Press release
Orrstown Financial Services, Inc. Reports First Quarter 2020 diluted EPS of $0.46 and Announces Quarterly Dividend of $0.17 per Share
Announced initiatives in March 2020 to assist clients, employees and communities affected by COVID-19Began to see impact of COVID-19 in Q1 with provision for
About this update from Orrstown Financial Services, Inc.
[{"type":"text","content":"Announced initiatives in March 2020 to assist clients, employees and communities affected by COVID-19Began to see impact of COVID-19 in Q1 with provision for loan losses of $0.9 million, mortgage servicing impairment of $0.5 million, wealth management fee pressure and a reduction in commercial loan closings due to project delaysInitiated proactive risk mitigation efforts, which included contacting existing clients representing over 70% of the commercial loan portfolio, completing loan deferral arrangements for clients with balances totaling $35.7 million through March 31, 2020 and actively participating in the Small Business Administration Paycheck Protection Program (the “SBA PPP”) in April 2020In April 2020, expected closings of SBA PPP loans total approximately $370 million with approximately $9 million of processing fees to be earned primarily over Q2 and Q3Classified loans fell by $10.3 million to $30.5 million at March 31, 2020 from $40.8 million at December 31, 2019; non-performing loans to total loans fell by 18 basis points to 0.47% at March 31, 2020 as compared to 0.65% at December 31, 2019; net recoveries of $0.2 million were recorded in the three months ended March 31, 2020Due to the hiring of commercial relationship managers in the second half of 2019, commercial loan growth was strong for a second quarter in a row, at 15% annualized, after 20% annualized growth in the fourth quarter of 2019; however, the impact of COVID-19 will make it difficult to maintain that growth throughout the remainder of 2020Annualized gross loan growth of 3.0%, despite sales of portfolio loans and high payoffs in the mortgage portfolio due to heavy refinance activityWith market uncertainty, deposits grew by $54.3 million, or 16% annualized, in checking, money market and savings accounts; continued planned runoff of an additional $25 million of brokered and subscription depositsWith rapidly falling interest rates and an asset sensitive balance sheet, margin management was active, resulting in a four basis point expansion in the net interest margin to 3.41% for the three months ended March 31, 2020 as compared to 3.37% for the three months ended December 31, 2019Repriced deposits quickly, leading to a nine basis point reduction in the cost of deposits, replaced maturing funding with lower cost alternatives, and new origination loan spreads ...