Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Merger or Acquisition (December 2023)
22 slides from Orrstown Financial Services's merger presentation, Dec 13, 2023
Slide 1: Merger of Equals with Codorus Valley Bancorp, Inc. Investor Presentation
Exhibit 99.2 Orrstown Financial Services, Inc. (Nasdaq: ORRF) Merger of Equals with Codorus Valley Bancorp, Inc. (Nasdaq: CVLY) Investor Presentation December 12, 2023 1
Slide 2: Disclaimer: Forward Looking Statements
Disclaimer Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Orrstown Financial Services, I
Slide 3: Disclaimer: No Offer or Solicitation
Disclaimer No Offer or Solicitation This document is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Or
Slide 4: Creating a High Performing Community Banking Franchise
Creating a High Performing Community Banking Franchise 1 Significantly Enhanced Scale $5.3B $4.0B $4.5B Assets Loans Deposits PA Lebanon Harrisburg $2.7B $460M+ Carlisle AUM Market Cap York 2 Lancaster Peer Leading Performance Chambersburg ~1.50% ~20% ~49% 2025 ROAA 2025 ROATCE 2025 Efficiency MD 2
Slide 5: Strategic Rationale
Strategic Rationale Significantly Enhanced Scale 1 Peer Leading Performance 2 Strategically Compelling 3 Strong Transaction Metrics 4 Benefits All Stakeholders 5 5
Slide 6: Orrstown Financial Services, Inc. (ORRF) Company Overview
Orrstown Financial Services, Inc. (ORRF) Company Overview Q3 2023 Financial Highlights • Holding company for Orrstown Bank, founded in 1919, and headquartered in Shippensburg, Pennsylvania $3.1B $2.3B $2.5B • Operates 21 branches serving consumers and businesses Total Assets Total Loans Total Deposi
Slide 7: Codorus Valley Bancorp, Inc. (CVLY) Company Overview
Codorus Valley Bancorp, Inc. (CVLY) Company Overview Q3 2023 Financial Highlights • Holding company for PeoplesBank, A Codorus Valley Company, founded in 1864, and headquartered in York, Pennsylvania $2.2B $1.7B $1.9B • Largest full-service bank headquartered in York County with 30 Total Assets Tota
Slide 8: Commanding Positions in Attractive and Diverse Markets
Commanding Positions in Attractive and Diverse Markets 1 Regional Breakout Community Bank Deposits in PA and MD New Headquarters S&T Bancorp $7.0B ORRF Branches (21) Univest $6.0B CVLY Branches (30) Forbright $5.6B Eastern Shore Bancshares $4.7B Peoples Financial $4.6B Central Capital Funding $4.5B
Slide 9: Pro Forma Footprint | Markets of Operation by MSA
Pro Forma Footprint | Markets of Operation by MSA Harrisburg-Carlisle, PA York-Hanover, PA Baltimore-Columbia-Towson, MD Population: 2.9M Population: 602K Population: 461K Median HHI: $93K Median HHI: $75K Median HHI: $76K # of Businesses: 149K # of Businesses: 38.2K # of Businesses: 20.0K Projected
Slide 10: High-Quality Core Deposit Base
High-Quality Core Deposit Base Pro forma 9% 12% 8% 9% 7% 11% $2.5B $1.9B $4.5B 17% 19% Deposits Deposits Deposits 56% 21% 68% 63% Noninterest Bearing IB Demand, Savings & MMDA Retail Time Deposits Jumbo Time Deposits Cost of Deposits: 1.65% Cost of Deposits: 1.84% Cost of Deposits: 1.73% 1 1 1 Depos
Slide 11: Diversified Pro Forma Loan Portfolio
Diversified Pro Forma Loan Portfolio Pro forma 1% 1% 1% 16% 11% 13% 14% 16% 10% 6% 7% $2.3B $1.7B $4.0B 9% loans loans loans 10% 13% 8% 55% 54% 55% CRE & Multi C&D Home Equity C&I Residential RE Other Yield on Loans: 5.78% Yield on Loans: 6.08% Yield on Loans: 5.91% Source: S&P Global Market Intelli
Slide 12: Enhances Wealth Management Offering
Enhances Wealth Management Offering $2.7B pro forma assets under management CVLY $1.0B $2.7B ORRF Pro Forma AUM $1.7B 42% of pro forma non-interest income 1 Pro Forma Non-Interest Income Composition Combined company provides a full spectrum of wealth management, financial planning and Wealth Managem
Slide 13: Thorough Reciprocal Due Diligence Process
Thorough Reciprocal Due Diligence Process § Thorough management review of all key functional areas Key Functions for both companies § Joint on-site management meetings provided Comprehensive understanding of shared cultural values and business due diligence functions Credit and Finance & § Rigorous
Slide 14: Merger Overview
Merger Overview • Merger of equals • Codorus Valley Bancorp, Inc. to merge into Orrstown Financial Services, Inc.; Peoples Bank to merge into Orrstown Bank Merger structure • 100% stock consideration & consideration • 0.875x of a ORRF share for each CVLY share 1 • Implied price per share of $21.31,
Slide 15: Key Merger Assumptions
Key Merger Assumptions • All stock transaction Structural • ORRF is the legal and accounting acquiror Elements • CVLY options exchanged for ORRF options • ORRF and CVLY earnings per share per street consensus estimates ─ ORRF: $0.82 in 2023Q4 | $2.93 in 2024 | $3.05 in 2025 Earnings ─ CVLY: $0.53 in
Slide 16: Pro Forma Financial Impact
Pro Forma Financial Impact Financially compelling transaction with significantly increased profitability 1 2 GAAP Metrics Non-GAAP Metrics GAAP Metrics (Excl. AOCI & Rate Marks) (Excl. CECL Day-2 Double Count) Earnings ~46% ~21% ~8% ~25% ~19% ~43% 2024E EPS 2025E EPS 2025E Cash EPS 2025E EPS 2024E C
Slide 17: Top-Tier Pro Forma Profitability
Top-Tier Pro Forma Profitability 1 2 2025 Estimated Profitability: Pro Forma Company vs. Peers Return on Average Assets Pro Forma Return on Average Equity Pro Forma Efficiency Ratio Pro Forma Source: S&P Global Market Intelligence 1) Pro forma company estimates based on consensus street estimates fo
Slide 18: Potential for Significant Shareholder Value Creation
Potential for Significant Shareholder Value Creation 1 Pro Forma Peers 2025 Estimated Median Top Quartile 2 3 Profitability 2025E GAAP 2025E Cash ROAA 1.50% 1.29% 0.88% 0.92% ROAE 16.3% 14.0% 8.9% 10.4% Net interest margin 4.04% 3.55% 3.01% 3.40% Efficiency ratio 49.5% 55.0% 62.8% 55.9% Fee income /
Slide 19: Merger Synergies & Profitability Acceleration
Merger Synergies & Profitability Acceleration Achievable Cost Savings 2025E Noninterest Expense / Avg. Assets $25M in annual pre-tax cost savings identified • 18% of combined operating expense • Inclusive of incremental expenses ü Elimination of redundancies will enhance operating leverage going 202
Slide 20: Merger Benefits All Stakeholders
Merger Benefits All Stakeholders ü Materially accretive to each entity’s EPS, ROA and ROE ü Pro forma market capitalization enhances shareholder liquidity ü Significant upside for all shareholders with successful integration, execution and delivery of estimated Shareholders performance metrics + ü G
Slide 21: Appendix
ORRSTOWN Financial Services, Inc. —— Appendix ey VAL e ay
Slide 22: Pro Forma Reconciliation
Pro Forma Reconciliation Tangible Book Value Per Share Dilution 2025 Earnings Per Share Accretion Shares $ per GAAP Cash Diluted ($M) (M) share ($M) ($M) shares (M) Orrstown Financial Services, Inc. ORRF 2025E net income $31.7 $31.7 10.4 standalone TBV as of 9/30/23 $221.7 10.6 $20.89 CVLY 2025E net
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