Orrstown Financial Services, Inc. reported net income of $19.4 million, or $1.01 diluted earnings per share, for the second quarter ended June 30, 2025. This marks an increase from $18.1 million, or $0.93 diluted earnings per share, in the prior quarter. Excluding merger-related expenses, adjusted net income was $20.2 million, or $1.04 diluted earnings per share.
The company announced a dividend increase, reflecting its strong financial performance and confidence in future profitability. This increase follows a period of significant integration efforts and successful core system conversion. Management stated that meaningful merger-related expenses are not expected going forward, indicating the completion of the integration phase.
Net interest income increased to $49.5 million, with the net interest margin expanding to 4.07% in Q2 2025, driven by a 12 basis point decline in the cost of funds. Loans held for investment increased by $55.4 million, including a $25.4 million purchase of property assessed clean energy (PACE) loans, demonstrating positive traction in loan production.
Asset quality remained strong, with net charge-offs at $0.1 million and classified loans decreasing by $10.4 million to $65.8 million. Capital ratios continued to strengthen, with tangible book value per share rising to $22.77, tangible common equity ratio to 8.3%, total risk-based capital ratio to 13.3%, and Tier 1 leverage ratio to 9.0%. The company repurchased 2,134 common shares during the quarter under its authorized program.
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