GlobeNewswire Inc | Jul 20, 2021 04:02PM EDT

July 20, 2021

-- Net income of $8.8 million for the quarter; diluted second quarter 2021 EPS of $0.79 per share versus $0.92 per share in the first quarter of 2021 and $0.58 per share in the second quarter of 2020 -- The Board of Directors declared a cash dividend of $0.19 per common share, payable August 9, 2021, to shareholders of record as of August 2, 2021, an increase from $0.18 per common share in the first quarter of 2021 -- Commercial loan growth for the quarter, excluding Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans, was 24% annualized as loan demand was robust late in the second quarter of 2021; momentum continues with a strong commercial pipeline -- Provision expense of $0.6 million was recorded in the second quarter of 2021 as compared to a provision reversal of $1.0 million in the first quarter of 2021; commercial loan production drove the increase; the provision included $0.8 million and $1.0 million of COVID-19 reserve reductions for the three months ended June 30, 2021 and March 31, 2021, respectively -- Noninterest expenses improved to $17.0 million in the second quarter of 2021 as compared to $17.8 million in the first quarter of 2021; the efficiency ratio was stable at 60% for first and second quarters of 2021 -- Noninterest income was $6.7 million in the second quarter of 2021 as compared to $7.5 million in the first quarter of 2021; the first quarter included a $0.6 million reduction of the mortgage servicing rights valuation reserve -- Return on average assets totaled 1.2% in the second quarter of 2021 compared to 1.4% in the first quarter of 2021; second quarter provision increase caused the reduction -- Tangible book value per share(1) increased to $21.61 at June 20, 2021 from $20.59 at March 31, 2021 and $19.93 at December 31, 2020 -- Net interest margin declined to 3.24% in the second quarter of 2021 from 3.38% in the first quarter of 2021 due primarily to increased liquidity that resulted from SBA PPP forgiveness -- The SBA PPP portfolio averaged $471.2 million in the three months ended June 30, 2021 as compared to $463.0 million in the three months ended March 31, 2021 -- Deposits declined by $53.0 million, or 8% annualized, from the first quarter of 2021 as a result of the usage of stimulus and PPP funds; average deposits per branch remained strong at $97 million for the second quarter of 2021 -- Cost of deposits fell by six basis points in the quarter due to late first quarter rate adjustments and changes in mix

(1) Non-GAAP measure. See Appendix B for additional information.

SHIPPENSBURG, Pa., July 20, 2021 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown" or the Company) (NASDAQ: ORRF), the parent company of Orrstown Bank (the Bank), announced earnings for the three months ended June 30, 2021. Net income totaled $8.8 million for the three months ended June 30, 2021, compared with $10.2 million for the three months ended March 31, 2021 and $6.4 million in the three months ended June 30, 2020. Diluted earnings per share totaled $0.79 for the three months ended June 30, 2021, compared with $0.92 in the three months ended March 31, 2021 and $0.58 in the three months ended June 30, 2020.

Thomas R. Quinn, Jr., President & CEO, commented, With another quarter of strong earnings and growing optimism for sustained future earnings, Orrstown's Board saw an opportunity to further enhance shareholder value and approved an increase to its quarterly dividend. Orrstown strives to serve its community, employees and shareholders in the best way possible and this action along with the Company's efforts in the past 15 months solidifies that message. After tirelessly devoting the past several quarters to SBA PPP efforts, our seasoned lending team quickly pivoted to commercial loan production. While we continue to service the needs of our PPP clients as we help them navigate through the forgiveness process, our primary focus has returned to growing our core business. The commercial loan pipeline is robust and we expect to see excellent production through the second half of the year. Orrstown continues to take advantage of market disruption which has resulted in both new client relationships and new talent that fits with our strategic vision and core values.

Mr. Quinn continued, With the economy re-opened and COVID-19 mandates lifted, our commercial lenders have been enabled to do what they do best, which is interacting with clients and driving new business opportunities. Recruitment will be the key to increasing mortgage banking revenue and replenishing the mortgage loan portfolio. As the profit boost from PPP activity wanes through 2022, our focus remains on replacing that income over the long-term. With interest rates expected to remain at historical lows in the near term, we plan to maintain discipline with our commercial lending and seek appropriate opportunities to utilize excess liquidity that fit within our relationship model and drive long-term growth.

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment, which includes SBA PPP loans, declined by $99.6 million from March 31, 2021 to June 30, 2021, or 20% annualized, due to SBA PPP forgiveness and consumer loan reductions, partially offset by net commercial loan production. SBA PPP loans, net of deferred fees and costs, declined during the quarter by $148.7 million to $355.6 million at June 30, 2021 from $504.3 million at March 31, 2021. Commercial loans, excluding SBA PPP loans, increased by $68.8 million, or 24% annualized, from March 31, 2021 to June 30, 2021 resulting from strong commercial loan production. Loans held for investment are down by $34.3 million, or 2%, from December 31, 2020 to June 30, 2021. Loan demand has increased and is expected to continue for the remainder of the year as the COVID-19 related restrictions were lifted in the second quarter of 2021.

We expect most of the 2020 SBA PPP loan balances to be forgiven by the end of 2021. The SBA PPP loan originations in 2021 totaled $231.7 million at June 30, 2021. A number of the 2021 loans began to achieve forgiveness in the second quarter of 2021 and it is expected most of these 2021 originations will be forgiven by the end of 2022. Net deferred fees of $11.2 million remain at June 30, 2021, the majority of which is expected to be earned by the end of 2022.

Residential mortgage loans declined by $13.3 million, or 24% annualized in the three months ended June 30, 2021. In addition to experiencing an overall decline in mortgage volume, the low interest rate environment has reduced the Company's appetite for portfolio mortgage loans. Despite this decline, overall loan growth in 2021, excluding SBA PPP, is expected to be mid-single digits with commercial lending growth exceeding 10%.

Deposits

Deposits declined by $53.0 million, or 8% annualized, but remained at $2.5 billion at June 30, 2021 compared to March 31, 2021. This decline is attributed to deposit customers' utilization of stimulus funds received in the first quarter of 2021, as well as usage of SBA PPP funds. Non-interest bearing demand deposits declined by $19.0 million in the second quarter of 2021, or 14% annualized, and interest bearing checking deposits declined by $28.9 million, or 12% annualized. This decline was partially offset by money market and savings account growth of $19.3 million, or 12% annualized, from March 31, 2021 to June 30, 2021. Certificates of deposit declined by $24.3 million from March 31, 2021 to June 30, 2021, or 25% annualized. Deposits are up by $137.2 million, or 6%, from December 31, 2020 to June 30, 2021 due primarily to SBA PPP loan fundings. Deposit balances are expected to continue to gradually decline over time as clients access their remaining PPP funds and deploy their excess liquidity, which contributed to the Bank's loan-to-deposit ratio of 78% at June 30, 2021. On a longer term basis, the Bank will continue to target a loan-to-deposit ratio of 90%.

Other

Investment securities increased by $42.1 million to $460.1 million at June 30, 2021 as compared to $418.0 million at March 31, 2021, due primarily to purchases of agency backed securities and municipal bonds. Longer term, the Bank will continue to seek to deploy excess liquidity to relationship lending strategies to maximize its net interest margin as rates rise. See Appendix C for a summary of the current investment portfolio that highlights the concentrations, quality and credit enhancement levels for the portfolio.

Income Statement

Net Interest Income and Margin

Net interest income remained consistent at $21.9 million for the three months ended June 30, 2021 compared to the three months ended March 31, 2021. The net interest margin declined to 3.24% in the second quarter of 2021 from 3.38% in the first quarter of 2021. The margin reduction was primarily a result of an increase in excess cash (17 basis points) and lower purchase accounting accretion (6 basis points), partially offset by a 13 basis point increase in yield on SBA PPP loans.

SBA PPP loans had an average outstanding balance of $471.2 million and yielded approximately 4.4% in the three months ended June 30, 2021. This yield increased from approximately 3.9% in the first quarter of 2021 due to the realization of fees on $197.5 million of SBA PPP loans forgiven in the second quarter of 2021 compared to $80.3 million forgiven in the first quarter of 2021. Net deferred SBA PPP fees of $3.8 million were earned in the second quarter of 2021.

Repricing actions by management at the end of the first quarter of 2021 led to a deposit cost reduction of six basis points in the second quarter of 2021 to 0.17%, which is down from 0.23% in the first quarter of 2021 and 0.60% in the second quarter of 2020.

Excess liquidity that has resulted from SBA PPP forgiveness and an inflow of deposit funds from the SBA PPP and government stimulus programs is expected to continue to negatively impact the margin in the short term as there is little spread on its earnings. We expect that this excess liquidity will exit the banking system in the future as our clients utilize these funds. Our objective of emphasizing balance sheet mix is expected to lead to a higher net interest margin over the long-term. These efforts may mute growth in assets, but should lead to growth in net interest income, earnings and return on assets. It is anticipated that the net interest margin will remain under pressure in 2021 due to excess liquidity combined with low interest rates anticipated for the remainder of the year, coupled with an asset sensitive balance sheet. We believe that our efforts on balance sheet mix enhancement, SBA PPP lending and fee income generation will be effective to manage through the currently challenging external environment.

Provision for Loan Losses

We continue to see favorable asset quality trends including most loans that we placed on payment deferral in 2020 having resumed paying status. The allowance for loan losses totaled $19.4 million at June 30, 2021, compared with $19.0 million at March 31, 2021. Total classified loans decreased by $3.7 million, or 11%, to $28.7 million from March 31, 2021 to June 30, 2021. As of June 30, 2021, the Bank had active COVID-19 related deferred loans totaling $3.9 million, or 0.25% of its total loan portfolio, excluding PPP loans. This compared to $7.5 million, or 0.49% of total loans, excluding PPP loans, at March 31, 2021 and $239.3 million, or 15.1% of total loans, excluding PPP loans, at June 30, 2020.

Net charge offs were $0.2 million, or 0.01% of total non-SBA PPP loans, for both the June 30, 2021 and March 31, 2021 quarters. Nonperforming loans totaled $9.9 million at both June 30, 2021 and March 31, 2021, which was 0.51% of gross loans at June 30, 2021 and 0.48% of gross loans at March 31, 2021. The ratio of the allowance for loan losses to nonperforming loans was 195% at June 30, 2021 compared to 192% at March 31, 2021. The allowance to non-SBA guaranteed loans(1) remained steady at 1.2% as of June 30, 2021 and March 31, 2021. Management believes the allowance for loan losses to be adequate based on current asset quality metrics.

Strong commercial loan growth and some charge-off activity resulted in provision expense of $0.6 million in the three months ended June 30, 2021 despite generally positive trends and sustained performance in the asset quality of the loan portfolio. This compares to a provision reversal of $1.0 million recorded in the three months ended March 31, 2021 and $1.9 million of provision expense recorded in the three months ended June 30, 2020. While there remains uncertainty in the external environment regarding the relative strength of the economy, management determined that a release of a portion of its COVID-19 qualitative reserve is appropriate. This was due to the satisfactory performance of borrowers in the commercial portfolio and consideration of the amount of deferrals that have resumed making regular monthly payments. Accordingly, the qualitative factor within the allowance designated for the impact of COVID-19 was lowered by $0.8 million from March 31, 2021 to $1.0 million at June 30, 2021.

The combination of active client relationship consultation, loan payment deferrals, increased risk management focus on higher risk loan concentrations (primarily hotels and restaurants) and significant client participation in the SBA PPP have contributed to the favorable delinquency and charge-off trends we experienced during the pandemic.

(1) Non-GAAP measure. See Appendix B for additional information.

Noninterest Income

Noninterest income totaled $6.7 million in the three months ended June 30, 2021 compared with $7.5 million in the three months ended March 31, 2021 and $7.2 million in the three months ended June 30, 2020. Management continues to focus on opportunities to enhance fee income to offset potential net interest margin compression.

Total wealth management income for the three months ended June 30, 2021 grew to $2.9 million, as compared to $2.7 million for the three months ended March 31, 2021 and $2.3 million in the second quarter of 2020. Strong market conditions continue to drive wealth management income along with the addition of new clients.

Mortgage banking income declined by $1.0 million from the first quarter of 2021 to $1.2 million in the second quarter of 2021, partially due to a $0.5 million reduction in the fair value of the mortgages held for sale and interest rate lock commitments compared a reduction of $0.1 million in the first quarter of 2021. This was driven by declining production volume. Also, the second quarter of 2021 included a mortgage servicing valuation allowance reduction of $0.1 million as compared to $0.6 million in the first quarter of 2021. Mortgage loans sold totaled $51.8 million in the second quarter of 2021 compared with $57.3 million in the first quarter of 2021 and $49.5 million in the second quarter of 2020. As of June 30, 2021, the Bank services $480.4 million of loans for others, which is up by $16.4 million from March 31, 2021. On a year-to-date basis, mortgage activity has been strong. Mortgage banking income was $3.4 million for the six months ended June 30, 2021 as compared to $1.9 million for the six months ended June 30, 2020.

Debit card interchange income totaled $1.1 million in the second quarter of 2021, which is up $0.1 million from the prior quarter and up $0.2 million from the second quarter of 2020. Rising spending activity from the re-opening of the economy from COVID-19 and government stimulus payments drove this increase.

Noninterest Expenses

Noninterest expenses declined by $0.8 million to $17.0 million in the three months ended June 30, 2021 from the three months ended March 31, 2021. The decrease is due primarily to a $0.4 million reduction in the Bank's unfunded commitment reserve in the three months ended June 30, 2021 as compared to an increase of $0.3 million in the same reserve for the three months ended March 31, 2021. There were also declines in occupancy, advertising and professional services due to normal fluctuations. Market disruption continues to present opportunities to add experienced lenders and other valuable contributors to the organization. As these opportunities arise to facilitate the Company's growth, it could lead to increased expenses.

Income Taxes

The Company's effective tax rate for the second quarter of 2021 was 19.3% compared with 19.1% for the first quarter of 2021. The Company's effective tax rate is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies, as well as tax credits. The change in the effective rate reflects an increase in projected income for the full 2021 year.

Capital

Shareholders equity totaled $265.9 million at June 30, 2021, an increase of $11.5 million from $254.4 million at March 31, 2021. The increase was primarily attributable to net income and accumulated other comprehensive income from investment gains recorded in the three months ended June 30, 2021 offset by dividends paid in the period. Tangible book value per share grew from $19.93 per share at December 31, 2020 to $21.61 per share at June 30, 2021, an increase of 8%.

The Company's tangible common equity ratio increased to 8.4% at June 30, 2021 from 7.8% at March 31, 2021. The Company's Tier 1 leverage ratio was 8.0% at June 30, 2021 and 8.1% at March 31, 2021. The Company's total risk-based capital ratio decreased from 16.2% at March 31, 2021 to 15.6% at June 30, 2021. A balance sheet shift to higher risk assets, including commercial loans, drove this reduction. As the balance of SBA PPP loans starts to decline, the Bank's tier 1 leverage ratio is expected to gradually increase if the cash position remains stable or reduced. The ratio is still well above that required to be considered "well-capitalized" under applicable regulatory requirements. As a result of the Company's performance in the first half of 2021 and a strong capital position, the Board of Directors approved a quarterly dividend increase from $0.18 per share to $0.19 per share. The dividend payout ratio totaled 24% for the three months ended June 30, 2021. The Company continues to believe that capital is adequate at this time to support the risks inherent in the balance sheet, as well as growth requirements.

Investor Relations Contact: Media Contact:Matthew C. Schultheis, CFA Luke BernsteinDirector Strategic Planning and Investor Corporate CommunicationsRelations OfficerPhone (717) 510-7127 Phone (717) 510-7107

ORRSTOWN FINANCIAL SERVICES, INC.FINANCIAL HIGHLIGHTS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30,(Dollars in thousands,except per share 2021 2020 2021 2020amounts) Profitability for the period:Net interest income $ 21,901 $ 20,798 $ 43,756 $ 39,060 Provision for loan 625 1,900 (375 ) 2,825 lossesNoninterest income 6,664 7,193 14,208 14,267 Noninterest expenses 17,033 18,431 34,816 36,735 Income before income 10,907 7,660 23,523 13,767 taxesIncome tax expense 2,131 1,301 4,540 2,340 Net income available $ 8,776 $ 6,359 $ 18,983 $ 11,427 to common shareholders Financial ratios: Return on average 1.20 % 0.94 % 1.33 % 0.90 %assets^(1)Return on average 13.56 % 11.82 % 15.04 % 10.36 %equity^(1)Net interest margin^ 3.24 % 3.37 % 3.31 % 3.39 %(1)Efficiency ratio 59.6 % 65.8 % 60.1 % 68.9 %Income per common share:Basic $ 0.80 $ 0.58 $ 1.73 $ 1.04 Diluted $ 0.79 $ 0.58 $ 1.71 $ 1.04 Average equity to 8.83 % 7.94 % 8.84 % 8.69 %average assets ^(1) Annualized.

ORRSTOWN FINANCIAL SERVICES, INC. FINANCIAL HIGHLIGHTS (Unaudited) (continued) June 30, December 31, 2021 2020At period-end: Total assets $ 2,912,717 $ 2,750,572 Total deposits 2,494,100 2,356,880 Loans, net of allowance for loan losses 1,926,002 1,959,539 Loans held-for-sale, at fair value 8,092 11,734 Securities available for sale 450,402 466,465 Borrowings 80,709 77,511 Subordinated notes 31,932 31,903 Shareholders' equity 265,938 246,249 Credit quality and capital ratios^(1): Allowance for loan losses to total loans 1.00 % 1.02 %Total nonaccrual loans to total loans 0.51 % 0.52 %Nonperforming assets to total assets 0.34 % 0.37 %Allowance for loan losses to nonaccrual loans 195 % 195 %Total risk-based capital: Orrstown Financial Services, Inc. 15.6 % 15.6 %Orrstown Bank 14.7 % 14.7 %Tier 1 risk-based capital: Orrstown Financial Services, Inc. 12.8 % 12.5 %Orrstown Bank 13.5 % 13.5 %Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 12.8 % 12.5 %Orrstown Bank 13.5 % 13.5 %Tier 1 leverage capital: Orrstown Financial Services, Inc. 8.0 % 8.1 %Orrstown Bank 8.5 % 8.7 % Book value per common share $ 23.61 $ 21.98 ^(1) Capital ratios are estimated, subject to regulatory filings

ORRSTOWN FINANCIAL SERVICES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except per share amounts) June 30, 2021 December 31, 2020Assets Cash and due from banks $ 27,623 $ 26,203 Interest-bearing deposits with banks 309,139 99,055 Cash and cash equivalents 336,762 125,258 Restricted investments in bank stocks 9,691 10,563 Securities available for sale (amortized cost of$440,411 and $460,999 at June30, 2021 and 450,402 466,465 December31, 2020, respectively)Loans held for sale, at fair value 8,092 11,734 Loans 1,945,383 1,979,690 Less: Allowance for loan losses (19,381 ) (20,151 )Net loans 1,926,002 1,959,539 Premises and equipment, net 34,529 35,149 Cash surrender value of life insurance 69,375 68,554 Goodwill 18,724 18,724 Other intangible assets, net 4,800 5,458 Accrued interest receivable 7,930 8,927 Other assets 46,410 40,201 Total assets $ 2,912,717 $ 2,750,572 Liabilities Deposits: Noninterest-bearing $ 529,137 $ 456,778 Interest-bearing 1,964,963 1,900,102 Total deposits 2,494,100 2,356,880 Securities sold under agreements to repurchase 22,872 19,466 FHLB advances and other 57,837 58,045 Subordinated notes 31,932 31,903 Accrued interest and other liabilities 40,038 38,029 Total liabilities 2,646,779 2,504,323 Shareholders? Equity Preferred stock, $1.25 par value per share;500,000 shares authorized; no shares issued or ? ? outstandingCommon stock, no par value?$0.05205 stated valueper share 50,000,000 shares authorized;11,265,510 shares issued and 11,262,751 586 586 outstanding at June30, 2021; 11,257,046 sharesissued and 11,201,317 outstanding at December31,2020Additional paid?in capital 188,772 189,066 Retained earnings 69,052 54,099 Accumulated other comprehensive income 7,578 3,346 Treasury stock? 2,759 and 55,729 shares, at costat June30, 2021 and December31, 2020, (50 ) (848 )respectivelyTotal shareholders? equity 265,938 246,249 Total liabilities and shareholders? equity $ 2,912,717 $ 2,750,572

ORRSTOWN FINANCIAL SERVICES, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30,(In thousands, except per 2021 2020 2021 2020share amounts)Interest income Loans $ 21,323 $ 21,794 $ 42,834 $ 41,960 Investment securities - 1,614 2,795 3,493 6,233 taxableInvestment securities - 638 420 1,138 704 tax-exemptShort-term investments 81 13 120 92 Total interest income 23,656 25,022 47,585 48,989 Interest expense Deposits 1,081 3,310 2,473 7,664 Securities sold under 8 152 17 184 agreements to repurchaseFHLB advances and other 164 260 335 1,078 Subordinated notes 502 502 1,004 1,003 Total interest expense 1,755 4,224 3,829 9,929 Net interest income 21,901 20,798 43,756 39,060 Provision for loan losses 625 1,900 (375 ) 2,825 Net interest income after 21,276 18,898 44,131 36,235 provision for loan lossesNoninterest income Service charges 880 719 1,765 1,706 Interchange income 1,064 819 2,019 1,607 Swap fee income 15 232 68 432 Wealth management income 2,930 2,295 5,653 4,654 Mortgage banking activities 1,162 1,609 3,351 1,941 Gains on sale of portfolio ? 925 ? 2,803 loansInvestment securities gains 11 9 156 (31 )(losses)Other income 602 585 1,196 1,155 Total noninterest income 6,664 7,193 14,208 14,267 Noninterest expenses Salaries and employee 10,212 10,063 20,409 21,657 benefitsOccupancy, furniture and 2,400 2,326 4,918 4,615 equipmentData processing, telephone, 1,032 791 2,051 1,662 and communicationAdvertising and bank 274 167 699 956 promotionsFDIC insurance 158 214 352 261 Professional services 579 1,021 1,300 1,737 Taxes other than income 462 449 913 451 Intangible asset 324 404 658 867 amortizationInsurance claim recovery ? ? ? (486 )Other operating expenses 1,592 2,996 3,516 5,015 Total noninterest expenses 17,033 18,431 34,816 36,735 Income before income tax 10,907 7,660 23,523 13,767 expenseIncome tax expense 2,131 1,301 4,540 2,340 Net income $ 8,776 $ 6,359 $ 18,983 $ 11,427 Share information: Basic earnings per share $ 0.80 $ 0.58 $ 1.73 $ 1.04 Diluted earnings per share $ 0.79 $ 0.58 $ 1.71 $ 1.04 Weighted average shares - 10,975 10,916 10,975 10,937 basicWeighted average shares - 11,112 10,993 11,093 11,027 diluted

ORRSTOWN FINANCIAL SERVICES, INC. ANALYSIS OF NET INTEREST INCOME Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) Three Months Ended 6/30/2021 03/31/21 12/31/20 09/30/20 6/30/2020 Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable-(Dollars in thousands) Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest RateAssets Federal funds sold & $ 290,039 $ 81 0.11 % $ 145,595 $ 39 0.11 % $ 48,019 $ 14 0.12 % $ 31,087 $ 9 0.12 % $ 27,949 $ 13 0.18 %interest-bearing bank balancesInvestment securities ^(1) 438,110 2,421 2.22 468,273 2,512 2.18 486,613 2,643 2.16 496,107 2,673 2.14 493,847 3,327 2.71 Loans^ (1)(2)(3) 2,014,600 21,375 4.26 2,033,219 21,574 4.30 2,015,749 23,960 4.73 2,054,193 21,741 4.21 1,988,114 21,912 4.43 Total interest-earning assets 2,742,749 23,877 3.49 2,647,087 24,125 3.70 2,550,381 26,617 4.15 2,581,387 24,423 3.76 2,509,910 25,252 4.05 Other assets 188,810 182,737 182,764 190,119 200,684 Total $ 2,931,559 $ 2,829,824 $ 2,733,145 $ 2,771,506 $ 2,710,594 Liabilities and Shareholders' EquityInterest-bearing demand deposits $ 1,394,384 292 0.08 $ 1,334,219 438 0.13 $ 1,283,024 655 0.20 $ 1,213,208 939 0.31 $ 1,154,434 1,259 0.44 Savings deposits 200,439 50 0.10 183,576 45 0.10 172,068 52 0.12 168,377 67 0.16 160,738 63 0.16 Time deposits 382,467 739 0.78 397,271 909 0.93 411,395 1,155 1.12 432,438 1,477 1.36 462,664 1,988 1.73 Securities sold under agreements 22,417 8 0.14 21,452 9 0.17 20,055 13 0.26 21,145 20 0.38 21,582 24 0.45 to repurchaseFHLB advances and other 57,896 164 1.14 58,000 171 1.20 135,558 320 0.94 219,567 394 0.71 175,336 388 0.89 Subordinated notes 31,924 502 6.29 31,909 502 6.29 31,895 502 6.29 31,881 501 6.28 31,867 502 6.33 Total interest-bearing 2,089,527 1,755 0.34 2,026,427 2,074 0.42 2,053,995 2,697 0.52 2,086,616 3,398 0.65 2,006,621 4,224 0.85 liabilitiesNoninterest-bearing demand 545,617 516,849 406,454 417,939 452,253 depositsOther 37,561 36,244 36,216 37,330 36,511 Total Liabilities 2,672,705 2,579,520 2,496,665 2,541,885 2,495,385 Shareholders' Equity 258,854 250,304 236,480 229,621 215,209 Total $ 2,931,559 $ 2,829,824 $ 2,733,145 $ 2,771,506 $ 2,710,594 Taxable-equivalent net interest 22,122 3.15 % 22,051 3.28 % 23,920 3.63 % 21,025 3.12 % 21,028 3.20 %income / net interest spreadTaxable-equivalent net interest 3.24 % 3.38 % 3.73 % 3.24 % 3.37 %marginTaxable-equivalent adjustment (221 ) (196 ) (192 ) (207 ) (230 ) Net interest income $ 21,901 $ 21,855 $ 23,728 $ 20,818 $ 20,798 Ratio of averageinterest-earning assets to 131 % 131 % 124 % 124 % 125 %average interest-bearingliabilities NOTES: ^(1) Yields and interest income on tax-exempt assets have been computed on ataxable-equivalent basis assuming a 21% tax rate.^(2) Average balances include nonaccrual loans.^(3) Interest income on loans includes prepayment and late fees, whereapplicable, prior periods have been adjusted to include these fees.

ORRSTOWN FINANCIAL SERVICES, INC. ANALYSIS OF NET INTEREST INCOME Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) Six Months Ended June 30, 2021 June 30, 2020 Taxable- Taxable- Taxable- Taxable- Average Equivalent Equivalent Average Equivalent Equivalent(Dollars in Balance Interest Rate Balance Interest Ratethousands)Assets Federal funds sold& interest-bearing $ 218,216 $ 120 0.11 % $ 25,409 $ 92 0.73 %bank balancesInvestment 453,108 4,933 2.20 497,418 7,124 2.88 securities ^(1)Loans ^(1)(2)(3) 2,023,858 42,949 4.28 1,820,830 42,199 4.66 Totalinterest-earning 2,695,182 48,002 3.59 2,343,657 49,415 4.24 assetsOther assets 185,791 194,543 Total $ 2,880,973 $ 2,538,200 Liabilities andShareholders' EquityInterest-bearing $ 1,364,483 728 0.11 $ 1,063,460 3,161 0.60 demand depositsSavings deposits 192,039 96 0.10 155,966 127 0.16 Time deposits 389,828 1,649 0.85 483,014 4,376 1.82 Securities soldunder agreements to 21,937 17 0.16 15,499 52 0.67 repurchaseFHLB advances and 57,948 335 1.17 181,372 1,210 1.34 otherSubordinated notes 31,916 1,004 6.29 31,860 1,003 6.29 Totalinterest-bearing 2,058,151 3,829 0.38 1,931,171 9,929 1.03 liabilitiesNoninterest-bearing 531,313 351,208 demand depositsOther 36,906 35,139 Total Liabilities 2,626,370 2,317,518 Shareholders' 254,603 220,682 EquityTotal $ 2,880,973 $ 2,538,200 Taxable-equivalentnet interest income 44,173 3.22 % 39,486 3.21 %/ net interestspreadTaxable-equivalent 3.31 % 3.39 %net interest marginTaxable-equivalent (417 ) (426 ) adjustmentNet interest income $ 43,756 $ 39,060 Ratio of averageinterest-earningassets to average 131 % 121 %interest-bearingliabilities NOTES TO ANALYSIS OF NET INTEREST INCOME: ^(1) Yields and interest income on tax-exempt assets have been computed on ataxable-equivalent basis assuming a 21% tax rate.^(2) Average balances include nonaccrual loans.^(3) Interest income on loans includes prepayment and late fees, whereapplicable, prior periods have been adjusted to include these fees.

ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) (In thousands, December Septemberexcept per June 30, March 31, 31, 30, June 30,share amounts 2021 2021 2020 2020 2020)Profitabilityfor the quarter:Net interest $ 21,901 $ 21,855 $ 23,729 $ 20,818 $ 20,798 incomeProvision for 625 (1,000 ) 300 2,200 1,900 loan lossesNoninterest 6,664 7,544 7,181 6,861 7,193 incomeNoninterest 17,033 17,783 18,080 19,265 18,431 expensesIncome before 10,907 12,616 12,530 6,214 7,660 income taxesIncome tax 2,131 2,409 2,471 1,237 1,301 expenseNet income $ 8,776 $ 10,207 $ 10,059 $ 4,977 $ 6,359 Financial ratios:Return onaverage 1.20 % 1.44 % 1.47 % 0.72 % 0.94 %assets^(1)Return onaverage 13.56 % 16.31 % 17.01 % 8.67 % 11.82 %equity^(1)Net interest 3.24 % 3.38 % 3.73 % 3.24 % 3.37 %margin^(1)Efficiency 59.6 % 60.5 % 58.5 % 69.6 % 65.8 %ratio Per share information:Income per common share:Basic $ 0.80 $ 0.93 $ 0.92 $ 0.45 $ 0.58 Diluted $ 0.79 $ 0.92 $ 0.91 $ 0.45 $ 0.58 Book value $ 23.61 $ 22.62 $ 21.98 $ 20.78 $ 20.13 Tangible book $ 21.61 $ 20.59 $ 19.93 $ 18.70 $ 18.03 value ^(2)Cash dividends $ 0.18 $ 0.18 $ 0.17 $ 0.17 $ 0.17 paidAverage basic 10,975 10,975 10,953 10,941 10,916 sharesAverage 11,112 11,074 11,057 11,025 10,993 diluted shares

^(1) Annualized.^(2) Non-GAAP based financial measure. Please refer to Appendix B -Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAPReconciliations for a discussion of our use of non-GAAP based financialmeasures, including tables reconciling GAAP and non-GAAP financial measuresappearing herein.

ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)(continued) June 30, March December September June 30, 2021 31, 31, 30, 2020 2021 2020 2020Noninterest income: Service charges $ 880 $ 885 $ 999 $ 852 $ 719Interchange income 1,064 955 916 900 819Loan swap referral fees 15 53 320 95 232Wealth management income 2,930 2,723 2,615 2,464 2,295Mortgage banking 1,162 2,189 1,348 1,985 1,609activitiesOther income 602 594 955 578 1,510Investment securities 11 145 28 (13 ) 9gains (losses)Total noninterest income $ 6,664 $ 7,544 $ 7,181 $ 6,861 $ 7,193 Noninterest expenses: Salaries and employee $ 10,212 $ 10,197 $ 10,998 $ 10,695 $ 10,063benefitsOccupancy, furniture and 2,400 2,518 2,467 2,434 2,326equipmentData processing,telephone, and 1,032 1,019 954 958 791communicationAdvertising and bank 274 425 507 197 167promotionsFDIC insurance 158 194 195 230 214Professional services 579 721 780 603 1,021Taxes other than income 462 451 240 453 449Intangible asset 324 334 345 357 404amortizationMerger related andbranch consolidation ? ? ? 1,310 ?expensesOther operating expenses 1,592 1,924 1,594 2,028 2,996Total noninterest $ 17,033 $ 17,783 $ 18,080 $ 19,265 $ 18,431expenses

ORRSTOWN FINANCIAL SERVICES, INC.HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)(continued) June 30, March 31, December September June 30, 2021 2021 31, 30, 2020 2020 2020Balance Sheet at quarter end:Cash and cash $ 336,762 $ 326,245 $ 125,258 $ 87,307 $ 52,290 equivalentsRestrictedinvestments in bank 9,691 10,307 10,563 12,646 16,256 stocksSecurities 450,402 407,690 466,465 478,288 483,936 available for saleLoans held for 8,092 11,449 11,734 12,804 13,594 sale, at fair valueLoans: Commercial real estate: Owner occupied 191,595 177,934 174,908 166,623 164,442 Non-owner 471,541 415,219 409,567 403,138 390,980 occupied Multi-family 112,420 111,757 113,635 110,153 111,016 Non-owneroccupied 99,631 101,381 114,505 111,958 116,531 residentialCommercial and 599,123 750,831 647,368 690,330 665,312 industrial ^(1)Acquisition and development: 1-4 familyresidential 9,686 12,138 9,486 9,627 7,966 construction Commercial and 55,330 45,229 51,826 37,850 50,220 land developmentMunicipal 14,452 19,238 20,523 28,867 34,276 Total commercial 1,553,778 1,633,727 1,541,818 1,558,546 1,540,743 loansResidential mortgage: First lien 211,918 225,247 244,321 273,149 295,736 Home equity ? 8,321 9,183 10,169 11,108 11,944 term Home equity ? 149,601 153,169 157,021 158,106 160,842 lines of creditInstallment and 21,765 23,695 26,361 28,961 32,052 other loansTotal loans 1,945,383 2,045,021 1,979,690 2,029,870 2,041,317 Allowance for loan (19,381 ) (18,967 ) (20,151 ) (19,725 ) (17,517 )lossesNet loans 1,926,002 2,026,054 1,959,539 2,010,145 2,023,800 held-for-investmentGoodwill 18,724 18,724 18,724 18,724 18,724 Other intangible 4,800 5,124 5,458 5,803 6,160 assets, netTotal assets 2,912,717 2,963,534 2,750,572 2,781,667 2,772,796 Total deposits 2,494,100 2,547,089 2,356,880 2,279,483 2,251,731 Borrowings 80,709 80,736 77,511 200,818 226,520 Subordinated notes 31,932 31,918 31,903 31,889 31,875 Total shareholders' 265,938 254,448 246,249 232,847 225,638 equity

(1) This balance includes $355.6 million, $504.3 million, $403.3 million, $458.1 million and $447.2 million of SBA PPP loans, net of deferred fees and costs, at June30, 2021, March31, 2021, December31, 2020, September30, 2020, and June30, 2020, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)(continued) June 30, March 31, December September June 30, 2021 2021 31, 30, 2020 2020 2020Capital and creditquality measures^ (1):Total risk-based capital:Orrstown Financial 15.6 % 16.2 % 15.6 % 15.0 % 14.5 %Services, IncOrrstown Bank 14.7 % 15.3 % 14.7 % 14.3 % 13.9 %Tier 1 risk-based capital:Orrstown Financial 12.8 % 13.2 % 12.5 % 12.0 % 11.7 %Services, IncOrrstown Bank 13.5 % 14.1 % 13.5 % 13.1 % 12.8 %Tier 1 commonequity risk-based capital:Orrstown Financial 12.8 % 13.2 % 12.5 % 12.0 % 11.7 %Services, IncOrrstown Bank 13.5 % 14.1 % 13.5 % 13.1 % 12.8 %Tier 1 leverage capital:Orrstown Financial 8.0 % 8.1 % 8.1 % 7.8 % 7.6 %Services, IncOrrstown Bank 8.5 % 8.6 % 8.7 % 8.5 % 8.4 % Average equity to 8.83 % 8.85 % 8.65 % 8.29 % 7.94 %average assetsAllowance for loanlosses to total 1.00 % 0.93 % 1.02 % 0.97 % 0.86 %loansTotal nonaccrualloans to total 0.51 % 0.48 % 0.52 % 0.39 % 0.36 %loansNonperformingassets to total 0.34 % 0.33 % 0.37 % 0.28 % 0.27 %assetsAllowance for loanlosses to 195 % 192 % 195 % 250 % 237 %nonaccrual loans Other information: Net charge-offs $ 211 $ 184 $ (126 ) $ (8 ) $ 186 (recoveries)Classified loans 28,731 32,408 33,147 36,408 33,376 Nonperforming and other risk assets:Nonaccrual loans 9,941 9,895 10,310 7,899 7,404 Other real estate ? ? ? ? 17 ownedTotalnonperforming 9,941 9,895 10,310 7,899 7,421 assetsRestructured loans 852 921 934 945 960 still accruingLoans past due 90days or more and 212 196 554 520 909 still accruing ^(2) Totalnonperforming and $ 11,005 $ 11,012 $ 11,798 $ 9,364 $ 9,290 other risk assets

(1) Capital ratios are estimated, subject to regulatory filings.(2) Includes $196 thousand, $179 thousand, $515 thousand, $520 thousand and$594 thousand of purchased credit impaired loans at June30, 2021, March31,2021, December31, 2020, September30, 2020, and June30, 2020, respectively.

Appendix A- Supplemental Reporting of Unusual Items

The following table presents unusual items that impacted each period shown. These items are presented to enable investors to better understand the magnitude of certain significant items on reported GAAP results in the context of the Company's growth and acquisition activities.

Three Months Ended Year To Date 6/30 3/ 12/ 6/30/ 6/30/ 6/30/ / 31/ 31/ 9/30/20 2020 2021 2020 2021 21 20(In thousands) Pretax Items Branch consolidation $ ? $ ? $ ? $ 1,310 $ ? $ ? $ ? expensesNet securities gains 11 145 28 (13 ) 9 156 (31 )(losses)Gain on swap termination ? ? 226 ? ? ? ? Earnings on life ? ? 58 ? ? ? ? insurance proceedsGains on sale of ? ? ? ? 925 ? 2,803 portfolio loansAccretion - recoverieson purchased credit 23 256 779 294 1,021 278 1,232 impaired loansInsurance claim ? ? ? ? ? ? 486 receivable recovery

Appendix B- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets totaling $23.5 million and $24.2 million at June30, 2021 and December31, 2020, respectively. Additionally, the Company incurred approximately $1.3 million in charges associated with branch consolidation efforts during the three months ended September 30, 2020.

Management believes providing certain non-GAAP financial information will assist investors in their understanding of the effect of acquisition activity on reported results, particularly to overcome comparability issues related to the influence of intangibles (principally goodwill) created in acquisitions. Management also believes providing certain other non-GAAP financial information will assist investors in their understanding of the effect on recent financial results of non-recurring charges associated with increasing operational efficiencies for the long-term, and provide investors with clarity on its allowance for loan losses to total loans ratio. The Company believes that excluding SBA PPP loans, due to its credit enhancement, from loans held for investment is useful to investors due to the size and effect on the total and ratio.

Tangible book value per common share and allowance to non-SBA guaranteed loans, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following tables present the computation of each non-GAAP based measure:

(dollars in thousands, except per share information)

Tangible Book June 30, March 31, December 31, September June 30,Value per 2021 2021 2020 30, 2020Common Share 2020Shareholders' $ 265,938 $ 254,448 $ 246,249 $ 232,847 $ 225,638 equityLess: 18,724 18,724 18,724 18,724 18,724 GoodwillOtherintangible 4,800 5,124 5,458 5,803 6,160 assetsRelated tax (1,008 ) (1,076 ) (1,146 ) (1,219 ) (1,294 )effectTangiblecommon equity $ 243,422 $ 231,676 $ 223,213 $ 209,539 $ 202,048 (non-GAAP) Common shares 11,263 11,251 11,201 11,204 11,209 outstanding Book valueper share(mostdirectly $ 23.61 $ 22.62 $ 21.98 $ 20.78 $ 20.13 comparableGAAP basedmeasure)Intangibleassets per 2.00 2.03 2.05 2.08 2.10 shareTangible bookvalue per $ 21.61 $ 20.59 $ 19.93 $ 18.70 $ 18.03 share(non-GAAP)

Allowance to Non-SBA Guaranteed Loans: June 30, 2021 March 31, 2021Allowance for loan losses $ 19,381 $ 18,967 Gross loans 1,945,383 2,045,021 less: SBA guaranteed loans (356,905 ) (506,296 )Non-SBA guaranteed loans $ 1,588,478 $ 1,538,725 Allowance to non-SBA guaranteed loans 1.2 % 1.2 %

Appendix C- Investment Portfolio Concentrations

The following table summarizes the credit ratings and collateral associated with the Company's investment portfolio, excluding equity securities, at June30, 2021:

(dollars in thousands)

Sector Portfolio Amortized Fair Value Credit AAA AA A BBB NR Collateral Mix Book Enhancement TypeUnsecured UnsecuredABS 1 % $ 4,044 $ 4,086 53 % ? % ? % ? % ? % 100 % Consumer DebtStudent SeasonedLoan ABS 2 % 9,945 9,882 26 ? % ? % ? % ? % 100 % Student LoansFederal FederalFamily 41 % 176,220 176,388 6 71 % 16 % 13 % ? % ? % FamilyEducation EducationLoan ABS Loan (1)PACE Loan 1 % 4,525 4,644 6 100 % ? % ? % ? % ? % PACE LoansABSNon-Agency ReverseRMBS 3 % 14,013 14,642 47 100 % ? % ? % ? % ? % Mortgages (2)Municipal- General 19 % 83,541 89,179 2 % 90 % 8 % ? % ? % ObligationMunicipal 15 % 66,344 70,237 ? % 70 % 15 % ? % 15 % - RevenueSBA SBAReRemic 2 % 9,783 9,772 ? % 100 % ? % ? % ? % Guarantee (3) ResidentialAgency MBS 16 % 71,597 71,173 ? % 100 % ? % ? % ? % Mortgages (3)Bank CDs ? % 249 249 ? % ? % ? % ? % 100 % FDIC Insured CD 100 % $ 440,261 $ 450,252 33 % 52 % 9 % ? % 6 % ^(1) Minimum of 97% guaranteed by U.S. government^(2) Reverse mortgages fund over time and credit enhancement is estimated basedon prior experience^(3) 100% guaranteed by U.S. government agencies Note : Ratings in table are the lowest of the three rating agencies (Standard &Poors, Moody's & Fitch). Standard & Poors rates U.S. government obligations atAA+Note: S&P rates US government obligations at AA+

About the Company

With $2.9 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Howard, and Washington Counties, Maryland, as well as Baltimore City, 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 common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

Cautionary Note Regarding Forward-looking Statements:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements reflect the current views of the Company's management with respect to, among other things, future events and the Company's financial performance. These statements are often, but not always, made through the use of words or phrases such as may, should, could, predict, potential, believe, will likely result, expect, continue, will, anticipate, seek, estimate, intend, plan, project, forecast, goal, target, would and outlook, or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the Company's industry, managements beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will be able to continue to successfully execute on its strategic growth plan into Dauphin, Lancaster, York and Berks counties, Pennsylvania, and the greater Baltimore market in Maryland, with newer markets continuing to be receptive to our community banking model; to take advantage of market disruption; to experience sustained growth in loans and deposits or maintain the momentum experienced to date from these actions. In addition to risks and uncertainties related to the COVID-19 pandemic (including those related to variants, such as the delta variant) and resulting governmental and societal responses, factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: ineffectiveness of the Company's strategic growth plan due to changes in current or future market conditions; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; the integration of the Company's strategic acquisitions; the inability to fully achieve expected savings, efficiencies or synergies from mergers and acquisitions, or taking longer than estimated for such savings, efficiencies and synergies to be realized; changes in laws and regulations; interest rate movements; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; deteriorating economic conditions; expenses associated with pending litigation and legal proceedings; the failure of the SBA to honor its guarantee of loans issued under the SBA PPP; the timing of the repayment of SBA PPP loans and the impact it has on fee recognition; our ability to convert new relationships gained through the SBA PPP efforts to full banking relationships; and other risks and uncertainties, including those set forth under the heading "Risk Factors" in the Company's 2020 Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. The foregoing list of factors is not exhaustive.

If one or more events related to these or other risks or uncertainties materializes, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company's behalf may issue.

The review period for subsequent events extends up to and includes the filing date of a public companys financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change.