-
Orrstown Financial Services, Inc. Reports Third Quarter 2022 Results
来源: Nasdaq GlobeNewswire / 18 10月 2022 15:03:41 America/Chicago
- Net income of $5.4 million and diluted earnings per share of $0.52 for the quarter ended September 30, 2022 compared to net income of $8.9 million and diluted earnings per share of $0.83 for the quarter ended June 30, 2022;
- Excluding the impact from the previously announced restructuring charge of $3.2 million, net income and diluted earnings per share were $7.9 million and $0.75(1) for the third quarter of 2022, respectively;
- Net interest income increased to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022 despite a decline of $1.4 million in Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loan income over the same period;
- Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022; net interest margin has increased for five consecutive quarters; strong margin momentum continues as a result of loan growth and the rising interest rate environment;
- Third quarter commercial loan growth, excluding SBA PPP loans, was $57.7 million, or 14% annualized;
- Deposits grew by $27.2 million, or 4% annualized, during the third quarter of 2022;
- Noninterest income of $6.1 million in the third quarter of 2022 compared to $7.2 million in the second quarter of 2022; significant increases in mortgage rates caused a decrease in the fair value of residential mortgages held-for-sale; also contributing to the decline was a reduction in secondary market activity;
- Noninterest expenses increased by $4.6 million to $23.4 million in the third quarter of 2022 from $18.8 million in the second quarter of 2022; excluding the impact from the restructuring charge, noninterest expenses increased to $20.3 million(1) during the third quarter of 2022; salaries and benefits increased during the third quarter of 2022 due primarily to the impact of wage pressures and incentive compensation, but are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter;
- Provision for loan losses of $1.5 million in the third quarter of 2022 compared to $1.8 million in the second quarter of 2022;
- The Board of Directors declared a cash dividend of $0.19 per common share, payable November 7, 2022, to shareholders of record as of October 31, 2022;
- Strategic initiatives were previously announced to drive long-term growth and improve operating efficiencies through branch closures and staffing model adjustments, which resulted in a pre-tax restructuring charge of $3.2 million during the third quarter of 2022.
SHIPPENSBURG, Pa., Oct. 18, 2022 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown" or the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended September 30, 2022. Net income totaled $5.4 million for the three months ended September 30, 2022, compared with $8.9 million for the three months ended June 30, 2022 and $7.2 million for the three months ended September 30, 2021. Diluted earnings per share totaled $0.52 for the three months ended September 30, 2022, compared with $0.83 for the three months ended June 30, 2022 and $0.65 for the three months ended September 30, 2021. Excluding the impact from the restructuring charge, net income and diluted earnings per share were $7.9 million and $0.75, respectively, for the third quarter of 2022(1).
“Late in the third quarter, we announced initiatives designed to focus the organization on the rapidly changing banking environment and improve operating efficiencies. These initiatives included the closing of five branch locations and staffing model adjustments. We intend to utilize a portion of the savings generated from these initiatives to make additional investments in technology to further optimize the Bank's digital banking experience and address ongoing wage pressures. We expect that these initiatives will generate meaningful efficiencies in 2023 and forward to drive Orrstown’s long-term growth,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.
(1) Non-GAAP measures. See Appendix A for additional information.
“As expected, these initiatives negatively affected our third quarter results. However, we believe that our core operating results remained strong and expect to continue to benefit from the current interest rate environment. Net interest margin has expanded for several quarters and commercial and consumer loan growth continued during the quarter. Our asset quality metrics compare favorably to historical measurements. While our mortgage banking operations have been negatively impacted by rapid interest rate increases, we continue to focus on strengthening other fee income sources. For example, our wealth management team has sustained its level of income generation despite a significant downturn in the equity markets. The diversification of revenue sources will be critical going forward. We remain focused on enhancing our earnings power through measured growth in an economic environment that is expected to be challenging.”
DISCUSSION OF RESULTS
Balance Sheet
Loans
Excluding SBA PPP loans, total loans increased by $83.5 million from June 30, 2022 to September 30, 2022, or 17% annualized. SBA PPP loans, net of deferred fees and costs, declined by $13.2 million to $17.0 million at September 30, 2022 from $30.2 million at June 30, 2022 due to forgiveness activity. Net deferred SBA PPP fees of $0.3 million remain at September 30, 2022. Commercial loans, excluding SBA PPP loans, increased by $57.7 million, or 14% annualized, from June 30, 2022 to September 30, 2022. Loans held for investment, which includes SBA PPP loans, increased by $70.3 million from June 30, 2022 to September 30, 2022, or 14% annualized, due to net commercial and consumer loan growth.
The first lien residential mortgage portfolio grew by $18.2 million, or 36% annualized, in the three months ended September 30, 2022 from jumbo and adjustable-rate mortgage production. Home equity lines of credit increased by $9.0 million, or 21% annualized, in the three months ended September 30, 2022.
Investment Securities
Investment securities decreased by $9.1 million to $510.1 million at September 30, 2022 compared to $519.2 million at June 30, 2022. During the third quarter of 2022, the Bank purchased mortgage-backed securities totaling $10.1 million and asset-backed securities totaling $8.0 million. These purchases were more than offset by an increase in net unrealized losses of $17.3 million, which resulted from market interest rate increases, and normal paydown activity of $9.0 million. See Appendix B for a summary of the Bank's investment securities at September 30, 2022, highlighting the concentrations, credit ratings and credit enhancement levels of the investment securities portfolio at such date.
Deposits
Deposits increased by $27.2 million, or 4% annualized, totaling approximately $2.5 billion at both September 30, 2022 and June 30, 2022. This increase resulted primarily from seasonality of public fund balances as well as retail deposit generation partially offset by certificate of deposit runoff. In the third quarter of 2022, interest-bearing demand deposits increased by $49.0 million, or 21% annualized. There were decreases in certificates of deposits of $12.1 million, or 18% annualized, non-interest-bearing demand deposits of $7.2 million, or 5% annualized, and money market and savings deposits of $2.5 million, or 1% annualized. The Bank's loan-to-deposit ratio was 83% at September 30, 2022, an increase of 2% from June 30, 2022 due to loan growth.
Income Statement
Net Interest Income and Margin
Net interest income increased by $1.4 million to $25.5 million for the three months ended September 30, 2022 compared to $24.1 million for the three months ended June 30, 2022. Net interest margin on a tax equivalent basis increased to 3.92% in the third quarter of 2022 from 3.68% in the second quarter of 2022. The increase in net interest margin was a result of further deployment of cash into loans and investments as well as the impact of the rising interest rates on the loan and investment securities portfolios, partially offset by the increase in the cost of funds.
Interest income on loans, for the three months ended September 30, 2022, increased by $1.1 million to $23.2 million compared to $22.1 million for the three months ended June 30, 2022. Loan growth and higher interest rates were the primary drivers of this increase. Interest income on loans for the three months ended September 30, 2022 included prepayment fee income of $0.1 million, a decrease of $0.3 million, from the three months ended June 30, 2022. Similarly, accretion on acquired loans decreased by $0.3 million to $0.1 million for the three months ended September 30, 2022 compared to the three months ended June 30, 2022 due to fewer payoffs and declining prepayment speed assumptions.
Interest income recognized on SBA PPP loans totaled $0.5 million in the three months ended September 30, 2022 compared to $1.9 million in the three months ended June 30, 2022. The SBA PPP loan portfolio averaged $25.0 million in the three months ended September 30, 2022 compared to $72.5 million in the three months ended June 30, 2022, which reflects continued forgiveness from the SBA.
Interest income on investment securities increased by $1.0 million to $4.4 million in the three months ended September 30, 2022 from $3.4 million for the second quarter of 2022. The increase reflects the impact from rising interest rates on investments for which resets occur at various frequencies and the additional yield generated from investments purchased at the end of the second quarter and into the third quarter of 2022.
Average cash and cash equivalents decreased from $131.4 million in the three months ended June 30, 2022 to $38.1 million in the three months ended September 30, 2022. The decrease reflects the deployment of excess cash balances into loans and investment securities.
Provision for Loan Losses
The Company recorded a provision for loan losses of $1.5 million for the three months ended September 30, 2022 compared to $1.8 million for the three months ended June 30, 2022 primarily due to increases in both commercial and consumer loans during the third quarter of 2022. Net charge-offs were $70 thousand for the three months ended September 30, 2022 compared to net charge-offs of $4 thousand for the three months ended June 30, 2022. The allowance for loan losses totaled $24.7 million at September 30, 2022, compared with $23.3 million at June 30, 2022, and the allowance for loan losses to total loans increased to 1.18% at September 30, 2022 from 1.15% from June 30, 2022.
Asset quality metrics in the third quarter of 2022 compare favorably to historical measurements. The ratio of nonperforming loans to gross loans improved to 0.25% at September 30, 2022, a decrease of 0.02%, from 0.27% at June 30, 2022. Classified loans remained consistent at $19.6 million at both September 30, 2022 and June 30, 2022. Criticized loans increased from $34.1 million at June 30, 2022 to $54.9 million at September 30, 2022 primarily due to downgrades for one borrower within Acquisition and Development and the other borrower within the Commercial and Industrial loan categories. The ratio of the allowance for loan losses to nonaccrual loans increased to 466% at September 30, 2022 from 432% at June 30, 2022. Management believes the allowance for loan losses to be adequate based on current asset quality metrics and economic conditions.
Noninterest Income
Noninterest income totaled $6.1 million in the three months ended September 30, 2022 compared with $7.2 million in the three months ended June 30, 2022.
Mortgage banking income decreased by $1.5 million from income of $0.5 million in the second quarter of 2022 to a loss of $1.0 million in the third quarter of 2022. Market conditions, including rapidly increasing mortgage interest rates and low housing inventory, caused a significant decline in the fair value of the held-for-sale mortgages. In addition, construction has been prolonged in part due to supply chain challenges, which have delayed the marketability of mortgages for sale. The impact was a fair value reduction of $1.4 million in the three months ended September 30, 2022. The difficult mortgage market also slowed residential mortgage loan production, thereby causing corresponding reductions in the residential mortgage loan pipeline and secondary market sales during the three months ended September 30, 2022. Mortgage loans sold totaled $12.7 million in the third quarter of 2022 compared with $22.9 million in the second quarter of 2022.
Swap fee income decreased by $0.6 million to $0.2 million for the three months ended September 30, 2022 compared to $0.8 million for the three months ended June 30, 2022. Swap fee income fluctuates based on market conditions and client demand.
Other income increased by $0.9 million to $1.1 million for the three months ended September 30, 2022 from $0.2 million during the three months ended June 30, 2022. The third quarter of 2022 included income from distributions on investments in non-housing limited partnerships totaling $1.0 million.
Noninterest Expenses
Noninterest expenses increased by $4.6 million to $23.4 million in the three months ended September 30, 2022 from $18.8 million in the three months ended June 30, 2022. During the third quarter of 2022, the Company announced that five branch locations would be closing and staffing model adjustments would be made to drive long-term growth and improve operating efficiencies in 2023 and forward. As a result of these initiatives, the Company recorded a pre-tax restructuring charge of $3.2 million, which consisted of building and fixed asset write-offs of $1.9 million and early retirement/severance costs of $1.3 million.
Salaries and benefits expense increased by $1.4 million to $12.7 million in the three months ended September 30, 2022 from $11.3 million in the three months ended June 30, 2022 due to the filling of several vacancies, higher healthcare costs and merit-based salary and incentive compensation increases. These expenses are expected to decline in 2023 as a result of the staffing model adjustments made during the quarter.
Advertising and bank promotions expense decreased by $0.6 million to $0.3 million in the three months ended September 30, 2022 from $0.9 million for the three months ended June 30, 2022 due to $0.5 million in contributions to the Pennsylvania Educational Improvement Tax Credit Program during the second quarter of 2022. Taxes other than income increased by $0.4 million to $0.5 million in the three months ended September 30, 2022. This increase reflects the tax credits recognized on these contributions during the second quarter of 2022.
Income Taxes
The Company's effective tax rate for the second quarter of 2022 was 17.6% compared with 17.4% for the second quarter of 2022. The Company's effective tax rate for the three months ended September 30, 2022 is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies, as well as tax credits. The effective tax rate for the nine months ended September 30, 2022 is 18.2%.
Capital
Shareholders’ equity totaled $227.6 million at September 30, 2022, a decrease of $9.9 million from $237.5 million at June 30, 2022. The decrease was primarily attributable to a reduction of $14.1 million in accumulated other comprehensive income as unrealized losses on available-for-sale securities increased from higher market interest rates and dividends paid of $2.0 million, partially offset by net income of $5.4 million for the three months ended September 30, 2022. Tangible book value per share(1) decreased from $20.23 per share at June 30, 2022 to $19.30 per share at September 30, 2022 primarily as a result of the decrease in shareholders' equity.
The Company's tangible common equity ratio decreased to 7.3% at September 30, 2022 from 7.7% at June 30, 2022 primarily due to a decrease in tangible equity from the increase in unrealized losses on available-for-sale securities. The Company's total risk-based capital ratio decreased to 13.2% at September 30, 2022 from 13.5% at June 30, 2022 due to deployment of cash into commercial loans and an increase in deferred tax assets resulting primarily from the increase in unrealized losses on available-for-sale securities, both resulting in increases to risk weighted assets. The Company's Tier 1 leverage ratio increased to 8.8% at September 30, 2022 from 8.5% at June 30, 2022 primarily due to the impact of the decrease in average assets caused by the decrease in average deposits over that period.
The Board of Directors approved a quarterly dividend of $0.19 per share, payable on November 7, 2022, to shareholders of record as of October 31, 2022. The dividend payout ratio totaled 37% for the three months ended September 30, 2022 compared to 23% for the three months ended June 30, 2022. The increase is partially attributable to the impact of the restructuring charge. At this time, 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 ORRSTOWN FINANCIAL SERVICES, INC. FINANCIAL HIGHLIGHTS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2021 2022 2021 Profitability for the period: Net interest income $ 25,455 $ 20,620 $ 72,146 $ 64,376 Provision for loan losses 1,500 365 3,575 (10 ) Noninterest income 6,058 7,651 20,726 21,859 Noninterest expenses 23,412 19,035 61,570 53,851 Income before income taxes 6,601 8,871 27,727 32,394 Income tax expense 1,159 1,679 5,046 6,219 Net income available to common shareholders $ 5,442 $ 7,192 $ 22,681 $ 26,175 Financial ratios: Return on average assets(1) 0.77 % 0.98 % 1.07 % 1.21 % Return on average assets, adjusted(1) (2) (3) 1.12 % 0.98 % 1.19 % 1.21 % Return on average equity(1) 8.93 % 10.69 % 12.03 % 13.49 % Return on average equity, adjusted(1) (2) (3) 13.02 % 10.69 % 13.35 % 13.49 % Net interest margin(1) 3.92 % 3.03 % 3.70 % 3.21 % Efficiency ratio 74.3 % 67.3 % 66.3 % 62.4 % Efficiency ratio, adjusted(2) (3) 64.3 % 67.3 % 62.9 % 62.4 % Income per common share: Basic $ 0.52 $ 0.66 $ 2.14 $ 2.38 Basic, adjusted(2) (3) $ 0.77 $ 0.66 $ 2.37 $ 2.38 Diluted $ 0.52 $ 0.65 $ 2.11 $ 2.36 Diluted, adjusted(2) (3) $ 0.75 $ 0.65 $ 2.34 $ 2.36 Average equity to average assets 8.59 % 9.20 % 8.90 % 8.96 % (1)Annualized. (2) Ratio has been adjusted for restructuring expenses. (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. ORRSTOWN FINANCIAL SERVICES, INC. FINANCIAL HIGHLIGHTS (Unaudited) (continued) September 30, December 31, 2022 2021 At period-end: Total assets $ 2,849,362 $ 2,834,565 Total deposits 2,505,853 2,464,929 Loans, net of allowance for loan losses 2,063,218 1,958,806 Loans held-for-sale, at fair value 10,175 8,868 Securities available for sale 503,596 472,438 Borrowings 22,632 25,197 Subordinated notes 32,010 31,963 Shareholders' equity 227,648 271,656 Credit quality and capital ratios(1): Allowance for loan losses to total loans 1.18 % 1.07 % Total nonaccrual loans to total loans 0.25 % 0.33 % Nonperforming assets to total assets 0.19 % 0.23 % Allowance for loan losses to nonaccrual loans 466 % 328 % Total risk-based capital: Orrstown Financial Services, Inc. 13.2 % 15.0 % Orrstown Bank 12.9 % 14.0 % Tier 1 risk-based capital: Orrstown Financial Services, Inc. 10.7 % 12.2 % Orrstown Bank 11.8 % 12.9 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc. 10.7 % 12.2 % Orrstown Bank 11.8 % 12.9 % Tier 1 leverage capital: Orrstown Financial Services, Inc. 8.8 % 8.5 % Orrstown Bank 9.6 % 8.9 % Book value per common share $ 21.30 $ 24.29 (1) Capital ratios are estimated, subject to regulatory filings ORRSTOWN FINANCIAL SERVICES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except per share amounts) September 30, 2022 December 31, 2021 Assets Cash and due from banks $ 34,481 $ 21,217 Interest-bearing deposits with banks 32,446 187,493 Cash and cash equivalents 66,927 208,710 Restricted investments in bank stocks 6,469 7,252 Securities available for sale (amortized cost of $558,056 and $466,806 at September 30, 2022 and December 31, 2021, respectively) 503,596 472,438 Loans held for sale, at fair value 10,175 8,868 Loans 2,087,927 1,979,986 Less: Allowance for loan losses (24,709 ) (21,180 ) Net loans 2,063,218 1,958,806 Premises and equipment, net 31,457 34,045 Cash surrender value of life insurance 71,332 70,217 Goodwill 18,724 18,724 Other intangible assets, net 3,338 4,183 Accrued interest receivable 9,212 8,234 Deferred tax assets, net 24,145 11,648 Other assets 40,769 31,440 Total assets $ 2,849,362 $ 2,834,565 Liabilities Deposits: Noninterest-bearing $ 562,024 $ 553,238 Interest-bearing 1,943,829 1,911,691 Total deposits 2,505,853 2,464,929 Securities sold under agreements to repurchase 21,065 23,301 FHLB advances and other 1,567 1,896 Subordinated notes 32,010 31,963 Accrued interest and other liabilities 61,219 40,820 Total liabilities 2,621,714 2,562,909 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; 11,236,558 shares issued and 10,686,064 outstanding at September 30, 2022; 11,258,167 shares issued and 11,183,050 outstanding at December 31, 2021 585 586 Additional paid—in capital 188,730 189,689 Retained earnings 95,137 78,700 Accumulated other comprehensive (loss) income (43,468 ) 4,449 Treasury stock— 550,494 and 75,117 shares, at cost at September 30, 2022 and December 31, 2021, respectively (13,336 ) (1,768 ) Total shareholders’ equity 227,648 271,656 Total liabilities and shareholders’ equity $ 2,849,362 $ 2,834,565 ORRSTOWN FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (In thousands) 2022 2021 2022 2021 Interest income Loans $ 23,152 $ 19,890 $ 66,548 $ 62,724 Investment securities - taxable 2,907 1,514 6,462 5,007 Investment securities - tax-exempt 1,160 652 3,013 1,790 Short-term investments 200 135 536 255 Total interest income 27,419 22,191 76,559 69,776 Interest expense Deposits 1,372 937 2,758 3,410 Securities sold under agreements to repurchase 10 8 24 25 FHLB advances and other 78 123 121 458 Subordinated notes 504 503 1,510 1,507 Total interest expense 1,964 1,571 4,413 5,400 Net interest income 25,455 20,620 72,146 64,376 Provision for loan losses 1,500 365 3,575 (10 ) Net interest income after provision for loan losses 23,955 20,255 68,571 64,386 Noninterest income Service charges 1,216 993 3,483 2,758 Interchange income 1,014 1,030 3,059 3,049 Swap fee income 197 67 1,935 135 Wealth management income 2,953 2,917 8,716 8,570 Mortgage banking activities (1,014 ) 1,333 205 4,684 Investment securities (losses) gains (14 ) 479 (163 ) 635 Other income 1,706 832 3,491 2,028 Total noninterest income 6,058 7,651 20,726 21,859 Noninterest expenses Salaries and employee benefits 12,705 11,498 35,354 31,907 Occupancy, furniture and equipment 2,380 2,374 7,370 7,292 Data processing 1,192 990 3,410 3,041 Advertising and bank promotions 278 735 1,514 1,434 FDIC insurance 294 218 767 570 Professional services 887 562 2,417 1,862 Taxes other than income 488 16 1,160 929 Intangible asset amortization 272 314 845 972 Restructuring expenses 3,155 — 3,155 — Other operating expenses 1,761 2,328 5,578 5,844 Total noninterest expenses 23,412 19,035 61,570 53,851 Income before income tax expense 6,601 8,871 27,727 32,394 Income tax expense 1,159 1,679 5,046 6,219 Net income $ 5,442 $ 7,192 $ 22,681 $ 26,175 Share information: Basic earnings per share $ 0.52 $ 0.66 $ 2.14 $ 2.38 Diluted earnings per share $ 0.52 $ 0.65 $ 2.11 $ 2.36 Weighted average shares - basic 10,369 10,979 10,611 10,976 Weighted average shares - diluted 10,529 11,122 10,758 11,103 ORRSTOWN FINANCIAL SERVICES, INC. ANALYSIS OF NET INTEREST INCOME Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) Three Months Ended 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Taxable- Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent Average Equivalent Equivalent (Dollars in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Federal funds sold & interest-bearing bank balances $ 38,068 $ 200 2.08 % $ 131,449 $ 235 0.72 % $ 199,788 $ 101 0.20 % $ 250,336 $ 98 0.16 % $ 347,242 $ 135 0.15 % Investment securities (1) 528,988 4,377 3.31 523,940 3,388 2.59 472,195 2,512 2.13 477,217 2,506 2.08 464,417 2,339 2.00 Loans (1)(2)(3) 2,051,707 23,219 4.49 2,008,283 22,090 4.41 1,974,804 21,429 4.39 1,975,014 21,559 4.33 1,919,926 19,945 4.12 Total interest-earning assets 2,618,763 27,796 4.22 2,663,672 25,713 3.87 2,646,787 24,042 3.67 2,702,567 24,163 3.55 2,731,585 22,419 3.26 Other assets 196,277 192,561 184,300 187,622 195,089 Total $ 2,815,040 $ 2,856,233 $ 2,831,087 $ 2,890,189 $ 2,926,674 Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 1,379,082 912 0.26 $ 1,420,051 301 0.09 $ 1,398,182 256 0.07 $ 1,430,845 273 0.08 $ 1,411,243 286 0.08 Savings deposits 237,462 90 0.15 236,916 63 0.11 227,676 57 0.10 215,957 55 0.10 209,112 53 0.10 Time deposits 265,015 370 0.55 275,408 337 0.49 298,618 372 0.51 313,148 461 0.58 349,215 598 0.68 Total interest-bearing deposits 1,881,559 1,372 0.29 1,932,375 701 0.15 1,924,476 685 0.14 1,959,950 789 0.16 1,969,570 937 0.19 Securities sold under agreements to repurchase 23,480 10 0.18 24,045 7 0.11 23,530 7 0.12 24,069 7 0.12 23,578 8 0.13 FHLB advances and other 10,394 78 3.02 1,741 21 4.74 1,850 22 4.74 1,956 23 4.70 45,071 123 1.09 Subordinated notes 32,000 504 6.29 31,985 503 6.29 31,969 503 6.29 31,954 503 6.29 31,938 503 6.29 Total interest-bearing liabilities 1,947,433 1,964 0.40 1,990,146 1,232 0.25 1,981,825 1,217 0.25 2,017,929 1,322 0.26 2,070,157 1,571 0.30 Noninterest-bearing demand deposits 575,777 572,171 540,139 559,882 548,923 Other 49,964 47,190 40,919 42,380 38,409 Total Liabilities 2,573,174 2,609,507 2,562,883 2,620,191 2,657,489 Shareholders' Equity 241,866 246,726 268,204 269,998 269,185 Total $ 2,815,040 $ 2,856,233 $ 2,831,087 $ 2,890,189 $ 2,926,674 Taxable-equivalent net interest income / net interest spread 25,832 3.82 % 24,481 3.62 % 22,825 3.42 % 22,841 3.29 % 20,848 2.96 % Taxable-equivalent net interest margin 3.92 % 3.68 % 3.49 % 3.35 % 3.03 % Taxable-equivalent adjustment (377 ) (363 ) (252 ) (243 ) (228 ) Net interest income $ 25,455 $ 24,118 $ 22,573 $ 22,598 $ 20,620 Ratio of average interest-earning assets to average interest-bearing liabilities 134 % 134 % 134 % 134 % 132 % 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 balances include nonaccrual loans. (3)Interest income on loans includes prepayment and late fees, where applicable ORRSTOWN FINANCIAL SERVICES, INC. ANALYSIS OF NET INTEREST INCOME Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited) Nine Months Ended September 30, 2022 September 30, 2021 Taxable- Taxable- Taxable- Taxable- Average Equivalent Equivalent Average Equivalent Equivalent (Dollars in thousands) Balance Interest Rate Balance Interest Rate Assets Federal funds sold & interest-bearing bank balances $ 122,509 $ 536 0.59 % $ 261,697 $ 255 0.13 % Investment securities (1) 508,582 10,276 2.70 456,919 7,272 2.13 Loans (1)(2)(3) 2,011,881 66,738 4.43 1,988,834 62,895 4.23 Total interest-earning assets 2,642,972 77,550 3.92 2,707,450 70,422 3.48 Other assets 191,090 188,924 Total $ 2,834,062 $ 2,896,374 Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 1,399,035 1,470 0.14 $ 1,380,241 1,014 0.10 Savings deposits 234,054 209 0.12 197,792 149 0.10 Time deposits 279,557 1,079 0.52 376,142 2,247 0.80 Total interest-bearing deposits 1,912,646 2,758 0.19 1,954,175 3,410 0.23 Securities sold under agreements to repurchase 23,685 24 0.14 22,490 25 0.15 FHLB advances and other 4,693 121 3.44 53,608 458 1.14 Subordinated notes 31,985 1,510 6.29 31,924 1,507 6.29 Total interest-bearing liabilities 1,973,009 4,413 0.30 2,062,197 5,400 0.35 Noninterest-bearing demand deposits 562,826 537,247 Other 46,058 37,413 Total Liabilities 2,581,893 2,636,857 Shareholders' Equity 252,169 259,517 Total $ 2,834,062 $ 2,896,374 Taxable-equivalent net interest income / net interest spread 73,137 3.62 % 65,022 3.13 % Taxable-equivalent net interest margin 3.70 % 3.21 % Taxable-equivalent adjustment (991 ) (646 ) Net interest income $ 72,146 $ 64,376 Ratio of average interest-earning assets to average interest-bearing liabilities 134 % 131 % 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 balances include nonaccrual loans. (3) Interest income on loans includes prepayment and late fees, where applicable ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) (In thousands) September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Profitability for the quarter: Net interest income $ 25,455 $ 24,118 $ 22,573 $ 22,598 $ 20,620 Provision for loan losses 1,500 1,775 300 1,100 365 Noninterest income 6,058 7,194 7,474 7,293 7,651 Noninterest expenses 23,412 18,794 19,364 20,290 19,035 Income before income taxes 6,601 10,743 10,383 8,501 8,871 Income tax expense 1,159 1,872 2,015 1,795 1,679 Net income $ 5,442 $ 8,871 $ 8,368 $ 6,706 $ 7,192 Financial ratios: Return on average assets(1) 0.77 % 1.25 % 1.20 % 0.93 % 0.98 % Return on average equity(1) 8.93 % 14.42 % 12.65 % 9.93 % 10.69 % Net interest margin(1) 3.92 % 3.68 % 3.49 % 3.35 % 3.03 % Efficiency ratio 74.3 % 60.0 % 64.4 % 67.9 % 67.3 % Per share information: Income per common share: Basic $ 0.52 $ 0.84 $ 0.77 $ 0.61 $ 0.66 Diluted 0.52 0.83 0.76 0.60 0.65 Book value 21.30 22.25 23.00 24.29 23.97 Tangible book value(2) 19.30 20.23 21.03 22.32 21.98 Cash dividends paid 0.19 0.19 0.19 0.19 0.19 Average basic shares 10,369 10,610 10,860 10,939 10,979 Average diluted shares 10,529 10,744 11,007 11,113 11,122 (1) Annualized. (2) 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. ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) (continued) September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Noninterest income: Service charges $ 1,216 $ 1,194 $ 1,073 $ 935 $ 993 Interchange income 1,014 1,064 981 1,080 1,030 Swap fee income 197 785 953 158 67 Wealth management income 2,953 2,894 2,869 2,897 2,917 Mortgage banking activities (1,014 ) 498 721 1,225 1,333 Other income 1,706 762 1,023 995 832 Investment securities (losses) gains (14 ) (3 ) (146 ) 3 479 Total noninterest income $ 6,058 $ 7,194 $ 7,474 $ 7,293 $ 7,651 Noninterest expenses: Salaries and employee benefits $ 12,705 $ 11,312 $ 11,337 $ 12,095 $ 11,498 Occupancy, furniture and equipment 2,380 2,423 2,567 2,554 2,374 Data processing 1,192 1,165 1,053 1,020 990 Advertising and bank promotions 278 881 355 744 735 FDIC insurance 294 190 283 246 218 Professional services 887 722 808 693 562 Taxes other than income 488 108 564 392 16 Intangible asset amortization 272 281 292 303 314 Restructuring expenses 3,155 — — — — Other operating expenses 1,761 1,712 2,105 2,243 2,328 Total noninterest expenses $ 23,412 $ 18,794 $ 19,364 $ 20,290 $ 19,035 ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) (continued) September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Balance Sheet at quarter end: Cash and cash equivalents $ 66,927 $ 111,906 $ 214,238 $ 208,710 $ 311,415 Restricted investments in bank stocks 6,469 6,500 6,791 7,252 7,051 Securities available for sale 503,596 512,698 529,730 472,438 445,018 Loans held for sale, at fair value 10,175 7,824 7,403 8,868 6,412 Loans: Commercial real estate: Owner occupied 313,125 287,825 256,526 238,668 196,585 Non-owner occupied 573,605 559,309 558,999 551,783 509,703 Multi-family 114,561 116,110 93,158 93,255 112,002 Non-owner occupied residential 105,267 109,141 102,269 106,112 100,088 Commercial and industrial(1) 378,574 379,729 443,170 485,728 540,205 Acquisition and development: 1-4 family residential construction 20,810 22,650 15,115 12,279 12,246 Commercial and land development 148,512 134,947 105,204 93,925 71,784 Municipal 12,683 12,957 14,626 14,989 13,631 Total commercial loans 1,667,137 1,622,668 1,589,067 1,596,739 1,556,244 Residential mortgage: First lien 220,970 202,787 203,231 198,831 203,360 Home equity – term 5,869 5,996 5,820 6,081 7,079 Home equity – lines of credit 180,267 171,269 164,818 160,705 154,004 Installment and other loans 13,684 14,909 15,371 17,630 19,077 Total loans 2,087,927 2,017,629 1,978,307 1,979,986 1,939,764 Allowance for loan losses (24,709 ) (23,279 ) (21,508 ) (21,180 ) (19,965 ) Net loans held-for-investment 2,063,218 1,994,350 1,956,799 1,958,806 1,919,799 Goodwill 18,724 18,724 18,724 18,724 18,724 Other intangible assets, net 3,338 3,610 3,891 4,183 4,486 Total assets 2,849,362 2,824,201 2,900,537 2,834,565 2,870,182 Total deposits 2,505,853 2,478,616 2,545,992 2,464,929 2,502,108 Borrowings 22,632 25,965 26,412 25,197 29,598 Subordinated notes 32,010 31,994 31,978 31,963 31,948 Total shareholders' equity 227,648 237,527 254,804 271,656 268,569 (1) This balance includes $17.0 million, $30.2 million, $122.5 million, $189.9 million and $259.9 million of SBA PPP loans, net of deferred fees and costs, at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively. ORRSTOWN FINANCIAL SERVICES, INC. HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited) (continued) September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Capital and credit quality measures (1): Total risk-based capital: Orrstown Financial Services, Inc 13.2 % 13.5 % 14.3 % 15.0 % 15.6 % Orrstown Bank 12.9 % 13.3 % 13.8 % 14.0 % 14.7 % Tier 1 risk-based capital: Orrstown Financial Services, Inc 10.7 % 10.9 % 11.7 % 12.2 % 12.8 % Orrstown Bank 11.8 % 12.2 % 12.7 % 12.9 % 13.5 % Tier 1 common equity risk-based capital: Orrstown Financial Services, Inc 10.7 % 10.9 % 11.7 % 12.2 % 12.8 % Orrstown Bank 11.8 % 12.2 % 12.7 % 12.9 % 13.5 % Tier 1 leverage capital: Orrstown Financial Services, Inc 8.8 % 8.5 % 8.8 % 8.5 % 8.3 % Orrstown Bank 9.6 % 9.5 % 9.5 % 8.9 % 8.7 % Average equity to average assets 8.59 % 8.64 % 9.47 % 9.34 % 9.20 % Allowance for loan losses to total loans 1.18 % 1.15 % 1.09 % 1.07 % 1.03 % Total nonaccrual loans to total loans 0.25 % 0.27 % 0.28 % 0.33 % 0.47 % Nonperforming assets to total assets 0.19 % 0.19 % 0.19 % 0.23 % 0.32 % Allowance for loan losses to nonaccrual loans 466 % 432 % 390 % 328 % 219 % Other information: Net charge-offs (recoveries) $ 70 $ 4 $ (28 ) $ (115 ) $ (219 ) Classified loans 19,576 19,682 23,421 23,050 26,910 Nonperforming and other risk assets: Nonaccrual loans 5,303 5,387 5,510 6,449 9,116 Other real estate owned — — — — — Total nonperforming assets 5,303 5,387 5,510 6,449 9,116 Restructured loans still accruing 689 568 575 804 839 Loans past due 90 days or more and still accruing(2) 232 322 238 1,201 362 Total nonperforming and other risk assets $ 6,224 $ 6,277 $ 6,323 $ 8,454 $ 10,317 (1) Capital ratios are estimated, subject to regulatory filings. (2) Includes $0.2 million, $0.3 million, $0.2 million, $0.3 million and $0.4 million of purchased credit impaired loans at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively. As of December 31, 2021, there was one loan for $0.9 million, which was in the process of collection and guaranteed by the SBA, and was subsequently collected during the first quarter of 2022. Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations
As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets, which totaled $22.1 million and $22.9 million at September 30, 2022 and December 31, 2021, respectively. Additionally, the Company incurred $3.2 million in restructuring charges during the three months ended September 30, 2022.
Management believes providing certain “non-GAAP” financial information will assist investors in their understanding of the effect of acquisition activity on reported results, particularly to overcome comparability issues related to the influence of intangibles (principally goodwill) created in acquisitions. Management also 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 associated with increasing operating efficiencies for the long-term.
Tangible book value per common share and adjusted net income and associated ratios from the restructuring charge, 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:
(dollars and shares in thousands)
Tangible Book Value per Common Share September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Shareholders' equity $ 227,648 $ 237,527 $ 254,804 $ 271,656 $ 268,569 Less: Goodwill 18,724 18,724 18,724 18,724 18,724 Other intangible assets 3,338 3,610 3,891 4,183 4,486 Related tax effect (701 ) (758 ) (817 ) (878 ) (942 ) Tangible common equity (non-GAAP) $ 206,287 $ 215,951 $ 233,006 $ 249,627 $ 246,301 Common shares outstanding 10,686 10,676 11,079 11,183 11,205 Book value per share (most directly comparable GAAP based measure) $ 21.30 $ 22.25 $ 23.00 $ 24.29 $ 23.97 Intangible assets per share 2.00 2.02 1.97 1.97 1.99 Tangible book value per share (non-GAAP) $ 19.30 $ 20.23 $ 21.03 $ 22.32 $ 21.98 (dollars and shares in thousands) September 30, 2022 Adjusted Ratios for Restructuring Charges Three Months Ended Nine Months Ended Net income (A) $ 5,442 $ 22,681 Plus: Restructuring expenses (B) 3,155 3,155 Less: Related tax effect (C) (663 ) (663 ) Adjusted net income (D=A+B-C) $ 7,934 $ 25,173 Average assets (E) $ 2,815,040 $ 2,834,062 Return on average assets(1)(= A / E) 0.77 % 1.07 % Return on average assets, adjusted(1)(= D / E) 1.12 % 1.19 % Average equity (F) $ 241,866 $ 252,169 Return on average equity(1)(= A / F) 8.93 % 12.03 % Return on average equity, adjusted(1)(= D / F) 13.02 % 13.35 % Weighted average shares - basic (G) 10,369 10,611 Basic earnings per share (= A / G) $ 0.52 $ 2.14 Basic earnings per share, adjusted (= D / G) $ 0.77 $ 2.37 Weighted average shares - diluted (H) 10,529 10,758 Diluted earnings per share (= A / H) $ 0.52 $ 2.11 Diluted earnings per share, adjusted (= D / H) $ 0.75 $ 2.34 Noninterest expense (I) $ 23,412 $ 61,570 Less: Restructuring expenses (B) (3,155 ) (3,155 ) Adjusted noninterest expense (J = I - B) $ 20,257 $ 58,415 Net interest income (K) $ 25,455 $ 72,146 Noninterest income (L) 6,058 20,726 Total operating income (M = K + L) $ 31,513 $ 92,872 Efficiency ratio (= I / M) 74.3 % 66.3 % Efficiency ratio, adjusted (= J / M) 64.3 % 62.9 % (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, 2022:
(dollars in thousands)
Sector Portfolio Mix Amortized Book Fair Value Credit Enhancement AAA AA A BBB NR Collateral Type Unsecured ABS 1 % $ 5,230 $ 4,731 28 % — % — % — % — % 100 % Unsecured Consumer Debt Student Loan ABS 1 7,284 7,079 26 — — — — 100 Seasoned Student Loans Federal Family Education Loan ABS 18 99,582 97,456 8 87 13 — — — Federal Family Education Loan (1) PACE Loan ABS — 2,777 2,542 6 100 — — — — PACE Loans (4) Non-Agency CMBS 2 10,047 10,045 18 — — — — 100 Commercial Real Estate Non-Agency RMBS 3 17,012 15,116 13 100 — — — — Reverse Mortgages (2) Municipal - General Obligation 22 122,576 107,870 5 90 5 — — Municipal - Revenue 24 132,026 112,166 — 83 12 — 5 SBA ReRemic (5) 1 5,840 5,737 — 100 — — — SBA Guarantee (3) Agency MBS 24 135,223 123,353 — 100 — — — Residential Mortgages (3) U.S. Treasury securities 4 20,074 17,115 — 100 — — — Bank CDs — 249 249 — — — — 100 FDIC Insured CD 100 % $ 557,920 $ 503,459 20 % 71 % 4 % — % 5 % (1) Minimum of 18% guaranteed by U.S. government (2) Reverse mortgages fund over time and credit enhancement is estimated based on prior experience (3) 75% guaranteed by U.S. government agencies (4) PACE acronym represents Property Assessed Clean Energy loans (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 $2.8 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, Howard, Kent and Washington Counties, Maryland, as well as Baltimore City, Maryland. 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). 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 and projections about 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. Forward-looking statements are statements that include projections, predictions, expectations, estimates or beliefs about events or results or otherwise are not statements of historical factors, 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, 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, successful merger and acquisition activity and cost savings initiatives and continued reductions in risk assets or mitigate losses in the future. In addition to risks and uncertainties related to the COVID-19 pandemic (including those related to variants) and resulting governmental and societal responses, factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: 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; the integration of the Company's strategic acquisitions; the inability to fully achieve expected savings, efficiencies or synergies from mergers and acquisitions and cost savings initiatives, or taking longer than estimated for such savings, efficiencies and synergies to be realized; changes in laws and regulations; interest rate movements; 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 pending litigation and legal proceedings; the failure of the SBA to honor its guarantee of loans issued under the SBA PPP; the timing of the repayment of SBA PPP loans and the impact it has on fee recognition; our ability to convert new relationships gained through the SBA PPP efforts to full banking relationships; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2021, 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. 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 does not undertake 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.
