Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Shareholder Meeting (April 2019)
41 slides from Orrstown Financial Services's shareholder meeting presentation, Apr 30, 2019
Slide 1: Exhibit 99
Exhibit 99
Slide 2: 2019 Annual Meeting of Shareholders
2019 Annual Meeting of Shareholders 1919- 2019 April 30, 2019 2 ORRSTOWN FINANCIAL SERVICES, INC.
Slide 3: Your Town. Our Town. This is Orrstown
Slide 4: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board 4 ORRSTOWN FINANCIAL SERVICES, INC.
Slide 5: Important Disclosures
mportant Disclosures Certain statements we may make today may constitute “forward looking statements” under the Private Securities Litigation Reform Act of 1995. Orrstown Financial’s actual results may differ significantly from the results discussed in such forward-looking statements. Factors that m
Slide 6: Rules of Conduct
Rules of Conduc + Inthe interest of an orderly Meeting of the Shareholders of Orrstown Financial Services, Inc.. (the “Company”), we ask you to honor the following rules of procedure: + Shareholders should not address the Meeting until recognized by the Chairman of the Meeting. Upon recognition by t
Slide 7: Rules of Conduct
ules of Co The views, constructive comments and criticisms from shareholders are welcome, but the purpose of the Meeting will be observed. The Chairman will stop discussions that are: * Irrelevant to the matter under consideration, * Proposals related to the conduct of the Company’s ordinary busines
Slide 8: Agenda
enda Callto Order Introductions Conduct Meeting Business Management Reports Thomas R. Quinn, Jr., President & CEO David P. Boyle, EVP/Chief Financial Officer Thomas R. Quinn, Jr., President & CEO Questions from our Shareholders Conduct Meeting Business Adjournment Joel Zullinger, Chairman of the Boa
Slide 9: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC.
Slide 10: Board of Directors
Board of Directors
Slide 11: Recognizing Former Directors
Recognizing Former Directors Dr. Anthony F. Ceddia ORRSTOWN FINANCIAL SERVICES, INC.
Slide 12: Recognizing Former Directors
Recognizing Former Direct f y Jeffrey W. Coy Gregory A. Rosenberry Served with distinction: Served with distinction: 1984-2018 1997-2019 ORRSTOWN FINANCIAL SERVICES, INC.
Slide 13: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC.
Slide 14: Management Report
Management Report Thomas R. Quinn, Jr. President & CEO 14 ORRSTOWN FINANCIAL SERVICES, INC.
Slide 15: Experienced Leadership Team
Experienced Leadership Team Name/Title Banking Joined | Experience / Disciplines Prior Experience Experience | ORRF Thomas R. Quinn, Jr. CEO | Strategy | President & CEO Bits cae Sales | Executive Lau) 2S nn ee en ee aie proen Eee fen 37 years 1997 HR | Training | Trust | Executive Financial Trust a
Slide 16: Summary of Achievements
Summary of Achievemen Our focus as described at last year’s Annual Shareholders Meeting: = Support commercial loan growth with deposit growth = Diversify revenue sources = Maintain our technology advantage and prioritize key initiatives = Develop Orrstown University to provide educational programs a
Slide 17: Support Commercial Loan and Deposit Growth
Commercial Loan Total Loan Growth (000’s) Total Deposit Growth (000’s) $1,300,000 $1,247,657 $1,600,000 $1,558,756 $1,250,000 "ae $1,500,000 $1,200,000 $1,400,000 suso.000 $1,300,000 $1,100,000 — $1,219,515 $1,050,000 stoteoi2 $1,200,000 $1,000,000 a $1,100,000 $950,000 | $1,000,000 SAO 12/31/17 12/
Slide 18: Adjusted Net Income Trend
Commercial Loan Deposit Growt $15,647 $15,000 Adjusted Net Income! Trend 13,000 $12,805 $12,000 $9,000 $7,000 $5,000 2016 2017 2018 (000s) Netincome(asreported) _m Amortization of coredepositand other intangibleassets m Merger related expenses GAAP net income ingreen above. 1: Anon-GAAP measure, whi
Slide 19: Quarterly Dividend Trend
upport Commercial Loan Deposit Growt 016 Quarterly Dividend Trend* os 0.15 0.15 014 3 0.13 0.13 _ ons 0.12 0.12 oz oat 010 09 0.08 0.07 0.07, 007 0.06 aprit2015 ‘april2013 “Quarterly dividends declared from 4/22/2015- 4/18/2019 19 OrrsTOWN FINANCIAL SERVI
Slide 20: Diversify Revenue Sources
Diversify Revenue Sources Noninterest Income Trend (000's)* $21,000 $20,848 aie $19,197 $19,000 $18,319 Top three noninterest income sources: sino 1. Trust & Brokerage 41% " $16,919 $17,254 | 2. Deposit Service Charges 29% $17,000 l] 3. Mortgage Business 13% $16,000 | $15,000 al 2014 «2015S «2016S 2
Slide 21: Maintain Our Technology Advantage and Prioritize Key Initiatives
n our Technology Advantage a ze Key Init Last year we said our focus was on: = Roll out of new account opening platform for fast and efficient account opening: Y Onboard teller platform successfully launched in April 2018 = Improving the OFA/Wheatland platforms Y AccuTrust Cheetah system integration
Slide 22: Develop Orrstown University
= The Learning & Development team made meaningful progress last yearin enhancing curriculums and increasing the number of courses available = Their mission has a dual focus = Ensure that our associates are knowledgeable about their jobs and continually learning as our industry changes = Education ou
Slide 23: Enhance and Leverage Our Brand
nhance an rage our Bran = All Orrstown branches will be refreshed by year end: = Technology friendly = Consistent look and feel (signage, colors, building materials, etc.) = Customer-centric layout and customer experience = Meaningful improvements to social media presence and metrics = 26% increase
Slide 24: Merger & Acquisition Expertise and Execution
Merger & Acquisition Expertise and Execution f ecoormerastie hamitontank Definitive Agreement Reached 5/31/2018 10/23/2018 Regulatory Approval Received 8/29/2018 4/26/2019 Legal Close 10/1/2018 Scheduled for 5/1/2019 Systems Conversion 2/2/2019 Scheduled for 8/16/2019 Key Takeaways * $155 million as
Slide 25: Financial Report
Financial Report David P. Boyle EVP/Chief Financial Officer 25 ORRSTOWN FINANCIAL SERVICES, INC.
Slide 26: Improve Earnings Through Loan, Deposit and Fee Income Growth
Improve Earnings Through Loa posi Fee Income Grow’ z [12/31/2017] Orga Organic | Acquisition [12/31/2018| Total cromn(s) | crown crewin) cro Assets $1,558,849 $1,934,388 24% Loans 1,010,012 96,542 10% 141,103 1,247,657 24% Deposits 1,219,515 178,808 14% 160,422 1,558,756 28% Total Shareholders’ Equi
Slide 27: Assets, Loans, and Deposits: Five Year and Five Quarter Trends
Assets, Loans, and Deposits: Five Year and Five Quarter Trends 1,934,388 1,900,000 1,700,000 1,558,849 1,558,756 1,500,000 1,414,504 1,292,816 _——— alts 1,219,515, 1,247,657 1,300,000 1,190,443 —_——— 4,152,452 a:i00000' oe 1,032,167 ——— 7,010,012 ee 949,704 —— 883,391 900,000 781,713 —— 704,946 700,
Slide 28: Strong core earnings growth
$15,647 $15,000 Strong core earnings growth: * 2016 to 2017: +22% $13,000 * 2017 to 2018: +92% $12,805 $11,000 $9,000 $8,157 ewe $8,090? $7,000 $6,693 |] a = 2016 2017 2018 (000's) mNetincome(asreported) _ m Amortization ofcoredepositand other intargibleassa's _m Merger related expenses GAAP net inc
Slide 29: Financial Highlights: Total Loans and Deposits
cial Highli Total Loans (000’s) Total Deposits (000’s) $1,250,000 Si300.090 $1,236,983 $4,219,515 20000 $1,200,000 $1,100,000 sepoone $1,000,000 Seasnno $900,000 $1,050,000 $200,000 $1,000,000 $693,358 139708, $700,000 $950,000 esi _ | | sos $500,000 $850,000 2014 2018 $800,000 2014 2018 OrrsTOWN FI
Slide 30: Financial Highlights: AUM and Efficiency Ratio
F cial Highl Assets Under Management $1,300,000 $1,200,000 $1,100,000 1,000,000 $900,000 $800,000 $700,000 (6000's) $1,017,013 2014 $1,330,595 2018 34.00 82.00 0.00 78.00 76.00 74.00 72.00 70.00 68.00 | _—sEfficiencyRatio | 83.0 2014
Slide 31: Earnings Per Share
ngs Per Share? $1.83 18 16 14 12 og 3081 ns 2017 2018 mDiluted EPS mAmortization of coredeposit and other intangibleassets ml merger related expenses © GAAP earnings per share in green above. 1. Anon-GAAP measure, which excludes intangible amortization expense and merger related expenses, net of rel
Slide 32: Regulatory Capital Ratios
Regulatory Cap atios Tier 1 Leverage (%) Tier 1 Risk-Based (%) Total Risk Based (%) 16.8 15.6 15.8 15.6 146 146 1233 13.3 21 120 120 95 98 93 100 . as 8.4 20 60 40 20 oo suoz suoz evo avoz roe suoz suoz avoz suoz suoz evo voz
Slide 33: Key Performance Metrics
Key Performance Metrics Tangible Return on Average Tangible Tangible Return on Average Tangible Assets! Equity? 1.00 % 0.92% 12.00 10.79% 0.90 10.00 0.80 0.70 8.00 0.60 9 0.55% 5.81% O.S1% 0.50 6.00 4.85% 0.40 4.00 0.30 0.20 2.00 0.10 0.00 0.00 2016 2017 2018 2016 2017 2018 GAAP measures in green ab
Slide 34: Quarterly Dividend Trend
upport Commercial Loan Deposit Growt 016 Quarterly Dividend Trend* os 0.15 0.15 014 3 0.13 0.13 _ ons 0.12 0.12 oz oat 010 09 0.08 0.07 0.07, 007 0.06 aprit2015 ‘april2013
Slide 35: Management Report
Management Report Thomas R. Quinn, Jr. President & CEO OrrsTOWN FINANCIAL SER
Slide 36: Strategic Focus in 2019
rategic Focus in 2019 = Expand and build out commercial lending, wealth management, and mortgage to take advantage of current and new markets = Greater emphasis in Lancaster, Harrisburg, and York markets = Focus on Maryland market = Complete integration of Hamilton Bank = Distribution center (branch
Slide 37: Strategic Focus in 2019
rategic Focus in 2 = Focus on operational efficiency = Focus on Enterprise Risk Management, including cyber security = Investmentin Orrstown University = Reward our shareholders
Slide 38: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC.
Slide 39: Your Town. Our Town. This is Orrstown
Slide 40: Appendix: Reconciliation of Non-GAAP Measures to GAAP Results
Appendix Reconciliation of Non-GAAP Measures to GAAP Results As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets. Management believes providing certain “non-GAAP” financial information will assist investors in their under
Slide 41: Adjusted Net Income and Adjusted Diluted Earnings per Share
41 (in thousands, except per share information) ‘Adlusted Net Income and Adlusted Diluted Earnings per Share Net income as reported (most directly comparable GAAP based measure) ‘Amortization of core deposit and other intangible assets Merger related expenses” ‘Adjusted Net Income (non-GAAP) ‘Weight
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