Orrstown Financial Services, Inc. · NASDAQ:ORRF
Orrstown Financial Services — Shareholder Meeting (May 2017)
42 slides from Orrstown Financial Services's shareholder meeting presentation, May 2, 2017
Slide 1: Successfully Executing Our Strategic Plan
1 SUCCESSFULLY EXECUTING OUR STRATEGIC PLAN Annual Shareholders Meeting | May 2, 2017
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements Certain statements we may make today may constitute “forward looking statements” under the Private Securities Litigation Reform Act of 1995. Orrstown Financial’s actual results may differ significantly from the results discussed in such forward-looking statements. Factor
Slide 3: Call to Order
3 Call to Order Joel R. Zullinger, Chairman of the Board
Slide 4: Conduct Meeting Business
4 Conduct Meeting Business Joel R. Zullinger, Chairman of the Board
Slide 5: Introduction of the Board of Directors
5 Introduction of the Board of Directors
Slide 6: Conduct Meeting Business
6 Conduct Meeting Business Joel R. Zullinger, Chairman of the Board
Slide 7: Rules of Conduct
7 Rules of Conduct • In the interest of an orderly Meeting of the Shareholders of Orrstown Financial Services, Inc. (the “Company”), we ask you to honor the following rules of procedure: • Shareholders should not address the Meeting until recognized by the Chairman of the Meeting. Upon recognition b
Slide 8: Rules of Conduct (continued)
8 Rules of Conduct (continued) • Shareholders should confine comments to one subject at a time in order to give other shareholders an opportunity to speak on that subject. Please permit the speaker to conclude his or her remarks without interruption. • A shareholder will be permitted up to two minut
Slide 9: Rules of Conduct (continued)
9 Rules of Conduct (continued) • The views, constructive comments and criticisms from shareholders are welcome, but the purpose of the Meeting will be observed. The Chairman will stop discussions that are: • Irrelevant to the matter under consideration, • Proposals related to the conduct of the Comp
Slide 10: Conduct Meeting Business
10 Conduct Meeting Business Joel R. Zullinger, Chairman of the Board
Slide 11: Management Report-Recap of 2016 Achievements
11 Management Report-Recap of 2016 Achievements Thomas R. Quinn, Jr., President & CEO
Slide 12: Our Experienced Leadership Team
12 Our Experienced Leadership Team Name/Title Banking Experience Joined ORRF Experience / Disciplines Prior Experience Thomas R. Quinn, Jr. President & CEO 27 years 2009 CEO | Strategy | Sales | Executive Citi, Fifth Third David P. Boyle EVP/Chief Financial Officer 26 years 2012 Finance | Treasury |
Slide 13: 2016 Achievements
13 2016 Achievements At last year’s shareholder meeting we said, “In 2016 our primary focus is to improve earnings and drive stock appreciation through a focus that includes growing revenue through multiple initiatives, including investment in customer-facing sales professionals to leverage the infr
Slide 14: Stock Performance Trend
14 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 Stock Performance Trend $17.32 3/31/2016 $22.35 3/31/2017 29.0% appreciation last 12 months PRICE PER SHARE
Slide 15: Dividend Growth Trend
15 Dividend Growth Trend $0.06 $0.07 $0.08 $0.09 $0.10 (per share, last nine quarters) 5/2015 8/2015 11/2015 2/2016 5/2016 8/2016 11/2016 2/2017 5/2017
Slide 16: Looking Back: Key Milestones
16 Looking Back: Key Milestones *as of 4/30/2017 ** Assets under management at 3/31/17 • May 2015: Quarterly dividend restored • June 2015: Opened first Lancaster County branch* • $132.2 million net loans • $43.6 million in deposits • May 2016: Opened LPO in Lancaster County • Base of operations for
Slide 17: Looking Back: Key Milestones
17 Looking Back: Key Milestones (1) FDIC June 2016 and system generated April 30, 2017 (2) Core system loan data 7/31/2016 and April 30, 2017 • August 2016: Relocated Camp Hill Regional Office • Hub office for all business lines • Superior location on Market Street • Significant growth since move •
Slide 18: Looking Back: Key Milestones
18 Looking Back: Key Milestones *Branch opened 4/17/2017-deposit data as of 4/30/2017 ** Includes May 2017 declaration of dividend • April 2017 Opened second branch in Lancaster County • $8.4 million in deposits; 45 new accounts in first 11 days* • April 2017 Declared dividend of $0.10/share • 9th c
Slide 19: Looking Back: Stock Performance in Summary
19 Looking Back: Stock Performance in Summary *at 4/27/17 **Source: NASDAQ volume average for respective years $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 • Listed on Russell 2000 Index • Market Cap of $183 million* • Increasing liquidity in stock** • 2015: 6,973 average daily volume • 2
Slide 20: 2016 Achievements: Investment in Customer-Facing Sales Professionals
20 2016 Achievements: Investment in Customer-Facing Sales Professionals • Commercial Lending 9 new business bankers • Orrstown Financial Advisors 4 new sales representatives • Registered Investment Advisor Acquisition of Wheatland Advisors, Inc. • Mortgage Lending 4 new mortgage lenders • Cash Manag
Slide 21: 2016 Achievements: Key Metrics
21 2016 Achievements: Key Metrics At last year’s shareholder meeting we said, “In 2016 our primary focus is to improve earnings and drive stock appreciation through a focus that includes growing revenue through multiple initiatives, including investment in customer-facing sales professionals to leve
Slide 22: 2016 Achievements: Key Metrics
22 2016 Achievements: Key Metrics • Focus on noninterest income: ($ in 000s) 2015 2016 Change Orrstown Financial Advisors(1) $6,623 $7,024 +6.1% Mortgage Banking Activities $2,747 $3,412 +24.2% Service Charges on Deposit Accounts 5,226 5,445 +4.2% Total noninterest income before securities gains $17
Slide 23: 2016 Achievements: Key Metrics
23 2016 Achievements: Key Metrics At last year’s shareholder meeting we said, “In 2016 our primary focus is to improve earnings and drive stock appreciation through a focus that includes growing revenue through multiple initiatives, including investment in customer-facing sales professionals to leve
Slide 24: A Review of 2016: Geographic Expansion in Favorable Markets
24 $11.1 billion in deposits(1) 1,802 businesses(2) $40.6 billion in deposits(1) 6,789 businesses(2) A Review of 2016: Geographic Expansion in Favorable Markets (1) FDIC, June 2016 (2) Dun & Bradstreet-Businesses with annual sales between $1-$50 million, April 2017
Slide 25: Geographic Expansion in Favorable Markets
25 Camp Hill Regional Hub Harrisburg Regional Office Manheim Pike Branch Lancaster LPO Geographic Expansion in Favorable Markets Roherstown Rd. Branch Wheatland Advisors New Holland Branch Wyomissing LPO • Expansion of Customer-facing sales force and support teams in 2016-2017 • Early results from n
Slide 26: A Review of 2016: Summary
26 A Review of 2016: Summary • Loan growth of 13.0% • Deposit growth of 11.7% • Fee income growth of 6.2%* • Continued focus on enterprise risk management • 29% stock appreciation year-over-year** • Strong performance from legacy markets • Successful entrance into new markets *Total noninterest inco
Slide 27: Meeting Agenda
27 Meeting Agenda • Call to Order • Introduction of the Board of Directors and Other Distinguished Guests • Conduct Meeting Business • Management Reports • Thomas R. Quinn, Jr., President & CEO Recap of 2016 Achievements • David P. Boyle, EVP/Chief Financial Officer Financial Review • Thomas R. Quin
Slide 28: Management Report - Financial Review
28 Management Report - Financial Review David P. Boyle, Chief Financial Officer
Slide 29: 2016: Financial Recap
29 For the year ended: (Dollars in 000s) 2014 2015 2016 % Change (2015 to 2016) Year-end Data Assets $1,190,443 $1,292,816 $1,414,504 9.4% Loans 704,946 781,713 883,391 13.0% Deposits 949,704 1,032,167 1,152,452 11.7% Total Shareholders’ Equity 127,265 133,061 134,859 1.4% Assets Under Management 1,
Slide 30: Five Quarter View Selected Financial Data
30 Five Quarter View Selected Financial Data 2016 2017 (Dollars in 000s) Q1 Q2 Q3 Q4 Q1 Total Assets $1,287,279 $1,311,353 $1,354,154 $1,414,504 $1,453,946 Loans 804,703 831,933 847,061 883,391 901,331 Total Deposits 1,048,376 1,087,969 1,133,332 1,152,452 1,183,876 Total Interest Income 9,961 10,27
Slide 31: Consistent Upward Trend in Key Metrics
31 Consistent Upward Trend in Key Metrics $1,287,279 $1,311,353 $1,354,154 $1,414,504 $1,453,946 $804,703 $831,933 $847,061 $883,391 $901,331 $1,048,376 $1,087,969 $1,133,332 $1,152,452 $1,183,876 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 $1,300,000 $1,400,000 $1,500,000 Q1 2016 Q2 2016 Q3
Slide 32: Noninterest Expense Review
32 $43,349 $43,247 $43,768 $44,607 $48,140 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 Noninterest Expense Review 2012 2013 2014 2015 2016 • 2015 and 2016 expenses influenced by increased costs related to litigation and investment in growth of company (sales team and geographic expansion
Slide 33: Stock Performance
33 Stock Performance Orrstown Financial Services, Inc. -------------- S & P 500 Index --------------
Slide 34: Regulatory Capital Ratios
34 Regulatory Capital Ratios 8.1% 13.7% 15.0% 9.5% 15.6% 16.8% 9.8% 14.6% 15.8% 9.3% 13.3% 14.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Tier 1 Leverage Tier 1 Risk Based Total Risk Based 2013 2014 2015 2016
Slide 35: Meeting Agenda
35 Meeting Agenda • Call to Order • Introduction of the Board of Directors and Other Distinguished Guests • Conduct Meeting Business • Management Report • Thomas R. Quinn, Jr., President & CEO Recap of 2016 Achievements • David P. Boyle, EVP/Chief Financial Officer Financial Review • Thomas R. Quinn
Slide 36: Management Report-Looking Forward 2017 and Beyond
36 Management Report-Looking Forward 2017 and Beyond Thomas R. Quinn, Jr., President & CEO
Slide 37: Looking Forward: Keys to Executing Plan and Improving Earnings
37 Looking Forward: Keys to Executing Plan and Improving Earnings • Continue to take advantage of market dislocation • Use of technology to attract and retain customers • Continue to leverage balance sheet and improve earnings through loan, deposit, and fee income growth • Continue to focus on enter
Slide 38: Meeting Agenda
38 Meeting Agenda • Call to Order • Introduction of the Board of Directors and Other Distinguished Guests • Conduct Meeting Business • Management Reports • Thomas R. Quinn, Jr., President & CEO Recap of 2016 Achievements • David P. Boyle, EVP/Chief Financial Officer Financial Review • Thomas R. Quin
Slide 39: Questions From Our Shareholders
39 Questions From Our Shareholders • Shareholders should confine comments to one subject at a time in order to give other shareholders an opportunity to speak on that subject. Please permit the speaker to conclude his or her remarks without interruption. • A shareholder will be permitted up to two m
Slide 40: Meeting Agenda
40 Meeting Agenda • Call to Order • Introduction of the Board of Directors and Other Distinguished Guests • Conduct Meeting Business • Management Reports • Thomas R. Quinn, Jr., President & CEO Recap of 2016 Achievements • David P. Boyle, EVP/Chief Financial Officer Financial Review • Thomas R. Quin
Slide 41: Conduct Meeting Business
41 Conduct Meeting Business Joel R. Zullinger, Chairman of the Board
Slide 42: Successfully Executing Our Strategic Plan
42 SUCCESSFULLY EXECUTING OUR STRATEGIC PLAN Annual Shareholders Meeting | May 2, 2017
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