Orrstown Financial Services (ORRF) AI Stock Analysis

• Market Cap: $667.27M
• Dividend Yield: 2.93%
• Average Volume (3M): 171.46K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.86
• Revenue Growth: 47.65%
• EPS Growth: 101.00%
• Country: US
• Employees: 607
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.11
• Shares Outstanding: 19,619,799
• 10 Day Avg. Volume: 158,102
• 30 Day Avg. Volume: 171,458
• PEG Ratio: 0.04
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 1.67
• P/FCF Ratio: 8.36
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 2.76
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 8.37
• 1Y Price Target: $42.50
• Price Target Upside: 24.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 4.24
• Revenue Forecast (FY): $259.63M

• Rating: 67 Neutral
• Price Target: $37.00 ▲(8.79% Upside)
• Action: Downgraded Date: 03/13/26
• Date: Action: Downgraded 03/13/26

The score is driven primarily by improved profitability and generally solid balance sheet positioning, offset by weak cash-flow quality. Valuation is a clear positive (low P/E and ~3.2% yield), while technicals are currently bearish (negative MACD, weak RSI/Stoch and price below key moving averages). The latest earnings call supports the fundamental outlook with conservative guidance and strong recent results, but flags meaningful rate- and funding-related sensitivities.

Positive Factors

Fee Income Diversification

Fee income representing roughly one-fifth of operating income indicates durable revenue diversification beyond net interest margin. Stable wealth, treasury and merchant services fees smooth earnings through rate cycles, support cross-sell economics, and provide predictable recurring revenue to fund growth investments.

Sustained Loan Growth & Pipeline

Consistent loan origination and a stated 5%+ growth target reflect genuine middle-market traction and a robust origination pipeline. Durable loan growth supports net interest income expansion, enhances asset mix control, and provides compounding earnings potential if credit quality remains stable.

Improving Capital & Shareholder Returns

Rising tangible equity and a dividend increase signal stronger capitalization and management discipline. A ~9% TCE provides a buffer for credit or market stress, supports continued lending and strategic investments, and preserves optionality for buybacks or M&A over the medium term.

Negative Factors

Weak Cash Conversion

A sharp decline in free cash flow and a collapse in cash-to-earnings indicate weaker cash conversion of reported profits. Over months this limits capacity to self-fund dividend growth, buybacks or investment, increases sensitivity to working capital shifts, and raises reliance on external funding.

Rising Leverage

Material debt increase and higher leverage reduce balance-sheet flexibility. In a regional bank context this raises funding-cost and refinancing sensitivity, amplifies downside in stress scenarios, and constrains strategic options if earnings weaken or credit costs rise.

Deposit Stability & Funding Sensitivity

Flat deposit balances and lagging repricing create funding risk and compress margin optionality. Elevated deposit costs limit low-cost funding, make NIM sensitive to competitor pricing and outflows, and reduce headroom to absorb weaker loan yields absent cheaper core funding.

Orrstown Financial Services Business Overview & Revenue Model

Company Description

Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans comprising home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, the company provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as provides other fiduciary services under the Orrstown Financial Advisors name; and offers retail brokerage services through a third-party broker/dealer arrangement. Further, it offers investment advisory, insurance, and brokerage services. The company operates through offices in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties, Pennsylvania; and Anne Arundel, Baltimore, Howard, and Washington counties, Maryland, as well as Baltimore City, Maryland. Orrstown Financial Services, Inc. was founded in 1919 and is based in Shippensburg, Pennsylvania.

How the Company Makes Money

Orrstown Financial Services primarily makes money through its banking subsidiary by (1) earning net interest income and (2) generating noninterest income from fees and fiduciary-related services. 1) Net interest income (core revenue stream) - Orrstown gathers funding primarily through customer deposits (e.g., checking, savings, money market, and time deposits) and, as needed, other borrowings. - It deploys those funds into interest-earning assets, chiefly loans (such as commercial real estate, commercial and industrial, residential mortgage, and consumer loans) and an investment securities portfolio. - The company’s largest earnings driver is typically the spread between interest earned on loans/securities and interest paid on deposits/borrowings (net interest margin). Changes in market interest rates, deposit mix and pricing, loan yields, credit demand, and balance-sheet composition influence this spread. 2) Noninterest income (fee-based revenue) - Service charges and banking fees: The company earns fees from deposit accounts and treasury/transaction services (e.g., account service charges and other customer banking fees). - Wealth management/trust income: It earns revenue from fiduciary and asset management activities (e.g., trust, investment management, and related advisory/administrative fees), where applicable. - Other recurring banking-related fees: Additional fee income can come from activities such as interchange/transaction-related fees and other customer service fees. 3) Other factors affecting earnings - Credit performance and provisioning: Loan losses and the level of provision for credit losses can materially affect profitability; higher charge-offs or higher expected-loss provisioning reduce earnings. - Operating leverage and efficiency: Like most banks, profitability also depends on controlling operating expenses (staffing, occupancy, technology, regulatory/compliance) relative to revenue. Significant partnerships or specific counterparties contributing to earnings: null

Orrstown Financial Services Financial Statement Overview

Summary

Income statement strength (78) shows solid multi-year revenue growth and a strong 2025 profitability rebound, while the balance sheet is generally manageable (71) but with rising leverage. Cash flow is the key weak spot (46) due to the sharp 2025 free-cash-flow decline and weaker cash-to-earnings alignment.

Income Statement

Revenue growth has been strong over the last few years (2023–2025), including a solid +5.5% in 2025 after a very large step-up in 2024. Profitability improved meaningfully in 2025, with net margin rising to ~22.8% (from ~7.8% in 2024) and operating profitability also stepping up. The main weakness is volatility: 2024 margins compressed sharply versus 2023, and the profit profile has not been consistently trending upward year-to-year despite overall revenue expansion.

Balance Sheet

The balance sheet looks reasonably positioned, with moderate leverage in 2025 (debt-to-equity ~0.57) and improving profitability on equity (~13.7% in 2025 versus ~4.3% in 2024). Equity has also built over time, supporting growth. The key watch-out is that leverage has risen versus 2024 (debt increasing from ~$210M to ~$336M), which can reduce flexibility if earnings soften, particularly in a regional banking environment where confidence and funding costs can shift quickly.

Cash Flow

Cash generation is positive, with operating cash flow of ~$38.7M in 2025 and free cash flow matching operating cash flow in 2025. However, free cash flow fell sharply in 2025 (down ~37.5%), and the provided cash-flow-to-earnings indicators deteriorated to 0.0 in 2025 (from ~0.95 in 2024), suggesting weaker cash conversion versus reported profits in the most recent year. Overall, cash flow is the clearest weak spot due to the abrupt decline and inconsistency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	353.86M	284.09M	174.30M	134.32M	121.64M
Gross Profit	249.97M	173.86M	127.62M	121.11M	113.83M
EBITDA	116.68M	37.50M	49.37M	31.24M	46.20M
Net Income	80.86M	22.05M	35.66M	22.04M	32.88M
Balance Sheet
Total Assets	5.54B	5.44B	3.06B	2.92B	2.83B
Cash, Cash Equivalents and Short-Term Investments	994.82M	1.08B	578.68M	574.55M	681.15M
Total Debt	336.37M	209.91M	179.38M	155.42M	57.16M
Total Liabilities	4.95B	4.92B	2.80B	2.69B	2.56B
Stockholders Equity	591.53M	516.68M	265.06M	228.90M	271.66M
Cash Flow
Free Cash Flow	70.50M	33.38M	41.41M	35.30M	39.56M
Operating Cash Flow	74.73M	34.96M	43.70M	36.19M	40.81M
Investing Cash Flow	-181.96M	60.99M	-153.25M	-270.99M	-2.01M
Financing Cash Flow	8.13M	87.76M	113.89M	86.91M	44.65M

Orrstown Financial Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 34.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORRF, the sentiment is Negative. The current price of 34.01 is below the 20-day moving average (MA) of 35.73, below the 50-day MA of 36.31, and below the 200-day MA of 34.15, indicating a bearish trend. The MACD of -0.73 indicates Positive momentum. The RSI at 34.90 is Neutral, neither overbought nor oversold. The STOCH value of 32.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ORRF.

Orrstown Financial Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FSBC	76 Outperform	$768.90M	10.76	13.95%	2.18%	22.24%	18.63%
THFF	71 Outperform	$717.50M	8.35	13.02%	3.19%	16.57%	69.64%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
ORRF	67 Neutral	$667.27M	7.29	14.41%	2.93%	47.65%	101.00%
NBBK	66 Neutral	$856.13M	26.28	6.55%	0.67%	14.04%	337.54%
CAC	64 Neutral	$764.18M	11.21	9.49%	3.66%	24.08%	9.83%
GSBC	62 Neutral	$663.60M	9.89	11.33%	2.48%	0.67%	17.88%