Page 1

Orrstown Financial Services , Inc. Reports Second Quarter 2021 Results and Announces Increased Quarterly Dividend Company Release - 7/20/2021 • Net income of $ 8.8 million for the quarter ; diluted second quarter 2021 EPS of $ 0.79 per share versus $ 0.92 per share in the first quarter of 2021 and $ 0.58 per share in the second quarter of 2020 The Board of Directors declared a cash dividend of $ 0.19 per common share , payable August 9 , 2021 , to shareholders of record as of August 2 , 2021 , an increase from $ 0.18 per common share in the first quarter of 2021 • Commercial loan growth for the quarter , excluding Small Business Administration ( " SBA " ) Paycheck Protection Program ( " PPP " ) loans , was 24 % annualized as loan demand was robust late in the second quarter of 2021 ; momentum continues with a strong commercial pipeline • Provision expense of $ 0.6 million was recorded in the second quarter of 2021 as compared to a provision reversal of $ 1.0 million in the first quarter of 2021 ; commercial loan production drove the increase ; the provision included $ 0.8 million and $ 1.0 million of COVID - 19 reserve reductions for the three months ended June 30 , 2021 and March 31 , 2021 , respectively • Noninterest expenses improved to $ 17.0 million in the second quarter of 2021 as compared to $ 17.8 million in the first quarter of 2021 ; the efficiency ratio was stable at 60 % for first and second quarters of 2021 • Noninterest income was $ 6.7 million in the second quarter of 2021 as compared to $ 7.5 million in the first quarter of 2021 ; the first quarter included a $ 0.6 million reduction of the mortgage servicing rights valuation reserve • Return on average assets totaled 1.2 % in the second quarter of 2021 compared to 1.4 % in the first quarter of 2021 ; second quarter provision increase caused the reduction Tangible book value per share ( 1 ) increased to $ 21.61 at June 20 , 2021 from $ 20.59 at March 31 , 2021 and $ 19.93 at December 31 , 2020 • Net interest margin declined to 3.24 % in the second quarter of 2021 from 3.38 % in the first quarter of 2021 due primarily to increased liquidity that resulted from SBA PPP forgiveness • The SBA PPP portfolio averaged $ 471.2 million in the three months ended June 30 , 2021 as compared to $ 463.0 million in the three months ended March 31 , 2021 Deposits declined by $ 53.0 million , or 8 % annualized , from the first quarter of 2021 as a result of the usage of stimulus and PPP funds ; average deposits per branch remained strong at $ 97 million for the second quarter of 2021 • Cost of deposits fell by six basis points in the quarter due to late first quarter rate adjustments and changes in mix ( 1 ) Non - GAAP measure . See Appendix B for additional information . SHIPPENSBURG , Pa . , July 20 , 2021 ( 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 June 30 , 2021. Net income totaled $ 8.8 million for the three months ended June 30 , 2021 , compared with $ 10.2 million for the three months ended March 31 , 2021 and $ 6.4 million in the three months ended June 30 , 2020 . Diluted earnings per share totaled $ 0.79 for the three months ended June 30 , 2021 , compared