Orrstown Financial Services Inc. Files 2023 Annual Report

TL;DR

<b>Orrstown Financial Services Inc. has submitted its 2023 10-K annual report detailing its financial performance and operations.</b>

AI Summary

ORRSTOWN FINANCIAL SERVICES INC (ORRF) filed a Annual Report (10-K) with the SEC on March 14, 2024. Orrstown Financial Services Inc. filed its 10-K annual report for the fiscal year ending December 31, 2023. The company is incorporated in Pennsylvania and operates under the SIC code 6022 for State Commercial Banks. The filing was made on March 14, 2024, with the SEC file number 001-34292. The principal business address is 77 E King Street, Shippensburg, PA 17257. The report covers the fiscal year from January 1, 2023, to December 31, 2023.

Why It Matters

For investors and stakeholders tracking ORRSTOWN FINANCIAL SERVICES INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Orrstown Financial Services Inc.'s financial health, operational strategies, and risk factors for the fiscal year 2023, crucial for investors and stakeholders to assess the company's performance and future outlook. As a publicly traded entity, the timely filing of this report is a regulatory requirement, ensuring transparency and compliance with SEC guidelines, which is vital for maintaining investor confidence and market integrity.

Risk Assessment

Risk Level: low — ORRSTOWN FINANCIAL SERVICES INC shows low risk based on this filing. The risk level is low as the filing is a standard annual report (10-K) and does not indicate any immediate or significant negative events or trends based on the provided header information.

Analyst Insight

Review the detailed financial statements and risk factors within the full 10-K filing to understand Orrstown Financial Services Inc.'s performance and strategic direction for 2023.

Key Numbers

• 20231231 — Fiscal Year End (Conformed Period of Report)
• 20240314 — Filing Date (As of Date)
• 001-34292 — SEC File Number (SEC File Number)
• 24749727 — Film Number (Film Number)

Key Players & Entities

• ORRSTOWN FINANCIAL SERVICES INC (company) — Filer name
• 0000826154 (company) — Central Index Key
• 6022 (company) — Standard Industrial Classification
• PA (company) — State of Incorporation
• 77 E KING STREET (company) — Business Address Street 1
• SHIPPENSBURG (company) — Business Address City
• 17257 (company) — Business Address ZIP
• 7175326114 (company) — Business Phone

FAQ

Industry Context

Orrstown Financial Services Inc. operates within the State Commercial Banks industry (SIC 6022). This sector is characterized by traditional banking services, including deposit-taking and lending.

Regulatory Implications

As a commercial bank, Orrstown Financial Services Inc. is subject to regulations from various federal and state authorities, including the SEC for its public filings and banking regulators for its operational activities.

What Investors Should Do

1. Analyze the full 10-K document for detailed financial performance metrics, including revenue, net income, and balance sheet information.
2. Examine the 'Risk Factors' section of the 10-K to understand potential challenges and threats to the company's business.
3. Review management's discussion and analysis (MD&A) to gain insights into the company's strategies, outlook, and significant events during the fiscal year 2023.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-03-14: Filing Date — Date the 10-K report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial extraction of header information for the 2023 10-K filing; comparison to prior filings requires access to those documents.

Key Financial Figures

• $2.2 billion — 2024. As of December 31, 2023, CVLY had $2.2 billion in assets and operated 22 full-service
• $3.1 b — , 2023, the Company had total assets of $3.1 billion, total deposits of $2.6 billion a
• $2.6 billion — sets of $3.1 billion, total deposits of $2.6 billion and total shareholders' equity of $265.
• $265.1 million — llion and total shareholders' equity of $265.1 million. The Bank operates in the community ba
• $1.0 m — h a committed loan balance in excess of $1.0 million, which includes confirmation of r
• $500 thousand — l commercial relationships greater than $500 thousand rated substandard, doubtful or loss are

Filing Documents

• orrf-20231231.htm (10-K) — 6270KB
• ex212023123110k.htm (EX-21) — 2KB
• ex2312023123110k.htm (EX-23.1) — 2KB
• ex3112023123110k.htm (EX-31.1) — 11KB
• ex3122023123110k.htm (EX-31.2) — 11KB
• ex3212023123110k.htm (EX-32.1) — 5KB
• ex3222023123110k.htm (EX-32.2) — 6KB
• ex97-compensationrecoveryp.htm (EX-97) — 31KB
• orrf-20231231_g1.jpg (GRAPHIC) — 110KB
• orrf-20231231_g2.jpg (GRAPHIC) — 6KB
• 0000826154-24-000060.txt (&nbsp;) — 27607KB
• orrf-20231231.xsd (EX-101.SCH) — 122KB
• orrf-20231231_cal.xml (EX-101.CAL) — 189KB
• orrf-20231231_def.xml (EX-101.DEF) — 759KB
• orrf-20231231_lab.xml (EX-101.LAB) — 1405KB
• orrf-20231231_pre.xml (EX-101.PRE) — 1161KB
• orrf-20231231_htm.xml (XML) — 6049KB

Business

Business 4 Item 1A.

Risk Factors

Risk Factors 13 Item 1B. Unresolved Staff Comments 27 Item 1C. Cybersecurity 27 Item 2.

Properties

Properties 28 Item 3.

Legal Proceedings

Legal Proceedings 29 Item 4. Mine Safety Disclosures 29 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. [Reserved] 32 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 70 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 72 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 139 Item 9A.

Controls and Procedures

Controls and Procedures 139 Item 9B. Other Information 139 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 139 Part III Item 10. Directors, Executive Officers and Corporate Governance 139 Item 11.

Executive Compensation

Executive Compensation 139 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 140 Item 13. Certain Relationships and Related Transactions, and Director Independence 140 Item 14. Principal Accountant Fees and Services 140 Part IV Item 15. Exhibit and Financial Statement Schedules 141 Item 16. Form 10-K Summary 143

Signatures

Signatures 144 1 Table of Contents Glossary of Defined Terms The following terms may be used throughout this Annual Report on Form 10-K, including the consolidated financial statements and related notes. Term Definition ACL Allowance for credit losses ALL Allowance for loan losses AFS Available-for-sale AOCI Accumulated other comprehensive income (loss) ASC Accounting Standards Codification ASU Accounting Standards Update Bank Orrstown Bank, the commercial banking subsidiary of Orrstown Financial Services, Inc. BHC Act Bank Holding Company Act of 1965 CECL Current expected credit losses CET1 Common Equity Tier 1 CFPB Consumer Financial Protection Bureau CMO Collateralized mortgage obligation CRA Community Reinvestment Act Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act ERM Enterprise Risk Management Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FDIA Federal Deposit Insurance Act FDIC Federal Deposit Insurance Corporation FDM Financial difficulty modification FHC Financial holding company FHLB Federal Home Loan Bank FRB Board of Governors of the Federal Reserve System GAAP Accounting principles generally accepted in the United States of America GDP Gross Domestic Product GLB Act Gramm-Leach-Bliley Act GSE United States government-sponsored enterprise IEL Individually evaluated loan IRC Internal Revenue Code of 1986, as amended LHFS Loans held for sale LIBOR London Interbank Offered Rate MBS Mortgage-backed securities MSR Mortgage servicing right NIM Net interest margin OCI Other comprehensive income (loss) OFA Orrstown Financial Advisors, a division of the Bank that provides investment and brokerage services OREO Other real estate owned (foreclosed real estate) OTTI Other-than-temporary impairment Parent Company Orrstown Financial Services, Inc., the parent company of Orrstown Bank 2011 Plan 2011 Orrstown Financial Services, Inc. St

– BUSINESS

ITEM 1 – BUSINESS Background Orrstown Financial Services, Inc., a Pennsylvania corporation, is the financial holding company ("FHC") for its wholly-owned subsidiary Orrstown Bank. The Company's principal executive offices are located at 77 East King Street, Shippensburg, Pennsylvania, with additional executive and administrative offices at 4750 Lindle Road, Harrisburg, Pennsylvania. The Parent Company was organized on November 17, 1987 for the purpose of acquiring the Bank and such other banks and bank-related activities as are permitted by law. The Company provides banking and financial advisory services located in south central Pennsylvania, principally in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Anne Arundel, Baltimore, Howard and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Pending Merger On December 12, 2023, the Company and Codorus Valley Bancorp, Inc. ("Codorus Valley" or "CVLY") entered into a definitive agreement to affect a "merger of equals" transaction pursuant to which CVLY will be merged with and into the Company, with the Company as the surviving corporation (the "Merger"). Promptly following the Merger, CVLY's wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company, will be merged with and into the Bank, with the Bank as the surviving bank. Under the terms of the agreement, CVLY shareholders will have the right to receive 0.875 shares of the Company's common stock and cash in lieu of any fractional shares of the Company's common stock. Upon closing, shareholders of the Company, prior to the closing of the Merger, will own approximately 56% of the combined company and shareholders of CVLY will own approximately 44% of the combined company. The transaction is subject to regulator

Business

Business The Bank was organized in 1919 as a state-chartered bank. On March 8, 1988, in a bank holding company reorganization transaction, the Parent Company acquired 100% ownership of the Bank. The Parent Company's primary activity consists of owning and supervising its subsidiary, the Bank. Day-to-day management is conducted by its officers, who are also Bank officers. The Parent Company has historically derived most of its income through dividends from the Bank. At December 31, 2023, the Company had total assets of $3.1 billion, total deposits of $2.6 billion and total shareholders' equity of $265.1 million. The Bank operates in the community banking segment and engages in lending activities, including commercial, residential, commercial mortgages, construction, municipal, and various forms of consumer lending and deposit services, including checking, savings, time and money market deposits. The Bank also provides fiduciary, investment advisory, insurance and brokerage services. These activities engaged in by the Bank are authorized by the Pennsylvania Banking Code of 1965. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by such regulatory authorities. The concentrations of credit by type of loan are included in Note 4, Loans and Allowance for Credit Losses, to the Consolidated Financial Statements under Part II, Item 8, "Financial Statements and Supplementary Data." Human Capital At December 31, 2023, the Bank had 410 full-time and 15 part-time employees. At December 31, 2023, approximately 66% of our workforce was female and 34% were male. Our average tenure is approximately seven years. The Parent Company has no employees. Its 12 executive officers are employees of the Bank, who represent a mix of newer and more seasoned employees with diverse experience and have an average tenure of ten years. We encourage and support the growth and development of our employees. Continuous learni

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View this 10-K filing on SEC EDGAR