Orrstown Financial Services (ORRF) AI Stock Analysis

157 Followers

Orrstown Financial Services

(NASDAQ:ORRF)

Select Model

Rating:76Outperform

Price Target:$50.00▲(13.30% Upside)

Action:reiterated

Date:11/10/26

The score is driven primarily by strong overall financial performance (notably improved profitability) and attractive valuation (low P/E with a moderate yield). Supportive technicals and a positive earnings-call outlook (NIM expansion and growth/efficiency progress) add to the rating, while rising leverage, weaker recent free-cash-flow momentum, and funding/capital headwinds temper the result.

Positive Factors

Margin ExpansionExpanding net interest income and margin show improved earnings power from the bank’s core intermediation model. Management’s 4.05%-4.15% NIM outlook through 2027 also suggests the benefit may persist beyond a single quarter, supporting revenue durability.

Negative Factors

Rising LeverageHigher leverage reduces financial flexibility and increases dependence on external funding if operating conditions weaken. The rising debt-to-equity trend could constrain future capital allocation and make earnings more sensitive to funding costs or a deterioration in credit conditions.

Orrstown Financial Services (ORRF) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $868.06M
Dividend Yield: 2.72%
Average Volume (3M): 95.43K
Price to Earnings (P/E): 9.4
Beta (1Y): 0.75
Revenue Growth: 1.02%
EPS Growth: 18.66%
Country: US
Employees: 627
Sector: Financial
Sector Strength: 68
Industry: Banks - Regional

Orrstown Financial Services Business Overview & Revenue Model

Company Description

Orrstown Financial Services, Inc. serves as the parent company for Orrstown Bank, offering a comprehensive range of commercial banking and trust solutions throughout the United States. The institution accepts various types of deposits, including chec...

How the Company Makes Money

Orrstown Financial Services primarily earns money through its banking operations. The largest revenue driver for a community bank is typically net interest income: the bank collects interest and fees on loans and interest-earning assets (such as comm...

Orrstown Financial Services Earnings Call Summary

Earnings Call Date:Oct 20, 2026(Q3-2026)|% Change Since:5.52%|Next Earnings Date:Jan 20, 2027

Earnings Call SentimentPositive

The call was strongly positive, supported by record or improved earnings metrics, expanding net interest margin, robust loan growth, improved efficiency, sound credit quality, deposit-cost progress, and external growth recognition. The main challenges were reliance on borrowings amid deposit outflows, sequentially lower fee income, investment-portfolio unrealized losses that reduced tangible common equity, competitive deposit pricing, and uncertainty around economic conditions and future loan growth. Highlights significantly outweighed the lowlights.

Positive Updates

Strong Quarterly Earnings and Returns

Net income was $22.8 million, or $1.17 per diluted share. Return on average assets was 1.60% and return on average equity was 14.62%; both increased quarter-to-quarter and continued to exceed peer multiples.

Negative Updates

Deposit Outflows Increased Borrowing Reliance

Significant loan growth combined with net deposit outflows, some of which were seasonal, required increased reliance on borrowings. The loan-to-deposit ratio increased to 92% as borrowings were used to fund loan growth, although available alternative funding sources remained strong at $1.7 billion.

Company Guidance

Management projected net interest margin through the end of 2027 in the range of 4.05%-4.15%, annualized fee income into 2027 in the range of $54 million-$56 million, and an annualized expense run rate between $153 million and $157 million; the loan growth goal remains in the mid-single digits going forward, with growth potentially being on the lower end of the mid-single digit range, while the team believes it can potentially do higher than the 5% target. The modeling assumes another two increases over the course of the next year, at 25 bps each; 4Q expenses are expected to be somewhat consistent with third quarter and then slowly build up. Core NIM is expected to increase, and every 25 basis point rate increase is expected to produce about a $500,000 impact for every 25 on a ramp basis, equating to about five basis points for every quarter for the margin. Deposit beta is expected to be higher than 25 basis points, and the company is comfortable with near-term reliance on time deposits, money markets, and wholesale deposits.

Orrstown Financial Services Financial Statement Overview

Summary

Income statement strength (Score 82) reflects improved TTM profitability and solid margins, but results have shown historical volatility. Balance sheet is generally sound (Score 74) with improved ROE, though rising debt-to-equity is a key risk. Cash flow is the main drag (Score 61) due to weaker TTM free cash flow growth despite good alignment between FCF and net income.

Income Statement

82Very Positive

Balance Sheet

74Positive

Cash Flow

61Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	360.25M	353.86M	284.09M	174.30M	134.32M	121.64M
Gross Profit	257.14M	249.97M	173.86M	127.62M	121.11M	113.83M
EBITDA	118.73M	117.98M	37.50M	49.37M	31.24M	46.20M
Net Income	87.27M	80.86M	22.05M	35.66M	22.04M	32.88M
Balance Sheet
Total Assets	5.71B	5.54B	5.44B	3.06B	2.92B	2.83B
Cash, Cash Equivalents and Short-Term Investments	1.05B	994.82M	1.08B	578.68M	574.55M	681.15M
Total Debt	425.36M	336.37M	209.91M	179.38M	155.42M	57.16M
Total Liabilities	5.10B	4.95B	4.92B	2.80B	2.69B	2.56B
Stockholders Equity	605.20M	591.53M	516.68M	265.06M	228.90M	271.66M
Cash Flow
Free Cash Flow	59.46M	70.50M	33.38M	41.41M	35.30M	39.56M
Operating Cash Flow	61.70M	74.73M	34.96M	43.70M	36.19M	40.81M
Investing Cash Flow	-289.80M	-181.96M	60.99M	-153.25M	-270.99M	-2.01M
Financing Cash Flow	169.60M	8.13M	87.76M	113.89M	86.91M	44.65M

Orrstown Financial Services Technical Analysis

Technical Analysis SentimentPositive

Last Price44.13

Price Trends

50DMA42.37Positive

100DMA41.94Positive

200DMA39.11Positive

Market Momentum

MACD0.61Positive

RSI56.52Neutral

STOCH15.76Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORRF, the sentiment is Positive. The current price of 44.13 is above the 20-day moving average (MA) of 43.85, above the 50-day MA of 42.37, and above the 200-day MA of 39.11, indicating a bullish trend. The MACD of 0.61 indicates Positive momentum. The RSI at 56.52 is Neutral, neither overbought nor oversold. The STOCH value of 15.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORRF.

Orrstown Financial Services Risk Analysis

Orrstown Financial Services disclosed 48 risk factors in its most recent earnings report. Orrstown Financial Services reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

3 New Risks

1.Our future results following the Merger may suffer if the combined company does not effectively manage its expanded operations.Q4, 2023

2.Combining with CVLY may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the Merger.Q4, 2023

3.We are subject to business uncertainties and contractual restrictions while the Merger is pending.Q4, 2023

Orrstown Financial Services Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

ORRF against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACNB	81Outperform	$680.20M	12.42	13.13%	3.13%	14.87%	64.71%
CZFS	78Outperform	$411.22M	9.51	12.40%	2.37%	4.04%	26.08%
ORRF	76Outperform	$867.47M	9.39	14.42%	2.72%	1.02%	18.66%
MPB	70Outperform	$894.61M	11.72	8.15%	2.69%	18.49%	19.19%
UVSP	69Neutral	$1.11B	11.99	9.94%	2.25%	2.28%	12.34%
Sector *	68Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FISI	61Neutral	$784.82M	9.82	13.02%	3.16%	41.75%	―

* Financial Sector Average

Performance Comparison

ORRF and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
ORRF	Orrstown Financial Services	44.13	11.48	35.15%
ACNB	ACNB Corp.	67.20	23.08	52.31%
FISI	Financial Institutions Inc	40.18	12.68	46.11%
MPB	Mid Penn	35.28	7.64	27.62%
UVSP	Univest Corporation Of Pennsylvania	40.52	11.26	38.49%
CZFS	Citizens Financial Services	85.15	32.96	63.15%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 10, 2026

Orrstown Financial Services AI Stock Analysis