Orrstown Financial Services 8K 2010 East Coast Financial Services Conference | ORRF 10 Nov 10

Orrstown

Financial Services, Inc.

NASDAQ: ORRF

Sandler O’Neill + Partners L.P.

2010 East Coast Financial Services Conference

Aventura, Florida

November 10 -12, 2010

Jeffrey W. Embly

EVP, Chief Credit /Risk Officer

Jeffrey W. Embly

EVP, Chief Credit /Risk Officer

Bradley S. Everly

EVP, Chief Financial Officer

Bradley S. Everly

EVP, Chief Financial Officer

Thomas R. Quinn, Jr.

President & Chief Executive Officer

Thomas R. Quinn, Jr.

President & Chief Executive Officer

Exhibit 99.1

Legal Disclaimers

This presentation may contain forward-looking information about Orrstown Financial Services, Inc. that is intended to be covered by the safe

harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ

materially from those set forth in such statements due to various risks, uncertainties and other factors. Such risks, uncertainties and other factors

that could cause actual results and experience to differ from those projected include, but are not limited to, the following: ineffectiveness of the

Company’s business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and

regulations, including industry consolidation and development of competing financial products and services; interest rate movements; changes in

credit quality; volatilities in the securities markets; and deteriorating economic conditions, and other risks and uncertainties, including those

detailed in Orrstown Financial Services, Inc.’s filings with the Securities and Exchange Commission. The statements are valid only as of the date

hereof and Orrstown Financial Services, Inc. disclaims any obligation to update this information.

This presentation contains the non-GAAP financial measures, ratio of tangible common equity to tangible assets and return on average tangible

equity. In order to calculate tangible common equity and tangible assets, the Company's management subtracts intangible assets from both

common equity and assets. The Company calculates the return on average tangible equity by excluding the balance of intangible assets and

their related amortization expense from the calculation of return on average equity. Reconciliations of these non-GAAP measures to the most

directly comparable GAAP measures are set forth in the Appendix.

Safe

Harbor

Regarding

Forward-Looking

Statements

Non-GAAP

Financial

Measures

•

Listed

the

NASDAQ

Capital

Market

–

April, 2009

•

Included

the

Russell

2000

3000

Indices

–

June, 2009 and June, 2010

•

Selected as one of the top 200 best performing community banks in the

nation by US Banker Magazine for 5 consecutive years

•

Recognized as one of the 50 Fastest Growing Companies by the Central

Pennsylvania

Business

Journal

for

the

time

•

Raised

net

capital

proceeds

$37.6

million

–

March, 2010

•

Posted record net income, by quarter, for each of the first 3 quarters of 2010

Highlights

•

In a challenging environment earnings up 17.8% year-over-year

•

Excellent Return Ratios:

–

ROA: 1.36% for 3Q 2010 & 1.23% for 9 months ended 9/30/2010

–

ROE: 12.18% for 3Q 2010 & 11.47% for 9 months ended 9/30/2010

–

ROTE:

14.03%

for

2010

13.57%

for

months

ended

9/30/2010

(1)

•

Asset Growth 9/30/09-9/30/10 up 27.4% (9 months average daily +20.8%)

•

Deposit Growth 9/30/09-9/30/10 up 34.1% (9 months average daily +29.9%)

•

Reduced

NPAs

29%

(3/31/10

–

9/30/10)

•

Reduced

NPLs

37%

(3/31/10

–

9/30/10)

•

NPAs/ Assets 1.15% at 9/30/2010

•

NPLs/ Loans 1.57% at 9/30/2010

Highlights

(1) See Appendix regarding non-GAAP financial measures.

Source: Company Documents as of 9/30/10

Highlights

•

Net Interest Margin up 19bp for 9 months 2010 vs. 9 months 2009 (3.72%

vs. 3.53%)

•

Lowered Cost of Funds for 21 consecutive months

•

Increased

dividends

for

over

consecutive

years,

and

year

annual

dividend CAGR

(1)

of 14.8%

•

Trust and brokerage assets grew 20.1% since 12/31/09 to $888 million at

9/30/10

•

Continued to take advantage of market dislocation to hire talented bankers

(1) Compound annual growth rate

Source: Company Documents

•

Recently hired commercial lenders have generated $63 million in new loan volume

since March, 2009

•

Emphasis on growing mortgage business has resulted in 11% increase in total

volume from $78 million 1Q-3Q ‘09 to $87 million 1Q-3Q ‘10

–

Added

new

products

(FHA,

VA,

USDA

Guaranteed

Rural

Housing,

PHFA

First

Time Home Buyers Program)

–

Continue to expand mortgage origination team

–

Significant investments in technology to support higher volumes

•

Orrstown Financial Advisors YTD Net Income up 39.7% & YTD revenue up 28%

1Q-3Q ‘10 vs. same period last year

•

Efficiency ratio 53.97% for the 9 months ended 9/30/2010

Highlights

(1)

Ranking based on 3 year ROAE of publicly traded banks and thrifts of major exchanges, pink sheets, and bulletin boards. Private companies that file with the SEC

are also included. Source: SNL Financial

(2)

As published by the Central Penn Business Journal (Based on minimum revenue of $500,000 for 3 years. Companies were first ranked by dollar growth year one

to year three, combined with percentage of growth year one to year three.)

Franchise Overview

•

Headquartered in Shippensburg, PA

•

Founded in 1919

•

20 branches in Pennsylvania and Maryland

–

8 branches in Cumberland County, PA

–

7 branches in Franklin County, PA

–

4 branches in Perry County, PA

–

1 branch in Washington County, MD

•

$1.478 billion in assets and $1.139 billion in

deposits at September 30, 2010

•

In addition to community banking services, provides

trust and investment services to individuals,

businesses, non-profits and municipalities ($888

million of trust and brokerage assets at 9/30/2010)

•

Ranked as one of the top 200 best performing

community

banks

the

nation

since

2006

(1)

•

Recognized

for

the

time

the

Central

Penn

Business Journal as one of the 50 Fastest Growing

Companies

(2)

Targeted Market Area

•

Currently operating 20 full-service

locations along the Route 81 corridor

from Washington County, Maryland

through Franklin, Cumberland and Perry

Counties, Pennsylvania

•

The combined population of the current

market

area

approximately

568,889

(1)

•

The current combined market has over

$9.6 billion in total deposits as of June

30, 2010

•

Orrstown

has $1.139 billion deposits at

September 30, 2010, or approximately

11.8% of the total share in its market

area

(2)

•

The four eastern contiguous counties

have total market deposits of $16.2 billion

(1)

U.S.

Census

Bureau,

2009

Population

Estimates,

2000

Census,

1990

Census

(2)

Based on June 30, 2010 total deposits in market as reported by the FDIC

Source: SNL Financial; Company Documents as of 9/30/10

PENNSYLVANIA

Market Share & Demographics

(1) Based on FDIC data as of June 30, 2010

Source: SNL Financial

Total

County

2010

Pop. Growth

Institutions

Deposit

Deposits

Mkt. Share

County

Population

'00 -

'10

'10 -

'15 Est.

'00 -

'10

'10 -

'15 Est.

in Market

Totals

($000)

Branches

(%)

Rank

Current

Counties

Operations

Cumberland, PA

234,508

9.8%

4.2%

31.0%

14.2%

102

$5,184,059

$700,517

14.21

Franklin, PA

147,089

13.8%

5.8%

26.5%

11.9%

$1,924,968

$272,268

14.14

Perry, PA

45,900

5.3%

2.0%

20.6%

10.5%

$613,918

$93,675

15.26

Washington, MD

150,904

14.4%

6.0%

20.6%

12.8%

$1,922,271

$24,537

1.28

Aggregate / Median

578,401

11.8%

5.0%

23.5%

12.4%

$9,645,216

$1,090,997

Contiguous

Counties

York, PA

434,017

13.7%

5.1%

29.2%

10.7%

149

$6,151,520

Dauphin, PA

259,828

3.2%

1.5%

31.4%

14.5%

$5,274,611

Adams, PA

102,759

12.6%

2.6%

24.8%

9.5%

$1,191,582

Frederick, MD

232,704

19.2%

4.7%

28.2%

13.6%

$3,591,861

Aggregate / Median

1,029,308

7.9%

2.1%

27.0%

10.1%

$16,209,574

Maryland

5,730,892

8.2%

1.9%

26.4%

13.7%

1,800

$112,624,504

$24,537

0.02%

116

Pennsylvania

12,574,407

2.4%

0.5%

31.5%

13.3%

4,717

$285,614,733

$1,066,460

0.37%

311,212,863

10.6%

3.9%

29.1%

12.4%

98,180

$6,911,804,490

$1,090,997

0.02%

442

Household Inc. Growth

ORRF Market Share

(1)

Favorable Performance Relative

to Regional Peers

(1)

(1) Includes publicly-traded Mid-Atlantic commercial banks with assets between $1bn and $2bn as identified in the Appendix

(2) See note in Appendix regarding non-GAAP financial measures

Source: Company Documents as of 9/30/10; SNL Financial

ORRF

Peer

YTD

Metric

ORRF

High

Low

Average

9/30/2010

YTD ROA

1.15%

1.39%

(1.17%)

0.46%

1.23%

YTD ROE

11.04%

15.77%

(44.46%)

3.57%

11.47%

YTD ROTCE

12.02%

18.79%

(44.46%)

4.61%

13.57%

Net Interest Margin

3.77%

4.98%

2.76%

3.70%

3.72%

Efficiency Ratio

53.25%

111.25%

53.13%

67.08%

53.97%

Non-Interest

Income/

Revenue

30.93%

37.83%

5.05%

20.94%

30.96%

Tangible

Common

Equity

Ratio

(2)

10.25%

9.70%

3.10%

7.20%

9.80%

Total Risk-Based Capital Ratio

15.30%

19.10%

9.40%

14.00%

14.90%

Reserves/ Gross Loans

1.62%

3.58%

0.94%

1.57%

1.67%

Reserves/ NPLs

100.59%

484.58%

19.71%

130.80%

107.00%

Reserves/ NPAs

92.53%

484.58%

14.81%

124.30%

90.75%

NPLs/ Gross Loans

1.61%

11.72%

0.28%

2.76%

1.57%

NPAs/ Assets

1.16%

8.89%

0.15%

2.15%

1.15%

NCOs/ Average Loans

0.65%

4.13%

0.00%

0.81%

0.48%

Peer Range

As of 6/30/2010

(1)

2006 reflects the acquisition of the First National Bank of Newport ($120mm of assets and $106mm of deposits)

(2)

NOTE: CAGR calculated from 12/31/05-9/30/2010: ‘05 Assets: 601,460; ‘05 Loans: 460,386; ‘05 Deposits: 462,822

Note: Dollar values in thousands

Source: Company Documents as of 9/30/10

Track Record of Strong Growth

Assets

Loans

Deposits

CAGR: 15.75%

CAGR: 20.87%

CAGR: 27.09%

2006¹

2007

2008

2009

YTD

2010

2006¹

2007

2008

2009

YTD

2010

2006¹

2007

2008

2009

YTD

2010

7.20%

7.60%

9.80%

8.67%

7.60%

9.50%

12.36%

10.10%

13.70%

14.00%

11.30%

14.90%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

12.00%

13.00%

14.00%

15.00%

TCE/ TA

Tier 1 Leverage

Tier 1 RBC

Total RBC

Peer Group Average 6/30/10

ORRF 12/31/09

ORRF 9/30/10

Capital Ratios

(1) See note in appendix regarding non-GAAP financial measures

(2) Calculated in accordance with bank regulatory requirements

Source: Company documents as of 9/30/10, SNL Financial

(2)

(1)

White line represents regulatory standard for being well capitalized

(before Capital Raise)

(after Capital Raise)

Deposit Composition

Source: Company Documents as of 9/30/10

•

Lowered Cost of Funds for 21 consecutive months

(Dollars in Thousands)

December 31, 2007

December 31, 2008

December 31, 2009

September 30, 2010

Deposit Type

Amount

% of Total

Amount

% of Total

Amount

% of Total

Amount

% of Total

Period End Balances

Non-Interest Bearing DDA

$91,365

14.1%

$84,261

11.1%

$90,676

9.9%

$105,452

9.3%

Interest Bearing DDA

231,413

35.8%

272,372

36.0%

353,428

38.6%

410,689

36.1%

Savings deposits

64,292

9.9%

60,846

8.0%

60,032

6.6%

64,076

5.6%

Time deposits < $100,000

147,211

22.9%

211,354

27.9%

179,362

19.6%

265,849

23.3%

Time deposits > $100,000

112,075

17.3%

128,535

17.0%

231,672

25.3%

292,803

25.7%

Total

$646,356

100.0%

$757,368

100.0%

$915,170

100.0%

$1,138,869

100.0%

Annual Growth

1.2%

17.2%

20.8%

24.4%

Average Total Deposit Cost

2.89%

2.07%

1.52%

0.98%

Investment Portfolio

Gov't Agency

30.4%

CMO

15.6%

MBS

31.3%

Municipal

22.0%

Cert. of Dep.

0.6%

Current Par Distribution

Source: Company Documents

•

As of September 30, 2010, the market value of the investment portfolio was approximately $424 million

•

Duration of 3.9 years and average life of 4.5 years

•

Investment portfolio is comprised of 99% A or better rated securities

•

Currently do not hold any corporate or high-yield instruments

AAA

86.2%

11.1%

1.9%

BBB

0.1%

0.6%

Debt Portfolio Breakdown by Rating

Historical Credit Cycle Analysis

NCOs/ Average Loans

(1)

All Banks as defined by SNL Financial

(2)

Mid-Atlantic Banks as defined by SNL Financial

(3)

$1-$5 Billion Banks as defined by SNL Financial

Source: Company Documents as of 9/30/10; SNL Financial

0.31

0.8

0.85

0.16

0.35

1.03

1.11

0.37

0.16

0.41

0.02

0.06

0.11

0.41

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.1

1.2

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

LTM as

6/30/10

All Banks

Mid Atlantic Banks

$1-$5 Billion Banks

ORRF

(1)

(2)

(3)

0.45

1.26

2.46

2.75

0.77

1.38

1.53

2.92

3.25

0.09

0.45

1.16

1.42

0.5

0.04

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.1

3.2

3.3

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

LTM as

6/30/10

All Banks

Mid Atlantic Banks

$1-$5 Billion Banks

ORRF

(1)

(2)

(3)

Historical Credit Cycle Analysis

NPAs/ Assets

(1)

All Banks as defined by SNL Financial

(2)

Mid-Atlantic Banks as defined by SNL Financial

(3)

$1-$5 Billion Banks as defined by SNL Financial

Source: Company Documents as of 9/30/10; SNL Financial

Commercial

74.4%

Residential Mortgage

12.1%

Home Equity Loans &

Lines

12.3%

Consumer

1.2%

Loan Portfolio Overview

Loan Stratification by Purpose

Gross Loans: $921 million

Most Recent Quarter Yield: 5.37%

Year to Date Yield: 5.42%

Source: Company Documents as of 9/30/10

Construction & Land

Development

17.0%

Multifamily

3.3%

Non-Owner Occupied

19.7%

Owner Occupied

23.2%

C&I, Term and Other

36.8%

Loan Portfolio Overview

Source: Company Documents as of 9/30/10

Commercial Loans by Purpose

Commercial Loans: $685 million

Commercial Raw

Land

16%

Residential Raw

Land

18%

Commercial Land

Development

Residential Land

Development

35%

Commercial Vertical

Construction

11%

Residential Vertical

Construction

18%

Loan Portfolio Overview

Construction & Land Development Breakdown

Source: Company Documents as of 9/30/10

Construction & Land Development Portfolio: $117 Million

Loan Portfolio Overview

Geographic Distribution¹

Commercial Loans by Industry

Cumberland, PA

41%

Franklin, PA

27%

Perry, PA

Washington, MD

13%

Other

13%

(1) Based on location where the borrower resides

Source: Company Documents as of 9/30/10

Agriculture

Construction &

Development

19%

Manufacturing

Wholesale Trade

Retail Trade

Transport

Finance

CRE - Owner-

Occ. and Non

Owner-Occ.

42%

Professional

Healthcare

Service &

Entertainment

Public Admin.

Other

Asset Quality Summary

Source: Company Documents as of 9/30/10, SNL Financial

Calendar Year to Date

(Dollars in Thousands)

12/31/2008

12/31/2009

3/31/2010

6/30/2010

9/30/2010

90 Days Past Due and Still Accruing

6,176

6,155

8,929

7,255

3,526

Total Non-Performing Loans and Leases

341

4,267

23,020

14,496

14,427

ORE and Repossessed Assets

608

1,065

873

1,264

2,528

NPAs & 90 Day Delinquent

7,125

11,487

32,822

23,015

20,481

Non-Performing Loans / Total Loans

0.04%

0.48%

2.56%

1.61%

1.57%

Non-Performing Assets / Total Assets

0.09%

0.44%

1.82%

1.16%

1.15%

Loan Loss Reserve

7,140

11,067

12,020

14,582

15,386

Loan Loss Reserves / Gross Loans

0.87%

1.26%

1.34%

1.62%

1.67%

Reserves / NPLs

2,094%

259%

52%

101%

107%

Net Charge-Offs

451

938

467

2,905

3,231

Net Charge-Offs / Average Loans

0.06%

0.11%

0.21%

0.65%

0.48%

Provision / Net Charge-Offs

322%

519%

304%

221%

234%

Cumberland, PA

Franklin, PA

Perry, PA

Washington, MD

Other

Nonperforming Assets

NPAs

by Market¹

(1) Based on location where the borrower resides

Source: Company Documents as of 9/30/10

(Dollar Values in Thousands)

Non-Acc.

Total

Gross

NPAs /

County

Loans

OREO

NPAs

Loans

Loans+REO

Cumberland, PA

$8,662

$1,212

$9,874

$379,642

2.59%

Franklin, PA

$2,151

$1,204

$3,355

$248,092

1.35%

Perry, PA

$902

$54,243

1.66%

Washington, MD

$1,428

$50

$1,478

$116,497

1.27%

Other

$1,284

$62

$1,346

$123,333

1.09%

Total

$14,427

$2,528

$16,955

$921,807

1.83%

1.84

1.48

2.03

1.62

1.67

0.85%

0.95%

1.05%

1.15%

1.25%

1.35%

1.45%

1.55%

1.65%

1.75%

1.85%

1.95%

2.05%

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

2.75

1.53

3.25

1.16

1.15

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

3.25%

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

Credit Quality Trends

Net Charge-Offs / Average Loans

Non-Performing Assets / Total Assets

Reserves / Loans

0.60

0.22

0.92

0.65

0.48

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

1.10%

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

(1)

All Banks as defined by SNL Financial

(2)

Mid Atlantic Banks as defined by SNL Financial

(3)

$1-$5 Billion Dollar Banks as defined by SNL Financial

Source: Company Documents as of 9/30/10; SNL Financial

NPAs

+90days Delinq/ Assets

2.91

1.65

3.38

1.39

1.69

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

All Banks(1)

Mid Atlantic(2)

$1-$5 Billion Banks(3)

ORRF

All Banks(1)

Mid Atlantic(2)

$1-$5 Billion Banks(3)

ORRF

All Banks(1)

Mid Atlantic(2)

$1-$5 Billion Banks(3)

ORRF

All Banks(1)

Mid Atlantic(2)

$1-$5 Billion Banks(3)

ORRF

•

Established South Central Pennsylvania bank with a history

of strong performance

•

Emphasis on credit quality, return to shareholders, solid

financial performance, and delivering peer-group leading

results

•

Well-positioned for future growth throughout the region, both

organically and through acquisitions

•

Deep and experienced management team with strong

community ties and operational ability

Compelling Investment Considerations

APPENDIX

Experienced Management Team

Executive

Title

Thomas R. Quinn, Jr.

President / CEO

Years

Jeffrey W. Embly

Executive Vice President / Chief Credit/Risk Officer

Years

Bradley S. Everly

Executive Vice President / Chief Financial Officer

Years

Philip E. Fague

Executive Vice President / Mortgage & Consumer Business

Years

Jeffrey S. Gayman

Senior Vice President / Chief Commercial Officer

Years

Barbara E. Brobst

Senior Vice President, Senior Trust Officer, Orrstown

Financial Advisors

Years

Gary R. Holder

Senior Vice President / Chief Retail Officer

Years

Michelle N. Paulnock

Senior Vice President of Operations

Years

Benjamin S. Stoops

Senior Vice President / Chief Technology Officer

Years

Douglas P. Barton

Senior Vice President & Chief Accounting Officer

Years

Mark G. Bayer

Vice President & Director of Marketing

Years

Stephen C. Caldwell

Vice President & Director of Human Resources

Years

Years with ORRF

Banking Experience

Summary Financial Highlights

(1) See note in Appendix regarding non-GAAP financial measures

Source: Company Documents as of 9/30/10

Year Ended December 31,

9 Months Ended

(Dollar Values in Thousands)

2005

2006

2007

2008

2009

September 30, 2010

Total Assets

$601,460

$809,031

$884,979

$1,051,783

$1,196,432

$1,477,780

Gross Loans

$460,386

$618,827

$701,964

$820,468

$881,074

$921,807

Total Deposits

$462,822

$638,719

$646,356

$757,368

$915,170

$1,138,869

Total Shareholder's Equity

$57,310

$89,388

$96,124

$103,347

$110,886

$163,933

Net Income

$9,987

$11,632

$12,558

$13,103

$13,373

$12,206

Basic Earnings Per Share

$1.76

$1.87

$1.95

$2.04

$2.09

$1.62

Diluted Earnings Per Share

$1.74

$1.86

$1.94

$2.03

$2.07

$1.62

Return on Average Assets

1.81%

1.61%

1.50%

1.38%

1.19%

1.23%

Return on Average Equity

18.69%

15.10%

13.64%

13.20%

12.48%

11.47%

Return

Average

Tangible

Equity

(1)

19.28%

18.98%

18.02%

17.02%

15.73%

13.57%

Net Interest Margin

4.55%

4.32%

4.08%

3.93%

3.66%

3.72%

Efficiency Ratio

52.86%

53.98%

55.58%

56.73%

58.85%

54.0%

Non-Interest Expense / Avg. Assets

3.14%

2.94%

2.96%

2.97%

2.82%

2.70%

Tang.

Common

Equity

Tang.

Assets

(1)

9.2%

8.6%

8.7%

8.0%

7.6%

9.83%

Total Risk-Based Capital Ratio

12.8%

12.0%

11.6%

10.9%

11.3%

14.90%

Non-Performing Assets / Assets

0.30%

0.05%

0.04%

0.09%

0.44%

1.15%

Loan Loss Reserves / Gross Loans

0.96%

0.89%

0.87%

1.26%

1.67%

Regional Peer Analysis

(1) See note in appendix regarding non-GAAP financial measures

Note:

Includes publicly-traded commercial banks with assets between $1bn and $2bn headquartered in the Mid Atlantic

Financial data as of June 30, 2010; Market data as of October 19, 2010

Source: Company Documents as of 9/30/10; SNL Financial

Balance Sheet

Non-

Total

Int. Inc./

Res./

NCOs/

NPAs/

Total

Gross

TCE /

RBC

Eff.

Total

Gross

Res./

Ave

Total

Market

Dividend

Assets

Deposits

Loans

(1)

Ratio

ROAA

ROAE

NIM

Ratio

Rev.

Loans

NPAs

Loans

Assets

Cap.

Yield

Company

St.

Ticker

($mm)

(%)

($mm)

(%)

Arrow Financial Corporation

AROW

1,846

1,439

1,145

7.4

15.5

1.20

15.19

3.72

56.74

20.66

1.26

446.58

0.06

0.18

291.2

3.99

Eagle Bancorp, Inc.

EGBN

1,937

1,578

1,529

8.8

12.9

0.74

7.08

4.01

62.55

6.70

1.42

67.90

0.37

1.65

230.5

0.00

Suffolk Bancorp

SUBK

1,703

1,455

1,159

8.4

12.3

0.73

9.13

4.98

53.13

11.73

1.80

45.71

0.57

2.68

256.9

3.41

First United Corporation

FUNC

1,776

1,374

1,082

3.1

12.0

(0.68)

(12.00)

2.95

71.24

22.81

2.20

34.17

0.63

3.70

26.1

0.96

First of Long Island Corporation

FLIC

1,598

1,273

864

8.0

16.8

1.18

15.77

3.83

54.39

10.38

1.38

484.58

0.00

0.15

215.9

3.53

State Bancorp, Inc.

STBC

1,615

1,389

1,101

7.2

13.3

0.57

6.15

4.29

63.94

5.05

2.84

399.94

0.93

0.48

157.4

2.21

Canandaigua National Corporation

CNND

1,624

1,432

1,188

6.5

14.0

1.11

15.68

4.25

60.06

30.34

1.26

57.69

0.39

1.59

149.0

3.64

Peapack-Gladstone Financial Corporation

PGC

1,477

1,311

959

6.4

13.3

0.52

6.79

3.66

65.98

22.49

1.44

44.43

0.92

2.11

106.6

1.67

Tower Bancorp, Inc.

TOBC

1,588

1,322

1,231

9.6

14.5

0.40

3.74

3.65

71.45

15.16

0.94

102.12

0.24

0.72

156.0

5.18

Alliance Financial Corporation

ALNC

1,457

1,118

916

6.4

13.9

0.80

9.28

3.58

65.35

29.84

1.12

95.18

0.29

0.73

144.6

4.00

First Mariner Bancorp

FMAR

1,342

1,116

974

3.2

9.4

(1.17)

(44.46)

2.76

111.25

37.83

1.23

14.81

1.30

6.00

12.5

0.00

Royal Bancshares of Pennsylvania, Inc.

RBPAA

1,183

792

635

6.1

16.7

(0.80)

(9.30)

2.87

94.49

14.51

3.58

19.94

4.13

8.89

26.8

0.00

Citizens & Northern Corporation

CZNC

1,339

969

724

9.3

19.1

1.39

11.91

54.12

24.01

1.17

91.37

0.02

0.69

165.3

3.29

VIST Financial Corp.

VIST

1,289

1,006

899

5.4

13.0

0.48

5.05

3.39

69.42

35.11

1.43

38.07

0.72

2.61

46.3

2.86

Bryn Mawr

Bank Corporation

BMTC

1,281

953

904

9.7

15.0

0.76

8.26

3.90

66.58

33.71

1.09

77.03

1.05

1.02

207.0

3.31

Center Bancorp, Inc.

CNBC

1,196

802

723

6.9

12.3

0.39

4.36

3.37

64.04

7.00

1.19

92.23

0.51

0.78

111.5

1.59

CNB Financial Corporation

CCNE

1,325

1,095

723

7.6

15.9

0.85

13.32

3.69

60.23

18.71

1.41

95.18

0.31

0.80

166.4

4.78

Shore Bancshares, Inc.

SHBI

1,129

972

905

9.4

12.9

(0.20)

(1.76)

3.95

62.52

30.95

1.47

30.48

2.22

3.86

80.0

2.50

High

1,937

1,578

1,529

9.7

19.1

1.39

15.77

4.98

111.25

37.83

3.58

484.58

4.13

8.89

291.2

5.18

Low

1,129

792

635

3.1

9.4

(1.17)

(44.46)

2.76

53.13

5.05

0.94

14.81

0.00

0.15

12.5

0.00

Mean

1,484

1,189

981

7.2

14.0

0.46

3.57

3.70

67.08

20.94

1.57

124.30

0.81

2.15

141.7

2.61

Median

1,467

1,196

938

7.3

13.6

0.65

6.94

3.69

63.99

21.57

1.40

72.47

0.54

1.31

152.5

3.08

Orrstown

Financial Services, Inc.

ORRF

1,359

1,090

898

10.3

15.3

1.15

11.04

3.77

53.25

30.93

1.62

92.53

0.65

1.16

194.3

3.53

Asset Quality

Profitability

Valuation

Non-

GAAP Financial Measures

The ratio of tangible common equity to tangible assets is a non-GAAP-based financial measure calculated using non-GAAP-

based

amounts.

The

most

directly

comparable

GAAP-based

measure

the

ratio

stockholders’

equity to assets. In order to

calculate tangible common equity and tangible assets, the Company’s management subtracts intangible assets from both

common equity and assets. Tangible common equity is then divided by tangible assets to arrive at the ratio of tangible

common equity to tangible assets. Management uses the ratio of tangible common equity to tangible assets to assess the

strength

the

Company’s

capital

position.

reconciliation

the

ratio

stockholders’

equity to assets and tangible common

equity to tangible assets is set forth below.

(Dollar Values in Thousands)

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

Common Equity

57,310

89,388

96,124

103,347

110,886

157,903

163,933

Intangible Assets

1,935

21,567

21,368

21,186

20,938

20,808

20,751

Tangible Common Equity

55,375

67,821

74,756

82,161

89,948

137,095

143,182

Assets

601,460

809,031

884,979

1,051,783

1,196,432

1,358,756

1,477,780

Intangible Assets

1,935

21,567

21,368

21,186

20,938

20,808

20,751

Tangible Assets

599,525

787,464

863,611

1,030,597

1,175,494

1,337,948

1,457,029

Equity/ Assets

9.53%

11.05%

10.86%

9.83%

9.27%

11.62%

11.09%

Tangible Common Equity/ Tangible Assets

9.24%

8.61%

8.66%

7.97%

7.65%

10.25%

9.83%

Year Ended December 31,

Non-

GAAP Financial Measures

Return on average tangible equity is a non-GAAP-based financial measure calculated using non-GAAP-based amounts. The

most directly comparable measure is return on average equity, which is calculated using GAAP-based amounts. The

Company calculates the return on average tangible equity by excluding the balance of intangible assets and their related

amortization expense from the calculation of return on average equity. Management uses the return on average tangible

equity to assess the Company’s core operating results and believes that this is a better measure of our performance. In

addition, this is consistent with the treatment by bank regulatory agencies, which exclude goodwill and other intangible assets

from the calculation of risk-based capital ratios. However, these non-GAAP financial measures are supplemental and are not

a substitute for an analysis based on GAAP measures. A reconciliation of return on average equity to the return on average

tangible equity is set forth below.

(Dollar

Values

Thousands,

Except

PerShare)

2005

2006

2007

2008

2009

6/30/2010

9/30/2010

18.69%

15.10%

13.64%

13.20%

12.48%

10.20%

11.47%

0.59%

3.88%

4.38%

3.82%

3.25%

1.82%

2.10%

19.28%

18.98%

18.02%

17.02%

15.73%

12.02%

13.57%

Year Ended December 31,

Return on average equity (GAAP basis)

Effect of excluding average intangible assets and related amortization

Return on average tangible equity

Thomas R. Quinn, Jr.

President & Chief Executive Officer

tquinn@orrstown.com

Jeffrey W. Embly

EVP, Chief Credit /Risk Officer

jembly@orrstown.com

Jeffrey W. Embly

EVP, Chief Credit /Risk Officer

jembly@orrstown.com

Bradley S. Everly

EVP, Chief Financial Officer

beverly@orrstown.com

Bradley S. Everly

EVP, Chief Financial Officer

beverly@orrstown.com

Toll Free: 1-888-677-7869

717-530-2648

Orrstown Financial Services (ORRF) 8-K2010 East Coast Financial Services Conference