8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

DATE OF REPORT (Date of Earliest Event Reported): November 17, 2008 (November 17, 2008)

ORRSTOWN FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA

(State or other jurisdiction of incorporation)

033-18888	23-2530374
(Commission file number)	(IRS employer ID)

77 East King Street, Shippensburg, Pennsylvania	17257
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number, including area code – (717) 532-6114

NONE

(Former name, address and fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ORRSTOWN FINANCIAL SERVICES, INC.

FORM 8-K

Item 7.01. Regulation FD Disclosure

On November 17, 2008, Orrstown Financial Services, Inc. (OTCBB: ORRF) mailed to shareholders a quarterly report of the third quarter and year-to-date September 30, 2008 results of operations.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.	Description
99.1	Orrstown Financial Services, Inc. Third Quarter Report for September 30, 2008.

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ORRSTOWN FINANCIAL SERVICES, INC.

FORM 8-K

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Orrstown Financial Services, Inc.
Date: November 17, 2008	/s/ Kenneth R. Shoemaker
	Kenneth R. Shoemaker, President and
	Chief Executive Officer

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ORRSTOWN FINANCIAL SERVICES, INC.

FORM 8-K

EXHIBIT INDEX

Exhibit Number	Description
99.1	Orrstown Financial Services, Inc. Third Quarter Report for September 30, 2008

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EX-99.1

EXHIBIT 99.1

Filed by Orrstown Financial Services, Inc.

Commission File No.: 033-18888

Taking it to THE NEXT LEVEL   Third Quarter Report • September 30, 2008

To our Shareholders, Customers, and Friends

Let’s face it; there hasn’t been much good news lately about banks in this country, or globally for that matter. However, it is important to know that not all banks are the same. Unlike some of the largest financial institutions, Orrstown Bank has never made one sub-prime or Alt-A (low documentation/no documentation) loan, nor did we purchase any preferred stock in government subsidized organizations like Fannie Mae or Freddie Mac. Throughout this financial crisis, Orrstown has continued to do business as usual—helping our customers and the communities we serve.

Despite the challenging national economic conditions, our core operating results across all business lines continue to be very solid. While our third quarter net consolidated income reflects a decrease over the same period last year, on a year-to-date basis our net earnings are up 5.3%. We are also pleased to note that total consolidated assets as of September 30, 2008 surpassed the one billion dollar mark for the first time, a significant milestone for our company.

Net income for the third quarter of 2008 was $3,163,000, compared to $3,427,000 during the same period last year. Primary earnings per share were $.49 for the third quarter of 2008, compared to $.53 per share during the third quarter of 2007. Increased provisions to the loan loss reserve, tighter net interest margins, and full integration of our state of the art operations center were primary contributors to lower earnings on a comparative quarter basis.

Net income for the nine months ending September 30, 2008 was $10,016,000, an increase of $506,000 compared to the same period last year. Primary earnings per share grew 5.4% for the first nine months from $1.48 per share in 2007 to $1.56 for 2008. Key year-to-date metrics continue to be very strong. Return on average tangible assets and return on average tangible equity were 1.49% and 17.55%, respectively, well above industry standards. The fourth quarter dividend of $.22 per share represents a 4.8% increase over the dividend of $.21 declared for the fourth quarter of 2007. For the year of 2008, total dividends increased 6.1% from $.82 per share to $.87 per share.

We are very proud to inform you that Orrstown continues to be recognized for significant accomplishments. This quarter I’m pleased to note that our institution was named one of Central Pennsylvania’s fastest growing companies for the seventh consecutive year! We were also chosen as a finalist by the Central Penn Business Journal as Business of the Year in the category of companies with 101 or more employees. These accolades demonstrate the quality of our growing organization.

Finally, I am pleased to report a very successful opening of our newest office located on Professional Court, just off the newly improved Eastern Boulevard in Hagerstown, Maryland. Our style of “hometown” personalized service is proving to be very popular in this new market and we are very excited about ongoing opportunities for growth. Vice President and Regional Senior Loan Officer, Terry Reiber, continues to do an outstanding job for our bank in the Hagerstown area. Recent additions to our Maryland team of banking professionals include Ed Hose, Business Banking Officer, and JD Pearl, Branch Executive Officer. Both men are seasoned bankers and have served the Washington County area for many years.

Orrstown is successfully weathering the current economic downturn and we are well positioned to take advantage of opportunities that may lie ahead. You can sleep at night knowing that Orrstown Financial Services, Inc. is strong, safe, and secure.

/s/ Kenneth R. Shoemaker

Kenneth R. Shoemaker

President and Chief Executive Officer

Consolidated Balance Sheets

(Unaudited) (Dollars in thousands, except per share)	September 30,
	2008			2007
Assets
Cash and due from banks	$	17,397		$	14,769
Federal funds sold		2,362			6,530
Interest bearing deposits with banks		89			393
Investment securities		129,514			102,740
Loans		784,074			684,430
Less: allowance for loan losses		(6,588	)		(5,643	)
Net loans		777,486			678,787
Premises and equipment, net		30,898			22,217
Goodwill and intangible assets		21,249			21,430
Cash surrender value of life insurance		16,412			15,873
Accrued interest receivable		3,688			3,536
Other assets		9,196			5,838
Total assets	$	1,008,291		$	872,113
Liabilities
Deposits:
Non-interest bearing	$	90,999		$	87,152
Interest bearing		617,803			571,719
Total deposits		708,802			658,871
Short term borrowings		87,353			59,804
Long term debt		103,616			52,250
Accrued interest payable		1,081			1,045
Other liabilities		6,263			5,877
Total liabilities		907,115			777,847
Shareholders’ Equity
Common stock		336			336
Additional paid-in capital		82,581			82,515
Retained earnings		19,447			12,169
Accumulated other comprehensive income		(236	)		333
Treasury stock		(952	)		(1,087	)
Total shareholders’ equity		101,176			94,266
Total liabilities and shareholders’ equity	$	1,008,291		$	872,113

Market Makers

Ferris, Baker Watts, Inc.	Ryan, Beck & Co., Inc.	Boenning & Scattergood, Inc.
1405 McFarland Road	18 Columbia Turnpike	Four Tower Bridge
Pittsburgh, PA 15216	Florham Park, NJ 07932	200 Barr Harbor Drive, Suite 300
877.282.1941	800.342.2325	West Conshohocken, PA 19428
		800.883.1212
100 Light Street	Janney Montgomery Scott, LLC
Baltimore, MD 21202	1801 Market Street
877.840.0012	10th Floor
	Philadelphia, PA 19103
	800.526.6397

Certain statements in this report may constitute “forward looking statements” under the Private Securities Litigation Reform Act of 1995, which involve risk and uncertainties. Orrstown Financial’s actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, economic conditions, competition in the geographic and business areas in which Orrstown Financial conducts its operations, fluctuations in interest rates, credit quality, and government regulation.

Consolidated Statements of Income

(Unaudited)	3 Months Ended September 30,						9 Months Ended September 30,
(Dollars in thousands, except per share)	2008			2007			2008			2007
Interest Income
Interest and fees on loans	$	12,111		$	12,481		$	36,082		$	35,679
Interest and dividends on investment securities		959			1,020			2,882			3,000
Interest on short term investments		28			155			207			556
Total interest and dividend income		13,098			13,656			39,171			39,235
Interest Expense
Interest on deposits		3,252			4,924			10,636			14,092
Interest on short-term borrowings		379			642			1,029			1,722
Interest on long-term debt		1,059			405			3,017			1,216
Total interest expense		4,690			5,971			14,682			17,030
Net interest income		8,408			7,685			24,489			22,205
Provision for loan losses		257			90			672			240
Net interest income after provision		8,151			7,595			23,817			21,965
Securities gains / (losses)		(75	)		(12	)		(27	)		58
Other income		3,820			3,535			11,527			9,779
Other expense		7,316			6,220			20,901			18,314
Income before income tax		4,580			4,898			14,416			13,488
Income tax expense		1,417			1,471			4,400			3,978
Net income	$	3,163		$	3,427			10,016			9,510
Per Share Data
Basic earnings per share	$	0.49		$	0.53		$	1.56		$	1.48
Diluted earnings per share	$	0.46		$	0.51		$	1.48		$	1.41
Dividends per share	$	0.22		$	0.21		$	0.65		$	0.61
Performance Statistics
Return on average assets		1.31	%		1.61	%		1.44	%		1.54	%
Return on average tangible assets		1.36	%		1.67	%		1.49	%		1.60	%
Return on average equity		12.57	%		14.70	%		13.59	%		13.95	%
Return on average tangible equity		16.17	%		19.36	%		17.55	%		18.49	%

2008 Common Stock Information

	Market Price						Quarterly Dividend
	High		Low		Close
First Quarter	$	31.50	$	29.50	$	30.10	$	0.21
Second Quarter		33.96		29.10		30.00		0.22
Third Quarter		31.75		29.00		30.50		0.22

Total Trust Assets $393 Million

Board of Directors

Dr. Anthony F. Ceddia	Kenneth R. Shoemaker	Peter C. Zimmerman	DIRECTORS EMERITI
President Emeritus,	President and CEO,	Executive Vice President,
Shippensburg University	Orrstown Bank	Senior Operations Officer,	Richard M. Diffenbaugh
		Orrstown Bank	Eldon E. Funk
Jeffrey W. Coy	Glenn W. Snoke		Frank S. Heberlig
Vice Chairman of the Board,	President,	Joel R. Zullinger	Robert T. Henry
Commissioner,	Snoke’s Excavating	Chairman of the Board,	William O. Hykes
PA Gaming Control Board	and Paving, Inc.	Attorney-at-Law,	Galen L. Myers
		Zullinger Davis, P.C.	Raymond I. Pugh
Andrea Pugh	Denver L. Tuckey
President,	Secretary of the Board,	Mark K. Keller
PharmCare Consultants, LLC	Retired,	State Representative,
	Tuckey Mechanical Services, Inc.	86th District
Gregory A. Rosenberry		Orrstown Bank Board only
President & General Partner,	John S. Ward
Rosenberry Family Limited	President,
Partnership	Modern Transit Partnership
Executive Officers
Kenneth R. Shoemaker	Philip E. Fague	Bradley S. Everly	Jeffrey W. Embly
President,	Executive Vice President,	Senior Vice President,	Executive Vice President,
Chief Executive Officer	Treasurer and	Assistant Secretary and	Chief Commercial Officer
	Chief Retail Officer	Chief Financial Officer
Peter C. Zimmerman
Executive Vice President,
Senior Operations Officer
Office Locations
CAMP HILL	CHAMBERSBURG	HAGERSTOWN	NEW BLOOMFIELD
3045 Market Street	625 Norland Avenue	201 South Cleveland Avenue	1 South Carlisle Street
Camp Hill, PA 17011	Chambersburg, PA 17201	Hagerstown, MD 21740	New Bloomfield, PA 17068
CARLISLE	1725 Lincoln Way East	1020 Professional Court	ORRSTOWN
22 South Hanover Street	Chambersburg, PA 17202	Hagerstown, MD 21740	3580 Orrstown Road
Carlisle, PA 17013			Orrstown, PA 17244
	1355 Orchard Drive	MECHANICSBURG
427 Village Drive	Chambersburg, PA 17201	3 Baden Powell Lane	SHIPPENSBURG
Carlisle, PA 17015		Mechanicsburg, PA 17050	77 East King Street
	DUNCANNON		Shippensburg, PA 17257
2250 Spring Road	403 North Market Street	1110 East Simpson Street
Carlisle, PA 17013	Duncannon, PA 17020	Mechanicsburg, PA 17055
			121 Lurgan Avenue
1 Giant Lane	GREENCASTLE	NEWPORT	Shippensburg, PA 17257
Carlisle, PA 17013	308 Carolle Street	15 North 2nd Street
	Greencastle, PA 17225	Newport, PA 17074	SPRING RUN
			16400 Path Valley Road
		18 Newport Plaza	Spring Run, PA 17262
		Newport, PA 17074

717.530.3530 or 1.888.ORRSTOWN • www.orrstown.com