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Get filing alertsOrrstown Financial reports Q2 net income of $21.2M, redeems $31M subordinated notes
Filed July 22, 2026 · Period ending July 21, 2026 · ~1 min read
Key Changes
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high
Q2 2026 net income of $21.2M ($1.09/share) down slightly from Q1's $21.8M ($1.12/share) but up from year-ago $19.4M ($1.01/share); ROA 1.53%, ROE 13.96%.
Exhibit 99.1 view on EDGAR → -
high
Redeemed $31M subordinated notes on June 30 at 7.72% rate; accelerated $1.6M fair value mark amortization compressed Q2 NIM to 3.87% (4.00% core); eliminates high-cost debt going forward.
Exhibit 99.1 view on EDGAR → -
high
Credit quality improved: nonaccrual loans down $6.2M to $23.8M (0.58% of loans vs. 0.74% prior quarter); classified loans down $8.4M to $49.2M on repayments.
Exhibit 99.1 view on EDGAR → -
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Loans grew $51.7M (5% annualized) led by residential mortgages up $32.8M (16% annualized); deposits down $7.4M to $4.6B as bank shifts mix toward lower-cost funding.
Exhibit 99.1 view on EDGAR → -
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Board declared $0.30/share quarterly dividend payable August 11 to shareholders of record August 4, matching prior quarter and up from $0.26 year-ago.
Exhibit 99.1 view on EDGAR →
Summary
Orrstown Financial Services reported second quarter 2026 net income of $21.2 million, or $1.09 per diluted share, a modest sequential decline from the prior quarter's $21.8 million but an 8% increase from the year-ago period.
The quarter's headline result was shaped by the June 30 redemption of $31 million in subordinated notes carrying a 7.72% interest rate, which triggered $1.6 million in accelerated fair value mark amortization and compressed the reported net interest margin to 3.87%. Excluding this one-time impact, the core margin was 4.00%, and management expects the elimination of the high-cost debt to enhance future profitability.
Credit quality improved materially, with nonaccrual loans declining $6.2 million to $23.8 million (0.58% of total loans, down from 0.74%) and classified loans falling $8.4 million to $49.2 million, both driven by repayments. The bank grew loans by $51.7 million during the quarter, led by residential mortgages (up $32.8 million, 16% annualized), while deposits declined slightly as the bank shifted its funding mix toward lower-cost sources. The Board maintained the quarterly dividend at $0.30 per share. For retail holders, the quarter demonstrates stable core earnings, improving asset quality, and proactive balance sheet management through the debt redemption, though the one-time NIM compression obscures the underlying trajectory.
Section-by-Section Diff
Event · Exhibit 99.1
Orrstown Financial Services reported Q2 2026 net income of $21.2M ($1.09/share), redeemed $31M subordinated notes, and declared $0.30/share dividend.
Added in current filing · view on EDGAR →
Loans held for investment increased by $51.7 million in the three months ended June 30, 2026 and totaled $4.1 billion at both June 30, 2026 and March 31, 2026. Residential mortgages increased by $32.8 million, or approximately 16% annualized, of which $17.1 million were home equities, and commercial loans increased by $18.9 million, or approximately 2% annualized, from March 31, 2026 to June 30, 2026. ... During the second quarter of 2026, deposits decreased by $7.4 million and totaled $4.6 billion at both June 30, 2026 and March 31, 2026.
Total loans increased by $51.7 million during the quarter, representing approximately 5% annualized growth, driven by residential mortgages (up $32.8 million, 16% annualized) and commercial loans (up $18.9 million, 2% annualized). Deposits decreased slightly by $7.4 million but remained at $4.6 billion, with the bank shifting its deposit mix toward lower-cost deposits. The loan-to-deposit ratio increased to 89% from 88%.
Added in current filing · view on EDGAR →
Classified loans decreased by $8.4 million to $49.2 million at June 30, 2026 from $57.6 million at March 31, 2026 due primarily to repayments of $7.8 million. Nonaccrual loans totaled $23.8 million at June 30, 2026 compared to $30.0 million at March 31, 2026. The decrease of $6.2 million in nonaccrual loans was due to repayments of $6.9 million, which included $4.2 million in commercial and land development loans that were on nonaccrual status and risk rated as substandard. Nonaccrual loans to total loans decreased to 0.58% at June 30, 2026 from 0.74% at March 31, 2026.
Credit quality improved during the quarter, with classified loans declining by $8.4 million to $49.2 million and nonaccrual loans decreasing by $6.2 million to $23.8 million. The nonaccrual loan ratio improved to 0.58% of total loans from 0.74% in the prior quarter. The allowance for credit losses to total loans decreased to 1.13% from 1.17%, reflecting improved underlying credit metrics.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 23, 2026 · How we verify