Press release
Orrstown Financial Services, Inc. Reports Second Quarter 2020 diluted EPS of $0.58 and Announces Quarterly Dividend of $0.17 per Share
Continued efforts to assist clients, employees and communities affected by COVID-19Second quarter closings of U.S Small Business Administration Paycheck
About this update from Orrstown Financial Services, Inc.
[{"type":"text","content":"Continued efforts to assist clients, employees and communities affected by COVID-19Second quarter closings of U.S Small Business Administration Paycheck Protection Program (\"SBA PPP\") loans were approximately $460 million with $13.2 million of net deferred processing fees. The net deferred fees are being recognized over the contractual life of the loans. While uncertainty exists with the forgiveness process, it is expected that a significant portion of the fees will be recognized by the first quarter of 2021Continued to build reserves due to economic uncertainty, thus recording $1.9 million of provision for loan losses in the second quarter; net charge-offs of $0.2 million; allowance to unguaranteed non-acquired loans of 1.3% at June 30, 2020 as compared to 1.2% at March 31, 2020; allowance plus purchase accounting marks to unguaranteed loans of 1.8% at June 30, 2020 and March 31, 2020Continued proactive risk mitigation efforts completing $239.3 million of COVID-19 related loan payment deferrals through June 30, 2020, increasing reviews of higher risk concentrations and outreach to commercial borrowersClassified loans increased by $2.9 million to $33.4 million from March 31, 2020 to June 30, 2020; non-performing loans to total loans fell by 11 basis points to 0.36% at June 30, 2020 as compared to 0.47% at March 31, 2020Net loan growth of $382.7 million in the quarter due to SBA PPP loan production, partially offset by runoff in the mortgage and consumer portfolio due to high refinance activityDeposits grew $354.4 million from March 31, 2020 to June 30, 2020 as clients were seeking a safe haven for their deposits combined with high usage of checking accounts for SBA PPP clientsCost of deposits fell 33 basis points to 0.60% in the quarter due to repricing and mix improvementStrong noninterest income of $7.2 million, or 26% of revenues, for the three months ended June 30, 2020; mortgage banking income increased significantly with the decline in interest rates, totaling $1.6 million in Q2 as compared to $0.3 million in Q1; noninterest income also included a $0.9 million gain on sale of portfolio loansDespite margin pressures from rapidly declining rates, net interest margin contracted only four basis points from the first quarter of 2020 to 3.37% as accretion continued from acquired loans and management repriced deposits rapidly; ...