Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Shareholder Meeting (April 2024)
31 slides from Orrstown Financial Services's shareholder meeting presentation, Apr 30, 2024
Slide 1: 2024 Annual Shareholder Meeting
2024 Annual Shareholder Meeting 2023: Execution of Growth Strategy ORRSTOWN FINANCIAL SERVICES, INC. a
Slide 2: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC. 2
Slide 3: Important Disclosures
Important Disclosures Caution About Forward-Looking Statements Certain statements appearing herein, which are not historical in nature, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21€ of the Exchange Act, and are intended to be covered by the sa
Slide 4: Important Disclosures (Cont'd)
Important Disclosures Caution About Forward-Looking Statements (Cont’d) For a description of factors that we believe could cause actual results to differ materially from such forward-looking statements, you should review our Risk Factors discussion in Item 1A, our Critical Accounting Policies sectio
Slide 5: Rules of Conduct
Rules of Cond In the interest of an orderly Meeting of the Shareholders of Orrstown Financial Services, Inc., we ask you to honor the following rules of procedure: v Shareholders who are attending via webcast can submit questions during the meeting and those questions will be addressed prior to adjo
Slide 6: Board of Directors
Board of Directors ‘Andrea L. Pugh My Floyd E. Stoner
Slide 7: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC. 7
Slide 8: Management Report
Management Report Thomas R. Quinn, Jr. President & CEO ORRSTOWN FINANCIAL SERVICES, INC. 8
Slide 9: Experienced Leadership Team
Experienced Leadership Team Joined Thomas R. Quinn, Jr. President & Chief Executive Officer Neelesh Kalani EvP/Chief Financial Officer ‘Adam D. Bonanno EvP/Chief Operations & Technology Officer David M. Chajkowski EVP/Chief Credit Officer Robert G. Coradi Eve/Chief Risk Officer Matthew Dyckman EvP/G
Slide 10: Corporate Overview
Corporate Overview Financial Highlights + $3.1B $2.3B $2.6B 3.80% Assets Loans Deposits NIM 1.22% 15.06% 63.4% 19.6% ROAA ROAE Efficiency Fee Income / Ratio Op. Revenue Franchise Overview * Founded in 1919 + Established track record of profitable growth since 2016 + 21 branches serving customers thr
Slide 11: Geographically Diverse Markets
ng Geographically Diverse Markets Relationship Banking Model v Three geographic regions Franklin & land Defend Market Share Harrisburg & West Shore Growth Market v Markets connected by significant Lancaster/ Berk : - ancaster/ Berks highway infrastructure Growth Market v Focus on commercial lending
Slide 12: Track Record of Profitable Growth
Track Record of Profitable Growth Entered Eastern PA First + Entered Baltimore + Originated 3,200¢ Originated3,350+PPP _—* Loan Growthof + har arouettiok market Community Bank of market with acquisition Paycheck Protection _loans 2$232 $349MM or 19% ( $15SMMor 7.3% ‘ered Harrisburg, PA Mercersburg o
Slide 13: 2023 Year in Review
2023 Year in Review > Record Earnings v Net Income of $35.7 million / Diluted EPS of $3.42 Y Prudent loan growth in a challenging interest rate environment ¥Y Maintained strong asset quality metrics Y Retained and grew deposit relationships despite headwinds within the industry v Successfully manage
Slide 14: Dividend Trend
so2s soe so20 sos soas sos soz soo $o08 $o06 soos $0.07 1234567 MAY 2015 Dividend Trend Dividend By Quarter Dividend By Year $1.20 186% go S800 INCREASE we $0.60 $0.40 $0.20 $0.00 8 9 1011 12 13 14.15 16 17 48 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34.35 Dec 2023 35 consecutive quarterly divid
Slide 15: Financial Report
Financial Report Neelesh Kalani Chief Financial Officer ORRSTOWN FINANCIAL SERVICES, INC.
Slide 16: Focus on Growth — Phases
Focus on Growth — Phase 3 ACQUISITIONS ORGANIC GROWTH KEY HIRES Market Expansio = Investin customer facing talent and infrastructure Branch Optimization: + Closed 14 branches since 2019 = Currently have 26 branches Acquisitions: = First Community Bank of Mercersburg = Hamilton Bank Focus on Revenue
Slide 17: 2023 Financial Highlights
2023 Financial Highlights > Loan Growth - $147 million, or 6.8% * Excluding PPP forgiveness, total loans grew by $155 million or 7.3% * Commercial loan growth - $118 million or 6.9% * Consumer loan growth - $37 million or 8.6% > Deposit Growth - $83 million or 3.3% * Modest growth despite elevated i
Slide 18: 2023 Financial Highlights
2023 Financial Highlights > Adjusted Net Income $36.6 million / Diluted EPS of $3.51 * Inclusive of merger related expenses, Net Income was $35.7 million or $3.42 diluted EPS > Net Interest Income Increased by $5.3 million, or 5.3% * Margin declined by 1 basis point to 3.80% in 2023 —near peer highs
Slide 19: Enhanced Profitability Levels
Enhanced Profitability Levels Earnings Growth * Return on Average Assets & Equity ? $3.51 $3.25 a Mam. 00% 12.12% 12.54 ——_ $2.96 to2wy 195% — : 209 - ‘ ° : 1.22% 1.22% $2.28 . 1.08% 1.04% 1.14% $1.80 $275 oon $24.0 2018 2019 2020 2021 2022 2023 $153 —e-ROAE —e-ROAA Net Interest Income and Net Inter
Slide 20: Loans and 4Q23 Loan Composition
Loans ($in millions) 4Q23 Loan Composition + $2,151 $2,298 Non-owner $1,980 $1,980 occupied CRE $1,644 Ouse 30% occupied CRE 16% 1.721, 1831 7 Multi-family 51,407] Yield on 1% 1,078} Acquisition & Li development oans: Non-owner 6x 5.91%? RA occuries y dential 2016 © 2017-«2018»=«-2019-«2020«.2021.-S
Slide 21: Focus on Growing Core Deposits
Focus on wing Core Deposits Deposits ($ in millions) 4Q23 Deposit Composition * $2,465 $2,476 $2,559 $2,357 Money $1,876 Interest DDA Markets $1,559 39% . $1,152 $1,220 Cost of $2,163] 2,152] Total Deposits: . $1,963 P P Deposits: $1,356 $2.6B Savings $1,175| 1.88%? 7% 2016 2017 2018 2019 2020 2021
Slide 22: Diversified Revenue Streams
Diversified Revenue Streams * $1.7 billion in assets under managementas of Non-Interest Income ($ in millions) December 31, 2023 $29.2 $28.5 $28.3 $27.0 * Opportunity to gain market share in growth $25.7 markets g19.4 $19.9 $21.0 v¥ Wealth Management Y Mortgage Banking 2016 2017 2018 2019 2020 2021
Slide 23: Operational Efficiency
Operational Efficienc We are focused on implementing processing efficiencies and optimizing results: * Efficiency ratio declined from 86% for the year ended December 31, 2016 to 63% for the quarter ended December 31, 2023 * Technology enhancements and process automation ini ‘ives designed to further
Slide 24: Summary Financial Overview
Summary Financial Overview 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 JAssets $1,934 $2,383, ‘$2,751, ‘$2,835 $2,922 $3,064 10% |Total Gross Loans* 1,251 1,654 1,991 1,989 2,162 2,304 13% ‘CR Loans* 342 432 843 739 686 751 17% tows te ss oo uss 0 1 Total Commercial Loans* 823,
Slide 25: Areas of Focus in 2024
Areas of Focus in 2024 Thomas R. Quinn, Jr. President & CEO ORRSTOWN FINANCIAL SERVICES, INC.
Slide 26: Areas of Focus in 2024
Areas of Focus in 2024 Y Integration of Codorus Valley Bancorp, Inc. Relationship Banking Model in Focus Manage Margin Effectively with Disciplined Pricing Strategy Maintain Credit Quality Levels Deposit Retention and Growth Fee Income Opportunities Manage Expense KN NN NNR Capital Management ORRSTO
Slide 27: Conduct Meeting Business
Conduct Meeting Business Joel R. Zullinger Chairman of the Board ORRSTOWN FINANCIAL SERVICES, INC.
Slide 28: Thank You for Being a Loyal Shareholder
2024 Annual Shareholder Meeting Thank You for Being a Loyal Shareholder ORRSTOWN FINANCIAL SERVICES, INC.
Slide 29: Reconciliation of Non-GAAP Measures to GAAP Results
Appendix Reconciliation of Non-GAAP Measures to GAAP Results Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges. During the three and twelve months ended Decemb
Slide 30: Non-GAAP Financial Measure Reconciliation
Non-GAAP Financial Measure Reconciliation (dollars in thousands) Net income (A) Plus: Merger-related expenses (B) Less: Related tax effect (C) [Adjusted net income (D=A+B-C) Non-interest expense (I) Less: Merger expenses (B) [Adjusted Non-interest expense (J =1-B) Net interest income (K) Non-interes
Slide 31: Non-GAAP Financial Measure Reconciliation
Non-GAAP Financial Measure Reconciliation Net Income / Diluted EPS / Ratios 2022 2021 2020 2019 2018 (Presented In Millions except for Diluted EPS) Average Assets $ 2,844.8 $ «2,894.8 $ —- 2,645.8 F 2,225.1 § 1,710.6 Average Equity 244.3 262.2 226.9 206.0 149.7 Net Income (GAAP) $ 22.0 $ 32.9 $ 265
Orrstown Financial Services — Shareholder Meeting (April 2024) on 6ix