Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Investor Presentation (March 2013)
19 slides from Orrstown Financial Services's investor presentation, Mar 8, 2013
Slide 1: Orrstown Financial Services, Inc. Investor Presentation
Orrstown Financial Services, Inc. OrRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence Investor Presentation March 2013
Slide 2: Forward Looking Information
Forward Looking Information ‘This presentation 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 events or results or otherwise ar
Slide 3: Orrstown Financial Services, Inc.
Orrstown Financial Services, Inc. ¥ $1.2 billion in assets Y Headquartered in Shippensburg, PA ¥ 21 locations in Pennsylvania and Maryland + 9 branches in Cumberland + 7 branches in Franklin + branches in Perry + 1 branch in Washington v Customer-focused business model with almost 100 years of succe
Slide 4: Seasoned Leadership Team
Seasoned Leadership Team Years Experience _ Previous Experience Thomas R. Quinn, Jr has served as President, Chief Executive Officer and Director of Orzstown Financial Services, Inc. and of Orzstown Bank since May 2009. Mr. Quinn joined the Bank in March Thomas Quinn Jr. 25 years 2009 a5 Presdentele
Slide 5: Market Area
Market Area Y Currently operating 21 full-service locations along the Route $1 corridor from Washington County, Maryland through Franklin, Cumberland and Perry Counties, Pennsylvania ¥ The combined population of the current market area is approximately 580,000 as of June 30, 2012 ¥ The current combi
Slide 6: Timeline of Events
Timeline of Events Price Change NPAs ($0005) Late 2007 - Mid 2010 “Financial Crisis” Lite Cycle NPA Peak Transition to Offense 40% 140000 r i ik ’ 1 ) c 1 20% 120000 ox 100,000 December June 200%: Poms 7 (20%) Added to the mmounced 659,000 a) ‘sell S000 —- totes imitates KEY aos) |p $60,000 on (ox)
Slide 7: Future Strategic Initiatives
Future Strategic Initiatives ¥ Completing Credit Turnaround + Asset quality remediation, including loan workouts, additional structural enhancements, and multiples sales of non performing assets to third parties have driven an 80% reduction in non performing assets from December 31, 2011 + Asset qua
Slide 8: Summary Financial Highlights
Summary Financial Highlights (Dollars in 0005) -am208 Balance Sheet 2008 2009 2010 2011 2012 Total Assets SIASI 763 — SL A96AS — STSLLTAD — Sasa — SL Ds2.66S IBIS Total Gross Loans 2046s 81074 956986967993. 711601711601 Total Deposits 77368 913470-=«1488377 «116902083039 1085039 Total ty 10338711088
Slide 9: Fundamental Operations
Fundamental Operations ‘(Dollars em 000) ‘BOL 1ZBYIL 331/12 6/30/12 Net Interest Income OTE) $13585. $1226 $1149 $1029 Nosintarat acon 89517379 61m 7027 Nonintereat Expense 10527 30886 1088510735, PreTax/PeeProvision Inconw $11,669 GI0S42) $9802 $6423 ee Realized Guin on Scie 52351 $3025 $2281 $2595
Slide 10: Diverse and Growing Revenue Stream
Diverse and Growing Revenue Stream + Non-interest income continues to be a stable and significant source of revenue + Mortgage banking favorably influenced by continued low interest rate environment and greater stability in the real estate market + Orrstown Financial Advisors continues to generate s
Slide 11: Deposit Franchise
Deposit Franchise Significant deposit franchise - with over 80% “core Limited use of wholesale and brokered deposits Effectively managing the cost of deposits which declined to 0.49% for the quarter ended December 31, 2012 $1.09 Billion ‘ost of Total Deposits(°) 050% 09% 66% 062% os oss 049% 040% 02
Slide 12: Capital Position
Capital Position 140% 120% 109% 109% 100% 8.0% ~ | 40% 20% 00% Leverage Ratio Tier1 Tier 1Risk- Total Risk- ‘Common Ratio based Ratio based Capital Ratio Regulatory Capital levels are solidly above “well capitalized” Simple capital structure - no trust preferred, TARP or holding company debt Common
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Composition (12/31/12) $704 Million MRQ Yield: 4.73% | other, $7M1% Commercial, ¥4Femily, 111M, 106M, 15% Municipal, 10% Home Equity, 9M, 13% Construction, 30M, 4% Fert. OprsTown FISANCUL SERIES NC Seog soem, Construction, $3.8M, 2% Occupied RE, S15M,8% B
Slide 14: Completing Credit Turnaround
Completing Credit Turnaround ¥ Significant Reduction in NPAs + Asset quality issues were addressed quickly and aggressively in 2012 “Risk Assets” totaled $22.9 million at December 31, 2012, a 79.9% reduction from $113.8 million at December 31, 2011 Risk Assets to assets of 1.86% as of December 31, 2
Slide 15: Transitioning to Offense - Expansion Opportunities
Transitioning to Offense - Expansion Opportunities ¥ Shareholder Focus - ROI/Accretion v New Markets Targeting attractive adjacent markets + Expansion market customer base allows for targeted line of business growth V Loan Production Offices and Full Service Branches v Branch Franchise Acquisitions
Slide 16: Investment Highlights
Investment Highlights v Established South Central Pennsylvania bank v Deep and experienced Management team with strong operational ability V Aggressively dealing with asset quality issues, with ratios that are now in-line with peers as a result of 2012 strategies v Strategic plans in place to drive
Slide 17: Appendix
Appendix Sort OrrRSTOWN FINANCIAL SERVICES, INC. A Tradition of Excellence
Slide 18: Non-Performing Asset Summary
Non-Performing Asset Summary ‘Non-Performing Assets Renegotiated Loans ‘90+ Days Delinquent Total "Risk Assets" ‘Assets 30-89 PD Asset Quality Ratios: Non-Accrual Loans / Loans NPAs/Assets" 2S YLL SEE 83697 x) 79%) 2.754 2.165 @7%) 3%) 33928 35862 (6%) 7%) 37:75 27917 (9%) 2.956 - NA Tans S 113779 2
Slide 19: Asset Quality Trends
Asset Quality Trends ea 6.00% 7.50% 2.88%. 453% 450% 6.00% 450% 3.00% 3.29% 3.00% uy 126%, 150% | 099% 087% 108 o.oo | coo, | Ml tt 2oo7y 2008¥ 2009 2010Y KY 200 2oury 2008y 2008Y 2010Y 201Y —2012¥ ms Pecrs == ORRF Peers —=ORRF Reserves / NPLs® NCOs / Avg. Loans 250% 10.00% 80% 8.00% 6.00% 4.00% 2.0
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