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 11.7% below its fair value

Earnings are forecast to grow 21.32% per year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet and good value.


Similar Companies

First BanCorp

NYSE:FBP

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.3%

ORRF

2.7%

US Banks

1.1%

US Market


1 Year Return

9.2%

ORRF

22.7%

US Banks

17.8%

US Market

Return vs Industry: ORRF underperformed the US Banks industry which returned 22.7% over the past year.

Return vs Market: ORRF underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

ORRFIndustryMarket
7 Day2.3%2.7%1.1%
30 Day1.7%0.9%1.4%
90 Day-4.5%10.0%3.9%
1 Year12.4%9.2%26.3%22.7%20.3%17.8%
3 Year0.7%-5.9%31.8%22.6%44.8%35.4%
5 Year46.0%32.2%80.2%60.2%71.3%52.4%

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?

11.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ORRF ($21.92) is trading below our estimate of fair value ($24.84)

Significantly Below Fair Value: ORRF is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ORRF is poor value based on its PE Ratio (15.7x) compared to the Banks industry average (12.7x).

PE vs Market: ORRF is good value based on its PE Ratio (15.7x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: ORRF is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: ORRF is good value based on its PB Ratio (1.1x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Orrstown Financial Services forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

21.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ORRF's forecast earnings growth (21.3% per year) is above the savings rate (1.7%).

Earnings vs Market: ORRF's earnings (21.3% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ORRF's revenue is expected to decline over the next 3 years (-1% per year).

High Growth Revenue: ORRF's revenue is forecast to decline over the next 3 years (-1% 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 (9.4%).


Next Steps

Past Performance

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

-17.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ORRF has a large one-off loss of $11.2M impacting its September 30 2019 financial results.

Growing Profit Margin: ORRF's current net profit margins (15%) are lower than last year (17.1%).


Past Earnings Growth Analysis

Earnings Trend: ORRF's earnings have declined by -17.9% per year over the past 5 years.

Accelerating Growth: ORRF's earnings growth over the past year (18.7%) exceeds its 5-year average (-17.9% per year).

Earnings vs Industry: ORRF earnings growth over the past year (18.7%) underperformed the Banks industry 27.1%.


Return on Equity

High ROE: ORRF's Return on Equity (6.2%) is considered low.


Return on Assets


Return on Capital Employed


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 0.5x 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 (0.44%)


Next Steps

Dividend

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

2.74%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: ORRF's dividend (2.74%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: ORRF's dividend (2.74%) is low compared to the top 25% of dividend payers in the US market (3.67%).


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 (41.5%), 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 (31.5% payout ratio).


Next Steps

Management

What is the CEO of Orrstown Financial Services's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Tom Quinn (60yo)

10.6yrs

Tenure

US$1,536,192

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 ($USD1.54M) is above average for companies of similar size in the US market ($USD1.12M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.5yrs

Average Tenure

53yo

Average Age

Experienced Management: ORRF's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

9.1yrs

Average Tenure

63yo

Average Age

Experienced Board: ORRF's board of directors are considered experienced (9.1 years average tenure).


Insider Trading

Insider Buying: ORRF insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$10,91529 Nov 19
Joel Zullinger
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares500
Max PriceUS$21.83
SellUS$117,64613 Sep 19
Thomas Quinn
EntityIndividual
Role
Chief Executive Officer
President
Shares5,261
Max PriceUS$22.61
SellUS$20,40401 Mar 19
Anthony Ceddia
EntityIndividual
Shares1,000
Max PriceUS$20.40
SellUS$10,00012 Feb 19
Anthony Ceddia
EntityIndividual
Shares500
Max PriceUS$20.00
BuyUS$5,71230 Jan 19
David Hornberger
EntityIndividual
Shares300
Max PriceUS$19.04

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 22.5%.


Management Team

  • Bob Coradi (57yo)

    Executive VP

    • Tenure: 5.7yrs
    • Compensation: US$561.14k
  • Tom Brugger (52yo)

    Executive VP & CFO

    • Tenure: 0.4yrs
  • Barb Brobst (60yo)

    Executive VP & Chief Human Resources Officer at Orrstown Bank

    • Tenure: 8.5yrs
    • Compensation: US$178.76k
  • Philip Fague (59yo)

    Executive VP

    • Tenure: 0yrs
    • Compensation: US$456.15k
  • Tom Quinn (60yo)

    President

    • Tenure: 10.6yrs
    • Compensation: US$1.54m
  • Matt Schultheis

    Senior Vice President of Strategic Planning & Investor Relations

    • Tenure: 0.4yrs
  • Jeff Gayman (46yo)

    EVP & Market President

    • Tenure: 8.5yrs
    • Compensation: US$186.15k
  • Bob Fignar (53yo)

    Executive VP and Chief Operations & Logistics Officer

    • Tenure: 0yrs
  • Adam Metz (47yo)

    Executive VP & Chief Lending Officer

    • Tenure: 3.3yrs
    • Compensation: US$514.64k
  • Luke Bernstein (40yo)

    Corporate Communications Officer

    • Tenure: 2.3yrs

Board Members

  • Andrea Pugh (66yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$88.24k
  • Glenn Snoke (70yo)

    Independent Director

    • Tenure: 20.9yrs
    • Compensation: US$85.14k
  • Joel Zullinger (71yo)

    Chairman of the Board

    • Tenure: 28.9yrs
    • Compensation: US$122.77k
  • Tom Quinn (60yo)

    President

    • Tenure: 10.6yrs
    • Compensation: US$1.54m
  • Mark Keller (65yo)

    Independent Director

    • Tenure: 10.6yrs
    • Compensation: US$113.98k
  • Eric Segal (61yo)

    Independent Director

    • Tenure: 6.3yrs
    • Compensation: US$89.25k
  • Michael Rice (57yo)

    Independent Director

    • Tenure: 1.2yrs
  • Floyd Stoner (70yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$106.25k
  • Cindy Joiner (57yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$86.60k
  • Tom Longenecker (51yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$84.25k

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$246.184m
  • Shares outstanding: 11.19m
  • 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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 23:43
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.