- Orrstown Financial Services, Inc. ("Orrstown" or the “Company”) closed the merger of equals transaction with Codorus Valley Bancorp, Inc. ("Codorus") on July 1, 2024, creating a premier Pennsylvania and Maryland community bank; as a result, the Company's results for the three months ended September 30, 2024 reflect the combined operating results of the combined companies;
- Codorus contributed, after fair value purchase accounting adjustments, approximately $2.2 billion in total assets, $1.6 billion in loans, and $1.9 billion in deposits at July 1, 2024;
- Net loss of $7.9 million, or $0.41 per diluted share, for the three months ended September 30, 2024 compared to net income of $7.7 million, or $0.73 per diluted share, for the three months ended June 30, 2024, reflecting the impact of $17.0 million in expenses related to the merger, $15.5 million of provision for credit losses on non-purchase credit deteriorated ("PCD") loans and $4.8 million for the previously announced executive retirement, net of taxes, collectively the "non-recurring charges";
- Excluding the impact of the non-recurring charges, net income and diluted earnings per share, respectively, were $21.4 million(1) and $1.11(1) for the third quarter of 2024 compared to net income and diluted earnings per share of $8.7 million(1) and $0.83(1), respectively, as adjusted for the impact of $1.1 million in merger-related expenses, net of taxes, recorded for the second quarter of 2024;
- Net interest margin, on a tax equivalent basis, was 4.14% in the third quarter of 2024 compared to 3.54% in the second quarter of 2024; the net accretion impact of purchase accounting marks on loans, deposits and borrowings was $5.8 million of net interest income, which represents 52 basis points of net interest margin;
- Noninterest income increased by $5.1 million to $12.4 million in the three months ended September 30, 2024 compared to $7.2 million in the three months ended June 30, 2024; continued strength in wealth management and swap fee generation by commercial teams are driving fee income growth;
- Return on average assets for the three months ended September 30, 2024 was (0.57)% compared to 0.97% for the three months ended June 30, 2024; excluding the non-recurring charges, return on average assets was 1.55%(1) for the three months ended September 30, 2024 compared to 1.09%(1) for the three months ended June 30, 2024, excluding merger-related expenses;
- Return on average equity for the three months ended September 30, 2024 was (5.85)% compared to 11.41% for the three months ended June 30, 2024; excluding the non-recurring charges, return on average equity was 15.85%(1) for the three months ended September 30, 2024 compared to 12.88%(1) for the three months ended June 30, 2024, excluding merger related expenses;
- The provision for credit losses was $13.7 million for the three months ended September 30, 2024 compared to $812 thousand for the three months ended June 30, 2024; the provision for credit losses on non-PCD loans for the three months ended September 30, 2024 was $15.5 million; excluding the impact of the merger, the provision for credit losses for the three months ended September 30, 2024 was a reversal of $1.8 million;
- At September 30, 2024, nonaccrual loans totaled $26.9 million, an increase of $18.5 million from $8.4 million at June 30, 2024; non-accrual loans acquired from Codorus totaled $12.8 million;
- Tangible book value per common share(1) decreased to $21.12 per share at September 30, 2024 compared to $24.08 per share at June 30, 2024; this decrease was primarily due to the impact of loan marks associated with the merger and the net loss incurred for the third quarter of 2024;
- The Board of Directors declared a cash dividend of $0.23 per common share, payable November 12, 2024, to shareholders of record as of November 5, 2024.
(1) Non-GAAP measure. See Appendix A for additional information.
HARRISBURG, Pa., Oct. 22, 2024 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ( ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended September 30, 2024. Net loss totaled $7.9 million for the three months ended September 30, 2024, compared to net income of $7.7 million for the three months ended June 30, 2024 and $9.0 million for the three months ended September 30, 2023. Diluted loss per share was $0.41 for the three months ended September 30, 2024, compared to diluted earnings per share of $0.73 for the three months ended June 30, 2024 and $0.87 for the three months ended September 30, 2023. For the third quarter of 2024, excluding the impact from the non-recurring charges, net of taxes, net income and diluted earnings per share were $21.4 million(1) and $1.11(1), respectively. For the second quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $8.7 million(1) and $0.83(1), respectively.
“While the results for the quarter reflected the impact of certain non-recurring charges, the core income generated by the business demonstrates the significant opportunities afforded by the additional scale and synergies created by the merger. Our core earnings were strong. We already have taken significant steps to achieve the cost savings announced in December, which we are on target to achieve in full in the defined timeline. Our system conversion in scheduled for completion in November 2024, at which time we expect further expense savings to be realized. We believe we are well on our way to improving our client experience, expanding and deepening our community presence, and enhancing shareholder value,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.
DISCUSSION OF RESULTS
Merger Update
The Company acquired Codorus 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 at their respective fair values as of July 1, 2024. The transaction was valued at approximately $234 million and expanded the Bank’s footprint into the York, Pennsylvania market while increasing its market penetration in its existing markets.
At the time of the merger, Codorus contributed, after fair value purchase accounting adjustments, approximately $2.2 billion in assets, $1.6 billion in loans, $326.7 million in investment securities and $1.9 billion in deposits. The excess of the merger consideration over the fair value of net Codorus assets resulted in goodwill of $51.9 million. The merger led to a 12% dilution in our tangible book value per share which was $21.12 at September 30, 2024 compared to $24.08 at June 30, 2024. The principal cause of the dilution was the impact of the associated purchase accounting marks on loans. The Company’s tangible common equity ratio at September 30, 2024 was 7.5%. The loan fair value adjustments are expected to accrete back through income and capital as the loans mature and should lead to earnings per share and capital accretion moving forward. The fair value of assets and liabilities are subject to refinement for up to one year after the acquisition date as allowable under U.S. Generally Accepted Accounting Principles.
The Company incurred expenses of $32.5 million and $34.3 million for the three and nine months ended September 30, 2023, respectively, related to merger costs and an increased allowance for credit losses on non-PCD portion of the loans assumed from Codorus.
The Company’s financial results for any periods ended prior to July 1, 2024 reflect Orrstown’s results only on a standalone basis. As a result of this factor and the below listed adjustments related to the merger, the Company’s financial results for the third quarter of 2024 may not be directly comparable to prior reported periods.
Balance Sheet
Loans
Loans held for investment increased by $1.7 billion from June 30, 2024 to September 30, 2024 as $1.6 billion of loans, net of purchase accounting marks, were assumed in the merger with Codorus.
Investment Securities
Investment securities, all of which are classified as available-for-sale, increased by $297.7 million to $826.8 million at September 30, 2024 from $529.1 million at June 30, 2024. Investments with a fair value of $326.7 million were assumed in the merger with Codorus. During the third quarter of 2024, investment securities totaling $162.7 million were sold from the portfolio acquired from Codorus. The portfolio was restructured to align the interest rate risk and credit profile for the combined balance sheet. Most of these proceeds were reinvested in investment securities as purchases of $140.4 million were made in the three months ended September 30, 2024. These purchases were partially offset by paydowns of investment securities of $20.6 million and two calls totaling $5.0 million. The overall duration of the Company's investment securities portfolio was 4.6 years at September 30, 2024 compared to 4.2 years at June 30, 2024. See Appendix B for a summary of the Bank's investment securities at September 30, 2024, highlighting their concentrations, credit ratings and credit enhancement levels.
Deposits
During the third quarter of 2024, deposits increased by $2.0 billion to approximately $4.7 billion at September 30, 2024 compared to $2.7 billion at June 30, 2024. Deposits of $1.9 billion were assumed in the merger. At September 30, 2024, deposits that are uninsured and not collateralized totaled $692.6 million, or 15% of total deposits compared to $422.3 million, or 16% of total deposits at June 30, 2024. The Bank's loan-to-deposit ratio decreased slightly to 86% at September 30, 2024 from 87% at June 30, 2024.
Borrowings
The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $115.4 million at September 30, 2024 and $115.0 million at June 30, 2024. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed on a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.0 billion at September 30, 2024. The Bank's FHLB borrowing capacity at September 30, 2024 was not inclusive of Codorus, which will be reflected in the fourth quarter.
The Company assumed $31.0 million aggregate principal amount of subordinated debentures and $10.3 million aggregate amount of trust preferred securities from Codorus in the merger. Fair value adjustments of $5.1 million were recorded on July 1, 2024 which reduced the amounts recorded on the balance sheet.
Income Statement
Net Interest Income and Margin
Net interest income was $51.7 million for the three months ended September 30, 2024 compared to $26.1 million for the three months ended June 30, 2024. The net interest margin, on a tax equivalent basis, increased to 4.14% in the third quarter of 2024 from 3.54% in the second quarter of 2024. The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, deposits and borrowings of $5.8 million, which represents 52 basis points of net interest margin. Funding costs show signs of stabilizing.
Several components of the net interest margin increased primarily as the result of the assets and liabilities assumed in the merger with Codorus.
Interest income on loans, on a tax equivalent basis, increased by $35.2 million to $70.8 million for the three months ended September 30, 2024 compared to $35.7 million for the three months ended June 30, 2024.
Interest income on investment securities, on a tax equivalent basis, was $10.1 million for the third quarter of 2024 compared to $6.1 million in the second quarter of 2024.
Interest expense, on a tax equivalent basis, increased by $14.1 million to $31.3 million for the three months ended September 30, 2024 compared to $17.2 million for the three months ended June 30, 2024. Average interest-bearing deposits increased by $1.6 billion during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. Average borrowings increased by $35.8 million during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. Interest expense includes $0.4 million and $0 of amortization of purchase accounting marks for the three months ended September 30, 2024 and June 30, 2024, respectively.
Provision for Credit Losses
The Company recorded a provision for credit losses of $13.7 million for the three months ended September 30, 2024 compared to $0.8 million for the three months ended June 30, 2024. The allowance for credit losses ("ACL") on loans increased to $49.6 million at September 30, 2024 from $29.9 million at June 30, 2024. The increase in the ACL was primarily due to the addition of $21.4 million of reserves as a result of the merger. This increase was made up of $15.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $5.9 million for PCD loans which was recognized through retained earnings. The provision for credit losses for the three months ended September 30, 2024 included a provision reversal of $1.8 million due to changes in qualitative factors, a change in the peer group utilized for the calculation and a reduction in the required reserve for unfunded commitments. The ACL to total loans was 1.25% at September 30, 2024 compared to 1.27% at June 30, 2024. Net charge-offs were $0.3 million for the three months ended September 30, 2024 compared to net charge-offs of $0.1 million for the three months ended June 30, 2024.
As a result of the merger, classified loans increased by $56.8 million to $105.5 million at September 30, 2024 from $48.7 million at June 30, 2024. Non-accrual loans increased by $18.5 million to $26.9 million at September 30, 2024 from $8.4 million at June 30, 2024 due primarily to the assumption of $12.8 million of non-accrual loans from Codorus. Nonaccrual loans to total loans increased to 0.68% at September 30, 2024 compared to 0.36% at June 30, 2024 and decreased from 1.11% at December 31, 2023. Management believes the ACL to be adequate based on current asset quality metrics and economic conditions.
Noninterest Income
Noninterest income increased by $5.1 million to $12.4 million in the three months ended September 30, 2024 compared to $7.2 million in the three months ended June 30, 2024 primarily due to the merger.
Wealth management income increased to $5.0 million in the three months ended September 30, 2024 compared to $3.3 million for the three months ended June 30, 2024. The strong sales efforts, organic growth and stock market performance have collectively driven exceptional wealth results throughout the year. As a result of the merger, assets under management increased to approximately $3.2 billion at September 30, 2024 from $2.1 billion at June 30, 2024.
During the third quarter of 2024, the Company recorded swap fee income of $0.5 million compared to $0.4 million in the three months ended June 30, 2024. Swap fee generation has been strong, but fluctuates based on market conditions and client demand.
Noninterest Expenses
Noninterest expenses increased by $37.7 million to $60.3 million in the three months ended September 30, 2024 from $22.6 million in the three months ended June 30, 2024 primarily due to the merger.
For the three months ended September 30, 2024, merger-related expenses totaled $17.0 million, an increase of $15.9 million, compared to $1.1 million for the three months ended June 30, 2024. The increase is due to primarily to employee separation costs, vendor contract terminations, and professional fees incurred during the third quarter of 2024. The Company will incur additional merger-related expenses from the operational and technology processes to combine systems and services of both companies, which is expected to be completed in November 2024.
Salaries and benefits expense increased by $14.0 million to $27.2 million for the three months ended September 30, 2024 compared to $13.2 million for the three months ended June 30, 2024. The three months ended September 30, 2024 includes $4.8 million of expenses associated with the retirement of an executive.
Intangible asset amortization increased to $2.5 million for the three months ended September 30, 2024 compared to $0.2 million for the three months ended June 30, 2024. This increase is due to the amortization expense recognized on the core deposit intangible of $35.9 million and wealth customer relationship intangible of $10.4 million established on July 1, 2024 from the merger.
Taxes other than income increased to $0.5 million in the three months ended September 30, 2024 compared to less than $0.1 million in the three months ended June 30, 2024. This increase reflects the tax credits recognized on the contributions during the second quarter of 2024.
There was $257 thousand of restructuring expenses recognized in the three months ended September 30, 2024 associated with previously announced branch closures.
Income Taxes
The Company's effective tax rate for the third quarter of 2024 was 20.1% compared to 21.2% for the second quarter of 2024. The Company's effective tax rate for the three months ended September 30, 2024 is less than the 21% federal statutory rate primarily due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits partially offset by the disallowed portion of interest expense against earnings in association with the Bank's tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") and the impact of nondeductible merger-related costs. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.
Capital
Shareholders’ equity totaled $516.2 million at September 30, 2024, an increase of $237.8 million from $278.4 million at June 30, 2024. The increase was primarily attributable to the equity assumed in the merger, net of purchase accounting adjustments, partially offset by a net loss of $7.9 million and dividends paid of $4.4 million.
Tangible book value per share(1) decreased to $21.12 per share at September 30, 2024 from $24.08 per share at June 30, 2024 due to the purchase accounting adjustments associated with the merger.
The Company's tangible common equity ratio decreased to 7.5% at September 30, 2024 from 8.1% at June 30, 2024 due to purchase accounting marks and a net loss recorded during the third quarter of 2024. The Company's total risk-based capital ratio was 12.5% at September 30, 2024 compared to 13.3% at June 30, 2024. The Company's Tier 1 leverage ratio was 8.0% at September 30, 2024 compared to 8.9% at June 30, 2024. The loan fair value adjustments are expected to accrete back through income and capital as the loans mature and should lead to earnings per share and capital accretion moving forward.
At September 30, 2024, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.
(1) Non-GAAP measure. See Appendix A for additional information.
| Investor Relations Contact: |
| Neelesh Kalani |
| Executive Vice President, Chief Financial Officer |
| Phone (717) 510-7097 |
| FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| (In thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Profitability for the period: | |||||||||||||||
| Net interest income | $ | 51,697 | $ | 26,219 | $ | 104,681 | $ | 78,888 | |||||||
| Provision for credit losses | 13,681 | 136 | 14,791 | 1,264 | |||||||||||
| Noninterest income | 12,386 | 5,925 | 26,188 | 19,161 | |||||||||||
| Noninterest expenses | 60,299 | 20,447 | 105,407 | 61,451 | |||||||||||
| (Loss) income before income tax (benefit) expense | (9,897 | ) | 11,561 | 10,671 | 35,334 | ||||||||||
| Income tax (benefit) expense | (1,994 | ) | 2,535 | 2,305 | 7,314 | ||||||||||
| Net (loss) income available to common shareholders | $ | (7,903 | ) | $ | 9,026 | $ | 8,366 | $ | 28,020 | ||||||
| Financial ratios: | |||||||||||||||
| Return on average assets (1) | (0.57)% | 1.18 | % | 0.28 | % | 1.25 | % | ||||||||
| Return on average assets, adjusted (1) (2) (3) | 1.55 | % | 1.18 | % | 1.33 | % | 1.25 | % | |||||||
| Return on average equity (1) | (5.85)% | 14.42 | % | 3.10 | % | 15.51 | % | ||||||||
| Return on average equity, adjusted (1) (2) (3) | 15.85 | % | 14.42 | % | 14.59 | % | 15.51 | % | |||||||
| Net interest margin (1) | 4.14 | % | 3.73 | % | 3.88 | % | 3.83 | % | |||||||
| Efficiency ratio | 94.1 | % | 63.6 | % | 80.5 | % | 62.7 | % | |||||||
| Efficiency ratio, adjusted (2) (3) | 60.2 | % | 63.6 | % | 62.6 | % | 62.7 | % | |||||||
| (Loss) income per common share: | |||||||||||||||
| Basic | $ | (0.41 | ) | $ | 0.87 | $ | 0.63 | $ | 2.71 | ||||||
| Basic, adjusted (2) (3) | $ | 1.12 | $ | 0.87 | $ | 2.96 | $ | 2.71 | |||||||
| Diluted | $ | (0.41 | ) | $ | 0.87 | $ | 0.62 | $ | 2.68 | ||||||
| Diluted, adjusted (2) (3) | $ | 1.11 | $ | 0.87 | $ | 2.93 | $ | 2.68 | |||||||
| Average equity to average assets | 9.75 | % | 8.18 | % | 9.13 | % | 8.09 | % | |||||||
| (1) Annualized for the three and nine months ended September 30, 2024 and 2023. | |||||||||||||||
| (2) Ratio for the three and nine months ended September 30, 2024 has been adjusted for the non-recurring charges. | |||||||||||||||
| (3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein. | |||||||||||||||
| FINANCIAL HIGHLIGHTS (Unaudited) | |||||||
| (continued) | |||||||
| September 30, | December 31, | ||||||
| (Dollars in thousands, except per share amounts) | 2024 | 2023 | |||||
| At period-end: | |||||||
| Total assets | $ | 5,470,589 | $ | 3,064,240 | |||
| Loans, net of allowance for credit losses | 3,931,807 | 2,269,611 | |||||
| Loans held-for-sale, at fair value | 3,561 | 5,816 | |||||
| Securities available for sale, at fair value | 826,828 | 513,519 | |||||
| Total deposits | 4,650,853 | 2,558,814 | |||||
| FHLB advances and other borrowings and Securities sold under agreements to repurchase | 137,310 | 147,285 | |||||
| Subordinated notes and trust preferred debt | 68,510 | 32,093 | |||||
| Shareholders' equity | 516,206 | 265,056 | |||||
| Credit quality and capital ratios (1): | |||||||
| Allowance for credit losses to total loans | 1.25 | % | 1.25 | % | |||
| Total nonaccrual loans to total loans | 0.68 | % | 1.11 | % | |||
| Nonperforming assets to total assets | 0.49 | % | 0.83 | % | |||
| Allowance for credit losses to nonaccrual loans | 184 | % | 112 | % | |||
| Total risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 12.5 | % | 13.0 | % | |||
| Orrstown Bank | 12.3 | % | 12.8 | % | |||
| Tier 1 risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 10.0 | % | 10.8 | % | |||
| Orrstown Bank | 11.1 | % | 11.6 | % | |||
| Tier 1 common equity risk-based capital: | |||||||
| Orrstown Financial Services, Inc. | 9.8 | % | 10.8 | % | |||
| Orrstown Bank | 11.1 | % | 11.6 | % | |||
| Tier 1 leverage capital: | |||||||
| Orrstown Financial Services, Inc. | 8.0 | % | 8.9 | % | |||
| Orrstown Bank | 8.8 | % | 9.5 | % | |||
| Book value per common share | $ | 26.65 | $ | 24.98 | |||
| (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard. | |||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
| (Dollars in thousands, except per share amounts) | September 30, 2024 | December 31, 2023 | |||||
| Assets | |||||||
| Cash and due from banks | $ | 65,064 | $ | 32,586 | |||
| Interest-bearing deposits with banks | 171,716 | 32,575 | |||||
| Cash and cash equivalents | 236,780 | 65,161 | |||||
| Restricted investments in bank stocks | 20,247 | 11,992 | |||||
| Securities available for sale (amortized cost of $845,869 and $549,089 at September 30, 2024 and December 31, 2023, respectively) | 826,828 | 513,519 | |||||
| Loans held for sale, at fair value | 3,561 | 5,816 | |||||
| Loans | 3,981,437 | 2,298,313 | |||||
| Less: Allowance for credit losses | (49,630 | ) | (28,702 | ) | |||
| Net loans | 3,931,807 | 2,269,611 | |||||
| Premises and equipment, net | 49,839 | 29,393 | |||||
| Cash surrender value of life insurance | 142,895 | 73,204 | |||||
| Goodwill | 70,655 | 18,724 | |||||
| Other intangible assets, net | 46,144 | 2,414 | |||||
| Accrued interest receivable | 20,562 | 13,630 | |||||
| Deferred tax assets, net | 38,517 | 22,017 | |||||
| Other assets | 82,754 | 38,759 | |||||
| Total assets | $ | 5,470,589 | $ | 3,064,240 | |||
| Liabilities | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 815,404 | $ | 430,959 | |||
| Interest-bearing | 3,835,449 | 2,127,855 | |||||
| Total deposits | 4,650,853 | 2,558,814 | |||||
| Securities sold under agreements to repurchase and federal funds purchased | 21,932 | 9,785 | |||||
| FHLB advances and other borrowings | 115,378 | 137,500 | |||||
| Subordinated notes and trust preferred debt | 68,510 | 32,093 | |||||
| Other liabilities | 97,710 | 60,992 | |||||
| Total liabilities | 4,954,383 | 2,799,184 | |||||
| Shareholders’ Equity | |||||||
| Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding | — | — | |||||
| Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,723,217 shares issued and 19,373,354 outstanding at September 30, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023 | 1,027 | 583 | |||||
| Additional paid—in capital | 422,177 | 189,027 | |||||
| Retained earnings | 117,311 | 117,667 | |||||
| Accumulated other comprehensive loss | (15,888 | ) | (28,476 | ) | |||
| Treasury stock— 349,863 and 592,209 shares, at cost at September 30, 2024 and December 31, 2023, respectively | (8,421 | ) | (13,745 | ) | |||
| Total shareholders’ equity | 516,206 | 265,056 | |||||
| Total liabilities and shareholders’ equity | $ | 5,470,589 | $ | 3,064,240 | |||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| (Dollars in thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Interest income | |||||||||||||||
| Loans | $ | 70,647 | $ | 32,738 | $ | 142,417 | $ | 92,685 | |||||||
| Investment securities - taxable | 9,005 | 4,459 | 18,588 | 13,244 | |||||||||||
| Investment securities - tax-exempt | 883 | 861 | 2,641 | 2,591 | |||||||||||
| Short-term investments | 2,452 | 633 | 5,272 | 1,349 | |||||||||||
| Total interest income | 82,987 | 38,691 | 168,918 | 109,869 | |||||||||||
| Interest expense | |||||||||||||||
| Deposits | 28,603 | 10,582 | 57,384 | 25,392 | |||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 96 | 31 | 148 | 84 | |||||||||||
| FHLB advances and other borrowings | 1,154 | 1,354 | 3,780 | 3,992 | |||||||||||
| Subordinated notes and trust preferred debt | 1,437 | 505 | 2,925 | 1,513 | |||||||||||
| Total interest expense | 31,290 | 12,472 | 64,237 | 30,981 | |||||||||||
| Net interest income | 51,697 | 26,219 | 104,681 | 78,888 | |||||||||||
| Provision for credit losses | 13,681 | 136 | 14,791 | 1,264 | |||||||||||
| Net interest income after provision for credit losses | 38,016 | 26,083 | 89,890 | 77,624 | |||||||||||
| Noninterest income | |||||||||||||||
| Service charges | 2,360 | 1,260 | 4,843 | 3,668 | |||||||||||
| Interchange income | 1,779 | 963 | 3,651 | 2,921 | |||||||||||
| Swap fee income | 505 | 255 | 1,079 | 451 | |||||||||||
| Wealth management income | 5,037 | 2,826 | 11,451 | 8,395 | |||||||||||
| Mortgage banking activities | 491 | (142 | ) | 1,318 | 448 | ||||||||||
| Investment securities gains (losses) | 271 | 2 | 254 | (8 | ) | ||||||||||
| Other income | 1,943 | 761 | 3,592 | 3,286 | |||||||||||
| Total noninterest income | 12,386 | 5,925 | 26,188 | 19,161 | |||||||||||
| Noninterest expenses | |||||||||||||||
| Salaries and employee benefits | 27,190 | 12,885 | 54,137 | 38,135 | |||||||||||
| Occupancy, furniture and equipment | 4,333 | 2,460 | 9,677 | 7,059 | |||||||||||
| Data processing | 2,046 | 1,248 | 4,548 | 3,666 | |||||||||||
| Advertising and bank promotions | 537 | 332 | 1,709 | 1,656 | |||||||||||
| FDIC insurance | 862 | 477 | 1,722 | 1,500 | |||||||||||
| Professional services | 1,119 | 965 | 2,551 | 2,203 | |||||||||||
| Taxes other than income | 503 | 387 | 1,046 | 847 | |||||||||||
| Intangible asset amortization | 2,464 | 228 | 2,904 | 717 | |||||||||||
| Merger-related expenses | 16,977 | — | 18,784 | — | |||||||||||
| Restructuring expenses | 257 | — | 257 | — | |||||||||||
| Other operating expenses | 4,011 | 1,465 | 8,072 | 5,668 | |||||||||||
| Total noninterest expenses | 60,299 | 20,447 | 105,407 | 61,451 | |||||||||||
| (Loss) income before income tax (benefit) expense | (9,897 | ) | 11,561 | 10,671 | 35,334 | ||||||||||
| Income tax (benefit) expense | (1,994 | ) | 2,535 | 2,305 | 7,314 | ||||||||||
| Net (loss) income | $ | (7,903 | ) | $ | 9,026 | $ | 8,366 | $ | 28,020 | ||||||
| continued | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Share information: | |||||||||||||||
| Basic (loss) earnings per share | $ | (0.41 | ) | $ | 0.87 | $ | 0.63 | $ | 2.71 | ||||||
| Diluted (loss) earnings per share | $ | (0.41 | ) | $ | 0.87 | $ | 0.62 | $ | 2.68 | ||||||
| Dividends paid per share | $ | 0.23 | $ | 0.20 | $ | 0.63 | $ | 0.60 | |||||||
| Weighted average shares - basic | 19,088 | 10,319 | 13,298 | 10,346 | |||||||||||
| Weighted average shares - diluted | 19,226 | 10,405 | 13,441 | 10,440 | |||||||||||
| ANALYSIS OF NET INTEREST INCOME | |||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | |||||||||||||||||||||||||||||||||||||||||||||
| Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | Taxable- | ||||||||||||||||||||||||||||||||||||||||
| (In | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | ||||||||||||||||||||||||||||||||||
| thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||||
| Federal funds sold & interest-bearing bank balances | $ | 184,465 | $ | 2,452 | 5.29 | % | $ | 142,868 | $ | 1,864 | 5.25 | % | $ | 74,523 | $ | 956 | 5.16 | % | $ | 37,873 | $ | 460 | 4.82 | % | $ | 57,778 | $ | 633 | 4.35 | % | |||||||||||||||||||
| Investment securities (1)(2) | 849,700 | 10,123 | 4.77 | 538,451 | 6,114 | 4.54 | 519,851 | 5,694 | 4.39 | 508,891 | 5,890 | 4.63 | 521,234 | 5,548 | 4.26 | ||||||||||||||||||||||||||||||||||
| Loans (1)(3)(4)(5) | 3,989,259 | 70,849 | 7.07 | 2,324,942 | 35,690 | 6.17 | 2,308,103 | 36,382 | 6.34 | 2,286,678 | 34,055 | 5.91 | 2,256,727 | 32,878 | 5.78 | ||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,023,424 | 83,424 | 6.61 | 3,006,261 | 43,668 | 5.84 | 2,902,477 | 43,032 | 5.96 | 2,833,442 | 40,405 | 5.67 | 2,835,739 | 39,059 | 5.47 | ||||||||||||||||||||||||||||||||||
| Other assets | 491,719 | 204,863 | 196,295 | 204,382 | 200,447 | ||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 5,515,143 | $ | 3,211,124 | $ | 3,098,772 | $ | 3,037,824 | $ | 3,036,186 | |||||||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 2,554,743 | 16,165 | 2.52 | $ | 1,649,753 | 10,118 | 2.47 | $ | 1,570,622 | 9,192 | 2.35 | $ | 1,543,575 | 8,333 | 2.14 | $ | 1,541,728 | 7,476 | 1.92 | |||||||||||||||||||||||||||||
| Savings deposits | 283,337 | 148 | 0.21 | 165,467 | 140 | 0.34 | 170,005 | 144 | 0.34 | 178,351 | 153 | 0.34 | 190,817 | 164 | 0.34 | ||||||||||||||||||||||||||||||||||
| Time deposits | 1,014,628 | 12,290 | 4.82 | 481,721 | 5,007 | 4.18 | 428,443 | 4,180 | 3.92 | 392,085 | 3,632 | 3.67 | 357,194 | 2,942 | 3.27 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,852,708 | 28,603 | 2.95 | 2,296,941 | 15,265 | 2.67 | 2,169,070 | 13,516 | 2.51 | 2,114,011 | 12,118 | 2.27 | 2,089,739 | 10,582 | 2.01 | ||||||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 23,075 | 96 | 1.66 | 13,412 | 27 | 0.81 | 12,010 | 25 | 0.85 | 13,874 | 30 | 0.85 | 15,006 | 31 | 0.83 | ||||||||||||||||||||||||||||||||||
| FHLB advances and other borrowings | 115,388 | 1,154 | 3.98 | 115,000 | 1,152 | 4.03 | 137,505 | 1,474 | 4.31 | 127,843 | 1,358 | 4.21 | 128,131 | 1,354 | 4.19 | ||||||||||||||||||||||||||||||||||
| Subordinated notes and trust preferred debt | 68,399 | 1,437 | 8.36 | 32,118 | 734 | 9.19 | 32,100 | 754 | 9.45 | 32,083 | 504 | 6.29 | 32,066 | 505 | 6.29 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 4,059,570 | 31,290 | 3.07 | 2,457,471 | 17,178 | 2.81 | 2,350,685 | 15,769 | 2.70 | 2,287,811 | 14,010 | 2.43 | 2,264,942 | 12,472 | 2.19 | ||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 807,886 | 423,037 | 417,469 | 441,695 | 468,628 | ||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 110,017 | 57,828 | 62,329 | 59,876 | 54,353 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 4,977,473 | 2,938,336 | 2,830,483 | 2,789,382 | 2,787,923 | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 537,670 | 272,788 | 268,289 | 248,442 | 248,263 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 5,515,143 | $ | 3,211,124 | $ | 3,098,772 | $ | 3,037,824 | $ | 3,036,186 | |||||||||||||||||||||||||||||||||||||||
| Taxable-equivalent net interest income / net interest spread | 52,134 | 3.55 | % | 26,490 | 3.02 | % | 27,263 | 3.26 | % | 26,395 | 3.24 | % | 26,587 | 3.29 | % | ||||||||||||||||||||||||||||||||||
| Taxable-equivalent net interest margin | 4.14 | % | 3.54 | % | 3.77 | % | 3.71 | % | 3.73 | % | |||||||||||||||||||||||||||||||||||||||
| Taxable-equivalent adjustment | (437 | ) | (387 | ) | (382 | ) | (377 | ) | (368 | ) | |||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 51,697 | $ | 26,103 | $ | 26,881 | $ | 26,018 | $ | 26,219 | |||||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 124 | % | 122 | % | 123 | % | 124 | % | 125 | % | |||||||||||||||||||||||||||||||||||||||
| NOTES: | |||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. | |||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Average balance of investment securities is computed at fair value. | |||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Average balances include nonaccrual loans. | |||||||||||||||||||||||||||||||||||||||||||||||||
| (4) Interest income on loans includes prepayment and late fees, where applicable. | |||||||||||||||||||||||||||||||||||||||||||||||||
| (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024. | |||||||||||||||||||||||||||||||||||||||||||||||||
| ANALYSIS OF NET INTEREST INCOME | |||||||||||||||||||
| Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) | |||||||||||||||||||
| (continued) | |||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Taxable- | Taxable- | Taxable- | Taxable- | ||||||||||||||||
| Average | Equivalent | Equivalent | Average | Equivalent | Equivalent | ||||||||||||||
| (In thousands) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||
| Assets | |||||||||||||||||||
| Federal funds sold & interest-bearing bank balances | $ | 134,136 | $ | 5,272 | 5.25 | % | $ | 41,861 | $ | 1,349 | 4.31 | % | |||||||
| Investment securities (1)(2) | 636,781 | 21,931 | 4.60 | 524,365 | 16,523 | 4.21 | |||||||||||||
| Loans (1)(3)(4)(5) | 2,878,171 | 142,921 | 6.63 | 2,223,701 | 93,051 | 5.59 | |||||||||||||
| Total interest-earning assets | 3,649,088 | 170,124 | 6.23 | 2,789,927 | 110,923 | 5.31 | |||||||||||||
| Other assets | 298,334 | 196,694 | |||||||||||||||||
| Total assets | $ | 3,947,422 | $ | 2,986,621 | |||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,927,337 | 35,475 | 2.46 | $ | 1,519,013 | 18,611 | 1.64 | |||||||||||
| Savings deposits | 206,552 | 432 | 0.28 | 204,832 | 431 | 0.28 | |||||||||||||
| Time deposits | 642,959 | 21,477 | 4.46 | 320,000 | 6,350 | 2.65 | |||||||||||||
| Total interest-bearing deposits | 2,776,848 | 57,384 | 2.76 | 2,043,845 | 25,392 | 1.66 | |||||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 16,191 | 148 | 1.22 | 14,190 | 84 | 0.79 | |||||||||||||
| FHLB advances and other borrowings | 122,604 | 3,780 | 4.12 | 122,300 | 3,992 | 4.36 | |||||||||||||
| Subordinated notes and trust preferred debt | 44,294 | 2,925 | 8.82 | 32,049 | 1,513 | 6.29 | |||||||||||||
| Total interest-bearing liabilities | 2,959,937 | 64,237 | 2.90 | 2,212,384 | 30,981 | 1.87 | |||||||||||||
| Noninterest-bearing demand deposits | 550,407 | 480,006 | |||||||||||||||||
| Other liabilities | 76,846 | 52,618 | |||||||||||||||||
| Total liabilities | 3,587,190 | 2,745,008 | |||||||||||||||||
| Shareholders' equity | 360,232 | 241,613 | |||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,947,422 | $ | 2,986,621 | |||||||||||||||
| Taxable-equivalent net interest income / net interest spread | 105,887 | 3.33 | % | 79,942 | 3.44 | % | |||||||||||||
| Taxable-equivalent net interest margin | 3.88 | % | 3.83 | % | |||||||||||||||
| Taxable-equivalent adjustment | (1,206 | ) | (1,054 | ) | |||||||||||||||
| Net interest income | $ | 104,681 | $ | 78,888 | |||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 123 | % | 126 | % | |||||||||||||||
| NOTES TO ANALYSIS OF NET INTEREST INCOME: | |||||||||||||||||||
| (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate. | |||||||||||||||||||
| (2) Average balance of investment securities is computed at fair value. | |||||||||||||||||||
| (3) Average balances include nonaccrual loans. | |||||||||||||||||||
| (4) Interest income on loans includes prepayment and late fees, where applicable. | |||||||||||||||||||
| (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status for the nine months ended September 30, 2024. | |||||||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (In thousands) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||
| Profitability for the quarter: | |||||||||||||||||||
| Net interest income | $ | 51,697 | $ | 26,103 | $ | 26,881 | $ | 26,018 | $ | 26,219 | |||||||||
| Provision for credit losses | 13,681 | 812 | 298 | 418 | 136 | ||||||||||||||
| Noninterest income | 12,386 | 7,172 | 6,630 | 6,491 | 5,925 | ||||||||||||||
| Noninterest expenses | 60,299 | 22,639 | 22,469 | 22,392 | 20,447 | ||||||||||||||
| (Loss) income before income taxes | (9,897 | ) | 9,824 | 10,744 | 9,699 | 11,561 | |||||||||||||
| Income tax (benefit) expense | (1,994 | ) | 2,086 | 2,213 | 2,056 | 2,535 | |||||||||||||
| Net (loss) income | $ | (7,903 | ) | $ | 7,738 | $ | 8,531 | $ | 7,643 | $ | 9,026 | ||||||||
| Financial ratios: | |||||||||||||||||||
| Return on average assets (1) | (0.57)% | 0.97 | % | 1.11 | % | 1.00 | % | 1.18 | % | ||||||||||
| Return on average assets, adjusted (1)(2)(3) | 1.55 | % | 1.09 | % | 1.19 | % | 1.13 | % | 1.18 | % | |||||||||
| Return on average equity (1) | (5.85)% | 11.41 | % | 12.79 | % | 12.21 | % | 14.42 | % | ||||||||||
| Return on average equity, adjusted (1)(2)(3) | 15.85 | % | 12.88 | % | 13.79 | % | 13.77 | % | 14.42 | % | |||||||||
| Net interest margin (1) | 4.14 | % | 3.54 | % | 3.77 | % | 3.71 | % | 3.73 | % | |||||||||
| Efficiency ratio | 94.1 | % | 68.0 | % | 67.0 | % | 68.9 | % | 63.6 | % | |||||||||
| Efficiency ratio, adjusted (2)(3) | 60.2 | % | 64.6 | % | 65.0 | % | 65.6 | % | 63.6 | % | |||||||||
| Per share information: | |||||||||||||||||||
| (Loss) income per common share: | |||||||||||||||||||
| Basic | $ | (0.41 | ) | $ | 0.74 | $ | 0.82 | $ | 0.74 | $ | 0.87 | ||||||||
| Basic, adjusted (2)(3) | 1.12 | 0.84 | 0.89 | 0.84 | 0.87 | ||||||||||||||
| Diluted | (0.41 | ) | 0.73 | 0.81 | 0.73 | 0.87 | |||||||||||||
| Diluted, adjusted (2)(3) | 1.11 | 0.83 | 0.88 | 0.83 | 0.87 | ||||||||||||||
| Book value | 26.65 | 25.97 | 25.38 | 24.98 | 22.90 | ||||||||||||||
| Tangible book value(3) | 21.12 | 24.08 | 23.47 | 23.03 | 20.94 | ||||||||||||||
| Cash dividends paid | 0.23 | 0.20 | 0.20 | 0.20 | 0.20 | ||||||||||||||
| Average basic shares | 19,088 | 10,393 | 10,349 | 10,321 | 10,319 | ||||||||||||||
| Average diluted shares | 19,226 | 10,553 | 10,482 | 10,419 | 10,405 | ||||||||||||||
| (1) Annualized. | |||||||||||||||||||
| (2) Ratio has been adjusted for non-recurring expenses for the three months ended September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023. | |||||||||||||||||||
| (3) Non-GAAP based financial measure. Please refer to Appendix A - Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein. | |||||||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | ||||||||||||||||||
| (continued) | ||||||||||||||||||
| (In thousands) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||
| Noninterest income: | ||||||||||||||||||
| Service charges | $ | 2,360 | $ | 1,283 | $ | 1,200 | $ | 1,198 | $ | 1,260 | ||||||||
| Interchange income | 1,779 | 961 | 911 | 952 | 963 | |||||||||||||
| Swap fee income | 505 | 375 | 199 | 588 | 255 | |||||||||||||
| Wealth management income | 5,037 | 3,312 | 3,102 | 2,945 | 2,826 | |||||||||||||
| Mortgage banking activities | 491 | 369 | 458 | 143 | (142 | ) | ||||||||||||
| Other income | 1,943 | 884 | 765 | 704 | 761 | |||||||||||||
| Investment securities gains (losses) | 271 | (12 | ) | (5 | ) | (39 | ) | 2 | ||||||||||
| Total noninterest income | $ | 12,386 | $ | 7,172 | $ | 6,630 | $ | 6,491 | $ | 5,925 | ||||||||
| Noninterest expenses: | ||||||||||||||||||
| Salaries and employee benefits | $ | 27,190 | $ | 13,195 | $ | 13,752 | $ | 12,848 | $ | 12,885 | ||||||||
| Occupancy, furniture and equipment | 4,333 | 2,705 | 2,639 | 2,534 | 2,460 | |||||||||||||
| Data processing | 2,046 | 1,237 | 1,265 | 1,247 | 1,248 | |||||||||||||
| Advertising and bank promotions | 537 | 774 | 398 | 501 | 332 | |||||||||||||
| FDIC insurance | 862 | 419 | 441 | 460 | 477 | |||||||||||||
| Professional services | 1,119 | 801 | 631 | 702 | 965 | |||||||||||||
| Taxes other than income | 503 | 49 | 494 | 203 | 387 | |||||||||||||
| Intangible asset amortization | 2,464 | 215 | 225 | 236 | 228 | |||||||||||||
| Merger-related expenses | 16,977 | 1,135 | 672 | 1,059 | — | |||||||||||||
| Restructuring expenses | 257 | — | — | — | — | |||||||||||||
| Other operating expenses | 4,011 | 2,109 | 1,952 | 2,602 | 1,465 | |||||||||||||
| Total noninterest expenses | $ | 60,299 | $ | 22,639 | $ | 22,469 | $ | 22,392 | $ | 20,447 | ||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (continued) | |||||||||||||||||||
| (In thousands) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||
| Balance Sheet at quarter end: | |||||||||||||||||||
| Cash and cash equivalents | $ | 236,780 | $ | 132,509 | $ | 182,722 | $ | 65,161 | $ | 94,939 | |||||||||
| Restricted investments in bank stocks | 20,247 | 11,147 | 11,453 | 11,992 | 12,987 | ||||||||||||||
| Securities available for sale | 826,828 | 529,082 | 514,909 | 513,519 | 495,162 | ||||||||||||||
| Loans held for sale, at fair value | 3,561 | 1,562 | 535 | 5,816 | 6,448 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||
| Owner occupied | 622,726 | 371,301 | 364,280 | 373,757 | 376,350 | ||||||||||||||
| Non-owner occupied | 1,164,501 | 710,477 | 707,871 | 694,638 | 630,514 | ||||||||||||||
| Multi-family | 276,296 | 151,542 | 147,773 | 150,675 | 143,437 | ||||||||||||||
| Non-owner occupied residential | 190,786 | 89,156 | 91,858 | 95,040 | 100,391 | ||||||||||||||
| Commercial and industrial | 601,469 | 374,976 | 365,524 | 367,085 | 374,190 | ||||||||||||||
| Acquisition and development: | |||||||||||||||||||
| 1-4 family residential construction | 56,383 | 32,439 | 22,277 | 24,516 | 25,642 | ||||||||||||||
| Commercial and land development | 262,317 | 129,883 | 118,010 | 115,249 | 153,279 | ||||||||||||||
| Municipal | 27,960 | 10,594 | 10,925 | 9,812 | 10,334 | ||||||||||||||
| Total commercial loans | 3,202,438 | 1,870,368 | 1,828,518 | 1,830,772 | 1,814,137 | ||||||||||||||
| Residential mortgage: | |||||||||||||||||||
| First lien | 451,195 | 271,153 | 270,748 | 266,239 | 248,335 | ||||||||||||||
| Home equity – term | 6,508 | 4,633 | 4,966 | 5,078 | 5,223 | ||||||||||||||
| Home equity – lines of credit | 303,165 | 192,736 | 189,966 | 186,450 | 188,736 | ||||||||||||||
| Installment and other loans | 18,131 | 8,713 | 8,875 | 9,774 | 10,405 | ||||||||||||||
| Total loans | 3,981,437 | 2,347,603 | 2,303,073 | 2,298,313 | 2,266,836 | ||||||||||||||
| Allowance for credit losses | (49,630 | ) | (29,864 | ) | (29,165 | ) | (28,702 | ) | (28,278 | ) | |||||||||
| Net loans held for investment | 3,931,807 | 2,317,739 | 2,273,908 | 2,269,611 | 2,238,558 | ||||||||||||||
| Goodwill | 70,655 | 18,724 | 18,724 | 18,724 | 18,724 | ||||||||||||||
| Other intangible assets, net | 46,144 | 1,974 | 2,189 | 2,414 | 2,650 | ||||||||||||||
| Total assets | 5,470,589 | 3,198,782 | 3,183,331 | 3,064,240 | 3,054,435 | ||||||||||||||
| Total deposits | 4,650,853 | 2,702,884 | 2,695,951 | 2,558,814 | 2,546,435 | ||||||||||||||
| FHLB advances and other borrowings and and Securities sold under agreements to repurchase | 137,310 | 129,625 | 127,099 | 147,285 | 175,241 | ||||||||||||||
| Subordinated notes and trust preferred debt | 68,510 | 32,128 | 32,111 | 32,093 | 32,076 | ||||||||||||||
| Total shareholders' equity | 516,206 | 278,376 | 271,682 | 265,056 | 243,080 | ||||||||||||||
| HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) | |||||||||||||||||||
| (continued) | |||||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Capital and credit quality measures(1): | |||||||||||||||||||
| Total risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 12.5 | % | 13.3 | % | 13.4 | % | 13.0 | % | 13.0 | % | |||||||||
| Orrstown Bank | 12.3 | % | 13.1 | % | 13.1 | % | 12.8 | % | 12.5 | % | |||||||||
| Tier 1 risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 10.0 | % | 11.1 | % | 11.2 | % | 10.8 | % | 10.6 | % | |||||||||
| Orrstown Bank | 11.1 | % | 12.0 | % | 11.9 | % | 11.6 | % | 11.4 | % | |||||||||
| Tier 1 common equity risk-based capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 9.8 | % | 11.1 | % | 11.2 | % | 10.8 | % | 10.6 | % | |||||||||
| Orrstown Bank | 11.1 | % | 12.0 | % | 11.9 | % | 11.6 | % | 11.4 | % | |||||||||
| Tier 1 leverage capital: | |||||||||||||||||||
| Orrstown Financial Services, Inc. | 8.0 | % | 8.9 | % | 9.0 | % | 8.9 | % | 8.7 | % | |||||||||
| Orrstown Bank | 8.8 | % | 9.5 | % | 9.6 | % | 9.5 | % | 9.3 | % | |||||||||
| Average equity to average assets | 9.75 | % | 8.50 | % | 8.66 | % | 8.18 | % | 8.18 | % | |||||||||
| Allowance for credit losses to total loans | 1.25 | % | 1.27 | % | 1.27 | % | 1.25 | % | 1.25 | % | |||||||||
| Total nonaccrual loans to total loans | 0.68 | % | 0.36 | % | 0.56 | % | 1.11 | % | 0.98 | % | |||||||||
| Nonperforming assets to total assets | 0.49 | % | 0.26 | % | 0.40 | % | 0.83 | % | 0.73 | % | |||||||||
| Allowance for credit losses to nonaccrual loans | 184 | % | 357 | % | 226 | % | 112 | % | 127 | % | |||||||||
| Other information: | |||||||||||||||||||
| Net charge-offs (recoveries) | $ | 269 | $ | 113 | $ | (42 | ) | $ | (6 | ) | $ | 241 | |||||||
| Classified loans | 105,465 | 48,722 | 48,997 | 55,030 | 33,593 | ||||||||||||||
| Nonperforming and other risk assets: | |||||||||||||||||||
| Nonaccrual loans | 26,927 | 8,363 | 12,886 | 25,527 | 22,324 | ||||||||||||||
| Other real estate owned | 138 | — | — | — | — | ||||||||||||||
| Total nonperforming assets | 27,065 | 8,363 | 12,886 | 25,527 | 22,324 | ||||||||||||||
| Financial difficulty modifications still accruing | 9,497 | — | — | 9 | — | ||||||||||||||
| Loans past due 90 days or more and still accruing | 337 | 187 | 99 | 66 | 277 | ||||||||||||||
| Total nonperforming and other risk assets | $ | 36,899 | $ | 8,550 | $ | 12,985 | $ | 25,602 | $ | 22,601 | |||||||||
| (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses ("CECL") to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard. | |||||||||||||||||||
Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations
Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges.
As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $116.8 million and $21.1 million at September 30, 2024 and December 31, 2023, respectively. In addition, during the three months ended September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, the Company incurred $17.0 million, $1.1 million, $0.7 million and $1.1 million in merger-related expenses, respectively. During the three months ended September 30, 2024, the Company incurred other non-recurring charges totaling $20.2 million.
Tangible book value per common share and the impact of the non-recurring expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.
The following tables present the computation of each non-GAAP based measure:
(In thousands)
| Tangible Book Value per Common Share | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Shareholders' equity (most directly comparable GAAP-based measure) | $ | 516,206 | $ | 278,376 | $ | 271,682 | $ | 265,056 | $ | 243,080 | ||||||||||
| Less: Goodwill | 70,655 | 18,724 | 18,724 | 18,724 | 18,724 | |||||||||||||||
| Other intangible assets | 46,144 | 1,974 | 2,189 | 2,414 | 2,650 | |||||||||||||||
| Related tax effect | (9,690 | ) | (415 | ) | (460 | ) | (507 | ) | (557 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 409,097 | $ | 258,093 | $ | 251,229 | $ | 244,425 | $ | 222,263 | ||||||||||
| Common shares outstanding | 19,373 | 10,720 | 10,705 | 10,612 | 10,613 | |||||||||||||||
| Book value per share (most directly comparable GAAP-based measure) | $ | 26.65 | $ | 25.97 | $ | 25.38 | $ | 24.98 | $ | 22.90 | ||||||||||
| Intangible assets per share | 5.53 | 1.89 | 1.91 | 1.95 | 1.96 | |||||||||||||||
| Tangible book value per share (non-GAAP) | $ | 21.12 | $ | 24.08 | $ | 23.47 | $ | 23.03 | $ | 20.94 | ||||||||||
| (In thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| Adjusted Ratios for Non-recurring Charges | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Net (loss) income (A) - most directly comparable GAAP-based measure | $ | (7,903 | ) | $ | 7,738 | $ | 8,531 | $ | 8,531 | $ | 9,026 | $ | 8,366 | $ | 28,020 | ||||||||||||
| Plus: Merger-related expenses (B) | 16,977 | 1,135 | 672 | 672 | — | 18,784 | — | ||||||||||||||||||||
| Plus: Executive retirement expenses (B) | 4,758 | — | — | — | — | 4,758 | — | ||||||||||||||||||||
| Plus: Provision for credit losses on non-PCD loans (B) | 15,504 | — | — | — | — | 15,504 | — | ||||||||||||||||||||
| Less: Related tax effect (C) | (7,915 | ) | (139 | ) | (1 | ) | (1 | ) | — | (8,056 | ) | — | |||||||||||||||
| Adjusted net (loss) income (D=A+B-C) - Non-GAAP | $ | 21,421 | $ | 8,734 | $ | 9,202 | $ | 9,202 | $ | 9,026 | $ | 39,356 | $ | 28,020 | |||||||||||||
| Average assets (E) | $ | 5,515,143 | $ | 3,211,124 | $ | 3,098,772 | $ | 3,098,772 | $ | 3,036,186 | $ | 3,947,422 | $ | 2,986,621 | |||||||||||||
| Return on average assets (= A / E) - most directly comparable GAAP-based measure (1) | (0.57)% | 0.97 | % | 1.11 | % | 1.11 | % | 1.18 | % | 0.28 | % | 1.25 | % | ||||||||||||||
| Return on average assets, adjusted (= D / E) - Non-GAAP (1) | 1.55 | % | 1.09 | % | 1.19 | % | 1.19 | % | 1.18 | % | 1.33 | % | 1.25 | % | |||||||||||||
| Average equity (F) | $ | 537,670 | $ | 272,788 | $ | 268,289 | $ | 268,289 | $ | 248,263 | $ | 360,232 | $ | 241,613 | |||||||||||||
| Return on average equity (= A / F) - most directly comparable GAAP-based measure (1) | (5.85)% | 11.41 | % | 12.79 | % | 12.79 | % | 14.42 | % | 3.10 | % | 15.51 | % | ||||||||||||||
| Return on average equity, adjusted (= D / F) - Non-GAAP (1) | 15.85 | % | 12.88 | % | 13.79 | % | 13.79 | % | 14.42 | % | 14.59 | % | 15.51 | % | |||||||||||||
| Weighted average shares - basic (G) - most directly comparable GAAP-based measure | 19,088 | 10,393 | 10,349 | 10,349 | 10,319 | 13,298 | 10,346 | ||||||||||||||||||||
| Basic (loss) earnings per share (= A / G) - most directly comparable GAAP-based measure | $ | (0.41 | ) | $ | 0.74 | $ | 0.82 | $ | 0.82 | $ | 0.87 | $ | 0.63 | $ | 2.71 | ||||||||||||
| Basic earnings per share, adjusted (= D / G) - Non-GAAP | $ | 1.12 | $ | 0.84 | $ | 0.89 | $ | 0.89 | $ | 0.87 | $ | 2.96 | $ | 2.71 | |||||||||||||
| Weighted average shares - diluted (H) - most directly comparable GAAP-based measure | 19,226 | 10,553 | 10,482 | 10,482 | 10,405 | 13,441 | 10,440 | ||||||||||||||||||||
| Diluted (loss) earnings per share (= A / H) - most directly comparable GAAP-based measure | $ | (0.41 | ) | $ | 0.73 | $ | 0.81 | $ | 0.81 | $ | 0.87 | $ | 0.62 | $ | 2.68 | ||||||||||||
| Diluted earnings per share, adjusted (= D / H) - Non-GAAP | $ | 1.11 | $ | 0.83 | $ | 0.88 | $ | 0.88 | $ | 0.87 | $ | 2.93 | $ | 2.68 | |||||||||||||
| continued | |||||||||||||||||||||||||||
| (1) Annualized | |||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||
| Noninterest expense (I) - most directly comparable GAAP-based measure | $ | 60,299 | $ | 22,639 | $ | 22,469 | $ | 22,469 | $ | 20,447 | $ | 105,407 | $ | 61,451 | |||||||||||||
| Less: Merger-related expenses (B) | (16,977 | ) | (1,135 | ) | (672 | ) | (672 | ) | — | (18,784 | ) | — | |||||||||||||||
| Less: Executive retirement expenses (B) | (4,758 | ) | — | — | — | — | (4,758 | ) | — | ||||||||||||||||||
| Adjusted noninterest expense (J = I - B) - Non-GAAP | $ | 38,564 | $ | 21,504 | $ | 21,797 | $ | 21,797 | $ | 20,447 | $ | 81,865 | $ | 61,451 | |||||||||||||
| Net interest income (K) | $ | 51,697 | $ | 26,103 | $ | 26,881 | $ | 26,881 | $ | 26,219 | $ | 104,681 | $ | 78,888 | |||||||||||||
| Noninterest income (L) | 12,386 | 7,172 | 6,630 | 6,630 | 5,925 | 26,188 | 19,161 | ||||||||||||||||||||
| Total operating income (M = K + L) | $ | 64,083 | $ | 33,275 | $ | 33,511 | $ | 33,511 | $ | 32,144 | $ | 130,869 | $ | 98,049 | |||||||||||||
| Efficiency ratio (= I / M) - most directly comparable GAAP-based measure | 94.1 | % | 68.0 | % | 67.0 | % | 67.0 | % | 63.6 | % | 80.5 | % | 62.7 | % | |||||||||||||
| Efficiency ratio, adjusted (= J / M) - Non-GAAP | 60.2 | % | 64.6 | % | 65.0 | % | 65.0 | % | 63.6 | % | 62.6 | % | 62.7 | % | |||||||||||||
| (1) Annualized | |||||||||||||||||||||||||||
Appendix B- Investment Portfolio Concentrations
The following table summarizes the credit ratings and collateral associated with the Company's investment security portfolio, excluding equity securities, at September 30, 2024:
(In thousands)
| Sector | Portfolio Mix | Amortized Book | Fair Value | Credit Enhancement | AAA | AA | A | BBB | NR | Collateral / Guarantee Type | ||||||||||||||||||
| Unsecured ABS | — | % | $ | 3,199 | $ | 2,975 | 27 | % | — | % | — | % | — | % | — | % | 100 | % | Unsecured Consumer Debt | |||||||||
| Student Loan ABS | 1 | 4,348 | 4,283 | 27 | — | — | — | — | 100 | Seasoned Student Loans | ||||||||||||||||||
| Federal Family Education Loan ABS | 10 | 83,199 | 82,962 | 11 | 7 | 80 | — | 13 | — | Federal Family Education Loan (1) | ||||||||||||||||||
| PACE Loan ABS | — | 2,034 | 1,813 | 7 | 100 | — | — | — | — | PACE Loans (2) | ||||||||||||||||||
| Non-Agency CMBS | 2 | 13,750 | 14,045 | 26 | — | — | — | — | 100 | |||||||||||||||||||
| Non-Agency RMBS | 2 | 16,749 | 14,212 | 16 | 100 | — | — | — | — | Reverse Mortgages (3) | ||||||||||||||||||
| Municipal - General Obligation | 12 | 99,779 | 93,395 | 11 | 82 | 7 | — | — | ||||||||||||||||||||
| Municipal - Revenue | 14 | 121,130 | 112,705 | — | 82 | 12 | — | 6 | ||||||||||||||||||||
| SBA ReRemic (5) | — | 2,427 | 2,409 | — | 100 | — | — | — | SBA Guarantee (4) | |||||||||||||||||||
| Small Business Administration | 1 | 6,632 | 7,042 | — | 100 | — | — | — | SBA Guarantee (4) | |||||||||||||||||||
| Agency MBS | 18 | 154,058 | 154,762 | — | 100 | — | — | — | Residential Mortgages (4) | |||||||||||||||||||
| Agency CMO | 38 | 316,385 | 315,677 | — | 100 | — | — | — | ||||||||||||||||||||
| U.S. Treasury securities | 2 | 20,047 | 18,373 | — | 100 | — | — | — | U.S. Government Guarantee (4) | |||||||||||||||||||
| Corporate bonds | — | 1,932 | 1,975 | — | — | 52 | 48 | — | ||||||||||||||||||||
| 100 | % | $ | 845,669 | $ | 826,628 | 4 | % | 89 | % | 3 | % | 1 | % | 3 | % | |||||||||||||
| (1) 97% guaranteed by U.S. government | ||||||||||||||||||||||||||||
| (2) PACE acronym represents Property Assessed Clean Energy loans | ||||||||||||||||||||||||||||
| (3) Non-agency reverse mortgages with current structural credit enhancements | ||||||||||||||||||||||||||||
| (4) Guaranteed by U.S. government or U.S. government agencies | ||||||||||||||||||||||||||||
| (5) SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits | ||||||||||||||||||||||||||||
| Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor's, Moody's, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor's rates U.S. government obligations at AA+. | ||||||||||||||||||||||||||||
About the Company
With $5.5 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company's lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF, Financial). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. 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. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company's industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control. 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 mitigation of losses in the future. Factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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; changes in interest rates; the diversion of management's attention from ongoing business operations and opportunities; 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 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; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus (the “Merger”) are not realized when expected or at all; the possibility that the Merger may be more expensive to complete than anticipated; the possibility that revenues following the Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the ability to complete the integration of the two companies successfully; the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the Merger; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.
The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company's behalf may issue.
The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.
