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January 20, 2021 4:29 pm

First Trust Advisors L.P. Announces Distributions for Exchange-Traded Fund

First Trust Advisors L.P. Announces Distributions for Exchange-Traded Fund

WHEATON, Ill.–(BUSINESS WIRE)–
First Trust Advisors L.P. (“FTA”) announces the declaration of the monthly distributions for certain exchange-traded funds advised by FTA.

The following dates apply to today’s distribution declarations:

Expected Ex-Dividend Date:		January 21, 2021
Record Date:		January 22, 2021
Payable Date:		January 29, 2021

Ticker	Exchange		Frequency	Ordinary Income Per Share Amount

ACTIVELY MANAGED EXCHANGE-TRADED FUNDS

First Trust Exchange-Traded Fund III
FCAL	Nasdaq	First Trust California Municipal High Income ETF	Monthly	$0.0950
FEMB	Nasdaq	First Trust Emerging Markets Local Currency Bond ETF	Monthly	$0.1600
FMB	Nasdaq	First Trust Managed Municipal ETF	Monthly	$0.0975
FMHI	Nasdaq	First Trust Municipal High Income ETF	Monthly	$0.1400
FPE	NYSE Arca	First Trust Preferred Securities and Income ETF	Monthly	$0.0707
FPEI	NYSE Arca	First Trust Institutional Preferred Securities and Income ETF	Monthly	$0.0802
FSMB	NYSE Arca	First Trust Short Duration Managed Municipal ETF	Monthly	$0.0265
FUMB	NYSE Arca	First Trust Ultra Short Duration Municipal ETF	Monthly	$0.0110

First Trust Exchange-Traded Fund IV
FCVT	Nasdaq	First Trust SSI Strategic Convertible Securities ETF	Monthly	$0.0400
FDIV	Nasdaq	First Trust Strategic Income ETF	Monthly	$0.1700
FTSL	Nasdaq	First Trust Senior Loan Fund	Monthly	$0.1360
HYLS	Nasdaq	First Trust Tactical High Yield ETF	Monthly	$0.2300
LGOV	NYSE Arca	First Trust Long Duration Opportunities ETF	Monthly	$0.0800
LMBS	Nasdaq	First Trust Low Duration Opportunities ETF	Monthly	$0.0900

First Trust Exchange-Traded Fund VI
FTHI	Nasdaq	First Trust BuyWrite Income ETF	Monthly	$0.0800
FTLB	Nasdaq	First Trust Hedged BuyWrite Income ETF	Monthly	$0.0550

First Trust Exchange-Traded Fund VIII
DEED	NYSE Arca	First Trust TCW Securitized Plus ETF	Monthly	$0.0230
FIXD	Nasdaq	First Trust TCW Opportunistic Fixed Income ETF	Monthly	$0.0950
LDSF	Nasdaq	First Trust Low Duration Strategic Focus ETF	Monthly	$0.0300
UCON	NYSE Arca	First Trust TCW Unconstrained Plus Bond ETF	Monthly	$0.0540

INDEX EXCHANGE-TRADED FUNDS

First Trust Exchange-Traded Fund VI
MDIV	Nasdaq	Multi-Asset Diversified Income Index Fund	Monthly	$0.0840

FTA is a federally registered investment advisor and serves as the Funds’ investment advisor. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $171 billion as of December 31, 2020 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

You should consider the investment objectives, risks, charges and expenses of a Fund before investing. Prospectuses for the Funds contain this and other important information and are available free of charge by calling toll-free at 1-800-621-1675 or visiting www.ftportfolios.com. A prospectus should be read carefully before investing.

Past performance is no assurance of future results. Investment return and market value of an investment in a Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.

Principal Risk Factors: A Fund’s shares will change in value, and you could lose money by investing in a Fund. An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. There can be no assurance that a Fund’s investment objectives will be achieved. An investment in a Fund involves risks similar to those of investing in any portfolio of equity securities traded on exchanges. The risks of investing in each Fund are spelled out in its prospectus, shareholder report, and other regulatory filings.

Securities held by a fund, as well as shares of a fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on a fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of this COVID-19 pandemic may last for an extended period of time and will continue to impact the economy for the foreseeable future.

An Index ETF seeks investment results that correspond generally to the price and yield of an index. You should anticipate that the value of an Index Fund’s shares will decline, more or less, in correlation with any decline in the value of the index. An Index Fund’s return may not match the return of the index. Unlike a Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by a Fund.

Investors buying or selling Fund shares on the secondary market may incur customary brokerage commissions. Investors who sell Fund shares may receive less than the share’s net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the Fund by authorized participants, in very large creation/redemption units. If the Fund’s authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, Fund shares may trade at a discount to the Fund’s net asset value and possibly face delisting.

One of the principal risks of investing in a Fund is market risk. Market risk is the risk that a particular security owned by a Fund, Fund shares or securities in general may fall in value.

An actively managed ETF is subject to management risk because it is an actively managed portfolio. In managing such a Fund’s investment portfolio, the portfolio managers, management teams, advisor or sub-advisor, will apply investment techniques and risk analyses that may not have the desired result.

A Fund that is concentrated in securities of companies in a certain sector or industry involves additional risks, including limited diversification. An investment in a Fund concentrated in a single country or region may be subject to greater risks of adverse events and may experience greater volatility than a Fund that is more broadly diversified geographically.

Certain Funds may invest in small capitalization and mid-capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

An investment in a Fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. A Fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

Investments in securities of issuers located in emerging market countries are considered speculative and there is a heightened risk of investing in emerging markets securities. Financial and other reporting by companies and government entities also may be less reliable in emerging market countries. Shareholder claims that are available in the U.S., as well as regulatory oversight and authority that is common in the U.S., including for claims based on fraud, may be difficult or impossible for shareholders of securities in emerging market countries or for U.S. authorities to pursue.

Investments in sovereign bonds involve special risks because the governmental authority that controls the repayment of the debt may be unwilling or unable to repay the principal and/or interest when due. In times of economic uncertainty, the prices of these securities may be more volatile than those of corporate debt obligations or of other government debt obligations.

Preferred securities, high-yield securities, corporate bonds, government bonds, municipal bonds and senior loans are subject to credit risk, call risk, income risk, interest rate risk, inflation risk and prepayment risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk is heightened for floating-rate loans and high-yield securities. Call risk is the risk that if an issuer calls higher-yielding debt instruments held by a Fund, performance could be adversely impacted. Income risk is the risk that income from a Fund’s fixed-income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of the fixed-income securities in a Fund will decline because of rising market interest rates. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. Prepayment risk is the risk that during periods of falling interest rates, an issuer may exercise its right to pay principal on an obligation earlier than expected. This may result in a decline in a Fund’s income.

Many financial instruments use or may use a floating rate based upon the London Interbank Offered Rate (LIBOR), which is being phased out by the end of 2021. There remains some uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. Manipulation of the LIBOR rate-setting process would raise the risk of adverse impacts to a fund if a fund received a payment based upon LIBOR and such manipulation of LIBOR resulted in lower resets than would have occurred had there been no manipulation.

Senior floating-rate loans are usually rated below investment grade but may also be unrated. As a result, the risks associated with these loans are similar to the risks of high-yield fixed income instruments. High-yield securities, or “junk” bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. The market for high yield securities is smaller and less liquid than that for investment grade securities.

The senior loan market has seen an increase in loans with weaker lender protections which may impact recovery values and/or trading levels in the future. The absence of financial maintenance covenants in a loan agreement generally means that the lender may not be able to declare a default if financial performance deteriorates. This may hinder the Fund’s ability to reprice credit risk associated with a particular borrower and reduce the Fund’s ability to restructure a problematic loan and mitigate potential loss. As a result, the Fund’s exposure to losses on investments in senior loans may be increased, especially during a downturn in the credit cycle or changes in market or economic conditions.

In the event a borrower fails to pay scheduled interest or principal payments on a senior loan held by the Fund, the Fund will experience a reduction in its income and a decline in the value of the senior loan, which will likely reduce dividends and lead to a decline in the net asset value of the Fund’s common shares. If the Fund acquires a senior loan from another lender, for example, by acquiring a participation, the Fund may also be subject to credit risks with respect to that lender. Although senior loans may be secured by specific collateral, the value of the collateral may not equal the Fund’s investment when the senior loan is acquired or may decline below the principal amount of the senior loan subsequent to the Fund’s investment. Also, to the extent that collateral consists of stock of the borrower or its subsidiaries or affiliates, the Fund bears the risk that the stock may decline in value, be relatively illiquid, and/or may lose all or substantially all of its value, causing the senior loan to be under collateralized. Therefore, the liquidation of the collateral underlying a senior loan may not satisfy the issuer’s obligation to the Fund in the event of non-payment of scheduled interest or principal, and the collateral may not be readily liquidated.

Income from municipal bonds held by a Fund could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer.

Convertible securities have characteristics of both equity and debt securities and, as a result, are exposed to certain additional risks. The values of certain synthetic convertible securities will respond differently to market fluctuations than a traditional convertible security because such synthetic convertibles are composed of two or more separate securities or instruments, each with its own market value. A Fund is subject to the credit risk associated with the counterparty creating the synthetic convertible instrument. Synthetic convertible securities may also be subject to the risks associated with derivatives.

Exchange-traded notes (ETNs) are senior, unsecured, unsubordinated debt securities whose returns are linked to the performance of a particular market benchmark or strategy minus applicable fees. The value of an ETN may be influenced by various factors.

Real estate investment trusts (REITs) and real estate operating companies (REOCs) are subject to certain risks, including changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

Master limited partnerships (MLPs) are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, price controls, and other regulatory policies of various governments. In addition, there is the risk that a MLP could be taxed as a corporation, resulting in decreased returns from such MLP.

The use of futures, options, and other derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when a Fund’s portfolio managers use derivatives to enhance a Fund’s return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by a Fund.

A Fund may effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, an investment in a Fund may be less tax-efficient than an investment in an exchange-traded fund that effects its creations and redemptions for in-kind securities.

A Fund’s investment in repurchase agreements may be subject to market and credit risk with respect to the collateral securing the repurchase agreements.

Alternative investments may employ complex strategies, have unique investment and risk characteristics and may not be appropriate for all investors.

Certain Funds may invest in other investment companies, including closed-end funds (CEFs), ETFs and affiliated ETFs, which involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a Fund’s investment performance and risks may be related to the investment and performance of the underlying funds.

A Fund may invest in U.S. government obligations. U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. government. Securities issued or guaranteed by federal agencies and U.S. government sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. government.

Income from the First Trust Managed Municipal ETF (FMB), the First Trust California Municipal High Income ETF (FCAL), the First Trust Municipal High Income ETF (FMHI), the First Trust Short Duration Managed Municipal ETF (FSMB), and the First Trust Ultra Short Duration Municipal ETF (FUMB) may be subject to the federal alternative minimum income tax. FMB, FCAL, FMHI, FSMB, and FUMB may invest in zero coupon bonds which may be highly volatile as interest rates rise and fall. FCAL invests principally in municipal debt securities from issuers located in California. Such concentration exposes the Fund to political, fiscal, and economic conditions affecting California municipal issuers and may affect the value of the Fund’s investments.

Short selling creates special risks which could result in increased volatility of returns. In times of unusual or adverse market, economic, regulatory or political conditions, a Fund may not be able, fully or partially, to implement its short selling strategy.

Certain Funds may invest in distressed securities and many distressed securities are illiquid or trade in low volumes and thus may be more difficult to value. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Fund or at prices approximately the value at which the Fund is carrying the securities on its books.

Certain Funds are classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the Fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

Nasdaq^® and NASDAQ U.S. Multi-Asset Diversified Income Index^SM are registered trademarks and service marks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by FTA. The Funds have not been passed on by the Corporations as to its legality or suitability. The Funds are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUNDS.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005713/en/

Press Inquiries Ryan Issakainen 630-765-8689

Broker Inquiries Sales Team 866-848-9727

Analyst Inquiries Stan Ueland 630-517-7633

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Professional Services Finance

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January 20, 2021 4:29 pm

First Trust/Aberdeen Global Opportunity Income Fund Declares its Monthly Common Share Distribution of $0.08 Per Share for February

First Trust/Aberdeen Global Opportunity Income Fund Declares its Monthly Common Share Distribution of $0.08 Per Share for February

WHEATON, Ill.–(BUSINESS WIRE)–
First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”) (NYSE: FAM) has declared the Fund’s regularly scheduled monthly common share distribution in the amount of $0.08 per share payable on February 16, 2021, to shareholders of record as of February 2, 2021. The ex-dividend date is expected to be February 1, 2021. The monthly distribution information for the Fund appears below.

First Trust/Aberdeen Global Opportunity Income Fund (FAM):
Distribution per share:		$0.08
Distribution Rate based on the January 19, 2021 NAV of $11.13:		8.63%
Distribution Rate based on the January 19, 2021 closing market price of $10.57:		9.08%

This distribution will consist of net investment income earned by the Fund and return of capital and may also consist of realized capital gains. The final determination of the source and tax status of all distributions paid in 2021 will be made after the end of 2021 and will be provided on Form 1099-DIV.

The Fund is a diversified, closed-end management investment company that seeks to provide a high level of current income. As a secondary objective, the Fund seeks capital appreciation. The Fund pursues these investment objectives by investing in the world bond markets through a diversified portfolio of investment grade and below-investment grade government and corporate debt securities.

First Trust Advisors L.P. (“FTA”) is a federally registered investment advisor and serves as the Fund’s investment advisor. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $171 billion as of December 31, 2020 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

Aberdeen Standard Investments Inc. (“ASII”) serves as the Fund’s investment sub-advisor. ASII is an indirect wholly-owned subsidiary of Standard Life Aberdeen plc. Aberdeen Standard Investments is the brand name for the asset management group of Standard Life Aberdeen plc, managing approximately $562.9 billion in assets as of June 30, 2020, for a range of pension funds, financial institutions, investment trusts, unit trusts, offshore funds, charities and private clients.

Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. There can be no assurance that the Fund’s investment objectives will be achieved. The Fund may not be appropriate for all investors.

Principal Risk Factors: Securities held by a fund, as well as shares of a fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on a fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time and will continue to impact the economy for the foreseeable future.

The Fund invests in securities of non-U.S. issuers which are subject to higher volatility than securities of U.S. issuers. The Fund may invest from time to time a substantial amount of its assets in issuers located in a single country or region. Risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. Because the Fund invests in non-U.S. securities, you may lose money if the local currency of a non-U.S. market depreciates against the U.S. dollar.

The Fund invests in non-investment grade debt instruments, commonly referred to as “high-yield securities”. High-yield securities are subject to greater market fluctuations and risk of loss than securities with higher ratings. Lower-quality debt tends to be less liquid than higher-quality debt.

The debt securities in which the Fund invests are subject to certain risks, including issuer risk, reinvestment risk, prepayment risk, credit risk, and interest rate risk. Issuer risk is the risk that the value of fixed-income securities may decline for a number of reasons which directly relate to the issuer. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund invests the proceeds from matured, traded or called bonds at market interest rates that are below the Fund portfolio’s current earnings rate. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the Fund derives interest income will be reduced. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates.

Forward foreign currency exchange contracts involve certain risks, including the risk of failure of the counterparty to perform its obligations under the contract and the risk that the use of forward contracts may not serve as a complete hedge because of an imperfect correlation between movements in the prices of the contracts and the prices of the currencies hedged.

Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.

The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings.

The Fund’s daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at www.ftportfolios.com or by calling 1-800-988-5891.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005711/en/

Press Inquiries Jane Doyle 630-765-8775

Analyst Inquiries Jeff Margolin 630-915-6784

Broker Inquiries Jeff Margolin 630-915-6784

KEYWORDS: Illinois United States North America

INDUSTRY KEYWORDS: Professional Services Finance

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January 20, 2021 4:28 pm

Orrstown Financial Services, Inc. Reports Fourth Quarter and Full Year 2020 Results

Diluted fourth quarter 2020 EPS of $0.91 per share versus $0.45 per share in the third quarter of 2020 due to robust revenue growth combined with expense reductions; full year diluted EPS of $2.40 per share
Tangible book value per share⁽¹⁾ increased to $19.93 at December 31, 2020 from $18.70 at September 30, 2020 and $17.65 at December 31, 2019, an increase of 12.9% for fiscal year 2020
Small Business Administration Paycheck Protection Program (“SBA PPP”) portfolio averaged $443 million in the three months ended December 31, 2020; $5.8 million of unearned net processing fees at December 31, 2020
Continued efforts to assist clients, employees and communities affected by COVID-19; active participant in new round of SBA PPP lending in January 2021
Net interest income solidly higher at $23.7 million in the three months ended December 31, 2020 versus $20.8 million in the three months ended September 30, 2020; fourth quarter 2020 net interest margin expands to 3.73% versus 3.24% in the linked quarter
Relationship fee income momentum continues as noninterest income increased to $7.2 million for the fourth quarter of 2020 from $6.9 million in the third quarter of 2020
Commercial loan growth, excluding SBA PPP loans, for the three months ended December 31, 2020 totaled $38.1 million, or 13.9% annualized; total gross loans, excluding SBA PPP loans, grew slightly during the quarter as residential mortgage loans continue to be paid off at a high rate
Deposit growth of $77.4 million, or 13.6% annualized, from September 30, 2020 to December 31, 2020 with non-interest DDA balances growing by $47.5 million from September 30, 2020 to $457.0 million at December 31, 2020
COVID-19 related loan deferrals fell to $18.2 million at December 31, 2020 from $78.4 million at September 30, 2020 and $239.3 million at June 30, 2020
Provision for loan losses in fourth quarter of $0.3 million due primarily to loan growth; COVID-19 qualitative reserves flat at $2.7 million at December 31, 2020
Asset quality metrics continue to be solid with non-performing loans to non-SBA loans of 0.65% at December 31, 2020 as compared to 0.50% at September 30, 2020; net recoveries in the three months ended December 31, 2020 totaling $126 thousand as compared to $8 thousand in the three months ended September 30, 2020.
Allowance to non-SBA and non-acquired loans of 1.5% at December 31, 2020 and September 30, 2020; allowance plus purchase accounting marks to unguaranteed loans⁽¹⁾ of 1.8% at December 31, 2020 compared to 1.9% at September 30, 2020
For the full year, net recoveries totaled $0.2 million with another $2.8 million in net gains recorded on the sale of problem loans
The fourth quarter 2020 efficiency ratio fell to 58.5% due to strong revenue growth; noninterest expenses fell to $18.1 million
The Board of Directors declared a cash dividend of $0.18 per common share, payable February 8, 2021, to shareholders of record as of February 1, 2021, an increase from the $0.17 dividend declared in previous quarters.

⁽¹⁾ Non-GAAP measure. See Appendix B for additional information.

SHIPPENSBURG, Pa., Jan. 20, 2021 (GLOBE NEWSWIRE) — Orrstown Financial Services, Inc. (“Orrstown” or the “Company”) (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months and full year ended December 31, 2020. Net income totaled $10.1 million for the three months ended December 31, 2020, compared with $5.0 million for the three months ended September 30, 2020 and $4.2 million for the three months ended December 31, 2019. Diluted earnings per share totaled $0.91 for the three months ended December 31, 2020, compared with $0.45 for the three months ended September 30, 2020 and $0.38 for the three months ended December 31, 2019. For the year ended December 31, 2020, net income was $26.5 million, or $2.40 per diluted share compared to $16.9 million, or $1.61 per diluted share for the year ended December 31, 2019.

Thomas R. Quinn, Jr., President & CEO, commented, “The COVID-19 pandemic and resultant economic fallout brought unprecedented challenges for Orrstown Bank in 2020. However, past strategic investments in technology, geographic diversity, and top-notch talent combined with our associates’ unwavering dedication to clients, Company, and coworkers resulted in a record level of pretax earnings for both the full-year and the fourth quarter. Though the window for new PPP loans was closed during the fourth quarter of 2020, the work continued as our team members shepherded clients through the forgiveness process and worked to deepen relationships with clients that are new to Orrstown Bank from the PPP. Mortgage volumes remained robust during the fourth quarter, but experienced seasonal slowness. Despite an elevated loan loss provision in 2020 due to economic uncertainty, asset quality metrics remain strong with minimal charge-offs during the year, which speaks to the Company’s risk management discipline.”

Mr. Quinn continued, “The arrival of a vaccine and passage of more government stimulus in late 2020 provides hope for a return to normalcy in 2021. That said, many of the headwinds created by the pandemic will persist into 2021 and perhaps beyond. These include, but are not limited to, a lower interest rate environment, which will impact our margin negatively, reduced loan demand, and greater risk of default from borrowers. We remain confident we can partially offset these negative factors through the combined impact of increased fee revenue, particularly mortgage, wealth management, and interchange income and expense control, as evidenced by our third quarter 2020 announcement of reductions to our branch count and staffing re-alignment. Commercial loan demand is expected to be muted in 2021 as the economy recovers and we remain committed to maintaining our credit and financial discipline. We are pleased to report that we are participating in the latest round of PPP, and will provide updated information at a later date, but we look forward to using this opportunity to introduce more new clients to the high-touch, consultative business approach of the Company.”

Orrstown has implemented the following steps to mitigate the potential spread of COVID-19 and help our clients during this challenging time:

Continue to perform branch transactions via drive-thru lanes or scheduled appointments at branch locations;
Launched an internal Pandemic Response Team at the outset of the COVID-19 pandemic;
Waived Orrstown fees on all foreign ATM transactions from March 18, 2020 through June 1, 2020 to encourage and support the use of this key delivery channel;
Waived late fees on all loan payments for 60 days through May 31, 2020 to assist those whose employment status and income may have been negatively impacted by the virus;
Designated a select group of loan specialists to work with clients needing special assistance or guidance;
Implemented strategic efforts to effectively operate most of the core operations of the Company in a remote work environment;
Maintaining enhanced staffing levels at our Client Service Center to manage and support our increased call volume;
Instituted extensive preventative measures for workplace health and safety;
Continuing to educate clients and consumers on the various assistance programs available to them through the SBA, as well as other federal and state government resources;
Conducted virtual, interactive webinars with lending clients and community groups in order to educate and support them on the SBA PPP process, including loan forgiveness. Recently held more than five webinars regarding new SBA PPP funding;
Conducted media interviews and launched a multi-channel advertising campaign in all markets aimed at educating the community about PPP funding; and
Partnered with the American Bankers Association to execute their Banks Never Ask That campaign, aimed at educating clients and consumers on how to protect their privacy and money, especially during the pandemic as reports warn of heightened scam and fraud attempts

Loss Mitigation Efforts / Loan Concentration

Management has continued numerous proactive efforts to prepare for the difficult economic environment, including quarterly contact with commercial loan clients having $1.0 million or more in exposure and many with lower exposure, initiating a loan payment deferral program for consumer and business clients of up to six months, actively participating in the initial SBA PPP program and the recently approved Second Draw PPP Loan program, performing stress testing of higher risk concentrations in the loan portfolio and implementing tighter underwriting for new loans. Currently, with government stimulus programs adding support to the economy and the benefits of limited re-opening of businesses in our markets, the Bank has not experienced a material increase in loan delinquencies or a negative impact to charge-off trends. We remain cautious regarding the economic impact of COVID-19 on our consumer and business borrowers in future quarters as the impact of federal stimulus wanes.

Due to continuing uncertainty in the external environment, management continues to maintain the qualitative factor designated for the impact of COVID-19, which represented $2.7 million of the Bank’s allowance for loan losses at December 31, 2020. As of December 31, 2020, the Bank had active COVID-19 related deferred loans totaling $18.2 million, or 1.15% of its total loan portfolio, excluding PPP loans. This compared to $78.4 million, or 5.0% of total loans, excluding PPP loans, at September 30, 2020 and $239.3 million in active COVID-19 deferrals, or 15.1% of total loans, excluding PPP loans, at June 30, 2020. While there was recent fiscal stimulus from the Federal government and talk of more to come, its impact will eventually wane and reopening plans continue to yield mixed results in our primary markets. We remain cautious with regard to our future credit outlook.

The Bank is also actively consulting with clients that applied for and received SBA PPP loans. At December 31, 2020, the Bank had $409.1 million outstanding principal for such loans. The program provides that the principal balance (or a reduced portion thereof) and accrued interest on these loans may be forgiven if the borrower satisfies certain specified criteria. The Bank has begun to process applications received from borrowers requesting such forgiveness, including the implementation of the SBA’s recently announced, streamlined forgiveness approval process on PPP loans of $150,000 and under. Loans of $150,000 and under make up the majority of the number of the Bank’s PPP loans, but a relatively small amount of its total PPP loan balances.

The combination of active client relationship consultation, loan payment deferrals, increased risk management focus on higher risk loan concentrations and significant client participation in the SBA PPP are anticipated to help offset potential future losses. Due to the current economic environment, charge-offs may increase in the coming quarters, but more time is needed to fully understand the magnitude and length of the economic downturn and its impact on our loan portfolio.

The following table summarizes COVID-19 related modifications, including deferrals and forbearances:

Loan Type	Amount of Loans				% of Non-PPP Loans
Loan Type	December 31, 2020		September 30, 2020		December 31, 2020		September 30, 2020
Commercial	$	15,702	$	61,597	1.4	%	5.6	%
Consumer Portfolio Loans	2,504		16,845		0.6		3.6
Total Loans	$	18,206	$	78,442	1.2	%	5.0	%

The following table summarizes COVID-19 related deferral balances within certain industry segments at December 31, 2020:

Industry Segment	Deferral Balance		% of Total non-PPP Loans		$ Non-PPP Segment Total		% of non-PPP Segment
Hotel/Motel	$	9,497	0.6	%	$	48,379	19.6	%
Restaurant/Bar	774		0.1		33,400		2.3
Commercial construction	499		—		51,826		1.0
Mixed use	376		—		21,875		1.7
Multi-Family CRE	—		—		115,671		—
Strip Center/Retail	—		—		61,268		—
Senior Housing	—		—		43,814		—

DISCUSSION OF RESULTS

Balance Sheet

Loans

Net loans fell by $50.6 million from September 30, 2020 to December 31, 2020 primarily due to SBA PPP loan forgiveness and runoff in residential mortgages. Commercial loans, excluding SBA PPP loans, grew by $38.1 million, or 13.9% annualized, from September 30, 2020 to December 31, 2020 as commercial loan demand started to improve late in the fourth quarter. Commercial loan closing activity significantly increased in the second half of December but local markets still have not improved to pre-pandemic levels. Forgiveness approvals for SBA PPP loans started to be received in the fourth quarter, resulting in outstanding PPP loans, net of deferred fees and costs, falling by $54.8 million to $403.3 million from September 30, 2020 to December 31, 2020. We expect these SBA PPP loans to continue to runoff in the first three quarters of 2021 as our clients’ forgiveness requests are approved. The Bank plans on being an active participant in the new SBA PPP program in the first quarter of 2021 and has seen strong interest for new SBA PPP loans in January 2021.

Residential mortgage loans on the balance sheet continue to prepay at a high rate due to historically low interest rates, resulting in the portfolio declining $28.8 million or 42% annualized to $244.3 million at December 31, 2020 from September 30, 2020. The Bank has begun an effort to selectively portfolio some quality mortgage loans to reduce the runoff. To date, these efforts have not had a material impact on balances but we expect that to change in 2021. Consumer loans also fell $4.6 million or 9% annualized to $198.2 million at December 31, 2020 from September 30, 2020. Overall loan growth in 2021, excluding SBA PPP loans is expected to be low single digits with higher single digits possible for commercial lending if conditions continue to improve.

Deposits

Deposits grew by $77.4 million, or 13.6% annualized, to $2.36 billion at December 31, 2020 from $2.28 billion at September 30, 2020. Clients continue to hold larger deposits with the Bank given the low level of interest rates and economic uncertainty, which contributed to positive fourth quarter seasonality. Non-interest DDA balances grew by $47.5 million in the quarter, or 46% annualized, while interest bearing checking accounts rose $42.9 million, or 21% annualized. The Bank also saw modest money market and savings growth of $5.6 million, or 4% annualized. Due to very low interest rates, time deposits continue to fall and were down another $18.7 million in the quarter, or 18% annualized. Some of the deposit growth achieved during the year was due to new SBA PPP client activity. Over the long term, when interest rates return to more normal levels above today’s rates, some of the deposit growth that has been seen in 2020 is expected to reverse as clients deploy their excess liquidity to meet their needs. The Bank has very strong liquidity and will continue to target a loan to deposit ratio of 90%.

During 2020, the Bank announced or completed 11 branch consolidations, which is 30% of total branch locations at December 31, 2019. The Bank completed the most recent consolidations in January 2021 and now has 26 locations. Because of these efforts, the average branch size has increased from $51 million at December 31, 2019 to $91 million today, an increase of 79%.

Other

Total borrowings fell by $123.3 million to $109.4 million from September 30, 2020 to December 31, 2020 due to deposit growth and SBA PPP loan forgiveness. Short term borrowings were paid off and the Bank fully paid off its borrowings under the SBA PPP Borrowing Facility. Excess liquidity is beginning to build as evidenced by a $45.5 million increase in cash held at the Federal Reserve from September 30, 2020 to December 31, 2020. The Bank expects some loan growth as well as deposit runoff in coming quarters but some excess liquidity may build in the short-term depending on timing of portfolio growth and overall SBA PPP activity.

Investments fell by $11.8 million, or 10%, annualized to $466.5 million at December 31, 2020 as compared to September 30, 2020 due to portfolio runoff. No purchases were completed in the three months ended December 31, 2020. The Bank intends on shrinking this portfolio given the low level of interest rates and the opportunity to deploy funds into quality relationship loans. During the year ended December 31, 2020, there were no other-than-temporary impairment charges or other material changes to the quality of the investment portfolio. See Appendix C for a summary of the current investment portfolio that highlights the concentrations, quality and credit enhancement levels for the portfolio.

Income Statement

Net Interest Income and Margin

Net interest income grew to $23.7 million for the three months ended December 31, 2020 despite a $31.0 million reduction in average earning assets to $2.55 billion during the three months ended December 31, 2020 as compared to the three months ended September 30, 2020. Additionally, the net interest margin rose 49 basis points to 3.73% over the same period. Net interest income rose as SBA PPP forgiveness began in the fourth quarter of 2020, which increased processing fee recognition by $1.4 million as compared to the third quarter of 2020. Accretion income grew by $0.6 million from the previous quarter due to some successful asset quality resolutions in the acquired loan portfolio. Finally, prepayment penalty income increased by $0.5 million from the previous quarter due to elevated refinance activity in the commercial real estate portfolio. These three items accounted for 90% of the increase in net interest income. The remainder was due to a continued favorable shift in balance sheet mix.

SBA PPP loans had an average outstanding balance of $443 million and yielded 4.3% in the three months ended December 31, 2020. This yield increased from the third quarter 2020 level of 2.9% due primarily to PPP forgiveness. As of December, 2020, 57% of the total $13.5 million in net deferred SBA PPP fees have been earned. The remaining fees are expected to be earned in the coming quarters upon SBA forgiveness of the loans. While there continues to be uncertainty, we expect a significant portion of the balances in the existing SBA PPP portfolio to be forgiven in the first three quarters of 2021 and a continuation of elevated SBA PPP income due to that forgiveness.

Balance sheet mix improvement efforts have been emphasized throughout the past year and the fourth quarter saw additional progress. In the loan portfolio, commercial loans, excluding PPP loans, rose $38.1 million while residential loans fell $28.8 million and investments fell by $11.8 million. Additionally, the funding mix improved as non-interest DDA balances rose $47.5 million, interest bearing DDA balances rose by $42.9 million, CDs fell by $18.7 million and borrowings fell by $123.3 million. During 2020, CDs fell from 27%of total deposits in the first quarter of 2020 to 18% in the fourth quarter of 2020 while core deposits rose from 73% to 82% of total deposits during the same period. The Bank ended the year with no brokered deposits. The mix improvement and repricing actions by management led to a deposit cost reduction of an additional 11 basis points in the fourth quarter to 0.33%. As CDs reprice, this cost of funds will drift lower but we are nearing the bottom for deposit cost of funds.

While some excess liquidity is beginning to build which may negatively impact the margin in the short term, our long-term objective of emphasizing balance sheet mix is expected to lead to a higher net interest margin over the long-term. These efforts may mute growth in assets but should lead to growth in net interest income, earnings and return on assets. It is anticipated that the net interest margin will be under pressure with low interest rates forecasted for 2021 given the low-cost deposit portfolio and short duration asset profile. We believe that our efforts on balance sheet mix enhancement and fee income generation will be effective to manage through the current external environment.

Provision for loan losses

The allowance for loan losses totaled $20.2 million at December 31, 2020, compared with $19.7 million at September 30, 2020. Total classified loans decreased by $3.3 million, or 9%, to $33.1 million from September 30, 2020 to December 31, 2020. The provision for loan losses totaled $0.3 million in the three months ended December 31, 2020, which is down from $2.2 million in the three months ended September 30, 2020 and $1.9 million in the three months ended June 30, 2020. We continue to see favorable asset quality trends and most loans that we placed on payment deferral have resumed paying status.

Asset quality metrics remain solid with net recoveries for a second consecutive quarter. Net recoveries of $126 thousand were recorded in the fourth quarter of 2020 following $8 thousand recorded in the third quarter of 2020. Nonperforming loans increased by $2.4 million from $7.9 million at September 30, 2020 to $10.3 million at December 31, 2020 and totaled 0.52% of gross loans at December 31, 2020, compared with 0.39% of loans at September 30, 2020. The allowance for loan losses to nonperforming loans ratio was 195% at December 31, 2020. We believe the allowance for loan losses to be adequate based on current asset quality metrics; however, deterioration in the loan portfolio could occur, requiring additional provisioning, if unemployment remains elevated or due to other economic factors caused by lower business activity as a result of the COVID-19 pandemic.

Noninterest Income

Noninterest income totaled $7.2 million in the three months ended December 31, 2020 compared with $6.9 million in the three months ended September 30, 2020.

Total wealth management income for the three months ended December 31, 2020 was $2.6 million, as compared to $2.5 million for the three months ended September 30, 2020. Strong equity markets helped to propel income along with the addition of new clients. The Bank remains focused on growth markets and there continue to be opportunities for growth over the long-term as the Bank seeks to expand its portfolio of wealth management clients.

Debit card interchange income totaled $0.9 million for a second quarter in a row. After the COVID-19 pandemic hit, the Bank saw increased client usage of cards and revenue trends 7% higher than the same period last year. We expect more growth in 2021 as client usage continues to increase and we add new clients. Other service charge income was $1.0 million for the three months ended December 31, 2020 as compared to $0.9 million in the prior quarter but down 11% from $1.1 million in the same period last year. This is primarily a result of less overdraft income as clients have kept more cash in their accounts due to economic uncertainty and client retention of government stimulus payments.

Mortgage banking activity fell from the third quarter due primarily to seasonality. Mortgage banking income for the three months ended December 31, 2020 decreased to $1.3 million versus $2.0 million in the previous linked quarter. Mortgage loans sold in the fourth quarter of 2020 totaled $60.7 million compared with $72.8 million in the third quarter of 2020. The pipeline remains solid with locked loans of $22.6 million at December 31, 2020. The Bank records gains on closed and locked loans. In the three months ended December 31, 2020 and September 30, 2020, impairment charges of $0 and $0.2 million, respectively, were recognized on the Bank’s mortgage servicing rights asset due to falling interest rates.

With an increase in loan demand occurring across our markets, loan swap fees increased to $0.3 million in the fourth quarter of 2020 as compared to $0.1 million in the previous quarter. These fees are derived from interest rate hedges for commercial real estate clients and we anticipate an increase in swap demand and activity in 2021.

With low interest rates, the Bank will focus on relationship fee income growth to offset net interest margin pressures. Growth in mortgage banking, wealth management, interchange income and interest rate swaps are an emphasis for 2021.

Noninterest Expenses

Noninterest expense fell by $1.2 million to $18.1 million in the three months ended December 31, 2020 from the three months ended September 30, 2020. In the third quarter of 2020, there were $1.6 million of charges related to the consolidation of branches and staff reductions. These initiatives are expected to result in approximately $4 million of expense savings in 2021.

Salaries and employee benefits totaled $11.0 million in the fourth quarter of 2020 as compared with $10.6 million in the third quarter of 2020. In the fourth quarter, $0.4 million was recorded for the liability associated with the carryover of paid time off for employees due to the pandemic. It is not anticipated that this will reoccur in future years. Also, $0.4 million was added for performance related incentives given the strong financial results recorded in fourth quarter of 2020. Finally, health insurance expenses rose by $0.2 million from the previous quarter to $0.9 million due to claims activity as employee spending was deferred from earlier quarters due to the pandemic.

Advertising expense increased by $0.3 million in the fourth quarter of 2020 as compared to the third quarter of 2020 primarily due to spending associated with a Pennsylvania Educational Improvement Initiative. Taxes other than income fell by $0.3 million primarily due to the related credit associated with the Educational Improvement program. Professional fees rose by $0.2 million from the three months ended September 30, 2020 to $0.8 million in the three months ended December 31, 2020 due primarily to higher legal expenses incurred in the quarter.

The Bank will continue to closely manage expenses in the near term. As the cost saving initiatives announced in 2020 are expected to be fully realized in 2021, we intend to selectively invest some of those savings in technology to meet client needs and improve the Bank’s efficiency in 2021. We also expect normal mild expense increases due to inflation but have no material hiring plans for 2021. Longer term, Orrstown will continue to invest in talent, technology and infrastructure.

Income Taxes

The Company’s effective tax rate for the fourth quarter of 2020 was 19.7% compared with 19.9% for the third quarter of 2020. The Company’s effective tax rate is less than the 21% federal statutory rate due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies, as well as tax credits.

Capital

Shareholders’ equity totaled $246.2 million at December 31, 2020, an increase of $13.4 million from $232.8 million at September 30, 2020. The increase was primarily attributable to net income recorded in the three months ended December 31, 2020 and an increase in accumulated other comprehensive income from changes in net unrealized gains and losses in securities available for sale which increased by $5.7 million from September 30, 2020 to December 31, 2020. For the year, tangible book value per share grew from $17.65 at December 31, 2019 to $19.93 at December 31, 2020, an increase of 12.9%.

The Company’s tangible common equity ratio rose from 7.6% at September 30, 2020 to 8.2% at December 31, 2020 and the Company’s Tier 1 leverage ratio increased from 7.8% at September 30, 2020 to 8.1% at December 31, 2020. The Company’s total risk-based capital ratio increased from 15.0% at September 30, 2020 to 15.6% at December 31, 2020. Based upon conversations with SBA PPP borrowers regarding their eligibility for loan forgiveness and guidance issued by the SBA, it is anticipated that most of the SBA PPP loans will achieve loan forgiveness by September 30, 2021. During this time, the Bank expects to generate approximately $4.7 million of additional retained earnings from its SBA PPP lending efforts. After the SBA PPP loans exit the balance sheet and the Bank records the net income, capital ratios are expected to increase, all other inputs remaining static. While the leverage ratio has temporarily declined from December 31, 2019, the risk-based capital ratios are not impacted by SBA PPP loan growth due to their 0% regulatory capital risk weighting. The Company continues to believe that capital is adequate at this time to support the risks inherent in the balance sheet.

Investor Relations Contact:	Media Contact:
Matthew C. Schultheis, CFA	Luke Bernstein
Director Strategic Planning and Investor Relations	Corporate Communications Officer
Phone (717) 510-7127	Phone (717) 510-7107

ORRSTOWN FINANCIAL SERVICES, INC.
FINANCIAL HIGHLIGHTS (Unaudited)


	Three Months Ended						Year Ended
	December 31,			December 31,			December 31,			December 31,
(Dollars in thousands, except per share amounts)	2020			2019			2020			2019

Profitability for the period:
Net interest income	$	23,729		$	17,941		$	83,607		$	69,295
Provision for loan losses	300			—			5,325			900
Noninterest income	7,181			7,028			28,309			28,539
Noninterest expenses	18,080			19,707			74,080			77,300
Income before income taxes	12,530			5,262			32,511			19,634
Income tax expense	2,471			1,028			6,048			2,710
Net income available to common shareholders	$	10,059		$	4,234		$	26,463		$	16,924

Financial ratios:
Return on average assets ⁽¹⁾	1.47		%	0.72		%	1.00		%	0.76		%
Return on average equity ⁽¹⁾	17.01		%	7.53		%	11.66		%	8.21		%
Net interest margin ⁽¹⁾	3.73		%	3.37		%	3.44		%	3.43		%
Efficiency ratio	58.5		%	78.9		%	66.2		%	79.0		%
Income per common share:
Basic	$	0.92		$	0.39		$	2.42		$	1.63
Diluted	$	0.91		$	0.38		$	2.40		$	1.61

Average equity to average assets	8.65		%	9.60		%	8.58		%	9.26		%

⁽¹⁾ Annualized.

ORRSTOWN FINANCIAL SERVICES, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
	December 31,			December 31,
	2020			2019
At period-end:
Total assets	$	2,750,572		$	2,383,274
Total deposits	2,356,880			1,875,522
Loans, net of allowance for loan losses	1,959,539			1,629,675
Loans held-for-sale, at fair value	11,734			9,364
Securities available for sale	466,465			490,885
Borrowings	77,511			217,936
Subordinated notes	31,903			31,847
Shareholders’ equity	246,249			223,249

Credit quality and capital ratios ⁽¹⁾:
Allowance for loan losses to total loans	1.02		%	0.89		%
Total nonaccrual loans to total loans	0.52		%	0.65		%
Nonperforming assets to total assets	0.37		%	0.46		%
Allowance for loan losses to nonaccrual loans	195		%	138		%
Total risk-based capital:
Orrstown Financial Services, Inc.	15.6		%	14.1		%
Orrstown Bank	14.7		%	13.4		%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.	12.5		%	11.3		%
Orrstown Bank	13.5		%	12.5		%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.	12.5		%	11.3		%
Orrstown Bank	13.5		%	12.5		%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.	8.1		%	8.6		%
Orrstown Bank	8.7		%	9.4		%

Book value per common share	$	21.98		$	19.93

⁽¹⁾ Capital ratios are estimated, subject to regulatory filings

ORRSTOWN FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands, except per share amounts)	December 31, 2020			December 31, 2019
Assets
Cash and due from banks	$	26,203		$	25,969
Interest-bearing deposits with banks	99,055			29,994
Cash and cash equivalents	125,258			55,963
Restricted investments in bank stocks	10,563			16,184
Securities available for sale (amortized cost of $460,999 and $491,492 at December 31, 2020 and December 31, 2019, respectively)	466,465			490,885
Loans held for sale, at fair value	11,734			9,364
Loans	1,979,690			1,644,330
Less: Allowance for loan losses	(20,151		)	(14,655		)
Net loans	1,959,539			1,629,675
Premises and equipment, net	35,149			37,524
Cash surrender value of life insurance	68,554			63,613
Goodwill	18,724			19,925
Other intangible assets, net	5,458			7,180
Accrued interest receivable	8,927			6,040
Other assets	40,201			46,921
Total assets	$	2,750,572		$	2,383,274
Liabilities
Deposits:
Noninterest-bearing	$	456,778		$	249,450
Interest-bearing	1,900,102			1,626,072
Total deposits	2,356,880			1,875,522
Securities sold under agreements to repurchase	19,466			8,269
FHLB Advances and other	58,045			209,667
Subordinated notes	31,903			31,847
Accrued interest and other liabilities	38,029			34,720
Total liabilities	2,504,323			2,160,025
Shareholders’ Equity
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding	—			—
Common stock, no par value—$0.05205 stated value per share 50,000,000 shares authorized; 11,257,046 shares issued and 11,201,317 outstanding at December 31, 2020; 11,220,604 shares issued and 11,199,874 outstanding at December 31, 2019	586			584
Additional paid—in capital	189,066			188,365
Retained earnings	54,100			35,246
Accumulated other comprehensive income (loss)	3,345			(480		)
Treasury stock— 55,729 and 20,730 shares, at cost at December 31, 2020 and December 31, 2019, respectively	(848		)	(466		)
Total shareholders’ equity	246,249			223,249
Total liabilities and shareholders’ equity	$	2,750,572		$	2,383,274

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended					Year Ended
	December 31,		December 31,			December 31,			December 31,
(In thousands, except per share amounts)	2020		2019			2020			2019
Interest income
Loans	$	23,887	$	20,083		$	87,492		$	75,071
Investment securities – taxable	2,080		3,575			10,458			14,538
Investment securities – tax-exempt	445		271			1,566			2,054
Short-term investments	14		99			115			1,331
Total interest income	26,426		24,028			99,631			92,994
Interest expense
Deposits	1,862		4,908			12,009			19,310
Securities sold under agreements to repurchase	13		539			85			623
FHLB Advances and other	320		139			1,924			1,779
Subordinated notes	502		501			2,006			1,987
Total interest expense	2,697		6,087			16,024			23,699
Net interest income	23,729		17,941			83,607			69,295
Provision for loan losses	300		—			5,325			900
Net interest income after provision for loan losses	23,429		17,941			78,282			68,395
Noninterest income
Service charges	999		1,119			3,557			4,209
Interchange income	916		859			3,423			3,281
Loan swap referral fees	320		568			847			1,197
Wealth management income	2,615		2,478			9,733			9,681
Mortgage banking activities	1,348		1,304			5,274			3,047
Gains on sale of portfolio loans	—		—			2,803			—
Other income	955		682			2,688			2,375
Investment securities gains (losses)	28		18			(16		)	4,749
Total noninterest income	7,181		7,028			28,309			28,539
Noninterest expenses
Salaries and employee benefits	10,998		11,407			43,350			39,495
Occupancy, furniture and equipment	2,467		2,433			9,516			9,048
Data processing, telephone, and communication	954		941			3,574			3,599
Advertising and bank promotions	507		619			1,660			1,967
FDIC insurance	195		(30		)	686			367
Professional services	780		876			3,120			2,954
Taxes other than income	240		92			1,144			1,018
Intangible asset amortization	345		474			1,569			1,570
Merger related and branch consolidation expenses	—		988			1,310			8,964
Insurance claim (recovery) receivable write-off	—		—			(486		)	615
Other operating expenses	1,594		1,907			8,637			7,703
Total noninterest expenses	18,080		19,707			74,080			77,300
Income before income tax expense	12,530		5,262			32,511			19,634
Income tax expense	2,471		1,028			6,048			2,710
Net income	$	10,059	$	4,234		$	26,463		$	16,924

Share information:
Basic earnings per share	$	0.92	$	0.39		$	2.42		$	1.63
Diluted earnings per share	$	0.91	$	0.38		$	2.40		$	1.61
Weighted average shares – basic	10,953		10,966			10,942			10,362
Weighted average shares – diluted	11,057		11,097			11,034			10,514

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Three Months Ended
	12/31/2020							09/30/20							06/30/20							03/31/20							12/31/2019
			Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-
	Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent
(Dollars in thousands)	Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate
Assets
Federal funds sold & interest-bearing bank balances	$	48,019	$	14		0.12	%	$	31,087	$	9		0.12	%	$	27,949	$	13		0.18	%	$	22,869	$	80		1.41	%	$	21,396	$	99		1.84	%
Securities ⁽¹⁾	486,613		2,643			2.16		496,107		2,673			2.14		493,847		3,327			2.71		500,987		3,797			3.05		504,571		3,919			3.08
Loans^(1)(2)(3)	2,015,749		23,960			4.73		2,054,193		21,741			4.21		1,988,114		21,912			4.43		1,653,547		20,287			4.93		1,606,608		20,207			4.99
Total interest-earning assets	2,550,381		26,617			4.15		2,581,387		24,423			3.76		2,509,910		25,252			4.05		2,177,403		24,164			4.46		2,132,575		24,225			4.51
Other assets	182,764							190,119							200,684							188,400							191,585
Total	$	2,733,145						$	2,771,506						$	2,710,594						$	2,365,803						$	2,324,160
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	1,283,024	655			0.20		$	1,213,208	939			0.31		$	1,154,434	1,259			0.44		$	972,486	1,903			0.79		$	955,975	2,136			0.89
Savings deposits	172,068		52			0.12		168,377		67			0.16		160,738		63			0.16		151,195		63			0.17		150,221		64			0.17
Time deposits	411,395		1,155			1.12		432,438		1,477			1.36		462,664		1,988			1.73		503,364		2,388			1.91		551,789		2,708			1.95
Securities sold under agreements to repurchase	20,055		13			0.26		21,145		20			0.38		21,582		24			0.45		9,416		28			1.20		9,257		29			1.24
FHLB advances and other	135,558		320			0.94		219,567		394			0.71		175,336		388			0.89		187,408		822			1.76		119,632		649			2.15
Subordinated notes	31,895		502			6.29		31,881		501			6.28		31,867		502			6.33		31,853		501			6.33		31,839		501			6.23
Total interest-bearing liabilities	2,053,995		2,697			0.52		2,086,616		3,398			0.65		2,006,621		4,224			0.85		1,855,722		5,705			1.24		1,818,713		6,087			1.33
Noninterest-bearing demand deposits	406,454							417,939							452,253							250,163							247,107
Other	36,216							37,330							36,511							33,763							35,282
Total Liabilities	2,496,665							2,541,885							2,495,385							2,139,648							2,101,102
Shareholders’ Equity	236,480							229,621							215,209							226,155							223,058
Total	$	2,733,145						$	2,771,506						$	2,710,594						$	2,365,803						$	2,324,160
Taxable-equivalent net interest income / net interest spread			23,920			3.63	%			21,025			3.12	%			21,028			3.20	%			18,459			3.23	%			18,138			3.18	%
Taxable-equivalent net interest margin						3.73	%						3.24	%						3.37	%						3.41	%						3.37	%
Taxable-equivalent adjustment			(192		)					(207		)					(230		)					(197		)					(197		)
Net interest income			$	23,728						$	20,818						$	20,798						$	18,262						$	17,941
Ratio of average interest-earning assets to average interest-bearing liabilities						124	%						124	%						125	%						117	%						117	%

NOTES:
⁽¹⁾ Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾Average balances include nonaccrual loans.
⁽³⁾ Interest income on loans includes prepayment and late fees, where applicable, prior periods have been adjusted to include these fees.

ORRSTOWN FINANCIAL SERVICES, INC.
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
(continued)
	Year Ended
	December 31, 2020							December 31, 2019
			Taxable-			Taxable-				Taxable-			Taxable-
	Average		Equivalent			Equivalent		Average		Equivalent			Equivalent
(Dollars in thousands)	Balance		Interest			Rate		Balance		Interest			Rate
Assets
Federal funds sold & interest-bearing bank balances	$	32,519	$	115		0.35	%	$	58,100	$	1,339		2.30	%
Securities ⁽¹⁾	494,372		12,440			2.52		499,282		17,130			3.43
Loans ^(1)(2)(3)	1,928,486		87,900			4.56		1,492,815		75,568			5.06
Total interest-earning assets	2,455,377		100,455			4.09		2,050,197		94,037			4.59
Other assets	190,470							174,924
Total	$	2,645,847						$	2,225,121
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	1,156,292	4,755			0.41		$	920,025	8,253			0.90
Savings deposits	163,133		246			0.15		138,761		261			0.19
Time deposits	452,298		7,008			1.55		549,937		10,796			1.96
Securities sold under agreements to repurchase	18,064		86			0.48		32,001		623			1.95
FHLB advances and other	179,457		1,923			1.07		80,636		1,779			2.21
Subordinated notes	31,874		2,006			6.29		31,842		1,987			6.24
Total interest-bearing liabilities	2,001,118		16,024			0.80		1,753,202		23,699			1.35
Noninterest-bearing demand deposits	381,869							234,354
Other	35,960							31,544
Total Liabilities	2,418,947							2,019,100
Shareholders’ Equity	226,900							206,021
Total	$	2,645,847						$	2,225,121
Taxable-equivalent net interest income / net interest spread			84,431			3.29	%			70,338			3.24	%
Taxable-equivalent net interest margin						3.44	%						3.43	%
Taxable-equivalent adjustment			(824		)					(1,043		)
Net interest income			$	83,607						$	69,295
Ratio of average interest-earning assets to average interest-bearing liabilities						123	%						117	%

NOTES TO ANALYSIS OF NET INTEREST INCOME:
⁽¹⁾ Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾ Average balances include nonaccrual loans.
⁽³⁾ Interest income on loans includes prepayment and late fees, where applicable, prior periods have been adjusted to include these fees.
⁽⁴⁾ For the year ended December 31, 2019, expenses associated with the early redemption of brokered time deposits totaled $0.2 million, and increased the cost of funds by five basis points.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands, except per share amounts )	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Profitability for the quarter:
Net interest income	$	23,729		$	20,818		$	20,798		$	18,262		$	17,941
Provision for loan losses	300			2,200			1,900			925			—
Noninterest income	7,181			6,861			7,193			7,074			7,028
Noninterest expenses	18,080			19,265			18,431			18,304			19,707
Income before income taxes	12,530			6,214			7,660			6,107			5,262
Income tax expense	2,471			1,237			1,301			1,039			1,028
Net income	$	10,059		$	4,977		$	6,359		$	5,068		$	4,234

Financial ratios:
Return on average assets ⁽¹⁾	1.47		%	0.72		%	0.94		%	0.86		%	0.72		%
Return on average equity ⁽¹⁾	17.01		%	8.67		%	11.82		%	8.96		%	7.53		%
Net interest margin ⁽¹⁾	3.73		%	3.24		%	3.37		%	3.41		%	3.37		%
Efficiency ratio	58.5		%	69.6		%	65.8		%	72.2		%	78.9		%
Efficiency ratio, adjusted⁽²⁾	58.5		%	64.8		%	65.9		%	72.1		%	75.0		%

Per share information :
Income per common share:
Basic	$	0.92		$	0.45		$	0.58		$	0.46		$	0.39
Diluted	$	0.91		$	0.45		$	0.58		$	0.46		$	0.38
Book value	$	21.98		$	20.78		$	20.13		$	18.81		$	19.93
Tangible book value ⁽³⁾	$	19.93		$	18.70		$	18.03		$	16.53		$	17.65
Cash dividends paid	$	0.17		$	0.17		$	0.17		$	0.17		$	0.15
Average basic shares	10,953			10,941			10,916			10,959			10,966
Average diluted shares	11,057			11,025			10,993			11,062			11,097
⁽¹⁾ Annualized.
⁽²⁾ Efficiency ratio has been adjusted for merger related and branch consolidation expenses and investment securities (losses) gains.
⁽³⁾ Non-GAAP based financial measure. Please refer to Appendix B – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	December 31, 2020		September 30, 2020			June 30, 2020		March 31, 2020			December 31, 2019
Noninterest income:
Service charges	$	999	$	852		$	719	$	987		$	1,119
Interchange income	916		900			819		788			859
Loan swap referral fees	320		95			232		200			568
Wealth management income	2,615		2,464			2,295		2,359			2,478
Mortgage banking activities	1,348		1,985			1,609		332			1,304
Other income	955		578			585		2,448			682
Investment securities gains (losses)	28		(13		)	9		(40		)	18
Total noninterest income	$	7,181	$	6,861		$	6,268	$	7,074		$	7,028

Noninterest expenses:
Salaries and employee benefits	$	10,998	$	10,695		$	10,063	$	11,594		$	11,407
Occupancy, furniture and equipment	2,467		2,434			2,326		2,289			2,433
Data processing, telephone, and communication	954		958			791		871			941
Advertising and bank promotions	507		197			167		789			619
FDIC insurance	195		230			214		47			(30		)
Professional services	780		603			1,021		716			876
Taxes other than income	240		453			449		2			92
Intangible asset amortization	345		357			404		463			474
Merger related and branch consolidation expenses	—		1,310			—		—			988
Insurance claim receivable recovery	—		—			—		(486		)	—
Other operating expenses	1,594		2,028			2,996		2,019			1,907
Total noninterest expenses	$	18,080	$	19,265		$	18,431	$	18,304		$	19,707

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Balance Sheet at quarter end:
Cash and cash equivalents	$	125,258		$	87,307		$	52,290		$	57,137		$	55,963
Restricted investments in bank stocks	10,563			12,646			16,256			15,823			16,184
Securities available for sale	466,465			478,288			483,936			479,599			490,885
Loans held for sale, at fair value	11,734			12,804			13,594			7,900			9,364
Loans:
Commercial real estate:
Owner occupied	174,908			166,623			164,442			168,586			170,884
Non-owner occupied	409,567			403,138			390,980			377,933			361,050
Multi-family	113,635			110,153			111,016			107,797			106,893
Non-owner occupied residential	114,505			111,958			116,531			118,773			120,038
Commercial and industrial	647,368			690,330			665,312			235,791			214,554
Total commercial loans	1,459,983			1,482,202			1,448,281			1,008,880			973,419
Acquisition and development:
1-4 family residential construction	9,486			9,627			7,966			13,037			15,865
Commercial and land development	51,826			37,850			50,220			49,348			41,538
Municipal	20,523			28,867			34,276			46,551			47,057
Residential mortgage:
First lien	244,321			273,149			295,736			324,766			336,372
Home equity – term	10,169			11,108			11,944			13,337			14,030
Home equity – lines of credit	157,021			158,106			160,842			165,375			165,314
Installment and other loans	26,361			28,961			32,052			35,654			50,735
Total loans	1,979,690			2,029,870			2,041,317			1,656,948			1,644,330
Allowance for loan losses	(20,151		)	(19,725		)	(17,517		)	(15,803		)	(14,655		)
Net loans held-for-investment	1,959,539			2,010,145			2,023,800			1,641,145			1,629,675
Goodwill	18,724			18,724			18,724			20,142			19,925
Other intangible assets, net	5,458			5,803			6,160			6,717			7,180
Total assets	2,750,572			2,781,667			2,772,796			2,387,553			2,383,274
Total deposits	2,356,880			2,279,483			2,251,731			1,897,296			1,875,522
Borrowings	77,511			200,818			226,520			212,099			217,936
Subordinated notes	31,903			31,889			31,875			31,861			31,847
Total shareholders’ equity	246,249			232,847			225,638			210,570			223,249

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	December 31, 2020				September 30, 2020				June 30, 2020			March 31, 2020				December 31, 2019
Capital and credit quality measures ⁽¹⁾:
Total risk-based capital:
Orrstown Financial Services, Inc	15.6			%	15.0			%	14.5		%	14.0			%	14.1		%
Orrstown Bank	14.7			%	14.3			%	13.9		%	13.4			%	13.4		%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc	12.5			%	12.0			%	11.7		%	11.2			%	11.3		%
Orrstown Bank	13.5			%	13.1			%	12.8		%	12.5			%	12.5		%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc	12.5			%	12.0			%	11.7		%	11.2			%	11.3		%
Orrstown Bank	13.5			%	13.1			%	12.8		%	12.5			%	12.5		%
Tier 1 leverage capital:
Orrstown Financial Services, Inc	8.1			%	7.8			%	7.6		%	8.5			%	8.6		%
Orrstown Bank	8.7			%	8.5			%	8.4		%	9.4			%	9.4		%

Average equity to average assets	8.65			%	8.29			%	7.94		%	9.56			%	9.60		%
Allowance for loan losses to total loans	1.02			%	0.97			%	0.86		%	0.95			%	0.89		%
Total nonaccrual loans to total loans	0.52			%	0.39			%	0.36		%	0.47			%	0.65		%
Nonperforming assets to total assets	0.37			%	0.28			%	0.27		%	0.34			%	0.46		%
Allowance for loan losses to nonaccrual loans	195			%	250			%	237		%	202			%	138		%

Other information:
Net (recoveries) charge-offs	$	(126	)		$	(8	)		$	186		$	(223	)		$	154
Classified loans	33,147				36,408				33,376			30,470				40,808
Nonperforming and other risk assets:
Nonaccrual loans	10,310				7,899				7,404			7,806				10,657
Other real estate owned	—				—				17			197				197
Total nonperforming assets	10,310				7,899				7,421			8,003				10,854
Restructured loans still accruing	934				945				960			971				979
Loans past due 90 days or more and still accruing ⁽²⁾	554				520				909			2,115				2,232
Total nonperforming and other risk assets	$	11,798			$	9,364			$	9,290		$	11,089			$	14,065
(1) Capital ratios are estimated, subject to regulatory filings.
(2) Includes $0.5 million, $0.5 million, $0.6 million, $1.9 million and $2.0 million of purchased credit impaired loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.

Appendix A- Supplemental Reporting of Unusual Items

The following table presents unusual items that impacted each period shown. These items are presented to enable investors to better understand the magnitude of certain significant items on reported GAAP results in the context of the Company’s growth and acquisition activities.

	Three Months Ended												Year To Date
	12/31/2020		9/30/20			6/30/20		3/31/20			12/31/2019		12/31/2020			12/31/2019
(In thousands)
Pretax Items
Merger related expenses	$	—	$	—		$	—	$	—		$	—	$	—		$	7,976
Branch consolidation expenses	—		1,310			—		—			988		1,310			988
Net securities gains (losses)	28		(13		)	9		(40		)	18		(16		)	4,749
Accelerated payoff of brokered deposits and borrowings penalty	—		—			—		—			—		—			223
Gain on swap termination	226		—			—		—			—		226			—
Life insurance proceeds	31		—			—		—			—		—			255
Restricted stock forfeiture expense benefit	—		—			—		—			—		—			350
Gain on sale of portfolio loans	—		—			925		1,878			—		2,803			—
Accretion – recoveries on purchased credit impaired loans	779		294			1,021		211			109		2,304			845
Insurance claim receivable recovery (write-off)	—		—			—		486			—		486			(615		)

Income Tax Expense Items
Tax benefit from state deferred tax asset rate change	—		—			—		—			—		—			334
Tax benefit from acquired life insurance assets	—		—			—		—			—		—			185

Appendix B- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

As a result of acquisitions, the Company has intangible assets consisting of goodwill and core deposit and other intangible assets totaling $24.2 million and $27.1 million at December 31, 2020 and December 31, 2019, respectively. Additionally, the Company incurred approximately $1.3 million during the three months ended September 30, 2020 and the year ended December 31, 2020 in charges associated with branch consolidation efforts.

Management believes providing certain “non-GAAP” financial information will assist investors in their understanding of the effect of acquisition activity on reported results, particularly to overcome comparability issues related to the influence of intangibles (principally goodwill) created in acquisitions. Management also believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results of non-recurring charges associated with increasing operational efficiencies for the long-term.

Tangible book value per share, net interest margin excluding the impact of purchase accounting, adjusted diluted EPS and adjusted non-interest expenses, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following tables present the computation of each non-GAAP based measure:

(dollars in thousands, except per share information)

Tangible Book Value per Common Share	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Shareholders’ equity	$	246,249		$	232,847		$	225,638		$	210,570		$	223,249
Less: Goodwill	18,724			18,724			18,724			20,142			19,925
Other intangible assets	5,458			5,803			6,160			6,717			7,180
Related tax effect	(1,146		)	(1,219		)	(1,294		)	(1,411		)	(1,508		)
Tangible common equity (non-GAAP)	$	223,213		$	209,539		$	202,048		$	185,122		$	197,652

Common shares outstanding	11,201			11,204			11,209			11,197			11,200

Book value per share (most directly comparable GAAP based measure)	$	21.98		$	20.78		$	20.13		$	18.81		$	19.93
Intangible assets per share	2.05			2.08			2.10			2.28			2.28
Tangible book value per share (non-GAAP)	$	19.93		$	18.70		$	18.03		$	16.53		$	17.65

Allowance for loan losses to unguaranteed, non-acquired loans:

	December 31, 2020				September 30, 2020
Allowance for loan losses	$	20,151			$	19,725
less: Reserves on acquired loans	(558		)		(518		)
Allowance for loan losses, adjusted	$	19,593			$	19,207

Gross loans	1,979,690				2,029,870
less: SBA guaranteed loans	(404,205		)		(459,662		)
less: Acquired loans	(269,103		)		(298,854		)
Unguaranteed, non-acquired loans	$	1,306,382			$	1,271,354

Allowance for loan losses to unguaranteed, non-acquired loans	1.5			%	1.5			%

Allowance for loan losses plus purchase accounting marks to unguaranteed loans:

	December 31, 2020				September 30, 2020
Allowance for loan losses	$	20,151			$	19,725
Purchase accounting marks	7,784				9,607
Allowance plus purchase accounting marks	$	27,935			$	29,332

Gross loans	1,979,690				2,029,870
Less: SBA guaranteed loans	(404,205		)		(459,662		)
Unguaranteed loans	$	1,575,485			$	1,570,208

Allowance for loan losses plus purchase accounting marks to unguaranteed loans:	1.8			%	1.9			%

		Three Months Ended
(dollars in thousands)		December 31, 2020					September 30, 2020					June 30, 2020					March 31, 2020					December 31, 2019
Taxable-Equivalent Net Interest Margin (excluding the effect of purchase accounting)
Taxable-equivalent net interest income/margin, as reported		$	23,920		3.73	%	$	21,025		3.24	%	$	21,028		3.37	%	$	18,459		3.41	%	$	18,138		3.37	%
Effect of purchase accounting:
Loans	Income	(1,846		)	(0.30	)%	(1,199		)	(0.20	)%	(1,603		)	(0.27	)%	(899		)	(0.20	)%	(1,186		)	(0.24	)%
Time deposits	Expense	13			—	%	16			—	%	24			—	%	28			—	%	(145		)	0.03	%
Purchase accounting effect on taxable-equivalent income/margin		(1,859		)	(0.30	)%	(1,215		)	(0.20	)%	(1,627		)	(0.27	)%	(927		)	(0.20	)%	(1,041		)	(0.21	)%
Taxable-equivalent net interest income/margin (excluding the effect of purchase accounting) (non-GAAP)		$	22,061		3.43	%	$	19,810		3.04	%	$	19,401		3.10	%	$	17,532		3.21	%	$	17,097		3.16	%


		Year Ended
(dollars in thousands)		December 31, 2020					December 31, 2019
Taxable-Equivalent Net Interest Margin (excluding the effect of purchase accounting)
Taxable-equivalent net interest income/margin, as reported		$	84,431		3.44	%	$	70,338		3.43	%
Effect of purchase accounting:
Loans	Income	(5,547		)	(0.24	)%	(3,758		)	(0.21	)%
Time deposits	Expenses	81			—	%	(102		)	0.01	%
Purchase accounting effect on taxable-equivalent income/ margin		(5,628		)	(0.24	)%	(3,656		)	(0.20	)%
Taxable-equivalent net interest income/margin (excluding the effect of purchase accounting) (non-GAAP)		$	78,803		3.20	%	$	66,682		3.23	%

Appendix C- Investment Portfolio Concentrations

The following table summarizes the credit ratings and collateral associated with the Company’s investment portfolio, excluding equity securities, at December 31, 2020:

(dollars in thousands)

Sector	Portfolio Mix		Amortized Book		Fair Value		Credit Enhancement		AAA		AA		A		BBB		NR		Collateral Type
Unsecured ABS	1	%	$	6,730	$	6,806	44	%	2	%	—	%	—	%	—	%	98	%	Unsecured Consumer Debt
Student Loan ABS	2	%	11,222		11,137		26		—		—		—		—		100		Seasoned Student Loans
Federal Family Education Loan ABS	39	%	180,031		177,519		6		4	%	73	%	23	%	—	%	—	%	Federal Family Education Loan (1)
PACE Loan ABS	1	%	5,147		5,243		5		100	%	—	%	—	%	—	%	—	%	PACE Loans
Non-Agency CMBS	14	%	63,941		62,236		53		97	%	—	%	3	%	—	%	—	%	Commercial Real Estate
Non-Agency RMBS	4	%	16,505		16,919		33		100	%	—	%	—	%	—	%	—	%	Reverse Mortgages (2)
Municipal – General Obligation	12	%	53,789		59,186				3	%	85	%	12	%	—	%	—	%
Municipal – Revenue	11	%	50,915		53,483				—	%	61	%	19	%	—	%	20	%
SBA ReRemic	3	%	11,295		11,262				—	%	100	%	—	%	—	%	—	%	SBA Guarantee (3)
Agency MBS	13	%	61,054		62,304				—	%	100	%	—	%	—	%	—	%	Residential Mortgages (3)
Bank CDs	—	%	249		249				—	%	—	%	—	%	—	%	100		FDIC Insured CD
	100	%	$	460,878	$	466,344			20	%	61	%	13	%	—	%	6	%

(1) Minimum of 97% guaranteed by U.S. government
(2) Reverse mortgages, expected credit enhancement is provided above
(3) 100% guaranteed by U.S. government agencies
Note : Ratings in table are the lowest of the three rating agencies (Standard & Poors, Moody’s & Fitch). Standard & Poors rates U.S. government obligations at AA+

About the Company

With $2.8 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services through banking 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 Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

Cautionary Note Regarding Forward-looking Statements:

This press release 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; and to realize cost savings from our branch consolidation efforts. In addition to risks and uncertainties related to the COVID-19 pandemic 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 2019 Annual Report on Form 10-K and subsequent filings. 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.

The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change.

January 20, 2021 4:25 pm

MetroCity Bankshares, Inc. Declares Quarterly Cash Dividend

PR Newswire

ATLANTA, Jan. 20, 2021 /PRNewswire/ — MetroCity Bankshares, Inc. (NASDAQ: MCBS) announced today that its board of directors declared a quarterly cash dividend of $0.10 per share on its common stock. The cash dividend is payable on February 12, 2021 to shareholders of record as of February 3, 2021.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta metropolitan area. Metro City Bank currently operates 19 full-service branch locations in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas and Virginia. To learn more about Metro City Bank, visit www.metrocitybank.bank.

Contact Information

Farid Tan

770-455-4978
[email protected]

Lucas Stewart

678-580-6414
[email protected]

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SOURCE MetroCity Bankshares, Inc.

January 20, 2021 4:25 pm

Silvergate Launches Follow-on Public Offering of Class A Common Stock

Silvergate Launches Follow-on Public Offering of Class A Common Stock

LA JOLLA, Calif.–(BUSINESS WIRE)–
Silvergate Capital Corporation (“Silvergate” or the “Company”) announced today the launch of an underwritten public offering of $200 million of shares of Class A common stock pursuant to an effective Registration Statement on Form S-3 previously filed with the Securities and Exchange Commission (“SEC”). The Company also expects to grant the underwriters a 30-day option to purchase up to an additional $30 million of shares of Class A common stock.

The Company intends to use the net proceeds from the proposed offering to further supplement the regulatory capital levels of the Company and its wholly-owned subsidiary, Silvergate Bank (the “Bank”), and for other general corporate purposes, which may include providing capital to support the Company’s growth organically or through strategic acquisitions, and other growth initiatives, including the Bank’s SEN Leverage lending product, custody and other digital asset services.

Goldman Sachs & Co. LLC, Keefe, Bruyette & Woods, A Stifel Company, and Canaccord Genuity will act as joint lead book-running managers. Compass Point and Craig-Hallum are also acting as co-managers for the offering.

Silvergate filed a Registration Statement on Form S-3, which was effective upon filing on January 20, 2021, including a base prospectus dated January 20, 2021, and will file a preliminary prospectus supplement, to which this communication relates. Before you invest, you should read the prospectus in the Registration Statement, the related preliminary prospectus supplement and the other documents Silvergate has filed with the SEC for more complete information about Silvergate and this offering. The proposed offering is being made only by means of an effective shelf registration statement, including a preliminary prospectus supplement and final prospectus supplement, copies of which may be obtained, when available, by contacting Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 866-471-2526, facsimile: 212-902-9316, e-mail: [email protected]; Keefe, Bruyette & Woods, Inc., 787 7th Avenue, 4th Floor, New York, New York 10019, Attn: Equity Syndicate, by emailing , or by telephone at 1-800-966-1559; or Canaccord Genuity LLC, 99 High Street, Suite 1200, Boston, Massachusetts 02110, Attn: Syndicate Department, by telephone at (617) 371-3900, or by email at [email protected].

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Silvergate

Silvergate Capital Corporation (NYSE: SI) is the leading provider of innovative financial infrastructure solutions and services for the growing digital currency industry. The Company’s real-time payments platform, known as the Silvergate Exchange Network, is at the heart of its customer-centric suite of payments, lending and funding solutions serving an expanding class of digital currency companies and investors around the world. Silvergate is enabling the rapid growth of digital currency markets and reshaping global commerce for a digital currency future.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to, among other things, future events and our 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,” “projection,” “forecast,” “goal,” “target,” “would,” “aim” and “outlook,” or the negative version of those words or other comparable words or phrases 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 our industry and management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. The inclusion of these forward-looking statements should not be regarded as a representation by us or any other person that such expectations, estimates and projections will be achieved. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. For information about other important factors that could cause actual results to differ materially from those discussed in the forward-looking statements contained in this release, please refer to the Company’s public reports filed with the SEC.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to fully reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; our cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experiences additional resolution costs.

Any forward-looking statement speaks only as of the date of this earnings release, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether because of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence. In addition, we cannot assess the impact of each risk and uncertainty on our business or the extent to which any risk or uncertainty, or combination of risks and uncertainties, may cause actual results to differ materially from those contained in any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005709/en/

Investor Relations Contact:

Lauren Scott/Hunter Stenback

(858) 200-3782

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Professional Services Finance

MEDIA:

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January 20, 2021 4:23 pm

Cohen & Steers, Inc. to Release Fourth Quarter and Full Year 2020 Financial Results on January 27, 2021

PR Newswire

NEW YORK, Jan. 20, 2021 /PRNewswire/ — Cohen & Steers, Inc. (NYSE: CNS) announced that it expects to release fourth quarter and full year 2020 financial results after the market closes on Wednesday, January 27, 2021. The earnings release and accompanying earnings presentation will be available at www.cohenandsteers.com under “Company—Investor Relations—Press Releases.”

The company will host a conference call on Thursday, January 28, 2021 at 10:00 a.m. (ET) with access available via webcast and telephone. Chief executive officer, Robert Steers, president, Joseph Harvey, and chief financial officer, Matthew Stadler, will review the company’s financial results and outlook and be available for questions.

Investors and analysts can access the live conference call by dialing 800-895-8003 (U.S.) or +1-212-231-2901 (international); passcode: 21989586. A replay of the call will be available for two weeks starting at approximately 12:00 p.m. (ET) on January 28, 2021 and can be accessed at 800-633-8284 (U.S.) or +1-402-977-9140 (international); passcode: 21989586. Internet access to the webcast, which includes audio (listen-only), will be available on the company’s website at www.cohenandsteers.com under “Company—Investor Relations—Overview.” The webcast will be archived on the website for one month. Participants should plan to register at least 10 minutes before the conference call begins.

About Cohen & Steers

Cohen & Steers is a global investment manager specializing in liquid real assets, including real estate securities, listed infrastructure and natural resource equities, as well as preferred securities and other income solutions. Founded in 1986, the firm is headquartered in New York City, with offices in London, Dublin, Hong Kong and Tokyo.

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SOURCE Cohen & Steers, Inc.

January 20, 2021 4:23 pm

MSC Industrial Supply Co. Announces Enhanced Customer Support Model

– Company moves from branch office network to virtual customer care hubs

– Supports achievement of 3-year targets of accelerating market share capture and improving ROIC

– Plan expected to drive annualized savings of $15 million to $18 million beginning in fiscal 2022

PR Newswire

MELVILLE, N.Y. and DAVIDSON, N.C., Jan. 20, 2021 /PRNewswire/ — MSC INDUSTRIAL SUPPLY CO. (NYSE: MSM), a premier distributor of Metalworking and Maintenance, Repair and Operations products and services to industrial customers throughout North America, today announced a series of actions designed to enhance the in-person and virtual support provided to customers. The company will move from its branch office network to virtual customer care hubs to provide personalized support to its customers, regardless of their physical location.

MSC will close 73 branch offices, which have been closed temporarily due to the COVID-19 pandemic. Sales associates who previously worked in these offices will continue to work remotely through virtual customer care hubs to maintain customer relationships and personalized service in local markets. Included as part of this plan is the reduction of roughly 115 management and other positions within the commercial sales organization that interact infrequently with customers.

The company expects to achieve ongoing annual cost savings of $15 million to $18 million beginning in fiscal 2022, and savings of $7 million to $9 million in fiscal 2021. A portion of the expected savings will be reinvested into customer-facing sales roles that support the company’s five growth initiatives: Metalworking, Solutions, Selling the Portfolio, Digital, and Diversified End Markets. To achieve the savings, the company expects to incur total costs and charges related to these actions in the range of approximately $21 million to $25 million in fiscal 2021, the majority of which will be in its fiscal second quarter. These non-recurring costs include a one-time impairment charge for the lease right-of-use assets, associate separation benefits charges, and other exit-related costs.

Erik Gershwind, President and CEO, said, “Today’s announcement is another significant milestone in our Mission Critical program. It will support the achievement of our 3-year targets of accelerating market share capture to 400 basis points above the Industrial Production Index and improving ROIC into the high teens by fiscal 2023. We are eliminating significant structural cost in keeping with our commitment to reduce operating expenses by $90 million to $100 million and freeing up capital that will fund the needed investments into our five growth initiatives.”

Gershwind continued, “We are creating a leaner, faster and more agile customer care organization. Our new structure is breaking down geographic barriers, enabling us to recruit technical talent that can serve our customers wherever they need us. It also positions MSC to help solve the manufacturing skills gap that has plagued the industry. Our best-in-class technology platform enables us to create economies of scale through a virtual Customer Care network. Lastly, we are building on the hybrid work model that began with reimagining our Melville, N.Y. office space. Our associates and customers have confirmed that the work from home model is working and will work well into the future.”

About MSC Industrial Supply Co. MSC Industrial Supply Co. (NYSE:MSM) is a leading North American distributor of metalworking and maintenance, repair and operations (MRO) products and services. We help our customers drive greater productivity, profitability and growth with approximately 1.9 million products, inventory management and other supply chain solutions, and deep expertise from over 75 years of working with customers across industries.

Our experienced team of more than 6,300 associates is dedicated to working side by side with our customers to help drive results for their businesses – from keeping operations running efficiently today to continuously rethinking, retooling, and optimizing for a more productive tomorrow.

For more information on MSC, please visit mscdirect.com.

Note Regarding Forward-Looking Statements

Statements in this Press Release may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including statements about the branch closures, workforce reduction, salesforce expansion, expected benefits from our five growth initiatives, virtual Customer Care network and cost reduction plans, and expected future growth, profitability and ROIC, are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this Press Release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. Factors that could cause actual results to differ materially from those in forward-looking statements include the following, many of which are and will be amplified by the COVID-19 pandemic: the effects of the COVID-19 pandemic, including any future resurgences, on our business operations, results of operations and financial condition; general economic conditions in the markets in which we operate; changing customer and product mixes; competition, including the adoption by competitors of aggressive pricing strategies and sales methods; industry consolidation and other changes in the industrial distribution sector; our ability to realize the expected benefits from our investment and strategic plans, including our transition from a spot-buy supplier to a mission-critical partner; our ability to realize the expected cost savings and benefits from our restructuring activities and structural cost reductions; our ability to realize the expected benefits from our five growth initiatives; the need to revise the estimates of the expected cost savings as well as the estimates of the expected costs and timing of the workforce reduction and branch closures; retention of key personnel and qualified sales and customer service personnel and metalworking specialists; volatility in commodity and energy prices; the outcome of government or regulatory proceedings or future litigation; credit risk of our customers; risk of customer cancellation or rescheduling of orders; difficulties in calibrating customer demand for our products, in particular personal protective equipment or “PPE” products, which could cause an inability to sell excess products ordered from manufacturers resulting in inventory write-downs or could conversely cause inventory shortages of such products; work stoppages or other business interruptions (including those due to extreme weather conditions) at transportation centers, shipping ports, our headquarters or our customer fulfillment centers; disruptions or breaches of our information systems, or violations of data privacy laws; risk of loss of key suppliers, key brands or supply chain disruptions; changes to trade policies, including the impact from significant restrictions or tariffs; risks associated with opening or expanding our customer fulfillment centers; litigation risk due to the nature of our business; risks associated with the integration of acquired businesses or other strategic transactions; financial restrictions on outstanding borrowings; our ability to maintain our credit facilities; interest rate uncertainty due to LIBOR reform; failure to comply with applicable environmental, health and safety laws and regulations; and goodwill and intangible assets recorded as a result of our acquisitions could be impaired. Additional information concerning these and other risks is described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the reports on Forms 10-K and 10-Q that we file with the U.S. Securities and Exchange Commission. We assume no obligation to update any of these forward-looking statements.

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SOURCE MSC Industrial Supply Co.

January 20, 2021 4:23 pm

Celanese to Host Virtual 2021 Investor Day

Celanese to Host Virtual 2021 Investor Day

DALLAS–(BUSINESS WIRE)–
Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today announced it will host a virtual Investor Day on Thursday, March 25, 2021. Chairman of the Board and Chief Executive Officer, Lori Ryerkerk, and other members of Celanese’s executive management team will provide details on the company’s business strategies and outline the path for growth through 2023.

The event will begin at 9:00 a.m. Eastern time and will conclude at approximately 12:00 p.m. Details and access to the live event will be available at https://investors.celanese.com under News & Events/Events Calendar.

Presentation materials will be available at https://investors.celanese.com at approximately 6:00 a.m. Eastern time on March 25. Access to a replay of the presentations will be available on the website for at least six months following the event.

About Celanese

Celanese Corporation is a global chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese’s global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of $6.3 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com or our blog at www.celaneseblog.com.

Forward-Looking Statements: This release may contain “forward-looking statements,” which include information concerning the company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company or its customers will realize these benefits or that these expectations will prove correct. There are a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from the forward-looking statements contained in this release. Risk factors include those that are discussed in the Company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005698/en/

Celanese Contacts:

Investor Relations

Brandon Ayache

+1 972 443 8509

[email protected]

Media Relations – Global

W. Travis Jacobsen

+1 972 443 3750

[email protected]

Media Relations Europe (Germany)

Petra Czugler

+49 69 45009 1206

[email protected]

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Chemicals/Plastics Manufacturing

MEDIA:

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January 20, 2021 4:22 pm

Discover Financial Services Reports Fourth Quarter Net Income of $799 Million or $2.59 Per Diluted Share

Discover Financial Services Reports Fourth Quarter Net Income of $799 Million or $2.59 Per Diluted Share

BOARD OF DIRECTORS APPROVES REPURCHASE OF UP TO $1.1 BILLION OF COMMON STOCK

RIVERWOODS, Ill.–(BUSINESS WIRE)–
Discover Financial Services (NYSE: DFS):

Fourth Quarter Results
	2020	2019	YOY Change
Total loans, end of period (in billions)	$90.4	$95.9	(6%)
Total revenue net of interest expense (in millions)	$2,824	$2,944	(4%)
Total net charge-off rate	2.38%	3.19%	-81 bps
Net income/(loss) (in millions)	$799	$708	13%
Diluted EPS	$2.59	$2.25	15%

Discover Financial Services (NYSE: DFS) today reported net income of $799 million or $2.59 per diluted share for the fourth quarter of 2020, as compared to net income of $708 million or $2.25 per diluted share for the fourth quarter of 2019.

“The challenges the nation and our company faced in 2020 were unprecedented, and I am extremely proud of our efforts to protect our employees, support our customers and strengthen the Discover franchise,” said Roger Hochschild, CEO and President of Discover. “While there is still uncertainty in the U.S. economy, the strength of our digital banking business model and the benefits of our investment in core capabilities have positioned us well heading into 2021.”

Segment Results:

Direct Banking

Direct Banking pretax income of $991 million for the quarter was $108 million higher than pretax income for the prior year period primarily driven by a decrease in the provision for credit losses partially offset by lower revenue net of interest expense and higher operating expenses.

Total loans ended the quarter at $90.4 billion, down 6% year-over-year. Credit card loans ended the quarter at $71.5 billion, down 7% year-over-year. Personal loans decreased $510 million, or 7%, year-over-year. Private student loans increased $301 million, or 3%, year-over-year. The organic student loan portfolio, which excludes purchased loans, increased $587 million, or 7% year-over-year.

Net interest income for the quarter decreased $47 million, or 2%, from the prior year period, driven by lower average receivables and an unfavorable net impact from lower market rates. Net interest margin was 10.63%, up 34 basis points versus the prior year period. Card yield was 12.65%, a decrease of 43 basis points from the prior year period primarily driven by a lower prime rate partially offset by favorable portfolio mix and lower interest charge-offs. Interest expense as a percent of total loans decreased 90 basis points from the prior year period, primarily as a result of lower market rates and proactive management of deposit costs.

Non-interest income decreased $63 million, or 15%, from the prior year, mainly driven by higher promotional rewards cost.

The overall net charge-off rate of 2.38% was 81 basis points lower versus the prior year reflecting stable credit across the portfolio. The credit card net charge-off rate was 2.63%, down 78 basis points from the prior year and down 82 basis points from the prior quarter. The 30+ day delinquency rate for credit card loans was 2.07%, down 55 basis points year-over year and up 16 basis points from the prior quarter. The student loan net charge-off rate was 0.71%, down 31 basis points from the prior year and up 13 basis points from the prior quarter. The personal loans net charge-off rate of 2.79% was down 147 basis points from the prior year and up 10 basis points from the prior quarter.

Provision for credit losses of $531 million decreased $307 million from the prior year period driven by the impact of lower net charge-offs. The reserve level remained unchanged for the fourth quarter of 2020, compared to a reserve build of $87 million in the fourth quarter of 2019.

Total operating expenses were up $89 million, year-over year, or 8%, primarily reflecting one-time expense items and higher compensation, partially offset by reductions in marketing and professional fees. Information processing increased reflecting one-time software write-offs and ongoing investments in technology capabilities and infrastructure. Employee compensation increased as a result of higher average salaries and headcount. Marketing decreased driven by reductions in brand and acquisition expense. Professional fees decreased primarily due to lower collection fees as courts are operating at limited capacity.

Payment Services

Payment Services pretax income was $24 million in the quarter, down $17 million year-over-year primarily driven by lower Diners Club and Network Partners revenue.

Payment Services volume was $70.1 billion, up 6% year-over-year. PULSE dollar volume was up 10% year-over-year driven by higher average spend per transaction as purchase patterns changed related to the pandemic. Diners Club volume was down 28% year-over-year reflecting the global impact of COVID-19 across all regions. Network Partners volume increased by 23% year-over-year driven by AribaPay volume.

Share Repurchase

As previously announced, earlier this week, the company’s Board of Directors approved a new $1.1 billion share repurchase program, having suspended share repurchases since March 2020 in response to the economic recession. The new program expires on December 31, 2021, and can be terminated at any time. The company expects to repurchase shares from time to time subject to the company’s repurchase program limit, its capital plan, market conditions and other factors, including legal and regulatory restrictions and required approvals, if any.

Adoption of Accounting Standard for Measurement of Credit Losses

The company’s results for the fourth quarter of 2020 reflect the January 1, 2020 adoption of Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments for the Company (the “ASU”). For purposes of calculating the company’s regulatory capital, the company has elected to defer recognition of the estimated impact of the ASU on regulatory capital for two years in accordance with the interim final rule adopted by federal bank regulatory agencies on March 27, 2020. Pursuant to the interim final rule, the estimated impact of the ASU on regulatory capital will be phased in over a three year period beginning in 2022.

Conference Call and Webcast Information

The company will host a conference call to discuss its fourth quarter results on Thursday, January 21, 2021, at 7:00 a.m. Central time. Interested parties can listen to the conference call via a live audio webcast at https://investorrelations.discover.com.

About Discover

Discover Financial Services (NYSE: DFS) is a digital banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.

A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company’s Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC’s website (http://www.sec.gov) and the company’s website (https://investorrelations.discover.com).

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the effect of the coronavirus disease 2019 (“COVID-19”) pandemic and measures taken to mitigate the pandemic, including their impact on our credit quality and business operations as well as their impact on general economic and financial markets, changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment, the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to tax reform, financial regulatory reform, consumer financial services practices, anti-corruption, and funding, capital and liquidity; the actions and initiatives of current and potential competitors; the company’s ability to manage its expenses; the company’s ability to successfully achieve card acceptance across its networks and maintain relationships with network participants; the company’s ability to sustain and grow its non-card products; difficulty obtaining regulatory approval for, financing, closing, transitioning, integrating or managing the expenses of acquisitions of or investments in new businesses, products or technologies; the company’s ability to manage its credit risk, market risk, liquidity risk, operational risk, compliance and legal risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company’s investment portfolio; limits on the company’s ability to pay dividends and repurchase its common stock; limits on the company’s ability to receive payments from its subsidiaries; fraudulent activities or material security breaches of key systems; the company’s ability to remain organizationally effective; the company’s ability to increase or sustain Discover card usage or attract new customers; the company’s ability to maintain relationships with merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; the company’s ability to introduce new products or services; the company’s ability to manage its relationships with third-party vendors; the company’s ability to maintain current technology and integrate new and acquired systems; the company’s ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company’s ability to attract and retain employees; the company’s ability to protect its reputation and its intellectual property; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters. The company routinely evaluates and may pursue acquisitions of or investments in businesses, products, technologies, loan portfolios or deposits, which may involve payment in cash or the company’s debt or equity securities.

Additional factors that could cause the company’s results to differ materially from those described in the forward-looking statements can be found under “Risk Factors,” “Business – Competition,” “Business – Supervision and Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2019, “Risk Factors” and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” in the company’s Quarterly Report on Form 10-Q for the quarters ended September 30, 2020, June 30, 2020 and March 31, 2020, which is filed with the SEC and available at the SEC’s internet site (http://www.sec.gov) and subsequent reports on Forms 8-K and 10-Q, including the company’s Current Report on Form 8-K filed today with the SEC.

DISCOVER FINANCIAL SERVICES
(unaudited, in millions, except per share statistics)
	Quarter Ended
	December 31, 2020		September 30, 2020		December 31, 2019
EARNINGS SUMMARY
Interest Income	$2,760		$2,681		$3,039
Interest Expense	383		416		615
Net Interest Income	2,377		2,265		2,424

Discount/Interchange Revenue	811		752		800
Rewards Cost	569		514		519
Discount and Interchange Revenue, net	242		238		281
Protection Products Revenue	45		44		48
Loan Fee Income	110		100		123
Transaction Processing Revenue	52		50		51
Other Income	(2	)	17		17
Total Non-Interest Income	447		449		520

Revenue Net of Interest Expense	2,824		2,714		2,944

Provision for Credit Losses	531		750		836

Employee Compensation and Benefits	504		471		447
Marketing and Business Development	159		140		234
Information Processing & Communications	198		111		113
Professional Fees	192		151		214
Premises and Equipment	30		26		27
Other Expense	195		106		149
Total Operating Expense	1,278		1,005		1,184

Income/(Loss) Before Income Taxes	1,015		959		924
Tax Expense	216		188		216
Net Income/(Loss)	$799		$771		$708

Net Income/(Loss) Allocated to Common Stockholders	$794		$751		$704


PER SHARE STATISTICS
Basic EPS	$2.59		$2.45		$2.25
Diluted EPS	$2.59		$2.45		$2.25
Common Stock Price (period end)	$90.53		$57.78		$84.82
Book Value per share	$35.50		$33.45		$38.24

BALANCE SHEET SUMMARY
Total Assets	$112,889		$124,349		$113,996
Total Liabilities	102,005		114,097		102,137
Total Equity	10,884		10,252		11,859
Total Liabilities and Stockholders’ Equity	$112,889		$124,349		$113,996

TOTAL LOAN RECEIVABLES
Ending Loans ¹	$90,449		$88,660		$95,894
Average Loans ¹	$88,960		$88,422		$93,437

Interest Yield	11.96	%	11.78	%	12.52	%
Gross Principal Charge-off Rate ²	3.17	%	3.78	%	4.00	%
Net Principal Charge-off Rate ²	2.38	%	3.00	%	3.19	%
Delinquency Rate (30 or more days)	1.89	%	1.77	%	2.41	%
Delinquency Rate (30 or more days) excluding Purchased Loans ³	1.88	%	1.76	%	2.40	%
Delinquency Rate (90 or more days)	0.88	%	0.80	%	1.15	%
Delinquency Rate (90 or more days) excluding Purchased Loans ³	0.88	%	0.80	%	1.15	%
Gross Principal Charge-off Dollars ²	$709		$842		$941
Net Principal Charge-off Dollars ²	$531		$668		$751
Net Interest and Fee Charge-off Dollars	$113		$141		$166
Loans Delinquent 30 or more days	$1,705		$1,567		$2,312
Loans Delinquent 30 or more days excluding Purchased Loans ³	$1,687		$1,544		$2,276
Loans Delinquent 90 or more days	$795		$708		$1,098
Loans Delinquent 90 or more days excluding Purchased Loans ³	$791		$702		$1,089

Allowance for Credit Losses (period end) ⁴	$8,226		$8,226		$3,383
Reserve Change Build/(Release) ^{5, 6, 7}	$0		$42		$85
Reserve Rate	9.09	%	9.28	%	3.53	%

CREDIT CARD LOANS
Ending Loans	$71,472		$69,656		$77,181
Average Loans	$69,997		$69,643		$74,814

Interest Yield	12.65	%	12.40	%	13.08	%
Gross Principal Charge-off Rate	3.53	%	4.33	%	4.34	%
Net Principal Charge-off Rate	2.63	%	3.45	%	3.41	%
Delinquency Rate (30 or more days)	2.07	%	1.91	%	2.62	%
Delinquency Rate (90 or more days)	1.03	%	0.93	%	1.32	%
Gross Principal Charge-off Dollars	$621		$759		$818
Net Principal Charge-off Dollars	$463		$604		$644
Loans Delinquent 30 or more days	$1,478		$1,328		$2,019
Loans Delinquent 90 or more days	$739		$650		$1,020

Allowance for Credit Losses (period end) ⁴	$6,491		$6,491		$2,883
Reserve Change Build/(Release) ^{5, 6}	$0		$0		$84
Reserve Rate	9.08	%	9.32	%	3.74	%

Total Discover Card Volume	$43,581		$39,783		$42,794
Discover Card Sales Volume	$40,957		$37,134		$39,188
Rewards Rate	1.38	%	1.38	%	1.32	%

SEGMENT- INCOME/(LOSS) BEFORE INCOME TAXES
Direct Banking	$991		$917		$883
Payment Services	24		42		41
Total	$1,015		$959		$924

NETWORK VOLUME
PULSE Network	$55,055		$54,993		$50,037
Network Partners	8,740		8,917		7,099
Diners Club International ⁸	6,321		5,839		8,831
Total Payment Services	70,116		69,749		65,967
Discover Network – Proprietary	42,526		38,699		40,579
Total	$112,642		$108,448		$106,546

¹Total Loans includes Home Equity and other loans.

²Prior to adoption of ASU No. 2016-13 on January 1, 2020, net charge-offs on Purchased Credit Impaired (“PCI”) loans generally did not result in a charge to earnings

³ Prior to adoption of ASU No. 2016-13 on January 1, 2020, Purchased loans (formerly referred to as PCI) were accounted for on a pooled basis. Since a pool was accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, was not meaningful. Because the Company was recognizing interest income on a pool of loans, it was all considered to be performing

⁴Prior to adoption of ASU No. 2016-13 on January 1, 2020, credit losses were estimated using the incurred loss approach. Under the new current expected credit loss (“CECL”) approach, reserves are now recorded for expected losses, not simply those deemed to be already incurred, and the loss estimate period is extended to include the entire life of the loan

⁵ Prior to adoption of ASU No. 2016-13 on January 1, 2020, the allowance for credit loss included the net change in reserves on PCI pools having no remaining non-accretable difference which did not impact the reserve change build/(release) in provision for credit losses

⁶ Excludes January 1, 2020 CECL day one impact

⁷ Excludes any build/release of the liability for expected credit losses on unfunded commitments as the offset is recorded in accrued expenses and other liabilities in the Company’s condensed consolidated statements of financial condition

⁸ Volume is derived from data provided by licencees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment

Note: See Glossary for definitions of financial terms in the financial supplement which is available online at the SEC’s website (http://www.sec.gov) and the Company’s website (http://investorrelations.discoverfinancial.com).

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005708/en/

Investors:

Eric Wasserstrom, 224-405-5923

[email protected]

Media:

Jon Drummond, 224-405-1888

[email protected]

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

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January 20, 2021 4:21 pm

Golub Capital BDC, Inc. Announces Preliminary Fiscal Year 2021 First Quarter Financial Results

PR Newswire

NEW YORK, Jan. 20, 2021 /PRNewswire/ — Golub Capital BDC, Inc. (NASDAQ: GBDC) (“we,” “us,” “our,” “GBDC” or the “Company”) announced preliminary estimates of certain financial results for its first fiscal quarter ended December 31, 2020.

Set forth in the table below are certain preliminary estimates of our financial condition and results of operations for the three months ended December 31, 2020. These estimates are subject to the completion of financial closing procedures and are not a comprehensive statement of the Company’s financial results for the three months ended December 31, 2020. Actual results may differ materially from these estimates as a result of the completion of our financial closing procedures, final adjustments and other developments arising between now and the time that financial quarterly results for the three months ended December 31, 2020 are finalized. These preliminary estimates have been prepared by, and are the responsibility of, management. Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to such preliminary estimates, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

“GBDC expects to report strong net income and solid credit results for the quarter ended December 31, 2020,” said David B. Golub, Chief Executive Officer of GBDC. “We believe the portfolio’s performance since the onset of COVID-19 validates our underwriting focus on resilient businesses backed by strong private equity sponsors.”

The Company began in April 2020 providing supplemental, preliminary estimates of its quarterly financial performance in light of financial market volatility and the evolving economic impact from COVID-19. Given that market volatility and uncertainty have decreased considerably since that time, we currently plan to return to our normal course of reporting for our second fiscal quarter financial results.

PRELIMINARY ESTIMATES OF CERTAIN FINANCIAL RESULTS

	Estimated Ranges for the three months ended December 31, 2020
Net Investment Income Per Share
Net investment income per share	$	0.22	$	0.23
Amortization of purchase premium per share¹	0.05		0.06
Adjusted net investment income per share¹	0.27		0.29
Net Realized/Unrealized Gain (Loss) Per Share
Net realized/unrealized gain (loss) per share	0.29		0.36
Reversal of unrealized loss resulting from the amortization of the purchase price premium per share¹	(0.05)		(0.06)
Adjusted net realized/unrealized gain (loss) per share¹	0.24		0.30
Earnings per Share
Earnings per share	0.51		0.59
Adjusted earnings per share¹	0.51		0.59

Based on the estimated range of earnings per share in the table above, the Company is estimating a net asset value per share between $14.55 and $14.63 as of December 31, 2020, as shown below:


Net Asset Value per Share
Actual net asset value per share, September 30, 2020	$	14.33	$	14.33
Estimated earnings per share for the three months ended December 31, 2020	0.51		0.59
Dividend paid per share on December 30, 2020	(0.29)		(0.29)
Estimated net asset value per share, December 31, 2020	$	14.55	$	14.63

On September 16, 2019, the Company completed its acquisition of Golub Capital Investment Corporation (“GCIC”). The acquisition was accounted for under the asset acquisition method of accounting in accordance with Accounting Standards Codification 805-50, Business Combinations – Related Issues. Under asset acquisition accounting, where the consideration paid to GCIC’s stockholders exceeded the relative fair values of the assets acquired and the liabilities assumed, the premium paid by the Company was allocated to the cost of the GCIC assets acquired by the Company pro-rata based on their relative fair value. Immediately following the acquisition of GCIC, the Company recorded its assets at their respective fair values and, as a result, the purchase premium allocated to the cost basis of the GCIC assets acquired was immediately recognized as unrealized depreciation on the Company’s Consolidated Statement of Operations. The purchase premium allocated to investments in loan securities acquired from GCIC will amortize over the life of the loans through interest income with a corresponding reversal of the unrealized depreciation on such loans acquired through their ultimate disposition. The purchase premium allocated to investments in equity securities will not amortize over the life of the equity securities through interest income and, assuming no subsequent change to the fair value of the GCIC equity securities acquired and disposition of such equity securities at fair value, the Company will recognize a realized loss with a corresponding reversal of the unrealized depreciation upon disposition of the GCIC equity securities acquired.

As a supplement to U.S. generally accepted accounting principles (“GAAP”) financial measures, the Company is providing the following estimates of non-GAAP financial measures that it believes are useful for the reasons described below:

“Adjusted Net Investment Income Per Share” – excludes the amortization of the purchase premium and the accrual for the capital gain incentive fee (including the portion of such accrual that is not payable under the Company’s investment advisory agreement) from net investment income calculated in accordance with GAAP.
“Adjusted Net Realized and Unrealized Gain/(Loss) Per Share” – excludes the unrealized loss resulting from the purchase premium write-down and the corresponding reversal of the unrealized loss from the amortization of the premium on loans or from the sale of equity investments from the determination of realized and unrealized gain/(loss) determined in accordance with GAAP.
“Adjusted Earnings Per Share” – calculates net income and earnings per share based on Adjusted Net Investment Income Per Share and Adjusted Net Realized and Unrealized Gain/(Loss) Per Share.

The Company believes that excluding the financial impact of the purchase premium in the above non-GAAP financial measures is useful for investors as it is a non-cash expense/loss resulting from the acquisition of GCIC and is one method the Company uses to measure its financial condition and results of operations. In addition, the Company believes excluding the accrual of the capital gain incentive fee in the above non-GAAP financial measures is useful as it includes the portion of such accrual that is not contractually payable under the terms of the Company’s investment advisory agreement with GC Advisors. Although these estimates of non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

Other First Fiscal Quarter 2021 Preliminary Estimates

During the three months ended December 31, 2020, the Company estimates originations in new middle market investment commitments were $526.8 million. Approximately 75.0% of the new middle-market investment commitments were one stop loans, 22.0% were senior secured loans and 3.0% were equity and other securities. Total investments at fair value are estimated to have increased by approximately $266.3 million during the three months ended December 31, 2020 after factoring in debt repayments, sales of securities, net fundings on revolvers, and net change in unrealized gains (losses).
As of December 31, 2020, the Company estimates it had well over $350.0 million of liquidity in the form of cash, restricted cash, available commitments under its revolving credit facilities, and undrawn SBIC debentures and a GAAP debt-to-equity ratio between 0.94x and 0.98x.
As of December 31, 2020, the Company was in compliance with all of its covenants under its revolving credit facilities and debt securitizations.
As of December 31, 2020, the Company estimates that non-accrual investments declined again as a percentage of total investments at fair value to less than 1.5% and that non-accrual investments as a percentage of total investments at cost declined to less than 2.0%. Additionally, the Company estimates that the number of non-accrual investments decreased from nine investments as of September 30, 2020 to seven investments as of December 31, 2020.

Conference Call

The Company will report its financial results for the quarter ended December 31, 2020 on Monday, February 8, 2021 after the close of the financial markets. The Company will host an earnings conference call at 1:00 p.m. (Eastern Time) on Tuesday, February 9, 2021 to discuss its quarterly financial results. All interested parties may participate in the conference call by dialing (833) 900-2240 approximately 10-15 minutes prior to the call; international callers should dial +1 (236) 714-2752. Participants should reference Golub Capital BDC, Inc. when prompted. An archived replay of the call will be available shortly after the call until 12:00 a.m. (Eastern Time) on February 16, 2021. To hear the replay, please dial (800) 585-8367. International dialers, please dial +1 (416) 621-4642. For all replays, please reference program ID number 7894556.

ABOUT GOLUB CAPITAL BDC, INC.

Golub Capital BDC, Inc. (“GBDC”) is an externally-managed, non-diversified closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. GBDC invests primarily in one stop and other senior secured loans to middle market companies that are often sponsored by private equity investors. GBDC’s investment activities are managed by its investment adviser, GC Advisors LLC, an affiliate of the Golub Capital LLC group of companies (“Golub Capital”).

ABOUT GOLUB CAPITAL

Golub Capital is a market-leading, award-winning direct lender and credit asset manager, with over $35 billion of capital under management. Golub Capital specializes in delivering reliable, creative and compelling financing solutions to middle market companies backed by private equity sponsors. The firm’s credit expertise also forms the foundation of its Late Stage Lending business and its Broadly Syndicated Loan investment program. Across its activities, Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from its private equity sponsor clients and investors. Founded over 25 years ago, Golub Capital today has over 500 employees and lending offices in Chicago, New York and San Francisco. For more information, please visit golubcapital.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. Golub Capital BDC, Inc. undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

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SOURCE Golub Capital BDC, Inc.