Exhibit

SHIPPENSBURG, PA (October 25, 2017) -- Orrstown Financial Services, Inc. (the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”) and Wheatland Advisors, Inc. ("Wheatland"), announced earnings for the three and nine months ended September 30, 2017. Net income totaled $2.8 million for the three months ended September 30, 2017, compared with $1.4 million for the same period in 2016. For the nine months ended September 30, 2017, net income totaled $8.1 million, compared with $4.7 million for the same period in 2016. Diluted earnings per share totaled $0.34 and $0.98 for the three and nine months ended September 30, 2017, respectively, compared with $0.18 and $0.58 for the same 2016 periods. Earnings in 2017 continue to reflect increased interest income from expanding loan and investment portfolios.

Thomas R. Quinn, Jr., President and Chief Executive Officer, commented, "We are encouraged by continued momentum and improvement in key performance indicators as we continue to execute our strategic plan. In the third quarter we experienced solid earnings, continued double-digit annualized loan growth, and year-over-year margin expansion. Our results have enabled us to increase our dividend in the fourth quarter. We're also pleased that, in late August, we opened

Net interest income totaled $11.1 million for the three months ended September 30, 2017, a 20.0% increase compared with the same period in 2016. For the nine months ended September 30, 2017, net interest income totaled $32.0 million, a 19.4% increase compared with the nine months ended September 30, 2016. Net interest margin on a taxable-equivalent basis totaled 3.31% for the three months and 3.34% for the nine months ended September 30, 2017, compared with 3.14% and 3.12% for the same periods in 2016.

As had been experienced in the first half of 2017, increased yields on loans and investments reflected a higher interest rate environment in 2017 compared with 2016. Additionally, tax-exempt securities were added to the portfolio in late 2016 and early 2017 with taxable-equivalent yields higher than the portfolio average. The cost of interest-bearing liabilities has increased at a slower pace than the yields earned on interest-earning assets in 2017, as the market was initially slow to respond to interest rate changes. The net interest margin of 3.31% in the third quarter of 2017 was 4 basis points less than the 3.35% experienced in each of the first two quarters of 2017, principally due to increases in costs of interest-bearing liabilities.

The Company recorded a $100 thousand provision for loan losses for the three months ended September 30, 2017 compared with $250 thousand in the same period in 2016. For the nine months ended September 30, the provision for loan losses totaled $200 thousand in 2017 compared with $250 thousand in 2016. In calculating the required provision for loan losses, both quantitative and qualitative factors are considered in the determination of the adequacy of the allowance for loan losses. Favorable historical charge-off data combined with continued stable economic and market conditions resulted in the determination that a modest provision for loan losses in the third quarter of 2017 was required to offset net charge-offs and for loan growth experienced.

Trust, investment management and brokerage income increased $269 thousand and $773 thousand in comparing the three and nine month periods ended September 30 from 2016 to 2017. Wheatland Advisors, Inc., acquired in December 2016, has been a significant contributor to the increases in 2017. Trust department fees have also increased as additional revenues have been generated from favorable market conditions and the addition of an office in Berks County, Pennsylvania.

Investment securities gains totaled $533 thousand and $1.2 million for the three and nine months ended September 30, 2017, compared with $0 and $1.4 million for the same periods in 2016. At times, the Company may accelerate earnings on securities through gains as market conditions present opportunities to act on asset/liability management strategies and interest rate conditions while also meeting the funding requirements of anticipated lending activity. In the third quarter of 2017, the Company took advantage of market conditions to reposition part of its investment portfolio at a gain to improve responsiveness of the portfolio to increases in Fed Funds rates.

The principal drivers of increased expense items in comparing 2017 with 2016 were salaries and employee benefits, occupancy, furniture and equipment costs and professional services. As noted in the past few quarters, increases for salaries and benefits and occupancy, furniture and equipment costs include previously disclosed market expansion actions by the Company as it has added new, primarily customer-facing, employees and facilities, principally in Berks, Cumberland, Dauphin and Lancaster counties. In the third quarter of 2017, the Company also expanded its lending activities in York County, Pennsylvania, with the addition of two lenders focused in this region.

Salaries and employee benefits totaled $7.5 million and $22.4 million for the three and nine months ended September 30, 2017, compared with $6.8 million and $19.3 million for the same periods in 2016. Higher expenses throughout 2017 have been incurred for the aforementioned additional employees, merit increases and increased incentive compensation, increased health care costs, and incremental expense for additional share-based awards granted in 2017.

Professional services expenses totaled $945 thousand and $1.9 million for the three and nine months ended September 30, 2017, compared with $585 thousand and $1.7 million for the same periods in 2016. Generally, professional fees in 2017 have been lower than in 2016, when additional costs for outstanding litigation against the Company and administrative proceedings by the Securities and Exchange Commission were incurred. Professional fees increased in the third quarter of 2017 due to indemnification costs to several professional service providers, totaling $508 thousand, incurred in connection with the previously disclosed outstanding litigation against the Company.

Income tax expense totaled $376 thousand and $1.3 million for the three and nine months ended September 30, 2017, compared with $125 thousand and $1.0 million for the same periods in 2016. The Company’s effective tax rate is significantly less than the 34.0% federal statutory rate principally due to tax-exempt income, including interest earned on tax-exempt loans and securities, earnings on the cash value of life insurance policies and income tax credits. The effective tax rate for the nine months ended September 30, 2017 was 14.0%, compared with 17.4% for the nine months ended September 30, 2016. The lower effective tax rate for 2017 compared with 2016 is primarily the result of a larger percentage of tax-exempt income to total income and additional tax credits in 2017, coupled with a larger percentage of non-tax deductible expenses in 2016.

Assets totaled $1.53 billion at September 30, 2017, an increase of $119.1 million from $1.41 billion at December 31, 2016 and of $179.4 million from $1.35 billion at September 30, 2016. Loans, which are summarized below, were the principal driver for the growth in total assets at September 30, 2017 from December 31, 2016 and September 30, 2016. In the September 30 year-over-year comparison, securities available for sale were also a significant growth component, increasing 12.4%, from $374.9 million in 2016 to $421.5 million in 2017. Deposit growth of $64.3 million in the first nine months of 2017 was the primary source of funding for growth in loans in the period. Year-over-year growth in securities and loans was funded by deposit growth of $83.4 million, an overall increase in borrowings of $88.4 million and a reduction in cash balances of $15.2 million.



(Dollars in thousands)	September 30, 2017		December 31, 2016		September 30, 2016

Commercial real estate:
Owner occupied	$	117,687	$	112,295	$	111,437
Non-owner occupied	231,111		206,358		192,449
Multi-family	52,118		47,681		39,394
Non-owner occupied residential	76,763		62,533		56,759
Acquisition and development:
1-4 family residential construction	10,214		4,663		6,379
Commercial and land development	24,219		26,085		28,030
Commercial and industrial	107,998		88,465		87,492
Municipal	50,533		53,741		54,241
Residential mortgage:
First lien	155,811		139,851		134,498
Home equity – term	12,506		14,248		14,896
Home equity – lines of credit	129,911		120,353		114,274
Installment and other loans	12,349		7,118		7,212
	$	981,220	$	883,391	$	847,061

Growth was experienced in nearly all loan segments from December 31, 2016 to September 30, 2017, with the largest dollar increase in the commercial real estate segment, which grew by $48.8 million (15.2% annualized), representing approximately one-half of the portfolio growth for the period. The residential mortgage and commercial and industrial segments also showed substantial growth of $23.8 million (11.6% annualized) and $19.5 million (29.5% annualized), respectively, during this period. The Company continues to grow in both core markets and new markets through expansion of its sales force and by capitalizing on market disruption caused by the acquisition of some of our competitors by larger institutions. The Company has placed emphasis on growing commercial and industrial loans in 2017 to increase diversification of its loan portfolio. In the third quarter of 2017, the Company also increased diversification of its loan portfolio with the purchase of approximately $5 million of automobile financing loans at returns higher than comparable cash flows in the investment portfolio. These purchased loans are included in installment and other loans.

Shareholders’ equity totaled $144.4 million at September 30, 2017, an increase of $9.5 million, or 7.1%, from $134.9 million at December 31, 2016. Equity increased principally from net income totaling $8.1 million for the nine months ended September 30, 2017 coupled with a $2.7 million increase in accumulated other comprehensive income (loss), net of tax, and was reduced by dividends declared on common stock during the first nine months of 2017.

The allowance for loan losses balance totaled $12.8 million at September 30, 2017 and December 31, 2016, compared with $13.9 million at September 30, 2016. Management believes the allowance for loan losses to total loans ratio remains adequate at 1.30% at September 30, 2017. Favorable historical charge-off data and management's emphasis on loan quality have been significant contributors to the determination that a relatively stable allowance for loan losses balance is adequate even as the loan portfolio has been increasing.



ORRSTOWN FINANCIAL SERVICES, INC.
Operating Highlights (Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars in thousands, except per share information)	2017			2016			2017			2016

Net income	$	2,774		$	1,442		$	8,084		$	4,700
Diluted earnings per share	$	0.34		$	0.18		$	0.98		$	0.58
Dividends per share	$	0.10		$	0.09		$	0.30		$	0.26
Return on average assets	0.73		%	0.43		%	0.74		%	0.48		%
Return on average equity	7.61		%	4.09		%	7.72		%	4.54		%
Net interest income	$	11,081		$	9,234		$	32,036		$	26,835
Net interest margin	3.31		%	3.14		%	3.34		%	3.12		%



ORRSTOWN FINANCIAL SERVICES, INC.
Balance Sheet Highlights (Unaudited)
	September 30,			December 31,			September 30,
(Dollars in thousands, except per share information)	2017			2016			2016

Assets	$	1,533,586		$	1,414,504		$	1,354,154
Loans, gross	981,220			883,391			847,061
Allowance for loan losses	(12,771		)	(12,775		)	(13,850		)
Deposits	1,216,727			1,152,452			1,133,332
Shareholders' equity	144,384			134,859			139,795
Book value per share	17.30			16.28			16.86



ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

			September 30,			December 31,			September 30,
(Dollars in thousands)			2017			2016			2016
Assets
Cash and cash equivalents			$	22,474		$	30,273		$	37,641
Securities available for sale			421,455			400,154			374,902

Loans held for sale			8,217			2,768			3,956

Loans			981,220			883,391			847,061
Less: Allowance for loan losses			(12,771		)	(12,775		)	(13,850		)
	Net loans		968,449			870,616			833,211

Premises and equipment, net			35,225			34,871			34,630
Other assets			77,766			75,822			69,814
		Total assets	$	1,533,586		$	1,414,504		$	1,354,154

Liabilities
Deposits:
	Noninterest-bearing		$	164,481		$	150,747		$	148,388
	Interest-bearing		1,052,246			1,001,705			984,944
		Total deposits	1,216,727			1,152,452			1,133,332
Borrowings			155,474			112,027			67,099
Accrued interest and other liabilities			17,001			15,166			13,928
		Total liabilities	1,389,202			1,279,645			1,214,359

Shareholders' Equity
Common stock			435			437			437
Additional paid - in capital			125,120			124,935			124,935
Retained earnings			17,264			11,669			10,483
Accumulated other comprehensive income (loss)			1,580			(1,165		)	5,136
Treasury stock			(15		)	(1,017		)	(1,196		)
		Total shareholders' equity	144,384			134,859			139,795
		Total liabilities and shareholders' equity	$	1,533,586		$	1,414,504		$	1,354,154



ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

		Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
(Dollars in thousands, except per share information)		2017		2016		2017		2016
Interest and dividend income
Interest and fees on loans		$	10,337	$	8,631	$	29,392	$	25,006
Interest and dividends on investment securities		2,761		2,023		8,004		5,881
	Total interest and dividend income	13,098		10,654		37,396		30,887
Interest expense
Interest on deposits		1,619		1,295		4,429		3,625
Interest on borrowings		398		125		931		427
	Total interest expense	2,017		1,420		5,360		4,052
Net interest income		11,081		9,234		32,036		26,835
Provision for loan losses		100		250		200		250
	Net interest income after provision for loan losses	10,981		8,984		31,836		26,585

Noninterest income
Service charges on deposit accounts		1,437		1,370		4,224		4,045
Trust, investment management and brokerage income		1,975		1,706		6,029		5,256
Mortgage banking activities		797		1,012		2,113		2,381
Other income		514		480		1,658		1,668
Investment securities gains		533		0		1,190		1,420
	Total noninterest income	5,256		4,568		15,214		14,770

Noninterest expenses
Salaries and employee benefits		7,544		6,823		22,366		19,318
Occupancy, furniture and equipment		1,576		1,465		4,600		4,117
Data processing		527		532		1,702		1,686
Advertising and bank promotions		325		433		1,103		1,244
FDIC insurance		139		143		454		598
Professional services		945		585		1,938		1,675
Collection and problem loan		56		39		134		187
Real estate owned		41		94		49		195
Taxes other than income		211		186		659		594
Regulatory settlement		0		0		0		1,000
Other operating expenses		1,723		1,685		4,645		5,050
	Total noninterest expenses	13,087		11,985		37,650		35,664
	Income before income tax expense	3,150		1,567		9,400		5,691
Income tax expense		376		125		1,316		991
Net income		$	2,774	$	1,442	$	8,084	$	4,700

Per share information:
	Basic earnings per share	$	0.34	$	0.18	$	1.00	$	0.58
	Diluted earnings per share	0.34		0.18		0.98		0.58
	Dividends per share	0.10		0.09		0.30		0.26
	Weighted-average shares outstanding - diluted	8,239,374		8,149,416		8,215,215		8,141,525



ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)

	Three Months Ended
	September 30, 2017							September 30, 2016
			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	$	22,507	$	78		1.37	%	$	23,330	$	42		0.72	%
Securities	422,045		3,073			2.89		358,259		2,207			2.45
Loans	954,943		10,549			4.38		844,547		8,860			4.17
Total interest-earning assets	1,399,495		13,700			3.88		1,226,136		11,109			3.60
Other assets	106,840							102,828
Total	$	1,506,335						$	1,328,964
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	660,980	$	610		0.37		$	584,257	$	330		0.22
Savings deposits	95,414		38			0.16		90,790		36			0.16
Time deposits	289,285		971			1.33		279,006		929			1.32
Short-term borrowings	84,228		182			0.86		33,912		21			0.25
Long-term debt	42,868		216			2.00		24,295		104			1.70
Total interest-bearing liabilities	1,172,775		2,017			0.68		1,012,260		1,420			0.56
Noninterest-bearing demand deposits	173,112							161,874
Other	15,846							14,515
Total Liabilities	1,361,733							1,188,649
Shareholders' Equity	144,602							140,315
Total	$	1,506,335						$	1,328,964
Taxable-equivalent net interest income / net interest spread			11,683			3.20	%			9,689			3.04	%
Taxable-equivalent net interest margin						3.31	%						3.14	%
Taxable-equivalent adjustment			(602		)					(455		)
Net interest income			$	11,081						$	9,234

NOTES:
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 34% tax rate.
(2) For yield calculation purposes, nonaccruing loans are included in the average loan balance.



ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)

	Nine Months Ended
	September 30, 2017							September 30, 2016
			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	$	13,539	$	142		1.40	%	$	38,964	$	186		0.64	%
Securities	418,095		9,070			2.90		350,975		6,374			2.43
Loans	926,556		30,036			4.33		821,528		25,751			4.19
Total interest-earning assets	1,358,190		39,248			3.86		1,211,467		32,311			3.56
Other assets	108,070							98,517
Total	$	1,466,260						$	1,309,984
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	637,238	$	1,449		0.30		$	549,385	$	861		0.21
Savings deposits	95,004		112			0.16		89,948		107			0.16
Time deposits	296,468		2,868			1.29		294,627		2,657			1.20
Short-term borrowings	96,212		543			0.75		52,619		112			0.28
Long-term debt	25,066		388			2.07		24,377		315			1.73
Total interest-bearing liabilities	1,149,988		5,360			0.62		1,010,956		4,052			0.54
Noninterest-bearing demand deposits	161,040							147,161
Other	15,217							13,699
Total Liabilities	1,326,245							1,171,816
Shareholders' Equity	140,015							138,168
Total	$	1,466,260						$	1,309,984
Taxable-equivalent net interest income / net interest spread			33,888			3.24	%			28,259			3.02	%
Taxable-equivalent net interest margin						3.34	%						3.12	%
Taxable-equivalent adjustment			(1,852		)					(1,424		)
Net interest income			$	32,036						$	26,835

NOTES:
(1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 34% tax rate.
(2) For yield calculation purposes, nonaccruing loans are included in the average loan balance.



ORRSTOWN FINANCIAL SERVICES, INC.
Nonperforming Assets / Risk Elements (Unaudited)

	September 30,			June 30,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2016			2016

Nonaccrual loans (cash basis)	$	5,249		$	5,160		$	7,043		$	13,552
Other real estate (OREO)	1,258			1,012			346			719
Total nonperforming assets	6,507			6,172			7,389			14,271
Restructured loans still accruing	1,192			1,204			930			901
Loans past due 90 days or more and still accruing	0			0			0			39
Total nonperforming and other risk assets	$	7,699		$	7,376		$	8,319		$	15,211

Loans 30-89 days past due	$	914		$	1,069		$	1,218		$	1,401

Asset quality ratios:
Total nonperforming loans to total loans	0.53		%	0.55		%	0.80		%	1.60		%
Total nonperforming assets to total assets	0.42		%	0.42		%	0.52		%	1.05		%
Total nonperforming assets to total loans and OREO	0.66		%	0.66		%	0.84		%	1.68		%
Total risk assets to total loans and OREO	0.78		%	0.79		%	0.94		%	1.79		%
Total risk assets to total assets	0.50		%	0.50		%	0.59		%	1.12		%

Allowance for loan losses to total loans	1.30		%	1.36		%	1.45		%	1.64		%
Allowance for loan losses to nonperforming loans	243.30		%	247.11		%	181.39		%	102.20		%
Allowance for loan losses to nonperforming and restructured loans still accruing	198.28		%	200.36		%	160.23		%	95.83		%



ORRSTOWN FINANCIAL SERVICES, INC.
Allowance for Loan Losses Activity (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2017			2016			2017			2016

Balance, beginning of period	$	12,751		$	13,440		$	12,775		$	13,568
Provision for loan losses	100			250			200			250
Recoveries	55			264			138			619
Charge-offs	(135		)	(104		)	(342		)	(587		)
Balance, end of period	$	12,771		$	13,850		$	12,771		$	13,850

With over $1.5 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiaries, Orrstown Bank and Wheatland Advisors, Inc., provide a wide range of consumer and business financial services through banking and financial advisory offices in Berks, Cumberland, Dauphin, Franklin, Lancaster and Perry Counties, Pennsylvania and Washington County, 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 stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com. For more information about Wheatland Advisors, Inc., visit www.wheatlandadvisors.com.

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise that are not statements of historical facts, including, without limitation, statements regarding our ability to integrate additional teams across all business lines as we continue expansion of our community banking model into Dauphin, Lancaster and Berks counties and fill a void created in the community banking space from the disruption caused by the acquisition of several competitors, and our belief that we are positioned to create additional long-term shareholder value from these expansion initiatives.

Actual results and trends could differ materially from those set forth in such statements and there can be no assurances that we will be able to continue to successfully execute on our strategic expansion east into Dauphin, Lancaster and Berks counties, take advantage of market disruption, and experience sustained growth in loans and deposits or maintain the momentum experienced to date from these actions. Factors that could cause actual results to differ from those expressed or implied by the forward looking statements include, but are not limited to, the following: ineffectiveness of the Company's business strategy due to changes in current or future market conditions; the effects of competition, including industry consolidation and development of competing financial products and services; changes in laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; interest rate movements; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatilities in the securities markets; deteriorating economic conditions; the integration of the Company's strategic acquisitions; expenses associated with pending litigation and legal proceedings; and other risks and uncertainties, including those detailed in Orrstown Financial Services, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 and Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” and in other filings made with the Securities and Exchange Commission. The statements are valid only as of the date hereof and Orrstown Financial Services, Inc. disclaims any obligation to update this information.


•	Net income for the three months ended September 30, 2017 totaled $2.8 million, or $0.34 per diluted share, compared with $1.4 million, or $0.18 per diluted share, for the same period in 2016. Net income for the nine months ended September 30, 2017 totaled $8.1 million, or $0.98 per diluted share, compared with $4.7 million, or $0.58 per diluted share, for the same period in 2016.


•	Gross loans outstanding at September 30, 2017, excluding loans held for sale, totaled $981.2 million, an increase of $97.8 million, or 14.8% on an annualized basis, compared with the balance of $883.4 million at December 31, 2016. In a year-over-year comparison, gross loans outstanding at September 30, 2017 increased 15.8% over September 30, 2016.


•	Deposits totaled $1.22 billion at September 30, 2017 and grew at a 7.5% annualized basis compared with the $1.15 billion balance at December 31, 2016.


•	The Board of Directors declared a cash dividend of $0.12 per common share, payable November 15, 2017, to shareholders of record as of November 6, 2017, an increase of 33.3% over the dividend declared in the fourth quarter of 2016 and 20.0% over prior quarters in 2017.