Orrstown Financial Services (ORRF) investor relations material

Executive summary

• Q3 2026 net income was $22.8 million, or $1.17 per diluted share, versus $21.2 million and $1.09 in Q2 and $21.9 million and $1.13 in Q3 2025.

• Net income rose 7.8% QoQ and 4.3% YoY; diluted EPS increased 7.4% QoQ and 3.6% YoY.

• Loan growth, NIM expansion and improved credit quality supported results; loans grew 9% annualized and classified and nonaccrual loans declined.

Financial highlights

• Net interest income rose $4.5 million QoQ to $53.3 million; NIM reached 4.12%, up 25 bps reported and 12 bps after adjusting Q2 for a one-time charge.

• Loan interest income excluding purchase-accounting accretion increased to $62.6 million from $59.0 million QoQ.

• Noninterest income was $13.4 million, down $0.4 million QoQ and essentially unchanged YoY; noninterest expense fell $0.4 million QoQ to $37.3 million, versus $36.3 million YoY.

• Total revenue was $66.7 million.

• Provision for loan losses was $1.1 million versus $0.4 million in Q2; net charge-offs were $1.0 million versus $1.2 million.

Outlook and guidance

• Through 2027, NIM guidance is 4.05%–4.15%, modeled with two 25-bp rate increases over the next year; management plans to reevaluate the range next quarter.

• Loan growth guidance is 5.0% annualized; management cited potential to exceed 5%, with 2027 growth possibly at the lower end depending on rates and client demand.

• Annualized guidance through 2027: noninterest income of $54 million–$56 million, noninterest expenses of $153 million–$157 million, and an effective tax rate of ~21%.

• Q4 expenses are expected to be consistent with Q3, then gradually rise with hiring, salary increases and technology investment.

• Management expects some core NIM growth; each 25-bp rate increase equates to ~$500,000 of NII on a ramp basis and ~5 bps of quarterly NIM.