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Orrstown Financial Services Inc (ORRF)
NASDAQ:ORRF
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Orrstown Financial Services
(NASDAQ:ORRF)
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Rating:76Outperform
Price Target:
$36.00
â–²(11.49% Upside)
Orrstown Financial Services receives a strong overall score driven by robust financial performance and positive earnings call insights. The company's stable financial position and attractive dividend yield further support the score. However, technical indicators suggest short-term bearish momentum, which slightly offsets the positive aspects.
Orrstown Financial Services (ORRF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$626.25M
Dividend Yield3.16%
Average Volume (3M)103.72K
Price to Earnings (P/E)14.4
Beta (1Y)0.97
Revenue Growth89.40%
EPS Growth-29.07%
CountryUS
Employees607
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.04
Shares Outstanding19,491,096
10 Day Avg. Volume101,807
30 Day Avg. Volume103,722
Financial Highlights & Ratios
PEG Ratio-0.43
Price to Book (P/B)1.05
Price to Sales (P/S)1.90
P/FCF Ratio16.19
Enterprise Value/Market Cap1.30
Enterprise Value/Revenue2.63
Enterprise Value/Gross Profit3.52
Enterprise Value/Ebitda11.57
Forecast
1Y Price Target
$39.00Price Target Upside20.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Orrstown Financial Services Business Overview & Revenue Model
Company DescriptionOrrstown 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 MoneyOrrstown Financial Services generates revenue through several key streams: interest income from loans and mortgages, fees from banking services such as account maintenance and transaction services, and investment management fees from its wealth management and advisory services. The company also earns income through insurance premiums collected from its insurance offerings. Strategic partnerships with financial institutions and investment firms enhance its service portfolio and client base, contributing to its overall profitability. Additionally, the bank may benefit from economic factors such as interest rate fluctuations, which can impact its net interest margin.
Orrstown Financial Services Earnings Call Summary
Earnings Call Date:Jul 22, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 21, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with improvements in core earnings, net interest margin, and fee income. Capital ratios and credit quality also showed positive trends. However, there were concerns about competitive lending environments, lingering merger-related expenses, and potential impacts from interest rate changes.Q2-2025 Updates
Positive Updates
Strong Core Earnings and Financial Metrics
Excluding merger-related charges, return on average assets was 1.51%, and return on average equity was 15.12% for Q2 2025, compared to 1.45% and 14.97%, respectively, in Q1 2025.
Net Interest Margin Increase
Net interest margin increased to 4.07% in Q2 2025 from 4.00% in Q1 2025, with further upside potential.
Improvement in Fee Income
Fee income as a percentage of operating revenue improved to 21% during the quarter, with noninterest income increasing by $1.3 million quarter-to-quarter.
Efficiency Ratio Improvement
Excluding merger-related expenses, the efficiency ratio improved to 58.7% for Q2 2025 from 60.5% in Q1 2025.
Shareholder Value Initiatives
Authorized a share repurchase program of up to 500,000 shares. Increased quarterly dividend from $0.26 to $0.27 per share, marking the third increase in the past year.
Strong Loan Pipeline and Commercial Lending
The loan pipeline is strong, the highest since the merger, reflecting regional economic strength and new talent in the team.
Capital and Credit Quality
Capital ratios increased across the board. Nonaccrual loans to total loans decreased to 0.57% for Q2 2025 from 0.59% in Q1 2025.
Negative Updates
Lingering Merger-Related Expenses
Despite strong earnings, some lingering merger-related expenses affected financial performance.
Competitive Lending Environment
The lending environment remains competitive, with potential margin pressure and a need for prudent loan pricing.
Uncertain Fee Income Continuity
Although fee income was strong in Q2 2025, certain components are dependent on timing, suggesting potential volatility.
Potential Impact of Interest Rate Changes
The potential for 2-3 Fed rate cuts could negatively impact net interest income, despite current asset sensitivity.
Company Guidance
During the Orrstown Financial Services, Inc. second quarter 2025 earnings call, several key financial metrics and strategic insights were highlighted. The company reported a return on average assets of 1.51% and a return on average equity of 15.12%, reflecting an improvement from the previous quarter's figures of 1.45% and 14.97%, respectively. The net interest margin increased to 4.07% from 4.00% in the prior quarter. Fee income represented 21% of operating revenue, with noninterest income rising by $1.3 million quarter-over-quarter. Expenses were noted to be slightly elevated due to merger-related activities, but the efficiency ratio improved to 58.7% from 60.5%. Loan growth was modest, with an annualized increase of 6%, and nonaccrual loans decreased to 0.57% of total loans. Capital ratios strengthened, and a new share repurchase program was authorized. The company also increased its quarterly dividend by $0.01 to $0.27 per share, marking the third increase in the past year.Orrstown Financial Services Financial Statement Overview
Summary
Orrstown Financial Services demonstrates solid revenue growth and profitability with a net profit margin of 9.79%. The balance sheet is strong with a manageable debt-to-equity ratio of 0.36. Cash flow metrics are adequate, though there is room for improvement in free cash flow growth.Income Statement
Orrstown Financial Services shows a solid revenue growth of 13.45% in the TTM, alongside a decent gross profit margin of 62.45%. The net profit margin improved to 9.79%, reflecting healthy profitability. However, the EBIT margin of 12.36% indicates room for operational efficiency improvements.85
Very Positive
Balance Sheet
The balance sheet is relatively strong with a debt-to-equity ratio of 0.36, indicating manageable leverage. The equity ratio stands at 9.79%, suggesting a reasonable degree of financial stability. Return on equity is robust at 5.92%, showcasing effective use of equity capital.78
Positive
Cash Flow
The cash flow statement reveals a decline in free cash flow growth, but the company maintains a solid operating cash flow to net income ratio of 1.05. The free cash flow to net income ratio of 0.93 reflects adequate cash generation relative to earnings.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 308.30M | 284.09M | 174.30M | 134.32M | 121.64M | 126.88M |
| Gross Profit | 230.84M | 173.86M | 127.62M | 121.11M | 113.83M | 105.53M |
| EBITDA | 70.15M | 37.50M | 49.37M | 31.24M | 46.20M | 39.08M |
| Net Income | 43.28M | 22.05M | 35.66M | 22.04M | 32.88M | 26.46M |
Balance Sheet | ||||||
| Total Assets | 5.39B | 5.44B | 3.06B | 2.92B | 2.83B | 2.75B |
| Cash, Cash Equivalents and Short-Term Investments | 939.71M | 1.08B | 578.68M | 574.55M | 681.15M | 591.72M |
| Total Debt | 250.59M | 209.91M | 179.38M | 155.42M | 57.16M | 109.41M |
| Total Liabilities | 4.84B | 4.92B | 2.80B | 2.69B | 2.56B | 2.50B |
| Stockholders Equity | 548.45M | 516.68M | 265.06M | 228.90M | 271.66M | 246.25M |
Cash Flow | ||||||
| Free Cash Flow | 46.70M | 33.38M | 41.41M | 35.30M | 39.56M | 28.87M |
| Operating Cash Flow | 51.29M | 34.96M | 43.70M | 36.19M | 40.81M | 30.17M |
| Investing Cash Flow | 91.62M | 60.99M | -153.25M | -270.99M | -2.01M | -292.56M |
| Financing Cash Flow | -126.03M | 87.76M | 113.89M | 86.91M | 44.65M | 331.47M |
Orrstown Financial Services Technical Analysis
Negative
32.29
Price Trends
34.10
Negative
32.97
Negative
32.11
Positive
Market Momentum
-0.39
Positive
36.49
Neutral
38.25
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 32.29 is below the 20-day moving average (MA) of 33.91, below the 50-day MA of 34.10, and above the 200-day MA of 32.11, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 36.49 is Neutral, neither overbought nor oversold. The STOCH value of 38.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ORRF.
Orrstown Financial Services Risk Analysis
Orrstown Financial Services disclosed 52 risk factors in its most recent earnings report. Orrstown Financial Services reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Orrstown Financial Services Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $673.09M | 12.90 | 13.01% | 2.54% | 20.43% | 1.84% | |
76 Outperform | $626.25M | 14.38 | 10.47% | 3.16% | 89.40% | -29.07% | |
74 Outperform | $625.88M | 12.88 | 6.92% | 0.40% | 17.31% | 251.27% | |
72 Outperform | $599.74M | 11.23 | 8.47% | 4.74% | 22.21% | 6.20% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $630.65M | 9.25 | 11.18% | 2.93% | 0.60% | 17.95% | |
67 Neutral | $612.56M | 9.87 | 11.08% | 3.96% | 20.07% | 21.46% |
* Financial Sector Average
ORRF
Orrstown Financial Services
32.29
-3.84
-10.63%
CAC
Camden National
35.69
-4.56
-11.33%
THFF
First Financial Indiana
51.56
9.38
22.24%
GSBC
Great Southern Bancorp
56.08
-0.74
-1.30%
FSBC
Five Star
32.29
1.83
6.01%
NBBK
NB Bancorp, Inc.
17.32
-1.16
-6.28%
Orrstown Financial Services Corporate Events
Stock Buyback
Orrstown Financial Services Announces Share Repurchase Program
Neutral
Jun 23, 2025
On June 23, 2025, Orrstown Financial Services, Inc. announced the adoption of a share repurchase program by its Board of Directors. This program allows the company to buy back up to 500,000 shares of its common stock, which represents approximately 2.5% of its current issued and outstanding shares.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.