Orrstown Financial Services AGM: Directors Elected, Say-on-Pay Passes, CEO Quinn Exit Nears

Key Points

• Shareholders elected four directors — Brian D. Brunner, Scott V. Fainor, Cindy J. Joiner and Eric A. Segal — and approved the non-binding advisory "say-on-pay" vote, while also ratifying Crowe LLP as the company's independent auditor.
• Orrstown posted a strong 2025, reporting adjusted net income of $82.9 million and adjusted diluted EPS of $4.28, with $5.5 billion in total assets, a 4.04% net interest margin, $4.0 billion in loans and fee income rising to 21% of operating revenue.
• CEO Tom Quinn will retire on June 1 after 17 years; the board expressed confidence in COO Adam Metz and outlined 2026 priorities focused on capital allocation, risk management, growth, efficiency and technology/AI investments.

Orrstown Financial Services NASDAQ: ORRF shareholders elected directors and approved two additional proposals at the company’s 2026 annual meeting, where executives also highlighted 2025 financial results and outlined strategic priorities for the year ahead.

Shareholders elect directors and approve advisory and audit proposals

Joel Zullinger, chairman of the board, opened the meeting by reviewing voting procedures and noting that only shareholders of record as of March 6, 2026 were entitled to vote. He said the company had 19,619,798 shares outstanding on the record date and that a quorum was present.

Shareholders voted on three agenda items:

• Election of four directors to three-year terms expiring in 2029: Brian D. Brunner, Scott V. Fainor, Cindy J. Joiner, and Eric A. Segal
• A non-binding advisory vote on named executive officer compensation (“say on pay”)
• Ratification of Crowe LLP as the independent registered public accounting firm for fiscal year 2026

Matthew Dyckman, the company’s general counsel and the appointed judge of election, reported that 15,064,235 shares were represented at the meeting via valid proxies, representing 76.78% of total voting shares outstanding as of the record date. Dyckman said each director nominee was elected, and that a majority of votes cast approved both the say-on-pay proposal and the ratification of Crowe LLP.

CEO highlights acquisition-driven growth and profitability metrics

President and CEO Tom Quinn emphasized the company’s leadership team and experience, saying the average tenure of the executive group is 27 years. Quinn also reviewed company statistics, including 43 full-time and limited-service branches, 652 employees, $3.1 billion in assets under management, and common shares outstanding of about 19.5 million. He said tangible book value per common share was $25.21.

Quinn discussed Orrstown’s geographic footprint and growth over time, pointing to expansion across Central Pennsylvania, Lancaster and Lebanon, York and Adams through the Codorus transaction, and into the Baltimore market. He cited prior deals, including acquisitions of Community Bank of Mercersburg in 2018 and Hamilton Bancorp in 2019, and the 2024 merger with Codorus Valley.

Quinn said 2025 marked “our seventh consecutive year of core earnings” and the “reported highest annual net income in the company’s history.” He reported:

• Net income adjusted for merger-related charges of $82.9 million
• Adjusted diluted EPS of $4.28
• Adjusted ROAA of 1.53% and adjusted ROAE of 15.13%

He also said the company expanded its net interest margin due to disciplined pricing strategies, maintained strong asset quality metrics relative to peers, fully recognized anticipated expense saves from the Codorus Valley merger, and improved post-merger capital ratios faster than projected. Quinn added that the company made strategic investments in talent and technology and expects returns on those investments in coming years.

On shareholder returns, Quinn said the company has paid consecutive quarterly dividends since May 2015, with the dividend increased 14 times over the last 43 quarters. He also cited a 329% increase in the dividend since reinstatement and a 17% compounded annual growth rate, stating that rewarding shareholders through dividends and value creation remains a goal.

CFO details 2025 results, balance sheet trends, and fee income mix

Chief Financial Officer Neil Kalani said the company’s “growth story continued in 2025” and that Orrstown reached $5.5 billion in total assets. He said the company met or exceeded targets established heading into the year.

Kalani reported 2025 net income of $80.9 million, or EPS of $4.18. Adjusting for merger expenses, he reiterated net income of $82.9 million and EPS of $4.28. He also said net interest income increased $45 million from 2024 and that net interest margin rose 12 basis points year over year to 4.04%.

On balance sheet activity, Kalani said loans grew by $90 million, or 2% annualized. He said the company “deliberately slowed down” commercial loan production early in the year while focusing on overall risk profile, managing commercial real estate concentration, and working out certain loans, before returning focus to loan origination. Kalani said the bank saw annualized loan growth of 4% in the second half of 2025.

Deposits declined by $94 million during 2025, which Kalani said was primarily due to maturities of higher-cost time deposits. He said the decline was anticipated and helped bring funding costs down. He also said net charge-offs were minimal and that the allowance coverage ratio ended the year at 1.24% of loans.

Kalani said loans totaled $4.0 billion at Dec. 31, 2025, representing an annualized growth rate of 19% since 2020. He reported a yield on loans of 6.42%. Deposits totaled $4.5 billion at year-end 2025, and he said the cost of deposits declined to 1.98% with the benefit of Federal Reserve rate reductions and a decline in time deposits. He added that core deposits represented 80% of deposits and that the loan-to-deposit ratio was 89%.

Kalani said fee income increased to 21% of total operating revenue. He noted the wealth management business recorded $21.7 million of fee income in 2025 and said the company also saw growth in service charges and swap fees. He added that treasury management activity was “very strong again” and remains an area for further growth opportunities.

Efficiency and innovation remain a focus

Kalani said the company’s efficiency ratio declined to 58% and that management’s goal is to reduce it further. He said the company plans to invest in software to streamline processes and reporting and highlighted automated solutions, including opportunities involving artificial intelligence, to create efficiencies and enhance service levels.

Strategic priorities for 2026 and CEO transition noted

In a strategic overview for 2026, the company outlined six focus areas: disciplined capital allocation and balance sheet optimization; risk management and organizational resilience; sustainable growth in core banking; operational excellence; technology, data, and innovation; and strategic positioning and franchise expansion.

At the close of the meeting, Zullinger noted that the 2026 annual meeting was Quinn’s last before his “previously disclosed retirement on June 1st.” Zullinger thanked Quinn for his 17 years with the company, stating that Quinn’s leadership helped transform Orrstown and expressing confidence in Chief Operating Officer Adam Metz, the board, the executive team, and employees to lead the bank forward.

About Orrstown Financial Services NASDAQ: ORRF

Orrstown Financial Services, Inc is the bank holding company for Orrstown Bank, a community banking organization headquartered in Shippensburg, Pennsylvania. The roots of Orrstown Bank date back to 1865, and the holding company structure was established to support its growth and diversification. As a regional financial institution, Orrstown Financial Services focuses on delivering personalized banking solutions to individuals, families and businesses across Central Pennsylvania.

The company's core offerings include a full suite of deposit products such as checking and savings accounts, money market accounts and certificates of deposit.

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