Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Shareholder Meeting (May 2013)
27 slides from Orrstown Financial Services's shareholder meeting presentation, May 1, 2013
Slide 1: Annual Shareholder Meeting April 30, 2013
ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of: Excellence Annual Shareholder Meeting April 30, 2013
Slide 2: Forward Looking Statement
Forward Looking Statement —— EEE 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. Fa
Slide 3: Call to Order, Conduct Meeting Business
ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence Joel Zullinger Chairman of the Board Call to Order Conduct Meeting Business
Slide 4: Management Report
Gort ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence Thomas R. Quinn, Jr. President & Chief Executive Officer Management Report
Slide 5: May 1, 2012 Priorities
May 1, 2012 Priorities OL OResolution of problem assets oContinue to address regulatory concerns oCareful building & strengthening of team oEnterprise Risk Management (ERM) priority OReinforcing the Orrstown brand o ORRSTOWN |
Slide 6: May 1, 2012: (continued)
May 1, 2012: (continued) Oo Continued support of all lines of business Xo Mortgage-poised to take advantage as economy recovers o Orrstown Financial Advisors - continue to expand and build assets under management and revenue oO Retail-strong branch network, product offerings, build on momentum oDive
Slide 7: May 1, 2012: (continued)
May 1, 2012: (continued) — EEE ORemain committed to our communities oContinued focus on asset remediation as the economy recovers
Slide 8: 2012: The Year in Review
2012: The Year in Review $3200 7 $113,779 {$100,000 + 360,000 +— 40,000 |— $20,000 |— 98-2011 | $88,317 | 12012 Total Troubled Assets ( in 000’s) 22012 03-2012 08-2012 an-2013 "rouble assets dined ae renacena! loan a accruing, restructured lane, loans pet due 90 dye or more and el accruing and cer e
Slide 9: 2012: The Year in Review
2012: The Year in Review wll $5,000 $o -$5,000 -$10,000 -$15,000 -$20,000 -$25,000 t Income/(I ss (-)) (in 000’) 030 $1,560 -$8,218 -$9,914 -$21,352 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013
Slide 10: 2012: The Year in Review
10 2012: The Year in Review $4,000 $2,000 $O -$2,000 -$4,000 -$6,000 -$8,000 -$10,000 -$12,000 Nét Income/(iosé (2) (in 000s) 91.8% increase - $1,030 $1,580 = -$1,500 $8,218 7 $9,914 Lee (OTA) Q1/2012-@2/2012, 3/2012. a4/2012.-—Q1/2013 -$21,352
Slide 11: Analyst's View of ORRF
Analyst’s View of ORRF a $16 4 |Date: | Sandler O’Neill + Partners * 7130/12 Problem Assets Improve but not out of the woods yet 12/21/12 Large Bulk Loan Sale Announced...significantly reduces classified assets and accelerates credit improvement 1/24/13 4Q12 FIRST LOOK: Areturn to profitability 4/25
Slide 12: Analyst's View of ORRF
Analyst’s View of ORRF 1/27/12: Maintain Neutral Rating | 4/30/12: Maintain Neutral Rating 7/30/12: Maintain Neutral Rating 10/30/12: Maintain Neutral Rating 12/21/12: Reported Sale of Troubled Assets; Raising Rating to Outperform From Neutral; Adjusting Estimates ($10.50 Target) —1 i —_ 2 T 1/24/13
Slide 13: 2012: The Year in Review
2012: The Year in Review 5/1/12 $7.68 4/25/13
Slide 14: Summary Financial Review
ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of: Excellence David P. Boyle Chief Financial Officer Summary Financial Review
Slide 15: 2012: Financial Recap
2012: Financial Recap Earnings Summary ($ in 000’s) YD 3/31/2012 6/30/2012 9/30/2012 12/31/2012] 12/31/2012) 3/31/2013 Net interest Income (FTE) $ 11,49 $ 10129 $ 9,578 $ —8.954|$ 40,151]$ 8,562 Noninterest Income 6191 7,027 4,880 5,164|$ 23,262 4,432 Noninterest Expense 10,883 10,733 11,133 10,600]
Slide 16: Funding Composition
Funding Composition Deposit Composition (12/31/11) Deposit Composition (12/31/12) Time <$100K Time <$100K 9% 12% tae Time >$100K 42% ime. Time >$100K 20% nor ee 20% ‘Savings 6% A Core Funded Franchise
Slide 17: Loan Portfolio Breakdown
Loan Portfolio Breakdown 2011 Oth
Slide 18: Noninterest Income
Noninterest Income hee 2011 Noninterest Income 2012 Noninterest Income Composition Compo: Securities Gains 23% Trust Bre Merchant 22% Processing Fon 1% Peoate Brokerage Banking 26% Mortgage 14% Merchant Banking Processing 11% 7% Strong & Stable Diversified Non-Interest Income
Slide 19: 2012: The Year in Review
2012: The Year in Review LL o“Operation Bottom Line” oLed by Chairman Joel Zullinger, Vice- Chairman Jeff Coy, and the entire Board of Directors oTargeted expense reductions of $5.0 million over 24 months. 0$1.3 million in targeted expenses already eliminated (at 26% of goal)
Slide 20: 2012: The Year in Review
2012: The Year in Review sate Net Income/(loss) (in 000’s) "1.5% increase $2,000 $1,030 $1,560 $0 - | | |_| -$2,000 | $1,500 -$4,000 -$6,000 -$8,000 -$10,000 -$8,218 Pa -$9,914 -$12,000 VV Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 -$21,352
Slide 21: 2012: The Year in Review
2012: The Year in review a 12/31/12 Capital Ratios (%) 14.00% 12.20% 12.00% 10.90% 10.00% 10.00% Key: red line represents regulatory “well capitalized 8.00% 00% 5%:6%, and 10%, respectivel 6.00% ssid 6.00% 4.00% | 200% 0.00% - - Ter 1 Leverage Ratio. Tier 1 Risk Based Ratio ‘Total Risk-Based Ratio.
Slide 22: 2012: The Year in Review
2012: The Year in Review 4/25/13 e001 fm 5/1/12 $7.68 4.00 2.00
Slide 23: Management Report
ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of: Excellence Thomas R. Quinn, Jr. President & Chief Executive Officer Management Report
Slide 24: Going Forward
Going Forward OContinue to Work with Primary Regulators to Remediate and Remove Enforcement Action oBuild a Diversified and Growing Balance Sheet oContinue to Make Investments in Technology and Infrastructure to Support Future Plans Oo Operation “Bottom Line” led by the Board of Directors
Slide 25: Going Forward
Going Forward A cEnterprise Risk Management Focus throughout the Organization Oo Sustainable Earnings Improvement Quarter-over-Quarter oEnhance Earnings Through Loan Growth cCommitment to our Communities cContinue to Grow Shareholder Value OReinstate Dividends as Soon as Possible
Slide 26: The Floor is Open for Questions
Fort ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence The Floor is Open for Questions
Slide 27: Annual Shareholder Meeting Thank You
ORRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence Annual Shareholder Meeting Thank You
Orrstown Financial Services — Shareholder Meeting (May 2013) on 6ix