Orrstown Financial Services Inc (ORRF, Financial) filed Quarterly Report for the period ended 2011-09-30.
Orrstown Financial Services Inc has a market cap of $71.2 million; its shares were traded at around $8.88 with a P/E ratio of 37 and P/S ratio of 0.8.
Net income for the quarter ended September 30, 2011 was $4.3 million, compared to net income of $4.9 million for the same quarter in 2010, resulting in diluted earnings per share of $0.54 and $0.61 for the periods, respectively. As a result of the lower net income level in 2011, the Companys return on assets and return on tangible equity ratios declined from 1.36% and 14.03%, respectively, for the quarter ended September 30, 2010 to 1.11% and 12.54%, respectively, for the same period in 2011.
Net interest income measured on a fully tax equivalent basis, totaled $13.5 million for the three months ended September 30, 2011, a $1.3 million, or 11.0%, increase over 2010. The growth in net interest income came principally through an increase in interest earning assets, which averaged $1.461 billion for the quarter ended September 30, 2011, compared to $1.329 billion in 2010. Complementing the growth in interest earning assets was a 4 basis point increase in net interest margin. Despite the low interest rate environment, the Company has been able to manage its blend of interest earnings assets and liabilities so that net interest margin increased slightly from 3.62% for the three months ended September 30, 2010 to 3.66% for the same quarter in 2011. The Company has been able to lower its overall cost of funds to 0.72% for the period, an improvement over the prior years cost of funds of 0.92% and the linked quarters cost of 0.76%.
For the nine months ended September 30, 2011, net interest income measured on a fully tax equivalent basis, increased $5.4 million, or 15.4%, to $40.1 million from $34.8 million in the corresponding period in 2010. The primary reason for the increase in net interest income was an increase in average earning assets from $1.236 billion for the first nine months of 2010 to $1.443 billion in 2011. Offsetting the growth in average interest earning assets was a decline in net interest margin by 3 basis points from 3.72% in 2010 to 3.69% for 2011. The net interest spread for the nine months ending September 30, 2011 was 3.57%, consistent with the 3.58% earned in the same period in 2010.
Total shareholders equity decreased $1.3 million from $160.4 million at December 31, 2010 to $159.1 million at September 30, 2011. The decrease in shareholders equity was principally the result of dividends declared of $5.5 million combined with the net loss for the period of $2.5 million, offset by gains on securities available for sale of $6.5 million. Historically, earnings retention, defined as net income less dividends declared, has served as a primary source of capital to the Company. As a result of the net loss posted during the nine months ended September 30, 2011, dividends declared have exceeded the years net income. Quarterly, management evaluates its ability to pay a dividend in light of regulatory guidance, capital needed for growth initiatives and minimum regulatory capital ratios. In October 2011, the Company announced it had discontinued its quarterly dividend, the result of regulatory guidance indicating that the dividend application would not be approved. It is anticipated that by not paying the dividend, the Company will retain approximately $7.4 million of capital annually. There can be no assurances as to whether, or in what amounts, cash dividends will be declared in the future or, if declared, whether they will continue, be suspended or discontinued.
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Orrstown Financial Services Inc has a market cap of $71.2 million; its shares were traded at around $8.88 with a P/E ratio of 37 and P/S ratio of 0.8.
Highlight of Business Operations:
The Company recorded net income of $4.3 million for the third quarter of 2011 compared to $4.9 million for the same period in 2010, representing a decrease of $582,000 or 11.9%. Basic and diluted earnings per share for the third quarter of 2011 were $0.54, compared to $0.61 for the third quarter of 2010. On a year-to-date basis, the net loss recorded for the period was $2.5 million for 2011, compared to net income of $12.2 million in 2010. Diluted earnings (loss) per share totaled ($0.31) for the nine months ended September 30, 2011 compared to $1.62 in 2010.Net income for the quarter ended September 30, 2011 was $4.3 million, compared to net income of $4.9 million for the same quarter in 2010, resulting in diluted earnings per share of $0.54 and $0.61 for the periods, respectively. As a result of the lower net income level in 2011, the Companys return on assets and return on tangible equity ratios declined from 1.36% and 14.03%, respectively, for the quarter ended September 30, 2010 to 1.11% and 12.54%, respectively, for the same period in 2011.
Net interest income measured on a fully tax equivalent basis, totaled $13.5 million for the three months ended September 30, 2011, a $1.3 million, or 11.0%, increase over 2010. The growth in net interest income came principally through an increase in interest earning assets, which averaged $1.461 billion for the quarter ended September 30, 2011, compared to $1.329 billion in 2010. Complementing the growth in interest earning assets was a 4 basis point increase in net interest margin. Despite the low interest rate environment, the Company has been able to manage its blend of interest earnings assets and liabilities so that net interest margin increased slightly from 3.62% for the three months ended September 30, 2010 to 3.66% for the same quarter in 2011. The Company has been able to lower its overall cost of funds to 0.72% for the period, an improvement over the prior years cost of funds of 0.92% and the linked quarters cost of 0.76%.
For the nine months ended September 30, 2011, net interest income measured on a fully tax equivalent basis, increased $5.4 million, or 15.4%, to $40.1 million from $34.8 million in the corresponding period in 2010. The primary reason for the increase in net interest income was an increase in average earning assets from $1.236 billion for the first nine months of 2010 to $1.443 billion in 2011. Offsetting the growth in average interest earning assets was a decline in net interest margin by 3 basis points from 3.72% in 2010 to 3.69% for 2011. The net interest spread for the nine months ending September 30, 2011 was 3.57%, consistent with the 3.58% earned in the same period in 2010.
Total shareholders equity decreased $1.3 million from $160.4 million at December 31, 2010 to $159.1 million at September 30, 2011. The decrease in shareholders equity was principally the result of dividends declared of $5.5 million combined with the net loss for the period of $2.5 million, offset by gains on securities available for sale of $6.5 million. Historically, earnings retention, defined as net income less dividends declared, has served as a primary source of capital to the Company. As a result of the net loss posted during the nine months ended September 30, 2011, dividends declared have exceeded the years net income. Quarterly, management evaluates its ability to pay a dividend in light of regulatory guidance, capital needed for growth initiatives and minimum regulatory capital ratios. In October 2011, the Company announced it had discontinued its quarterly dividend, the result of regulatory guidance indicating that the dividend application would not be approved. It is anticipated that by not paying the dividend, the Company will retain approximately $7.4 million of capital annually. There can be no assurances as to whether, or in what amounts, cash dividends will be declared in the future or, if declared, whether they will continue, be suspended or discontinued.
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