Orrstown Financial Services Inc (ORRF) stock analysis

P/E above its 5-year median

Orrstown Financial Services's P/E of 9.8 is above its own 5-year median of 9.1.

P/E below the industry

Orrstown Financial Services's P/E of 9.8 is below the Commercial Banks median of 12.1.

P/S below the industry

Orrstown Financial Services's price-to-sales of 3.35 is below the Commercial Banks median of 3.60.

P/B above the industry

Orrstown Financial Services's price-to-book of 1.43 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $44.10 is above our fair value estimate of $42.47.

Margin of safety under 20%

The price is 3.8% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 24.0% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 26.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 19.5% over the last twelve months, against a 5-year average of 25.0% a year.

Growing slower than the industry

Revenue grew 4.0% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 14.8% over the last twelve months and averaged 11.2% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.6%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Orrstown Financial Services's return on equity of 14.8% is above the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 25.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 33.7% over the last twelve months, against a 5-year average of 154%.

Net margin above the industry

Orrstown Financial Services's net margin of 33.7% is above the Commercial Banks median of 30.3%.

Well capitalized

Equity is 10.6% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 90.8% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.1% of loans; we look for at least 1%.

Efficient operations

Non-interest expense takes 57.6% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 1.1% over the past year.

Borrowings

Needs debt and equity figures.

Pays a dividend

Orrstown Financial Services paid dividends worth 2.7% of the share price over the last twelve months.

Yield below Treasuries

The 2.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Orrstown Financial Services yields 2.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 26.3% of net income.

Covered by free cash flow

Dividends take 38.5% of free cash flow.