NasdaqCM:ORRF

Stock Analysis Report

Orrstown Financial Services

Executive Summary

Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States.

Rewards

Trading at 30.4% below its fair value

Earnings are forecast to grow 12.43% per year

Earnings grew by 32.2% over the past year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Very undervalued with flawless balance sheet.


Similar Companies

Share Price & News

How has Orrstown Financial Services's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ORRF's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.3%

ORRF

-10.6%

US Banks

-4.1%

US Market


1 Year Return

-35.6%

ORRF

-33.7%

US Banks

-14.9%

US Market

Return vs Industry: ORRF underperformed the US Banks industry which returned -31.1% over the past year.

Return vs Market: ORRF underperformed the US Market which returned -13.6% over the past year.


Shareholder returns

ORRFIndustryMarket
7 Day-5.3%-10.6%-4.1%
30 Day-34.3%-31.6%-19.1%
90 Day-44.6%-43.4%-23.4%
1 Year-33.7%-35.6%-31.8%-33.7%-13.2%-14.9%
3 Year-34.4%-38.9%-23.1%-28.7%10.7%3.5%
5 Year-20.1%-28.2%2.3%-9.4%28.5%14.5%

Price Volatility Vs. Market

How volatile is Orrstown Financial Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Orrstown Financial Services undervalued compared to its fair value and its price relative to the market?

30.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ORRF ($12.26) is trading below our estimate of fair value ($17.62)

Significantly Below Fair Value: ORRF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ORRF is good value based on its PE Ratio (7.5x) compared to the Banks industry average (8.8x).

PE vs Market: ORRF is good value based on its PE Ratio (7.5x) compared to the US market (12.9x).


Price to Earnings Growth Ratio

PEG Ratio: ORRF is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: ORRF is good value based on its PB Ratio (0.6x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Orrstown Financial Services forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ORRF's forecast earnings growth (12.4% per year) is above the savings rate (1.7%).

Earnings vs Market: ORRF's earnings (12.4% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: ORRF's earnings are forecast to grow, but not significantly.

Revenue vs Market: ORRF's revenue is expected to decline over the next 3 years (-13.2% per year).

High Growth Revenue: ORRF's revenue is forecast to decline over the next 3 years (-13.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ORRF's Return on Equity is forecast to be low in 3 years time (9%).


Next Steps

Past Performance

How has Orrstown Financial Services performed over the past 5 years?

-16.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ORRF has a large one-off loss of $9.0M impacting its December 31 2019 financial results.

Growing Profit Margin: ORRF's current net profit margins (17.4%) are lower than last year (17.7%).


Past Earnings Growth Analysis

Earnings Trend: ORRF's earnings have declined by -16.3% per year over the past 5 years.

Accelerating Growth: ORRF's earnings growth over the past year (32.2%) exceeds its 5-year average (-16.3% per year).

Earnings vs Industry: ORRF earnings growth over the past year (32.2%) exceeded the Banks industry 10.9%.


Return on Equity

High ROE: ORRF's Return on Equity (7.6%) is considered low.


Next Steps

Financial Health

How is Orrstown Financial Services's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ORRF has a low level of unsold assets or inventory.

Debt Coverage by Assets: ORRF's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: ORRF's level of assets compared to its equity is moderate.

Allowance for Bad Loans: ORRF has a sufficient allowance for bad loans.

Low Risk Liabilities: ORRF's liabilities are made up of primarily low risk sources of funding.

Loan Level: ORRF has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ORRF's loans are broadly funded by customer deposits.

Level of Bad Loans: ORRF has an appropriate level of bad loans (0.65%)


Next Steps

Dividend

What is Orrstown Financial Services's current dividend yield, its reliability and sustainability?

5.55%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ORRF's dividend (5.55%) is higher than the bottom 25% of dividend payers in the US market (2%).

High Dividend: ORRF's dividend (5.55%) is low compared to the top 25% of dividend payers in the US market (5.56%).


Stability and Growth of Payments

Stable Dividend: ORRF's dividend payments have been volatile in the past 10 years.

Growing Dividend: ORRF's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.7%), ORRF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ORRF's dividends in 3 years are forecast to be well covered by earnings (35.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Tom Quinn (60yo)

10.92s

Tenure

US$1,392,280

Compensation

Mr. Thomas Rodney Quinn, Jr., also known as Tom, has been the Chief Executive Officer and President at Orrstown Financial Services Inc. since May 5, 2009. Mr. Quinn has been the President and Chief Executi ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD1.39M) is above average for companies of similar size in the US market ($USD605.16K).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Quinn
President10.92yrsUS$1.39m0.51% $695.8k
Thomas Brugger
Executive VP & CFO0.75yrUS$292.90k0.075% $103.0k
Philip Fague
Executive VP & Assistant Secretaryno dataUS$452.15k0.36% $487.9k
Adam Metz
Executive VP & Chief Revenue Officer1.17yrsUS$468.00k0.15% $207.4k
Robert Coradi
Executive VP2.25yrsUS$522.59k0.22% $295.2k
Robert Fignar
Executive VP and Chief Operations & Logistics Officer1.25yrsno data0.13% $171.3k
Neelesh Kalani
Chief Accounting Officer0.083yrno datano data
Matthew Schultheis
Senior Vice President of Strategic Planning & Investor Relations0.75yrno datano data
Luke Bernstein
Executive VP2.58yrsno data0.10% $138.5k
Barbara Brobst
Executive VP & Chief Human Resources Officer8.83yrsUS$178.76k0.15% $203.9k

1.3yrs

Average Tenure

53yo

Average Age

Experienced Management: ORRF's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Thomas Quinn
President10.92yrsUS$1.39m0.51% $695.8k
Andrea Pugh
Independent Director24.25yrsUS$81.62k0.28% $377.3k
Glenn Snoke
Independent Director21.25yrsUS$79.53k0.20% $277.0k
Joel Zullinger
Independent Chairman of the Board29.25yrsUS$113.22k0.37% $502.7k
Mark Keller
Independent Director10.92yrsUS$92.07k0.12% $166.2k
Eric Segal
Independent Director6.67yrsUS$84.52k0.11% $145.5k
Michael Rice
Independent Director1.5yrsUS$74.02k0.091% $125.1k
Floyd Stoner
Independent Director7.92yrsUS$101.52k0.18% $246.5k
Cindy Joiner
Independent Director4.25yrsUS$81.87k0.082% $112.5k
Thomas Longenecker
Independent Director4.25yrsUS$79.52k0.079% $108.2k

9.4yrs

Average Tenure

63yo

Average Age

Experienced Board: ORRF's board of directors are considered experienced (9.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ORRF insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 23.9%.


Top Shareholders

Company Information

Orrstown Financial Services, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Orrstown Financial Services, Inc.
  • Ticker: ORRF
  • Exchange: NasdaqCM
  • Founded: 1919
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$136.893m
  • Shares outstanding: 11.17m
  • Website: https://www.orrstown.com

Number of Employees


Location

  • Orrstown Financial Services, Inc.
  • 77 East King Street
  • PO Box 250
  • Shippensburg
  • Pennsylvania
  • 17257
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ORRFNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDJul 1998

Biography

Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial loans, such as commercial real estate, equipment, working capital, and other commercial purpose loans; consumer loans comprising home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; agribusiness loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, the company provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as provides other fiduciary services under the Orrstown Financial Advisors name; and offers retail brokerage services through a third-party broker/dealer arrangement. Further, it offers investment advisory services through an office in Lancaster County, Pennsylvania. The company provides its banking and bank-related services through branches located in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties of Pennsylvania, as well as Washington County, Maryland. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 01:13
End of Day Share Price2020/04/02 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.