Orrstown Financial Services, Inc. Reports Second Quarter 2025 Results and Announces Dividend Increase

• Net income of $19.4 million, or $1.01 per diluted share, for the three months ended June 30, 2025 compared to net income of $18.1 million, or $0.93 per diluted share, for the three months ended March 31, 2025; the second quarter of 2025 included $1.0 million in merger-related expenses compared to $1.6 million in merger-related expenses for the first quarter of 2025;
• Excluding the impact of the merger-related expenses referenced above, net of taxes, net income and diluted earnings per share were $20.2 million⁽¹⁾ and $1.04⁽¹⁾, respectively, for the second quarter of 2025 compared to $19.3 million⁽¹⁾ and $1.00⁽¹⁾, respectively, for the first quarter of 2025;
• Net interest margin, on a tax equivalent basis, was 4.07% in the second quarter of 2025 compared to 4.00% in the first quarter of 2025; the net accretion of purchase accounting marks positively impacted the margin by 50 basis points in the second quarter of 2025;
• Return on average assets was 1.45% and return on average equity was 14.56% for the three months ended June 30, 2025, compared to 1.35% and 13.98% for the return on average assets and return on average equity, respectively, for the three months ended March 31, 2025;
• Excluding the impact of the merger-related expenses referenced above, net of taxes, adjusted return on average assets was 1.51%⁽¹⁾ and adjusted return on average equity was 15.12%⁽¹⁾ for the three months ended June 30, 2025 compared to 1.45%⁽¹⁾ and 14.97%⁽¹⁾, respectively, for the three months ended March 31, 2025;
• Loans increased by $55.4 million, or 6% annualized, from March 31, 2025 to June 30, 2025; classified loans decreased by $10.4 million from $76.2 million at March 31, 2025 to $65.8 million at June 30, 2025;
• Noninterest income increased by $1.3 million from $11.6 million for the three months ended March 31, 2025 to $12.9 million for the three months ended June 30, 2025;
• Noninterest expense decreased by $0.6 million from $38.2 million for the three months ended March 31, 2025 to $37.6 million for the three months ended June 30, 2025, reflecting a decline in merger-related expenses during the second quarter of 2025; merger-related costs are not expected to be meaningful going forward; the second quarter of 2025 also included $0.6 million of severance charges in salaries and employee benefits expense;
• Efficiency ratio decreased from 63.2% for the three months ended March 31, 2025 to 60.3% for the three months ended June 30, 2025; excluding the impact of the merger-related expenses, the efficiency ratio was 58.7%⁽¹⁾ for the three months ended June 30, 2025 compared to 60.5%⁽¹⁾ for the three months ended March 31, 2025;
• Tangible common equity increased to 8.3% at June 30, 2025 compared to 7.9% at March 31, 2025;
• Tangible book value per common share⁽¹⁾ increased to $22.77 per share at June 30, 2025 compared to $21.99 per share at March 31, 2025;
• The Board of Directors authorized a share repurchase program on June 20, 2025, through which the Company could repurchase up to 500,000 shares of its common stock;
• The Board of Directors declared a cash dividend of $0.27 per common share, payable August 12, 2025, to shareholders of record as of August 5, 2025; this represents a $0.01 per share increase in the Company's quarter cash dividend; the dividend has increased by 35% since the closing of the merger with Codorus Valley Bancorp.
  
  

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

HARRISBURG, Pa., July 22, 2025 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (NASDAQ:ORRF), the parent company of Orrstown Bank (the "Bank"), announced earnings for the periods ended June 30, 2025. Net income totaled $19.4 million for the three months ended June 30, 2025, compared to net income of $18.1 million for the three months ended March 31, 2025 and net income of $7.7 million for the three months ended June 30, 2024. Diluted earnings per share was $1.01 for the three months ended June 30, 2025, compared to diluted earnings per share of $0.93 for the three months ended March 31, 2025 and diluted earnings per share of $0.73 for the three months ended June 30, 2024. For the second quarter of 2025, excluding the impact of merger-related expenses, net of taxes, net income and diluted earnings per share were $20.2 million⁽¹⁾ and $1.04⁽¹⁾, respectively. For the first quarter of 2025, excluding the impact of merger-related expenses, net of taxes, net income and diluted earnings per share were $19.3 million⁽¹⁾ and $1.00⁽¹⁾, respectively. For the second quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $8.7 million⁽¹⁾ and $0.83⁽¹⁾, respectively.

"At the one-year mark after the merger with Codorus Valley Bancorp, we are very pleased to have achieved metrics near top of peers, with significant upside opportunities in front of us," said Thomas R. Quinn, Jr., President and Chief Executive Officer. "In the second quarter, we experienced positive traction on loan production. While commercial loan growth was lower than expected, our pipeline remains strong as we head into the third quarter. We remain prudent with our lending decisions and will not compromise on credit quality. Net interest margin improved in the quarter with good momentum going into the remainder of the year. While expenses remain slightly elevated, we do not anticipate any further meaningful merger-related expenses and continue to implement process improvements that will enhance efficiency and facilitate future growth. We believe that our strong credit metrics and capital generation have positioned us well for the future."

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment increased by $55.4 million and totaled $3.9 billion at both June 30, 2025 and March 31, 2025. Commercial loans increased by $16.1 million, or 2% annualized, and residential mortgages increased by $37.9 million from March 31, 2025 to June 30, 2025. The increase in loans included a purchase of property assessed clean energy ("PACE") loans totaling $25.4 million.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $29.9 million to $885.4 million at June 30, 2025 from $855.5 million at March 31, 2025. During the second quarter of 2025, the Bank purchased $50.1 million of investment securities, which was partially offset by paydowns totaling $20.4 million. The overall duration of the Company's investment securities portfolio was 4.5 years at June 30, 2025 compared to 4.3 years at March 31, 2025. See Appendix B for a summary of the Bank's investment securities at June 30, 2025, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the second quarter of 2025, deposits decreased by $117.1 million and totaled $4.5 billion at June 30, 2025 compared to $4.6 billion March 31, 2025. Time deposits, money market deposits, non-interest bearing demand deposits, saving deposits and interest-bearing demand deposits decreased by $58.0 million, $35.8 million, $13.9 million, $6.2 million and $3.2 million, respectively, from March 31, 2025 to June 30, 2025. The declines in time deposits and money market deposits are due to continued run-off in higher yielding promotional balances. The decreases in the other categories were consistent with normal cyclical activity. As a result of the decrease in total deposits, the Bank's loan-to-deposit ratio increased to 87% at June 30, 2025 from 84% at March 31, 2025.

Borrowings

The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $136.3 million at June 30, 2025 compared to $100.3 million at March 31, 2025. The increase was due to higher utilization of overnight borrowings during the second quarter of 2025 as deposit balances declined and lending and investing activities increased. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed in a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.7 billion at June 30, 2025.

Income Statement

Net Interest Income and Margin

Net interest income was $49.5 million for the three months ended June 30, 2025 compared to $48.8 million for the three months ended March 31, 2025. The net interest margin, on a tax equivalent basis, increased to 4.07% in the second quarter of 2025 from 4.00% in the first quarter of 2025. This increase is primarily the result of the cost of funds declining by 12 basis points from the first quarter of 2025 to the second quarter of 2025. This was partially offset by a decrease of seven basis points in the yield on loans from the three months ended March 31, 2025 to the three months ended June 30, 2025. This decrease was due to a reduction in accelerated accretion on acquired loans over that period. The second quarter 2025 net interest margin reflects the full impact of deposit rate reductions implemented in the prior quarter as well as the runoff of higher rate time deposits and money market balances.

The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $5.2 million during the second quarter of 2025 compared to $6.9 million for the first quarter of 2025. This change was due primarily to lower accelerated accretion in the three months ended June 30, 2025.

Interest income on loans, on a tax equivalent basis, decreased by $0.4 million to $63.2 million for the three months ended June 30, 2025 compared to $63.6 million for the three months ended March 31, 2025. Average loans decreased by $14.7 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025. The accretion of purchase accounting marks on loans totaled $4.9 million during the second quarter of 2025 compared to $6.6 million during the first quarter of 2025.

Interest income on investment securities, on a tax equivalent basis, was $10.6 million for the second quarter of 2025 compared to $10.1 million in the first quarter of 2025, an increase of $0.5 million. Average investment securities increased by $39.0 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025 primarily due to the aforementioned purchases.

Interest expense, on a tax equivalent basis, decreased by $1.5 million to $25.3 million for the three months ended June 30, 2025 compared to $26.8 million for the three months ended March 31, 2025. Average interest-bearing deposits decreased by $70.3 million during the three months ended June 30, 2025 compared to the three months ended March 31, 2025. The cost of interest-bearing deposits declined by 14 basis points from the first quarter of 2025 to the second quarter of 2025. In addition, interest expense includes $0.4 million and $0.6 million of amortization of purchase accounting marks on interest bearing liabilities for the three months ended June 30, 2025 and March 31, 2025, respectively.

Provision for Credit Losses on Loans

The allowance for credit losses ("ACL") on loans increased to $47.9 million at June 30, 2025 from $47.8 million at March 31, 2025. The ACL to total loans was 1.22% at June 30, 2025 compared to 1.23% at March 31, 2025. The Company recorded provision expense of $0.2 million for the three months ended June 30, 2025 compared to a recovery in the provision for credit losses on loans of $0.6 million for the three months ended March 31, 2025 . Net charge-offs were $0.1 million for the three months ended June 30, 2025 compared to $0.3 million for the three months ended March 31, 2025.

Classified loans decreased by $10.4 million to $65.8 million at June 30, 2025 from $76.2 million at March 31, 2025 due to net upgrades and loan repayments. Non-accrual loans totaled $22.4 million at June 30, 2025 compared to $22.7 million at March 31, 2025. Nonaccrual loans to total loans decreased to 0.57% at June 30, 2025 compared to 0.59% at March 31, 2025. Management believes the ACL to be adequate based on current asset quality metrics and economic forecasts.

Noninterest Income

Noninterest income increased by $1.3 million to $12.9 million for the three months ended June 30, 2025 from $11.6 million for the three months ended March 31, 2025.

Swap fee income increased by $0.3 million to $0.7 million for the three months ended June 30, 2025 compared to $0.4 million for the three months ended March 31, 2025. Swap fee income will fluctuate based on market conditions and client demand.

Income from service charges was $2.6 million for the three months ended June 30, 2025 compared to $2.4 million for the three months ended March 31, 2025 based on increased cash management services activity.

Income from mortgage banking activities increased by $0.2 million from $0.3 million in the three months ended March 31, 2025 to $0.5 million in the three months ended June 30, 2025. The first quarter of 2025 included a decrease of $0.2 million in the fair value of mortgage servicing rights.

Wealth management income decreased by $0.2 million to $5.2 million for the three months ended June 30, 2025 compared to $5.4 million for the three months ended March 31, 2025.

Other income increased by $0.7 million to $2.4 million for the three months ended June 30, 2025 compared to $1.7 million for the three months ended March 31, 2025. During the second quarter of 2025, the Bank recorded $0.3 million in solar tax credits and a gain on the sale of other real estate owned of $0.1 million.

Noninterest Expenses

Noninterest expenses decreased by $0.6 million to $37.6 million in the three months ended June 30, 2025 from $38.2 million in the three months ended March 31, 2025.

For the three months ended June 30, 2025, merger-related expenses totaled $1.0 million, a decrease of $0.6 million, compared to $1.6 million for the three months ended March 31, 2025. The merger-related costs incurred in the second quarter of 2025 primarily included software conversion costs. The Company does not expect to incur meaningful merger-related expenses going forward.

Salaries and benefits expense increased by $1.0 million to $21.4 million for the three months ended June 30, 2025 compared to $20.4 million for the three months ended March 31, 2025. The increase during the second quarter of 2025 includes $0.6 million of severance costs, the impact of merit salary increases in May and the impact of one extra day in the quarter.

Occupancy, furniture and equipment expenses decreased by $0.5 million to $4.2 million for the three months ended June 30, 2025 from $4.7 million for the three months ended March 31, 2025 primarily due to the seasonal expenses incurred during the first quarter of 2025.

Professional services expense increased by $0.2 million from the three months ended March 31, 2025 to the three months ended June 30, 2025. During the quarter, the Company continued to utilize an elevated level of third-party assistance to enhance daily functions and operational processes throughout the organization. While the Company will remain reliant on these services into the second half of 2025, the Company expects expenses related to these services to decline beginning in the third quarter of 2025.

Advertising and bank promotions expense increased by $0.6 million to $1.1 million in the three months ended June 30, 2025 from $0.5 million in the three months ended March 31, 2025 due to $0.7 million in contributions to tax credit programs during the second quarter of 2025. Taxes other than income decreased by $0.6 million in the three months ended June 30, 2025 compared to the three months ended March 31, 2025. This decrease reflects the tax impact of the contributions referenced above.

Income Taxes

The Company's effective tax rate was 21.3% for the second quarter of 2025 compared to 20.7% for the first quarter of 2025. The Company's effective tax rate for the three months ended June 30, 2025 is greater than the 21% federal statutory rate primarily due to the disallowed portion of interest expense against earnings in association with the Bank's tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 partially offset by the benefit of tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

Capital

Shareholders' equity totaled $548.4 million at June 30, 2025 compared to $532.9 million at March 31, 2025. The increase is due to net income of $19.4 million and share-based compensation activity of $1.6 million, partially offset by dividend payments of $5.1 million and other comprehensive losses of $0.5 million.

Tangible book value per common share⁽¹⁾ increased to $22.77 per share at June 30, 2025 from $21.99 per share at March 31, 2025. The Company's tangible common equity ratio was 8.3% at June 30, 2025 compared to 7.9% at March 31, 2025. Average tangible common equity per common share⁽¹⁾ was $18.43 at June 30, 2025 compared to $17.91 at March 31, 2025.

The Company's capital ratios increased during the three months ended June 30, 2025 due primarily to earnings. The Company's tier 1 common equity, tier 1 and total risk-based capital ratios were 10.9%, 11.1% and 13.3%, respectively, at June 30, 2025 compared to 10.6%, 10.8% and 13.1%, respectively, at March 31, 2025. The Company's Tier 1 leverage ratio increased to 9.0% at June 30, 2025 compared to 8.6% at March 31, 2025.

At June 30, 2025, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed "well capitalized" under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

The Board of Directors authorized a share repurchase program on June 20, 2025, through which the Company could repurchase up to 500,000 shares of its common stock. The Company repurchased 2,134 common shares during the second quarter of 2025.

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

Investor Relations Contact:

Neelesh Kalani

Executive Vice President, Chief Financial Officer

Phone (717) 510-7097

FINANCIAL HIGHLIGHTS (Unaudited)
	Three Months Ended								Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(In thousands)		2025				2024				2025				2024
Profitability for the period:
Net interest income	$	49,512			$	26,103			$	98,273			$	52,984
Provision for (Recovery of) credit losses - loans		209				812				(345	)			1,233
Recovery of credit losses - unfunded loan commitments		(100	)			—				(100	)			(123	)
Noninterest income		12,915				7,172				24,539				13,802
Noninterest expenses		37,614				22,639				75,790				45,108
Income before income tax expense		24,704				9,824				47,467				20,568
Income tax expense		5,256				2,086				9,968				4,299
Net income available to common shareholders	$	19,448			$	7,738			$	37,499			$	16,269
Financial ratios:
Return on average assets (1)		1.45	%			0.97	%			1.40	%			1.04	%
Return on average assets, adjusted (1) (2) (3)		1.51	%			1.09	%			1.48	%			1.14	%
Return on average equity (1)		14.56	%			11.41	%			14.28	%			12.09	%
Return on average equity, adjusted (1) (2) (3)		15.12	%			12.88	%			15.05	%			13.33	%
Net interest margin (1)		4.07	%			3.54	%			4.04	%			3.65	%
Efficiency ratio		60.3	%			68.0	%			61.7	%			67.5	%
Efficiency ratio, adjusted (2) (3)		58.7	%			64.6	%			59.6	%			64.8	%
Income per common share:
Basic	$	1.01			$	0.74			$	1.96			$	1.57
Basic, adjusted (2) (3)	$	1.05			$	0.84			$	2.06			$	1.73
Diluted	$	1.01			$	0.73			$	1.94			$	1.55
Diluted, adjusted (2) (3)	$	1.04			$	0.83			$	2.04			$	1.71
Average equity to average assets		9.97	%			8.50	%			9.81	%			8.58	%
(1) Annualized for the three and six months ended June 30, 2025 and 2024.
(2) Ratio has been adjusted for the non-recurring charges for all periods presented.
(3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
	June 30,				December 31,
(Dollars in thousands, except per share amounts)		2025				2024
At period-end:
Total assets	$	5,387,645			$	5,441,589
Loans, net of allowance for credit losses		3,883,481				3,882,525
Loans held-for-sale, at fair value		5,206				6,614
Securities available for sale, at fair value		885,373				829,711
Total deposits		4,516,625				4,623,096
FHLB advances and other borrowings and Securities sold under agreements to repurchase		166,381				141,227
Subordinated notes and trust preferred debt		69,021				68,680
Shareholders' equity		548,448				516,682
Credit quality and capital ratios (1):
Allowance for credit losses to total loans		1.22	%			1.24	%
Total nonaccrual loans to total loans		0.57	%			0.61	%
Nonperforming assets to total assets		0.42	%			0.45	%
Allowance for credit losses to nonaccrual loans		214	%			202	%
Total risk-based capital:
Orrstown Financial Services, Inc.		13.3	%			12.4	%
Orrstown Bank		13.3	%			12.4	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		11.1	%			10.2	%
Orrstown Bank		12.1	%			11.2	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.9	%			10.0	%
Orrstown Bank		12.1	%			11.2	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		9.0	%			8.3	%
Orrstown Bank		9.8	%			9.1	%
Book value per common share	$	28.07			$	26.65
(1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard.

ORRSTOWN FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands, except per share amounts)	June 30, 2025				December 31, 2024
Assets
Cash and due from banks	$	54,335			$	51,026
Interest-bearing deposits with banks		95,042				197,848
Cash and cash equivalents		149,377				248,874
Restricted investments in bank stocks		21,204				20,232
Securities available for sale (amortized cost of $916,830 and $864,920 at June 30, 2025 and December 31, 2024, respectively)		885,373				829,711
Loans held for sale, at fair value		5,206				6,614
Loans		3,931,379				3,931,214
Less: Allowance for credit losses		(47,898	)			(48,689	)
Net loans		3,883,481				3,882,525
Premises and equipment, net		51,703				50,217
Cash surrender value of life insurance		145,760				143,854
Goodwill		69,751				68,106
Other intangible assets, net		42,748				47,765
Accrued interest receivable		19,958				21,058
Deferred tax assets, net		36,683				42,647
Other assets		76,401				79,986
Total assets	$	5,387,645			$	5,441,589
Liabilities
Deposits:
Noninterest-bearing	$	918,263			$	894,176
Interest-bearing		3,598,362				3,728,920
Total deposits		4,516,625				4,623,096
Securities sold under agreements to repurchase and federal funds purchased		30,047				25,863
FHLB advances and other borrowings		136,334				115,364
Subordinated notes and trust preferred debt		69,021				68,680
Other liabilities		87,170				91,904
Total liabilities		4,839,197				4,924,907
Shareholders' Equity
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding		—				—
Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,713,126 shares issued and 19,535,835 outstanding at June 30, 2025; 19,722,640 shares issued and 19,389,967 outstanding at December 31, 2024		1,026				1,027
Additional paid—in capital		422,349				423,274
Retained earnings		153,923				126,540
Accumulated other comprehensive loss		(24,479	)			(26,316	)
Treasury stock— 177,291 and 332,673 shares, at cost at June 30, 2025 and December 31, 2024, respectively		(4,371	)			(7,843	)
Total shareholders' equity		548,448				516,682
Total liabilities and shareholders' equity	$	5,387,645			$	5,441,589

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
(Dollars in thousands, except per share amounts)			2025				2024				2025				2024
Interest income
Loans		$	63,036			$	35,537			$	126,468			$	71,770
Investment securities - taxable			9,406				4,999				18,350				9,583
Investment securities - tax-exempt			878				881				1,753				1,758
Short-term investments			1,513				1,864				3,781				2,820
Total interest income			74,833				43,281				150,352				85,931
Interest expense
Deposits			22,855				15,265				47,115				28,781
Securities sold under agreements to repurchase and federal funds purchased			106				27				190				52
FHLB advances and other borrowings			1,030				1,152				2,148				2,626
Subordinated notes and trust preferred debt			1,330				734				2,626				1,488
Total interest expense			25,321				17,178				52,079				32,947
Net interest income			49,512				26,103				98,273				52,984
Provision for (Recovery of) credit losses - loans			209				812				(345	)			1,233
Recovery of credit losses - unfunded loan commitments			(100	)			—				(100	)			(123	)
Net interest income after provision for (recovery of) credit losses			49,403				25,291				98,718				51,874
Noninterest income
Service charges			2,630				1,283				5,025				2,483
Interchange income			1,441				961				2,868				1,872
Swap fee income			669				375				1,063				574
Wealth management income			5,267				3,312				10,682				6,414
Mortgage banking activities			478				369				780				827
Investment securities gains (losses)			8				(12	)			21				(17	)
Other income			2,422				884				4,100				1,649
Total noninterest income			12,915				7,172				24,539				13,802
Noninterest expenses
Salaries and employee benefits			21,364				13,195				41,752				26,947
Occupancy, furniture and equipment			4,211				2,705				8,886				5,344
Data processing			965				1,237				1,889				2,502
Advertising and bank promotions			1,077				774				1,576				1,172
FDIC insurance			674				419				1,498				860
Professional services			2,016				801				3,842				1,432
Taxes other than income			295				49				1,237				543
Intangible asset amortization			2,472				215				5,007				440
Merger-related expenses			968				1,135				2,617				1,807
Restructuring expenses			—				—				91				—
Other operating expenses			3,572				2,109				7,395				4,061
Total noninterest expenses			37,614				22,639				75,790				45,108
Income before income tax expense			24,704				9,824				47,467				20,568
Income tax expense			5,256				2,086				9,968				4,299
Net income		$	19,448			$	7,738			$	37,499			$	16,269
		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
			2025				2024				2025				2024
Share information:
Basic earnings per share		$	1.01			$	0.74			$	1.96			$	1.57
Diluted earnings per share		$	1.01			$	0.73			$	1.94			$	1.55
Dividends paid per share		$	0.26			$	0.20			$	0.52			$	0.40
Weighted average shares - basic			19,173				10,393				19,165				10,371
Weighted average shares - diluted			19,342				10,553				19,335				10,517

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Three Months Ended
	6/30/2025									3/31/2025									12/31/2024									9/30/2024									6/30/2024
(In thousands)				Taxable-				Taxable-					Taxable-				Taxable-					Taxable-				Taxable-					Taxable-				Taxable-					Taxable-				Taxable-
	Average			Equivalent				Equivalent		Average			Equivalent				Equivalent		Average			Equivalent				Equivalent		Average			Equivalent				Equivalent		Average			Equivalent				Equivalent
	Balance			Interest				Rate		Balance			Interest				Rate		Balance			Interest				Rate		Balance			Interest				Rate		Balance			Interest				Rate
Assets
Federal funds sold & interest-bearing bank balances	$	136,106		$	1,513			4.46%		$	203,347		$	2,268			4.52%		$	199,236		$	2,492			4.96%		$	184,465		$	2,452			5.29%		$	142,868		$	1,864			5.25%
Investment securities (1)(2)		904,119			10,626			4.70			865,126			10,052			4.65			849,389			9,887			4.66			849,700			10,123			4.77			538,451			6,114			4.54
Loans (1)(3)(4)(5)		3,894,979			63,246			6.52			3,909,694			63,641			6.59			3,961,269			68,073			6.82			3,989,259			70,849			7.07			2,324,942			35,690			6.17
Total interest-earning assets		4,935,203			75,385			6.13			4,978,167			75,961			6.17			5,009,894			80,452			6.38			5,023,424			83,424			6.61			3,006,261			43,668			5.84
Other assets		439,569									447,530									454,271									491,719									204,863
Total assets	$	5,374,772								$	5,425,697								$	5,464,165								$	5,515,143								$	3,211,124
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	2,463,687			13,880			2.26		$	2,473,543			14,156			2.32		$	2,522,885			15,575			2.45		$	2,554,743			16,165			2.52		$	1,649,753			10,118			2.47
Savings deposits		269,309			165			0.25			273,313			165			0.25			272,718			166			0.24			283,337			148			0.21			165,467			140			0.34
Time deposits		914,108			8,810			3.87			970,588			9,939			4.15			998,963			11,109			4.41			1,014,628			12,290			4.82			481,721			5,007			4.18
Total interest-bearing deposits		3,647,104			22,855			2.51			3,717,444			24,260			2.65			3,794,566			26,850			2.81			3,852,708			28,603			2.95			2,296,941			15,265			2.67
Securities sold under agreements to repurchase and federal funds purchased		25,917			106			1.64			26,163			84			1.30			21,572			67			1.23			23,075			96			1.66			13,412			27			0.81
FHLB advances and other borrowings		104,068			1,030			3.97			112,859			1,118			4.02			115,373			1,165			4.01			115,388			1,154			3.98			115,000			1,152			4.03
Subordinated notes and trust preferred debt		68,910			1,330			7.74			68,739			1,296			7.65			68,571			1,360			7.88			68,399			1,437			8.36			32,118			734			9.19
Total interest-bearing liabilities		3,845,999			25,321			2.64			3,925,205			26,758			2.76			4,000,082			29,442			2.92			4,059,570			31,290			3.07			2,457,471			17,178			2.81
Noninterest-bearing demand deposits		904,031									887,726									849,999									807,886									423,037
Other liabilities		89,058									89,077									97,685									110,017									57,828
Total liabilities		4,839,088									4,902,008									4,947,766									4,977,473									2,938,336
Shareholders' equity		535,684									523,689									516,399									537,670									272,788
Total	$	5,374,772								$	5,425,697								$	5,464,165								$	5,515,143								$	3,211,124
Taxable-equivalent net interest income / net interest spread					50,064			3.49%						49,203			3.41%						51,010			3.46%						52,134			3.55%						26,490			3.02%
Taxable-equivalent net interest margin								4.07%									4.00%									4.05%									4.14%									3.54%
Taxable-equivalent adjustment					(552	)								(442	)								(437	)								(437	)								(387	)
Net interest income				$	49,512								$	48,761								$	50,573								$	51,697								$	26,103
Ratio of average interest-earning assets to average interest-bearing liabilities								128%									127%									125%									124%									122%
NOTES:
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
(2) Average balance of investment securities is computed at fair value.
(3) Average balances include nonaccrual loans.
(4) Interest income on loans includes prepayment and late fees, where applicable.
(5) Interest income on loans includes accretion on purchase accounting marks of $4.9 million, $6.6 million, $7.6 million, $7.3 million and $0.2 million for the three months ended June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, respectively.

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
(continued)
	Six Months Ended
	June 30, 2025										June 30, 2024
				Taxable-				Taxable-						Taxable-				Taxable-
	Average			Equivalent				Equivalent			Average			Equivalent				Equivalent
(In thousands)	Balance			Interest				Rate			Balance			Interest				Rate
Assets
Federal funds sold & interest-bearing bank balances	$	169,541		$	3,781			4.50	%		$	108,695		$	2,820			5.22	%
Investment securities (1)(2)		884,730			20,787			4.70				529,151			11,808			4.47
Loans (1)(3)(4)(5)(6)		3,902,295			126,883			6.56				2,316,522			72,072			6.25
Total interest-earning assets		4,956,566			151,451			6.15				2,954,368			86,700			5.90
Other assets		443,528										200,580
Total assets	$	5,400,094									$	3,154,948
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	2,468,589			28,036			2.29			$	1,610,188			19,310			2.41
Savings deposits		271,104			330			0.25				167,736			284			0.34
Time deposits		942,387			18,749			4.01				455,082			9,187			4.06
Total interest-bearing deposits		3,682,080			47,115			2.58				2,233,006			28,781			2.59
Securities sold under agreements to repurchase and federal funds purchased		26,039			190			1.47				12,711			52			0.83
FHLB advances and other borrowings		108,439			2,148			3.99				126,253			2,626			4.18
Subordinated notes and trust preferred debt		68,825			2,626			7.69				32,109			1,488			9.32
Total interest-bearing liabilities		3,885,383			52,079			2.70				2,404,079			32,947			2.76
Noninterest-bearing demand deposits		895,924										420,253
Other liabilities		89,067										60,078
Total liabilities		4,870,374										2,884,410
Shareholders' equity		529,720										270,538
Total liabilities and shareholders' equity	$	5,400,094									$	3,154,948
Taxable-equivalent net interest income / net interest spread					99,372			3.45	%						53,753			3.14	%
Taxable-equivalent net interest margin								4.04	%									3.65	%
Taxable-equivalent adjustment					(1,099	)									(769	)
Net interest income				$	98,273									$	52,984
Ratio of average interest-earning assets to average interest-bearing liabilities								128	%									123	%

NOTES TO ANALYSIS OF NET INTEREST INCOME:
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
(2) Average balance of investment securities is computed at fair value.
(3) Average balances include nonaccrual loans.
(4) Interest income on loans includes prepayment and late fees, where applicable.
(5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status for the six months ended June 30, 2024.
(6) Interest income on loans includes accretion on purchase accounting marks of $11.5 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(In thousands)	June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024
Profitability for the quarter:
Net interest income	$	49,512			$	48,761			$	50,573			$	51,697			$	26,103
Provision for (Recovery of) credit losses		109				(554	)			1,755				13,681				812
Noninterest income		12,915				11,624				11,247				12,386				7,172
Noninterest expenses		37,614				38,176				42,930				60,299				22,639
Income (loss) before income taxes		24,704				22,763				17,135				(9,897	)			9,824
Income tax expense (benefit)		5,256				4,712				3,451				(1,994	)			2,086
Net income (loss)	$	19,448			$	18,051			$	13,684			$	(7,903	)		$	7,738
Financial ratios:
Return on average assets (1)		1.45	%			1.35	%			1.00	%		(0.57)%					0.97	%
Return on average assets, adjusted (1)(2)(3)		1.51	%			1.45	%			1.22	%			1.55	%			1.09	%
Return on average equity (1)		14.56	%			13.98	%			10.54	%		(5.85)%					11.41	%
Return on average equity, adjusted (1)(2)(3)		15.12	%			14.97	%			12.86	%			15.85	%			12.88	%
Net interest margin (1)		4.07	%			4.00	%			4.05	%			4.14	%			3.54	%
Efficiency ratio		60.3	%			63.2	%			69.4	%			94.1	%			68.0	%
Efficiency ratio, adjusted (2)(3)		58.7	%			60.5	%			62.3	%			60.2	%			64.6	%
Per share information:
Income (loss) per common share:
Basic	$	1.01			$	0.94			$	0.72			$	(0.41	)		$	0.74
Basic, adjusted (2)(3)		1.05				1.01				0.87				1.12				0.84
Diluted		1.01				0.93				0.71				(0.41	)			0.73
Diluted, adjusted (2)(3)		1.04				1.00				0.87				1.11				0.83
Book value		28.07				27.32				26.65				26.65				25.97
Tangible book value(3)		22.77				21.99				21.19				21.12				24.08
Average tangible common equity(3)		18.43				17.91				13.62				(6.49	)			12.35
Cash dividends paid		0.26				0.26				0.23				0.23				0.20
Average basic shares		19,172				19,157				19,118				19,088				10,393
Average diluted shares		19,342				19,328				19,300				19,226				10,553
(1) Annualized.
(2) Ratio has been adjusted for non-recurring expenses for all periods presented.
(3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	June 30, 2025			March 31, 2025			December 31, 2024				September 30, 2024			June 30, 2024
Noninterest income:
Service charges	$	2,630		$	2,395		$	2,050			$	2,360		$	1,283
Interchange income		1,441			1,427			1,608				1,779			961
Swap fee income		669			394			597				505			375
Wealth management income		5,267			5,415			4,902				5,037			3,312
Mortgage banking activities		478			302			517				491			369
Other income		2,422			1,678			1,578				1,943			884
Investment securities gains (losses)		8			13			(5	)			271			(12	)
Total noninterest income	$	12,915		$	11,624		$	11,247			$	12,386		$	7,172
Noninterest expenses:
Salaries and employee benefits	$	21,364		$	20,388		$	22,444			$	27,190		$	13,195
Occupancy, furniture and equipment		4,211			4,675			4,893				4,333			2,705
Data processing		965			924			1,540				2,046			1,237
Advertising and bank promotions		1,077			499			878				537			774
FDIC insurance		674			824			955				862			419
Professional services		2,016			1,826			1,591				1,119			801
Taxes other than income		295			942			(312	)			503			49
Intangible asset amortization		2,472			2,535			2,838				2,464			215
Provision for legal settlement		—			—			478				—			—
Merger-related expenses		968			1,649			3,887				16,977			1,135
Restructuring expenses		—			91			39				257			—
Other operating expenses		3,572			3,823			3,699				4,011			2,109
Total noninterest expenses	$	37,614		$	38,176		$	42,930			$	60,299		$	22,639

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024
Balance Sheet at quarter end:
Cash and cash equivalents	$	149,377			$	287,120			$	248,874			$	236,780			$	132,509
Restricted investments in bank stocks		21,204				19,693				20,232				20,247				11,147
Securities available for sale		885,373				855,456				829,711				826,828				529,082
Loans held for sale, at fair value		5,206				5,261				6,614				3,561				1,562
Loans:
Commercial real estate:
Owner occupied		622,315				617,854				633,567				622,726				371,301
Non-owner occupied		1,203,038				1,157,383				1,160,238				1,164,501				710,477
Multi-family		239,388				257,724				274,135				276,296				151,542
Non-owner occupied residential		163,018				168,354				179,512				190,786				89,156
Agricultural		124,291				134,916				125,156				129,486				25,551
Commercial and industrial		487,063				455,494				451,384				471,983				349,425
Acquisition and development:
1-4 family residential construction		38,490				40,621				47,432				56,383				32,439
Commercial and land development		198,889				227,434				241,424				262,317				129,883
Municipal		28,693				30,780				30,044				27,960				10,594
Total commercial loans		3,105,185				3,090,560				3,142,892				3,202,438				1,870,368
Residential mortgage:
First lien		472,030				464,642				460,297				451,195				271,153
Home equity – term		5,784				9,224				5,988				6,508				4,633
Home equity – lines of credit		305,968				295,820				303,561				303,165				192,736
Other - term(1)		25,384				—				—				—				—
Installment and other loans		17,028				15,739				18,476				18,131				8,713
Total loans		3,931,379				3,875,985				3,931,214				3,981,437				2,347,603
Allowance for credit losses		(47,898	)			(47,804	)			(48,689	)			(49,630	)			(29,864	)
Net loans held for investment		3,883,481				3,828,181				3,882,525				3,931,807				2,317,739
Goodwill		69,751				68,106				68,106				70,655				18,724
Other intangible assets, net		42,748				45,230				47,765				46,144				1,974
Total assets		5,387,645				5,441,586				5,441,589				5,470,589				3,198,782
Total deposits		4,516,625				4,633,716				4,623,096				4,650,853				2,702,884
FHLB advances and other borrowings and Securities sold under agreements to repurchase		166,381				123,480				141,227				137,310				129,625
Subordinated notes and trust preferred debt		69,021				68,850				68,680				68,510				32,128
Total shareholders' equity		548,448				532,936				516,682				516,206				278,376
(1) Other - term includes property assessed clean energy ("PACE") loans.

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024
Capital and credit quality measures(1):
Total risk-based capital:
Orrstown Financial Services, Inc.		13.3	%			13.1	%			12.4	%			12.4	%			13.3	%
Orrstown Bank		13.3	%			13.0	%			12.4	%			12.2	%			13.1	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		11.1	%			10.8	%			10.2	%			10.0	%			11.1	%
Orrstown Bank		12.1	%			11.9	%			11.2	%			11.0	%			12.0	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.9	%			10.6	%			10.0	%			9.8	%			11.1	%
Orrstown Bank		12.1	%			11.9	%			11.2	%			11.0	%			12.0	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		9.0	%			8.6	%			8.3	%			8.0	%			8.9	%
Orrstown Bank		9.8	%			9.5	%			9.1	%			8.8	%			9.5	%
Average equity to average assets		9.97	%			9.65	%			9.45	%			9.75	%			8.50	%
Allowance for credit losses to total loans		1.22	%			1.23	%			1.24	%			1.25	%			1.27	%
Total nonaccrual loans to total loans		0.57	%			0.59	%			0.61	%			0.68	%			0.36	%
Nonperforming assets to total assets		0.42	%			0.42	%			0.45	%			0.49	%			0.26	%
Allowance for credit losses to nonaccrual loans		214	%			210	%			202	%			184	%			357	%
Other information:
Net charge-offs	$	115			$	331			$	3,002			$	269			$	113
Classified loans		65,754				76,211				88,628				105,465				48,722
Nonperforming and other risk assets:
Nonaccrual loans		22,423				22,727				24,111				26,927				8,363
Other real estate owned		—				138				138				138				—
Total nonperforming assets		22,423				22,865				24,249				27,065				8,363
Financial difficulty modifications still accruing		5,759				5,127				4,897				9,497				—
Loans past due 90 days or more and still accruing		1,312				400				641				337				187
Total nonperforming and other risk assets	$	29,494			$	28,392			$	29,787			$	36,899			$	8,550
(1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard.

Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

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.

As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $112.5 million and $115.9 million at June 30, 2025 and December 31, 2024, respectively. In addition, during the three months ended June 30, 2025, March, 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, the Company incurred $1.0 million, $1.6 million, $3.9 million, $17.0 million and $1.1 million in merger-related expenses, respectively. During the three months ended December 31, 2024 and September 30, 2024, the Company incurred other non-recurring charges totaling $0.5 million and $20.2 million, respectively.

Tangible book value per common share, tangible common equity and the impact of the non-recurring expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following tables present the computation of each non-GAAP based measure:

(In thousands)

Tangible Book Value per Common Share		June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024
Shareholders' equity (most directly comparable GAAP-based measure)		$	548,448			$	532,936			$	516,682			$	516,206			$	278,376
Less: Goodwill			69,751				68,106				68,106				70,655				18,724
Other intangible assets			42,748				45,230				47,765				46,144				1,974
Related tax effect			(8,977	)			(9,498	)			(10,031	)			(9,690	)			(415	)
Tangible common equity (non-GAAP)		$	444,926			$	429,098			$	410,842			$	409,097			$	258,093
Common shares outstanding			19,536				19,510				19,390				19,373				10,720
Book value per share (most directly comparable GAAP-based measure)		$	28.07			$	27.32			$	26.65			$	26.65			$	25.97
Intangible assets per share			5.30				5.33				5.46				5.53				1.89
Tangible book value per share (non-GAAP)		$	22.77			$	21.99			$	21.19			$	21.12			$	24.08

Return on Average Common Equity		June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024			June 30, 2024
Average shareholders' equity		$	535,684			$	523,689			$	516,399			$	537,670		$	272,788
Less: Average goodwill			68,126				68,106				71,477				36,034			18,724
Less: Average other intangible assets, gross			44,304				46,864				45,319				17,393			2,105
Average tangible equity		$	423,254			$	408,719			$	399,603			$	484,243		$	251,959
Return on average tangible equity			18.43	%			17.91	%			13.62	%		(6.49)%				12.35	%

(In thousands)	Three Months Ended																				Six Months Ended
Adjusted Ratios for Non-recurring Charges	June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				June 30, 2025					June 30, 2024
Net income (loss) (A) - most directly comparable GAAP-based measure	$	19,448			$	18,051			$	13,684			$	(7,903	)		$	7,738			$	37,499				$	16,269
Plus: Merger-related expenses (B)		968				1,649				3,887				16,977				1,135				2,617					1,807
Plus: Executive retirement expenses (B)		—				—				35				4,758				—				—					—
Plus: Provision for credit losses on non-PCD loans (B)		—				—				—				15,504				—				—					—
Plus: Provision for legal settlement (B)		—				—				478				—				—				—					—
Less: Related tax effect (C)		(221	)			(368	)			(1,386	)			(7,915	)			(139	)			(590	)				(140	)
Adjusted net income (D=A+B-C) - Non-GAAP	$	20,195			$	19,332			$	16,698			$	21,421			$	8,734			$	39,526				$	17,936
Average assets (E)	$	5,374,772			$	5,425,697			$	5,464,165			$	5,515,143			$	3,211,124			$	5,400,094				$	3,154,948
Return on average assets (= A / E) - most directly comparable GAAP-based measure (1)		1.45	%			1.35	%			1.00	%		(0.57)%					0.97	%			1.40	%				1.04	%
Return on average assets, adjusted (= D / E) - Non-GAAP (1)		1.51	%			1.45	%			1.22	%			1.55	%			1.09	%			1.48	%				1.14	%
Average equity (F)	$	535,684			$	523,689			$	516,399			$	537,670			$	272,788			$	529,720				$	270,538
Return on average equity (= A / F) - most directly comparable GAAP-based measure (1)		14.56	%			13.98	%			10.54	%		(5.85)%					11.41	%			14.28	%				12.09	%
Return on average equity, adjusted (= D / F) - Non-GAAP (1)		15.12	%			14.97	%			12.86	%			15.85	%			12.88	%			15.05	%				13.33	%
Weighted average shares - basic (G) - most directly comparable GAAP-based measure		19,173				19,157				19,118				19,088				10,393				19,165					10,371
Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure	$	1.01			$	0.94			$	0.72			$	(0.41	)		$	0.74			$	1.96				$	1.57
Basic earnings per share, adjusted (= D / G) - Non-GAAP	$	1.05			$	1.01			$	0.87			$	1.12			$	0.84			$	2.06				$	1.73
Weighted average shares - diluted (H) - most directly comparable GAAP-based measure		19,342				19,328				19,300				19,226				10,553				19,335					10,517
Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure	$	1.01			$	0.93			$	0.71			$	(0.41	)		$	0.73			$	1.94				$	1.55
Diluted earnings per share, adjusted (= D / H) - Non-GAAP	$	1.04			$	1.00			$	0.87			$	1.11			$	0.83			$	2.04				$	1.71
(1) Annualized
	Three Months Ended																				Six Months Ended
	June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				June 30, 2025					June 30, 2024
Noninterest expense (I) - most directly comparable GAAP-based measure	$	37,614			$	38,176			$	42,930			$	60,299			$	22,639			$	75,790				$	45,108
Less: Merger-related expenses (B)		(968	)			(1,649	)			(3,887	)			(16,977	)			(1,135	)			(2,617	)				(1,807	)
Less: Executive retirement expenses (B)		—				—				(35	)			(4,758	)			—				—					—
Less: Provision for legal settlement (B)		—				—				(478	)			—				—				—					—
Adjusted noninterest expense (J = I - B) - Non-GAAP	$	36,646			$	36,527			$	38,531			$	38,564			$	21,504			$	73,173				$	43,301
Net interest income (K)	$	49,512			$	48,761			$	50,573			$	51,697			$	26,103			$	98,273				$	52,984
Noninterest income (L)		12,915				11,624				11,247				12,386				7,172				24,539					13,802
Total operating income (M = K + L)	$	62,427			$	60,385			$	61,820			$	64,083			$	33,275			$	122,812				$	66,786
Efficiency ratio (= I / M) - most directly comparable GAAP-based measure		60.3	%			63.2	%			69.4	%			94.1	%			68.0	%			61.7	%				67.5	%
Efficiency ratio, adjusted (= J / M) - Non-GAAP		58.7	%			60.5	%			62.3	%			60.2	%			64.6	%			59.6	%				64.8	%
(1) Annualized

Appendix B- Investment Portfolio Concentrations

The following table summarizes the credit ratings and collateral associated with the Company's investment security portfolio, excluding equity securities, at June 30, 2025:

(In thousands)

Sector	Portfolio Mix			Amortized Book			Fair Value			Credit Enhancement			AAA			AA			A			BBB			BB			NR			Collateral / Guarantee Type
Unsecured ABS	—	%		$	2,827		$	2,673		28	%		—	%		—	%		—	%		—	%		—	%		100	%		Unsecured Consumer Debt
Student Loan ABS	—				3,577			3,576		28			—			—			—			—			—			100			Seasoned Student Loans
Federal Family Education Loan ABS	8				75,724			74,828		11			—			47			33			7			13			—			Federal Family Education Loan (1)
PACE Loan ABS	—				1,912			1,702		7			100			—			—			—			—			—			PACE Loans (2)
Non-Agency CMBS	3				24,012			24,027		24			—			—			—			—			—			100
Non-Agency RMBS	2				15,936			14,596		16			100			—			—			—			—			—			Reverse Mortgages (3)
Municipal - General Obligation	11				100,035			90,241					16			77			7			—			—			—
Municipal - Revenue	13				120,446			105,710					—			82			12			—			—			6
SBA ReRemic (5)	—				1,904			1,890					—			100			—			—			—			—			SBA Guarantee (4)
Small Business Administration	1				5,156			5,275					—			100			—			—			—			—			SBA Guarantee (4)
Agency MBS	22				198,876			197,965					—			100			—			—			—			—			Residential Mortgages (4)
Agency CMO	38				344,233			342,057					—			100			—			—			—			—
U.S. Treasury securities	2				20,036			18,641					—			100			—			—			—			—			U.S. Government Guarantee (4)
Corporate bonds	—				1,941			1,977					—			—			52			48			—			—
	100	%		$	916,615		$	885,158					4	%		85	%		5	%		1	%		1	%		4	%
(1) 97% guaranteed by U.S. government
(2) PACE acronym represents Property Assessed Clean Energy loans
(3) Non-agency reverse mortgages with current structural credit enhancements
(4) Guaranteed by U.S. government or U.S. government agencies
(5) SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits
Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor's, Moody's, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor's rates U.S. government obligations at AA+.

About the Company

With $5.4 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes counties in Pennsylvania, Maryland, Delaware, Virginia and West Virginia within a 75-mile radius of the Company's executive and administrative offices as well as the District of Columbia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.'s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company's management with respect to, among other things, future events and the Company's financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "project," "forecast," "goal," "target," "would" and "outlook," or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results to differ from those expressed or implied by the forward-looking statements include, but are not limited to, the following: interest rate changes or volatility; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company's strategic growth plan due to changes in current or future market conditions; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in, and evolving interpretations of, existing and future laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus Valley Bancorp are not realized when expected or at all; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2024 under the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in subsequent filings made with the Securities and Exchange Commission.

The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company's behalf may issue.

The review period for subsequent events extends up to and includes the filing date of a public company's financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.