10-Q 1 mar10q.txt FORM 10 - Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended March 31, 2003 Commission file number 33-18888 -------------- -------- ORRSTOWN FINANCIAL SERVICES, INC. --------------------------------- (Exact name of registrant as specified in its charter) Commonwealth of Pennsylvania 23-2530374 --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 77 East King Street 17257 --------------- P.O. Box 250, Shippensburg, Pennsylvania (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (717) 532-6114 --------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filled by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- Class Outstanding at April 30, 2003 -------------------------------- ----------------------------- (Common Stock, no par value ) 2,405,551 Page 1 ORRSTOWN FINANCIAL SERVICES, INC. INDEX Page -------- Part I - FINANCIAL INFORMATION Item 1. Financial statements (unaudited) Condensed consolidated balance sheets - March 31, 2003 and December 31, 2002. 4 Condensed consolidated statements of income - Three months ended March 31, 2003 and 2002. 5 Condensed consolidated statements of comprehensive income - Three months ended March 31, 2003 and 2002. 6 Condensed consolidated statements of cash flows - Three Months ended March 31, 2003 and 2002. 7 Notes to condensed consolidated financial statements 8 - 10 Item 2. Management's discussion and analysis of financial condition and results of operations 11 - 16 PART II - OTHER INFORMATION Other Information 18 Signatures 19 Certifications of Principal Executive Officer and Principal Financial Officer 20 - 23 Exhibits 24 - 26 Page 2 PART I - FINANCIAL INFORMATION Page 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Unaudited) (Audited)* March 31, December 31, (Dollars in Thousands) 2003 2002 ---------------------------------------------------------------------- - ASSETS Cash and due from banks $ 13,062 $ 10,656 Interest bearing deposits with banks 1,328 1,095 Federal funds sold 11,011 8,217 Securities available for sale 83,318 90,106 Federal Home Loan Bank, Federal Reserve and Atlantic Central Bankers Bank Stock, at cost which approximates market value 2,918 2,268 Loans 299,698 281,391 Allowance for loan losses ( 3,979) ( 3,734) -------- --------- Net Loans 295,719 277,657 Premises and equipment, net 10,138 9,849 Accrued interest receivable 1,668 1,606 Cash value-life insurance 6,984 6,916 Other assets 2,394 1,928 --------- --------- Total assets $ 428,540 $ 410,298 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing $ 43,718 $ 42,704 Interest bearing 293,630 276,464 --------- --------- Total deposits 337,348 319,168 --------- --------- Federal funds purchased and other short term borrowed funds 19,938 20,808 Long term borrowed funds 28,539 28,539 Accrued interest payable 247 248 Other liabilities 3,840 3,573 --------- --------- Total liabilities 389,912 372,336 --------- --------- Common stock, no par value-$.1041 stated value per share at March 31, 2003 and December 31, 2002, 10,000,000 shares authorized with 2,401,969 shares issued at March 31, 2003 and 2,398,405 issued at December 31, 2002 250 250 Additional paid - in capital 26,089 25,913 Retained earnings 10,814 9,750 Accumulated other comprehensive income 1,475 2,049 --------- --------- Total stockholders' equity 38,628 37,962 --------- --------- Total liabilities and stockholders' equity $ 428,540 $ 410,298 ========= ========= *Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial statements. Page 4 ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended ------------------ March March (Dollars in Thousands) 2003 2002 --------------------------------------------------------------------- INTEREST INCOME Interest and fees on loans $ 4,636 $ 4,542 Interest on federal funds sold 21 56 Interest and dividends on investment securities 1,039 1,002 Interest income on deposits with banks 4 5 ------- ------- Total interest income 5,700 5,605 ------- ------- INTEREST EXPENSE Interest on deposits 1,295 1,608 Interest on borrowed money 407 454 ------- ------- Total interest expense 1,702 2,062 ------- ------- Net interest income 3,998 3,543 Provision for loan losses 252 150 ------- ------- Net interest income after provision for loan losses 3,746 3,393 ------- ------- OTHER INCOME Service charges on deposits 610 476 Other service charges 254 219 Trust department income 319 322 Brokerage income 111 80 Other income 101 80 Securities gains / (losses) 178 1 ------- ------- Total other income 1,573 1,178 ------- ------- OTHER EXPENSES Salaries and employee benefits 1,676 1,479 Net occupancy and equipment expenses 506 428 Other operating expenses 937 781 ------- ------- Total other expense 3,119 2,688 ------- ------- Income before income tax 2,200 1,883 Income tax expenses 656 549 ------- ------- Net income $ 1,544 $ 1,334 ======= ======= PER SHARE DATA Earnings per share Basic earnings per share $ 0.64 $ 0.56 Weighted average number of shares outstanding 2,400,746 2,383,332 Diluted earnings per share $ 0.63 $ 0.55 Weighted average number of shares outstanding 2,464,929 2,424,392 Dividends per share $ 0.20 $ 0.17
The accompanying notes are an integral part of these condensed financial statements. Page 5 ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended --------------- --- March March (Dollars in Thousands) 2003 2002 ---------------------------------------------------------------------- --- COMPREHENSIVE INCOME Net Income $ 1,544 $ 1,334 Other comprehensive income, net of tax Unrealized gain (loss) on investment securities available for sale ( 574) ( 104) ------- --- ---- Comprehensive Income $ 970 $ 1,230 ======= =======
The accompanying notes are an integral part of these condensed financial statements. Page 6