{"success":true,"data":{"pressRelease":{"id":"174601","rtpr_id":"nGNX4dq060-20261020","ticker":"ORRF","exchange":"NASDAQ","all_tickers":["ORRF"],"title":"Orrstown Financial Services, Inc. Reports Third Quarter 2026 Results","author":"Globe Newswire","published_at":"2026-10-20T20:05:02.221Z","article_body":"* Net income of $22.8 million, or $1.17 per diluted share, for the three\nmonths ended September 30, 2026 compared to net income of $21.2 million, or\n$1.09 per diluted share, for the three months ended June 30, 2026;\n* Net interest margin, on a tax equivalent basis, increased by 25 basis points\nto 4.12% in the third quarter of 2026 compared to 3.87% in the second quarter\nof 2026; excluding the amortization of the fair value mark on the redeemed\nsubordinated notes, net interest margin was 4.00% ((1)) in the second quarter\nof 2026;\n* Return on average assets was 1.60% and return on average equity was 14.62%\nfor the three months ended September 30, 2026, compared to 1.53% and 13.96%,\nrespectively, for the three months ended June 30, 2026;\n* Total loans increased by $95.3 million, or 9% annualized, from June 30, 2026\nto September 30, 2026; classified loans decreased by 8% during the third\nquarter of 2026; nonaccrual loans to total loans decreased to 0.54% at\nSeptember 30, 2026 from 0.58% at June 30, 2026;\n* Total deposits decreased by $38.1 million, or 3% annualized, from June 30,\n2026 to September 30, 2026;\n* Efficiency ratio was 56.0% for the three months ended September 30, 2026\ncompared to 60.1% for the three months ended June 30, 2026;\n* Federal income tax credits purchased resulted in a $0.4 million income tax\nbenefit for the third quarter of 2026 compared to an income tax benefit of\n$1.6 million from tax credit purchases during the second quarter of 2026;\n* The Board of Directors declared a cash dividend of $0.30 per common share,\npayable November 10, 2026, to shareholders of record as of November 3, 2026.\nHARRISBURG, Pa., Oct. 20, 2026 (GLOBE NEWSWIRE) -- Orrstown Financial\nServices, Inc. (the \"Company\") (NASDAQ: ORRF), the parent company of Orrstown\nBank (the “Bank”), announced earnings for the three and nine months ended\nSeptember 30, 2026. Net income totaled $22.8 million for the three months\nended September 30, 2026, compared to net income of $21.2 million and $21.9\nmillion for the three months ended June 30, 2026 and September 30, 2025,\nrespectively. Diluted earnings per share was $1.17 for the three months ended\nSeptember 30, 2026, compared to $1.09 and $1.13 for the three months ended\nJune 30, 2026 and September 30, 2025, respectively.\n\nAdam L. Metz, President and Chief Executive Officer, said, “Orrstown\ndelivered strong third quarter results, with diluted earnings per common share\nof $1.17 and a return on average assets of 1.60%. The quarter demonstrated\nsolid execution across the franchise, including a 25 basis point increase in\nnet interest margin to 4.12%, a 56.0% efficiency ratio and 9% annualized loan\ngrowth. We also continued to see favorable trends in credit quality, with both\nclassified loans and nonaccrual loans declining during the quarter. Our\nresults reflect the progress we are making in growing core net interest income\nwhile actively managing funding costs and the declining benefit of purchase\naccounting accretion from our previous merger. Although the economic, interest\nrate and competitive environments remain dynamic, we enter the remainder of\nthe year from a position of strength and are confident in our ability to\nexecute across a range of economic conditions.”\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\nDISCUSSION OF RESULTS\n\nBalance Sheet\n\nLoans\n\nLoans held for investment increased by $95.3 million, or approximately 9%\nannualized, from $4.1 billion at June 30, 2026 to $4.2 billion at\nSeptember 30, 2026. Commercial loans increased by $45.4 million, or\napproximately 6% annualized, from June 30, 2026 to September 30, 2026, with\nparticularly strong growth in the commercial and industrial segment. Home\nequity lines of credit increased by $31.6 million, or approximately 36%\nannualized, which included purchases with a principal balance totaling $15.5\nmillion. The retail teams have been successful in recent efforts over the past\nseveral quarters to drive growth in this category. First lien residential\nmortgages increased by $17.0 million, or approximately 13% annualized.\n\nInvestment Securities\n\nInvestment securities, all of which are classified as available-for-sale,\ndecreased by $29.9 million to $919.4 million at September 30, 2026 from\n$949.3 million at June 30, 2026. During the three months ended September 30,\n2026, net unrealized losses on investment securities increased by $41.6\nmillion as a result of widening spreads and a rise in interest rates. The Bank\npurchased $34.9 million of investment securities, consisting of $24.9 million\nof agency mortgage backed securities and collateralized mortgage obligations\nand $10.0 million of non-agency collateralized mortgage obligations during the\nthird quarter of 2026. The remaining change in investment securities during\nthe quarter was due primarily to paydowns of $24.2 million, partially offset\nby net accretion of $1.4 million. The overall duration of the Company's\ninvestment securities portfolio was 4.2 years at September 30, 2026 compared\nto 4.5 years at June 30, 2026. See Appendix B for a summary of the Bank's\ninvestment securities at September 30, 2026, highlighting their\nconcentrations and credit ratings.\n\nDeposits\n\nDuring the third quarter of 2026, deposits decreased by $38.1 million, or 3%\nannualized, and totaled $4.6 billion at both September 30, 2026 and June 30,\n2026. Time deposits, interest-bearing demand deposits, non-interest bearing\ndeposits and savings deposits decreased by $28.1 million, $25.1 million, $24.8\nmillion and $8.7 million, respectively. The decreases were primarily due to\nnormal seasonal activity as well as time deposit maturities. These decreases\nwere partially offset by a $48.6 million increase in money market deposits\nresulting from both promotional activities and the purchase of $25.1 million\nof brokered deposits. The Bank's loan-to-deposit ratio was 92% at\nSeptember 30, 2026 compared to 89% at June 30, 2026.\n\nBorrowings\n\nThe Company actively manages its liquidity position through its various\nsources of funding to meet the needs of its clients. FHLB advances and other\nborrowings were $417.3 million at September 30, 2026 compared to $274.8\nmillion at June 30, 2026. The higher utilization of borrowings during the\nthird quarter of 2026 was primarily to fund loan growth. The Bank seeks to\nmaintain sufficient liquidity to ensure that client needs can be addressed in\na timely basis. The Bank had available alternative funding sources, such as\nFHLB advances and other wholesale options, of $1.7 billion at September 30,\n2026.\n\nIncome Statement\n\nNet Interest Income and Margin\n\nNet interest income increased by $4.5 million to $53.3 million for the three\nmonths ended September 30, 2026 compared to $48.8 million for the three\nmonths ended June 30, 2026. The net interest margin, on a tax equivalent\nbasis, increased by 25 basis points to 4.12% in the third quarter of 2026 from\n3.87% in the second quarter of 2026. The yield on interest-earning assets\nincreased by eight basis points and the cost of deposits decreased by five\nbasis points during the three months ended September 30, 2026 compared to the\nthree months ended June 30, 2026. In addition, the net interest margin in the\nsecond quarter of 2026 includes the $1.6 million accelerated amortization\nexpense of the subordinated notes' fair value mark. Excluding the amortization\nof the fair value mark on the redeemed subordinated notes, net interest margin\nwas 4.00%((1)) in the second quarter of 2026.\n\nInterest income on loans, on a tax equivalent basis, increased by $3.2 million\nto $66.7 million for the three months ended September 30, 2026 compared to\n$63.5 million for the three months ended June 30, 2026. Average loans\nincreased by $92.6 million during the three months ended September 30, 2026\ncompared to the three months ended June 30, 2026. Interest income on loans\nincludes accretion on purchase accounting marks of $3.9 million for the three\nmonths ended September 30, 2026 compared to $4.3 million for the three months\nended June 30, 2026. Prepayment fee income on loans increased by $335 thousand\nduring the third quarter of 2026 compared to the second quarter of 2026.\n\nInterest expense, on a tax equivalent basis, decreased by $1.5 million to\n$24.4 million for the three months ended September 30, 2026 compared to $25.9\nmillion for the three months ended June 30, 2026. Borrowing costs decreased by\n$1.1 million during the three months ended September 30, 2026 compared to the\nthree months ended June 30, 2026 primarily due to the accelerated amortization\nof the remaining subordinated debt fair value mark of $1.6 million during the\nsecond quarter of 2026.\n\nThe cost of deposits decreased by five basis points during the three months\nended September 30, 2026 compared to the three months ended June 30, 2026.\nAverage interest-bearing deposits decreased by $27.9 million during the three\nmonths ended September 30, 2026 compared to the three months ended June 30,\n2026. Average FHLB advances and other borrowings increased by $130.6 million\nfrom the three months ended June 30, 2026 to the three months ended\nSeptember 30, 2026 driven by loan growth in addition to maintaining\nsufficient liquidity due to seasonal deposit activity during the third quarter\nof 2026.\n\nProvision for Credit Losses on Loans\n\nThe allowance for credit losses (\"ACL\") on loans increased to $46.8 million at\nSeptember 30, 2026 from $46.6 million at June 30, 2026. The ACL to total\nloans was 1.11% at September 30, 2026 compared to 1.13% at June 30, 2026. The\nCompany recorded provision expense on loans of $1.1 million for the three\nmonths ended September 30, 2026 compared to $0.4 million for the three months\nended June 30, 2026. The increase in provision expense resulted from strong\nloan growth, net charge-offs and updates to our qualitative factors, partially\noffset by a favorable GDP forecast and macroeconomic conditions. Net\ncharge-offs were $1.0 million during the three months ended September 30,\n2026 compared to $1.2 million during the three months ended June 30, 2026.\n\nClassified loans decreased by $4.0 million to $45.2 million at September 30,\n2026 from $49.2 million at June 30, 2026 due to repayments of $5.3 million and\ncharge-offs of $1.0 million, partially offset by net downgrades of $2.3\nmillion. Nonaccrual loans totaled $22.9 million at September 30, 2026\ncompared to $23.8 million at June 30, 2026. The decrease of $0.9 million in\nnonaccrual loans was due to repayments of $1.5 million and net charge offs\ntotaling $1.0 million, partially offset by loans placed on nonaccrual status\nof $1.6 million. Nonaccrual loans to total loans decreased to 0.54% at\nSeptember 30, 2026 from 0.58% at June 30, 2026. Management believes the ACL\nto be adequate based on current asset quality metrics and economic forecasts.\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\nNoninterest Income\n\nNoninterest income decreased by $0.4 million to $13.4 million for the three\nmonths ended September 30, 2026 from $13.8 million for the three months ended\nJune 30, 2026.\n\nSwap fee income decreased by $0.3 million to $0.4 million for the three months\nended September 30, 2026 compared to $0.7 million for the three months ended\nJune 30, 2026. Swap fee income will fluctuate based on market conditions and\nclient demand.\n\nMortgage banking income decreased by $0.2 million to $0.2 million for the\nthree months ended September 30, 2026 from $0.4 million for the three months\nended June 30, 2026. The decrease was due to a reduction in loan sale activity\nand a decrease in the fair value adjustment of loans held-for-sale and in the\npipeline due to rising market interest rates.\n\nWealth management income was $6.0 million for the three months ended\nSeptember 30, 2026 compared to $5.9 million for the three months ended June\n30, 2026.\n\nNoninterest Expenses\n\nNoninterest expenses decreased by $0.4 million to $37.3 million for the three\nmonths ended September 30, 2026 from $37.7 million in the three months ended\nJune 30, 2026.\n\nProfessional services expense decreased by $0.2 million to $1.0 million for\nthe three months ended September 30, 2026 compared to $1.2 million for the\nthree months ended June 30, 2026. The Company continues to focus on reducing\nthird-party utilization.\n\nOther operating expenses decreased by $0.4 million to $3.9 million for the\nthree months ended September 30, 2026 compared to $4.3 million for the three\nmonths ended June 30, 2026. This was due primarily to an increase of $0.5\nmillion in mark-to-market gains on non-hedging derivatives from the second\nquarter of 2026 to the third quarter of 2026.\n\nSalaries and benefits expense increased by $0.2 million to $22.4 million for\nthe three months ended September 30, 2026 compared to $22.2 million for the\nthree months ended June 30, 2026. The third quarter of 2026 reflects a full\nquarter impact from the increase in merit-based salaries that went into effect\nin May 2026 and the impact of one extra day compared to the prior quarter.\n\nAdvertising and bank promotions expense decreased by $0.7 million to $0.4\nmillion in the three months ended September 30, 2026 from $1.1 million in the\nthree months ended June 30, 2026 due to $0.7 million in contributions to tax\ncredit programs during the second quarter of 2026. Taxes other than income\nincreased by $0.6 million to $1.0 million in the three months ended\nSeptember 30, 2026 compared to $0.4 million in the three months ended June\n30, 2026. This increase reflects the tax credits recognized in the second\nquarter of 2026 as result of the charitable contributions.\n\nIncome Taxes\n\nThe Company's effective tax rate was 19.4% for the third quarter of 2026\ncompared to 14.2% for the second quarter of 2026. The Company's effective tax\nrate for the three months ended September 30, 2026 is less than the 21%\nfederal statutory rate primarily due to the purchase of federal income tax\ncredits, which reduced income tax expense by $0.4 million. During the three\nmonths ended June 30, 2026, the Company purchased federal income tax credits,\nwhich reduced income tax expense by $1.6 million. In addition, the effective\ntax rate for both periods was impacted by tax-exempt income, including\ninterest earned on tax-exempt loans and securities and non-taxable income from\nlife insurance policies and tax credits partially offset by the disallowed\nportion of interest expense against earnings in association with the Bank's\ntax-exempt investments under the Tax Equity and Fiscal Responsibility Act of\n1982. The Company regularly analyzes its projected taxable income and makes\nadjustments to the provision for income taxes accordingly.\n\nCapital\n\nShareholders’ equity totaled $605.2 million at September 30, 2026 compared\nto $621.7 million at June 30, 2026. The decrease of $16.5 million is primarily\ndue to other comprehensive losses of $34.5 million and dividends of $5.9\nmillion, partially offset by net income of $22.8 million and share-based\ncompensation activity of $1.1 million. The change in other comprehensive\nlosses is primarily due to the increase in net unrealized losses on investment\nsecurities caused by the widening of spreads and a rise in interest rates.\n\nTangible book value per common share((1)) was $25.96 at September 30, 2026\ncompared to $26.71 at June 30, 2026. The Company's tangible common equity\nratio was 9.1% of total tangible assets at September 30, 2026 compared to\n9.5% at June 30, 2026. Return on average tangible common equity per common\nshare((1) )was 17.52% for the three months ended September 30, 2026 compared\nto 16.86% for the three months ended June 30, 2026. The decreases in tangible\nbook value per common share and the tangible common equity ratio were\nprimarily due to the decrease in shareholders' equity caused by the increase\nin net unrealized losses on investment securities.\n\nThe Company's tier 1 common equity, tier 1 capital and total risk-based\ncapital ratios were 12.1%, 12.3% and 13.3%, respectively, at September 30,\n2026 compared to 12.0%, 12.2% and 13.2%, respectively, at June 30, 2026. The\nCompany's Tier 1 leverage ratio increased to 10.2% at September 30, 2026\ncompared to 10.1% at June 30, 2026.\n\nAt September 30, 2026, all four capital ratios applicable to the Company were\nabove regulatory minimum levels to be deemed “well capitalized” under\ncurrent bank regulatory guidelines. The Company continues to believe that\ncapital is adequate to support the risks inherent in the balance sheet, as\nwell as growth requirements.\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\n Investor Relations Contact: \n Neelesh Kalani \n Executive Vice President, Chief Financial Officer \n Phone (717) 510-7097 \n \n\n\n\n FINANCIAL HIGHLIGHTS (Unaudited) \n \n \n Three Months Ended Nine Months Ended \n September 30, September 30, September 30, September 30, \n (In thousands) 2026 2025 2026 2025 \n Profitability for the period: \n Net interest income $ 53,320 $ 50,988 $ 151,156 $ 149,261 \n Provision for credit losses - loans 1,126 396 2,192 51 \n Recovery of credit losses - unfunded loan commitments (84 ) — (460 ) (100 ) \n Noninterest income 13,378 13,382 42,791 37,921 \n Noninterest expenses 37,334 36,297 111,728 112,087 \n Income before income tax expense 28,322 27,677 80,487 75,144 \n Income tax expense 5,507 5,812 14,705 15,780 \n Net income available to common shareholders $ 22,815 $ 21,865 $ 65,782 $ 59,364 \n \n Financial ratios: \n Return on average assets ((1)) 1.60 % 1.60 % 1.58 % 1.47 % \n Return on average assets, adjusted ((1)(3)(4)) n/a n/a n/a 1.52 % \n Return on average equity ((1)) 14.62 % 15.72 % 14.44 % 14.77 % \n Return on average equity, adjusted ((1)(3)(4)) n/a n/a n/a 15.28 % \n Net interest margin ((1)) 4.12 % 4.11 % 3.97 % 4.06 % \n Net interest margin, adjusted ((1)(2)(4)) n/a n/a 4.01 % n/a \n Efficiency ratio 56.0 % 56.4 % 57.6 % 59.9 % \n Efficiency ratio, adjusted ((2)(3)(4)) n/a n/a 57.1 % 58.5 % \n Income per common share: \n Basic $ 1.18 $ 1.14 $ 3.40 $ 3.09 \n Basic, adjusted ((3)(4)) n/a n/a n/a $ 3.20 \n Diluted $ 1.17 $ 1.13 $ 3.38 $ 3.07 \n Diluted, adjusted ((3)(4)) n/a n/a n/a $ 3.17 \n \n Average equity to average assets 10.98 % 10.18 % 10.92 % 9.94 % \n \n ((1))Annualized for the three and nine months ended September 30, 2026 and 2025. \n ((2))Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the nine months ended September 30, 2026. \n ((3))Ratio has been adjusted for the merger-related expenses for the nine months ended September 30, 2025. \n ((4))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. \n \n\n\n\n FINANCIAL HIGHLIGHTS (Unaudited) \n (continued) \n September 30, December 31, \n (Dollars in thousands, except per share amounts) 2026 2025 \n At period-end: \n Total assets $ 5,707,243 $ 5,542,255 \n Loans, net of allowance for credit losses 4,161,598 3,973,012 \n Loans held-for-sale, at fair value 3,924 6,090 \n Securities available for sale, at fair value 919,448 952,740 \n Total deposits 4,581,910 4,528,774 \n FHLB advances and other borrowings and Securities sold under agreements to repurchase 417,252 299,243 \n Subordinated notes and trust preferred debt 8,109 37,122 \n Shareholders' equity 605,200 591,535 \n \n Credit quality and capital ratios ((1)): \n Allowance for credit losses to total loans 1.11 % 1.19 % \n Total nonaccrual loans to total loans 0.54 % 0.70 % \n Nonperforming assets to total assets 0.40 % 0.51 % \n Allowance for credit losses to nonaccrual loans 204 % 170 % \n Total risk-based capital: \n Orrstown Financial Services, Inc. 13.3 % 13.3 % \n Orrstown Bank 13.2 % 13.3 % \n Tier 1 risk-based capital: \n Orrstown Financial Services, Inc. 12.3 % 11.7 % \n Orrstown Bank 12.2 % 12.2 % \n Tier 1 common equity risk-based capital: \n Orrstown Financial Services, Inc. 12.1 % 11.5 % \n Orrstown Bank 12.2 % 12.2 % \n Tier 1 leverage capital: \n Orrstown Financial Services, Inc. 10.2 % 9.5 % \n Orrstown Bank 10.1 % 9.9 % \n \n Book value per common share $ 30.77 $ 30.32 \n \n ((1))Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (\"CECL\") to regulatory capital. At December 31, 2025, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the \n CECL standard. At September 30, 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n CONSOLIDATED BALANCE SHEETS (Unaudited) \n \n (Dollars in thousands, except per share amounts) September 30, 2026 December 31, 2025 \n Assets \n Cash and due from banks $ 48,690 $ 42,083 \n Interest-bearing deposits with banks 76,956 107,691 \n Cash and cash equivalents 125,646 149,774 \n Restricted investments in bank stocks 32,514 26,717 \n Securities available for sale (amortized cost of $985,444 and $972,138 at September 30, 2026 and December 31, 2025, respectively) 919,448 952,740 \n Loans held for sale, at fair value 3,924 6,090 \n Loans 4,208,373 4,020,693 \n Less: Allowance for credit losses (46,775 ) (47,681 ) \n Net loans 4,161,598 3,973,012 \n Premises and equipment, net 49,948 51,029 \n Cash surrender value of life insurance 148,345 146,994 \n Goodwill 69,751 69,751 \n Other intangible assets, net 31,457 37,990 \n Accrued interest receivable 20,733 21,473 \n Deferred tax assets, net 43,126 33,931 \n Other assets 100,753 72,754 \n Total assets $ 5,707,243 $ 5,542,255 \n \n Liabilities \n Deposits: \n Noninterest-bearing $ 896,069 $ 870,906 \n Interest-bearing 3,685,841 3,657,868 \n Total deposits 4,581,910 4,528,774 \n Securities sold under agreements to repurchase and federal funds purchased — 24,542 \n FHLB advances and other borrowings 417,252 274,701 \n Subordinated notes and trust preferred debt 8,109 37,122 \n Other liabilities 94,772 85,581 \n Total liabilities 5,102,043 4,950,720 \n \n Shareholders’ Equity \n Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding — — \n Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,706,971 shares issued and 19,670,559 outstanding at September 30, 2026; 19,711,628 shares issued and 19,507,208 outstanding at December 31, 2025 1,026 1,026 \n Additional paid—in capital 422,956 424,596 \n Retained earnings 234,886 186,752 \n Accumulated other comprehensive loss (52,318 ) (15,201 ) \n Treasury stock— 36,412 and 204,420 shares, at cost at September 30, 2026 and December 31, 2025, respectively (1,350 ) (5,638 ) \n Total shareholders’ equity 605,200 591,535 \n Total liabilities and shareholders’ equity $ 5,707,243 $ 5,542,255 \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) \n \n Three Months Ended Nine Months Ended \n September 30, September 30, September 30, September 30, \n (Dollars in thousands, except per share amounts) 2026 2025 2026 2025 \n Interest income \n Loans $ 66,454 $ 65,751 $ 192,764 $ 192,219 \n Investment securities - taxable 9,901 9,367 29,658 27,717 \n Investment securities - tax-exempt 814 881 2,537 2,634 \n Short-term investments 567 1,123 1,843 4,904 \n Total interest income 77,736 77,122 226,802 227,474 \n Interest expense \n Deposits 21,269 22,639 64,942 69,754 \n Securities sold under agreements to repurchase and federal funds purchased 6 107 132 297 \n FHLB advances and other borrowings 2,931 1,791 6,921 3,939 \n Subordinated notes and trust preferred debt 210 1,597 3,651 4,223 \n Total interest expense 24,416 26,134 75,646 78,213 \n Net interest income 53,320 50,988 151,156 149,261 \n Provision for credit losses - loans 1,126 396 2,192 51 \n Recovery of credit losses - unfunded loan commitments (84 ) — (460 ) (100 ) \n Net interest income after net provision for (recovery of) credit losses 52,278 50,592 149,424 149,310 \n Noninterest income \n Service charges 2,916 2,997 8,521 8,022 \n Interchange income 1,597 1,620 4,712 4,488 \n Swap fee income 436 816 2,426 1,879 \n Wealth management income 5,968 5,277 17,471 15,959 \n Mortgage banking activities 212 522 974 1,302 \n Income from life insurance 1,410 1,471 6,547 4,071 \n Investment securities gains 15 50 70 71 \n Other income 824 629 2,070 2,129 \n Total noninterest income 13,378 13,382 42,791 37,921 \n Noninterest expenses \n Salaries and employee benefits 22,400 21,439 65,786 63,191 \n Occupancy, furniture and equipment 4,109 4,075 12,217 12,961 \n Data processing 1,752 1,116 4,992 3,005 \n Advertising and bank promotions 423 154 2,232 1,730 \n FDIC insurance 627 652 1,810 2,150 \n Professional services 1,015 1,703 3,438 5,545 \n Taxes other than income 1,022 828 2,439 2,065 \n Intangible asset amortization 2,115 2,410 6,533 7,417 \n Merger-related expenses — — — 2,617 \n Restructuring expenses — — — 91 \n Other operating expenses 3,871 3,920 12,281 11,315 \n Total noninterest expenses 37,334 36,297 111,728 112,087 \n Income before income tax expense 28,322 27,677 80,487 75,144 \n Income tax expense 5,507 5,812 14,705 15,780 \n Net income $ 22,815 $ 21,865 $ 65,782 $ 59,364 \n \n Share information: \n Basic earnings per share $ 1.18 $ 1.14 $ 3.40 $ 3.09 \n Diluted earnings per share $ 1.17 $ 1.13 $ 3.38 $ 3.07 \n Dividends paid per share $ 0.30 $ 0.27 $ 0.90 $ 0.79 \n Weighted average shares - basic 19,380 19,224 19,323 19,185 \n Weighted average shares - diluted 19,504 19,364 19,449 19,345 \n \n\n\n\n ANALYSIS OF NET INTEREST INCOME \n Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) \n Three Months Ended \n 9/30/2026 6/30/2026 3/31/2026 12/31/2025 9/30/2025 \n Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- \n Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent \n (In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate \n Assets \n Federal funds sold & interest-bearing bank balances $ 62,164 $ 567 3.62 % $ 69,784 $ 639 3.67 % $ 70,086 $ 637 3.69 % $ 103,886 $ 1,017 3.88 % $ 101,728 $ 1,123 4.38 % \n Investment securities ((1)(2)) 973,344 11,064 4.54 971,932 11,096 4.57 984,060 11,079 4.51 976,957 11,177 4.58 906,399 10,593 4.67 \n Loans ( (1)(3)(4)(5)) 4,167,877 66,679 6.35 4,075,290 63,542 6.25 4,070,889 63,214 6.29 3,997,842 64,635 6.42 3,979,044 65,975 6.58 \n Total interest-earning assets 5,203,385 78,310 5.98 5,117,006 75,277 5.90 5,125,035 74,930 5.91 5,078,685 76,829 6.01 4,987,171 77,691 6.19 \n Other assets 436,997 425,913 423,779 426,626 433,659 \n Total assets $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 \n Liabilities and Shareholders' Equity \n Interest-bearing demand deposits $ 2,593,059 13,681 2.09 $ 2,577,915 13,629 2.12 $ 2,534,291 13,796 2.21 $ 2,471,895 14,078 2.26 $ 2,450,034 14,145 2.29 \n Savings deposits 254,541 126 0.20 260,712 128 0.20 259,585 143 0.22 262,240 164 0.25 264,761 164 0.25 \n Time deposits 863,559 7,462 3.43 900,412 7,930 3.53 906,875 8,047 3.60 912,611 8,342 3.63 897,416 8,330 3.68 \n Total interest-bearing deposits 3,711,159 21,269 2.27 3,739,039 21,687 2.33 3,700,751 21,986 2.41 3,646,746 22,584 2.46 3,612,211 22,639 2.49 \n Securities sold under agreements to repurchase and federal funds purchased 2,535 6 0.85 12,024 29 0.98 23,674 97 1.66 27,348 105 1.52 27,772 107 1.53 \n FHLB advances and other borrowings 306,346 2,931 3.80 175,734 1,635 3.73 248,357 2,355 3.85 238,806 2,371 3.94 168,939 1,791 4.21 \n Subordinated notes and trust preferred debt ((6)) 8,069 210 10.29 36,664 2,520 27.57 37,175 921 10.05 37,023 669 7.17 68,749 1,597 9.21 \n Total interest-bearing liabilities 4,028,109 24,416 2.40 3,963,461 25,871 2.62 4,009,957 25,359 2.56 3,949,923 25,729 2.58 3,877,671 26,134 2.67 \n Noninterest-bearing demand deposits 910,748 889,378 850,415 882,552 902,128 \n Other liabilities 82,378 81,981 89,112 93,977 89,086 \n Total liabilities 5,021,235 4,934,820 4,949,484 4,926,452 4,868,885 \n Shareholders' equity 619,147 608,099 599,330 578,859 551,945 \n Total $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 \n Taxable-equivalent net interest income / net interest spread 53,894 3.58 % 49,406 3.28 % 49,571 3.35 % 51,100 3.43 % 51,557 3.52 % \n Taxable-equivalent net interest margin 4.12 % 3.87 % 3.90 % 4.00 % 4.11 % \n Taxable-equivalent adjustment (574 ) (575 ) (566 ) (569 ) (569 ) \n Net interest income $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 \n Ratio of average interest-earning assets to average interest-bearing liabilities 129 % 129 % 128 % 129 % 129 % \n \n \n NOTES: \n ((1))Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. \n ((2))Average balance of investment securities is computed at fair value. \n ((3) )Average balances include nonaccrual loans. \n ((4))Interest income on loans includes prepayment and late fees, where applicable. \n ((5))Interest income on loans includes accretion on purchase accounting marks of $3.9 million, $4.3 million, $4.2 million, $4.7 million and $5.3 million for the three months ended September 30, 2026, June 30, 2026, March 31, 2026, December 31, 2025 and September 30, 2025, respectively. \n ((6))Interest expense includes accelerated amortization of the of the fair value mark from the redeemed subordinated notes of $1.6 million for the three months ended June 30, 2026. \n \n\n\n\n ANALYSIS OF NET INTEREST INCOME \n Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) \n (continued) \n Nine Months Ended \n September 30, 2026 September 30, 2025 \n Taxable- Taxable- Taxable- Taxable- \n Average Equivalent Equivalent Average Equivalent Equivalent \n (In thousands) Balance Interest Rate Balance Interest Rate \n Assets \n Federal funds sold & interest-bearing bank balances $ 67,316 $ 1,843 3.66 % $ 146,688 $ 4,904 4.47 % \n Investment securities ((1)(2)) 976,406 33,238 4.54 892,033 31,379 4.69 \n Loans ((1)(3)(4)(5)) 4,105,041 193,435 6.30 3,928,159 192,858 6.56 \n Total interest-earning assets 5,148,763 228,516 5.93 4,966,880 229,141 6.17 \n Other assets 428,944 440,153 \n Total assets $ 5,577,707 $ 5,407,033 \n Liabilities and Shareholders' Equity \n Interest-bearing demand deposits $ 2,568,637 41,105 2.14 $ 2,462,336 42,181 2.29 \n Savings deposits 258,261 398 0.21 268,966 494 0.25 \n Time deposits 890,123 23,439 3.52 927,232 27,079 3.90 \n Total interest-bearing deposits 3,717,021 64,942 2.34 3,658,534 69,754 2.55 \n Securities sold under agreements to repurchase and federal funds purchased 12,667 132 1.39 26,623 297 1.49 \n FHLB advances and other borrowings 243,691 6,921 3.80 128,827 3,939 4.09 \n Subordinated notes and trust preferred debt ((6)) 27,196 3,651 17.95 68,799 4,223 8.21 \n Total interest-bearing liabilities 4,000,575 75,646 2.53 3,882,783 78,213 2.69 \n Noninterest-bearing demand deposits 883,735 898,015 \n Other liabilities 84,466 89,025 \n Total liabilities 4,968,776 4,869,823 \n Shareholders' equity 608,931 537,210 \n Total liabilities and shareholders' equity $ 5,577,707 $ 5,407,033 \n Taxable-equivalent net interest income / net interest spread 152,870 3.40 % 150,928 3.47 % \n Taxable-equivalent net interest margin 3.97 % 4.06 % \n Taxable-equivalent adjustment (1,714 ) (1,667 ) \n Net interest income $ 151,156 $ 149,261 \n Ratio of average interest-earning assets to average interest-bearing liabilities 129 % 128 % \n \n\n\n\n NOTES TO ANALYSIS OF NET INTEREST INCOME: \n ((1))Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. \n ((2))Average balance of investment securities is computed at fair value. \n ((3))Average balances include nonaccrual loans. \n ((4))Interest income on loans includes prepayment and late fees, where applicable. \n ((5))Interest income on loans includes accretion on purchase accounting marks of $12.4 million and $16.7 million for the nine months ended September 30, 2026 and 2025, respectively. \n ((6))Interest expense includes accelerated amortization of the of the fair value mark from the redeemed subordinated notes of $1.6 million for the nine months ended September 30, 2026. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Profitability for the quarter: \n Net interest income $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 \n Net provision for credit losses on loans and unfunded loan commitments 1,042 338 352 75 396 \n Noninterest income 13,378 13,836 15,577 14,392 13,382 \n Noninterest expenses 37,334 37,666 36,728 37,355 36,297 \n Income before income taxes 28,322 24,663 27,502 27,493 27,677 \n Income tax expense 5,507 3,505 5,693 6,002 5,812 \n Net income $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 \n \n Financial ratios: \n Return on average assets ((1)) 1.60 % 1.53 % 1.59 % 1.55 % 1.60 % \n Return on average equity ((1)) 14.62 % 13.96 % 14.76 % 14.73 % 15.72 % \n Net interest margin ((1)) 4.12 % 3.87 % 3.90 % 4.00 % 4.11 % \n Net interest margin, adjusted ((1)(2)(3)) n/a 4.00 % n/a n/a n/a \n Efficiency ratio 56.0 % 60.1 % 56.9 % 57.5 % 56.4 % \n Efficiency ratio, adjusted ( (2)(3)) n/a 58.6 % n/a n/a n/a \n \n Per share information: \n Income per common share: \n Basic $ 1.18 $ 1.10 $ 1.13 $ 1.12 $ 1.14 \n Diluted 1.17 1.09 1.12 1.11 1.13 \n Book value 30.77 31.60 30.76 30.32 29.33 \n Tangible book value ((3)) 25.96 26.71 25.76 25.21 24.12 \n Average tangible common equity ((1)(3)) 17.52 16.86 17.96 18.15 19.70 \n Cash dividends paid 0.30 0.30 0.30 0.27 0.27 \n \n Average basic shares 19,380 19,313 19,274 19,251 19,224 \n Average diluted shares 19,504 19,432 19,410 19,384 19,364 \n \n ((1))Annualized. \n ((2))Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the three months ended June 30, 2026. \n ((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. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Noninterest income: \n Service charges $ 2,916 $ 2,734 $ 2,871 $ 3,225 $ 2,997 \n Interchange income 1,597 1,602 1,513 1,553 1,620 \n Swap fee income 436 651 1,339 1,112 816 \n Wealth management income 5,968 5,946 5,557 5,739 5,277 \n Mortgage banking activities 212 436 326 503 522 \n Income from life insurance 1,410 1,376 3,761 1,331 1,471 \n Other income 824 1,034 212 834 629 \n Investment securities gains (losses) 15 57 (2 ) 95 50 \n Total noninterest income $ 13,378 $ 13,836 $ 15,577 $ 14,392 $ 13,382 \n \n Noninterest expenses: \n Salaries and employee benefits $ 22,400 $ 22,229 $ 21,157 $ 21,980 $ 21,439 \n Occupancy, furniture and equipment 4,109 3,887 4,221 4,017 4,075 \n Data processing 1,752 1,703 1,537 1,292 1,116 \n Advertising and bank promotions 423 1,126 683 561 154 \n FDIC insurance 627 634 549 683 652 \n Professional services 1,015 1,202 1,221 1,947 1,703 \n Taxes other than income 1,022 392 1,025 574 828 \n Intangible asset amortization 2,115 2,179 2,239 2,348 2,410 \n Other operating expenses 3,871 4,314 4,096 3,953 3,920 \n Total noninterest expenses $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 \n \n\n\n\n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Balance Sheet at quarter end: \n Cash and cash equivalents $ 125,646 $ 144,841 $ 161,136 $ 149,774 $ 184,146 \n Restricted investments in bank stocks 32,514 27,429 23,984 26,717 24,111 \n Securities available for sale 919,448 949,281 947,018 952,740 890,357 \n Loans held for sale, at fair value 3,924 3,639 3,366 6,090 6,026 \n Loans: \n Commercial real estate: \n Owner occupied 680,146 679,295 645,026 644,713 629,481 \n Non-owner occupied 1,306,387 1,305,379 1,322,251 1,260,198 1,254,959 \n Multi-family 246,026 229,425 216,658 236,703 234,782 \n Non-owner occupied residential 145,716 150,917 151,560 155,749 163,138 \n Agricultural 91,094 97,729 114,409 121,417 118,596 \n Commercial and industrial 532,125 489,247 481,815 489,371 479,929 \n Acquisition and development: \n 1-4 family residential construction 54,370 39,344 46,355 41,489 41,141 \n Commercial and land development 178,823 198,399 198,957 198,234 195,158 \n Municipal 34,348 33,950 27,744 25,302 28,664 \n Total commercial loans 3,269,035 3,223,685 3,204,775 3,173,176 3,145,848 \n Residential mortgage: \n First lien 518,321 501,306 484,022 478,870 476,006 \n Home equity – term 5,298 5,401 5,685 5,972 5,800 \n Home equity – lines of credit 376,096 344,495 327,141 321,438 311,458 \n Other - term ((1)) 20,424 20,929 22,442 22,906 23,737 \n Installment and other loans 19,199 17,215 17,254 18,331 16,887 \n Total loans 4,208,373 4,113,031 4,061,319 4,020,693 3,979,736 \n Allowance for credit losses (46,775 ) (46,632 ) (47,463 ) (47,681 ) (48,105 ) \n Net loans held for investment 4,161,598 4,066,399 4,013,856 3,973,012 3,931,631 \n Goodwill 69,751 69,751 69,751 69,751 69,751 \n Other intangible assets, net 31,457 33,572 35,751 37,990 40,338 \n Total assets 5,707,243 5,612,151 5,576,972 5,542,255 5,470,233 \n Total deposits 4,581,910 4,620,023 4,627,424 4,528,774 4,533,560 \n FHLB advances and other borrowings and Securities sold under agreements to repurchase 417,252 282,362 225,958 299,243 241,719 \n Subordinated notes and trust preferred debt 8,109 8,049 37,274 37,122 36,970 \n Total shareholders' equity 605,200 621,650 603,184 591,535 571,936 \n \n ((1))Other - term includes property assessed clean energy (\"PACE\") loans. \n\n\n\n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Capital and credit quality measures ((1)): \n Total risk-based capital: \n Orrstown Financial Services, Inc. 13.3 % 13.2 % 13.5 % 13.3 % 13.1 % \n Orrstown Bank 13.2 % 13.1 % 13.6 % 13.3 % 12.9 % \n Tier 1 risk-based capital: \n Orrstown Financial Services, Inc. 12.3 % 12.2 % 12.0 % 11.7 % 11.3 % \n Orrstown Bank 12.2 % 12.1 % 12.5 % 12.2 % 11.8 % \n Tier 1 common equity risk-based capital: \n Orrstown Financial Services, Inc. 12.1 % 12.0 % 11.8 % 11.5 % 11.1 % \n Orrstown Bank 12.2 % 12.1 % 12.5 % 12.2 % 11.8 % \n Tier 1 leverage capital: \n Orrstown Financial Services, Inc. 10.2 % 10.1 % 9.7 % 9.5 % 9.3 % \n Orrstown Bank 10.1 % 10.0 % 10.2 % 9.9 % 9.6 % \n \n Average equity to average assets 10.98 % 10.97 % 10.80 % 10.51 % 10.18 % \n Allowance for credit losses to total loans 1.11 % 1.13 % 1.17 % 1.19 % 1.21 % \n Total nonaccrual loans to total loans 0.54 % 0.58 % 0.74 % 0.70 % 0.66 % \n Nonperforming assets to total assets 0.40 % 0.44 % 0.56 % 0.51 % 0.48 % \n Allowance for credit losses to nonaccrual loans 204 % 196 % 158 % 170 % 184 % \n \n Other information: \n Net charge-offs $ 983 $ 1,169 $ 946 $ 499 $ 189 \n Classified loans 45,201 49,190 57,584 58,351 64,089 \n Nonperforming and other risk assets: \n Nonaccrual loans 22,919 23,751 30,025 28,031 26,191 \n Other real estate owned — 1,055 1,055 — — \n Total nonperforming assets 22,919 24,806 31,080 28,031 26,191 \n Financial difficulty modifications still accruing 1,629 1,794 949 1,253 1,245 \n Loans past due 90 days or more and still accruing 591 853 443 1,040 497 \n Total nonperforming and other risk assets $ 25,139 $ 27,453 $ 32,472 $ 30,324 $ 27,933 \n \n (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (\"CECL\") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new \n CECL standard, which concluded at December 31, 2025. Starting with periods in 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. \n \n\nAppendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP\nReconciliations\n\nManagement believes providing certain other “non-GAAP” financial\ninformation will assist investors in their understanding of the effect on\nrecent financial results from non-recurring charges.\n\nAs a result of acquisitions, the Company has intangible assets consisting of\ngoodwill, core deposit and other intangible assets, which totaled $101.2\nmillion and $107.7 million at September 30, 2026 and December 31, 2025,\nrespectively. During the nine months ended September 30, 2025, the Company\nincurred $2.6 million in merger-related expenses, respectively. The Company\ndid not incur merger-related or other non-recurring expenses during the three\nmonths ended September 30, 2026, June 30, 2026, March 31, 2026. December 31,\n2025 and September 30, 2025.\n\nOn June 30, 2026, the Company redeemed the $31.0 million outstanding 4.50%\nfixed-to-floating rate subordinated notes assumed from Codorus Valley Bancorp,\nInc. on July 1, 2024. During the nine months ended September 30, 2026, the\nCompany amortized the remaining fair value mark of $1.6 million to interest\nexpense as a result of the redemption, which reduced net interest margin.\n\nTangible book value per common share, tangible common equity, and the impact\nof the accelerated amortization of fair value marks on net interest margin and\nthe efficiency ratio and merger-related expenses on net income and associated\nratios, as used by the Company in this earnings release, are determined by\nmethods other than in accordance with U.S. Generally Accepted Accounting\nPrinciples (\"GAAP\"). While we believe this information is a useful supplement\nto GAAP based measures presented in this earnings release, readers are\ncautioned that this non-GAAP disclosure has limitations as an analytical tool,\nshould not be viewed as a substitute for financial measures determined in\naccordance with GAAP, and should not be considered in isolation or as a\nsubstitute for analysis of our results and financial condition as reported\nunder GAAP, nor are such measures necessarily comparable to non-GAAP\nperformance measures that may be presented by other companies. This\nsupplemental presentation should not be construed as an inference that our\nfuture results will be unaffected by similar adjustments to be determined in\naccordance with GAAP.\n\nThe following tables present the computation of each non-GAAP based measure:\n\n(In thousands)\n\n Tangible Book Value per Common Share September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Shareholders' equity (most directly comparable GAAP-based measure) $ 605,200 $ 621,650 $ 603,184 $ 591,535 $ 571,936 \n Less: Goodwill 69,751 69,751 69,751 69,751 69,751 \n Other intangible assets 31,457 33,572 35,751 37,990 40,338 \n Related tax effect (6,606 ) (7,050 ) (7,508 ) (7,978 ) (8,471 ) \n Tangible common equity (non-GAAP) $ 510,598 $ 525,377 $ 505,190 $ 491,772 $ 470,318 \n \n Common shares outstanding 19,671 19,670 19,611 19,507 19,501 \n \n Book value per share (most directly comparable GAAP-based measure) $ 30.77 $ 31.60 $ 30.76 $ 30.32 $ 29.33 \n Intangible assets per share 4.81 4.89 5.00 5.11 5.21 \n Tangible book value per share (non-GAAP) $ 25.96 $ 26.71 $ 25.76 $ 25.21 $ 24.12 \n \n Return on Average Tangible Common Equity September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Net Income $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 \n Average shareholders' equity $ 619,147 $ 608,099 $ 599,330 $ 578,859 $ 551,945 \n Less: Average goodwill 69,751 69,751 69,751 69,751 69,751 \n Less: Average other intangible assets, gross 32,793 34,920 37,132 39,467 41,809 \n Average tangible equity $ 516,603 $ 503,428 $ 492,447 $ 469,641 $ 440,385 \n Return on average tangible equity (non-GAAP) ((1)) 17.52 % 16.86 % 17.96 % 18.15 % 19.70 % \n ((1))- Annualized \n\n\n\n (In thousands) Three Months Ended Nine Months Ended \n Adjusted Ratios for Non-recurring Charges September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 September 30, 2026 September 30, 2025 \n Net income (A) - most directly comparable GAAP-based measure $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 $ 65,782 $ 59,364 \n Plus: Merger-related expenses (B) — — — — — — 2,617 \n Less: Related tax effect (C) — — — — — — (589 ) \n Adjusted net income (D=A+B-C) - Non-GAAP $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 $ 65,782 $ 61,392 \n \n Average assets (E) $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 $ 5,577,707 $ 5,407,033 \n Return on average assets (= A / E) - most directly comparable GAAP-based measure ((1)) 1.60 % 1.53 % 1.59 % 1.55 % 1.60 % 1.58 % 1.47 % \n Return on average assets, adjusted (= D / E) - Non-GAAP ((1)) n/a n/a n/a n/a n/a n/a 1.52 % \n \n Average equity (F) $ 619,147 $ 608,099 $ 599,330 $ 578,859 $ 551,945 $ 608,931 $ 537,210 \n Return on average equity (= A / F) - most directly comparable GAAP-based measure ((1)) 14.62 % 13.96 % 14.76 % 14.73 % 15.72 % 14.44 % 14.77 % \n Return on average equity, adjusted (= D / F) - Non-GAAP ((1)) n/a n/a n/a n/a n/a n/a 15.28 % \n \n Weighted average shares - basic (G) - most directly comparable GAAP-based measure 19,380 19,313 19,274 19,251 19,224 19,323 19,185 \n Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure $ 1.18 $ 1.10 $ 1.13 $ 1.12 $ 1.14 $ 3.40 $ 3.09 \n Basic earnings per share, adjusted (= D / G) - Non-GAAP n/a n/a n/a n/a n/a n/a $ 3.20 \n \n Weighted average shares - diluted (H) - most directly comparable GAAP-based measure 19,504 19,432 19,410 19,384 19,364 19,449 19,345 \n Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure $ 1.17 $ 1.09 $ 1.12 $ 1.11 $ 1.13 $ 3.38 $ 3.07 \n Diluted earnings per share, adjusted (= D / H) - Non-GAAP n/a n/a n/a n/a n/a n/a $ 3.17 \n \n continued \n\n\n\n Three Months Ended Nine Months Ended \n September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 September 30, 2026 September 30, 2025 \n Noninterest expense (I) - most directly comparable GAAP-based measure $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 $ 111,728 $ 112,087 \n Less: Merger-related expenses (B) — — — — — — (2,617 ) \n Adjusted noninterest expense (J = I - B) - Non-GAAP $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 $ 111,728 $ 109,470 \n \n Net interest income (K) $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 $ 151,156 $ 149,261 \n Noninterest income (L) 13,378 13,836 15,577 14,392 13,382 42,791 37,921 \n Total operating income (M = K + L) - most directly comparable GAAP-based measure $ 66,698 $ 62,667 $ 64,582 $ 64,923 $ 64,370 $ 193,947 $ 187,182 \n Plus: Accelerated amortization of fair value mark on redeemed subordinated notes (N) — 1,624 — — — 1,624 — \n Adjusted total operating income (O = M + N) - Non-GAAP $ 66,698 $ 64,291 $ 64,582 $ 64,923 $ 64,370 $ 195,571 $ 187,182 \n \n Efficiency ratio (= I / M) - most directly comparable GAAP-based measure 56.0 % 60.1 % 56.9 % 57.5 % 56.4 % 57.6 % 59.9 % \n Efficiency ratio, adjusted (= J / N) - Non-GAAP n/a 58.6 % n/a n/a n/a 57.1 % 58.5 % \n \n (1) Annualized \n\n\n\n Nine Months Ended September 30, 2026 \n Average Balance - most Taxable-Equivalent Interest - most directly comparable GAAP- Less: accelerated Adjusted Taxable- Taxable-Equivalent Rate - Adjusted Taxable- \n directly comparable based measure amortization on fair value Equivalent Interest - Non-GAAP most directly comparable Equivalent Rate - Non-GAAP \n GAAP-based measure mark from subordinated GAAP-based measure \n notes redemption \n Total interest-earning assets $ 5,148,763 $ 228,516 $ — $ 228,516 5.93 % 5.93 % \n \n Total interest-bearing liabilities $ 4,000,575 75,646 (1,624 ) 74,022 2.53 % 2.47 % \n \n Taxable-equivalent net interest income / net interest spread $ 152,870 $ 1,624 $ 154,494 3.40 % 3.46 % \n \n Taxable-equivalent net interest margin 3.97 % 4.01 % \n \n\n\n\n Three Months Ended June 30, 2026 \n Average Balance - most directly comparable GAAP-based measure Taxable-Equivalent Interest - most directly comparable GAAP- based measure Less: accelerated amortization on fair value mark from subordinated notes redemption Adjusted Taxable- Equivalent Interest - Non-GAAP Taxable-Equivalent Rate - most directly comparable GAAP-based measure Adjusted Taxable- Equivalent Rate - Non-GAAP \n Total interest-earning assets $ 5,117,006 $ 75,277 $ — $ 75,277 5.90 % 5.90 % \n \n Total interest-bearing liabilities $ 3,963,461 25,871 (1,624 ) 24,247 2.62 % 2.45 % \n \n Taxable-equivalent net interest income / net interest spread $ 49,406 $ 1,624 $ 51,030 3.28 % 3.45 % \n \n Taxable-equivalent net interest margin 3.87 % 4.00 % \n \n\nAppendix B- Investment Portfolio Concentrations\n\nThe following table summarizes the credit ratings and collateral associated\nwith the Company's investment security portfolio, excluding equity securities,\nat September 30, 2026:\n\n(In thousands)\n\n Sector Portfolio Mix Amortized Book Fair Value AAA AA A BBB BB NR Collateral / Guarantee Type \n Unsecured ABS — % $ 2,203 $ 2,173 — % — % — % — % — % 100 % Unsecured Consumer Debt \n Student Loan ABS — 2,342 2,343 — — — — — 100 Seasoned Student Loans \n Federal Family Education Loan ABS 7 64,907 64,722 4 74 — 9 13 — Federal Family Education Loan ((1)) \n PACE Loan ABS — 1,450 1,274 100 — — — — — PACE Loans ((2)) \n Non-Agency CMBS 4 38,629 37,415 — — — — — 100 \n Non-Agency RMBS 4 39,198 37,370 94 6 — — — — Reverse Mortgages ((3)) \n Municipal - General Obligation 10 98,818 86,644 17 78 5 — — — \n Municipal - Revenue 12 118,983 100,673 — 75 19 — — 6 \n SBA ReRemic ((5)) — 1,105 1,094 — 100 — — — — SBA Guarantee ((4)) \n Small Business Administration — 2,433 2,488 — 100 — — — — SBA Guarantee ((4)) \n Agency MBS 26 252,259 234,756 — 100 — — — — Residential Mortgages ((4)) \n Agency CMO 35 346,837 333,056 — 100 — — — — \n U.S. Treasury securities 2 15,010 14,166 — 100 — — — — U.S. Government Guarantee ((4)) \n Corporate bonds — 957 961 — — — 100 — — \n 100 % $ 985,131 $ 919,135 6 % 84 % 3 % 1 % 1 % 5 % \n \n ((1))97% guaranteed by U.S. government \n ((2))PACE acronym represents Property Assessed Clean Energy loans \n ((3))Non-agency reverse mortgages with current structural credit enhancements \n ((4))Guaranteed by U.S. government or U.S. government agencies \n ((5))SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits \n \n 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+. \n \n\nAbout the Company\n\nWith $5.7 billion in assets, Orrstown Financial Services, Inc. and its\nwholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and\nbusiness financial services in Berks, Cumberland, Dauphin, Franklin,\nLancaster, Perry and York Counties, Pennsylvania and Anne Arundel, Baltimore,\nHarford, Howard, and Washington Counties, Maryland, as well as Baltimore City,\nMaryland. The Company’s lending area also includes counties in Pennsylvania,\nMaryland, Delaware, Virginia and West Virginia within a 75-mile radius of the\nCompany's executive and administrative offices as well as the District of\nColumbia. Orrstown Bank is an Equal Housing Lender and its deposits are\ninsured up to the legal maximum by the FDIC. Orrstown Financial Services,\nInc.’s common stock is traded on Nasdaq (ORRF). For more information about\nOrrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.\n\nCautionary Note Regarding Forward-Looking Statements\n\nThis press release contains “forward-looking statements” within the\nmeaning of Section 27A of the Securities Act and Section 21E of the Exchange\nAct. Forward-looking statements reflect the current views of the Company's\nmanagement with respect to, among other things, future events and the\nCompany's financial performance. These statements are often, but not always,\nmade through the use of words or phrases such as “may,” “should,”\n“could,” “predict,” “potential,” “believe,” “will likely\nresult,” “expect,” “continue,” “will,” “anticipate,”\n“seek,” “estimate,” “intend,” “plan,” “project,”\n“forecast,” “goal,” “target,” “would” and “outlook,” or\nthe negative variations of those words or other comparable words of a future\nor forward-looking nature. These forward-looking statements are not historical\nfacts, and are based on current expectations, estimates, predictions or\nprojections about events or the Company's industry, management’s beliefs and\ncertain assumptions made by management, many of which, by their nature, are\ninherently uncertain and beyond the Company's control. Accordingly, the\nCompany cautions you that any such forward-looking statements are not\nguarantees of future performance and are subject to risks, assumptions and\nuncertainties that are difficult to predict. Although the Company believes\nthat the expectations reflected in these forward-looking statements are\nreasonable as of the date made, actual results may prove to be materially\ndifferent from the results expressed or implied by the forward-looking\nstatements and there can be no assurances that the Company will achieve the\ndesired level of new business development and new loans, growth in the balance\nsheet and fee-based revenue lines of business, cost savings initiatives and\ncontinued reductions in risk assets or mitigation of losses in the future.\nFactors which could cause the actual results to differ from those expressed or\nimplied by the forward-looking statements include, but are not limited to, the\nfollowing: interest rate changes or volatility; general economic conditions\n(including inflation and concerns about liquidity) on a national basis or in\nthe local markets in which the Company operates; ineffectiveness of the\nCompany’s strategic growth plan due to changes in current or future market\nconditions; the effects of competition and how it may impact our community\nbanking model, including industry consolidation and development of competing\nfinancial products and services; changes in consumer behavior due to changing\npolitical, business and economic conditions, or legislative or regulatory\ninitiatives; changes in, and evolving interpretations of, existing and future\nlaws and regulations; changes in credit quality; inability to raise capital,\nif necessary, under favorable conditions; volatility in the securities\nmarkets; the demand for our products and services; deteriorating economic\nconditions; geopolitical tensions; operational risks including, but not\nlimited to, cybersecurity incidents, fraud, natural disasters and future\npandemics; expenses associated with litigation and legal proceedings; and\nother risks and uncertainties, including those detailed in our Annual Report\non Form 10-K for the year ended December 31, 2025 under the sections titled\n“Risk Factors” and “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations” and in subsequent filings made with the\nSecurities and Exchange Commission.\n\nThe foregoing list of factors is not exhaustive. If one or more events related\nto these or other risks or uncertainties materializes, or if the Company's\nunderlying assumptions prove to be incorrect, actual results may differ\nmaterially from what the Company anticipates. Accordingly, you should not\nplace undue reliance on any such forward-looking statements. Any\nforward-looking statement speaks only as of the date on which it is made, and\nthe Company disclaims any obligation to publicly update or review any\nforward-looking statement, whether as a result of new information, future\ndevelopments or otherwise. New risks and uncertainties arise from time to\ntime, and it is not possible for the Company to predict those events or how\nthey may affect it. In addition, the Company cannot assess the impact of each\nfactor on its business or the extent to which any factor, or combination of\nfactors, may cause actual results to differ materially from those contained in\nany forward-looking statements. All forward-looking statements, expressed or\nimplied, included in this press release are expressly qualified in their\nentirety by this cautionary statement. This cautionary statement should also\nbe considered in connection with any subsequent written or oral\nforward-looking statements that the Company or persons acting on the Company's\nbehalf may issue.\n\nThe review period for subsequent events extends up to and includes the filing\ndate of a public company’s financial statements, when filed with the\nSecurities and Exchange Commission. Accordingly, the consolidated financial\ninformation presented in this announcement is subject to change. Annualized,\npro forma, projected and estimated numbers in this document are used for\nillustrative purposes only and are not forecasts and may not reflect actual\nresults.\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/95ff307d-f467-4fe2-b42d-cfc4f5a27b80)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX4dq060-20261020","title":"Orrstown Financial Services, Inc. Reports Third Quarter 2026 Results","author":"Globe Newswire","ticker":"ORRF","created":"2026-10-20T20:05:02.221Z","tickers":["ORRF"],"exchange":"NASDAQ","article_body":"* Net income of $22.8 million, or $1.17 per diluted share, for the three\nmonths ended September 30, 2026 compared to net income of $21.2 million, or\n$1.09 per diluted share, for the three months ended June 30, 2026;\n* Net interest margin, on a tax equivalent basis, increased by 25 basis points\nto 4.12% in the third quarter of 2026 compared to 3.87% in the second quarter\nof 2026; excluding the amortization of the fair value mark on the redeemed\nsubordinated notes, net interest margin was 4.00% ((1)) in the second quarter\nof 2026;\n* Return on average assets was 1.60% and return on average equity was 14.62%\nfor the three months ended September 30, 2026, compared to 1.53% and 13.96%,\nrespectively, for the three months ended June 30, 2026;\n* Total loans increased by $95.3 million, or 9% annualized, from June 30, 2026\nto September 30, 2026; classified loans decreased by 8% during the third\nquarter of 2026; nonaccrual loans to total loans decreased to 0.54% at\nSeptember 30, 2026 from 0.58% at June 30, 2026;\n* Total deposits decreased by $38.1 million, or 3% annualized, from June 30,\n2026 to September 30, 2026;\n* Efficiency ratio was 56.0% for the three months ended September 30, 2026\ncompared to 60.1% for the three months ended June 30, 2026;\n* Federal income tax credits purchased resulted in a $0.4 million income tax\nbenefit for the third quarter of 2026 compared to an income tax benefit of\n$1.6 million from tax credit purchases during the second quarter of 2026;\n* The Board of Directors declared a cash dividend of $0.30 per common share,\npayable November 10, 2026, to shareholders of record as of November 3, 2026.\nHARRISBURG, Pa., Oct. 20, 2026 (GLOBE NEWSWIRE) -- Orrstown Financial\nServices, Inc. (the \"Company\") (NASDAQ: ORRF), the parent company of Orrstown\nBank (the “Bank”), announced earnings for the three and nine months ended\nSeptember 30, 2026. Net income totaled $22.8 million for the three months\nended September 30, 2026, compared to net income of $21.2 million and $21.9\nmillion for the three months ended June 30, 2026 and September 30, 2025,\nrespectively. Diluted earnings per share was $1.17 for the three months ended\nSeptember 30, 2026, compared to $1.09 and $1.13 for the three months ended\nJune 30, 2026 and September 30, 2025, respectively.\n\nAdam L. Metz, President and Chief Executive Officer, said, “Orrstown\ndelivered strong third quarter results, with diluted earnings per common share\nof $1.17 and a return on average assets of 1.60%. The quarter demonstrated\nsolid execution across the franchise, including a 25 basis point increase in\nnet interest margin to 4.12%, a 56.0% efficiency ratio and 9% annualized loan\ngrowth. We also continued to see favorable trends in credit quality, with both\nclassified loans and nonaccrual loans declining during the quarter. Our\nresults reflect the progress we are making in growing core net interest income\nwhile actively managing funding costs and the declining benefit of purchase\naccounting accretion from our previous merger. Although the economic, interest\nrate and competitive environments remain dynamic, we enter the remainder of\nthe year from a position of strength and are confident in our ability to\nexecute across a range of economic conditions.”\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\nDISCUSSION OF RESULTS\n\nBalance Sheet\n\nLoans\n\nLoans held for investment increased by $95.3 million, or approximately 9%\nannualized, from $4.1 billion at June 30, 2026 to $4.2 billion at\nSeptember 30, 2026. Commercial loans increased by $45.4 million, or\napproximately 6% annualized, from June 30, 2026 to September 30, 2026, with\nparticularly strong growth in the commercial and industrial segment. Home\nequity lines of credit increased by $31.6 million, or approximately 36%\nannualized, which included purchases with a principal balance totaling $15.5\nmillion. The retail teams have been successful in recent efforts over the past\nseveral quarters to drive growth in this category. First lien residential\nmortgages increased by $17.0 million, or approximately 13% annualized.\n\nInvestment Securities\n\nInvestment securities, all of which are classified as available-for-sale,\ndecreased by $29.9 million to $919.4 million at September 30, 2026 from\n$949.3 million at June 30, 2026. During the three months ended September 30,\n2026, net unrealized losses on investment securities increased by $41.6\nmillion as a result of widening spreads and a rise in interest rates. The Bank\npurchased $34.9 million of investment securities, consisting of $24.9 million\nof agency mortgage backed securities and collateralized mortgage obligations\nand $10.0 million of non-agency collateralized mortgage obligations during the\nthird quarter of 2026. The remaining change in investment securities during\nthe quarter was due primarily to paydowns of $24.2 million, partially offset\nby net accretion of $1.4 million. The overall duration of the Company's\ninvestment securities portfolio was 4.2 years at September 30, 2026 compared\nto 4.5 years at June 30, 2026. See Appendix B for a summary of the Bank's\ninvestment securities at September 30, 2026, highlighting their\nconcentrations and credit ratings.\n\nDeposits\n\nDuring the third quarter of 2026, deposits decreased by $38.1 million, or 3%\nannualized, and totaled $4.6 billion at both September 30, 2026 and June 30,\n2026. Time deposits, interest-bearing demand deposits, non-interest bearing\ndeposits and savings deposits decreased by $28.1 million, $25.1 million, $24.8\nmillion and $8.7 million, respectively. The decreases were primarily due to\nnormal seasonal activity as well as time deposit maturities. These decreases\nwere partially offset by a $48.6 million increase in money market deposits\nresulting from both promotional activities and the purchase of $25.1 million\nof brokered deposits. The Bank's loan-to-deposit ratio was 92% at\nSeptember 30, 2026 compared to 89% at June 30, 2026.\n\nBorrowings\n\nThe Company actively manages its liquidity position through its various\nsources of funding to meet the needs of its clients. FHLB advances and other\nborrowings were $417.3 million at September 30, 2026 compared to $274.8\nmillion at June 30, 2026. The higher utilization of borrowings during the\nthird quarter of 2026 was primarily to fund loan growth. The Bank seeks to\nmaintain sufficient liquidity to ensure that client needs can be addressed in\na timely basis. The Bank had available alternative funding sources, such as\nFHLB advances and other wholesale options, of $1.7 billion at September 30,\n2026.\n\nIncome Statement\n\nNet Interest Income and Margin\n\nNet interest income increased by $4.5 million to $53.3 million for the three\nmonths ended September 30, 2026 compared to $48.8 million for the three\nmonths ended June 30, 2026. The net interest margin, on a tax equivalent\nbasis, increased by 25 basis points to 4.12% in the third quarter of 2026 from\n3.87% in the second quarter of 2026. The yield on interest-earning assets\nincreased by eight basis points and the cost of deposits decreased by five\nbasis points during the three months ended September 30, 2026 compared to the\nthree months ended June 30, 2026. In addition, the net interest margin in the\nsecond quarter of 2026 includes the $1.6 million accelerated amortization\nexpense of the subordinated notes' fair value mark. Excluding the amortization\nof the fair value mark on the redeemed subordinated notes, net interest margin\nwas 4.00%((1)) in the second quarter of 2026.\n\nInterest income on loans, on a tax equivalent basis, increased by $3.2 million\nto $66.7 million for the three months ended September 30, 2026 compared to\n$63.5 million for the three months ended June 30, 2026. Average loans\nincreased by $92.6 million during the three months ended September 30, 2026\ncompared to the three months ended June 30, 2026. Interest income on loans\nincludes accretion on purchase accounting marks of $3.9 million for the three\nmonths ended September 30, 2026 compared to $4.3 million for the three months\nended June 30, 2026. Prepayment fee income on loans increased by $335 thousand\nduring the third quarter of 2026 compared to the second quarter of 2026.\n\nInterest expense, on a tax equivalent basis, decreased by $1.5 million to\n$24.4 million for the three months ended September 30, 2026 compared to $25.9\nmillion for the three months ended June 30, 2026. Borrowing costs decreased by\n$1.1 million during the three months ended September 30, 2026 compared to the\nthree months ended June 30, 2026 primarily due to the accelerated amortization\nof the remaining subordinated debt fair value mark of $1.6 million during the\nsecond quarter of 2026.\n\nThe cost of deposits decreased by five basis points during the three months\nended September 30, 2026 compared to the three months ended June 30, 2026.\nAverage interest-bearing deposits decreased by $27.9 million during the three\nmonths ended September 30, 2026 compared to the three months ended June 30,\n2026. Average FHLB advances and other borrowings increased by $130.6 million\nfrom the three months ended June 30, 2026 to the three months ended\nSeptember 30, 2026 driven by loan growth in addition to maintaining\nsufficient liquidity due to seasonal deposit activity during the third quarter\nof 2026.\n\nProvision for Credit Losses on Loans\n\nThe allowance for credit losses (\"ACL\") on loans increased to $46.8 million at\nSeptember 30, 2026 from $46.6 million at June 30, 2026. The ACL to total\nloans was 1.11% at September 30, 2026 compared to 1.13% at June 30, 2026. The\nCompany recorded provision expense on loans of $1.1 million for the three\nmonths ended September 30, 2026 compared to $0.4 million for the three months\nended June 30, 2026. The increase in provision expense resulted from strong\nloan growth, net charge-offs and updates to our qualitative factors, partially\noffset by a favorable GDP forecast and macroeconomic conditions. Net\ncharge-offs were $1.0 million during the three months ended September 30,\n2026 compared to $1.2 million during the three months ended June 30, 2026.\n\nClassified loans decreased by $4.0 million to $45.2 million at September 30,\n2026 from $49.2 million at June 30, 2026 due to repayments of $5.3 million and\ncharge-offs of $1.0 million, partially offset by net downgrades of $2.3\nmillion. Nonaccrual loans totaled $22.9 million at September 30, 2026\ncompared to $23.8 million at June 30, 2026. The decrease of $0.9 million in\nnonaccrual loans was due to repayments of $1.5 million and net charge offs\ntotaling $1.0 million, partially offset by loans placed on nonaccrual status\nof $1.6 million. Nonaccrual loans to total loans decreased to 0.54% at\nSeptember 30, 2026 from 0.58% at June 30, 2026. Management believes the ACL\nto be adequate based on current asset quality metrics and economic forecasts.\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\nNoninterest Income\n\nNoninterest income decreased by $0.4 million to $13.4 million for the three\nmonths ended September 30, 2026 from $13.8 million for the three months ended\nJune 30, 2026.\n\nSwap fee income decreased by $0.3 million to $0.4 million for the three months\nended September 30, 2026 compared to $0.7 million for the three months ended\nJune 30, 2026. Swap fee income will fluctuate based on market conditions and\nclient demand.\n\nMortgage banking income decreased by $0.2 million to $0.2 million for the\nthree months ended September 30, 2026 from $0.4 million for the three months\nended June 30, 2026. The decrease was due to a reduction in loan sale activity\nand a decrease in the fair value adjustment of loans held-for-sale and in the\npipeline due to rising market interest rates.\n\nWealth management income was $6.0 million for the three months ended\nSeptember 30, 2026 compared to $5.9 million for the three months ended June\n30, 2026.\n\nNoninterest Expenses\n\nNoninterest expenses decreased by $0.4 million to $37.3 million for the three\nmonths ended September 30, 2026 from $37.7 million in the three months ended\nJune 30, 2026.\n\nProfessional services expense decreased by $0.2 million to $1.0 million for\nthe three months ended September 30, 2026 compared to $1.2 million for the\nthree months ended June 30, 2026. The Company continues to focus on reducing\nthird-party utilization.\n\nOther operating expenses decreased by $0.4 million to $3.9 million for the\nthree months ended September 30, 2026 compared to $4.3 million for the three\nmonths ended June 30, 2026. This was due primarily to an increase of $0.5\nmillion in mark-to-market gains on non-hedging derivatives from the second\nquarter of 2026 to the third quarter of 2026.\n\nSalaries and benefits expense increased by $0.2 million to $22.4 million for\nthe three months ended September 30, 2026 compared to $22.2 million for the\nthree months ended June 30, 2026. The third quarter of 2026 reflects a full\nquarter impact from the increase in merit-based salaries that went into effect\nin May 2026 and the impact of one extra day compared to the prior quarter.\n\nAdvertising and bank promotions expense decreased by $0.7 million to $0.4\nmillion in the three months ended September 30, 2026 from $1.1 million in the\nthree months ended June 30, 2026 due to $0.7 million in contributions to tax\ncredit programs during the second quarter of 2026. Taxes other than income\nincreased by $0.6 million to $1.0 million in the three months ended\nSeptember 30, 2026 compared to $0.4 million in the three months ended June\n30, 2026. This increase reflects the tax credits recognized in the second\nquarter of 2026 as result of the charitable contributions.\n\nIncome Taxes\n\nThe Company's effective tax rate was 19.4% for the third quarter of 2026\ncompared to 14.2% for the second quarter of 2026. The Company's effective tax\nrate for the three months ended September 30, 2026 is less than the 21%\nfederal statutory rate primarily due to the purchase of federal income tax\ncredits, which reduced income tax expense by $0.4 million. During the three\nmonths ended June 30, 2026, the Company purchased federal income tax credits,\nwhich reduced income tax expense by $1.6 million. In addition, the effective\ntax rate for both periods was impacted by tax-exempt income, including\ninterest earned on tax-exempt loans and securities and non-taxable income from\nlife insurance policies and tax credits partially offset by the disallowed\nportion of interest expense against earnings in association with the Bank's\ntax-exempt investments under the Tax Equity and Fiscal Responsibility Act of\n1982. The Company regularly analyzes its projected taxable income and makes\nadjustments to the provision for income taxes accordingly.\n\nCapital\n\nShareholders’ equity totaled $605.2 million at September 30, 2026 compared\nto $621.7 million at June 30, 2026. The decrease of $16.5 million is primarily\ndue to other comprehensive losses of $34.5 million and dividends of $5.9\nmillion, partially offset by net income of $22.8 million and share-based\ncompensation activity of $1.1 million. The change in other comprehensive\nlosses is primarily due to the increase in net unrealized losses on investment\nsecurities caused by the widening of spreads and a rise in interest rates.\n\nTangible book value per common share((1)) was $25.96 at September 30, 2026\ncompared to $26.71 at June 30, 2026. The Company's tangible common equity\nratio was 9.1% of total tangible assets at September 30, 2026 compared to\n9.5% at June 30, 2026. Return on average tangible common equity per common\nshare((1) )was 17.52% for the three months ended September 30, 2026 compared\nto 16.86% for the three months ended June 30, 2026. The decreases in tangible\nbook value per common share and the tangible common equity ratio were\nprimarily due to the decrease in shareholders' equity caused by the increase\nin net unrealized losses on investment securities.\n\nThe Company's tier 1 common equity, tier 1 capital and total risk-based\ncapital ratios were 12.1%, 12.3% and 13.3%, respectively, at September 30,\n2026 compared to 12.0%, 12.2% and 13.2%, respectively, at June 30, 2026. The\nCompany's Tier 1 leverage ratio increased to 10.2% at September 30, 2026\ncompared to 10.1% at June 30, 2026.\n\nAt September 30, 2026, all four capital ratios applicable to the Company were\nabove regulatory minimum levels to be deemed “well capitalized” under\ncurrent bank regulatory guidelines. The Company continues to believe that\ncapital is adequate to support the risks inherent in the balance sheet, as\nwell as growth requirements.\n\n((1)) Non-GAAP measure. See Appendix A for additional information.\n\n Investor Relations Contact: \n Neelesh Kalani \n Executive Vice President, Chief Financial Officer \n Phone (717) 510-7097 \n \n\n\n\n FINANCIAL HIGHLIGHTS (Unaudited) \n \n \n Three Months Ended Nine Months Ended \n September 30, September 30, September 30, September 30, \n (In thousands) 2026 2025 2026 2025 \n Profitability for the period: \n Net interest income $ 53,320 $ 50,988 $ 151,156 $ 149,261 \n Provision for credit losses - loans 1,126 396 2,192 51 \n Recovery of credit losses - unfunded loan commitments (84 ) — (460 ) (100 ) \n Noninterest income 13,378 13,382 42,791 37,921 \n Noninterest expenses 37,334 36,297 111,728 112,087 \n Income before income tax expense 28,322 27,677 80,487 75,144 \n Income tax expense 5,507 5,812 14,705 15,780 \n Net income available to common shareholders $ 22,815 $ 21,865 $ 65,782 $ 59,364 \n \n Financial ratios: \n Return on average assets ((1)) 1.60 % 1.60 % 1.58 % 1.47 % \n Return on average assets, adjusted ((1)(3)(4)) n/a n/a n/a 1.52 % \n Return on average equity ((1)) 14.62 % 15.72 % 14.44 % 14.77 % \n Return on average equity, adjusted ((1)(3)(4)) n/a n/a n/a 15.28 % \n Net interest margin ((1)) 4.12 % 4.11 % 3.97 % 4.06 % \n Net interest margin, adjusted ((1)(2)(4)) n/a n/a 4.01 % n/a \n Efficiency ratio 56.0 % 56.4 % 57.6 % 59.9 % \n Efficiency ratio, adjusted ((2)(3)(4)) n/a n/a 57.1 % 58.5 % \n Income per common share: \n Basic $ 1.18 $ 1.14 $ 3.40 $ 3.09 \n Basic, adjusted ((3)(4)) n/a n/a n/a $ 3.20 \n Diluted $ 1.17 $ 1.13 $ 3.38 $ 3.07 \n Diluted, adjusted ((3)(4)) n/a n/a n/a $ 3.17 \n \n Average equity to average assets 10.98 % 10.18 % 10.92 % 9.94 % \n \n ((1))Annualized for the three and nine months ended September 30, 2026 and 2025. \n ((2))Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the nine months ended September 30, 2026. \n ((3))Ratio has been adjusted for the merger-related expenses for the nine months ended September 30, 2025. \n ((4))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. \n \n\n\n\n FINANCIAL HIGHLIGHTS (Unaudited) \n (continued) \n September 30, December 31, \n (Dollars in thousands, except per share amounts) 2026 2025 \n At period-end: \n Total assets $ 5,707,243 $ 5,542,255 \n Loans, net of allowance for credit losses 4,161,598 3,973,012 \n Loans held-for-sale, at fair value 3,924 6,090 \n Securities available for sale, at fair value 919,448 952,740 \n Total deposits 4,581,910 4,528,774 \n FHLB advances and other borrowings and Securities sold under agreements to repurchase 417,252 299,243 \n Subordinated notes and trust preferred debt 8,109 37,122 \n Shareholders' equity 605,200 591,535 \n \n Credit quality and capital ratios ((1)): \n Allowance for credit losses to total loans 1.11 % 1.19 % \n Total nonaccrual loans to total loans 0.54 % 0.70 % \n Nonperforming assets to total assets 0.40 % 0.51 % \n Allowance for credit losses to nonaccrual loans 204 % 170 % \n Total risk-based capital: \n Orrstown Financial Services, Inc. 13.3 % 13.3 % \n Orrstown Bank 13.2 % 13.3 % \n Tier 1 risk-based capital: \n Orrstown Financial Services, Inc. 12.3 % 11.7 % \n Orrstown Bank 12.2 % 12.2 % \n Tier 1 common equity risk-based capital: \n Orrstown Financial Services, Inc. 12.1 % 11.5 % \n Orrstown Bank 12.2 % 12.2 % \n Tier 1 leverage capital: \n Orrstown Financial Services, Inc. 10.2 % 9.5 % \n Orrstown Bank 10.1 % 9.9 % \n \n Book value per common share $ 30.77 $ 30.32 \n \n ((1))Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (\"CECL\") to regulatory capital. At December 31, 2025, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the \n CECL standard. At September 30, 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n CONSOLIDATED BALANCE SHEETS (Unaudited) \n \n (Dollars in thousands, except per share amounts) September 30, 2026 December 31, 2025 \n Assets \n Cash and due from banks $ 48,690 $ 42,083 \n Interest-bearing deposits with banks 76,956 107,691 \n Cash and cash equivalents 125,646 149,774 \n Restricted investments in bank stocks 32,514 26,717 \n Securities available for sale (amortized cost of $985,444 and $972,138 at September 30, 2026 and December 31, 2025, respectively) 919,448 952,740 \n Loans held for sale, at fair value 3,924 6,090 \n Loans 4,208,373 4,020,693 \n Less: Allowance for credit losses (46,775 ) (47,681 ) \n Net loans 4,161,598 3,973,012 \n Premises and equipment, net 49,948 51,029 \n Cash surrender value of life insurance 148,345 146,994 \n Goodwill 69,751 69,751 \n Other intangible assets, net 31,457 37,990 \n Accrued interest receivable 20,733 21,473 \n Deferred tax assets, net 43,126 33,931 \n Other assets 100,753 72,754 \n Total assets $ 5,707,243 $ 5,542,255 \n \n Liabilities \n Deposits: \n Noninterest-bearing $ 896,069 $ 870,906 \n Interest-bearing 3,685,841 3,657,868 \n Total deposits 4,581,910 4,528,774 \n Securities sold under agreements to repurchase and federal funds purchased — 24,542 \n FHLB advances and other borrowings 417,252 274,701 \n Subordinated notes and trust preferred debt 8,109 37,122 \n Other liabilities 94,772 85,581 \n Total liabilities 5,102,043 4,950,720 \n \n Shareholders’ Equity \n Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding — — \n Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,706,971 shares issued and 19,670,559 outstanding at September 30, 2026; 19,711,628 shares issued and 19,507,208 outstanding at December 31, 2025 1,026 1,026 \n Additional paid—in capital 422,956 424,596 \n Retained earnings 234,886 186,752 \n Accumulated other comprehensive loss (52,318 ) (15,201 ) \n Treasury stock— 36,412 and 204,420 shares, at cost at September 30, 2026 and December 31, 2025, respectively (1,350 ) (5,638 ) \n Total shareholders’ equity 605,200 591,535 \n Total liabilities and shareholders’ equity $ 5,707,243 $ 5,542,255 \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) \n \n Three Months Ended Nine Months Ended \n September 30, September 30, September 30, September 30, \n (Dollars in thousands, except per share amounts) 2026 2025 2026 2025 \n Interest income \n Loans $ 66,454 $ 65,751 $ 192,764 $ 192,219 \n Investment securities - taxable 9,901 9,367 29,658 27,717 \n Investment securities - tax-exempt 814 881 2,537 2,634 \n Short-term investments 567 1,123 1,843 4,904 \n Total interest income 77,736 77,122 226,802 227,474 \n Interest expense \n Deposits 21,269 22,639 64,942 69,754 \n Securities sold under agreements to repurchase and federal funds purchased 6 107 132 297 \n FHLB advances and other borrowings 2,931 1,791 6,921 3,939 \n Subordinated notes and trust preferred debt 210 1,597 3,651 4,223 \n Total interest expense 24,416 26,134 75,646 78,213 \n Net interest income 53,320 50,988 151,156 149,261 \n Provision for credit losses - loans 1,126 396 2,192 51 \n Recovery of credit losses - unfunded loan commitments (84 ) — (460 ) (100 ) \n Net interest income after net provision for (recovery of) credit losses 52,278 50,592 149,424 149,310 \n Noninterest income \n Service charges 2,916 2,997 8,521 8,022 \n Interchange income 1,597 1,620 4,712 4,488 \n Swap fee income 436 816 2,426 1,879 \n Wealth management income 5,968 5,277 17,471 15,959 \n Mortgage banking activities 212 522 974 1,302 \n Income from life insurance 1,410 1,471 6,547 4,071 \n Investment securities gains 15 50 70 71 \n Other income 824 629 2,070 2,129 \n Total noninterest income 13,378 13,382 42,791 37,921 \n Noninterest expenses \n Salaries and employee benefits 22,400 21,439 65,786 63,191 \n Occupancy, furniture and equipment 4,109 4,075 12,217 12,961 \n Data processing 1,752 1,116 4,992 3,005 \n Advertising and bank promotions 423 154 2,232 1,730 \n FDIC insurance 627 652 1,810 2,150 \n Professional services 1,015 1,703 3,438 5,545 \n Taxes other than income 1,022 828 2,439 2,065 \n Intangible asset amortization 2,115 2,410 6,533 7,417 \n Merger-related expenses — — — 2,617 \n Restructuring expenses — — — 91 \n Other operating expenses 3,871 3,920 12,281 11,315 \n Total noninterest expenses 37,334 36,297 111,728 112,087 \n Income before income tax expense 28,322 27,677 80,487 75,144 \n Income tax expense 5,507 5,812 14,705 15,780 \n Net income $ 22,815 $ 21,865 $ 65,782 $ 59,364 \n \n Share information: \n Basic earnings per share $ 1.18 $ 1.14 $ 3.40 $ 3.09 \n Diluted earnings per share $ 1.17 $ 1.13 $ 3.38 $ 3.07 \n Dividends paid per share $ 0.30 $ 0.27 $ 0.90 $ 0.79 \n Weighted average shares - basic 19,380 19,224 19,323 19,185 \n Weighted average shares - diluted 19,504 19,364 19,449 19,345 \n \n\n\n\n ANALYSIS OF NET INTEREST INCOME \n Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) \n Three Months Ended \n 9/30/2026 6/30/2026 3/31/2026 12/31/2025 9/30/2025 \n Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- \n Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent \n (In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate \n Assets \n Federal funds sold & interest-bearing bank balances $ 62,164 $ 567 3.62 % $ 69,784 $ 639 3.67 % $ 70,086 $ 637 3.69 % $ 103,886 $ 1,017 3.88 % $ 101,728 $ 1,123 4.38 % \n Investment securities ((1)(2)) 973,344 11,064 4.54 971,932 11,096 4.57 984,060 11,079 4.51 976,957 11,177 4.58 906,399 10,593 4.67 \n Loans ( (1)(3)(4)(5)) 4,167,877 66,679 6.35 4,075,290 63,542 6.25 4,070,889 63,214 6.29 3,997,842 64,635 6.42 3,979,044 65,975 6.58 \n Total interest-earning assets 5,203,385 78,310 5.98 5,117,006 75,277 5.90 5,125,035 74,930 5.91 5,078,685 76,829 6.01 4,987,171 77,691 6.19 \n Other assets 436,997 425,913 423,779 426,626 433,659 \n Total assets $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 \n Liabilities and Shareholders' Equity \n Interest-bearing demand deposits $ 2,593,059 13,681 2.09 $ 2,577,915 13,629 2.12 $ 2,534,291 13,796 2.21 $ 2,471,895 14,078 2.26 $ 2,450,034 14,145 2.29 \n Savings deposits 254,541 126 0.20 260,712 128 0.20 259,585 143 0.22 262,240 164 0.25 264,761 164 0.25 \n Time deposits 863,559 7,462 3.43 900,412 7,930 3.53 906,875 8,047 3.60 912,611 8,342 3.63 897,416 8,330 3.68 \n Total interest-bearing deposits 3,711,159 21,269 2.27 3,739,039 21,687 2.33 3,700,751 21,986 2.41 3,646,746 22,584 2.46 3,612,211 22,639 2.49 \n Securities sold under agreements to repurchase and federal funds purchased 2,535 6 0.85 12,024 29 0.98 23,674 97 1.66 27,348 105 1.52 27,772 107 1.53 \n FHLB advances and other borrowings 306,346 2,931 3.80 175,734 1,635 3.73 248,357 2,355 3.85 238,806 2,371 3.94 168,939 1,791 4.21 \n Subordinated notes and trust preferred debt ((6)) 8,069 210 10.29 36,664 2,520 27.57 37,175 921 10.05 37,023 669 7.17 68,749 1,597 9.21 \n Total interest-bearing liabilities 4,028,109 24,416 2.40 3,963,461 25,871 2.62 4,009,957 25,359 2.56 3,949,923 25,729 2.58 3,877,671 26,134 2.67 \n Noninterest-bearing demand deposits 910,748 889,378 850,415 882,552 902,128 \n Other liabilities 82,378 81,981 89,112 93,977 89,086 \n Total liabilities 5,021,235 4,934,820 4,949,484 4,926,452 4,868,885 \n Shareholders' equity 619,147 608,099 599,330 578,859 551,945 \n Total $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 \n Taxable-equivalent net interest income / net interest spread 53,894 3.58 % 49,406 3.28 % 49,571 3.35 % 51,100 3.43 % 51,557 3.52 % \n Taxable-equivalent net interest margin 4.12 % 3.87 % 3.90 % 4.00 % 4.11 % \n Taxable-equivalent adjustment (574 ) (575 ) (566 ) (569 ) (569 ) \n Net interest income $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 \n Ratio of average interest-earning assets to average interest-bearing liabilities 129 % 129 % 128 % 129 % 129 % \n \n \n NOTES: \n ((1))Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. \n ((2))Average balance of investment securities is computed at fair value. \n ((3) )Average balances include nonaccrual loans. \n ((4))Interest income on loans includes prepayment and late fees, where applicable. \n ((5))Interest income on loans includes accretion on purchase accounting marks of $3.9 million, $4.3 million, $4.2 million, $4.7 million and $5.3 million for the three months ended September 30, 2026, June 30, 2026, March 31, 2026, December 31, 2025 and September 30, 2025, respectively. \n ((6))Interest expense includes accelerated amortization of the of the fair value mark from the redeemed subordinated notes of $1.6 million for the three months ended June 30, 2026. \n \n\n\n\n ANALYSIS OF NET INTEREST INCOME \n Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) \n (continued) \n Nine Months Ended \n September 30, 2026 September 30, 2025 \n Taxable- Taxable- Taxable- Taxable- \n Average Equivalent Equivalent Average Equivalent Equivalent \n (In thousands) Balance Interest Rate Balance Interest Rate \n Assets \n Federal funds sold & interest-bearing bank balances $ 67,316 $ 1,843 3.66 % $ 146,688 $ 4,904 4.47 % \n Investment securities ((1)(2)) 976,406 33,238 4.54 892,033 31,379 4.69 \n Loans ((1)(3)(4)(5)) 4,105,041 193,435 6.30 3,928,159 192,858 6.56 \n Total interest-earning assets 5,148,763 228,516 5.93 4,966,880 229,141 6.17 \n Other assets 428,944 440,153 \n Total assets $ 5,577,707 $ 5,407,033 \n Liabilities and Shareholders' Equity \n Interest-bearing demand deposits $ 2,568,637 41,105 2.14 $ 2,462,336 42,181 2.29 \n Savings deposits 258,261 398 0.21 268,966 494 0.25 \n Time deposits 890,123 23,439 3.52 927,232 27,079 3.90 \n Total interest-bearing deposits 3,717,021 64,942 2.34 3,658,534 69,754 2.55 \n Securities sold under agreements to repurchase and federal funds purchased 12,667 132 1.39 26,623 297 1.49 \n FHLB advances and other borrowings 243,691 6,921 3.80 128,827 3,939 4.09 \n Subordinated notes and trust preferred debt ((6)) 27,196 3,651 17.95 68,799 4,223 8.21 \n Total interest-bearing liabilities 4,000,575 75,646 2.53 3,882,783 78,213 2.69 \n Noninterest-bearing demand deposits 883,735 898,015 \n Other liabilities 84,466 89,025 \n Total liabilities 4,968,776 4,869,823 \n Shareholders' equity 608,931 537,210 \n Total liabilities and shareholders' equity $ 5,577,707 $ 5,407,033 \n Taxable-equivalent net interest income / net interest spread 152,870 3.40 % 150,928 3.47 % \n Taxable-equivalent net interest margin 3.97 % 4.06 % \n Taxable-equivalent adjustment (1,714 ) (1,667 ) \n Net interest income $ 151,156 $ 149,261 \n Ratio of average interest-earning assets to average interest-bearing liabilities 129 % 128 % \n \n\n\n\n NOTES TO ANALYSIS OF NET INTEREST INCOME: \n ((1))Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. \n ((2))Average balance of investment securities is computed at fair value. \n ((3))Average balances include nonaccrual loans. \n ((4))Interest income on loans includes prepayment and late fees, where applicable. \n ((5))Interest income on loans includes accretion on purchase accounting marks of $12.4 million and $16.7 million for the nine months ended September 30, 2026 and 2025, respectively. \n ((6))Interest expense includes accelerated amortization of the of the fair value mark from the redeemed subordinated notes of $1.6 million for the nine months ended September 30, 2026. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Profitability for the quarter: \n Net interest income $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 \n Net provision for credit losses on loans and unfunded loan commitments 1,042 338 352 75 396 \n Noninterest income 13,378 13,836 15,577 14,392 13,382 \n Noninterest expenses 37,334 37,666 36,728 37,355 36,297 \n Income before income taxes 28,322 24,663 27,502 27,493 27,677 \n Income tax expense 5,507 3,505 5,693 6,002 5,812 \n Net income $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 \n \n Financial ratios: \n Return on average assets ((1)) 1.60 % 1.53 % 1.59 % 1.55 % 1.60 % \n Return on average equity ((1)) 14.62 % 13.96 % 14.76 % 14.73 % 15.72 % \n Net interest margin ((1)) 4.12 % 3.87 % 3.90 % 4.00 % 4.11 % \n Net interest margin, adjusted ((1)(2)(3)) n/a 4.00 % n/a n/a n/a \n Efficiency ratio 56.0 % 60.1 % 56.9 % 57.5 % 56.4 % \n Efficiency ratio, adjusted ( (2)(3)) n/a 58.6 % n/a n/a n/a \n \n Per share information: \n Income per common share: \n Basic $ 1.18 $ 1.10 $ 1.13 $ 1.12 $ 1.14 \n Diluted 1.17 1.09 1.12 1.11 1.13 \n Book value 30.77 31.60 30.76 30.32 29.33 \n Tangible book value ((3)) 25.96 26.71 25.76 25.21 24.12 \n Average tangible common equity ((1)(3)) 17.52 16.86 17.96 18.15 19.70 \n Cash dividends paid 0.30 0.30 0.30 0.27 0.27 \n \n Average basic shares 19,380 19,313 19,274 19,251 19,224 \n Average diluted shares 19,504 19,432 19,410 19,384 19,364 \n \n ((1))Annualized. \n ((2))Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the three months ended June 30, 2026. \n ((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. \n \n\n\n\n ORRSTOWN FINANCIAL SERVICES, INC. \n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Noninterest income: \n Service charges $ 2,916 $ 2,734 $ 2,871 $ 3,225 $ 2,997 \n Interchange income 1,597 1,602 1,513 1,553 1,620 \n Swap fee income 436 651 1,339 1,112 816 \n Wealth management income 5,968 5,946 5,557 5,739 5,277 \n Mortgage banking activities 212 436 326 503 522 \n Income from life insurance 1,410 1,376 3,761 1,331 1,471 \n Other income 824 1,034 212 834 629 \n Investment securities gains (losses) 15 57 (2 ) 95 50 \n Total noninterest income $ 13,378 $ 13,836 $ 15,577 $ 14,392 $ 13,382 \n \n Noninterest expenses: \n Salaries and employee benefits $ 22,400 $ 22,229 $ 21,157 $ 21,980 $ 21,439 \n Occupancy, furniture and equipment 4,109 3,887 4,221 4,017 4,075 \n Data processing 1,752 1,703 1,537 1,292 1,116 \n Advertising and bank promotions 423 1,126 683 561 154 \n FDIC insurance 627 634 549 683 652 \n Professional services 1,015 1,202 1,221 1,947 1,703 \n Taxes other than income 1,022 392 1,025 574 828 \n Intangible asset amortization 2,115 2,179 2,239 2,348 2,410 \n Other operating expenses 3,871 4,314 4,096 3,953 3,920 \n Total noninterest expenses $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 \n \n\n\n\n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n (In thousands) September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Balance Sheet at quarter end: \n Cash and cash equivalents $ 125,646 $ 144,841 $ 161,136 $ 149,774 $ 184,146 \n Restricted investments in bank stocks 32,514 27,429 23,984 26,717 24,111 \n Securities available for sale 919,448 949,281 947,018 952,740 890,357 \n Loans held for sale, at fair value 3,924 3,639 3,366 6,090 6,026 \n Loans: \n Commercial real estate: \n Owner occupied 680,146 679,295 645,026 644,713 629,481 \n Non-owner occupied 1,306,387 1,305,379 1,322,251 1,260,198 1,254,959 \n Multi-family 246,026 229,425 216,658 236,703 234,782 \n Non-owner occupied residential 145,716 150,917 151,560 155,749 163,138 \n Agricultural 91,094 97,729 114,409 121,417 118,596 \n Commercial and industrial 532,125 489,247 481,815 489,371 479,929 \n Acquisition and development: \n 1-4 family residential construction 54,370 39,344 46,355 41,489 41,141 \n Commercial and land development 178,823 198,399 198,957 198,234 195,158 \n Municipal 34,348 33,950 27,744 25,302 28,664 \n Total commercial loans 3,269,035 3,223,685 3,204,775 3,173,176 3,145,848 \n Residential mortgage: \n First lien 518,321 501,306 484,022 478,870 476,006 \n Home equity – term 5,298 5,401 5,685 5,972 5,800 \n Home equity – lines of credit 376,096 344,495 327,141 321,438 311,458 \n Other - term ((1)) 20,424 20,929 22,442 22,906 23,737 \n Installment and other loans 19,199 17,215 17,254 18,331 16,887 \n Total loans 4,208,373 4,113,031 4,061,319 4,020,693 3,979,736 \n Allowance for credit losses (46,775 ) (46,632 ) (47,463 ) (47,681 ) (48,105 ) \n Net loans held for investment 4,161,598 4,066,399 4,013,856 3,973,012 3,931,631 \n Goodwill 69,751 69,751 69,751 69,751 69,751 \n Other intangible assets, net 31,457 33,572 35,751 37,990 40,338 \n Total assets 5,707,243 5,612,151 5,576,972 5,542,255 5,470,233 \n Total deposits 4,581,910 4,620,023 4,627,424 4,528,774 4,533,560 \n FHLB advances and other borrowings and Securities sold under agreements to repurchase 417,252 282,362 225,958 299,243 241,719 \n Subordinated notes and trust preferred debt 8,109 8,049 37,274 37,122 36,970 \n Total shareholders' equity 605,200 621,650 603,184 591,535 571,936 \n \n ((1))Other - term includes property assessed clean energy (\"PACE\") loans. \n\n\n\n HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) \n (continued) \n September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Capital and credit quality measures ((1)): \n Total risk-based capital: \n Orrstown Financial Services, Inc. 13.3 % 13.2 % 13.5 % 13.3 % 13.1 % \n Orrstown Bank 13.2 % 13.1 % 13.6 % 13.3 % 12.9 % \n Tier 1 risk-based capital: \n Orrstown Financial Services, Inc. 12.3 % 12.2 % 12.0 % 11.7 % 11.3 % \n Orrstown Bank 12.2 % 12.1 % 12.5 % 12.2 % 11.8 % \n Tier 1 common equity risk-based capital: \n Orrstown Financial Services, Inc. 12.1 % 12.0 % 11.8 % 11.5 % 11.1 % \n Orrstown Bank 12.2 % 12.1 % 12.5 % 12.2 % 11.8 % \n Tier 1 leverage capital: \n Orrstown Financial Services, Inc. 10.2 % 10.1 % 9.7 % 9.5 % 9.3 % \n Orrstown Bank 10.1 % 10.0 % 10.2 % 9.9 % 9.6 % \n \n Average equity to average assets 10.98 % 10.97 % 10.80 % 10.51 % 10.18 % \n Allowance for credit losses to total loans 1.11 % 1.13 % 1.17 % 1.19 % 1.21 % \n Total nonaccrual loans to total loans 0.54 % 0.58 % 0.74 % 0.70 % 0.66 % \n Nonperforming assets to total assets 0.40 % 0.44 % 0.56 % 0.51 % 0.48 % \n Allowance for credit losses to nonaccrual loans 204 % 196 % 158 % 170 % 184 % \n \n Other information: \n Net charge-offs $ 983 $ 1,169 $ 946 $ 499 $ 189 \n Classified loans 45,201 49,190 57,584 58,351 64,089 \n Nonperforming and other risk assets: \n Nonaccrual loans 22,919 23,751 30,025 28,031 26,191 \n Other real estate owned — 1,055 1,055 — — \n Total nonperforming assets 22,919 24,806 31,080 28,031 26,191 \n Financial difficulty modifications still accruing 1,629 1,794 949 1,253 1,245 \n Loans past due 90 days or more and still accruing 591 853 443 1,040 497 \n Total nonperforming and other risk assets $ 25,139 $ 27,453 $ 32,472 $ 30,324 $ 27,933 \n \n (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (\"CECL\") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new \n CECL standard, which concluded at December 31, 2025. Starting with periods in 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. \n \n\nAppendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP\nReconciliations\n\nManagement believes providing certain other “non-GAAP” financial\ninformation will assist investors in their understanding of the effect on\nrecent financial results from non-recurring charges.\n\nAs a result of acquisitions, the Company has intangible assets consisting of\ngoodwill, core deposit and other intangible assets, which totaled $101.2\nmillion and $107.7 million at September 30, 2026 and December 31, 2025,\nrespectively. During the nine months ended September 30, 2025, the Company\nincurred $2.6 million in merger-related expenses, respectively. The Company\ndid not incur merger-related or other non-recurring expenses during the three\nmonths ended September 30, 2026, June 30, 2026, March 31, 2026. December 31,\n2025 and September 30, 2025.\n\nOn June 30, 2026, the Company redeemed the $31.0 million outstanding 4.50%\nfixed-to-floating rate subordinated notes assumed from Codorus Valley Bancorp,\nInc. on July 1, 2024. During the nine months ended September 30, 2026, the\nCompany amortized the remaining fair value mark of $1.6 million to interest\nexpense as a result of the redemption, which reduced net interest margin.\n\nTangible book value per common share, tangible common equity, and the impact\nof the accelerated amortization of fair value marks on net interest margin and\nthe efficiency ratio and merger-related expenses on net income and associated\nratios, as used by the Company in this earnings release, are determined by\nmethods other than in accordance with U.S. Generally Accepted Accounting\nPrinciples (\"GAAP\"). While we believe this information is a useful supplement\nto GAAP based measures presented in this earnings release, readers are\ncautioned that this non-GAAP disclosure has limitations as an analytical tool,\nshould not be viewed as a substitute for financial measures determined in\naccordance with GAAP, and should not be considered in isolation or as a\nsubstitute for analysis of our results and financial condition as reported\nunder GAAP, nor are such measures necessarily comparable to non-GAAP\nperformance measures that may be presented by other companies. This\nsupplemental presentation should not be construed as an inference that our\nfuture results will be unaffected by similar adjustments to be determined in\naccordance with GAAP.\n\nThe following tables present the computation of each non-GAAP based measure:\n\n(In thousands)\n\n Tangible Book Value per Common Share September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Shareholders' equity (most directly comparable GAAP-based measure) $ 605,200 $ 621,650 $ 603,184 $ 591,535 $ 571,936 \n Less: Goodwill 69,751 69,751 69,751 69,751 69,751 \n Other intangible assets 31,457 33,572 35,751 37,990 40,338 \n Related tax effect (6,606 ) (7,050 ) (7,508 ) (7,978 ) (8,471 ) \n Tangible common equity (non-GAAP) $ 510,598 $ 525,377 $ 505,190 $ 491,772 $ 470,318 \n \n Common shares outstanding 19,671 19,670 19,611 19,507 19,501 \n \n Book value per share (most directly comparable GAAP-based measure) $ 30.77 $ 31.60 $ 30.76 $ 30.32 $ 29.33 \n Intangible assets per share 4.81 4.89 5.00 5.11 5.21 \n Tangible book value per share (non-GAAP) $ 25.96 $ 26.71 $ 25.76 $ 25.21 $ 24.12 \n \n Return on Average Tangible Common Equity September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 \n Net Income $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 \n Average shareholders' equity $ 619,147 $ 608,099 $ 599,330 $ 578,859 $ 551,945 \n Less: Average goodwill 69,751 69,751 69,751 69,751 69,751 \n Less: Average other intangible assets, gross 32,793 34,920 37,132 39,467 41,809 \n Average tangible equity $ 516,603 $ 503,428 $ 492,447 $ 469,641 $ 440,385 \n Return on average tangible equity (non-GAAP) ((1)) 17.52 % 16.86 % 17.96 % 18.15 % 19.70 % \n ((1))- Annualized \n\n\n\n (In thousands) Three Months Ended Nine Months Ended \n Adjusted Ratios for Non-recurring Charges September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 September 30, 2026 September 30, 2025 \n Net income (A) - most directly comparable GAAP-based measure $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 $ 65,782 $ 59,364 \n Plus: Merger-related expenses (B) — — — — — — 2,617 \n Less: Related tax effect (C) — — — — — — (589 ) \n Adjusted net income (D=A+B-C) - Non-GAAP $ 22,815 $ 21,158 $ 21,809 $ 21,491 $ 21,865 $ 65,782 $ 61,392 \n \n Average assets (E) $ 5,640,382 $ 5,542,919 $ 5,548,814 $ 5,505,311 $ 5,420,830 $ 5,577,707 $ 5,407,033 \n Return on average assets (= A / E) - most directly comparable GAAP-based measure ((1)) 1.60 % 1.53 % 1.59 % 1.55 % 1.60 % 1.58 % 1.47 % \n Return on average assets, adjusted (= D / E) - Non-GAAP ((1)) n/a n/a n/a n/a n/a n/a 1.52 % \n \n Average equity (F) $ 619,147 $ 608,099 $ 599,330 $ 578,859 $ 551,945 $ 608,931 $ 537,210 \n Return on average equity (= A / F) - most directly comparable GAAP-based measure ((1)) 14.62 % 13.96 % 14.76 % 14.73 % 15.72 % 14.44 % 14.77 % \n Return on average equity, adjusted (= D / F) - Non-GAAP ((1)) n/a n/a n/a n/a n/a n/a 15.28 % \n \n Weighted average shares - basic (G) - most directly comparable GAAP-based measure 19,380 19,313 19,274 19,251 19,224 19,323 19,185 \n Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure $ 1.18 $ 1.10 $ 1.13 $ 1.12 $ 1.14 $ 3.40 $ 3.09 \n Basic earnings per share, adjusted (= D / G) - Non-GAAP n/a n/a n/a n/a n/a n/a $ 3.20 \n \n Weighted average shares - diluted (H) - most directly comparable GAAP-based measure 19,504 19,432 19,410 19,384 19,364 19,449 19,345 \n Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure $ 1.17 $ 1.09 $ 1.12 $ 1.11 $ 1.13 $ 3.38 $ 3.07 \n Diluted earnings per share, adjusted (= D / H) - Non-GAAP n/a n/a n/a n/a n/a n/a $ 3.17 \n \n continued \n\n\n\n Three Months Ended Nine Months Ended \n September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 September 30, 2026 September 30, 2025 \n Noninterest expense (I) - most directly comparable GAAP-based measure $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 $ 111,728 $ 112,087 \n Less: Merger-related expenses (B) — — — — — — (2,617 ) \n Adjusted noninterest expense (J = I - B) - Non-GAAP $ 37,334 $ 37,666 $ 36,728 $ 37,355 $ 36,297 $ 111,728 $ 109,470 \n \n Net interest income (K) $ 53,320 $ 48,831 $ 49,005 $ 50,531 $ 50,988 $ 151,156 $ 149,261 \n Noninterest income (L) 13,378 13,836 15,577 14,392 13,382 42,791 37,921 \n Total operating income (M = K + L) - most directly comparable GAAP-based measure $ 66,698 $ 62,667 $ 64,582 $ 64,923 $ 64,370 $ 193,947 $ 187,182 \n Plus: Accelerated amortization of fair value mark on redeemed subordinated notes (N) — 1,624 — — — 1,624 — \n Adjusted total operating income (O = M + N) - Non-GAAP $ 66,698 $ 64,291 $ 64,582 $ 64,923 $ 64,370 $ 195,571 $ 187,182 \n \n Efficiency ratio (= I / M) - most directly comparable GAAP-based measure 56.0 % 60.1 % 56.9 % 57.5 % 56.4 % 57.6 % 59.9 % \n Efficiency ratio, adjusted (= J / N) - Non-GAAP n/a 58.6 % n/a n/a n/a 57.1 % 58.5 % \n \n (1) Annualized \n\n\n\n Nine Months Ended September 30, 2026 \n Average Balance - most Taxable-Equivalent Interest - most directly comparable GAAP- Less: accelerated Adjusted Taxable- Taxable-Equivalent Rate - Adjusted Taxable- \n directly comparable based measure amortization on fair value Equivalent Interest - Non-GAAP most directly comparable Equivalent Rate - Non-GAAP \n GAAP-based measure mark from subordinated GAAP-based measure \n notes redemption \n Total interest-earning assets $ 5,148,763 $ 228,516 $ — $ 228,516 5.93 % 5.93 % \n \n Total interest-bearing liabilities $ 4,000,575 75,646 (1,624 ) 74,022 2.53 % 2.47 % \n \n Taxable-equivalent net interest income / net interest spread $ 152,870 $ 1,624 $ 154,494 3.40 % 3.46 % \n \n Taxable-equivalent net interest margin 3.97 % 4.01 % \n \n\n\n\n Three Months Ended June 30, 2026 \n Average Balance - most directly comparable GAAP-based measure Taxable-Equivalent Interest - most directly comparable GAAP- based measure Less: accelerated amortization on fair value mark from subordinated notes redemption Adjusted Taxable- Equivalent Interest - Non-GAAP Taxable-Equivalent Rate - most directly comparable GAAP-based measure Adjusted Taxable- Equivalent Rate - Non-GAAP \n Total interest-earning assets $ 5,117,006 $ 75,277 $ — $ 75,277 5.90 % 5.90 % \n \n Total interest-bearing liabilities $ 3,963,461 25,871 (1,624 ) 24,247 2.62 % 2.45 % \n \n Taxable-equivalent net interest income / net interest spread $ 49,406 $ 1,624 $ 51,030 3.28 % 3.45 % \n \n Taxable-equivalent net interest margin 3.87 % 4.00 % \n \n\nAppendix B- Investment Portfolio Concentrations\n\nThe following table summarizes the credit ratings and collateral associated\nwith the Company's investment security portfolio, excluding equity securities,\nat September 30, 2026:\n\n(In thousands)\n\n Sector Portfolio Mix Amortized Book Fair Value AAA AA A BBB BB NR Collateral / Guarantee Type \n Unsecured ABS — % $ 2,203 $ 2,173 — % — % — % — % — % 100 % Unsecured Consumer Debt \n Student Loan ABS — 2,342 2,343 — — — — — 100 Seasoned Student Loans \n Federal Family Education Loan ABS 7 64,907 64,722 4 74 — 9 13 — Federal Family Education Loan ((1)) \n PACE Loan ABS — 1,450 1,274 100 — — — — — PACE Loans ((2)) \n Non-Agency CMBS 4 38,629 37,415 — — — — — 100 \n Non-Agency RMBS 4 39,198 37,370 94 6 — — — — Reverse Mortgages ((3)) \n Municipal - General Obligation 10 98,818 86,644 17 78 5 — — — \n Municipal - Revenue 12 118,983 100,673 — 75 19 — — 6 \n SBA ReRemic ((5)) — 1,105 1,094 — 100 — — — — SBA Guarantee ((4)) \n Small Business Administration — 2,433 2,488 — 100 — — — — SBA Guarantee ((4)) \n Agency MBS 26 252,259 234,756 — 100 — — — — Residential Mortgages ((4)) \n Agency CMO 35 346,837 333,056 — 100 — — — — \n U.S. Treasury securities 2 15,010 14,166 — 100 — — — — U.S. Government Guarantee ((4)) \n Corporate bonds — 957 961 — — — 100 — — \n 100 % $ 985,131 $ 919,135 6 % 84 % 3 % 1 % 1 % 5 % \n \n ((1))97% guaranteed by U.S. government \n ((2))PACE acronym represents Property Assessed Clean Energy loans \n ((3))Non-agency reverse mortgages with current structural credit enhancements \n ((4))Guaranteed by U.S. government or U.S. government agencies \n ((5))SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits \n \n 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+. \n \n\nAbout the Company\n\nWith $5.7 billion in assets, Orrstown Financial Services, Inc. and its\nwholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and\nbusiness financial services in Berks, Cumberland, Dauphin, Franklin,\nLancaster, Perry and York Counties, Pennsylvania and Anne Arundel, Baltimore,\nHarford, Howard, and Washington Counties, Maryland, as well as Baltimore City,\nMaryland. The Company’s lending area also includes counties in Pennsylvania,\nMaryland, Delaware, Virginia and West Virginia within a 75-mile radius of the\nCompany's executive and administrative offices as well as the District of\nColumbia. Orrstown Bank is an Equal Housing Lender and its deposits are\ninsured up to the legal maximum by the FDIC. Orrstown Financial Services,\nInc.’s common stock is traded on Nasdaq (ORRF). For more information about\nOrrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.\n\nCautionary Note Regarding Forward-Looking Statements\n\nThis press release contains “forward-looking statements” within the\nmeaning of Section 27A of the Securities Act and Section 21E of the Exchange\nAct. Forward-looking statements reflect the current views of the Company's\nmanagement with respect to, among other things, future events and the\nCompany's financial performance. These statements are often, but not always,\nmade through the use of words or phrases such as “may,” “should,”\n“could,” “predict,” “potential,” “believe,” “will likely\nresult,” “expect,” “continue,” “will,” “anticipate,”\n“seek,” “estimate,” “intend,” “plan,” “project,”\n“forecast,” “goal,” “target,” “would” and “outlook,” or\nthe negative variations of those words or other comparable words of a future\nor forward-looking nature. These forward-looking statements are not historical\nfacts, and are based on current expectations, estimates, predictions or\nprojections about events or the Company's industry, management’s beliefs and\ncertain assumptions made by management, many of which, by their nature, are\ninherently uncertain and beyond the Company's control. Accordingly, the\nCompany cautions you that any such forward-looking statements are not\nguarantees of future performance and are subject to risks, assumptions and\nuncertainties that are difficult to predict. Although the Company believes\nthat the expectations reflected in these forward-looking statements are\nreasonable as of the date made, actual results may prove to be materially\ndifferent from the results expressed or implied by the forward-looking\nstatements and there can be no assurances that the Company will achieve the\ndesired level of new business development and new loans, growth in the balance\nsheet and fee-based revenue lines of business, cost savings initiatives and\ncontinued reductions in risk assets or mitigation of losses in the future.\nFactors which could cause the actual results to differ from those expressed or\nimplied by the forward-looking statements include, but are not limited to, the\nfollowing: interest rate changes or volatility; general economic conditions\n(including inflation and concerns about liquidity) on a national basis or in\nthe local markets in which the Company operates; ineffectiveness of the\nCompany’s strategic growth plan due to changes in current or future market\nconditions; the effects of competition and how it may impact our community\nbanking model, including industry consolidation and development of competing\nfinancial products and services; changes in consumer behavior due to changing\npolitical, business and economic conditions, or legislative or regulatory\ninitiatives; changes in, and evolving interpretations of, existing and future\nlaws and regulations; changes in credit quality; inability to raise capital,\nif necessary, under favorable conditions; volatility in the securities\nmarkets; the demand for our products and services; deteriorating economic\nconditions; geopolitical tensions; operational risks including, but not\nlimited to, cybersecurity incidents, fraud, natural disasters and future\npandemics; expenses associated with litigation and legal proceedings; and\nother risks and uncertainties, including those detailed in our Annual Report\non Form 10-K for the year ended December 31, 2025 under the sections titled\n“Risk Factors” and “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations” and in subsequent filings made with the\nSecurities and Exchange Commission.\n\nThe foregoing list of factors is not exhaustive. If one or more events related\nto these or other risks or uncertainties materializes, or if the Company's\nunderlying assumptions prove to be incorrect, actual results may differ\nmaterially from what the Company anticipates. Accordingly, you should not\nplace undue reliance on any such forward-looking statements. Any\nforward-looking statement speaks only as of the date on which it is made, and\nthe Company disclaims any obligation to publicly update or review any\nforward-looking statement, whether as a result of new information, future\ndevelopments or otherwise. New risks and uncertainties arise from time to\ntime, and it is not possible for the Company to predict those events or how\nthey may affect it. In addition, the Company cannot assess the impact of each\nfactor on its business or the extent to which any factor, or combination of\nfactors, may cause actual results to differ materially from those contained in\nany forward-looking statements. All forward-looking statements, expressed or\nimplied, included in this press release are expressly qualified in their\nentirety by this cautionary statement. This cautionary statement should also\nbe considered in connection with any subsequent written or oral\nforward-looking statements that the Company or persons acting on the Company's\nbehalf may issue.\n\nThe review period for subsequent events extends up to and includes the filing\ndate of a public company’s financial statements, when filed with the\nSecurities and Exchange Commission. Accordingly, the consolidated financial\ninformation presented in this announcement is subject to change. Annualized,\npro forma, projected and estimated numbers in this document are used for\nillustrative purposes only and are not forecasts and may not reflect actual\nresults.\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/95ff307d-f467-4fe2-b42d-cfc4f5a27b80)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-10-20T20:05:02.344383081Z","server_sent_at_ms":1792526702344},"received_at":"2026-10-20T20:05:02.406Z","source_url":null},"analysis":{"id":"162658","press_release_id":"174601","analysis_json":{"industry":{"label":"Banks","sector":"Financials"},"redFlags":["deposit outflow of $38.1 million funded partly by increased wholesale borrowings ($417.3M vs $274.8M prior quarter)","net unrealized losses on securities rose $41.6 million, cutting tangible book value per share to $25.96 from $26.71","provision for credit losses rose to $1.1 million from $0.4 million despite improving credit metrics"],"eventType":"earnings","narrative":"Orrstown Financial reported Q3 2026 net income of $22.8 million, or $1.17 per diluted share, up from $1.09 in Q2 2026 and $1.13 a year earlier.\n\nNet interest margin expanded 25 basis points sequentially to 4.12%, while the efficiency ratio improved to 56.0% from 60.1%. Loans grew $95.3 million (9% annualized) and credit quality improved, with nonaccrual loans falling to 0.54% of total loans.\n\nDeposits dipped 3% annualized, with funding partly supplemented by higher FHLB borrowings of $417.3 million. The board declared a $0.30 per share dividend payable November 10, 2026.","sentiment":"bullish","agentHooks":{"shouldPost":true,"suggestedAngle":"Mid-cap bank beat on all fronts: 25 bps NIM expansion, 9% annualized loan growth, and improving credit quality."},"keyFigures":{"eps":1.17,"revenue":"$53.3 million net interest income (Q3 2026)","guidance":"No quantitative guidance; management expressed confidence executing 'across a range of economic conditions'","revenueYoy":"net interest income up ~4.6% YoY ($53.3M vs $51.0M)","customDimensions":{"nim":"4.12%","roaa":"1.60%","roae":"14.62%","net_income":22815000,"total_assets":"$5.7 billion","nim_change_qoq":"+25 bps","total_deposits":"$4.6 billion","efficiency_ratio":"56.0%","acl_to_total_loans":"1.11%","deposit_change_qoq":"-$38.1 million (3% annualized decline)","dividend_per_share":"$0.30","tier1_leverage_ratio":"10.2%","loan_growth_annualized":"9%","loans_held_for_investment":"$4.2 billion","nonaccrual_to_total_loans":"0.54%","tangible_book_value_per_share":"$25.96"}},"quotedText":"Orrstown delivered strong third quarter results, with diluted earnings per common share of $1.17 and a return on average assets of 1.60%.","namedEntities":{"people":[{"name":"Adam L. Metz","role":"President and CEO"},{"name":"Neelesh Kalani","role":"Executive Vice President, Chief Financial Officer"}],"products":[],"companies":[{"name":"Orrstown Financial Services, Inc.","ticker":"ORRF","relationship":"filer"},{"name":"Orrstown Bank","relationship":"subsidiary"},{"name":"Codorus Valley Bancorp, Inc.","relationship":"acquisition source (subordinated notes assumed in 2024 merger)"}],"dollarAmounts":[{"amount":"$22.8 million","context":"Q3 2026 net income"},{"amount":"$53.3 million","context":"Q3 2026 net interest income"},{"amount":"$95.3 million","context":"quarterly loan growth"},{"amount":"$38.1 million","context":"quarterly deposit decline"},{"amount":"$0.30","context":"quarterly cash dividend per common share"},{"amount":"$4.2 billion","context":"loans held for investment at September 30, 2026"},{"amount":"$5.7 billion","context":"total assets"},{"amount":"$1.6 million","context":"accelerated amortization of fair value mark on redeemed subordinated notes (Q2 2026)"}]},"materialImpact":{"score":4,"reasoning":"Q3 2026 showed sequential improvement on nearly every metric: diluted EPS up to $1.17 from $1.09, NIM up 25 bps to 4.12%, 9% annualized loan growth, improving credit quality, and efficiency ratio improving to 56.0%. A solid quarter for a mid-cap bank, though not a >10% surprise class event."},"tickerRelevance":{"others":[],"primary":"ORRF"},"globalImportance":30,"audienceRelevance":20,"eventTypeSecondary":["dividend"],"importanceComponents":{"tickerTier":"small/mid-cap regional bank","eventGravity":"routine quarterly earnings with positive operating momentum","sectorWeight":"financials — rate-sensitive but standard earnings event","householdBrandBoost":0,"retailFavoriteBoost":0}},"event_type":"earnings","event_type_secondary":["dividend"],"sentiment":"bullish","material_impact_score":4,"narrative":"Orrstown Financial reported Q3 2026 net income of $22.8 million, or $1.17 per diluted share, up from $1.09 in Q2 2026 and $1.13 a year earlier.\n\nNet interest margin expanded 25 basis points sequentially to 4.12%, while the efficiency ratio improved to 56.0% from 60.1%. Loans grew $95.3 million (9% annualized) and credit quality improved, with nonaccrual loans falling to 0.54% of total loans.\n\nDeposits dipped 3% annualized, with funding partly supplemented by higher FHLB borrowings of $417.3 million. The board declared a $0.30 per share dividend payable November 10, 2026.","key_figures":{"eps":1.17,"revenue":"$53.3 million net interest income (Q3 2026)","guidance":"No quantitative guidance; management expressed confidence executing 'across a range of economic conditions'","revenueYoy":"net interest income up ~4.6% YoY ($53.3M vs $51.0M)","customDimensions":{"nim":"4.12%","roaa":"1.60%","roae":"14.62%","net_income":22815000,"total_assets":"$5.7 billion","nim_change_qoq":"+25 bps","total_deposits":"$4.6 billion","efficiency_ratio":"56.0%","acl_to_total_loans":"1.11%","deposit_change_qoq":"-$38.1 million (3% annualized decline)","dividend_per_share":"$0.30","tier1_leverage_ratio":"10.2%","loan_growth_annualized":"9%","loans_held_for_investment":"$4.2 billion","nonaccrual_to_total_loans":"0.54%","tangible_book_value_per_share":"$25.96"}},"named_entities":{"people":[{"name":"Adam L. Metz","role":"President and CEO"},{"name":"Neelesh Kalani","role":"Executive Vice President, Chief Financial Officer"}],"products":[],"companies":[{"name":"Orrstown Financial Services, Inc.","ticker":"ORRF","relationship":"filer"},{"name":"Orrstown Bank","relationship":"subsidiary"},{"name":"Codorus Valley Bancorp, Inc.","relationship":"acquisition source (subordinated notes assumed in 2024 merger)"}],"dollarAmounts":[{"amount":"$22.8 million","context":"Q3 2026 net income"},{"amount":"$53.3 million","context":"Q3 2026 net interest income"},{"amount":"$95.3 million","context":"quarterly loan growth"},{"amount":"$38.1 million","context":"quarterly deposit decline"},{"amount":"$0.30","context":"quarterly cash dividend per common share"},{"amount":"$4.2 billion","context":"loans held for investment at September 30, 2026"},{"amount":"$5.7 billion","context":"total assets"},{"amount":"$1.6 million","context":"accelerated amortization of fair value mark on redeemed subordinated notes (Q2 2026)"}]},"model_name":"glm-5.3-flashx","prompt_hash":"sha256:5c812bd9e28b810d","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-10-20T20:05:20.065Z","global_importance":30,"audience_relevance":20,"importance_components":{"tickerTier":"small/mid-cap regional bank","eventGravity":"routine quarterly earnings with positive operating momentum","sectorWeight":"financials — rate-sensitive but standard earnings event","householdBrandBoost":0,"retailFavoriteBoost":0}},"durationMs":7988,"modelName":"glm-5.3-flashx"}}