Orrstown Financial Services, Inc. (ORRF) reported a net income of $22.1 million for the year ended December 31, 2024, compared to $35.7 million in 2023 and $22.0 million in 2022. Diluted earnings per share were $1.48, $3.42, and $2.06 for 2024, 2023, and 2022, respectively. The decrease in net income from 2023 to 2024 included $22.7 million in merger-related expenses, a $15.5 million provision for credit losses on acquired non-PCD loans, $4.8 million in retirement expenses for an executive, and a $478,000 provision for a legal settlement. Excluding these non-recurring expenses, net income for 2024 was $56.1 million, and diluted earnings per share were $3.76.
Net interest income increased significantly to $155.3 million in 2024 from $104.9 million in 2023 and $99.6 million in 2022. This increase reflects the July 1, 2024 merger with Codorus Valley Bancorp, Inc. (Codorus Valley), valued at $233.4 million, and organic growth in commercial loans. Noninterest income also rose to $37.4 million in 2024 from $25.7 million in 2023, primarily due to a $5.0 million increase in wealth management income and increases in service charges and interchange income, partially driven by the merger. Noninterest expenses increased to $148.3 million in 2024 from $83.8 million in 2023, largely due to the $22.7 million in merger-related expenses and other non-recurring costs.
The Codorus Valley merger expanded Orrstown Bank's footprint into the York, Pennsylvania market and increased market penetration in existing areas. As of December 31, 2024, Orrstown Bank had 607 full-time and 23 part-time employees. The merger resulted in the closure of six branches in Pennsylvania and Maryland, leaving the bank with 38 full-service and seven limited-purpose branches. Assets under management by Orrstown Financial Advisors totaled $3.2 billion at December 31, 2024.
Orrstown's loan portfolio at December 31, 2024, totaled $3.9 billion, a $1.6 billion increase from 2023, primarily due to the merger and organic growth. The allowance for credit losses (ACL) increased to $48.7 million at the end of 2024 from $28.7 million at the end of 2023, reflecting the merger and changes in the loan portfolio. The ACL to total loan ratio was 1.24% at December 31, 2024, compared to 1.25% at December 31, 2023. Total deposits increased to $4.6 billion at December 31, 2024, from $2.6 billion at December 31, 2023, including $1.9 billion from the merger. The company's investment securities portfolio totaled $829.7 million at December 31, 2024, up from $513.5 million at December 31, 2023, reflecting both organic growth and the acquisition of securities from Codorus Valley.
Orrstown's outlook is subject to various risks, including economic conditions, interest rate changes, competition, and regulatory compliance. The company's ability to realize the anticipated benefits of the Codorus Valley merger will depend on successful integration and management of its expanded operations. The company also faces risks related to credit quality, interest rate sensitivity, cybersecurity, and litigation. The company's common stock is listed on the Nasdaq Capital Market under the symbol "ORRF." The board declared cash dividends of $0.86 per common share in 2024.
About ORRSTOWN FINANCIAL SERVICES INC
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