Orrstown Financial Services beats Q2 adjusted EPS expectations

Overview

• Orrstown Q2 adjusted EPS of $1.04 beats analyst expectations, per LSEG data

• Net income for Q2 rises to $19.4 mln, reflecting improved profitability

• Co had announced share repurchase program for up to 500,000 shares

Outlook

• Orrstown sees positive momentum in net interest margin in the remainder of the year

• Company anticipates no further meaningful merger-related expenses

• Orrstown prioritizes credit quality despite lower commercial loan growth

• Company believes strong credit metrics position it well for future growth

Result Drivers

• NET INTEREST MARGIN - Improved to 4.07% due to lower cost of funds and positive impact from purchase accounting marks

• NONINTEREST INCOME - Increased by $1.3 mln, driven by higher swap fee income and service charges

• MERGER-RELATED EXPENSES - Decreased by $0.6 mln, contributing to lower overall noninterest expenses

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Orrstown Financial Services Inc is $37.00, about 9.4% above its July 21 closing price of $33.53

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nGNX6zB0p9