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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:73Outperform
Price Target:
$37.00
â–²(6.97% Upside)
Orrstown Financial Services is performing well with strong financial metrics and positive technical indicators. The earnings call provided a positive outlook, despite some concerns about expenses and competitive pressures. Valuation suggests the stock is fairly priced, offering a stable investment with a decent dividend yield.
Orrstown Financial Services (ORRF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$675.56M
Dividend Yield2.94%
Average Volume (3M)126.58K
Price to Earnings (P/E)15.6
Beta (1Y)0.98
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. Volume116,245
30 Day Avg. Volume126,577
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue4.60
Enterprise Value/Gross Profit4.61
Enterprise Value/Ebitda68.71
Forecast
1Y Price Target
$39.00Price Target Upside12.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Orrstown Financial Services Business Overview & Revenue Model
Company DescriptionOrrstown Financial Services (ORRF) is a financial holding company based in Pennsylvania, primarily engaged in providing a range of banking, investment, and insurance services. The company operates through its subsidiary, Orrstown Bank, which offers traditional banking products including checking and savings accounts, loans, and mortgages, along with wealth management and trust services. Additionally, Orrstown Financial Services provides financial planning and investment advisory services, catering to both individual and commercial clients across its regional footprint.
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 28, 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 has shown strong revenue growth and improved leverage management. However, declining net profit margins and inconsistent cash flow generation pose risks, highlighting the need to enhance profitability and stabilize cash flows.Income Statement
Orrstown Financial Services shows strong revenue growth over the years, with an increase from $97.8 million in 2019 to $176.1 million in 2024. The gross profit margin remained consistently high, indicating efficient operations. However, the net profit margin has declined from 22% in 2019 to 12.5% in 2024, suggesting increased expenses or lower profit efficiency. EBIT and EBITDA margins indicate good operational earnings, but the decline in net income should be monitored.75
Positive
Balance Sheet
The company's debt-to-equity ratio decreased significantly from 1.12 in 2019 to 0.36 in 2024, showing improved leverage management and financial stability. The equity ratio has improved from 9.36% in 2019 to 9.51% in 2024, reflecting a stable capital structure. Return on Equity decreased from 7.58% in 2019 to 4.27% in 2024, indicating reduced profitability relative to shareholder equity.70
Positive
Cash Flow
Free cash flow has grown from $6.2 million in 2019 to $0 in 2024, reflecting challenges in maintaining positive cash flow. Operating cash flow has been volatile, with a notable decrease in 2024. The absence of reported operating cash flow in 2024 is concerning and should be addressed to ensure sustainability.68
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 176.14M | 149.90M | 125.30M | 93.69M | 110.86M |
| Gross Profit | 176.14M | 143.79M | 122.34M | 87.67M | 106.59M |
| EBITDA | 0.00 | 0.00 | 29.82M | 46.20M | 0.00 |
| Net Income | 22.05M | 35.66M | 22.04M | 32.88M | 26.46M |
Balance Sheet | |||||
| Total Assets | 5.44B | 3.06B | 2.92B | 2.83B | 2.75B |
| Cash, Cash Equivalents and Short-Term Investments | 238.31M | 546.11M | 574.55M | 681.15M | 591.72M |
| Total Debt | 184.04M | 169.59M | 138.16M | 33.86M | 89.95M |
| Total Liabilities | 4.92B | 2.80B | 2.69B | 2.56B | 2.50B |
| Stockholders Equity | 516.68M | 265.06M | 228.90M | 271.66M | 246.25M |
Cash Flow | |||||
| Free Cash Flow | 33.38M | 41.41M | 35.30M | 39.56M | 28.87M |
| Operating Cash Flow | 34.96M | 43.70M | 36.19M | 40.81M | 30.17M |
| Investing Cash Flow | 60.99M | -153.25M | -270.99M | -2.01M | -292.56M |
| Financing Cash Flow | 87.76M | 113.89M | 86.91M | 44.65M | 331.47M |
Orrstown Financial Services Technical Analysis
Neutral
34.59
Price Trends
34.00
Positive
32.42
Positive
32.38
Positive
Market Momentum
0.33
Positive
50.40
Neutral
35.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORRF, the sentiment is Neutral. The current price of 34.59 is below the 20-day moving average (MA) of 35.00, above the 50-day MA of 34.00, and above the 200-day MA of 32.38, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 50.40 is Neutral, neither overbought nor oversold. The STOCH value of 35.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 620.00M | 15.89 | 3.04% | 5.17% | 6.63% | -19.64% | |
73 Outperform | 685.44M | 11.05 | 8.61% | 3.44% | 20.07% | 21.46% | |
73 Outperform | $675.56M | 15.65 | 10.47% | 2.94% | 89.40% | -29.07% | |
71 Outperform | 630.80M | 12.13 | 12.03% | 1.56% | 6.07% | 20.59% | |
69 Neutral | 590.11M | 17.64 | 6.53% | 0.92% | 6.63% | 62.84% | |
58 Neutral | 559.91M | -19.04 | -4.62% | 7.69% | -24.82% | -156.55% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
ORRF
Orrstown Financial Services
34.59
-0.07
-0.20%
CAC
Camden National
38.97
0.50
1.30%
THFF
First Financial Indiana
57.62
16.21
39.15%
GSBC
Great Southern Bancorp
61.95
6.58
11.88%
FSBC
Five Star
32.87
4.50
15.86%
NBBK
NB Bancorp, Inc.
18.08
-0.18
-0.99%
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.