# ORRSTOWN FINANCIAL SERVICES INC (ORRF)

Informational only - not investment advice.

CIK: 0000826154
SIC: 6022 State Commercial Banks
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6022 State Commercial Banks](/industry/6022/)
Latest 10-K filed: 2026-03-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=826154
Filing source: https://www.sec.gov/Archives/edgar/data/826154/000162828026017278/orrf-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-12 · accession 0001628280-26-017278 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000826154.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 303,734,000 USD | 2025 | verified |
| Net income | 80,855,000 USD | 2025 | verified |
| Assets | 5,542,255,000 USD | 2025 | verified |
| Free cash flow | 70,499,000 USD | 2025 | computed |
| Net margin | 26.62% | 2025 | computed |
| Revenue YoY | +22.01% | 2025 | computed |
| ROE | 13.67% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | ORRF | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 26.6% | 21.9% | 74 | 149 |
| Revenue growth | 22.0% | 6.0% | 92 | 148 |
| FCF margin | 23.2% | 23.8% | 47 | 133 |
| ROE | 13.7% | 9.6% | 91 | 149 |
| ROA | 1.5% | 1.1% | 82 | 149 |
| Liabilities / equity | 8.37 | 8.04 | 60 | 149 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6022 State Commercial Banks, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 303734000 | USD | 2025 | 2026-03-12 |
| Net income | 80855000 | USD | 2025 | 2026-03-12 |
| Assets | 5542255000 | USD | 2025 | 2026-03-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000826154.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 41,962,000 | 51,453,000 | 65,667,000 | 92,994,000 | 99,631,000 | 93,695,000 | 108,654,000 | 149,897,000 | 248,933,000 | 303,734,000 |
| Net income | 6,628,000 | 8,090,000 | 12,805,000 | 16,924,000 | 26,463,000 | 32,881,000 | 22,037,000 | 35,663,000 | 22,050,000 | 80,855,000 |
| Diluted EPS | 0.81 | 0.98 | 1.50 | 1.61 | 2.40 | 2.96 | 2.06 | 3.42 | 1.48 | 4.18 |
| Operating cash flow | 15,587,000 | 16,350,000 | 22,487,000 | 9,090,000 | 30,171,000 | 40,811,000 | 36,192,000 | 43,701,000 | 34,959,000 | 74,734,000 |
| Capital expenditures | 13,369,000 | 2,653,000 | 4,791,000 | 2,911,000 | 1,303,000 | 1,254,000 | 895,000 | 2,293,000 | 1,582,000 | 4,235,000 |
| Dividends paid | 2,898,000 | 3,488,000 | 4,375,000 | 6,150,000 | 7,610,000 | 8,280,000 | 8,264,000 | 8,485,000 | 13,177,000 | 20,643,000 |
| Share buybacks | 631,000 | 0.00 | 0.00 | 0.00 | 1,170,000 | 1,869,000 | 14,172,000 | 2,585,000 | 0.00 | 263,000 |
| Assets | 1,414,504,000 | 1,558,849,000 | 1,934,388,000 | 2,383,274,000 | 2,750,572,000 | 2,834,565,000 | 2,922,408,000 | 3,064,240,000 | 5,441,589,000 | 5,542,255,000 |
| Liabilities | 1,279,645,000 | 1,414,084,000 | 1,760,955,000 | 2,160,025,000 | 2,504,323,000 | 2,562,909,000 | 2,693,512,000 | 2,799,184,000 | 4,924,907,000 | 4,950,720,000 |
| Stockholders' equity | 134,859,000 | 144,765,000 | 173,433,000 | 223,249,000 | 246,249,000 | 271,656,000 | 228,896,000 | 265,056,000 | 516,682,000 | 591,535,000 |
| Free cash flow | 2,218,000 | 13,697,000 | 17,696,000 | 6,179,000 | 28,868,000 | 39,557,000 | 35,297,000 | 41,408,000 | 33,377,000 | 70,499,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 15.80% | 15.72% | 19.50% | 18.20% | 26.56% | 35.09% | 20.28% | 23.79% | 8.86% | 26.62% |
| Return on equity | 4.91% | 5.59% | 7.38% | 7.58% | 10.75% | 12.10% | 9.63% | 13.45% | 4.27% | 13.67% |
| Return on assets | 0.47% | 0.52% | 0.66% | 0.71% | 0.96% | 1.16% | 0.75% | 1.16% | 0.41% | 1.46% |
| Liabilities / equity | 9.49 | 9.77 | 10.15 | 9.68 | 10.17 | 9.43 | 11.77 | 10.56 | 9.53 | 8.37 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000826154.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | -0.47 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.87 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.94 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 38,691,000 | 9,026,000 | 0.87 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 40,028,000 | 7,643,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 42,650,000 | 8,531,000 | 0.81 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 43,281,000 | 7,738,000 | 0.73 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 82,987,000 | -7,903,000 | -0.41 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 80,015,000 | 13,684,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 75,519,000 | 18,051,000 | 0.93 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 74,833,000 | 19,448,000 | 1.01 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 77,122,000 | 21,865,000 | 1.13 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 76,260,000 | 21,491,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 74,364,000 | 21,809,000 | 1.12 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 74,702,000 | 21,158,000 | 1.09 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from ORRF's latest 10-K: [/company/ORRF/business/](/company/ORRF/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from ORRF's latest 10-K: [/company/ORRF/risk-factors/](/company/ORRF/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/826154/000162828026054267/orrf-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-06
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to assist readers in understanding the consolidated financial condition and results of operations of Orrstown and should be read in conjunction with the preceding unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q, as well as with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the SEC on March 12, 2026. Throughout this discussion, the yield on earning assets is stated on a fully taxable-equivalent basis and balances represent average daily balances unless otherwise stated. All dollar amounts presented in the tables, except per share amounts, are in thousands.

Overview

The Company, headquartered in Harrisburg, Pennsylvania, is a one-bank holding company that has elected status as a financial holding company. The consolidated financial information presented herein reflects the Company and its wholly-owned subsidiary, the Bank. At June 30, 2026, the Company had total assets of $5.6 billion, total liabilities of $5.0 billion and total shareholders’ equity of $621.7 million as reported in the unaudited consolidated balance sheet.

For the three and six months ended June 30, 2026, the Company had net income of $21.2 million and $43.0 million, respectively, compared to net income of $19.4 million and $37.5 million for the three and six months ended June 30, 2025, respectively. Diluted earnings per share was $1.09 and $1.01 for the three months ended June 30, 2026 and 2025, respectively. Diluted earnings per share was $2.21 and $1.94 for the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2025, the Company incurred merger-related expenses of $968 thousand and $2.6 million, respectively. The Company did not incur merger-related expenses during the three and six months ended June 30, 2026. The merger-related expenses are included in non-interest expenses in the unaudited consolidated statements of income.

Cautionary Note About Forward-Looking Statements

Certain statements appearing herein, which are not historical in nature, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, we may make other written and oral communications, from time to time, that contain such statements. Such forward-looking statements reflect the current views of the Company's management with respect to, among other things, future events and the Company's financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. Forward-looking statements are statements that include projections, predictions, expectations, estimates or beliefs about events or results or otherwise are not statements of historical facts, many of which, by their nature, are inherently uncertain and beyond the Company's control, and include, but are not limited to, statements related to new business development, new loan opportunities, growth in the balance sheet and fee-based revenue lines of business, merger and acquisition activity, cost savings initiatives, reducing risk assets, and mitigating losses in the future. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, cost savings initiatives, and continued reductions in risk assets or mitigate losses in the future. Factors which could cause the actual results to differ from those expressed or implied by the forward-looking statements include, but are not limited to, the following: interest rate changes or volatility; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company’s strategic growth plan due to changes in current or future market conditions; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in, and evolving interpretations of, existing and future laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; the impact of tariffs; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2025, and our Quarterly Reports on Form 10-Q under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings made with the SEC. The statements are valid only as of the date hereof and we disclaim any obligation to update this information.

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Economic Climate, Inflation and Interest Rates

Preliminary real GDP increased at a rate of 1.5% on an annualized basis for the second quarter of 2026, which was a decrease from 2.1% during the first quarter of 2026 and from 3.0% during the second quarter of 2025. The decrease during the second quarter of 2026 was primarily due to an increase in imports and decrease in government spending, partially offset by an increase in consumer spending and investments. The increase in imports, which reduces GDP, was primarily impacted by capital goods, which includes industrial equipment and semiconductors. Nondefense spending declined due to an increase in sales of crude oil. The increase in consumer spending was primarily driven by nondurable goods, including personal healthcare, motor vehicles and furniture. Investment in intellectual property products continues to rise.

The personal consumption expenditures ("PCE") price index increased by 5.1% in the second quarter of 2026 compared to an increase of 4.6% for the first quarter of 2026 and 2.1% during the second quarter of 2025. Excluding food and energy prices, the PCE price index increased by 3.4% in the second quarter of 2026, 4.4% in the first quarter of 2025 and 2.5% in the second quarter of 2025. The increase in the PCE price index reflects the rising costs from energy prices, which have been impacted by the geopolitical conflict in the Middle East, and pass-through costs on goods impacted by tariffs. Despite the inflationary pressures, consumer demand has allowed for prices to hold.

The national unemployment rate was 4.2% in June 2026 compared to 4.3% in March 2026 and 4.1% in June 2025. During the second quarter of 2026, there continued to be job gains in healthcare, professional services and social assistance; however, there was a decline in employment within leisure and hospitality. Within the Company's geographic footprint, the unemployment rate in Pennsylvania was 4.1% in June 2026 compared to 4.3% in March 2026 and 4.3% in June 2026. The unemployment rates in Pennsylvania and Maryland both remain aligned with the national level. These state-wide unemployment rates are consistent with those experienced by the counties in which the Company operates branches and other corporate offices.

During 2025, the FOMC implemented rate cuts of 25 basis points in September 2025, October 2025 and December 2025, reducing the target range to 3.50% to 3.75%. These changes were based on the FOMC's assessment of inflation, the unemployment rate and jobs report. There have been no rate changes in 2026.

At June 30, 2026, the 10-year Treasury bond yield was 4.44%, an increase from 4.30% at March 31, 2026 and 4.14% at December 31, 2025. Contributing factors for the increase include geopolitical conflict, which has caused energy prices to rise and created concerns with inflationary pressure. There is some belief that the current geopolitical conflict could result in an increase in the Federal Funds rate later in 2026.

The majority of the assets and liabilities of a financial institution are monetary in nature and, therefore, differ greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. However, inflation does have an impact on the Company, particularly with respect to the growth of total assets and noninterest expenses, which tend to rise during periods of general inflation. Risks also exist due to supply and demand imbalances, the interest rate environment, geopolitical tensions, uncertainty related to the impact of tariffs, the scope and timing of changes to fiscal, regulatory and trade policies.

Critical Accounting Estimates

The Company’s accounting and reporting policies are in accordance with GAAP and follow accounting and reporting guidelines prescribed by bank regulatory authorities and general practices within the financial services industry in which it operates. Our financial position and results of operations are affected by management's application of accounting policies, including estimates, and assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the balance sheet date and through the date the financial statements are filed with the SEC. Different assumptions in the application of these policies could result in material changes in the consolidated financial position and/or consolidated results of operations and related disclosures. The more critical accounting estimates include accounting for business combinations, accounting for credit losses and accounting for income taxes.

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Business Combinations

The Company accounts for its mergers and acquisitions using the acquisition method of accounting under the provisions of FASB ASC Topic 805 ("ASC 805"), Business Combinations. Under ASC 805, the assets acquired, including identified intangible assets such as core deposit intangibles and customer relationship intangibles, and liabilities assumed in a business combination are recognized at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the merger consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The valuations are based upon management’s assumptions of future growth rates, future attrition, discount rates and other relevant factors, wh

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/826154/000162828026017278/orrf-20251231.htm
Complete FY 2025 MD&A: /company/ORRF/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-03-12
Report date: 2025-12-31

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to assist readers in understanding the consolidated financial condition and results of operations of the Company and should be read in conjunction with our Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K. Certain prior period amounts presented in this discussion and analysis have been reclassified to conform to current period classifications. These reclassifications did not have a material impact on the Company's consolidated balance sheets, statements of income or statement of consolidated cash flows.

Overview

The Company, headquartered in Harrisburg, Pennsylvania, is a one-bank holding company that has elected status as a financial holding company. The consolidated financial information presented herein reflects the Company and its wholly-owned subsidiary, the Bank. At December 31, 2025, the Company had total assets of $5.5 billion, total liabilities of $5.0 billion and total shareholders' equity of $591.5 million as reported in the consolidated balance sheets.

The Company acquired Codorus Valley and its wholly-owned bank subsidiary PeoplesBank, A Codorus Valley Company on July 1, 2024. The merger and acquisition method of accounting was used to account for the transaction with the Company as the acquirer. The Company recorded the assets and liabilities of Codorus Valley at their respective fair values as of July 1, 2024. The transaction was valued at $233.4 million and expanded the Bank’s footprint into the York, Pennsylvania market while increasing its market penetration in its existing markets.

The Company incurred merger-related expenses of $2.6 million for the year ended December 31, 2025. For the year ended December 31, 2024, the Company incurred merger-related expenses of $22.7 million, a provision for non-PCD loans of $15.5 million, expenses for the retirement of an executive of $4.8 million and a provision for legal settlement of $478 thousand. The merger-related and other non-recurring expenses are included in non-interest expenses in the consolidated statements of income under Part II, Item 8, "Financial Statements and Supplemental Data."

Critical Accounting Estimates

The Company’s accounting and reporting policies are in accordance with GAAP and follow accounting and reporting guidelines prescribed by bank regulatory authorities and general practices within the financial services industry in which it operates. Our financial position and results of operations are affected by management's application of accounting policies, including estimates, and assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant accounting policies followed by the Company are presented in Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements under Part II, Item 8, "Financial Statements and Supplementary Data." These estimates, assumptions, and judgments are based on information available as of the balance sheet date and through the date the financial statements are filed with the SEC. In applying those accounting policies, the Company's management is required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. Certain of the critical accounting estimates are more dependent on such judgment and, in some cases, may contribute to volatility in our reported financial performance should the assumptions and estimates used change over time due to changes in circumstances. The more critical accounting estimates include accounting for credit losses, income tax methodologies and accounting for business combinations.

Business Combinations

The Company accounts for its mergers and acquisitions using the acquisition method of accounting under the provisions of FASB ASC Topic 805 ("ASC 805"), Business Combinations. Under ASC 805, the assets acquired, including identified intangible assets such as core deposit intangibles and customer relationship intangibles, and liabilities assumed in a business combination are recognized at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the merger consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The valuations are based upon management’s assumptions of future growth rates, future attrition, discount rates and other relevant factors, which involves a significant level of estimation and uncertainty. In addition, management engaged independent third-party specialists to assist in the development of the fair values of the acquired assets and assumed liabilities. The preliminary estimates of fair values may be adjusted for a period of time subsequent to the acquisition date if new information is obtained about facts and circumstances that existed as of the merger date that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments would be recorded to goodwill during the current reporting period.

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Examples of the impacted acquired loans and assumed liabilities includes loans, deposits, identifiable intangible assets, borrowings and certain other assets and liabilities.

For acquired loans at the merger date, management evaluated and classified loans based upon whether the loans had experienced a more-than-insignificant amount of credit deteriorating since origination. To determine the fair value of the loans, significant estimates and assumptions were applied, including projected cash flows, discount rates, repayment speeds, credit loss severity rates, default rates and realizable collateral values. At acquisition, the allowance on PCD loans is booked directly to the ACL using the Company’s existing ACL methodology, but there is no initial impact to net income. Subsequent to acquisition, future changes in estimates of expected credit losses on PCD loans are recognized as provision expense (or reversal of provision expense). The ACL for non-PCD loans is recognized as a provision for credit losses in the same reporting period as the business acquisition, using the Company’s existing ACL methodology.

These critical accounting estimates are discussed in detail in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025. Significant accounting policies and any changes in accounting principles and effects of new accounting pronouncements are discussed in Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements under Part II, Item 8, "Financial Statements and Supplementary Data," in our Annual Report on Form 10-K for the year ended December 31, 2025.

Accounting for Credit Losses - Loans

The ACL represents the amount that, in management’s judgment, appropriately reflects credit losses inherent in the loan portfolio at the balance sheet date. A provision for credit losses is recorded to adjust the level of the ACL as determined by management. In accordance with ASU 2016-13, the CECL methodology requires an organization to measure all expected credit losses over the contractual term for financial assets measured at amortized cost based on historical credit loss experience, current conditions, and reasonable and supportable forecasts.

Determining the ACL inherently involves a high degree of subjectivity and requires the Company to make significant estimates of current credit risks and trends, all of which may undergo material changes, including expected probabilities of default, expected loss given default, the timing of expected future cash flows including the impact from unexpected changes in prepayment speeds, estimated losses based on historical credit loss experience and forecasted economic conditions. To the extent actual results differ from management's estimates, additional provisions for credit losses may be required that could adversely impact results of operations and regulatory capital in future periods.

The ACL is maintained at a level considered appropriate to absorb credit losses over the expected life of the loan. The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans: collectively evaluated loans and individually evaluated loans. In addition, the ACL also includes a qualitative component, which adjusts the CECL model results for risk factors that are not considered within the CECL model, but are relevant in assessing the expected credit losses within the loan classes.

The ACL on loans is measured on a collective basis when similar risk characteristics exist within the Company's loan segments between commercial and consumer. Each of these loan segments are broken down into multiple loan classes, which are characterized by loan type, collateral type, risk attributions and the manner in which management monitors the performance of the borrower. The risks associated with lending activities differ and are subject to the impact of changes in interest rates, market conditions, the collateral securing the loans, and general economic conditions.

The ACL for loans collectively evaluated is measured using a lifetime expected loss rate model that considers historical loss performance and past events in addition to forecasts of future economic conditions. Based on management's analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the quantitatively calculated reserve on collectively evaluated loans. As the quantitative reserve calculation incorporates historical conditions, management may consider if an additional or reduced reserve is warranted and make adjustments through qualitative risk factors based on current and expected conditions. Management uses the best available information to complete these evaluations; however, future adjustments to the ACL may be necessary if conditions significantly differ from the assumptions used in making the evaluations.

The ACL for loans collectively evaluated is measured using a lifetime expected loss rate model under the vendor's neutral scenario that considers historical loss performance and past events in addition to forecasts of future economic conditions. The Company elected to use the DCF methodology for the quantitative analysis for the majority of its loan segments, which applies the probability of default to future cash flows, using a loss driver model and loss given default factors, and then adjusts to the net present value to derive the required reserve. The probability of default estimates are derived through the application of reasonable and supportable economic forecasts to the regression models, which incorporates the Company's and peer loss-rate data, unemployment rate and GDP and can be obtained from the Federal Reserve Economic Database. The reasonable and supportable forecasts of the selected economic metrics are then input into the regression model to calculate an expected default

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rate. The expected default rates are then applied to expected loan balances estimated through the consideration of contractual repayment terms and expected prepayments. The prepayment and curtailment assumptions adjust the contractual terms of the loan to arrive at the expected cash flows. The model incorporates an annualized prepayment rate and a twelve-month rate for curtailment based on a "statistical tendency to repay." Changes in the prepayment and curtailment speeds that vary from the current model inputs could result in inaccurate expected credit losses. The development and validation of credit models also included determining the le

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/ORRF/mda/fy2025/
All MD&A years: /company/ORRF/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/ORRF/mda/fy2024/): filed 2025-03-31; accession 0000826154-25-000090 (https://www.sec.gov/Archives/edgar/data/826154/000082615425000090/orrf-20241231.htm)
- [FY 2023 MD&A](/company/ORRF/mda/fy2023/): filed 2024-03-14; accession 0000826154-24-000060 (https://www.sec.gov/Archives/edgar/data/826154/000082615424000060/orrf-20231231.htm)
- [FY 2022 MD&A](/company/ORRF/mda/fy2022/): filed 2023-03-16; accession 0000826154-23-000067 (https://www.sec.gov/Archives/edgar/data/826154/000082615423000067/orrf-20221231.htm)
- [FY 2021 MD&A](/company/ORRF/mda/fy2021/): filed 2022-03-11; accession 0000826154-22-000079 (https://www.sec.gov/Archives/edgar/data/826154/000082615422000079/orrf-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6022 State Commercial Banks) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity

Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Consumer & credit](/thread/consumer-credit/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/ORRF.md · JSON record: /company/ORRF.json · verified financials: /company/ORRF/financials.json / /company/ORRF/financials.csv · machine TOC for the whole site: /llms.txt