• Orrstown Financial Services, Inc. Reports Third Quarter 2022 Results

    Источник: Nasdaq GlobeNewswire / 18 окт 2022 15:03:41   America/Chicago

    • Net income of $5.4 million and diluted earnings per share of $0.52 for the quarter ended September 30, 2022 compared to net income of $8.9 million and diluted earnings per share of $0.83 for the quarter ended June 30, 2022;
    • Excluding the impact from the previously announced restructuring charge of $3.2 million, net income and diluted earnings per share were $7.9 million and $0.75(1) for the third quarter of 2022, respectively;
    • Net interest income increased to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022 despite a decline of $1.4 million in Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loan income over the same period;
    • Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022; net interest margin has increased for five consecutive quarters; strong margin momentum continues as a result of loan growth and the rising interest rate environment;
    • Third quarter commercial loan growth, excluding SBA PPP loans, was $57.7 million, or 14% annualized;
    • Deposits grew by $27.2 million, or 4% annualized, during the third quarter of 2022;
    • Noninterest income of $6.1 million in the third quarter of 2022 compared to $7.2 million in the second quarter of 2022; significant increases in mortgage rates caused a decrease in the fair value of residential mortgages held-for-sale; also contributing to the decline was a reduction in secondary market activity;
    • Noninterest expenses increased by $4.6 million to $23.4 million in the third quarter of 2022 from $18.8 million in the second quarter of 2022; excluding the impact from the restructuring charge, noninterest expenses increased to $20.3 million(1) during the third quarter of 2022; salaries and benefits increased during the third quarter of 2022 due primarily to the impact of wage pressures and incentive compensation, but are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter;
    • Provision for loan losses of $1.5 million in the third quarter of 2022 compared to $1.8 million in the second quarter of 2022;
    • The Board of Directors declared a cash dividend of $0.19 per common share, payable November 7, 2022, to shareholders of record as of October 31, 2022;
    • Strategic initiatives were previously announced to drive long-term growth and improve operating efficiencies through branch closures and staffing model adjustments, which resulted in a pre-tax restructuring charge of $3.2 million during the third quarter of 2022.

    SHIPPENSBURG, Pa., Oct. 18, 2022 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown" or the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended September 30, 2022. Net income totaled $5.4 million for the three months ended September 30, 2022, compared with $8.9 million for the three months ended June 30, 2022 and $7.2 million for the three months ended September 30, 2021. Diluted earnings per share totaled $0.52 for the three months ended September 30, 2022, compared with $0.83 for the three months ended June 30, 2022 and $0.65 for the three months ended September 30, 2021. Excluding the impact from the restructuring charge, net income and diluted earnings per share were $7.9 million and $0.75, respectively, for the third quarter of 2022(1).

    “Late in the third quarter, we announced initiatives designed to focus the organization on the rapidly changing banking environment and improve operating efficiencies. These initiatives included the closing of five branch locations and staffing model adjustments. We intend to utilize a portion of the savings generated from these initiatives to make additional investments in technology to further optimize the Bank's digital banking experience and address ongoing wage pressures. We expect that these initiatives will generate meaningful efficiencies in 2023 and forward to drive Orrstown’s long-term growth,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.

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

    “As expected, these initiatives negatively affected our third quarter results. However, we believe that our core operating results remained strong and expect to continue to benefit from the current interest rate environment. Net interest margin has expanded for several quarters and commercial and consumer loan growth continued during the quarter. Our asset quality metrics compare favorably to historical measurements. While our mortgage banking operations have been negatively impacted by rapid interest rate increases, we continue to focus on strengthening other fee income sources. For example, our wealth management team has sustained its level of income generation despite a significant downturn in the equity markets. The diversification of revenue sources will be critical going forward. We remain focused on enhancing our earnings power through measured growth in an economic environment that is expected to be challenging.”

    DISCUSSION OF RESULTS

    Balance Sheet

    Loans

    Excluding SBA PPP loans, total loans increased by $83.5 million from June 30, 2022 to September 30, 2022, or 17% annualized. SBA PPP loans, net of deferred fees and costs, declined by $13.2 million to $17.0 million at September 30, 2022 from $30.2 million at June 30, 2022 due to forgiveness activity. Net deferred SBA PPP fees of $0.3 million remain at September 30, 2022. Commercial loans, excluding SBA PPP loans, increased by $57.7 million, or 14% annualized, from June 30, 2022 to September 30, 2022. Loans held for investment, which includes SBA PPP loans, increased by $70.3 million from June 30, 2022 to September 30, 2022, or 14% annualized, due to net commercial and consumer loan growth.

    The first lien residential mortgage portfolio grew by $18.2 million, or 36% annualized, in the three months ended September 30, 2022 from jumbo and adjustable-rate mortgage production. Home equity lines of credit increased by $9.0 million, or 21% annualized, in the three months ended September 30, 2022.

    Investment Securities

    Investment securities decreased by $9.1 million to $510.1 million at September 30, 2022 compared to $519.2 million at June 30, 2022. During the third quarter of 2022, the Bank purchased mortgage-backed securities totaling $10.1 million and asset-backed securities totaling $8.0 million. These purchases were more than offset by an increase in net unrealized losses of $17.3 million, which resulted from market interest rate increases, and normal paydown activity of $9.0 million. See Appendix B for a summary of the Bank's investment securities at September 30, 2022, highlighting the concentrations, credit ratings and credit enhancement levels of the investment securities portfolio at such date.

    Deposits

    Deposits increased by $27.2 million, or 4% annualized, totaling approximately $2.5 billion at both September 30, 2022 and June 30, 2022. This increase resulted primarily from seasonality of public fund balances as well as retail deposit generation partially offset by certificate of deposit runoff. In the third quarter of 2022, interest-bearing demand deposits increased by $49.0 million, or 21% annualized. There were decreases in certificates of deposits of $12.1 million, or 18% annualized, non-interest-bearing demand deposits of $7.2 million, or 5% annualized, and money market and savings deposits of $2.5 million, or 1% annualized. The Bank's loan-to-deposit ratio was 83% at September 30, 2022, an increase of 2% from June 30, 2022 due to loan growth.

    Income Statement

    Net Interest Income and Margin

    Net interest income increased by $1.4 million to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022. Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022. The increase in net interest margin was a result of further deployment of cash into loans and investments as well as the impact of the rising interest rates on the loan and investment securities portfolios, partially offset by the increase in the cost of funds.

    Interest income on loans, for the three months ended September 30, 2022, increased by $1.1 million to $23.2 million compared to $22.1 million for the three months ended June 30, 2022. Loan growth and higher interest rates were the primary drivers of this increase. Interest income on loans for the three months ended September 30, 2022 included prepayment fee income of $0.1 million, a decrease of $0.3 million, from the three months ended June 30, 2022. Similarly, accretion on acquired loans decreased by $0.3 million to $0.1 million for the three months ended September 30, 2022 compared to the three months ended June 30, 2022 due to fewer payoffs and declining prepayment speed assumptions.

    Interest income recognized on SBA PPP loans totaled $0.5 million in the three months ended September 30, 2022 compared to $1.9 million in the three months ended June 30, 2022. The SBA PPP loan portfolio averaged $25.0 million in the three months ended September 30, 2022 compared to $72.5 million in the three months ended June 30, 2022, which reflects continued forgiveness from the SBA.

    Interest income on investment securities increased by $1.0 million to $4.4 million in the three months ended September 30, 2022 from $3.4 million for the second quarter of 2022. The increase reflects the impact from rising interest rates on investments for which resets occur at various frequencies and the additional yield generated from investments purchased at the end of the second quarter and into the third quarter of 2022.

    Average cash and cash equivalents decreased from $131.4 million in the three months ended June 30, 2022 to $38.1 million in the three months ended September 30, 2022. The decrease reflects the deployment of excess cash balances into loans and investment securities.

    Provision for Loan Losses

    The Company recorded a provision for loan losses of $1.5 million for the three months ended September 30, 2022 compared to $1.8 million for the three months ended June 30, 2022 primarily due to increases in both commercial and consumer loans during the third quarter of 2022. Net charge-offs were $70 thousand for the three months ended September 30, 2022 compared to net charge-offs of $4 thousand for the three months ended June 30, 2022. The allowance for loan losses totaled $24.7 million at September 30, 2022, compared with $23.3 million at June 30, 2022, and the allowance for loan losses to total loans increased to 1.18% at September 30, 2022 from 1.15% from June 30, 2022.

    Asset quality metrics in the third quarter of 2022 compare favorably to historical measurements. The ratio of nonperforming loans to gross loans improved to 0.25% at September 30, 2022, a decrease of 0.02%, from 0.27% at June 30, 2022. Classified loans remained consistent at $19.6 million at both September 30, 2022 and June 30, 2022. Criticized loans increased from $34.1 million at June 30, 2022 to $54.9 million at September 30, 2022 primarily due to downgrades for one borrower within Acquisition and Development and the other borrower within the Commercial and Industrial loan categories. The ratio of the allowance for loan losses to nonaccrual loans increased to 466% at September 30, 2022 from 432% at June 30, 2022. Management believes the allowance for loan losses to be adequate based on current asset quality metrics and economic conditions.

    Noninterest Income

    Noninterest income totaled $6.1 million in the three months ended September 30, 2022 compared with $7.2 million in the three months ended June 30, 2022.

    Mortgage banking income decreased by $1.5 million from income of $0.5 million in the second quarter of 2022 to a loss of $1.0 million in the third quarter of 2022. Market conditions, including rapidly increasing mortgage interest rates and low housing inventory, caused a significant decline in the fair value of the held-for-sale mortgages. In addition, construction has been prolonged in part due to supply chain challenges, which have delayed the marketability of mortgages for sale. The impact was a fair value reduction of $1.4 million in the three months ended September 30, 2022. The difficult mortgage market also slowed residential mortgage loan production, thereby causing corresponding reductions in the residential mortgage loan pipeline and secondary market sales during the three months ended September 30, 2022. Mortgage loans sold totaled $12.7 million in the third quarter of 2022 compared with $22.9 million in the second quarter of 2022.

    Swap fee income decreased by $0.6 million to $0.2 million for the three months ended September 30, 2022 compared to $0.8 million for the three months ended June 30, 2022. Swap fee income fluctuates based on market conditions and client demand.

    Other income increased by $0.9 million to $1.1 million for the three months ended September 30, 2022 from $0.2 million during the three months ended June 30, 2022. The third quarter of 2022 included income from distributions on investments in non-housing limited partnerships totaling $1.0 million.

    Noninterest Expenses

    Noninterest expenses increased by $4.6 million to $23.4 million in the three months ended September 30, 2022 from $18.8 million in the three months ended June 30, 2022. During the third quarter of 2022, the Company announced that five branch locations would be closing and staffing model adjustments would be made to drive long-term growth and improve operating efficiencies in 2023 and forward. As a result of these initiatives, the Company recorded a pre-tax restructuring charge of $3.2 million, which consisted of building and fixed asset write-offs of $1.9 million and early retirement/severance costs of $1.3 million.

    Salaries and benefits expense increased by $1.4 million to $12.7 million in the three months ended September 30, 2022 from $11.3 million in the three months ended June 30, 2022 due to the filling of several vacancies, higher healthcare costs and merit-based salary and incentive compensation increases. These expenses are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter.

    Advertising and bank promotions expense decreased by $0.6 million to $0.3 million in the three months ended September 30, 2022 from $0.9 million for the three months ended June 30, 2022 due to $0.5 million in contributions to the Pennsylvania Educational Improvement Tax Credit Program during the second quarter of 2022. Taxes other than income increased by $0.4 million to $0.5 million in the three months ended September 30, 2022. This increase reflects the tax credits recognized on these contributions during the second quarter of 2022.

    Income Taxes

    The Company's effective tax rate for the second quarter of 2022 was 17.6% compared with 17.4% for the second quarter of 2022. The Company's effective tax rate for the three months ended September 30, 2022 is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies, as well as tax credits. The effective tax rate for the nine months ended September 30, 2022 is 18.2%.

    Capital

    Shareholders’ equity totaled $227.6 million at September 30, 2022, a decrease of $9.9 million from $237.5 million at June 30, 2022. The decrease was primarily attributable to a reduction of $14.1 million in accumulated other comprehensive income as unrealized losses on available-for-sale securities increased from higher market interest rates and dividends paid of $2.0 million, partially offset by net income of $5.4 million for the three months ended September 30, 2022. Tangible book value per share(1) decreased from $20.23 per share at June 30, 2022 to $19.30 per share at September 30, 2022 primarily as a result of the decrease in shareholders' equity.

    The Company's tangible common equity ratio decreased to 7.3% at September 30, 2022 from 7.7% at June 30, 2022 primarily due to a decrease in tangible equity from the increase in unrealized losses on available-for-sale securities. The Company's total risk-based capital ratio decreased to 13.2% at September 30, 2022 from 13.5% at June 30, 2022 due to deployment of cash into commercial loans and an increase in deferred tax assets resulting primarily from the increase in unrealized losses on available-for-sale securities, both resulting in increases to risk weighted assets. The Company's Tier 1 leverage ratio increased to 8.8% at September 30, 2022 from 8.5% at June 30, 2022 primarily due to the impact of the decrease in average assets caused by the decrease in average deposits over that period.

    The Board of Directors approved a quarterly dividend of $0.19 per share, payable on November 7, 2022, to shareholders of record as of October 31, 2022. The dividend payout ratio totaled 37% for the three months ended September 30, 2022 compared to 23% for the three months ended June 30, 2022. The increase is partially attributable to the impact of the restructuring charge. At this time, the Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

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

    Investor Relations Contact:
    Neelesh Kalani
    Executive Vice President, Chief Financial Officer
    Phone (717) 510-7097


    ORRSTOWN FINANCIAL SERVICES, INC.       
    FINANCIAL HIGHLIGHTS (Unaudited)       
            
     Three Months Ended Nine Months Ended
     September 30, September 30, September 30, September 30,
    (Dollars in thousands) 2022   2021   2022   2021 
            
    Profitability for the period:       
    Net interest income$25,455  $20,620  $72,146  $64,376 
    Provision for loan losses 1,500   365   3,575   (10)
    Noninterest income 6,058   7,651   20,726   21,859 
    Noninterest expenses 23,412   19,035   61,570   53,851 
    Income before income taxes 6,601   8,871   27,727   32,394 
    Income tax expense 1,159   1,679   5,046   6,219 
    Net income available to common shareholders$5,442  $7,192  $22,681  $26,175 
            
    Financial ratios:       
    Return on average assets(1) 0.77%  0.98%  1.07%  1.21%
    Return on average assets, adjusted(1) (2) (3) 1.12%  0.98%  1.19%  1.21%
    Return on average equity(1) 8.93%  10.69%  12.03%  13.49%
    Return on average equity, adjusted(1) (2) (3) 13.02%  10.69%  13.35%  13.49%
    Net interest margin(1) 3.92%  3.03%  3.70%  3.21%
    Efficiency ratio 74.3%  67.3%  66.3%  62.4%
    Efficiency ratio, adjusted(2) (3) 64.3%  67.3%  62.9%  62.4%
    Income per common share:       
    Basic$0.52  $0.66  $2.14  $2.38 
    Basic, adjusted(2) (3)$0.77  $0.66  $2.37  $2.38 
    Diluted$0.52  $0.65  $2.11  $2.36 
    Diluted, adjusted(2) (3)$0.75  $0.65  $2.34  $2.36 
            
    Average equity to average assets 8.59%  9.20%  8.90%  8.96%
            
    (1)Annualized.       
    (2) Ratio has been adjusted for restructuring expenses.       
    (3) 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.   
    FINANCIAL HIGHLIGHTS (Unaudited)   
    (continued)   
     September 30, December 31,
      2022   2021 
    At period-end:   
    Total assets$2,849,362  $2,834,565 
    Total deposits 2,505,853   2,464,929 
    Loans, net of allowance for loan losses 2,063,218   1,958,806 
    Loans held-for-sale, at fair value 10,175   8,868 
    Securities available for sale 503,596   472,438 
    Borrowings 22,632   25,197 
    Subordinated notes 32,010   31,963 
    Shareholders' equity 227,648   271,656 
        
    Credit quality and capital ratios(1):   
    Allowance for loan losses to total loans 1.18%  1.07%
    Total nonaccrual loans to total loans 0.25%  0.33%
    Nonperforming assets to total assets 0.19%  0.23%
    Allowance for loan losses to nonaccrual loans 466%  328%
    Total risk-based capital:   
    Orrstown Financial Services, Inc. 13.2%  15.0%
    Orrstown Bank 12.9%  14.0%
    Tier 1 risk-based capital:   
    Orrstown Financial Services, Inc. 10.7%  12.2%
    Orrstown Bank 11.8%  12.9%
    Tier 1 common equity risk-based capital:   
    Orrstown Financial Services, Inc. 10.7%  12.2%
    Orrstown Bank 11.8%  12.9%
    Tier 1 leverage capital:   
    Orrstown Financial Services, Inc. 8.8%  8.5%
    Orrstown Bank 9.6%  8.9%
        
    Book value per common share$21.30  $24.29 
        
    (1) Capital ratios are estimated, subject to regulatory filings   


    ORRSTOWN FINANCIAL SERVICES, INC.   
    CONSOLIDATED BALANCE SHEETS (Unaudited)   
        
    (Dollars in thousands, except per share amounts)September 30, 2022 December 31, 2021
    Assets   
    Cash and due from banks$34,481  $21,217 
    Interest-bearing deposits with banks 32,446   187,493 
    Cash and cash equivalents 66,927   208,710 
    Restricted investments in bank stocks 6,469   7,252 
    Securities available for sale (amortized cost of $558,056 and $466,806 at September 30, 2022 and December 31, 2021, respectively) 503,596   472,438 
    Loans held for sale, at fair value 10,175   8,868 
    Loans 2,087,927   1,979,986 
    Less: Allowance for loan losses (24,709)  (21,180)
    Net loans 2,063,218   1,958,806 
    Premises and equipment, net 31,457   34,045 
    Cash surrender value of life insurance 71,332   70,217 
    Goodwill 18,724   18,724 
    Other intangible assets, net 3,338   4,183 
    Accrued interest receivable 9,212   8,234 
    Deferred tax assets, net 24,145   11,648 
    Other assets 40,769   31,440 
    Total assets$2,849,362  $2,834,565 
    Liabilities   
    Deposits:   
    Noninterest-bearing$562,024  $553,238 
    Interest-bearing 1,943,829   1,911,691 
    Total deposits 2,505,853   2,464,929 
    Securities sold under agreements to repurchase 21,065   23,301 
    FHLB advances and other 1,567   1,896 
    Subordinated notes 32,010   31,963 
    Accrued interest and other liabilities 61,219   40,820 
    Total liabilities 2,621,714   2,562,909 
    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; 11,236,558 shares issued and 10,686,064 outstanding at September 30, 2022; 11,258,167 shares issued and 11,183,050 outstanding at December 31, 2021 585   586 
    Additional paid—in capital 188,730   189,689 
    Retained earnings 95,137   78,700 
    Accumulated other comprehensive (loss) income (43,468)  4,449 
    Treasury stock— 550,494 and 75,117 shares, at cost at September 30, 2022 and December 31, 2021, respectively (13,336)  (1,768)
    Total shareholders’ equity 227,648   271,656 
    Total liabilities and shareholders’ equity$2,849,362  $2,834,565 


    ORRSTOWN FINANCIAL SERVICES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
             
      Three Months Ended Nine Months Ended
      September 30, September 30, September 30, September 30,
    (In thousands)  2022   2021  2022   2021 
    Interest income        
    Loans $23,152  $19,890 $66,548  $62,724 
    Investment securities - taxable  2,907   1,514  6,462   5,007 
    Investment securities - tax-exempt  1,160   652  3,013   1,790 
    Short-term investments  200   135  536   255 
    Total interest income  27,419   22,191  76,559   69,776 
    Interest expense        
    Deposits  1,372   937  2,758   3,410 
    Securities sold under agreements to repurchase  10   8  24   25 
    FHLB advances and other  78   123  121   458 
    Subordinated notes  504   503  1,510   1,507 
    Total interest expense  1,964   1,571  4,413   5,400 
    Net interest income  25,455   20,620  72,146   64,376 
    Provision for loan losses  1,500   365  3,575   (10)
    Net interest income after provision for loan losses  23,955   20,255  68,571   64,386 
    Noninterest income        
    Service charges  1,216   993  3,483   2,758 
    Interchange income  1,014   1,030  3,059   3,049 
    Swap fee income  197   67  1,935   135 
    Wealth management income  2,953   2,917  8,716   8,570 
    Mortgage banking activities  (1,014)  1,333  205   4,684 
    Investment securities (losses) gains  (14)  479  (163)  635 
    Other income  1,706   832  3,491   2,028 
    Total noninterest income  6,058   7,651  20,726   21,859 
    Noninterest expenses        
    Salaries and employee benefits  12,705   11,498  35,354   31,907 
    Occupancy, furniture and equipment  2,380   2,374  7,370   7,292 
    Data processing  1,192   990  3,410   3,041 
    Advertising and bank promotions  278   735  1,514   1,434 
    FDIC insurance  294   218  767   570 
    Professional services  887   562  2,417   1,862 
    Taxes other than income  488   16  1,160   929 
    Intangible asset amortization  272   314  845   972 
    Restructuring expenses  3,155     3,155    
    Other operating expenses  1,761   2,328  5,578   5,844 
    Total noninterest expenses  23,412   19,035  61,570   53,851 
    Income before income tax expense  6,601   8,871  27,727   32,394 
    Income tax expense  1,159   1,679  5,046   6,219 
    Net income $5,442  $7,192 $22,681  $26,175 
             
    Share information:        
    Basic earnings per share $0.52  $0.66 $2.14  $2.38 
    Diluted earnings per share $0.52  $0.65 $2.11  $2.36 
    Weighted average shares - basic  10,369   10,979  10,611   10,976 
    Weighted average shares - diluted  10,529   11,122  10,758   11,103 


    ORRSTOWN FINANCIAL SERVICES, INC.    
    ANALYSIS OF NET INTEREST INCOME    
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)  
     Three Months Ended
     9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021
       Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-   Taxable- Taxable-
     Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent
    (Dollars in thousands)Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate
    Assets                             
    Federal funds sold & interest-bearing bank balances$38,068 $200  2.08% $131,449 $235  0.72% $199,788 $101  0.20% $250,336 $98  0.16% $347,242 $135  0.15%
    Investment securities (1) 528,988  4,377  3.31   523,940  3,388  2.59   472,195  2,512  2.13   477,217  2,506  2.08   464,417  2,339  2.00 
    Loans (1)(2)(3) 2,051,707  23,219  4.49   2,008,283  22,090  4.41   1,974,804  21,429  4.39   1,975,014  21,559  4.33   1,919,926  19,945  4.12 
    Total interest-earning assets 2,618,763  27,796  4.22   2,663,672  25,713  3.87   2,646,787  24,042  3.67   2,702,567  24,163  3.55   2,731,585  22,419  3.26 
    Other assets 196,277      192,561      184,300      187,622      195,089    
    Total$2,815,040     $2,856,233     $2,831,087     $2,890,189     $2,926,674    
    Liabilities and Shareholders' Equity                        
    Interest-bearing demand deposits$1,379,082  912  0.26  $1,420,051  301  0.09  $1,398,182  256  0.07  $1,430,845  273  0.08  $1,411,243  286  0.08 
    Savings deposits 237,462  90  0.15   236,916  63  0.11   227,676  57  0.10   215,957  55  0.10   209,112  53  0.10 
    Time deposits 265,015  370  0.55   275,408  337  0.49   298,618  372  0.51   313,148  461  0.58   349,215  598  0.68 
    Total interest-bearing deposits 1,881,559  1,372  0.29   1,932,375  701  0.15   1,924,476  685  0.14   1,959,950  789  0.16   1,969,570  937  0.19 
    Securities sold under agreements to repurchase 23,480  10  0.18   24,045  7  0.11   23,530  7  0.12   24,069  7  0.12   23,578  8  0.13 
    FHLB advances and other 10,394  78  3.02   1,741  21  4.74   1,850  22  4.74   1,956  23  4.70   45,071  123  1.09 
    Subordinated notes 32,000  504  6.29   31,985  503  6.29   31,969  503  6.29   31,954  503  6.29   31,938  503  6.29 
    Total interest-bearing liabilities 1,947,433  1,964  0.40   1,990,146  1,232  0.25   1,981,825  1,217  0.25   2,017,929  1,322  0.26   2,070,157  1,571  0.30 
    Noninterest-bearing demand deposits 575,777      572,171      540,139      559,882      548,923    
    Other 49,964      47,190      40,919      42,380      38,409    
    Total Liabilities 2,573,174      2,609,507      2,562,883      2,620,191      2,657,489    
    Shareholders' Equity 241,866      246,726      268,204      269,998      269,185    
    Total$2,815,040     $2,856,233     $2,831,087     $2,890,189     $2,926,674    
    Taxable-equivalent net interest income / net interest spread   25,832  3.82%    24,481  3.62%    22,825  3.42%    22,841  3.29%    20,848  2.96%
    Taxable-equivalent net interest margin    3.92%     3.68%     3.49%     3.35%     3.03%
    Taxable-equivalent adjustment   (377)      (363)      (252)      (243)      (228)  
    Net interest income  $25,455      $24,118      $22,573      $22,598      $20,620   
    Ratio of average interest-earning assets to average interest-bearing liabilities    134%     134%     134%     134%     132%
                                  
                                  
    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 balances include nonaccrual loans.
    (3)Interest income on loans includes prepayment and late fees, where applicable
     


    ORRSTOWN FINANCIAL SERVICES, INC.      
    ANALYSIS OF NET INTEREST INCOME    
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)  
     Nine Months Ended
     September 30, 2022 September 30, 2021
       Taxable- Taxable-   Taxable- Taxable-
     Average Equivalent Equivalent Average Equivalent Equivalent
    (Dollars in thousands)Balance Interest Rate Balance Interest Rate
    Assets           
    Federal funds sold & interest-bearing bank balances$122,509 $536  0.59% $261,697 $255  0.13%
    Investment securities (1) 508,582  10,276  2.70   456,919  7,272  2.13 
    Loans (1)(2)(3) 2,011,881  66,738  4.43   1,988,834  62,895  4.23 
    Total interest-earning assets 2,642,972  77,550  3.92   2,707,450  70,422  3.48 
    Other assets 191,090      188,924    
    Total$2,834,062     $2,896,374    
    Liabilities and Shareholders' Equity           
    Interest-bearing demand deposits$1,399,035  1,470  0.14  $1,380,241  1,014  0.10 
    Savings deposits 234,054  209  0.12   197,792  149  0.10 
    Time deposits 279,557  1,079  0.52   376,142  2,247  0.80 
    Total interest-bearing deposits 1,912,646  2,758  0.19   1,954,175  3,410  0.23 
    Securities sold under agreements to repurchase 23,685  24  0.14   22,490  25  0.15 
    FHLB advances and other 4,693  121  3.44   53,608  458  1.14 
    Subordinated notes 31,985  1,510  6.29   31,924  1,507  6.29 
    Total interest-bearing liabilities 1,973,009  4,413  0.30   2,062,197  5,400  0.35 
    Noninterest-bearing demand deposits 562,826      537,247    
    Other 46,058      37,413    
    Total Liabilities 2,581,893      2,636,857    
    Shareholders' Equity 252,169      259,517    
    Total$2,834,062     $2,896,374    
    Taxable-equivalent net interest income / net interest spread   73,137  3.62%    65,022  3.13%
    Taxable-equivalent net interest margin    3.70%     3.21%
    Taxable-equivalent adjustment   (991)      (646)  
    Net interest income  $72,146      $64,376   
    Ratio of average interest-earning assets to average interest-bearing liabilities    134%     131%
                
    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 balances include nonaccrual loans.
    (3) Interest income on loans includes prepayment and late fees, where applicable


    ORRSTOWN FINANCIAL SERVICES, INC.    
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)    
              
    (In thousands)September 30,
    2022
     June 30,
    2022
     March 31,
    2022
     December 31,
    2021
     September 30,
    2021
    Profitability for the quarter:         
    Net interest income$25,455  $24,118  $22,573  $22,598  $20,620 
    Provision for loan losses 1,500   1,775   300   1,100   365 
    Noninterest income 6,058   7,194   7,474   7,293   7,651 
    Noninterest expenses 23,412   18,794   19,364   20,290   19,035 
    Income before income taxes 6,601   10,743   10,383   8,501   8,871 
    Income tax expense 1,159   1,872   2,015   1,795   1,679 
    Net income$5,442  $8,871  $8,368  $6,706  $7,192 
              
    Financial ratios:         
    Return on average assets(1) 0.77%  1.25%  1.20%  0.93%  0.98%
    Return on average equity(1) 8.93%  14.42%  12.65%  9.93%  10.69%
    Net interest margin(1) 3.92%  3.68%  3.49%  3.35%  3.03%
    Efficiency ratio 74.3%  60.0%  64.4%  67.9%  67.3%
              
    Per share information:         
    Income per common share:         
        Basic$0.52  $0.84  $0.77  $0.61  $0.66 
        Diluted 0.52   0.83   0.76   0.60   0.65 
    Book value 21.30   22.25   23.00   24.29   23.97 
    Tangible book value(2) 19.30   20.23   21.03   22.32   21.98 
      Cash dividends paid 0.19   0.19   0.19   0.19   0.19 
              
    Average basic shares 10,369   10,610   10,860   10,939   10,979 
    Average diluted shares 10,529   10,744   11,007   11,113   11,122 
     
    (1) Annualized.
    (2) 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)         
     September 30,
    2022
     June 30,
    2022
     March 31,
    2022
     December 31,
    2021
     September 30,
    2021
    Noninterest income:         
    Service charges$1,216  $1,194  $1,073  $935 $993
    Interchange income 1,014   1,064   981   1,080  1,030
    Swap fee income 197   785   953   158  67
    Wealth management income 2,953   2,894   2,869   2,897  2,917
    Mortgage banking activities (1,014)  498   721   1,225  1,333
    Other income 1,706   762   1,023   995  832
    Investment securities (losses) gains (14)  (3)  (146)  3  479
    Total noninterest income$6,058  $7,194  $7,474  $7,293 $7,651
              
    Noninterest expenses:         
    Salaries and employee benefits$12,705  $11,312  $11,337  $12,095 $11,498
    Occupancy, furniture and equipment 2,380   2,423   2,567   2,554  2,374
    Data processing 1,192   1,165   1,053   1,020  990
    Advertising and bank promotions 278   881   355   744  735
    FDIC insurance 294   190   283   246  218
    Professional services 887   722   808   693  562
    Taxes other than income 488   108   564   392  16
    Intangible asset amortization 272   281   292   303  314
    Restructuring expenses 3,155           
    Other operating expenses 1,761   1,712   2,105   2,243  2,328
    Total noninterest expenses$23,412  $18,794  $19,364  $20,290 $19,035
              


    ORRSTOWN FINANCIAL SERVICES, INC.        
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)      
    (continued)         
     September 30,
    2022
     June 30,
    2022
     March 31,
    2022
     December 31,
    2021
     September 30,
    2021
    Balance Sheet at quarter end:         
    Cash and cash equivalents$66,927  $111,906  $214,238  $208,710  $311,415 
    Restricted investments in bank stocks 6,469   6,500   6,791   7,252   7,051 
    Securities available for sale 503,596   512,698   529,730   472,438   445,018 
    Loans held for sale, at fair value 10,175   7,824   7,403   8,868   6,412 
    Loans:         
    Commercial real estate:         
        Owner occupied 313,125   287,825   256,526   238,668   196,585 
        Non-owner occupied 573,605   559,309   558,999   551,783   509,703 
        Multi-family 114,561   116,110   93,158   93,255   112,002 
        Non-owner occupied residential 105,267   109,141   102,269   106,112   100,088 
    Commercial and industrial(1) 378,574   379,729   443,170   485,728   540,205 
    Acquisition and development:         
        1-4 family residential construction 20,810   22,650   15,115   12,279   12,246 
        Commercial and land development 148,512   134,947   105,204   93,925   71,784 
    Municipal 12,683   12,957   14,626   14,989   13,631 
        Total commercial loans 1,667,137   1,622,668   1,589,067   1,596,739   1,556,244 
    Residential mortgage:         
        First lien 220,970   202,787   203,231   198,831   203,360 
        Home equity – term 5,869   5,996   5,820   6,081   7,079 
        Home equity – lines of credit 180,267   171,269   164,818   160,705   154,004 
    Installment and other loans 13,684   14,909   15,371   17,630   19,077 
      Total loans 2,087,927   2,017,629   1,978,307   1,979,986   1,939,764 
      Allowance for loan losses (24,709)  (23,279)  (21,508)  (21,180)  (19,965)
      Net loans held-for-investment 2,063,218   1,994,350   1,956,799   1,958,806   1,919,799 
    Goodwill 18,724   18,724   18,724   18,724   18,724 
    Other intangible assets, net 3,338   3,610   3,891   4,183   4,486 
    Total assets 2,849,362   2,824,201   2,900,537   2,834,565   2,870,182 
    Total deposits 2,505,853   2,478,616   2,545,992   2,464,929   2,502,108 
    Borrowings 22,632   25,965   26,412   25,197   29,598 
    Subordinated notes 32,010   31,994   31,978   31,963   31,948 
    Total shareholders' equity 227,648   237,527   254,804   271,656   268,569 
                        
    (1) This balance includes $17.0 million, $30.2 million, $122.5 million, $189.9 million and $259.9 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.


    ORRSTOWN FINANCIAL SERVICES, INC.        
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)      
    (continued)         
     September 30,
    2022
     June 30,
    2022
     March 31,
    2022
     December 31,
    2021
     September 30,
    2021
    Capital and credit quality measures (1):         
    Total risk-based capital:         
    Orrstown Financial Services, Inc 13.2%  13.5%  14.3%  15.0%  15.6%
    Orrstown Bank 12.9%  13.3%  13.8%  14.0%  14.7%
    Tier 1 risk-based capital:         
    Orrstown Financial Services, Inc 10.7%  10.9%  11.7%  12.2%  12.8%
    Orrstown Bank 11.8%  12.2%  12.7%  12.9%  13.5%
    Tier 1 common equity risk-based capital:         
    Orrstown Financial Services, Inc 10.7%  10.9%  11.7%  12.2%  12.8%
    Orrstown Bank 11.8%  12.2%  12.7%  12.9%  13.5%
    Tier 1 leverage capital:         
    Orrstown Financial Services, Inc 8.8%  8.5%  8.8%  8.5%  8.3%
    Orrstown Bank 9.6%  9.5%  9.5%  8.9%  8.7%
              
    Average equity to average assets 8.59%  8.64%  9.47%  9.34%  9.20%
    Allowance for loan losses to total loans 1.18%  1.15%  1.09%  1.07%  1.03%
    Total nonaccrual loans to total loans 0.25%  0.27%  0.28%  0.33%  0.47%
    Nonperforming assets to total assets 0.19%  0.19%  0.19%  0.23%  0.32%
    Allowance for loan losses to nonaccrual loans 466%  432%  390%  328%  219%
              
    Other information:         
    Net charge-offs (recoveries)$70  $4  $(28) $(115) $(219)
    Classified loans 19,576   19,682   23,421   23,050   26,910 
    Nonperforming and other risk assets:         
    Nonaccrual loans 5,303   5,387   5,510   6,449   9,116 
    Other real estate owned              
    Total nonperforming assets 5,303   5,387   5,510   6,449   9,116 
    Restructured loans still accruing 689   568   575   804   839 
    Loans past due 90 days or more and still accruing(2) 232   322   238   1,201   362 
      Total nonperforming and other risk assets$6,224  $6,277  $6,323  $8,454  $10,317 
     
    (1) Capital ratios are estimated, subject to regulatory filings.
     
    (2) Includes $0.2 million, $0.3 million, $0.2 million, $0.3 million and $0.4 million of purchased credit impaired loans at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively. As of December 31, 2021, there was one loan for $0.9 million, which was in the process of collection and guaranteed by the SBA, and was subsequently collected during the first quarter of 2022.

    Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

    As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets, which totaled $22.1 million and $22.9 million at September 30, 2022 and December 31, 2021, respectively. Additionally, the Company incurred $3.2 million in restructuring charges during the three months ended September 30, 2022.

    Management believes providing certain “non-GAAP” financial information will assist investors in their understanding of the effect of acquisition activity on reported results, particularly to overcome comparability issues related to the influence of intangibles (principally goodwill) created in acquisitions. Management also 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 associated with increasing operating efficiencies for the long-term.

    Tangible book value per common share and adjusted net income and associated ratios from the restructuring charge, 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:

    (dollars and shares in thousands)

    Tangible Book Value per Common Share September 30,
    2022
     June 30,
    2022
     March 31,
    2022
     December 31,
    2021
     September 30,
    2021
    Shareholders' equity $227,648  $237,527  $254,804  $271,656  $268,569 
    Less: Goodwill  18,724   18,724   18,724   18,724   18,724 
    Other intangible assets  3,338   3,610   3,891   4,183   4,486 
    Related tax effect  (701)  (758)  (817)  (878)  (942)
    Tangible common equity (non-GAAP) $206,287  $215,951  $233,006  $249,627  $246,301 
               
    Common shares outstanding  10,686   10,676   11,079   11,183   11,205 
               
    Book value per share (most directly comparable GAAP based measure) $21.30  $22.25  $23.00  $24.29  $23.97 
    Intangible assets per share  2.00   2.02   1.97   1.97   1.99 
    Tangible book value per share (non-GAAP) $19.30  $20.23  $21.03  $22.32  $21.98 


    (dollars and shares in thousands)September 30, 2022
    Adjusted Ratios for Restructuring ChargesThree Months Ended Nine Months Ended
    Net income (A)$5,442  $22,681 
    Plus: Restructuring expenses (B) 3,155   3,155 
    Less: Related tax effect (C) (663)  (663)
    Adjusted net income (D=A+B-C)$7,934  $25,173 
        
    Average assets (E)$2,815,040  $2,834,062 
    Return on average assets(1)(= A / E) 0.77%  1.07%
    Return on average assets, adjusted(1)(= D / E) 1.12%  1.19%
        
    Average equity (F)$241,866  $252,169 
    Return on average equity(1)(= A / F) 8.93%  12.03%
    Return on average equity, adjusted(1)(= D / F) 13.02%  13.35%
        
    Weighted average shares - basic (G) 10,369   10,611 
    Basic earnings per share (= A / G)$0.52  $2.14 
    Basic earnings per share, adjusted (= D / G)$0.77  $2.37 
        
    Weighted average shares - diluted (H) 10,529   10,758 
    Diluted earnings per share (= A / H)$0.52  $2.11 
    Diluted earnings per share, adjusted (= D / H)$0.75  $2.34 
        
    Noninterest expense (I)$23,412  $61,570 
    Less: Restructuring expenses (B) (3,155)  (3,155)
    Adjusted noninterest expense (J = I - B)$20,257  $58,415 
        
    Net interest income (K)$25,455  $72,146 
    Noninterest income (L) 6,058   20,726 
    Total operating income (M = K + L)$31,513  $92,872 
        
    Efficiency ratio (= I / M) 74.3%  66.3%
    Efficiency ratio, adjusted (= J / M) 64.3%  62.9%
        
    (1) Annualized   

    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 September 30, 2022:

    (dollars in thousands)

    SectorPortfolio Mix Amortized Book Fair Value Credit Enhancement AAA AA A BBB NR Collateral Type
    Unsecured ABS1% $5,230 $4,731 28% % % % % 100% Unsecured Consumer Debt
    Student Loan ABS1   7,284  7,079 26          100  Seasoned Student Loans
    Federal Family Education Loan ABS18   99,582  97,456 8  87  13        Federal Family Education Loan (1)
    PACE Loan ABS   2,777  2,542 6  100          PACE Loans (4)
    Non-Agency CMBS2   10,047  10,045 18          100  Commercial Real Estate
    Non-Agency RMBS3   17,012  15,116 13  100          Reverse Mortgages (2)
    Municipal - General Obligation22   122,576  107,870   5  90  5       
    Municipal - Revenue24   132,026  112,166     83  12    5   
    SBA ReRemic (5)1   5,840  5,737     100        SBA Guarantee (3)
    Agency MBS24   135,223  123,353     100        Residential Mortgages (3)
    U.S. Treasury securities4   20,074  17,115     100         
    Bank CDs   249  249           100  FDIC Insured CD
     100% $557,920 $503,459   20% 71% 4% % 5%  
                        
    (1) Minimum of 18% guaranteed by U.S. government
    (2) Reverse mortgages fund over time and credit enhancement is estimated based on prior experience
    (3) 75% guaranteed by U.S. government agencies
    (4) PACE acronym represents Property Assessed Clean Energy loans
    (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 $2.8 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, Howard, Kent and Washington Counties, Maryland, as well as Baltimore City, Maryland. 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 and projections about 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. Forward-looking statements are statements that include projections, predictions, expectations, estimates or beliefs about events or results or otherwise are not statements of historical factors, many of which, by their nature, are inherently uncertain and beyond the Company's control, and include, but are not limited to, statements related to new business development, new loan opportunities, growth in the balance sheet and fee-based revenue lines of business, merger and acquisition activity, reducing risk assets and mitigating losses in the future. 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, successful merger and acquisition activity and cost savings initiatives and continued reductions in risk assets or mitigate losses in the future. In addition to risks and uncertainties related to the COVID-19 pandemic (including those related to variants) and resulting governmental and societal responses, factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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; the integration of the Company's strategic acquisitions; the inability to fully achieve expected savings, efficiencies or synergies from mergers and acquisitions and cost savings initiatives, or taking longer than estimated for such savings, efficiencies and synergies to be realized; changes in laws and regulations; interest rate movements; 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 pending litigation and legal proceedings; the failure of the SBA to honor its guarantee of loans issued under the SBA PPP; the timing of the repayment of SBA PPP loans and the impact it has on fee recognition; our ability to convert new relationships gained through the SBA PPP efforts to full banking relationships; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2021, and our Quarterly Reports on Form 10-Q under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings made with the SEC. The statements are valid only as of the date hereof and we disclaim any obligation to update this information. 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 does not undertake 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.

     


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