Orrstown Financial Services : Investor Presentation – August 2021

Orrstown Financial Services, Inc.

MISSION: "We create value for our shareholders by providing outstanding client experiences through community engagement and local decisions from people you know and trust."

VISION: "We aspire to be the financial institution of choice focused on quality client service, innovative solutions and sound financial advice."

Presentations Given During Third Quarter 2021

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Cautionary Note Regarding Forward Looking Statements | Non-GAAP Disclosures

Cautionary Note Regarding Forward Looking Statements

• This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. 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 be able to continue to successfully execute on its strategic growth plan into Dauphin, Lancaster, York and Berks counties, Pennsylvania, and the greater Baltimore market in Maryland, with newer markets continuing to be receptive to our community banking model; to take advantage of market disruption; to experience sustained growth in loans and deposits or maintain the momentum experienced to date from these actions. In addition to risks and uncertainties related to the COVID-19 pandemic (including those related to variants, such as the delta variant) 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, 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; deteriorating economic conditions; 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 set forth under the heading "Risk Factors" in the Company's 2020 Annual Report on Form 10-K and subsequent filings 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 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.

Non-GAAP Disclosures

In this presentation we refer to various core earnings measures, tangible book value per share and allowance to non-SBA guaranteed loans, which are non-GAAP measures. For a reconciliation of these non- GAAP measures to GAAP results and our rationale for usage of non-GAAP measures, see the appendix in this presentation.

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Trendline: Profitable and Effective Franchise Expansion

$3,500,000							1.33%	1.40%
						1.00%		1.20%
$3,000,000
								1.00%
$2,500,000	0.64%			0.75%	0.76%			0.80%
		0.54%
		0.50%					0.60%
$2,000,000
								0.40%
$1,500,000
								0.20%
$1,000,000								0.00%
TOTAL	12/31/2015	12/31/2016	12/31/2017	12/31/2018	12/31/2019	12/31/2020	YTD 2021	ROAA
ASSETS
(000'S)			Total Assets	Return on Average Assets

•

Restored quarterly

Lancaster County Focus:

Organic expansion

Acquisition of First

Acquisition of Hamilton

•

3,200 2020 vintage

•

Increased dividend

dividend

•

Hired Market

continues in growth

Community Bank of

Bancorp, Inc.

PPP loans totaling

•

3,363 2021 vintage PPP

•

President

markets:

Mercersburg

•

Deposits: $404

$467.7 million

loans totaling $231.7 million

Branch

•

Hired commercial

•

Additional branches

•

Deposits: $161

million

•

Branch

•

Maintain expense control;

rationalization

•

lending team

opened in Lancaster

million

•

Assets: 525 million

rationalization: Five

efficiency ratio improves to

begins: two

Opened regional

•

County

•

Assets: $184 million

•

Entrance into 20th

branches closed

60%

branches closed

Loan Production

LPO's opened in

•

largest MSA

•

Eliminated 27,000 sq.

•

Successfully pivoted from

•

Opened first

Office ("LPO")

Berks and York

Hired Market

ft. of excess office

PPP to commercial lending;

Dauphin County Focus:

counties

President

space

24% 2Q'21 annualized

Lancaster County

•

Purchased 85,000

•

Hired Lending MD

commercial loan growth, ex.

branch office

sq. ft. HQ to

Lending team

PPP

•

consolidate staff,

Branch

•

Hired four commercial

improve recruiting

rationalization: Three

lenders, Chief Operating

posture, and scale

•

branches closed;

Officer, Chief Accounting

for future expansion

Added 17 commercial

Officer and General Counsel

opportunities

lenders

3

Company Overview-Strong Geographically Diverse Markets

Geographic Focus Driven by Relationship Banking Model

• Four geographic regions: Market Presidents have full

authority and autonomy (within ERM guidelines)

• Market Presidents are all seasoned best-in-class bankers

• Markets connected by significant highway infrastructure

• Focus on commercial lending & deposits

• Offer full suite of products in every market

• Growth markets in Lancaster, Capitol Region, and Greater Baltimore well positioned for significant fee income penetration

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Company Overview-Product Suite Provides Expansion Opportunity

COMMERCIAL BANKING	INVESTMENTS & TRUST	MORTGAGE BANKING	PERSONAL BANKING
• C&I and CRE Lending	•	Wealth Management	•	Fixed-rate and Adjustable Mortgages	• Deposit Products and Services
•	Treasury Management	•	Retirement Planning	•	Purchase and Refinance	• Mobile and Online Banking
•	Small Business Lending	•	Estate Planning	•	Lot & Land Loans	• Digital Wallet and Debit/ATM Cards
•	SBA Lending	•	Trust Services	•	Government Programs	•	Health Savings Accounts
• Insurance (e.g. key man coverage)			•	Construction	•	Credit Cards
				•	Specialty Programs	• Personal and Home Equity Loans and Lines of Credit
						• Auto Loans (not indirect)

• Non-interestincome amounted to 24% of total revenue in 2Q'21 and was aided by strong wealth management results; historical range of fee income is 25%-30% of total revenue
• Products not yet to scale in all markets. Opportunity to garner "fair share" of mortgage and investment/trust business, enhance fee income and take advantage of solid upside potential in our growth markets (Lancaster, Capitol Region, Greater Baltimore)
• All three of our growth markets provide superior demographics in terms of household income, home values, investable wealth, etc. compared to markets served prior to 2015
• We remain opportunistic in identifying meaningful client-facing investments to create long-term revenue growth, including team lift outs

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