Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — KBW Philadelphia Community Banks Presentation 2018
18 slides from Orrstown Financial Services's conference presentation, Nov 2, 2018
Slide 1: Orrstown Financial Services, Inc. Company Overview
Orrstown Fi cial Services, Inc. Company Overview November 2, 2018 (KBW Philadelphia Community Banks’ Presentation)
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21€ of the Securities Exchange Act of 1934, as amended. These forward-looking statements includestatements
Slide 3: Experienced Leadership Team
Experienced Leadership Team Name/Title Thomas R. Quinn, Jr. President & CEO David P. Boyle EVP/Chief Financial Officer Barbara E. Brobst EVP/Chief Human Resources Officer Robert G. Coradi EVP/Chief Risk Officer Philip E. Fague EVP/Trust and Wealth Management Robert Fignar EVP/Market President Jeffre
Slide 4: 2015-Present: Strategic Investments Continue
2015-Present: Strategic Investments Continue Investments in customer-facing talent to take advantage of significant market disrupti + Cash Management Team + Commercial Lender lift outs begin investment in Lancaster intangibles” KEY TAKEAWAYS * Investments in customer facing talent continue (14 new c
Slide 5: Company Overview (Current & Pro Forma)
Company Overview (Current & Pro Forma) + 99 year old community bank headquartered in South Central Pennsylvania jon: $192.4 million into greater Baltimore market Iwo recent acquisitions, one in-market and another which extends current footprint Acquisition of Hamilton Bancorp announced 10/23/2018 wi
Slide 6: Orrstown Market Performance
rstow ket Perform ce ORRF 3-Year STOCK PERFORMANCE AND TOTAL RETURN 75.0% 50.0% 25.0% 0.0% 2 o fo fo A“ rat A CJ J 2 J yy rad ba yy a » yy id oy & & s & & s & & ss & ——ORRF Stock Appreciation ——ORRF Total Return ——KBW NASDAQ Regional Bank Source: S&P Global Market Inteligence Ones ‘ov
Slide 7: Company Overview: Profile
Company Overview: Profile GROWING REGIONAL FINANCIAL INSTITUION BUSINESS MODEL WELL POSITIONED FOR SUSTAINED GROWTH CONSISTENT STRONG OPERATING RESULTS Financialdate September 30, 2018 nal demographics (fastest growing area of Pennsylvania) Continue to benefit from market disruption Market President
Slide 8: New Branches Continue to Outperform Growth Projections
New Branches Continue to Outperform Growth Projections Lancaster Branch Deposits ($000's) - $75,832 HRO $1,988 45,000,000 40,000,000 35,000,000 30,000,000 aainssn 25,000,000 194i9s2 20,000,000 14585,682 15,000,000 000; aS 104/810 10,000,000 es 5,000,000 95 993 ca = Reciprocal Deposits = Spring Valle
Slide 9: Pennsylvania Demographics
a Demographics — Percent Change in Population, 2010 to 2017 —_— || Statewide: +0.8% A. cS cumberland Median HHI $60,219 235,406 $57,494 434,972 $56,529 101,407 $54,765 519,445 $53,470 411,442 $52,659 45,969 $52,371 268,100 $52,356 133,568 $51,035 149,618 Population # of HHs 93,943] 168,372] 38,013]
Slide 10: Maryland Demographics
Maryland Demographics 7 321,113 252,022 873,235 832,468 252,160 167,781 611,648 6,094,000 7.62% 6.31% 3.23% 2.83% 0.35% -1.51% 0.45% 119,765 93,587 216,299 327,381 94,376 60,986 245,803 median wealthiest in nation * Maryland 5‘ most densely populated state* * Strong potential for additional margin a
Slide 11: Key Metrics: Quarter Trend
Key Metrics: 5 Quarter Trend Gross Loans Total Assets ‘$1,100,000 ‘$1,750,000 $1,720,755 $1,080,000 $1,060,000 $1,700,000 S16; $1,040,000 51,650,000 51,635,905 $1,020,000 1,000,000 51,600,000 $980,000 51,558; $960,000 $1,550,000 $1,533,586 940,000 $1,500,000 $1,474.95 $920,000 $900,000 $1,480,000 02
Slide 12: Key Metrics: 2015 to Current
Key Metrics: 2015 to Current ROAA (%) ROAE (%) 1.00 a2 12.00 10.89 090 ia asa 10.00 070 . osa ate 0.60 0.50 ! 5.99 57 050 6.00 4.80 020 ia 4.00 020 i 010 0.00 0.00 2015 FY 2016 FY 2017 FY 2018 Fa3 YTD 2oisFY 2016 FY. «2017 FY 2018 FO3YTD Diluted EPS () Efficiency Ratio (%) aie Lat heed 83.5 iy a 82.
Slide 13: Key Metrics: Quarter Trend
Key Metrics: 5 Quarter Trend Cost of Deposits (%) ined 0.93 0.90 0.80 0.76 ‘O70 oe 0.67 0.61 0.60 — 0.50 2017 £3 2017 Fa 2018 Fa 2018 FO2 2018 FOS Net Interest Margin (%) 3.34 3.32 3.32 aah 3.30 3.28 3.28 azt 3.26 3.26 3.24 3.22 2017 Fa3 2017 Fa 2018 Fa 2018 FO2 2018 FOS
Slide 14: Mercersburg: Key Transaction Terms and Assumptions
Mercersburg: Key Transaction Terms and Assumptions ™ Mercersburg shareholders could elect 1.5291 ORRF shares or $40.00 in cash & Proration to ensure 85% of Mercersburg shares exchanged for stock and 15% for cash ™ Per share consideration valued at $40.00? Aggregate consideration valued at $32.4 mill
Slide 15: Transaction Pricing and Financial Impact
Transaction Pricing and Financial Impact ORRF / MCBG Recent Deals! Price / LTM Earnings? 23.7x 27.5x Normalized Price / LTM Earnings?? 19.0x 27.5x Normalized Price / LTM Earnings + Cost Savings?> 7.6x 11.1x Price / Tangible Book Value (LTM ROATCE) 1.53x (6.2%) 1.60x (5.9%) Normalized Price / Tangibl
Slide 16: Hamilton: Key Transaction Terms and Assumptions
Hamilton: Key Transaction Terms and Assumptions ® Hamilton common shares exchanged for 0.54 ORRF shares and $4.10 in cash? Hamilton options cashed out at the difference between merger and exercise price ™ Per share consideration valued at $16.90 Aggregate consideration valued at $58.5 million? $5.2
Slide 17: Transaction Pricing and Financial Impact
Transaction Pricing and Financial Impact Transaction Pricing: ORRF / HBK! Recent Deals? Normalized Price / LTM Earnings + Cost Savings** 10.1x 12.2x Normalized Price / Tangible Book Value* 131K 1.91x Core Deposit Premium? 4.3% 11.7% 2020 EPS Accretion 8.0% Internal Rate of Return 18.6% 2020E ROAA Pi
Slide 18: Additional Information
dditional In Thomas R. Quinn, Jr. David P. Boyle President & CEO Chief Financial Officer tquinn@orrstown.com dboyle@orrstown.com 717-530-2602 717-530-2294
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