Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Investor Presentation (May 2017)
26 slides from Orrstown Financial Services's investor presentation, May 16, 2017
Slide 1: Investor Presentation: Driving Shareholder Value
1 Investor Presentation: Driving Shareholder Value May 2017 NASDAQ: ORRF Thomas R. Quinn, Jr. President & CEO David P. Boyle EVP / Chief Financial Officer
Slide 2: Forward-Looking Statements
2 WWW.ORRSTOWN.COM Forward-Looking Statements Certain statements we make today may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about ev
Slide 3: Corporate Profile
3 WWW.ORRSTOWN.COM Corporate Profile • $1.4 billion community bank based in south- central Pennsylvania • Seasoned commercial lending, trust & wealth management, and mortgage lending disciplines with 26 retail locations in seven contiguous counties • Company has entered phase 3 of transition: 1. Cre
Slide 4: Corporate Profile: Financial Summary and Highlights
4 WWW.ORRSTOWN.COM Corporate Profile Financial Summary and Highlights (3/31/17) Total Assets $1.45 billion Total Gross Loans $901 million Total Deposits $1.18 billion Loans / Deposits 76% NPAs / Total Assets 0.51% Common Shareholders’ Equity $137.5 million Net Interest Margin 3.35% Total Assets Unde
Slide 5: Experienced Leadership Team
5 WWW.ORRSTOWN.COM Experienced Leadership Team Name/Title Experience Joined ORRF Disciplines Prior Experience Thomas R. Quinn, Jr. President & CEO 27 years 2009 CEO | Strategy | Sales | Executive Citi, Fifth Third David P. Boyle EVP/Chief Financial Officer 26 years 2012 Finance | Treasury | Strategy
Slide 6: Mission Statement & Core Values
6 WWW.ORRSTOWN.COM Mission Statement & Core Values MISSION STATEMENT: Our engaged employees deliver comprehensive, responsible financial solutions to our customers, and support the communities we serve, which results in company growth and profit. CORE VALUES: • We communicate with openness and respe
Slide 7: Three Phase Transition: Credit Turnaround, Building for Future, Growth Company
7 WWW.ORRSTOWN.COM Three Phase Transition: 1. Credit Turnaround> 2. Building for Future> 3. Growth Company 2012 2013 2014 2015 2016 2017 March 2012 Enforcement action June 2012 Loan sale (65 - $28.6MM*) December 2012 Loan sale (172 - $45.6MM*) July 2012-February 2013 Key executives join Bank January
Slide 8: Looking Back: Key Milestones
8 WWW.ORRSTOWN.COM Looking Back: Key Milestones *At 4/30/2017 ** Assets under management at 3/31/17 • May 2015: Quarterly dividend restored • June 2015: Opened first Lancaster County branch* • $132.2 million net loans • $43.6 million in deposits • May 2016: Opened LPO in Lancaster County • Base of o
Slide 9: Looking Back: Key Milestones
9 WWW.ORRSTOWN.COM Looking Back: Key Milestones (1) FDIC June 2016 and system generated April 30, 2017 (2) Core system loan data July 31, 2016 and April 30, 2017 (3) Branch opened April 17, 2017, deposit data as of May 8, 2017 • August 2016: Relocated Camp Hill Regional Office • Hub office for all b
Slide 10: Geographic Expansion in Favorable Markets
10 WWW.ORRSTOWN.COM 1,802 businesses(1) $11.1 billion in deposits(2) 6,789 businesses(1) $40.6 billion in deposits(2) Geographic Expansion in Favorable Markets (1) Dun & Bradstreet-Businesses with annual sales between $1-$50 million, April 2017; (2) FDIC, June 2016 * Includes full service branches,
Slide 11: 2016-2019 Execution of Strategic Plan: Drive Shareholder Value
11 WWW.ORRSTOWN.COM 2016-2019 Execution of Strategic Plan: Drive Shareholder Value • Continue core earnings improvement • Balance sheet leverage • Strategic growth of fee-based businesses • Expense control • Disciplined enterprise risk management • Consideration of strategic bank and non-bank acquis
Slide 12: 2016-2019: Strategic Investments in Customer-Facing Talent
12 WWW.ORRSTOWN.COM 2016 -2019: Strategic Investments in Customer-Facing Talent 2016 Hires • Commercial Lending 9 new business bankers • Orrstown Financial Advisors 4 new sales representatives • Registered Investment Advisor Acquisition of Wheatland Advisors, Inc. • Mortgage Lending 4 new mortgage l
Slide 13: Early Look – 2016 to 2019: 2016 + Q1 2017 Results
13 WWW.ORRSTOWN.COM Early Look – 2016 to 2019 2016 + Q1 2017 Results • Continued strength in core markets • Successful entrance into new markets • Favor quality relationships vs. “deal flow” • Focus on operating businesses with core deposits • Cash management team execution • Relationship banking st
Slide 14: Early Look – 2016 to 2019: Focus on Noninterest Income
14 WWW.ORRSTOWN.COM Early Look – 2016 to 2019 2016 Results: Focus on noninterest income ($ in 000s): 2015 2016 Change Orrstown Financial Advisors(1) $6,623 $7,024 +6.1% Mortgage Banking Activities $2,747 $3,412 +24.2% Service Charges on Deposit Accounts $5,226 $5,445 +4.2% Total noninterest income b
Slide 15: Selected Annual Financial Data 2011-2016
15 WWW.ORRSTOWN.COM Year Ended ($ in 000s) 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 % Change (2015-2016) Total Assets $1,444,097 $1,232,668 $1,177,812 $1,190,443 $1,292,816 $1,414,504 9.4% Total Loans $965,440 $703,739 $671,037 $704,946 $781,713 $883,391 13.0% Total Deposits
Slide 16: Financial Recap: Year-Over-Year Results
16 WWW.ORRSTOWN.COM Financial Recap: Year-Over-Year Results $1,444,097 $1,232,668 $1,177,812 $1,190,443 $1,292,816 $1,414,504 $965,440 $703,739 $671,037 $704,946 $781,713 $883,391 $1,216,902 $1,085,039 $1,000,390 $949,704 $1,032,167 $1,152,452 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200
Slide 17: Phase 3-Growth Company (5 quarter view)
17 WWW.ORRSTOWN.COM Phase 3-Growth Company (5 quarter view) Selected Financial Data 2016 2017 (Dollars in 000s) Q1 Q2 Q3 Q4 Q1 Total Assets $1,287,279 $1,311,353 $1,354,154 $1,414,504 $1,453,946 Total Loans 804,703 831,933 847,061 883,391 901,331 Total Deposits 1,048,376 1,087,969 1,133,332 1,152,45
Slide 18: Consistent Upward Trend in Key Metrics
18 WWW.ORRSTOWN.COM Consistent Upward Trend in Key Metrics $1,287,279 $1,311,353 $1,354,154 $1,414,504 $1,453,946 $804,703 $831,933 $847,061 $883,391 $901,331 $1,048,376 $1,087,969 $1,133,332 $1,152,452 $1,183,876 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 $1,300,000 $1,400,000 $1,500,000 To
Slide 19: Loan Composition
19 WWW.ORRSTOWN.COM Loan Composition CRE: Owner-occupied 13% CRE: Non-owner occupied 36% Acquisition & Development 3% Commercial & Industrial 10% Municipal 6% Residential mortgage 31% Installment and other 1%CRE: Owner-occupied 13% CRE: Non-owner occupied 30% Acquisition & Development 7% Commercial
Slide 20: Deposit Composition
20 WWW.ORRSTOWN.COM Deposit Composition 2015 2016 Noninterest-bearing 13% NOW and money market 53% Savings 8% Time - less than $100,000 17% Time - greater than $100,000 9% Noninterest-bearing 13% NOW and money market 49% Savings 8% Time - less than $100,000 18% Time - greater than $100,000 12% (30%
Slide 21: Diversified and Growing Revenue Streams
21 WWW.ORRSTOWN.COM Diversified and Growing Revenue Streams Margin business revenue includes interest and fees on loans, interest and dividends on investment securities and short term investments; Deposits includes service charges on deposit accounts, other services charges, commissions, and fees; W
Slide 22: Noninterest Expense Review
22 WWW.ORRSTOWN.COM $43,349 $43,247 $43,768 $44,607 $48,140 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 Noninterest Expense Review 2012 2013 2014 2015 2016 • 2015 and 2016 expenses influenced by increased costs related to litigation and investment in growth of company (sales team and geo
Slide 23: Regulatory Capital Ratios
23 WWW.ORRSTOWN.COM Regulatory Capital Ratios 8.1% 13.7% 15.0% 9.5% 15.6% 16.8% 9.8% 14.6% 15.8% 9.3% 13.3% 14.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Tier 1 Leverage Tier 1 Risk Based Total Risk Based 2013 2014 2015 2016
Slide 24: Looking Forward: Keys to Executing Plan and Improving Earnings
24 WWW.ORRSTOWN.COM Looking Forward: Keys to Executing Plan and Improving Earnings • Continue to take advantage of market disruption • Use of technology to attract and retain customers • Continue to leverage balance sheet and improve earnings through loan, deposit, and fee income growth • Continue t
Slide 25: Why Invest in Orrstown Financial Services, Inc.
25 WWW.ORRSTOWN.COM Why Invest in Orrstown Financial Services, Inc. • Successful turnaround by current management team • Invested and stable leadership • Already invested for the future: enterprise risk management, technology, infrastructure • New entry into attractive markets with continuing disrup
Slide 26: Driving Shareholder Value
26 Investor Presentation: Driving Shareholder Value May 2017 NASDAQ: ORRF 5/17f
Orrstown Financial Services — Investor Presentation (May 2017) on 6ix