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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 61.9GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
8.7%
Sector: 8.5%
Dividend Analysis audit
INCOME
3.03%
Trailing Yield
$3.03
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
44%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ORRSTOWN FINANCIAL SERVICES INC (ORRF) receives a "Hold" rating with a composite score of 56.3/100, ranked #282 out of 4446 stocks. Key factor scores: Quality 62/100, Value 77/100, Momentum 51/100. This is quantitative analysis only — not investment advice.
ORRSTOWN FINANCIAL SERVICES INC (ORRF) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ORRSTOWN FINANCIAL SERVICES INC Do?
Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans comprising home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, the company provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as provides other fiduciary services under the Orrstown Financial Advisors name; and offers retail brokerage services through a third-party broker/dealer arrangement. Further, it offers investment advisory, insurance, and brokerage services. The company operates through offices in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties, Pennsylvania; and Anne Arundel, Baltimore, Howard, and Washington counties, Maryland, as well as Baltimore City, Maryland. Orrstown Financial Services, Inc. was founded in 1919 and is based in Shippensburg, Pennsylvania. ORRSTOWN FINANCIAL SERVICES INC (ORRF) is classified as a small-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO Thomas R. Quinn and employs approximately 430 people, headquartered in SHIPPENSBURG, Pennsylvania. With a market capitalization of $712M, ORRF is one of the notable companies in the Financials sector.
As of April 2026, ORRSTOWN FINANCIAL SERVICES INC receives a Hold rating with a composite score of 56.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.ORRF ranks #282 out of 4,446 stocks in our coverage universe. Within the Financials sector, ORRSTOWN FINANCIAL SERVICES INC ranks #105 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ORRF Stock Price and 52-Week Range
ORRSTOWN FINANCIAL SERVICES INC (ORRF) currently trades at $38.39. The stock lost $0.56 (1.4%) in the most recent trading session. The 52-week high for ORRF is $40.72, which means the stock is currently trading -5.7% from its annual peak. The 52-week low is $25.57, putting the stock 50.2% above its annual trough. Recent trading volume was 109K shares, suggesting relatively thin trading activity.
Is ORRF Overvalued or Undervalued? — Valuation Analysis
ORRSTOWN FINANCIAL SERVICES INC (ORRF) carries a value factor score of 77/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 14.50x, compared to the Financials sector average of 14.88x — a discount of 3%. The price-to-book ratio stands at 1.26x, versus the sector average of 1.22x. The price-to-sales ratio is 2.40x, compared to 0.90x for the average Financials stock. On an enterprise value basis, ORRF trades at 9.27x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, ORRSTOWN FINANCIAL SERVICES INC appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
ORRSTOWN FINANCIAL SERVICES INC (ORRF) earns a quality factor score of 62/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 8.7%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 0.9% versus the sector average of 1.2%.
On a margin basis, ORRSTOWN FINANCIAL SERVICES INC reports gross margins of 0.0%. The operating margin is 21.8% (sector: 21.8%). Net profit margin stands at 17.2%, versus 17.7% for the average Financials stock. Revenue growth is running at 78.2% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
ORRF Debt, Balance Sheet, and Financial Health
ORRSTOWN FINANCIAL SERVICES INC has a debt-to-equity ratio of 837.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.12x, suggesting adequate working capital coverage. Total debt on the balance sheet is $246M. Cash and equivalents stand at $61M.
ORRF has a beta of 0.69, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ORRSTOWN FINANCIAL SERVICES INC is 83/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ORRSTOWN FINANCIAL SERVICES INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, ORRSTOWN FINANCIAL SERVICES INC reported revenue of $310M and earnings per share (EPS) of $4.21. Net income for the quarter was $51M. Gross margin was 0.0%. Operating income came in at $65M.
In FY 2025, ORRSTOWN FINANCIAL SERVICES INC reported revenue of $37M and earnings per share (EPS) of $4.21. Net income for the quarter was $81M. Revenue grew 36.0% year-over-year compared to FY 2024. Operating income came in at $103M.
In Q3 2025, ORRSTOWN FINANCIAL SERVICES INC reported revenue of $77M and earnings per share (EPS) of $1.14. Net income for the quarter was $22M. Revenue grew -7.1% year-over-year compared to Q3 2024. Operating income came in at $28M.
In Q2 2025, ORRSTOWN FINANCIAL SERVICES INC reported revenue of $75M and earnings per share (EPS) of $1.01. Net income for the quarter was $19M. Revenue grew 72.9% year-over-year compared to Q2 2024. Operating income came in at $25M.
Over the past 8 quarters, ORRSTOWN FINANCIAL SERVICES INC has demonstrated a growth trajectory, with revenue expanding from $43M to $310M. Investors analyzing ORRF stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ORRF Dividend Yield and Income Analysis
ORRSTOWN FINANCIAL SERVICES INC (ORRF) currently pays a dividend yield of 3.0%. At this yield, a $10,000 investment in ORRF stock would generate approximately $$303.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning ORRF offers above-average income for its sector. With a net margin of 17.2%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
ORRF Momentum and Technical Analysis Profile
ORRSTOWN FINANCIAL SERVICES INC (ORRF) has a momentum factor score of 51/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 22/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 29/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
ORRF vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing ORRF against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ORRF vs S&P 500 (SPY) comparison to assess how ORRSTOWN FINANCIAL SERVICES INC stacks up against the broader market across all factor dimensions.
ORRF Next Earnings Date
No upcoming earnings date has been announced for ORRSTOWN FINANCIAL SERVICES INC (ORRF) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ORRF? — Investment Thesis Summary
ORRSTOWN FINANCIAL SERVICES INC presents a balanced picture with arguments on both sides. The quality score of 62/100 indicates above-average profitability and business fundamentals. The value score of 77/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 83/100) reduces downside risk.
In summary, ORRSTOWN FINANCIAL SERVICES INC (ORRF) earns a Hold rating with a composite score of 56.3/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ORRF stock.
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Institutional Research Dossier
ORRSTOWN FINANCIAL SERVICES INC (ORRF) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Orrstown Financial Services (ORRF) receives a Hold rating, primarily driven by a mixed financial performance and a valuation that appears fair relative to its peers, despite some concerning trends in free cash flow. While the company exhibits strong revenue growth and attractive valuation multiples, its high debt-to-equity ratio and negative free cash flow raise concerns about its long-term financial sustainability and capital allocation efficiency.
The bank's strategic focus on community banking and trust services provides a stable foundation, but its ability to navigate the evolving regulatory landscape and maintain profitability in a competitive market will be crucial. Investors should closely monitor the company's efforts to improve its capital allocation strategy and reduce its debt burden to unlock further value.
Business Strategy & Overview
Orrstown Financial Services operates as a community bank, providing a range of financial services to individuals and businesses primarily in Pennsylvania and Maryland. The core of its business revolves around traditional banking activities, including accepting deposits and originating loans. These loans span commercial real estate, equipment financing, working capital, consumer loans, residential mortgages, and municipal loans. This diversified loan portfolio aims to mitigate risk by spreading exposure across various sectors and customer segments.
In addition to lending and deposit-taking, Orrstown offers trust and wealth management services through Orrstown Financial Advisors. This segment provides fiduciary services such as acting as trustee, executor, and investment advisor. The inclusion of wealth management diversifies revenue streams and caters to the financial planning needs of its customer base, fostering long-term relationships. Furthermore, the company offers retail brokerage services through a third-party arrangement, expanding its service offerings without the direct overhead of managing a brokerage operation.
Orrstown's strategic positioning centers on building strong relationships within its local communities. This approach allows the bank to understand the specific needs of its customers and tailor its services accordingly. The company operates through a network of offices in several counties in Pennsylvania and Maryland, focusing on markets where it can establish a significant presence and compete effectively with larger regional and national banks. This localized strategy enables Orrstown to differentiate itself through personalized service and community involvement.
The company's growth strategy appears to be a combination of organic expansion within its existing markets and potential acquisitions of smaller community banks. While the data does not provide specific details on recent acquisitions, the company's history and industry trends suggest that strategic acquisitions could be a part of its long-term growth plan. However, the company must carefully manage integration risks and ensure that any acquisitions align with its overall strategic objectives and financial goals.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
78.2%
Sector: 9.4%
+734% VS SCTR
Economic Moat Analysis
Orrstown Financial Services likely possesses a narrow economic moat, primarily derived from switching costs and local market presence. Community banks often benefit from established relationships with their customers, who may be hesitant to switch to larger, less personalized institutions. These relationships create a degree of customer loyalty, making it more difficult for competitors to attract existing Orrstown customers. The switching costs, while not insurmountable, provide a small but meaningful advantage.
The company's focus on specific geographic markets also contributes to its narrow moat. By concentrating its operations in Pennsylvania and Maryland, Orrstown has developed a deep understanding of the local economies and customer needs. This local expertise allows the bank to offer tailored services and build stronger relationships with its customers, further enhancing its competitive position. However, this geographic concentration also exposes the company to regional economic risks.
Unlike larger national banks, Orrstown does not benefit from significant economies of scale or brand recognition. Its cost structure is likely comparable to other community banks, and it lacks the marketing budget to compete effectively with larger institutions on a national level. Therefore, cost advantages and brand recognition do not contribute significantly to its moat.
The regulatory environment in the banking industry also plays a role in Orrstown's moat. Regulatory compliance costs can be a barrier to entry for new banks, providing a slight advantage to established players like Orrstown. However, these regulations also impose significant compliance burdens on existing banks, potentially offsetting some of the benefits.
Overall, Orrstown's narrow moat is primarily based on customer relationships, local market presence, and the regulatory environment. While these factors provide some degree of competitive advantage, they are not strong enough to create a wide moat. The company's ability to maintain and strengthen these advantages will be crucial for its long-term success.
Financial Health & Profitability
Orrstown Financial Services exhibits a mixed financial profile. The company's revenue growth has been impressive, with a TTM revenue growth rate of 78.2% significantly outpacing the sector average of 9.3%. However, this growth appears to be an anomaly when considering the quarterly revenue figures, which show significant fluctuations and inconsistencies. The FY2025 revenue of $37.14M is significantly lower than the sum of the quarterly revenues, suggesting potential data discrepancies or accounting adjustments that warrant further investigation.
Profitability metrics, such as operating margin (21.8%) and net margin (17.2%), are in line with the sector averages of 22.0% and 17.8%, respectively. The company's ROE of 8.7% is also slightly above the sector average of 8.5%, indicating decent profitability relative to equity. However, the quarterly operating margins show extreme volatility, ranging from -11.9% to 35.9%, and even reaching 276.3% for FY2025, raising concerns about the consistency and sustainability of these margins.
The balance sheet presents a more concerning picture. The company's debt-to-equity ratio of 837.00 is significantly higher than the sector average of 115.00, indicating a high level of leverage. This high debt burden could increase the company's vulnerability to economic downturns and rising interest rates. While the current ratio of 1.12 suggests adequate short-term liquidity, the high debt level remains a significant concern.
Free cash flow is a major red flag. The company's TTM free cash flow is negative at $-96.17M. This indicates that the company is not generating enough cash from its operations to cover its capital expenditures and other cash needs. The lack of free cash flow could limit the company's ability to invest in growth opportunities, pay dividends, or reduce its debt burden. The absence of free cash flow data in the quarterly financials makes it difficult to assess the trend over time, but the negative TTM figure is a clear warning sign.
In summary, while Orrstown exhibits strong revenue growth and decent profitability, its high debt-to-equity ratio and negative free cash flow raise significant concerns about its financial health. Investors should closely monitor the company's efforts to improve its capital allocation strategy and reduce its debt burden.
Valuation Assessment
Orrstown Financial Services appears attractively valued based on several key metrics. The company's P/E ratio of 8.3x is significantly lower than the sector average of 15.5x, suggesting that the stock is undervalued relative to its earnings. Similarly, the EV/EBITDA ratio of 1.5x is substantially below the sector average of 3.5x, further indicating a potential undervaluation based on its enterprise value and operating cash flow.
However, it's crucial to consider the context of these valuation multiples. The company's high debt-to-equity ratio and negative free cash flow could be contributing to the lower valuation. Investors may be discounting the stock due to concerns about the company's financial health and its ability to generate sustainable cash flow. Therefore, while the multiples appear attractive on the surface, they may reflect underlying risks.
The company's revenue growth of 78.2% is a significant factor that should be considered in the valuation assessment. High-growth companies often trade at higher multiples, but in Orrstown's case, the market may be skeptical about the sustainability of this growth, given the inconsistencies in the quarterly revenue figures. If the company can demonstrate consistent and sustainable revenue growth, the valuation could potentially increase.
Compared to its historical valuation, it is difficult to assess whether the current valuation is cheap or expensive without historical P/E and EV/EBITDA data. However, given the company's recent financial performance and the concerns about its debt and cash flow, it is likely that the current valuation reflects a degree of caution from investors.
Overall, Orrstown's valuation appears to be fair, considering its strong revenue growth, decent profitability, but also its high debt and negative free cash flow. The attractive valuation multiples may be justified by the underlying risks, and investors should carefully weigh these factors before making an investment decision.
Risk & Uncertainty
Orrstown Financial Services faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its high debt-to-equity ratio. This high level of leverage increases the company's vulnerability to economic downturns and rising interest rates. If the economy weakens or interest rates rise, the company's debt servicing costs could increase, potentially squeezing its profitability and cash flow. Furthermore, a high debt burden could limit the company's ability to invest in growth opportunities or return capital to shareholders.
Another key risk is the company's negative free cash flow. The lack of free cash flow indicates that the company is not generating enough cash from its operations to cover its capital expenditures and other cash needs. This could force the company to rely on external financing, such as debt or equity, to fund its operations, which could further increase its leverage or dilute its shareholders' equity. The negative free cash flow also raises concerns about the sustainability of the company's business model.
Competition from larger regional and national banks poses another significant risk. These larger banks have greater resources and brand recognition, allowing them to offer a wider range of products and services at potentially lower prices. Orrstown's ability to compete effectively with these larger institutions will depend on its ability to differentiate itself through personalized service, local expertise, and strong customer relationships. Failure to maintain its competitive edge could result in a loss of market share and reduced profitability.
Regulatory risk is also a factor. The banking industry is heavily regulated, and changes in regulations could increase the company's compliance costs or restrict its business activities. For example, changes in capital requirements or lending regulations could negatively impact the company's profitability and growth prospects. The company must stay abreast of regulatory developments and adapt its business practices accordingly.
Bulls Say / Bears Say
The Bull Case
BULL VIEWOrrstown's attractive valuation multiples, particularly its low P/E and EV/EBITDA ratios, suggest significant upside potential if the company can improve its financial performance and demonstrate sustainable growth.
BULL VIEWThe company's strong revenue growth indicates that it is gaining market share and successfully expanding its business, which could lead to increased profitability and shareholder value in the long term.
BULL VIEWOrrstown's focus on community banking and trust services provides a stable foundation and allows it to build strong relationships with its customers, creating a competitive advantage that is difficult for larger banks to replicate.
The Bear Case
BEAR VIEWOrrstown's high debt-to-equity ratio and negative free cash flow raise serious concerns about its financial health and sustainability, potentially leading to financial distress or the need for dilutive equity offerings.
BEAR VIEWThe company's inconsistent quarterly revenue figures and volatile operating margins suggest that its recent growth may not be sustainable, and its profitability could be negatively impacted by economic downturns or increased competition.
BEAR VIEWOrrstown's small size and limited geographic footprint make it vulnerable to competition from larger regional and national banks, which could erode its market share and reduce its profitability over time.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score ORRF and 4,400+ other equities.
ORRSTOWN FINANCIAL SERVICES INC exhibits a 88% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
0.9%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
21.8%
Sector: 21.8%
Net Margin
Bottom-line profitability
17.2%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+22%
Income Projection audit
A $10,000 investment would generate approximately $303 annually in dividends at the current trailing rate.
