses)2 (2)(8)3 (14)
Total noninterest income$5,925 $7,158 $6,078 $6,226 $6,058 
Noninterest expenses:
Salaries and employee benefits$12,885 $13,054 $12,196 $12,650 $12,705 
Occupancy, furniture and equipment2,460 2,266 2,333 2,442 2,380 
Data processing1,248 1,201 1,217 1,150 1,192 
Advertising and bank promotions332 919 405 750 278 
FDIC insurance477 519 504 316 294 
Professional services965 504 734 837 887 
Taxes other than income387 3 457 231 488 
Intangible asset amortization228 239 250 260 272 
Provision for legal settlement— — — — 13,000 
Restructuring expenses— — — — 3,155 
Other operating expenses1,465 2,044 2,159 2,600 1,761 
Total noninterest expenses$20,447 $20,749 $20,255 $21,236 $36,412 


14

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022		September 30,
2022
Balance Sheet at quarter end:
Cash and cash equivalents$94,939 $76,318 $98,323 $60,823 $66,927 
Restricted investments in bank stocks12,987 12,602 12,869 10,642 6,469 
Securities available for sale495,162 508,612 520,232 513,728 503,596 
Loans held for sale, at fair value6,448 6,450 7,341 10,880 10,175 
Loans:
Commercial real estate:
Owner occupied376,350 366,439 339,371 315,770 313,125 
Non-owner occupied630,514 626,140 603,396 608,043 573,605 
Multi-family143,437 145,257 144,053 138,832 114,561 
Non-owner occupied residential100,391 105,504 106,390 104,604 105,267 
Commercial and industrial (1)
374,190 379,905 380,683 357,774 378,574 
Acquisition and development:
1-4 family residential construction25,642 20,461 20,941 25,068 20,810 
Commercial and land development153,279 143,177 174,556 158,308 148,512 
Municipal10,334 10,638 11,329 12,173 12,683 
Total commercial loans1,814,137 1,797,521 1,780,719 1,720,572 1,667,137 
Residential mortgage:
First lien248,335 235,813 227,031 229,849 220,970 
Home equity – term5,223 5,228 5,371 5,505 5,869 
Home equity – lines of credit188,736 185,099 183,340 183,241 180,267 
Installment and other loans10,405 10,756 11,040 12,065 13,684 
Total loans2,266,836 2,234,417 2,207,501 2,151,232 2,087,927 
Allowance for credit losses (2)
(28,278)(28,383)(28,364)(25,178)(24,709)
Net loans held-for-investment2,238,558 2,206,034 2,179,137 2,126,054 2,063,218 
Goodwill18,724 18,724 18,724 18,724 18,724 
Other intangible assets, net2,650 2,589 2,828 3,078 3,338 
Total assets3,054,435 3,008,197 3,011,548 2,922,408 2,852,092 
Total deposits2,546,435 2,522,861 2,515,626 2,476,246 2,505,853 
Borrowings175,241 152,229 176,315 123,390 22,632 
Subordinated notes32,076 32,059 32,042 32,026 32,010 
Total shareholders' equity243,080 245,641 240,161 228,896 217,378 

(1) This balance includes $6.2 million, $7.2 million, $10.8 million, $13.8 million and $17.0 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.

(2) The balance includes $2.4 million in a one-time cumulative-effect adjustment that increased the allowance for credit losses from the adoption of the new CECL standard on January 1, 2023.
15

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022		September 30,
2022
Capital and credit quality measures (1):
Total risk-based capital:
Orrstown Financial Services, Inc13.0 %13.0 %12.8 %12.7 %12.7 %
Orrstown Bank12.5 %12.5 %12.4 %12.3 %12.9 %
Tier 1 risk-based capital:
Orrstown Financial Services, Inc10.6 %10.5 %10.4 %10.3 %10.2 %
Orrstown Bank11.4 %11.4 %11.2 %11.2 %11.8 %
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc10.6 %10.5 %10.4 %10.3 %10.2 %
Orrstown Bank11.4 %11.4 %11.2 %11.2 %11.8 %
Tier 1 leverage capital:
Orrstown Financial Services, Inc8.7 %8.6 %8.5 %8.5 %8.4 %
Orrstown Bank9.3 %9.3 %9.2 %9.2 %9.6 %
Average equity to average assets8.18 %8.11 %7.97 %7.68 %8.59 %
Allowance for credit losses to total loans1.25 %1.27 %1.28 %1.17 %1.18 %
Total nonaccrual loans to total loans0.98 %0.94 %0.96 %0.96 %0.25 %
Nonperforming assets to total assets0.73 %0.70 %0.71 %0.70 %0.19 %
Allowance for credit losses to nonaccrual loans127 %135 %134 %122 %466 %
Other information:
Net charge-offs (recoveries)$241 $380 $(34)$116 $70 
Classified loans33,593 26,347 34,024 36,325 19,576 
Nonperforming and other risk assets:
Nonaccrual loans (2)
22,324 21,062 21,246 20,583 5,303 
Other real estate owned— — 85 — — 
Total nonperforming assets22,324 21,062 21,331 20,583 5,303 
Financial difficulty modifications / Troubled debt restructurings still accruing (3)
— — — 682 689 
Loans past due 90 days or more and still accruing (2)
277 539 28 439 232 
Total nonperforming and other risk assets$22,601 $21,601 $21,359 $21,704 $6,224 
(1) Capital ratios are estimated, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. In the first year of adoption 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.
(2) Includes zero, zero, zero, $0.4 million and $0.2 million of purchased credit impaired loans at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively, in accordance with ASC 310-30. Upon adoption of the CECL standard, purchased credit deteriorated loans were evaluated on an individual loan level and reported on an individual loan basis under ASC 310-20, Nonrefundable Fees and Other Costs.
(3) On January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminated the troubled debt restructuring ("TDR") accounting model and requires that the Company evaluate, based on the accounting for loan modifications, whether the borrower is experiencing financial difficulty and the modification results in a more-than-insignificant direct change in the contractual cash flows and represents a new loan or a continuation of an existing loan. During 2023, the Company did not have loans meeting the “Financial Difficulty Modification” criteria in accordance with ASU 2022-02.

16

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 $21.4 million and $21.8 million at September 30, 2023 and December 31, 2022, respectively. Additionally, the Company incurred $3.2 million and $13.0 million in restructuring charges and a provision for legal settlement, respectively, during the three and nine months ended September 30, 2022.
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.
Tangible book value per common share and the impact of the restructuring charge and legal settlement on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.
The following tables present the computation of each non-GAAP based measure:
(dollars and shares in thousands)
Tangible Book Value per Common ShareSeptember 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022		September 30,
2022
Shareholders' equity (most directly comparable GAAP-based measure)$243,080 $245,641 $240,161 $228,896 $217,378 
Less: Goodwill18,724 18,724 18,724 18,724 18,724 
Other intangible assets2,650 2,589 2,828 3,078 3,338 
Related tax effect(557)(544)(594)(646)(701)
Tangible common equity (non-GAAP)$222,263 $224,872 $219,203 $207,740 $196,017 
Common shares outstanding10,613 10,611 10,692 10,671 10,686 
Book value per share (most directly comparable GAAP-based measure)$22.90 $23.15 $22.46 $21.45 $20.34 
Intangible assets per share1.96 1.96 1.96 1.98 2.00 
Tangible book value per share (non-GAAP)$20.94 $21.19 $20.50 $19.47 $18.34 

17

(dollars and shares in thousands)
Adjusted Ratios for Restructuring Charges and Provision for Legal SettlementSeptember 30,
2023		September 30,
2022		September 30,
2023		September 30,
2022
Three Months EndedThree Months EndedNine Months EndedNine Months Ended
Net income (loss) (A) - most directly comparable GAAP-based measure$9,026 $(4,828)$28,020 $12,411 
Plus: Restructuring expenses (B)— 3,155 — 3,155 
Plus: Provision for legal settlement (B)— 13,000 — 13,000 
Less: Related tax effect (C)— (3,393)— (3,393)
Adjusted net income (D=A+B-C) - Non-GAAP$9,026 $7,934 $28,020 $25,173 
Average assets (E)$3,036,186 $2,815,040 $2,986,621 $2,834,062 
Return on average assets (= A / E) - most directly comparable GAAP-based measure1.18 %(0.68)%1.25 %0.59 %
Return on average assets, adjusted (= D / E) - Non-GAAP1.18 %1.12 %1.25 %1.19 %
Average equity (F)$248,263 $241,866 $241,613 $252,169 
Return on average equity (= A / F) - most directly comparable GAAP-based measure14.42 %(7.92)%15.51 %6.58 %
Return on average equity, adjusted (= D / F) - Non-GAAP14.42 %13.02 %15.51 %13.35 %
Weighted average shares - basic (G) - most directly comparable GAAP-based measure10,319 10,369 10,346 10,611 
Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure$0.87 $(0.47)$2.71 $1.17 
Basic earnings per share, adjusted (= D / G) - Non-GAAP$0.87 $0.77 $2.71 $2.37 
Weighted average shares - diluted (H) - most directly comparable GAAP-based measure10,405 10,369 10,440 10,758 
Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure$0.87 $(0.47)$2.68 $1.16 
Weighted average shares - diluted (H) - Non-GAAP10,405 10,529 10,440 10,758 
Diluted earnings per share, adjusted (= D / H) - Non-GAAP$0.87 $0.75 $2.68 $2.34 
Noninterest expense (I) - most directly comparable GAAP-based measure$20,447 $36,412 $61,451 $74,570 
Less: Restructuring expenses (B)— (3,155)— (3,155)
Less: Provision for legal expenses (B)— (13,000)— (13,000)
Adjusted noninterest expense (J = I - B) - Non-GAAP$20,447 $20,257 $61,451 $58,415 
Net interest income (K)$26,219 $25,455 $78,888 $72,146 
Noninterest income (L)5,925 6,058 19,161 20,726 
Total operating income (M = K + L)$32,144 $31,513 $98,049 $92,872 
Efficiency ratio (= I / M) - most directly comparable GAAP-based measure63.6 %115.5 %62.7 %80.3 %
Efficiency ratio, adjusted (= J / M) - Non-GAAP63.6 %64.3 %62.7 %62.9 %
18

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, 2023:
(dollars in thousands)
SectorPortfolio MixAmortized BookFair ValueCredit EnhancementAAAAAABBBNRCollateral / Guarantee Type
Unsecured ABS1 %$4,053 $3,527 31 %— %— %— %— %100 %Unsecured Consumer Debt
Student Loan ABS1 5,781 5,711 27 — — — — 100 Seasoned Student Loans
Federal Family Education Loan ABS18 101,485 100,565 9 7 80 — 13 — 
Federal Family Education Loan (1)
PACE Loan ABS— 2,362 1,983 6 100 — — — — 
PACE Loans (2)
Non-Agency CMBS4 23,349 23,110 19 — — — — 100 
Non-Agency RMBS3 16,699 12,666 14 100 — — — — 
Reverse Mortgages (3)
Municipal - General Obligation19 103,818 88,804 10 83 7 — — 
Municipal - Revenue22 119,989 99,313 — 82 12 — 6 
SBA ReRemic (5)
1 3,855 3,732 — 100 — — — 
SBA Guarantee (4)
Small Business Administration1 8,562 9,100 — 100 — — — 
SBA Guarantee (4)
Agency MBS26 143,087 129,387 — 100 — — — 
Residential Mortgages (4)
U.S. Treasury securities4 20,060 17,143 — 100 — — — 
U.S. Government Guarantee (4)
100 %$553,102 $495,042 7 %80 %4 %2 %7 %
(1) 97% guaranteed by U.S. government
(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+.

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About the Company
With $3.1 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, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. 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, 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, 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, cost savings initiatives, 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, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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, 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; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2022 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequently filings made with the Securities and Exchange Commission. 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.
20

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.


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21
v3.23.3
Cover
Oct. 24, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 24, 2023
Entity Registrant Name ORRSTOWN FINANCIAL SERVICES, INC.
Entity Incorporation, State or Country Code PA
Entity File Number 001-34292
Entity Tax Identification Number 23-2530374
Entity Address, Address Line One 77 East King Street,
Entity Address, Address Line Two P. O. Box 250
Entity Address, City or Town Shippensburg,
Entity Address, State or Province PA
Entity Address, Postal Zip Code 17257
City Area Code (717)
Local Phone Number 532-6114
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, no par value
Trading Symbol ORRF
Security Exchange Name NASDAQ
Entity Central Index Key 0000826154
Amendment Flag false
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