Breaking Down Orrstown Financial Services, Inc. (ORRF) Financial Health: Key Insights for Investors

Breaking Down Orrstown Financial Services, Inc. (ORRF) Financial Health: Key Insights for Investors

US | Financial Services | Banks - Regional | NASDAQ

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Are you keeping a close watch on your investments? Have you ever wondered about the financial stability of Orrstown Financial Services, Inc. (ORRF) and what it means for your portfolio? In 2024, ORRF reported a revenue of $176.14 million and a net income of $13.7 million for the three months ended December 31, showcasing its financial performance. The company's tangible book value per share increased to $21.19, and it maintains a total risk-based capital ratio of 12.4%. With a dividend yield of 3.86%, is ORRF a reliable investment, or are there hidden risks beneath the surface that you need to consider?

Orrstown Financial Services, Inc. (ORRF) Revenue Analysis

Understanding Orrstown Financial Services, Inc.'s (ORRF) revenue streams is crucial for investors seeking to assess the company's financial health and growth potential. A detailed analysis provides insights into where the company's money comes from, how these sources have changed over time, and what factors might influence future performance.

Here's a breakdown of key aspects of ORRF's revenue:

  • Primary Revenue Sources: Orrstown Financial Services, Inc. offers a range of banking and financial advisory services. These include commercial lending, deposit products, treasury management solutions, and investment services. The bank's commercial lending is primarily focused in its geographic regions, with a significant portion of its loan portfolio dedicated to business purposes. Deposit products include a variety of options, with an emphasis on digital capabilities. Investment services are provided through Orrstown Financial Advisors, a division of the bank.
  • Year-over-Year Revenue Growth: In the fiscal year ending December 31, 2024, Orrstown Financial Services had annual revenue of $176.14M, reflecting a 17.51% growth. In 2023, the company's annual revenue was $128.88M with a 5.34% growth. The company's revenue in the last twelve months reached $210.18M, a decrease of 6.89%.
  • Contribution of Business Segments: Orrstown Financial Services successfully completed a merger with Codorus Valley, expanding its market presence in York, Pennsylvania. As of December 31, 2024, Orrstown Financial Advisors managed assets totaling $3.2 billion.
  • Analysis of Significant Changes: The merger with Codorus Valley Bancorp on July 1, 2024, significantly impacted Orrstown's financial results. The merger added $2.2 billion in assets, $1.6 billion in loans, and $1.9 billion in deposits to Orrstown Financial Services. The merger also resulted in an increase in net interest income by $50.4 million, attributed to the deployment of cash into higher-yielding commercial loans and investment securities.

Here's a look at Orrstown Financial Services' Revenue History:

Fiscal End Date Revenue Change Growth
Dec 31, 2024 176.14M 26.25M +17.51%
Dec 31, 2023 149.90M 148.61M +11,547.01%
Dec 31, 2022 1.29M -114.84M -98.89%
Dec 31, 2021 116.13M 4.21M +3.76%
Dec 31, 2020 111.92M 14.08M +14.39%
Dec 31, 2019 97.84M 24.61M +33.61%
Dec 31, 2018 73.22M 9.47M +14.85%
Dec 31, 2017 63.76M 7.47M +13.28%
Dec 31, 2016 56.28M 2.77M +5.18%
Dec 31, 2015 53.51M 634.00K +1.20%

For further insights into the investors behind Orrstown Financial Services, Inc., explore: Exploring Orrstown Financial Services, Inc. (ORRF) Investor Profile: Who’s Buying and Why?

Orrstown Financial Services, Inc. (ORRF) Profitability Metrics

Understanding Orrstown Financial Services, Inc. (ORRF)'s profitability involves analyzing several key metrics that reveal how efficiently the company generates profits from its revenue and assets. Profitability metrics offer insight into ORRF's financial health and its ability to sustain long-term growth.

Key profitability metrics for Orrstown Financial Services, Inc. (ORRF) include:

  • Gross Profit Margin
  • Operating Profit Margin
  • Net Profit Margin

Let's examine these metrics and related factors based on the available 2024 data.

Gross Profit: Orrstown Financial Services Inc. reported a gross profit of $176.14 million for the year 2024. The gross profit margin remained consistently high, indicating efficient operations.

Operating Profit Margin: The operating margin for Orrstown Financial Services Inc. was 42.17%.

Net Profit Margin:

Orrstown Financial Services's net profit margin, calculated as net income divided by revenue, provides a clear picture of overall profitability. For the quarter that ended in December 2024, the net margin was 22.43%, with a net income of $13.7 million and revenue of $61.0 million.

The net margin for the fiscal year that ended in December 2024 was 11.58%, with a net income of $22.05 million and revenue of $190.408 million.

However, the net profit margin has declined from 22% in 2019 to 12.5% in 2024, suggesting increased expenses or lower profit efficiency.

Trends in Profitability Over Time: Examining the trends in profitability over time helps to understand the consistency and growth of ORRF's financial performance. Net income for 2024 was $22.1 million, compared to $35.7 million in 2023. This decrease was attributed to merger-related expenses and a provision for legal settlement.

Net Interest Margin: Net interest margin, on a tax equivalent basis, was 4.05% in the fourth quarter of 2024, compared to 4.14% in the third quarter of 2024. The net accretion impact of purchase accounting marks was $7.2 million of net interest income, representing 52 basis points of net interest margin for the fourth quarter of 2024, compared to $5.8 million of net interest income, representing 42 basis points of net interest margin, for the third quarter of 2024.

Return on Assets and Equity: Return on average assets was -0.57%, and return on average equity was -5.85%. Excluding non-recurring charges, these figures improved to 1.55% and 15.85%, respectively.

Operational Efficiency: Orrstown’s ability to manage costs and maintain healthy gross margins reflects its operational efficiency. The previously announced cost save target of 18% has been achieved for the go-forward operating run rate as of December 31, 2024.

Here is a table summarizing key profitability figures for Orrstown Financial Services, Inc. (ORRF) in 2024:

Metric Value (2024)
Gross Profit $176.14 million
Operating Margin 42.17%
Net Income $22.1 million
Net Profit Margin (Year End) 11.58%
Net Profit Margin (Quarter End) 22.43%
Net Interest Margin (Q4) 4.05%

For more insights into Orrstown Financial Services, Inc., explore: Exploring Orrstown Financial Services, Inc. (ORRF) Investor Profile: Who’s Buying and Why?

Orrstown Financial Services, Inc. (ORRF) Debt vs. Equity Structure

Understanding how Orrstown Financial Services, Inc. (ORRF) manages its debt and equity is crucial for investors. This involves looking at the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity financing. Let's delve into these key aspects.

Analyzing Orrstown Financial Services, Inc.'s (ORRF) financial health involves a close look at its debt structure, which includes both short-term and long-term obligations. As of the fiscal year 2024, a detailed breakdown of their debt levels is essential to gauge their financial stability. While specific figures for 2024 are not available, we can examine recent trends and data to understand their approach to managing debt.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. A higher ratio suggests greater financial risk, as the company relies more on debt. Conversely, a lower ratio indicates a more conservative approach. Without 2024 data, comparing Orrstown Financial Services, Inc.'s (ORRF) debt-to-equity ratio to industry standards would provide insights into whether the company is more or less leveraged than its peers.

To provide a clearer picture, consider a hypothetical scenario based on previous trends. Let's assume the following:

  • Total Debt: $150 million
  • Total Equity: $250 million

In this scenario, the debt-to-equity ratio would be 0.6 ($150 million / $250 million). To assess the health of this ratio, it would need to be compared against the average debt-to-equity ratio of other financial institutions of similar size and scope. If the industry average is higher, it might indicate that Orrstown Financial Services, Inc. (ORRF) is conservatively financed.

Recent activities such as debt issuances, credit ratings, or refinancing provide clues about the company's financial strategy. For instance, a debt issuance could mean the company is investing in growth opportunities, while a refinancing might indicate an effort to lower interest expenses and improve cash flow. Credit ratings from agencies like Moody's or Standard & Poor's reflect their assessment of Orrstown Financial Services, Inc.'s (ORRF) creditworthiness.

Orrstown Financial Services, Inc. (ORRF) must strategically balance debt and equity financing. Debt can provide a cost-effective way to fund operations and growth, as interest payments are tax-deductible. However, excessive debt can increase financial risk. Equity financing, on the other hand, does not require repayment and can provide a buffer during downturns. The ideal mix depends on the company's growth strategy, risk tolerance, and market conditions.

For example, a company might choose to issue bonds (debt financing) to fund a major acquisition, hoping that the acquired assets will generate enough cash flow to cover the debt payments. Alternatively, it could issue new shares of stock (equity financing) to strengthen its balance sheet and reduce its debt-to-equity ratio.

A balanced approach to debt and equity is vital for sustainable growth. Here’s a hypothetical look at how Orrstown Financial Services, Inc. (ORRF) might manage its capital structure:

  • Conservative Debt Use: Maintaining a debt-to-equity ratio below the industry average to signal financial prudence.
  • Strategic Equity Offerings: Issuing new shares to fund specific growth initiatives without increasing debt burden.
  • Refinancing Opportunities: Taking advantage of lower interest rates to refinance existing debt and reduce interest expenses.

In summary, Orrstown Financial Services, Inc.'s (ORRF) approach to debt and equity is a key indicator of its financial health and strategic direction. Investors should closely monitor these metrics to assess the company's risk profile and growth potential. More in-depth analysis and data can be found at: Breaking Down Orrstown Financial Services, Inc. (ORRF) Financial Health: Key Insights for Investors

Orrstown Financial Services, Inc. (ORRF) Liquidity and Solvency

Analyzing Orrstown Financial Services, Inc. (ORRF)'s financial health involves a close examination of its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term and long-term obligations.

Assessing Orrstown Financial Services, Inc.'s Liquidity:

  • Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, which is often less liquid.
  • Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps to understand the operational efficiency and short-term financial health of Orrstown Financial Services, Inc. (ORRF).
  • Cash Flow Statements Overview: A review of the cash flow statements, specifically focusing on operating, investing, and financing activities, can reveal the sources and uses of cash. Positive operating cash flow is generally a good sign, indicating that the company is generating cash from its core business operations.
  • Potential Liquidity Concerns or Strengths: Identifying any potential liquidity concerns or strengths involves analyzing the above factors in conjunction with industry benchmarks and company-specific circumstances.

As of the fiscal year 2024, key financial data for Orrstown Financial Services, Inc. (ORRF) includes:

Metric Value (Fiscal Year 2024)
Total Assets $3.01 billion
Total Liabilities $2.61 billion
Total Equity $394.98 million
Net Income $18.33 million

The current ratio, a key indicator of liquidity, can be calculated using the available data. However, specific figures for current assets and current liabilities are needed to provide an accurate ratio. Similarly, analyzing cash flow trends requires a detailed breakdown of operating, investing, and financing activities from the cash flow statement.

Investors and stakeholders can further explore Orrstown Financial Services, Inc. (ORRF)'s financial health through a detailed analysis provided in the blog post: Breaking Down Orrstown Financial Services, Inc. (ORRF) Financial Health: Key Insights for Investors.

Orrstown Financial Services, Inc. (ORRF) Valuation Analysis

Assessing whether Orrstown Financial Services, Inc. (ORRF) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. This detailed examination provides investors with a comprehensive view of ORRF's current market position.

Key valuation ratios offer a snapshot of the company's relative worth:

  • Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings.
  • Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value, providing insight into whether the stock is trading at a premium or discount to its net asset value.
  • Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is used to assess the overall value of a company relative to its earnings before interest, taxes, depreciation, and amortization.

Analyzing these ratios in comparison to industry averages and ORRF's historical data can reveal potential undervaluation or overvaluation. For instance, a lower P/E or P/B ratio than its peers might suggest the stock is undervalued, while a significantly higher ratio could indicate overvaluation.

A review of Orrstown Financial Services, Inc. (ORRF)'s stock price trends over the past year, or longer, provides context on market sentiment and investor confidence. Consistent upward trends might reflect positive market perception, while declines could signal underlying concerns. As of April 21, 2025, it's important to consider these trends in light of overall market conditions and company-specific developments. Keep in mind that past stock performance does not guarantee future results.

Dividend yield and payout ratios are essential for income-focused investors. If applicable:

  • Dividend Yield: This is the annual dividend payment relative to the current stock price.
  • Payout Ratio: The percentage of earnings paid out as dividends. A sustainable payout ratio indicates the company's ability to maintain its dividend payments.

Analyst consensus provides an external perspective on ORRF's valuation. A consensus of 'buy' ratings suggests analysts believe the stock is undervalued, while 'hold' or 'sell' ratings may indicate concerns about its valuation or future performance. It's crucial to consider the source and rationale behind these ratings, as they can influence investor sentiment and stock price movements.

For additional insights into the company's mission, vision, and core values, refer to: Mission Statement, Vision, & Core Values of Orrstown Financial Services, Inc. (ORRF).

Orrstown Financial Services, Inc. (ORRF) Risk Factors

Understanding the risks facing Orrstown Financial Services, Inc. (ORRF) is crucial for investors. These risks can be both internal and external, impacting the company's financial health and future performance. Key areas of concern include industry competition, regulatory changes, and overall market conditions.

Industry Competition: The financial services industry is highly competitive. Orrstown Financial Services, Inc. (ORRF) faces competition from other community banks, regional banks, and larger national institutions. This competition can impact the company's ability to attract and retain customers, as well as its ability to maintain its profit margins. Increased competition may lead to pressure on interest rates, fees, and the range of services offered. The need to invest in technology and innovative services to stay competitive also presents a challenge.

Regulatory Changes: Banks are subject to extensive regulation at both the federal and state levels. Changes in these regulations can significantly affect Orrstown Financial Services, Inc. (ORRF)'s operations and profitability. For instance, changes in capital requirements, lending restrictions, or consumer protection laws can increase compliance costs and limit the company's ability to generate revenue. Staying compliant with evolving regulations requires ongoing investment in compliance infrastructure and expertise.

Market Conditions: Economic downturns, changes in interest rates, and other market conditions can significantly impact Orrstown Financial Services, Inc. (ORRF)'s financial performance. For example, a recession can lead to increased loan defaults and reduced demand for banking services. Fluctuations in interest rates can affect the company's net interest margin, which is the difference between the interest income it earns on loans and the interest it pays on deposits. Unfavorable market conditions can also impact the value of the company's investment portfolio.

Based on the 2024 fiscal year, here's a breakdown of potential risks:

  • Credit Risk: The risk that borrowers will default on their loans. This is a primary concern for any lending institution.
  • Interest Rate Risk: Fluctuations in interest rates can impact net interest income and the value of assets and liabilities.
  • Liquidity Risk: The risk of not having sufficient cash to meet obligations.
  • Operational Risk: Risks associated with internal processes, systems, and people, including fraud, errors, and disruptions.
  • Compliance Risk: The risk of failing to comply with laws and regulations.

Mitigation strategies often involve diversifying the loan portfolio, implementing robust risk management systems, and maintaining adequate capital reserves. The specifics would be detailed in their reports and filings.

For further insights into Orrstown Financial Services, Inc. (ORRF)'s strategic direction, consider exploring their Mission Statement, Vision, & Core Values of Orrstown Financial Services, Inc. (ORRF).

Orrstown Financial Services, Inc. (ORRF) Growth Opportunities

Orrstown Financial Services, Inc. (ORRF) operates in a dynamic financial landscape, where future growth hinges on several key factors. These include strategic initiatives, market conditions, and the company's ability to adapt to evolving customer needs.

Analysis of key growth drivers:

  • Market Expansion: Orrstown Financial Services, Inc. (ORRF) could explore expanding its footprint into new geographic markets. This expansion could involve opening new branches or acquiring smaller financial institutions to gain a foothold in these areas.
  • Product Innovation: Introducing new financial products and services tailored to specific customer segments can drive growth. This includes digital banking solutions, wealth management services, and specialized lending programs.
  • Strategic Partnerships: Collaborating with other businesses or organizations can create new opportunities. For example, partnering with local businesses to offer financial services to their employees or customers.

Future revenue growth projections and earnings estimates require a look at analyst expectations and company guidance. Keep in mind that these are subject to change based on economic conditions and company performance.

Strategic initiatives that may drive future growth:

  • Digital Transformation: Investing in technology to improve customer experience and streamline operations. This includes mobile banking apps, online account management tools, and automated loan processing systems.
  • Customer Relationship Management (CRM): Implementing a CRM system to better understand customer needs and preferences. This allows Orrstown Financial Services, Inc. (ORRF) to offer personalized financial advice and services.
  • Community Engagement: Participating in local community events and initiatives to build brand awareness and customer loyalty. This can also help Orrstown Financial Services, Inc. (ORRF) attract new customers and employees.

Competitive advantages that position the company for growth include:

  • Strong Local Presence: Orrstown Financial Services, Inc. (ORRF) has a strong presence in its local markets, which gives it a competitive advantage over larger national banks. This allows Orrstown Financial Services, Inc. (ORRF) to build strong relationships with customers and provide personalized service.
  • Experienced Management Team: Orrstown Financial Services, Inc. (ORRF) has an experienced management team with a proven track record of success. This team can guide Orrstown Financial Services, Inc. (ORRF) through changing market conditions and capitalize on new opportunities.
  • Sound Financial Performance: Orrstown Financial Services, Inc. (ORRF) has a history of sound financial performance, which provides a solid foundation for future growth. This includes strong asset quality, capital levels, and profitability.

More insights about the company can be found here: Mission Statement, Vision, & Core Values of Orrstown Financial Services, Inc. (ORRF).

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