Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — 2022 KBW Community Bank Investor Conference
18 slides from Orrstown Financial Services's conference presentation, Aug 2, 2022
Slide 1: 2022 KBW Community Bank Investor Conference
ORRSTOWN Financial Services, Inc. 2022 KBW Community Bank Investor Conference August 2-3, 2022
Slide 2: Cautionary Note Regarding Forward Looking Statements | Non-GAAP Disclosures
Cautionary Note Regarding Forward Looking Statements | Non-GAAP Disclosures Cautionary Note Regarding Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21€ of the Securities Exch
Slide 3: Orrstown Financial Services, Inc. (NASDAQ: ORRF) Overview
rrstown Fin al Services, Inc. (N Q: ORRF) Overview Financial Highlights (2022Q2) $2.8B $2.0B $2.5B 3.68% Assets Loans Deposits NIM co} tebGnor Harrisburg 1.25% 14.4% 60.0% 23.0% Cartslegs, QO°O ROAA ROAE Efficiency Fee Income / fo} Ratio Op. Revenue ooxg ae ® 5 neaster Franchise Overview © ochambers
Slide 4: Track Record of Profitable Growth
Track Record of Profitable Growth + Entered Eastern PA + Organic expansion —_—* Acquired First + Entered MD market + Originated 3,200 + Originated 3,350+ PPP + Momentum market continued in growth Community Bank of with acquisition of PPP loans totaling _loans totaling $282MM continues, 202202 + Ente
Slide 5: Strong Geographically Diverse Markets
rong Geographically Diverse M Geographic Focus Driven by Relationship Banking Model Y Four geographic regions kebanon’ \e B es ”\ ° Lancaster / York ¢ Y Markets connected by significant highway infrastructure Y Focus on commercial lending and MD / deposit relationships Y Growth markets are well- pos
Slide 6: Loans and 2022Q2 Loan Composition
Loans ($in millions) 2022Q2 Loan Composition Multi-family $1,992 $1,989 $2,025 Total Loans: Non-owner 6% $2.08 occupied CRE Non-owner euces . 28% occupied i residential Yield on 5% Owner Loans: $1,407 occupied CRE 4.41% Commercial & 14% industrial @ N 18% Acquisition & ppp 2016 2017 2018 2019 2020 2
Slide 7: Continued Focus on Core Deposit Growth
Continued Foc ing Core Deposi Deposits ($ in millions) 2022Q2 Deposit Composition $2,465 $2,479 $2,357 Total Deposits: $1,876 $2.5B Noninterest $1,559 bearing 2 23% $1,152 $1,220 Interest- Cost of $1,961 bearing Deposits: demand & 0.11% $1,175 q a on 66% Time deposits 2016 2017 2018 2019 2020 2021 2
Slide 8: Diversified Revenue Streams
Diversified Revenue Strea * $1.6 billionin Assets Under Management * Opportunity to gain market share in growth markets Y Wealth management and mortgage not yet to scale in growth markets * Focus on value added fee income * Continue to seek swap fee opportunities 23.0% 2022Q2 Fee Income / Operating
Slide 9: Efficiency
| Efficien Our current focus is on implementing processing efficiencies and optimizing results: * Efficiency ratio declined from 86% for the year ended December 31, 2016 to 60% for the quarter ended June 30, 2022 * Technology enhancements and process automation initiatives designed to further increa
Slide 10: Disciplined Underwriting and Risk Management
derwriting a Disciplined * Conservative underwriting approach supported by strong asset quality metrics * Recently tightened credit policy on select segments * Credit analysis for both new deals and periodic reviews includes targeted review of potential negative factors * Special Mention loans fell
Slide 11: Earnings Driving Capital & Dividend Growth
Earnings Driving Capital & Dividend Growt Tangible Book Value per Share (“TBVPS”) Ta ope Common Equity and TCE/TA% 9.46 % $22.49 $25.62 $93.91 9.22% 5 9, 8.32% g.15% 885% $17.99 $18.01 $16.49 $222 $134 fm 9144 MM S157 516.149 17.229NS 16.7 3S 17.6SfMNS 19.93IMNNS 2232S 20.23} 2016 «=. 2017_-—=S «201
Slide 12: Earnings Growth
Earnings Growth Returnon Average Assets and Average Equity mmm Net Income ($ in millions) — Diluted EPS 2016 2017 2018 2019 2020 2021 = =202202 YTD 37.9% 29.6% Net Income Diluted EPS CAGR* CAGR* *CAGR calculations based on 2016 to 2021 net income and diluted EPS —eROAE —e-ROAA 14.42% 0.75% 0.76% 0.5
Slide 13: Right People, Aligned for Success
Right People, Aligned for Success eu § Significant Experience Name Title Experience ORRF ThomasR. Quinn, Jr. President & CEO 31 years 2009 * Average 27 years of banking experience, mostly from Neelesh Kalani EVP/Chief Financial Officer 17 years 2020 money center and large regional banks + Average 10
Slide 14: Investment Highlights
Investment Highl Vv Established track record of robust organic growth through focus on relationship banking Y Diverse revenue streams Y Stable, low-cost core deposit base Y Well-positioned for rising rate environment with strong core earnings growth potential Y Disciplined underwriting and risk mana
Slide 15: For Additional Information
or Additional Information Thomas R. Quinn, Jr. Neil Kalani Robert Coradi President & CEO Chief Financial Officer Chief Risk Officer tquinn@orrstown.com nkalani@orrstown.com rcoradi@orrstown.com 717-530-2602 717-510-7097 717-709-3039
Slide 16: Summary Financial Overview
Summary Financial Overview 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/. share data and # lenders Assets $1,415 ‘$1,559 $1,934 $2,383 $2,751, ‘$2,835, $2,824 2% 13% Total Gross Loans 886 1,016 1,251 1,654 1,991 1,989 2,025 1% 16% ‘C&l Loans’ 255 as 342, 432 843 739 681 “13% 20% tows
Slide 17: Reconciliation of Non-GAAP Measures to GAAP Results
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 understanding
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation in Millions Efficiency Ratio 6/30/2022 42/31/2021 42/31/2020 ___12/31/2019___12/31/2018 12/34/2017 ___ 42/31/2016 Non-interest expense (A) $ 18.8 $ 741 $ 744 $ 713 $ 579 $ 50.3 $ 48.4 Net interest income (B) 24.4 87.0 836 69.3 52.2 43.8 36.5 Non-interest income (C) 12
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