Orrstown Financial Services(ORRF) - 2024 Q4 - Annual Results

Financial Performance - Net income for Q4 2024 was $13.7 million, or$0.71 per diluted share, compared to a net loss of $7.9 million, or$0.41 per diluted share in Q3 2024[2]. - Excluding non-recurring charges, adjusted net income for Q4 2024 was $16.7 million, with diluted earnings per share of$0.87, compared to $21.4 million and$1.11 in Q3 2024[3]. - Net income available to common shareholders for the twelve months ended December 31, 2024, was $22,050 thousand, down from$35,663 thousand in 2023, a decrease of 38.5%[31]. - Net income for Q4 2024 was $13,684,000, compared to$7,643,000 in Q4 2023, indicating an increase of 79.9%[35]. - The company reported a net income of $13,684,000 for the three months ended December 31, 2024, compared to a net loss of$7,903,000 in the previous quarter[56]. Dividends and Shareholder Equity - The Board declared a cash dividend of $0.26 per common share, representing a 13$516.7 million at December 31, 2024, up from $516.2 million at September 30, 2024, driven by net income of$13.7 million[27]. - The company paid dividends of $0.23 per share in Q4 2024, up from$0.20 in Q4 2023[37]. Income and Expenses - Noninterest income decreased by $1.2 million to$11.2 million in Q4 2024, driven by fee waivers and the absence of tax credits recognized in Q3 2024[17]. - Noninterest expenses decreased by $17.4 million to$42.9 million in Q4 2024, with merger-related expenses totaling $3.9 million[21]. - Total noninterest expenses for the quarter ended December 31, 2024, were$42,930,000, compared to $22,392,000 in the same quarter of 2023, indicating an increase of approximately 92.5$59.5 million, or 2%, primarily due to strategic actions to reduce risk in the portfolio[2]. - The provision for credit losses was $1.8 million in Q4 2024, including a charge-off of$2.4 million for one commercial and industrial relationship[2]. - The allowance for credit losses to total loans ratio was 1.24% at December 31, 2024, compared to 1.11% at December 31, 2023, indicating a slight increase in credit risk management[32]. - The allowance for credit losses to total loans ratio was 1.24% in Q4 2024, compared to 1.25% in Q3 2024, indicating a slight improvement in credit quality[50]. - Net charge-offs were reported at $3,002 thousand in Q4 2024, significantly higher than$269 thousand in Q3 2024, indicating increased credit losses[50]. Asset Growth and Financial Ratios - Total assets reached $5,431,023 thousand at December 31, 2024, compared to$3,064,240 thousand at December 31, 2023, reflecting a 77.2% growth[33]. - The Tier 1 leverage ratio improved to 8.3% at December 31, 2024, up from 8.0% at September 30, 2024, indicating stronger capital adequacy[27]. - The efficiency ratio for the three months ended December 31, 2024, was 69.4%, slightly higher than 68.9% in the same period of 2023[31]. - The return on average assets for the quarter ended December 31, 2024, was 1.00%, compared to 1.00% in the same quarter of 2023[47]. Interest Income and Margin - Net interest income for the three months ended December 31, 2024, was $50,573 thousand, compared to$26,018 thousand for the same period in 2023, representing a 94.5% increase[31]. - Total interest income for Q4 2024 reached $80,015,000, a 99.9$40,028,000 in Q4 2023[35]. - The net interest margin decreased to 4.05% in Q4 2024 from 4.14% in Q3 2024, with net interest income of $50.6 million[11]. - The yield on loans increased from 6.34% in the previous quarter to 6.82% in the current quarter[38]. Future Outlook and Risks - The company emphasizes that forward-looking statements are based on current expectations and are subject to risks and uncertainties that could lead to materially different actual results[61]. - Factors affecting future performance include general economic conditions, changes in interest rates, and competition impacting the community banking model[61]. - The anticipated benefits of the merger with Codorus may not be realized as expected, and the merger could be more expensive than anticipated[61]. - The company warns that actual results may differ from expectations due to various risks, including operational risks and changes in consumer behavior[62].