Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Piper Sandler Philly Bank Bonanza (June 2022)
19 slides from Orrstown Financial Services's conference presentation, Jun 16, 2022
Slide 1: Piper Sandler Philly Bank Bonanza
ORRSTOWN Financial Services, Inc. Piper Sandler Philly Bank Bonanza June 16, 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: Since 2016, the Company has transformed into a larger community bank
* Since 2016, the Company has transformed from a primarily rural community bank located in Central Pennsylvania to a larger, more complex community ank located in strong, geographically diverse markets throughout Central and Eastern Pennsylvania and Marylan * We have established a track record of pr
Slide 4: Geographically Diverse Markets: Relationship Banking Model
g Geographically Di Geographic Focus Driven by Relationship Banking Model ° a — * Four geographic regions: > Eastern (Lancaster/Berks)-Growth Market Capital (Harrisburg/West Shore)-Growth Market Maryland (Greater Baltimore)-Growth Market Southern (Franklin/Cumberland)-maintain and defend legacy mark
Slide 5: Track Record of Profitable and Effective Franchise Expansion
Track Record of Profitable and Effective Franchise Expansion 3,500,000 140% $3500, 1.20% $3,000,000 120% $2,500,000 1.00% $2,000,000 80% $1,500,000 60% $2,000,000 0% $500,000 020% roa $0 o.0o% Ise 12/81/2016 12/81/2017 12/31/2018 12/31/2019 12/31/2020 2/s1po02t 2/31/2022 (e005) mem Return on Average
Slide 6: Track Record of Profitable and Effective Franchise Expansion (cont.)
Track Record of Profitable and Effective Franchise Expansion (cont.) Assets $1,415 $1,559 $1,934 $2,383 $2,751 $2,835 3% 100% Total Gross Loans! 886 1,016 1,251 1,654 1,991 1,989 0% 124% C&i Loans! 254 275 342 433 843 740 (225) 191% CRE Loans 317 376 432 588 638 751 18% 137% Total Commercial Loans*
Slide 7: Disciplined Risk Management and Credit Policies To Support Growth
Disciplined Risk Management and Credit Policies To Support Growth RISK MANAGEMENT * Invested in risk and credit administration functions prior to expanding our commercial lending teams + Bifurcated credit risk from ERM risk with addition of new Chief Credit Officer; Credit Officers in each region ap
Slide 8: Right People, Aligned for Success
Right People, Aligned for Success Name/Title Thomas R. Quinn, Jr. President & CEO Neelesh Kalani EVP/Chief Financial Officer ‘Adam Bonanno EvP/Chief Operations & Technology Officer Barbara E. Brobst EVP/Chief Human Resources Officer Robert G. Coradi EvP/Chief Risk Officer Matthew Dyckman. £vP/Genera
Slide 9: Product Suite Provides Opportunities for Deeper Market Penetration
Product Suite Provides Opportunities for Deeper Market Pen COMMERCIAL BANKING + C8 and CRE Lending + Treasury Management + Small Business Lending + SBALending + Middle Market lending + Veterinary Lending + Insurance (e.g., key-man coverage) INVESTMENTS & TRUST ‘Wealth Management Retirement Planning
Slide 10: Significant Loan Growth Across All Growth Markets
Significant Loan Growth Across All Growth Markets Commercial Loans (excluding PPP) ‘ir Total Loans (excluding PPP) fleltl Amoutl it capt Eagern Maryind mount in capita tegen Maryn (00's) 12/3: 12/31/2021 = 3/31/2022 (000's) 12/31/2021 m 3/31/2022 KEY TAKEAWAYS: * Growth Markets have experienced stro
Slide 11: PPP Creates Ongoing Revenue Stream
PPP Creates Ongoing Revenue Stream 57% Through March 31, 2022, approximately 2,800 new business clients have joined Orrstown Bank as a result of PPP and generated: * $49.9 million in new loan fundings + 123 new Treasury Management clients PPP Loans to NEW bank clients PPP Loans to EXISTING bank clie
Slide 12: 2022-2023 Strategic Focus: Optimizing Results
2022-2023 Strategic Focus: Optimizing Results Diversified income streams provide flexibility in uncertain market conditions * Interest and fees earned from loan growth and higher yielding investment securities expected to outpace PPP income over time * Emphasis on other fee income areas to offset ea
Slide 13: 2022-2023 Strategic Focus: Optimizing Results (continued)
2022-2023 Strategic Focus: Optimizing Results (continued) Asset Quality * Continue proactive efforts to maintain strong asset quality; early identification and quick resolution of problems Balance Sheet Optimization * Enhance net interest margin through continued focus on disciplined growth of C&l a
Slide 14: Using Technology to Optimize Results
ing Technology to Optimize Resul Improving client interaction with new Treasury Management solution and mobile remote deposit capture capabilities. Enhancementsto commercial loan origination processes and mortgage e-closing. Contactless capability in new ATM units. Maximizing on electronic signature
Slide 15: Value Proposition: Shares Trade at Discount Compared to Peers
Value Proposition: Shares Trade at Discount Compared to Peers Financial Highlights Line Item 12/31/18 | 3/31/22 Tas SESE Tangible Book Value Pé Price2021 Price2022_ Price’ Core Deposit fost $26.73 $21.03 7.3% Market Dividend PriceLTM Estimated Estimated Tangible Premium - Value Vield- Eaming §=-EPS-
Slide 16: Value Proposition Summary
lue Proposition Summ * 5-year transformation from a primarily rural community bank located in Central Pennsylvania to a larger, more complex community bank located in strong, geographically diverse markets throughout Central and Eastern Pennsylvania and Maryland * Established track record of profita
Slide 17: 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 18: 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 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation in Millions Efficiency Rati 2021 2020 2019 2018 2017 2016 Non-interest expense (A) $ TA $ TAA $ 713 $ 57.9 $ 50.3 $ 48.4 Net interest income (B) 87.0 83.6 69.3 522 438 36.5 Non-interest income (C) 29.2 28.3 28.5 21.0 19.9 197 Total revenue (B+C) =D s 116.1_$ 119 $ 78
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