ex99.htm

SHIPPENSBURG, PA (October 29, 2012) Orrstown Financial Services, Inc. (the “Company”) (NASDAQ: ORRF) announced today a net loss for the quarter ended September 30, 2012 of $21.4 million, driven primarily by a $19.9 million non-cash valuation allowance against the deferred tax asset. These results compared to net income in the third quarter of 2011 of $4.3 million. On a year-to-date basis, net loss totaled $39.5 million for the nine months ended September 30, 2012 compared to $2.5 million for the same period in 2011. During the third quarter of 2012, the Company recorded a $19.9 million valuation allowance against its deferred tax asset. Excluding this valuation allowance, the net loss would have been $1.5 million and $19.6 million for the three and nine months ended September 30, 2012, respectively. According to accounting rules, deferred tax asset valuation allowances may be reversed in future periods.

Diluted earnings (loss) per share amounted to ($2.65) for the quarter ended September 30, 2012, as compared to $0.54 for the third quarter of 2011. On a year-to-date basis, diluted loss per share amounted to ($4.90) for the nine months in 2012, compared to ($0.31) for the same period in 2011. Excluding the aforementioned valuation allowance on the deferred tax asset, diluted loss per share would have equaled ($0.18) and ($2.43) for the three and nine months ended September 30, 2012, respectively.

Thomas R. Quinn, Jr., President & CEO, commented, “We are encouraged that during the third quarter of 2012 our nonaccrual loans and other risk elements stabilized on a linked quarter basis, and were reduced by 43.4% since December 31, 2011, allowing us to significantly decrease our provision for loan losses compared to the most recent three quarters. Our allowance for loan losses as a percentage of total loans was 4.57% at September 30, 2012; and although this is high compared to our peers, it is principally a general reserve, as we have taken specific charge-offs on loans determined to be impaired. As a result, the provision for loan losses during the third quarter essentially matched the net charge-offs for the quarter.”

Net interest income totaled $9.0 million for the three months ended September 30, 2012, a $3.8 million, or 29.7%, decrease compared to the $12.8 million earned in the same period in 2011. For the nine months ended September 30, 2012, net interest income totaled $29.4 million, a decrease of $8.6 million from the $38.0 million earned in the same period in 2011. The decline in net interest income is a result of both a decline in the average interest rate earned as well as a decrease in the volume of interest earning assets. The net interest margin for the three months ended September 30, 2012, was 3.10%, compared to 3.66% for the same period in 2011. On a year-to-date basis, 2012’s net interest margin was 3.16%, as compared to 3.69% for the same period in 2011. The increase in the level of loans on nonaccrual status, combined with the low interest rate environment in which proceeds from asset sales and maturities have been reinvested, has put pressure on the Company’s net interest margin. Also contributing to the decrease in net interest income was a $125 million decline in average interest earning assets to $1.32 billion for the nine months ended September 30, 2012, from an average of $1.44 billion for the first nine months of 2011. During the past year, the Company has been able to effectively manage its cost of funds, which declined to 0.61% for the nine months ended September 30, 2012, an improvement over the cost of funds of 0.77% for the same period in 2011.

The provision for loan losses for the three months ended September 30, 2012 totaled $5.1 million, a decrease of $2.8 million compared to the third quarter of 2011’s provision of $7.9 million and a decrease of $17.9 million when compared to the second quarter of 2012’s provision of $23.0 million. On a year-to-date basis, the provision for loan losses was $47.3 million for the nine months ended September 30, 2012, compared to $32.3 million for the same period in 2011. The Company’s net charge offs during the nine months ended September 30, 2012 were $54.3 million, compared to $22.7 million for the same period in 2011. In 2012 the Company began charging off all specific reserves provided on impaired loans against the allowance for loan losses. This elevated level of charge offs significantly increased our two-year average historical loss factors, leading to additional general reserves required on non-criticized loans.

The Company sold its merchant processing business in the third quarter of 2011. This business had contributed $1.3 million and $1.9 million in revenues for the three and nine months ended September 30, 2011, respectively, including the recognition of a gain of $995 thousand. In 2012, income recognized on merchant services consisted of amounts previously held back as gain until all conditions of the sales contract were satisfied. Noninterest income for the three and nine months ended September 30, 2011 was favorably influenced by the sale of interest rate swaps of $673 thousand and $791 thousand, respectively, with no similar gains occurring in 2012.

Noninterest expenses amounted to $11.1 million for the three months ended September 30, 2012 compared to $10.8 million for the corresponding prior year period, an increase of 2.8%. On a year-to-date basis, noninterest expenses totaled $32.7 million for the nine months ended September 30, 2012, an increase of 9.0%, or $2.7 million, compared to $30.0 million for the same period in 2011. Asset quality and regulatory matters have contributed significantly to the increase in noninterest expenses. Collection and problem loan expenses totaled $593 thousand and $1.9 million, respectively, for the three and nine months ended September 30 2012, compared to $359 thousand and $690 thousand, respectively, for the same periods in 2011. Real estate owned expenses, which include write-downs of properties to fair value less costs to dispose, totaled $230 and $706, respectively, for the three and nine months ended

September 30, 2012, compared to $235 thousand and $313 thousand, respectively, for the same periods in 2011. Professional service fees, including loan review assistance, legal fees and accounting expenses, have increased $300 thousand from $2.0 million for the nine months ended September 30, 2011 to $2.3 million in the same period in 2012. The increased complexity of the business, as well as complying with regulatory orders received in the first quarter of 2012, have led to additional assistance required from professional service providers. Despite the increase in professional services costs on a year-to-date basis, for the three months ended September 30, 2012, professional services costs declined $400 thousand as compared to the same period in 2011. This decrease was due to our retention in the third quarter of 2011 of third party service providers to assist us as we re-engineered our credit administration, loan review and loan workout functions, and hired regulatory consulting firms as we worked through regulatory matters.

As a result of the increase in noninterest expense, combined with declining net interest income, the Company’s efficiency ratio for the first nine months of 2012 increased to 71.7%, compared to 52.6% for the same period in 2011. The efficiency ratio expresses noninterest expense as a percentage of tax equivalent net interest income and noninterest income, excluding securities gains. As the Company continues to address its asset quality issues and regulatory concerns, it anticipates the efficiency ratio will remain elevated in comparison to prior year’s results.

During the quarter ended September 30, 2012, we evaluated our $19.9 million net deferred tax asset, which principally resulted from credit and credit related losses and expenses that the Company has recently experienced. As a result of the taxable losses that have been generated during 2012, and our inability to fully offset the tax against the two preceding carryback years allowed by tax regulation, our net deferred tax asset is dependent on tax planning strategies and future taxable income. Based on forecasted taxable income in the near future, combined with limited tax planning strategies, we were not able to conclude that the deferred tax asset would more likely than not be realized in its entirety, and as such, a valuation allowance was established for the full amount. The valuation allowance represents a non-cash charge to income tax expense, and will be recoverable in future years as the Company returns to profitability.

Assets decreased $248 million to $1.27 billion at September 30, 2012 from September 30, 2011. The Company has implemented a strategy designed to slow loan growth and reduce its risk weighted asset levels in order to maintain capital ratios at levels that exceed well capitalized limits. Much of the reduction in the balance sheet was in the Company’s loan portfolio. At September 30, 2012, loans, net of the allowance for loan losses, have declined by $196 million from September 30, 2011, with the net payoffs temporarily invested in interest bearing deposits with banks.

Shareholders’ equity totaled $87.3 million at September 30, 2012, a decrease of $71.9 million, or 45.1%, from $159 million at September 30, 2011. This decrease was primarily the result of the net loss posted for the period which includes the $19.9 million valuation allowance established on the net deferred tax asset, coupled with a decline in accumulated other comprehensive income. Despite the decline in shareholders’ equity, the Company’s regulatory capital ratios continue to exceed all regulatory minimums to be considered well capitalized. At September 30, 2012 the Company’s regulatory capital ratios consisted of a Tier-1 Leverage ratio of 6.5%, a Tier-1 Risk-based capital ratio of 9.6%, and a Total Risk-based capital ratio of 10.9%.

During the second quarter of 2011, the Company began to experience deterioration in asset quality as a result of continued softness in economic conditions and collateral values. During 2012, the Company continued to actively identify and monitor nonperforming assets and other risk assets, and acted aggressively to remediate these issues. Risk assets, defined as nonaccrual loans, restructured loans, loans past due 90 days or more and still accruing, and real estate owned, totaled $64.4 million at September 30, 2012, a 1.6% increase from June 30, 2012, but a significant improvement of $49.4 million from December 31, 2011 and an improvement of $9.7 million from September 30, 2011.

Nonaccrual loans at September 30, 2012 totaled $57.8 million, an increase of $26.6 million from September 30, 2011, but a decrease of $25.9 million from December 31, 2011’s balance of $83.7 million. The Company’s focus on asset quality remediation, including loan workouts, additional information gathered from borrowers or additional structural enhancements, and sales of non-performing assets to third parties has driven this significant reduction over year end 2011. This net decrease in nonaccrual loans for the nine months ended September 30, 2012 was the result of $55.1 million in loans charged off, $39.7 million in proceeds received from loan sales and net pay downs, $5.0 million of loans returned to accrual status, and $2.7 million of loans foreclosed on and transferred to real estate owned, offset by $76.6 million of loans being moved to nonaccrual status during the period, including $19.3 million previously classified as accruing restructured loans.

During the first nine months of 2012, the Company received payments/payoffs on restructured loans totaling $4.3 million, and charged-off $1.5 million in connection with loan workouts. Additionally, $19.3 million of restructured loans were migrated to nonaccrual status either due to missed payments or the Company’s determination that the borrowers would not be able to keep their payments current for a sustainable period of time. Offsetting these declines was a $300 thousand nonaccruing troubled debt restructuring that was returned to accrual status.

The allowance for loan losses totaled $36.7 million at September 30, 2012, an $11.0 million increase from September 30, 2011. As of September 30, 2012, the ratio of the allowance for loan losses to total loans was 4.57%, compared to 2.60% as of September 30, 2011. The ratio of the allowance for loan losses to nonaccrual loans and restructured loans still accruing increased to 60.27% at September 30, 2012, from 37.57% at September 30, 2011. The increase in the coverage ratios reflect lower levels of risk assets, particularly the significant decrease in non-performing assets discussed above.

A priority of the Company is to continue to work through its nonaccrual loans and other risk elements, in an attempt to reduce the levels of these underperforming assets. As new information is learned about borrowers or updated appraisals on real estate with lower fair values are obtained, the Company may continue to experience additional impaired loans. Through increased human resources allocated to credit related issues, the Company believes it can continue to mitigate its risk of loss, and to reduce its level of nonaccrual and classified loans.

(Dollars in thousands, except per share data)	September 30, 2012			September 30, 2011

For Quarter Ended:
Net income (loss)	$	(21,352	)	$	4,314
Diluted earnings (loss) per share	$	(2.65	)	$	0.54
Dividends per share	$	0.00		$	0.23
Return on average assets		(6.50	%)		1.11	%
Return on average equity		(79.60	%)		10.82	%
Return on average tangible assets (1)		(6.50	%)		1.13	%
Return on average tangible equity (1)		(80.22	%)		12.54	%
Net interest income	$	9,029		$	12,825
Net interest margin		3.10	%		3.66	%

	September 30, 2012			September 30, 2011

For Nine Months Ended:
Net income (loss)	$	(39,484	)	$	(2,482	)
Diluted earnings (loss) per share	$	(4.90	)	$	(0.31	)
Dividends per share	$	0.00		$	0.69
Return on average assets		(3.80	%)		(0.22	%)
Return on average equity		(44.87	%)		(2.06	%)
Return on average tangible assets (1)		(3.80	%)		(0.21	%)
Return on average tangible equity (1)		(45.12	%)		(2.27	%)
Net interest income	$	29,417		$	38,023
Net interest margin		3.16	%		3.69	%

Balance Sheet Highlights:	September 30, 2012			September 30, 2011
Assets	$	1,269,319		$	1,517,315
Loans, gross		811,787			996,488
Allowance for loan losses		36,700			25,677
Deposits		1,120,463			1,286,901
Shareholders' equity		87,320			159,171
Tangible equity (1)		86,436			138,630

Return on average tangible assets and return on average tangible equity are other non-GAAP-based financial measures calculated using non-GAAP-based amounts. The most directly comparable GAAP-based measures are return on average assets and return on average equity, which are calculated using GAAP-based amounts. The Company calculates the return on average tangible assets and equity by excluding the balance of intangible assets and their related amortization expense, net of tax, from the calculation of return on average assets and equity. Management uses the return on average tangible assets and equity to assess the Company’s core operating results and believes that this is a better measure of our operating performance, as it is based on the Company's tangible assets and capital. Further, we believe that by excluding the impact of purchase accounting adjustments it allows for a more meaningful comparison with the Company's peers, particularly those that may not have acquired other companies. Lastly, the exclusion of goodwill and intangible assets is consistent with the treatment by bank regulatory agencies, which exclude these amounts from the calculation of risk-based capital ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. A reconciliation of return on average assets and equity to return on average tangible assets and equity, respectively, is set forth below.

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2012			2011			2012			2011

Return on average assets (GAAP basis)		(6.50	%)		1.11	%		(3.80	%)		(0.22	%)
Effect of excluding average intangible
assets and related amortization, net of tax		0.00	%		0.02	%		0.00	%		0.01	%
Return on average tangible assets		(6.50	%)		1.13	%		(3.80	%)		(0.21	%)

Return on average equity (GAAP basis)		(79.60	%)		10.82	%		(44.87	%)		(2.06	%)
Effect of excluding average intangible
assets and related amortization, net of tax		(0.62	%)		1.72	%		(0.25	%)		(0.21	%)
Return on average tangible equity		(80.22	%)		12.54	%		(45.12	%)		(2.27	%)

ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)		(Audited)*		(Unaudited)
	September 30,		December 31,		September 30,
(Dollars in thousands, Except per Share Data)	2012		2011		2011
Assets
Cash and due from banks	$	13,960	$	19,630	$	16,233
Federal funds sold		0		0		0
Cash and cash equivalents		13,960		19,630		16,233

Short-term investments		0		0		248
Interest bearing deposits with banks		93,644		90,039		65,398
Restricted investments in bank stock		10,615		11,758		9,757
Securities available for sale		291,649		310,365		354,042

Loans held for sale		8,049			2,553			7,470
Loans		803,738			965,440			989,018
Less: Allowance for loan losses		(36,700	)		(43,715	)		(25,677	)
Net Loans		775,087			924,278			970,811

Premises and equipment, net		26,929			27,183			27,125
Cash surrender value of life insurance		24,797			24,147			23,903
Goodwill and intangible assets		884			1,041			20,541
Accrued interest receivable		3,696			4,548			5,172
Other assets		28,058			31,108			24,085
Total assets	$	1,269,319		$	1,444,097		$	1,517,315

Liabilities
Deposits:
Non-interest bearing	$	113,115		$	111,930		$	116,839
Interest bearing		1,007,348			1,104,972			1,170,062
Total deposits		1,120,463			1,216,902			1,286,901

Short-term borrowings		12,066			35,013			27,534
Long-term debt		37,808			53,798			34,120
Accrued interest and other liabilities		11,662			10,187			9,589
Total liabilities		1,181,999			1,315,900			1,358,144

Shareholders' Equity
Preferred Stock, $1.25 par value per share; 500,000 shares authorized;
no shares issued or outstanding		0			0			0
Common stock, no par value - $ 0.05205 stated value per share
50,000,000 shares authorized; 8,066,091, 8,055,787
and 8,041,067 shares issued; 8,065,279; 8,054,975
and 8,040,255 shares outstanding		420			419			419
Additional paid - in capital		122,616			122,514			122,324
Retained earnings (accumulated deficit)		(38,289	)		1,195			30,676
Accumulated other comprehensive income		2,593			4,089			5,772
Treasury stock - common, 812 shares, at cost		(20	)		(20	)		(20	)
Total shareholders' equity		87,320			128,197			159,171
Total liabilities and shareholders' equity	$	1,269,319		$	1,444,097		$	1,517,315

*The consolidated balance sheet at December 31, 2011 has been derived from audited financial statements at that date.

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars in thousands, Except per Share Data)	2012			2011			2012			2011
Interest and dividend income
Interest and fees on loans	$	9,567		$	12,406		$	30,717		$	37,224
Interest and dividends on investment securities
Taxable		768			2,287			3,105			6,746
Tax-exempt		325			756			1,413			2,296
Short-term investments		71			42			214			87
Total interest and dividend income		10,731			15,491			35,449			46,353

Interest expense
Interest on deposits		1,519			2,322			5,359			7,206
Interest on short-term borrowings		20			68			113			286
Interest on long-term debt		163			276			560			838
Total interest expense		1,702			2,666			6,032			8,330

Net interest income		9,029			12,825			29,417			38,023
Provision for loan losses		5,100			7,900			47,300			32,325
Net interest income after provision for loan losses		3,929			4,925			(17,883	)		5,698

Noninterest income
Service charges on deposit accounts		1,564			1,674			4,626			4,804
Other service charges, commissions and fees		368			323			966			1,020
Trust department income		1,096			1,046			3,348			3,092
Brokerage income		364			372			1,148			1,260
Mortgage banking activities		931			927			2,143			2,259
Earnings on life insurance		251			256			749			836
Merchant processing revenue		149			1,310			149			1,850
Other income		159			692			145			916
Investment securities gains (losses)		(2	)		2,351			4,824			3,199
Total noninterest income		4,880			8,951			18,098			19,236

Noninterest expenses
Salaries and employee benefits		4,874			4,690			14,508			13,698
Occupancy expense		491			477			1,518			1,516
Furniture and equipment		754			672			2,159			2,045
Data processing		171			375			434			1,036
Telephone		137			141			479			482
Advertising and bank promotions		434			276			1,115			830
FDIC Insurance		788			690			2,019			2,002
Professional services		729			1,125			2,281			1,993
Taxes other than income		231			226			695			636
Collection expense		593			359			1,890			690
OREO Expense		230			235			706			313
Intangible asset amortization		52			52			157			157
Other operating expenses		1,649			1,509			4,788			4,590
Total noninterest expenses		11,133			10,827			32,749			29,988
Income (loss) before income tax (benefit)		(2,324	)		3,049			(32,534	)		(5,054	)
Income tax expense (benefit)		19,028			(1,265	)		6,950			(2,572	)
Net income (loss)	$	(21,352	)	$	4,314		$	(39,484	)	$	(2,482	)

Per share information:
Basic earnings (loss) per share	$	(2.65	)	$	0.54		$	(4.90	)	$	(0.31	)
Diluted earnings (loss) per share		(2.65	)		0.54			(4.90	)		(0.31	)
Dividends per share		0.00			0.23			0.00			0.69
Average shares and common stock equivalents outstanding		8,065,268			8,026,925			8,061,682			8,017,550

	Three Months Ended
	September 30, 2012								September 30, 2011
			Tax			Tax					Tax			Tax
	Average		Equivalent			Equivalent			Average		Equivalent			Equivalent
(Dollars in thousands)	Balance		Interest			Rate			Balance		Interest			Rate
Assets
Federal funds sold
& interest bearing
bank balances	$	106,059	$	71			0.27	%	$	48,621	$	42			0.34	%
Securities		295,578		1,268			1.71			408,951		3,450			3.38
Loans		827,553		9,937			4.78			1,002,964		12,719			4.97
Total interest-earning
assets		1,229,190		11,276			3.65			1,460,536		16,211			4.38
Other assets		77,234								87,511
Total	$	1,306,424							$	1,548,047

Liabilities and Shareholders' Equity
Interest bearing
demand deposits	$	495,095	$	248			0.20		$	503,972	$	415			0.33
Savings deposits		73,757		31			0.17			72,845		36			0.20
Time deposits		439,628		1,240			1.12			585,030		1,871			1.27
Short term borrowings		20,647		20			0.39			53,015		68			0.51
Long term debt		38,006		163			1.71			43,192		276			2.55
Total interest bearing
liabilities		1,067,133		1,702			0.63			1,258,054		2,666			0.84
Non-interest bearing
demand deposits		122,050								121,749
Other		10,611								10,094
Total Liabilities		1,199,794								1,389,897
Shareholders' Equity		106,630								158,150
Total	$	1,306,424					0.55	%	$	1,548,047					0.72	%
Net interest income (FTE)/
net interest spread				9,574			3.02	%				13,545			3.54	%
Net interest margin							3.10	%							3.66	%
Tax-equivalent adjustment				(545	)							(720	)
Net interest income			$	9,029							$	12,825

	Nine Months Ended
	September 30, 2012								September 30, 2011
			Tax			Tax					Tax			Tax
	Average		Equivalent			Equivalent			Average		Equivalent			Equivalent
(Dollars in thousands)	Balance		Interest			Rate			Balance		Interest			Rate
Assets
Federal funds sold
& interest bearing
bank balances	$	108,526	$	214			0.26	%	$	32,184	$	87			0.36	%
Securities		322,369		5,279			2.19			413,483		10,277			3.32
Loans		887,111		31,736			4.78			997,504		38,111			5.06
Total interest-earning
assets		1,318,006		37,229			3.77			1,443,171		48,475			4.46
Other assets		70,605								89,389
Total	$	1,388,611							$	1,532,560

Liabilities and Shareholders' Equity
Interest bearing
demand deposits	$	517,094	$	1,008			0.26		$	463,737	$	1,280			0.37
Savings deposits		74,236		93			0.17			70,784		110			0.21
Time deposits		471,006		4,258			1.21			593,612		5,816			1.31
Short term borrowings		37,058		113			0.41			73,882		286			0.52
Long term debt		45,558		560			1.64			46,027		838			2.43
Total interest bearing
liabilities		1,144,952		6,032			0.70			1,248,042		8,330			0.89
Non-interest bearing
demand deposits		116,194								113,662
Other		9,914								9,901
Total Liabilities		1,271,060								1,371,605
Shareholders' Equity		117,551								160,955
Total	$	1,388,611					0.61	%	$	1,532,560					0.77	%
Net interest income (FTE)/
net interest spread				31,197			3.07	%				40,145			3.57	%
Net interest margin							3.16	%							3.69	%
Tax-equivalent adjustment				(1,780	)							(2,122	)
Net interest income			$	29,417							$	38,023

Nonperforming Assets / Risk Elements
	September 30,			June 30,			December 31,			September 30,
(Dollars in Thousands)	2012			2012			2011			2011
Nonaccrual loans (cash basis)	$	57,780		$	56,917		$	83,697		$	31,174
Other real estate (OREO)		2,575			2,337			2,165			2,754
Total nonperforming assets		60,355			59,254			85,862			33,928
Restructured loans still accruing		3,113			2,831			27,917			37,175
Loans past due 90 days or more and still accruing		923			1,275			0			2,956
Total risk assets	$	64,391		$	63,360		$	113,779		$	74,059

Loans 30-89 days past due	$	5,435		$	6,219		$	6,723		$	21,365

Asset quality ratios:
Total nonaccrual loans to loans		7.19	%		6.79	%		8.67	%		3.15	%
Total nonperforming assets to assets		4.75	%		4.46	%		5.95	%		2.24	%
Total nonperforming assets to total loans and OREO		7.49	%		7.05	%		8.87	%		3.42	%
Total risk assets to total loans and OREO		7.99	%		7.54	%		11.76	%		7.47	%
Total risk assets to total assets		5.07	%		4.77	%		7.88	%		4.88	%

Allowance for loan losses to total loans		4.57	%		4.32	%		4.53	%		2.60	%
Allowance for loan losses to nonaccrual loans		63.52	%		63.66	%		52.23	%		82.37	%
Allowance for loan losses to nonaccrual and
restructured loans still accruing		60.27	%		60.65	%		39.17	%		37.57	%

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected 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 recent Dodd-Frank Wall Street Reform and Consumer Protection Act; interest rate movements; changes in credit quality; inability to raise capital under favorable conditions, volatilities in the securities markets; and deteriorating economic conditions, and other risks and uncertainties, including those detailed in Orrstown Financial Services, Inc.'s filings 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.