HARRISBURG, Pa., July 21, 2026 -- Orrstown Financial Services, Inc. (the "Company") NASDAQ:ORRF, the parent company of Orrstown Bank (the “Bank”), announced earnings for the periods ended June 30, 2026. Net income totaled $21.2 million for the three months ended June 30, 2026, compared to net income of $21.8 million and $19.4 million for the three months ended March 31, 2026 and June 30, 2025, respectively. Diluted earnings per share was $1.09 for the three months ended June 30, 2026, compared to $1.12 and $1.01 for the three months ended March 31, 2026 and June 30, 2025, respectively. For the second quarter of 2025, excluding the impact from merger-related expenses, net of taxes, net income and diluted earnings per share were $20.2 million(1) and $1.04(1), respectively.

“Orrstown is pleased to have produced an outstanding quarter in which the strength of our foundation was evident in our key financial metrics,” said Adam L. Metz, President and Chief Executive Officer. "The core net interest margin expanded during the quarter as we continued to effectively manage funding costs. The redemption of the subordinated notes is expected to enhance future performance. We continue to create strong fee income from a variety of sources, highlighted by record quarterly wealth management revenue. We maintain a strong credit risk profile and we expect to continue to build upon our capital ratios at a healthy pace through earnings generation. With a solid balance sheet, diversified revenue streams and strong momentum across the organization, we are well positioned to build on our success in the second half of 2026 and beyond.”

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

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment increased by $51.7 million in the three months ended June 30, 2026 and totaled $4.1 billion at both June 30, 2026 and March 31, 2026. Residential mortgages increased by $32.8 million, or approximately 16% annualized, of which $17.1 million were home equities, and commercial loans increased by $18.9 million, or approximately 2% annualized, from March 31, 2026 to June 30, 2026.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $2.3 million to $949.3 million at June 30, 2026 from $947.0 million at March 31, 2026. During the three months ended June 30, 2026, net unrealized losses on investment securities decreased by $1.8 million. The Bank purchased $28.4 million of investment securities, consisting of $14.6 million of agency mortgage backed securities and collateralized mortgage obligations and $13.8 million of non-agency collateralized mortgage obligations during the second quarter of 2026. The remaining change in investment securities during the second quarter of 2026 was due to paydowns of $28.5 million and a call of $1.0 million, partially offset by net accretion of $1.5 million recorded on investment securities. The overall duration of the Company's investment securities portfolio was 4.5 years at June 30, 2026 compared to 4.7 years at March 31, 2026. See Appendix B for a summary of the Bank's investment securities at June 30, 2026, highlighting their concentrations and credit ratings.

Deposits

During the second quarter of 2026, deposits decreased by $7.4 million and totaled $4.6 billion at both June 30, 2026 and March 31, 2026. Time deposits, interest-bearing demand deposits and savings deposits decreased by $27.1 million, $24.7 million and $3.1 million, respectively. These decreases were partially offset by increases in non-interest demand deposits of $38.2 million and money market deposits of $9.3 million from March 31, 2026 to June 30, 2026. The Bank continues to focus on shifting its deposit mix to include more lower cost deposits. The Bank's loan-to-deposit ratio was 89% at June 30, 2026 compared to 88% at March 31, 2026.

Borrowings

On June 30, 2026, the Company redeemed the $31.0 million outstanding 4.50% fixed-to-floating rate subordinated notes assumed from Codorus Valley Bancorp, Inc. on July 1, 2024. At the time of redemption, the subordinated notes had an interest rate of 7.72%. During the three months ended June 30, 2026, the Company amortized the remaining fair value mark of $1.6 million to interest expense as a result of the redemption.

The Company actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $274.8 million at June 30, 2026 compared to $206.7 million at March 31, 2026. The increase was due to higher utilization of borrowings during the second quarter of 2026 primarily to fund loan growth. Despite the quarter-end increase, average FHLB advances and other borrowings decreased by $84.8 million from the three months ended March 31, 2026 to the three months ended June 30, 2026. The Bank seeks to maintain sufficient liquidity to ensure that 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 $1.8 billion at both June 30, 2026 and March 31, 2026.

Income Statement

Net Interest Income and Margin

Net interest income was $48.8 million for the three months ended June 30, 2026 compared to $49.0 million for the three months ended March 31, 2026. The net interest margin, on a tax equivalent basis, decreased to 3.87% in the second quarter of 2026 from 3.90% in the first quarter of 2026. The decrease is primarily the result of the accelerated amortization of the subordinated notes' fair value mark in the second quarter of 2026. Excluding the amortization of the fair value mark on the redeemed subordinated notes, net interest margin was 4.00% (1) in the second quarter of 2026. A decrease of eight basis points in the cost of interest-bearing deposits during the second quarter of 2026 partially offset the impact of the amortization of the fair value mark from the subordinated note redemption.

Interest income on loans, on a tax equivalent basis, increased by $0.3 million to $63.5 million for the three months ended June 30, 2026 compared to $63.2 million for the three months ended March 31, 2026. There was no significant change in the net accretion impact of the purchase accounting marks on loans between the first and second quarters of 2026.

Interest income on investment securities, on a tax equivalent basis, was $11.1 million for both the second and first quarters of 2026. Interest income on investments securities benefited from the purchases of higher yielding investment securities despite a $12.1 million decrease in average investment securities during the three months ended June 30, 2026 compared to the three months ended March 31, 2026. The decrease in average investment securities between the periods was due to the timing of purchases and paydowns.

Interest expense, on a tax equivalent basis, increased by $0.5 million to $25.9 million for the three months ended June 30, 2026 compared to $25.4 million for the three months ended March 31, 2026. Borrowing costs increased by $0.8 million during the three months ended June 30, 2026 compared to the three months ended March 31, 2026 due to the accelerated amortization of the remaining subordinated debt fair value mark of $1.6 million. The cost of deposits decreased by eight basis points during the three months ended June 30, 2026 compared to the three months ended March 31, 2026.

Average interest-bearing deposits increased by $38.3 million during the three months ended June 30, 2026 compared to the three months ended March 31, 2026. Average FHLB advances and other borrowings decreased by $84.8 million from the three months ended March 31, 2026 to the three months ended June 30, 2026. There were seasonal deposit declines in the first quarter of 2026, which increased borrowing balances. However, significant deposit inflow from seasonal sources in the back half of the first quarter enabled the Bank to substantially reduce its borrowing levels.

Provision for Credit Losses on Loans

The allowance for credit losses ("ACL") on loans decreased to $46.6 million at June 30, 2026 from $47.5 million at March 31, 2026. The ACL to total loans was 1.13% at June 30, 2026 compared to 1.17% at March 31, 2026. The Company recorded provision expense on loans of $0.4 million for the three months ended June 30, 2026 compared to $0.7 million for the three months ended March 31, 2026 partially due to the increase in loans. Net charge-offs were $1.2 million during the three months ended June 30, 2026 compared to $0.9 million during the three months ended March 31, 2026. As a result of improvements noted in underlying criteria, certain qualitative factors were adjusted, which reduced the ACL and partially offset the impact from the increase in loans and net charge-offs.

Classified loans decreased by $8.4 million to $49.2 million at June 30, 2026 from $57.6 million at March 31, 2026 due primarily to repayments of $7.8 million. Nonaccrual loans totaled $23.8 million at June 30, 2026 compared to $30.0 million at March 31, 2026. The decrease of $6.2 million in nonaccrual loans was due to repayments of $6.9 million, which included $4.2 million in commercial and land development loans that were on nonaccrual status and risk rated as substandard. Nonaccrual loans to total loans decreased to 0.58% at June 30, 2026 from 0.74% at March 31, 2026. Management believes the ACL to be adequate based on current asset quality metrics and economic forecasts.

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

Noninterest Income

Noninterest income decreased by $1.8 million to $13.8 million for the three months ended June 30, 2026 from $15.6 million for the three months ended March 31, 2026.

Income from life insurance decreased by $2.4 million to $1.4 million for the three months ended June 30, 2026 compared to $3.8 million for the three months ended March 31, 2026. During the first quarter of 2026, the Company recorded $2.4 million in income from life insurance policy death benefits.

Swap fee income decreased by $0.6 million to $0.7 million for the three months ended June 30, 2026 compared to $1.3 million for the three months ended March 31, 2026. Swap fee income will fluctuate based on market conditions and client demand.

Wealth management income increased by $0.3 million to $5.9 million for the three months ended June 30, 2026 compared to $5.6 million for the three months ended March 31, 2026.

Noninterest Expenses

Noninterest expenses increased by $1.0 million to $37.7 million for the three months ended June 30, 2026 from $36.7 million in the three months ended March 31, 2026.

Salaries and benefits expense increased by $1.0 million to $22.2 million for the three months ended June 30, 2026 compared to $21.2 million for the three months ended March 31, 2026. The increase during the second quarter of 2026 was due primarily to the impact from merit salary increases in May, higher healthcare costs due to claim volume and the impact of one extra day compared to the prior quarter.

Occupancy, furniture and equipment expense decreased by $0.3 million to $3.9 million for the three months ended June 30, 2026 compared to $4.2 million for the three months ended March 31, 2026 due to seasonal expenses incurred during the first quarter of 2026.

Advertising and bank promotions expense increased by $0.4 million to $1.1 million in the three months ended June 30, 2026 from $0.7 million in the three months ended March 31, 2026 due to $0.7 million in contributions to tax credit programs during the second quarter of 2026. Taxes other than income decreased by $0.6 million to $0.4 million in the three months ended June 30, 2026 compared to $1.0 million in the three months ended March 31, 2026. This decrease reflects the tax credits recognized in the second quarter of 2026 as result of the charitable contributions.

Other operating expenses increased by $0.2 million to $4.3 million for the three months ended June 30, 2026 compared to $4.1 million for the three months ended March 31, 2026. This was due primarily to an increase of $0.2 million in mark-to-market losses on non-hedging derivatives from the first quarter of 2026 to the second quarter of 2026.

Income Taxes

The Company's effective tax rate was 14.2% for the second quarter of 2026 compared to 20.7% for the first quarter of 2026. The Company's effective tax rate for the three months ended June 30, 2026 is less than the 21% federal statutory rate primarily due to the purchase of federal income tax credits, which reduced income tax expense by $1.6 million. In addition, the effective tax rate was impacted by tax-exempt income, including interest earned on tax-exempt loans and securities and non-taxable income from life insurance policies and tax credits partially offset by 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 ("TEFRA"). The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

Capital

Shareholders’ equity totaled $621.7 million at June 30, 2026 compared to $603.2 million at March 31, 2026. The increase of $18.5 million is primarily due to net income of $21.2 million, other comprehensive income of $1.9 million and share-based compensation activity of $1.3 million, partially offset by dividends of $5.9 million.

Tangible book value per common share(1) increased to $26.71 at June 30, 2026 from $25.76 at March 31, 2026. The Company's tangible common equity ratio was 9.5% of total tangible assets at June 30, 2026 compared to 9.2% at March 31, 2026. Return on average tangible common equity per common share(1) was 16.86% for the three months ended June 30, 2026 compared to 17.96% for the three months ended March 31, 2026. The decrease in the return on average tangible common equity per common share was primarily due to the increase in average shareholders' equity.

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

Most of the Company's capital ratios increased during the three months ended June 30, 2026 compared to the three months ended March 31, 2026 due to earnings. Total risk-based capital declined over that period due to the redemption of subordinated debt. The Company's tier 1 common equity, tier 1 capital and total risk-based capital ratios were 12.0%, 12.2% and 13.2%, respectively, at June 30, 2026 compared to 11.8%, 12.0% and 13.5%, respectively, at March 31, 2026. The Company's Tier 1 leverage ratio increased to 10.1% at June 30, 2026 compared to 9.7% at March 31, 2026.

At June 30, 2026, 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.

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) 2026   2025   2026   2025 Profitability for the period:       Net interest income$48,831  $49,512  $97,836  $98,273 Provision for (recovery of) credit losses - loans 338   209   1,066   (345)Recovery of credit losses - unfunded loan commitments —   (100)  (376)  (100)Noninterest income 13,836   12,915   29,413   24,539 Noninterest expenses 37,666   37,614   74,394   75,790 Income before income tax expense 24,663   24,704   52,165   47,467 Income tax expense 3,505   5,256   9,198   9,968 Net income available to common shareholders$21,158  $19,448  $42,967  $37,499         Financial ratios:       Return on average assets (1) 1.53%  1.45%  1.56%  1.40%Return on average assets, adjusted (1)(3)(4) n/a   1.51%  n/a   1.48%Return on average equity (1) 13.96%  14.56%  14.35%  14.28%Return on average equity, adjusted (1)(3)(4) n/a   15.12%  n/a   15.05%Net interest margin (1) 3.87%  4.07%  3.89%  4.04%Net interest margin, adjusted (1)(2)(4) 4.00%  n/a   3.95%  n/a Efficiency ratio 60.1%  60.3%  58.5%  61.7%Efficiency ratio, adjusted (2)(3)(4) 58.6%  58.7%  57.7%  59.6%Income per common share:       Basic$1.10  $1.01  $2.23  $1.96 Basic, adjusted (3)(4) n/a  $1.05   n/a  $2.06 Diluted$1.09  $1.01  $2.21  $1.94 Diluted, adjusted (3)(4) n/a  $1.04   n/a  $2.04         Average equity to average assets 10.97%  9.97%  10.89%  9.81%        (1) Annualized for the three and six months ended June 30, 2026 and 2025.(2) Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the three and six months ended June 30, 2026.(3) Ratio has been adjusted for the non-recurring charges for the three and six months ended June 30, 2025.(4) 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) 2026   2025 At period-end:   Total assets$5,612,151  $5,542,255 Loans, net of allowance for credit losses 4,066,399   3,973,012 Loans held-for-sale, at fair value 3,639   6,090 Securities available for sale, at fair value 949,281   952,740 Total deposits 4,620,023   4,528,774 FHLB advances and other borrowings and Securities sold under agreements to repurchase 282,362   299,243 Subordinated notes and trust preferred debt 8,049   37,122 Shareholders' equity 621,650   591,535     Credit quality and capital ratios (1):   Allowance for credit losses to total loans 1.13%  1.19%Total nonaccrual loans to total loans 0.58%  0.70%Nonperforming assets to total assets 0.44%  0.51%Allowance for credit losses to nonaccrual loans 196%  170%Total risk-based capital:   Orrstown Financial Services, Inc. 13.2%  13.3%Orrstown Bank 13.1%  13.3%Tier 1 risk-based capital:   Orrstown Financial Services, Inc. 12.2%  11.7%Orrstown Bank 12.1%  12.2%Tier 1 common equity risk-based capital:   Orrstown Financial Services, Inc. 12.0%  11.5%Orrstown Bank 12.1%  12.2%Tier 1 leverage capital:   Orrstown Financial Services, Inc. 10.1%  9.5%Orrstown Bank 10.0%  9.9%    Book value per common share$31.60  $30.32     (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. At December 31, 2025, 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. At June 30, 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. 
ORRSTOWN FINANCIAL SERVICES, INC.   CONSOLIDATED BALANCE SHEETS (Unaudited)       (Dollars in thousands, except per share amounts)June 30, 2026 December 31, 2025Assets   Cash and due from banks$58,319  $42,083 Interest-bearing deposits with banks 86,522   107,691 Cash and cash equivalents 144,841   149,774 Restricted investments in bank stocks 27,429   26,717 Securities available for sale (amortized cost of $973,712 and $972,138 at June 30, 2026 and December 31, 2025, respectively) 949,281   952,740 Loans held for sale, at fair value 3,639   6,090 Loans 4,113,031   4,020,693 Less: Allowance for credit losses (46,632)  (47,681)Net loans 4,066,399   3,973,012 Premises and equipment, net 50,166   51,029 Cash surrender value of life insurance 147,787   146,994 Goodwill 69,751   69,751 Other intangible assets, net 33,572   37,990 Accrued interest receivable 19,789   21,473 Deferred tax assets, net 32,693   33,931 Other assets 66,804   72,754 Total assets$5,612,151  $5,542,255     Liabilities   Deposits:   Noninterest-bearing$920,851  $870,906 Interest-bearing 3,699,172   3,657,868 Total deposits 4,620,023   4,528,774 Securities sold under agreements to repurchase and federal funds purchased 7,594   24,542 FHLB advances and other borrowings 274,768   274,701 Subordinated notes and trust preferred debt 8,049   37,122 Other liabilities 80,067   85,581 Total liabilities 4,990,501   4,950,720     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; 19,710,341 shares issued and 19,669,802 outstanding at June 30, 2026; 19,711,628 shares issued and 19,507,208 outstanding at December 31, 2025 1,026   1,026 Additional paid—in capital 421,960   424,596 Retained earnings 217,969   186,752 Accumulated other comprehensive loss (17,826)  (15,201)Treasury stock— 40,539 and 204,420 shares, at cost at June 30, 2026 and December 31, 2025, respectively (1,479)  (5,638)Total shareholders’ equity 621,650   591,535 Total liabilities and shareholders’ equity$5,612,151  $5,542,255 
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)  2026   2025   2026   2025 Interest income         Loans $63,315  $63,036  $126,310  $126,468 Investment securities - taxable  9,906   9,406   19,757   18,350 Investment securities - tax-exempt  842   878   1,723   1,753 Short-term investments  639   1,513   1,276   3,781 Total interest income  74,702   74,833   149,066   150,352 Interest expense         Deposits  21,687   22,855   43,673   47,115 Securities sold under agreements to repurchase and federal funds purchased  29   106   126   190 FHLB advances and other borrowings  1,635   1,030   3,990   2,148 Subordinated notes and trust preferred debt  2,520   1,330   3,441   2,626 Total interest expense  25,871   25,321   51,230   52,079 Net interest income  48,831   49,512   97,836   98,273 Provision for (recovery of) credit losses - loans  338   209   1,066   (345)Recovery of credit losses - unfunded loan commitments  —   (100)  (376)  (100)Net interest income after provision for (recovery of) credit losses  48,493   49,403   97,146   98,718 Noninterest income         Service charges  2,734   2,630   5,605   5,025 Interchange income  1,602   1,441   3,115   2,868 Swap fee income  651   669   1,990   1,063 Wealth management income  5,946   5,267   11,503   10,682 Mortgage banking activities  436   478   762   780 Income from life insurance  1,376   1,311   5,137   2,600 Investment securities gains  57   8   55   21 Other income  1,034   1,111   1,246   1,500 Total noninterest income  13,836   12,915   29,413   24,539 Noninterest expenses         Salaries and employee benefits  22,229   21,364   43,386   41,752 Occupancy, furniture and equipment  3,887   4,211   8,108   8,886 Data processing  1,703   965   3,240   1,889 Advertising and bank promotions  1,126   1,077   1,809   1,576 FDIC insurance  634   674   1,183   1,498 Professional services  1,202   2,016   2,423   3,842 Taxes other than income  392   295   1,417   1,237 Intangible asset amortization  2,179   2,472   4,418   5,007 Merger-related expenses  —   968   —   2,617 Restructuring expenses  —   —   —   91 Other operating expenses  4,314   3,572   8,410   7,395 Total noninterest expenses  37,666   37,614   74,394   75,790 Income before income tax expense  24,663   24,704   52,165   47,467 Income tax expense  3,505   5,256   9,198   9,968 Net income $21,158  $19,448  $42,967  $37,499 continued            Three Months Ended Six Months Ended  June 30, June 30, June 30, June 30,   2026   2025   2026   2025 Share information:         Basic earnings per share $1.10  $1.01  $2.23  $1.96 Diluted earnings per share $1.09  $1.01  $2.21  $1.94 Dividends paid per share $0.30  $0.26  $0.60  $0.52 Weighted average shares - basic  19,313   19,173   19,293   19,165 Weighted average shares - diluted  19,432   19,342   19,421   19,335 
ANALYSIS OF NET INTEREST INCOME    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)   Three Months Ended 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025(In thousands)AverageBalance Taxable-EquivalentInterest Taxable-EquivalentRate AverageBalance Taxable-EquivalentInterest Taxable-EquivalentRate AverageBalance Taxable-EquivalentInterest Taxable-EquivalentRate AverageBalance Taxable-EquivalentInterest Taxable-EquivalentRate AverageBalance Taxable-EquivalentInterest Taxable-EquivalentRateAssets                             Federal funds sold & interest-bearing bank balances$69,784 $639  3.67% $70,086 $637  3.69% $103,886 $1,017  3.88% $101,728 $1,123  4.38% $136,106 $1,513  4.46%Investment securities (1)(2) 971,932  11,096  4.57   984,060  11,079  4.51   976,957  11,177  4.58   906,399  10,593  4.67   904,119  10,626  4.70 Loans (1)(3)(4)(5) 4,075,290  63,542  6.25   4,070,889  63,214  6.29   3,997,842  64,635  6.42   3,979,044  65,975  6.58   3,894,978  63,246  6.52 Total interest-earning assets 5,117,006  75,277  5.90   5,125,035  74,930  5.91   5,078,685  76,829  6.01   4,987,171  77,691  6.19   4,935,203  75,385  6.13 Other assets 425,913      423,779      426,626      433,659      439,569    Total assets$5,542,919     $5,548,814     $5,505,311     $5,420,830     $5,374,772    Liabilities and Shareholders' Equity                        Interest-bearing demand deposits$2,577,915  13,629  2.12  $2,534,291  13,796  2.21  $2,471,895  14,078  2.26  $2,450,034  14,145  2.29  $2,463,687  13,880  2.26 Savings deposits 260,712  128  0.20   259,585  143  0.22   262,240  164  0.25   264,761  164  0.25   269,309  165  0.25 Time deposits 900,412  7,930  3.53   906,875  8,047  3.60   912,611  8,342  3.63   897,416  8,330  3.68   914,108  8,810  3.87 Total interest-bearing deposits 3,739,039  21,687  2.33   3,700,751  21,986  2.41   3,646,746  22,584  2.46   3,612,211  22,639  2.49   3,647,104  22,855  2.51 Securities sold under agreements to repurchase and federal funds purchased 12,024  29  0.98   23,674  97  1.66   27,348  105  1.52   27,772  107  1.53   25,917  106  1.64 FHLB advances and other borrowings 175,734  1,635  3.73   248,357  2,355  3.85   238,806  2,371  3.94   168,939  1,791  4.21   104,068  1,030  3.97 Subordinated notes and trust preferred debt 36,664  2,520  27.57   37,175  921  10.05   37,023  669  7.17   68,749  1,597  9.21   68,910  1,330  7.74 Total interest-bearing liabilities 3,963,461  25,871  2.62   4,009,957  25,359  2.56   3,949,923  25,729  2.58   3,877,671  26,134  2.67   3,845,999  25,321  2.64 Noninterest-bearing demand deposits 889,378      850,415      882,552      902,128      904,031    Other liabilities 81,981      89,112      93,977      89,086      89,058    Total liabilities 4,934,820      4,949,484      4,926,452      4,868,885      4,839,088    Shareholders' equity 608,099      599,330      578,859      551,945      535,684    Total$5,542,919     $5,548,814     $5,505,311     $5,420,830     $5,374,772    Taxable-equivalent net interest income / net interest spread   49,406  3.28%    49,571  3.35%    51,100  3.43%    51,557  3.52%    50,064  3.49%Taxable-equivalent net interest margin    3.87%     3.90%     4.00%     4.11%     4.07%Taxable-equivalent adjustment   (575)      (566)      (569)      (569)      (552)  Net interest income  $48,831      $49,005      $50,531      $50,988      $49,512   Ratio of average interest-earning assets to average interest-bearing liabilities    129%     128%     129%     129%     128%                                                            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 $4.3 million, $4.2 million, $4.7 million, $5.3 million and $4.9 million for the three months ended June 30, 2026, March 31, 2026, December 31, 2025, September 30, 2025 and June 30, 2025, respectively. 
ANALYSIS OF NET INTEREST INCOME    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)  (continued)            Six Months Ended June 30, 2026 June 30, 2025   Taxable- Taxable-   Taxable- Taxable- Average Equivalent Equivalent Average Equivalent Equivalent(In thousands)Balance Interest Rate Balance Interest RateAssets           Federal funds sold & interest-bearing bank balances$69,934 $1,276  3.68% $169,541 $3,781  4.50%Investment securities (1)(2) 977,962  22,174  4.54   884,730  20,787  4.70 Loans (1)(3)(4)(5) 4,073,103  126,757  6.27   3,902,295  126,883  6.56 Total interest-earning assets 5,120,999  150,207  5.90   4,956,566  151,451  6.15 Other assets 424,852      443,528    Total assets$5,545,851     $5,400,094    Liabilities and Shareholders' Equity           Interest-bearing demand deposits$2,556,224  27,424  2.16  $2,468,589  28,036  2.29 Savings deposits 260,152  271  0.21   271,104  330  0.25 Time deposits 903,625  15,978  3.57   942,387  18,749  4.01 Total interest-bearing deposits 3,720,001  43,673  2.37   3,682,080  47,115  2.58 Securities sold under agreements to repurchase and federal funds purchased 17,817  126  1.43   26,039  190  1.47 FHLB advances and other borrowings 211,844  3,990  3.80   108,439  2,148  3.99 Subordinated notes and trust preferred debt 36,918  3,441  18.80   68,825  2,626  7.69 Total interest-bearing liabilities 3,986,580  51,230  2.59   3,885,383  52,079  2.70 Noninterest-bearing demand deposits 870,004      895,924    Other liabilities 85,528      89,067    Total liabilities 4,942,112      4,870,374    Shareholders' equity 603,739      529,720    Total liabilities and shareholders' equity$5,545,851     $5,400,094    Taxable-equivalent net interest income / net interest spread   98,977  3.31%    99,372  3.45%Taxable-equivalent net interest margin    3.89%     4.04%Taxable-equivalent adjustment   (1,141)      (1,099)  Net interest income  $97,836      $98,273   Ratio of average interest-earning assets to average interest-bearing liabilities    128%     128%
  • 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 accretion on purchase accounting marks of $8.5 million and $11.5 million for the six months ended June 30, 2026 and 2025, respectively.
ORRSTOWN FINANCIAL SERVICES, INC.    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)              (In thousands)June 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025Profitability for the quarter:         Net interest income$48,831  $49,005  $50,531  $50,988  $49,512 Net provision for credit losses on loans and unfunded loan commitments 338   352   75   396   109 Noninterest income 13,836   15,577   14,392   13,382   12,915 Noninterest expenses 37,666   36,728   37,355   36,297   37,614 Income before income taxes 24,663   27,502   27,493   27,677   24,704 Income tax expense 3,505   5,693   6,002   5,812   5,256 Net income$21,158  $21,809  $21,491  $21,865  $19,448           Financial ratios:         Return on average assets (1) 1.53%  1.59%  1.55%  1.60%  1.45%Return on average assets, adjusted(1)(3)(4) n/a   n/a   n/a   n/a   1.51%Return on average equity (1) 13.96%  14.76%  14.73%  15.72%  14.56%Return on average equity, adjusted (1)(3)(4) n/a   n/a   n/a   n/a   15.12%Net interest margin (1) 3.87%  3.90%  4.00%  4.11%  4.07%Net interest margin, adjusted (1)(2)(4) 4.00%  n/a   n/a   n/a   n/a Efficiency ratio 60.1%  56.9%  57.5%  56.4%  60.3%Efficiency ratio, adjusted (2)(3)(4) 58.6%  n/a   n/a   n/a   58.7%          Per share information:         Income per common share:         Basic$1.10  $1.13  $1.12  $1.14  $1.01 Basic, adjusted (3)(4) n/a   n/a   n/a   n/a   1.05 Diluted 1.09   1.12   1.11   1.13   1.01 Diluted, adjusted (3)(4) n/a   n/a   n/a   n/a   1.04 Book value 31.60   30.76   30.32   29.33   28.07 Tangible book value (4) 26.71   25.76   25.21   24.12   22.77 Average tangible common equity (4) 16.86   17.96   18.15   19.70   18.43 Cash dividends paid 0.30   0.30   0.27   0.27   0.26           Average basic shares 19,313   19,274   19,251   19,224   19,173 Average diluted shares 19,432   19,410   19,384   19,364   19,342 (1) Annualized.(2) Ratio has been adjusted for accelerated amortization of the remaining fair value mark of $1.6 million from the redemption of the subordinated notes during the three months ended June 30, 2026.(3) Ratio has been adjusted for non-recurring expenses for the three months ended June 30, 2025. There were no non-recurring expenses for the three months ended June 30, 2026, March 31, 2026, December 31, 2025 and September 30, 2025.(4) 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 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025Noninterest income:         Service charges$2,734 $2,871  $3,225 $2,997 $2,630Interchange income 1,602  1,513   1,553  1,620  1,441Swap fee income 651  1,339   1,112  816  669Wealth management income 5,946  5,557   5,739  5,277  5,267Mortgage banking activities 436  326   503  522  478Income from life insurance 1,376  3,761   1,331  1,471  1,311Other income 1,034  212   834  629  1,111Investment securities gains (losses) 57  (2)  95  50  8Total noninterest income$13,836 $15,577  $14,392 $13,382 $12,915          Noninterest expenses:         Salaries and employee benefits$22,229 $21,157  $21,980 $21,439 $21,364Occupancy, furniture and equipment 3,887  4,221   4,017  4,075  4,211Data processing 1,703  1,537   1,292  1,116  965Advertising and bank promotions 1,126  683   561  154  1,077FDIC insurance 634  549   683  652  674Professional services 1,202  1,221   1,947  1,703  2,016Taxes other than income 392  1,025   574  828  295Intangible asset amortization 2,179  2,239   2,348  2,410  2,472Merger-related expenses —  —   —  —  968Other operating expenses 4,314  4,096   3,953  3,920  3,572Total noninterest expenses$37,666 $36,728  $37,355 $36,297 $37,614           
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)      (continued)         (In thousands)June 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025Balance Sheet at quarter end:         Cash and cash equivalents$144,841  $161,136  $149,774  $184,146  $149,377 Restricted investments in bank stocks 27,429   23,984   26,717   24,111   21,204 Securities available for sale 949,281   947,018   952,740   890,357   885,373 Loans held for sale, at fair value 3,639   3,366   6,090   6,026   5,206 Loans:         Commercial real estate:         Owner occupied 679,295   645,026   644,713   629,481   622,315 Non-owner occupied 1,305,379   1,322,251   1,260,198   1,254,959   1,203,038 Multi-family 229,425   216,658   236,703   234,782   239,388 Non-owner occupied residential 150,917   151,560   155,749   163,138   165,479 Agricultural 97,729   114,409   121,417   118,596   124,291 Commercial and industrial 489,247   481,815   489,371   479,929   487,063 Acquisition and development:         1-4 family residential construction 39,344   46,355   41,489   41,141   38,490 Commercial and land development 198,399   198,957   198,234   195,158   198,889 Municipal 33,950   27,744   25,302   28,664   28,693 Total commercial loans 3,223,685   3,204,775   3,173,176   3,145,848   3,107,646 Residential mortgage:         First lien 501,306   484,022   478,870   476,006   469,569 Home equity – term 5,401   5,685   5,972   5,800   5,784 Home equity – lines of credit 344,495   327,141   321,438   311,458   305,968 Other - term(1) 20,929   22,442   22,906   23,737   25,384 Installment and other loans 17,215   17,254   18,331   16,887   17,028 Total loans 4,113,031   4,061,319   4,020,693   3,979,736   3,931,379 Allowance for credit losses (46,632)  (47,463)  (47,681)  (48,105)  (47,898)Net loans held for investment 4,066,399   4,013,856   3,973,012   3,931,631   3,883,481 Goodwill 69,751   69,751   69,751   69,751   69,751 Other intangible assets, net 33,572   35,751   37,990   40,338   42,748 Total assets 5,612,151   5,576,972   5,542,255   5,470,233   5,387,645 Total deposits 4,620,023   4,627,424   4,528,774   4,533,560   4,516,625 FHLB advances and other borrowings and Securities sold under agreements to repurchase 282,362   225,958   299,243   241,719   166,381 Subordinated notes and trust preferred debt 8,049   37,274   37,122   36,970   69,021 Total shareholders' equity 621,650   603,184   591,535   571,936   548,448           (1) Other - term includes property assessed clean energy ("PACE") loans. 
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)      (continued)          June 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025Capital and credit quality measures(1):         Total risk-based capital:         Orrstown Financial Services, Inc. 13.2%  13.5%  13.3%  13.1%  13.3%Orrstown Bank 13.1%  13.6%  13.3%  12.9%  13.3%Tier 1 risk-based capital:         Orrstown Financial Services, Inc. 12.2%  12.0%  11.7%  11.3%  11.1%Orrstown Bank 12.1%  12.5%  12.2%  11.8%  12.1%Tier 1 common equity risk-based capital:         Orrstown Financial Services, Inc. 12.0%  11.8%  11.5%  11.1%  10.9%Orrstown Bank 12.1%  12.5%  12.2%  11.8%  12.1%Tier 1 leverage capital:         Orrstown Financial Services, Inc. 10.1%  9.7%  9.5%  9.3%  9.0%Orrstown Bank 10.0%  10.2%  9.9%  9.6%  9.8%          Average equity to average assets 10.97%  10.80%  10.51%  10.18%  9.97%Allowance for credit losses to total loans 1.13%  1.17%  1.19%  1.21%  1.22%Total nonaccrual loans to total loans 0.58%  0.74%  0.70%  0.66%  0.57%Nonperforming assets to total assets 0.44%  0.56%  0.51%  0.48%  0.42%Allowance for credit losses to nonaccrual loans 196%  158%  170%  184%  214%          Other information:         Net charge-offs$1,169  $946  $499  $189  $115 Classified loans 49,190   57,584   58,351   64,089   65,754 Nonperforming and other risk assets:         Nonaccrual loans 23,751   30,025   28,031   26,191   22,423 Other real estate owned 1,055   1,055   —   —   — Total nonperforming assets 24,806   31,080   28,031   26,191   22,423 Financial difficulty modifications still accruing 1,794   949   1,253   1,245   5,759 Loans past due 90 days or more and still accruing 853   443   1,040   497   1,312 Total nonperforming and other risk assets$27,453  $32,472  $30,324  $27,933  $29,494  (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, which concluded at December 31, 2025. Starting with periods in 2026, the day-one impact of ASU 2016-13 was fully applied to the capital ratios. 

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 $103.3 million and $107.7 million at June 30, 2026 and December 31, 2025, respectively. During the three and six months ended June 30, 2025, the Company incurred $1.0 million and $2.6 million in merger-related expenses, respectively. The Company did not incur merger-related or other non-recurring expenses during the three months ended June 30, 2026, March 31, 2026, December 31, 2025 and September 30, 2025.

On June 30, 2026, the Company redeemed the $31.0 million outstanding 4.50% fixed-to-floating rate subordinated notes assumed from Codorus Valley Bancorp, Inc. on July 1, 2024. During the three and six months ended June 30, 2026, the Company amortized the remaining fair value mark to interest expense as a result of the redemption, which reduced net interest margin.

Tangible book value per common share, tangible common equity, and the impact of the accelerated amortization of fair value marks on net interest margin and the efficiency ratio and merger-related 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 ShareJune 30,2026 March 31,2026December 31,2025 September 30,2025June 30,2025Shareholders' equity (most directly comparable GAAP-based measure)$621,650 $603,184 $591,535  $571,936  $548,448 Less: Goodwill 69,751  69,751  69,751   69,751   69,751 Other intangible assets 33,572  35,751  37,990   40,338   42,748 Related tax effect (7,050) (7,508) (7,978)  (8,471)  (8,977)Tangible common equity (non-GAAP)$525,377 $505,190 $491,772  $470,318  $444,926         Common shares outstanding 19,670  19,611  19,507   19,501   19,536         Book value per share (most directly comparable GAAP-based measure)$31.60 $30.76 $30.32  $29.33  $28.07 Intangible assets per share 4.89  5.00  5.11   5.21   5.30 Tangible book value per share (non-GAAP)$26.71 $25.76 $25.21  $24.12  $22.77         
Return on Average Common EquityJune 30,2026 March 31,2026December 31,2025 September 30,2025June 30,2025Net Income$21,158 $21,809 $21,491  $21,865  $19,448 Average shareholders' equity$608,099 $599,330 $578,859  $551,945  $535,684 Less: Average goodwill 69,751  69,751  69,751   69,751   68,126 Less: Average other intangible assets, gross 34,920  37,132  39,467   41,809   44,304 Average tangible equity$503,428 $492,447 $469,641  $440,385  $423,254 Return on average tangible equity(non-GAAP)(1) 16.86% 17.96% 18.15%  19.70%  18.43%(1) - Annualized               
(In thousands)Three Months Ended Six Months EndedAdjusted Ratios for Non-recurring ChargesJune 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025 June 30,2026 June 30,2025Net income (A) - most directly comparable GAAP-based measure$21,158  $21,809  $21,491  $21,865  $19,448  $42,967  $37,499 Plus: Merger-related expenses (B) —   —   —   —   968   —   2,617 Less: Related tax effect (C) —   —   —   —   (221)  —   (590)Adjusted net income (D=A+B-C) - Non-GAAP$21,158  $21,809  $21,491  $21,865  $20,195  $42,967  $39,526               Average assets (E)$5,542,919  $5,548,814  $5,505,311  $5,420,830  $5,374,772  $5,545,851  $5,400,094 Return on average assets (= A / E) - most directly comparable GAAP-based measure(1) 1.53%  1.59%  1.55%  1.60%  1.45%  1.56%  1.40%Return on average assets, adjusted (= D / E) - Non-GAAP (1) n/a   n/a   n/a   n/a   1.51%  n/a   1.48%              Average equity (F)$608,099  $599,330  $578,859  $551,945  $535,684  $603,739  $529,720 Return on average equity (= A / F) - most directly comparable GAAP-based measure(1) 13.96%  14.76%  14.73%  15.72%  14.56%  14.35%  14.28%Return on average equity, adjusted (= D / F) - Non-GAAP (1) n/a   n/a   n/a   n/a   15.12%  n/a   15.05%              Weighted average shares - basic (G) - most directly comparable GAAP-based measure 19,313   19,274   19,251   19,224   19,173   19,293   19,165 Basic earnings (loss) per share (= A / G) - most directly comparable GAAP-based measure$1.10  $1.13  $1.12  $1.14  $1.01  $2.23  $1.96 Basic earnings per share, adjusted (= D / G) - Non-GAAP n/a   n/a   n/a   n/a  $1.05   n/a  $2.06               Weighted average shares - diluted (H) - most directly comparable GAAP-based measure 19,432   19,410   19,384   19,364   19,342   19,421   19,335 Diluted earnings (loss) per share (= A / H) - most directly comparable GAAP-based measure$1.09  $1.12  $1.11  $1.13  $1.01  $2.21  $1.94 Diluted earnings per share, adjusted (= D / H) - Non-GAAP n/a   n/a   n/a   n/a  $1.04   n/a  $2.04               continued
 Three Months Ended Six Months Ended June 30,2026 March 31,2026 December 31,2025 September 30,2025 June 30,2025 June 30,2026 June 30,2025Noninterest expense (I) - most directly comparable GAAP-based measure$37,666  $36,728  $37,355  $36,297  $37,614  $74,394  $75,790 Less: Merger-related expenses (B) —   —   —   —   (968)  —   (2,617)Adjusted noninterest expense (J = I - B) - Non-GAAP$37,666  $36,728  $37,355  $36,297  $36,646  $74,394  $73,173               Net interest income (K)$48,831  $49,005  $50,531  $50,988  $49,512  $97,836  $98,273 Noninterest income (L) 13,836   15,577   14,392   13,382   12,915   29,413   24,539 Total operating income (M = K + L) - most directly comparable GAAP-based measure$62,667  $64,582  $64,923  $64,370  $62,427  $127,249  $122,812 Plus: Accelerated amortization of fair value mark on redeemed subordinated notes (N) 1,624   —   —   —   —   1,624   — Adjusted total operating income (O = M + N) - Non-GAAP$64,291  $64,582  $64,923  $64,370  $62,427  $128,873  $122,812               Efficiency ratio (= I / M) - most directly comparable GAAP-based measure 60.1%  56.9%  57.5%  56.4%  60.3%  58.5%  61.7%Efficiency ratio, adjusted (= J / N) - Non-GAAP 58.6%  n/a   n/a   n/a   58.7%  57.7%  59.6%                                          (1) Annualized                           
 Three Months Ended June 30, 2026 Average Balance - most directly comparable GAAP-based measure Taxable-Equivalent Interest -most directly comparable GAAP-based measure Less: accelerated amortization on fair value mark from subordinated notes redemption Adjusted Taxable-Equivalent Interest -Non-GAAP Taxable-Equivalent Rate - most directly comparable GAAP-based measure Adjusted Taxable-Equivalent Rate -Non-GAAPTotal interest-earning assets$5,117,006 $75,277 $—  $75,277 5.90% 5.90%            Total interest-bearing liabilities$3,963,461 $25,871 $(1,624) $24,247 2.62% 2.45%            Taxable-equivalent net interest income / net interest spread  $49,406 $1,624  $51,030 3.28% 3.45%            Taxable-equivalent net interest margin        3.87% 4.00%             Six Months Ended June 30, 2026 Average Balance - most directly comparable GAAP-based measure Taxable-Equivalent Interest -most directly comparable GAAP-based measure Less: accelerated amortization on fair value mark from subordinated notes redemption Adjusted Taxable-Equivalent Interest -Non-GAAP Taxable-Equivalent Rate - most directly comparable GAAP-based measure Adjusted Taxable-Equivalent Rate -Non-GAAPTotal interest-earning assets$5,120,999 $150,207 $—  $150,207 5.90% 5.90%            Total interest-bearing liabilities$3,986,580 $51,230 $(1,624) $49,606 2.59% 2.51%            Taxable-equivalent net interest income / net interest spread  $98,977 $1,624  $100,601 3.31% 3.40%            Taxable-equivalent net interest margin        3.89% 3.95%              

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, 2026:

(In thousands)

SectorPortfolio Mix Amortized Book Fair Value Credit Enhancement AAA AA A BBB BB NR Collateral / Guarantee TypeUnsecured ABS—% $2,327 $2,254 30% —% —% —% —% —% 100% Unsecured Consumer DebtStudent Loan ABS—   2,553  2,548 33  —  —  —  —  —  100  Seasoned Student LoansFederal Family Education Loan ABS7   66,511  66,295 12  —  49  31  7  13  —  Federal Family Education Loan (1)PACE Loan ABS—   1,602  1,469 8  100  —  —  —  —  —  PACE Loans (2)Non-Agency CMBS3   29,576  29,437 29  —  —  —  —  —  100   Non-Agency RMBS5   42,114  41,031 20  94  6  —  —  —  —  Reverse Mortgages (3)Municipal - General Obligation10   99,568  93,435   16  78  6  —  —  —   Municipal - Revenue12   119,287  110,693   —  75  19  —  —  6   SBA ReRemic (5)—   1,226  1,214   —  100  —  —  —  —  SBA Guarantee (4)Small Business Administration—   2,648  2,699   —  100  —  —  —  —  SBA Guarantee (4)Agency MBS25   238,301  234,635   —  100  —  —  —  —  Residential Mortgages (4)Agency CMO36   351,736  348,092   —  100  —  —  —  —   U.S. Treasury securities2   15,012  14,206   —  100  —  —  —  —  U.S. Government Guarantee (4)Corporate bonds—   953  975   —  —  —  100  —  —    100% $973,414 $948,983   6% 83% 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 $5.6 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; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2025 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.