Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — KBW Community Bank Investor Conference - New York (July 2013)
19 slides from Orrstown Financial Services's conference presentation, Jul 31, 2013
Slide 1: Orrstown Financial Services, Inc. Investor Presentation
Orrstown Financial Services, Inc. Investor Presentation KBW Community Bank Investor Conference - New York Fort OrrsTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence July 31, 2013
Slide 2: Forward Looking Information
Forward Looking Information This presentation may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, Forward- ooking statements are statements that include projections, predictions, expectations, or beliefs about events of results or otherwise are
Slide 3: Investment Considerations
Investment Considerations Orrstown Financial Services, Inc. (ORRF) Central Pennsylvania Community Banking Organization Total Assets $1.2B; Market Cap of $109M ¥ Financial performance historically ¥ Significant management changes above peers ¥ Retumed to profitability 4Q 2012 V Late to the credit cha
Slide 4: Experienced Leadership Team
Experienced Leadership Team Banking 0 D x ce / Disci \c Name/Title Experience | Joined ORRF | Experience/ Disciplines Prior Experience Thomas R. Quinn Bene h One 23 Years 2009 CEO, Strategy, Sales, Executive Citi, Filth Third David P. Boyle — a Finance, Treasury, Strategy, PNC/National City, Chief F
Slide 5: Orrstown Financial Services, Inc.
Orrstown Financial Services, Inc. ¥ $1.2 billion in assets ¥ Headquartered in Shippensburg, PA ¥ 21 locations in Pennsylvania and Maryland + 9 branches in Cumberland + 7 branches in Franklin + 4branches in Perry + 1 branch in Washington ¥ Customer-focused business model with nearly 100 years of succ
Slide 6: Market Area
Market Area Hee a, ma Currently operating 21 full-service locations along the Route 81 corridor from Washington County, Maryland through Franklin, Cumberland and Perry Counties, Pennsylvania ‘The combined population of the current market area is approximately 580,000 as of June 30, 2012 ‘The current
Slide 7: Strategic Initiatives
Strategic Initiatives ¥ Completing Credit Turnaround + Asset quality remediation, including loan workouts, additional structural enhancements, and multiples sales of non performing assets to third parties have driven an 83% reduction in non performing assets from December 31, 2011 + Asset quality me
Slide 8: Summary Financial Highlights
Summary Financial Highlights (Delain 0, ety shel) ya Balance Sheet: 2008 200920102011 20122013 Total Assets $4,051,783 51,196,432 $1,511,722 $1,444,087 51,232,668 § 1,191,217 Total Gross Loans 820,468 881,074 966,986 967,993 711,601 672,755 Total Deposits 757368 915,170 1,188,377 1,216,902 1,085,039
Slide 9: Fundamental Operations
Fundamental Operations For the Quarter Ended, eu 9802 BAY BIAS M3 $1029 $957k S585 $5562 SS113, 7027 4880 516h «432.6 4073311133 10600 1.949 10327 Sams S331 SSIS S205 2450 $2595 2) - si 2 52 52 2 2 + Collection and Problem Loan oad 53 407,82 199 + Other Litigation Charges 2 50 sa + Real Estate Owned
Slide 10: Diverse and Growing Revenue Stream
Diverse and Growing Revenue Stream + Non-interest income continues to be astable and significant source of revenue + Mortgage banking favorably influenced by continued low interest rate environment and greater stability in the real estate market + Orrstown Financial Advisors continues to generate so
Slide 11: Deposit Franchise
Deposit Franchise + Significant deposit franchise - with over 80% “core” + Limited use of wholesale and brokered deposits + Effectively managing the cost of deposits which declined to 0.44% for the quarter ended June 30, 2013 (6/30/13) Demand, 048% O.46% 0.44% 0.40% 0.20% - 0.00% 1 1912. 2912, 3012
Slide 12: Capital Position
Capital Position 75% Leverage Ratio 12.6% ‘Welt Gop Tier 1 Risk - Based Ratio 13.9% ‘Well Total Risk - Based Capital Ratio Regulatory Capital levels are solidly above “well capitalized”. Expect to be Basel II compliant within timetrame. Simple capital structure — no trust preferred, TARP or holding
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio Loans Held for Investment Composition (6/30/13) Non-Performing Loans by Type (6/30/13)" Million MRQ Yield: $18.0 Million Construction, Other, $6,637 $24728.4% / 1% Multi Family, $19,769, 3% Non-Owner Occupied Real Estate, S82 14Family, $7,165 , 40% Occupied 1 Estate, 19 ,
Slide 14: Completing Credit Turnaround
Completing Credit Turnaround v Significant Reduction in NPAs eo. + Asset quality issues were addressed quickly and aggressively in 2012 $100,000 * “Risk Assets” totaled $20.5 million at June 30, 2013, a $2% reduction from $113.8 million at Sot December 31, 2011 10000 | + Risk Assets to assets of 1.7
Slide 15: Transitioning to Offense - Expansion Opportunities
ransitioning to Offense - Expansion Opportunities Potential Expansion Markets (Illustr ¥ Shareholder Focus - ROI/Accretion v New Markets = Targeting attractive adjacent markets * Hiring top talent in Lancaster, York and Hagerstown, MD ¥ Loan Production Offices y¥ Full Service Branches v Investment a
Slide 16: Summary Highlights
Summary Highlights v Established South Central Pennsylvania bank v Deep and experienced Management team with strong operational ability v Aggressively dealt with asset quality issues, with ratios that are now in-line with peers as a result of 2012 strategies v Strategic plans in place to drive core
Slide 17: Appendix
Appendix Fort OrrsTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence
Slide 18: Non-Performing Asset Summary
Non-Performing Asset Summary ‘Now-Acsraal Loans 18087 OREO aus] 24132372573! n072 ‘Now-Pesocning Aneta 3 Bar|s san S San Saas Ses Stele See Restractred Loans Sl Acoing vow) 36a 28 sans 3m m8 ase 50+ Days Delinquent Sil Accring 3 2 a : Total Risk Asset Tiss wT sas Sas Ss Bos wIs|s HO ris assy ans} 48
Slide 19: Asset Quality Trends
Asset Quality Trends NPAs (incl. TDRe) & PD /Aseets® 6008 9.00% 788% 7k 4538 450% 6.00% 450% 3.00% 3.00% 1.50% 150% 0.00% oooy | Doosy 2008y 2010Y 201LY20L2Y 201302 Doosy —2008y 2aOY 2011Y OLY 201302 mm Peets. —-ORRF Allowance for Loan Losses /NPLs®) 200% 10.00% 160% 8.00% 120% 6.00% 80% 4.00% 40% 2
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