DEF 14A of Orrstown Financial Services Inc
Filed Mar 27, 2026 · FY20250001628280-26-021726
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS
Classification of the Company's Directors
Classification of the Company's Directors The bylaws of the Company provide that the Board of Directors shall consist of not less than nine and not more than 15 members, with such directors being divided into three classes, as nearly equal in number as possible, with each class of directors serving a three-year term of office. At each annual meeting of shareholders, a class of approximately one-third of all of the Company’s directors is elected to hold office for a term expiring at the annual meeting held in the third year following the year of his or her election. The Company currently has 13 directors, who are divided into three classes, Class A, Class B and Class C, with each class serving staggered three-year terms as follows: •The Class A directors are Brian D. Brunner, Scott V. Fainor, Cindy J. Joiner and Eric A. Segal and their terms will expire at the Annual Meeting; •The Class B directors are Barbara E. Brobst, Mark K. Keller, J. Rodney Messick, Thomas R. Quinn, Jr. and Michael J. Rice and their terms expire at the annual meeting of shareholders to be held in 2028; and •The Class C directors are Sarah M. Brown, John W. Giambalvo, Glenn W. Snoke and Joel R. Zullinger and their terms will expire at the annual meeting of shareholders to be held in 2027.
Nominees for Election
Nominees for Election At the Annual Meeting, the shareholders will be asked to elect four Class A director nominees to serve on our Board of Directors for a three-year term expiring in 2029. The Board of Directors has nominated the following persons for election as directors to Class A:
Nominees for Election
| Brian D. Brunner | | Scott V. Fainor | | Cindy J. Joiner, CPA | | Eric A. Segal |
Nominees for Election
Ms. Joiner and Messrs. Brunner, Fainor, and Segal presently serve as directors of the Company and the Bank. If one or more of the named nominees is unable or unwilling to serve as a director, the persons named in the proxy will vote for the election of such substitute nominee, if any, as will be named by the Board of Directors. The Company has no reason to believe that any of the named nominees will be unable or unwilling to serve as a director. Each named nominee has expressed a willingness to serve if elected. Directors are elected by a plurality of votes. This means that the four director nominees receiving the highest number of affirmative votes will be elected as directors. You may vote for all of the director nominees, withhold authority to vote your shares for all director nominees, or withhold your authority to vote your shares with respect to any to any one or more of the director nominees. Votes withheld and broker non-votes will have no effect on the election of directors. The Board of Directors recommends that you vote FOR the election of each of the director nominees named in this proxy statement.
Board Overview
Board Overview The independence and skill set of the Board of Directors is crucial to the continued success of the Company. The Board of Directors evaluates needed skill sets through the use of a matrix which evaluates directors and prospective directors for specific expertise, such as accounting, risk management, technology, and market or regional knowledge, among others. More than half of the directors have led companies headquartered within the Company’s market areas and represent significantly different industry backgrounds. Aside from sitting on the Board of Directors of the Company, 54% of our directors have extensive careers in financial services. Twelve of the thirteen directors, or 92%, are “independent" under NASDAQ listing rules.
Independent Chairman
Independent Chairman The Board of Directors believes that an independent Chairman serves an important corporate governance function by providing separate leadership for the independent directors. In addition to his formal duties as set forth in the Company’s various corporate governance documents, the Chairman meets with regulators, participates in shareholder engagement calls and attends meetings with management. Our independent Chairman also presides over meetings of independent directors in executive session at such times as deemed necessary or appropriate.
Nomination of Directors
Nomination of Directors In connection with the Annual Meeting, the Nominating and Governance Committee of the Board of Directors has reviewed the qualifications of, and made recommendations regarding, potential candidates to be nominated by the Board of Directors for election as directors. The nominees named above were recommended by the Nominating and Governance Committee, then submitted to, and approved by, the Board of Directors as the four nominees for election as directors to Class A. The Nominating and Governance Committee is responsible for identifying, assessing and recommending the slate of candidates to be nominated for election to the Board of Directors. In addition to meeting the minimum criteria to serve as a director as outlined in the Company’s bylaws, the committee uses a variety of methods and considers a variety of factors for identifying and evaluating nominees for director and assesses the mix of skills and the performance of the Board of Directors as a whole on a regular basis. In the course of establishing the slate of nominees for director each year, the committee will consider whether any vacancies on the Board of Directors are expected due to retirement or otherwise, the skills represented by retiring and continuing directors, and additional skills highlighted during the Board self-assessment process that could improve the overall quality and ability of the Board to carry out its function. The committee also considers factors including each candidate’s integrity, independence, experience (including experience in finance and banking and diversity of experience in relation to other members of the Board of Directors), the strategic direction of the Company and the Bank, involvement in the communities served by the Bank and such other factors it deems to be in the best interest of the Company, the Bank and the Company’s shareholders, which factors may change from time to time. The Nominating and Governance Committee will consider the incumbent directors whose terms are expiring at the forthcoming annual meeting, other candidates, if any, recommended to it by shareholders, other qualified individuals within the community, including the Bank’s regional advisory boards, and any candidates nominated by shareholders in accordance with the procedures set forth in the Company’s bylaws. The criteria for consideration of director candidates nominated by the Company’s shareholders, if nominated in a timely manner, is the same as for other director nominees.
Director Eligibility Requirements
Director Eligibility Requirements The Company’s bylaws provide for certain director eligibility requirements for a nominee to be eligible to become a member of the Board. All directors must hold at least 5,000 shares of Company Common Stock. Directors will have one year from the date they join the Board to meet this requirement. In addition, no one may be nominated to serve as a director of the Company if such person: (a) is under indictment or has been convicted of a crime involving a breach of trust with a penalty of imprisonment for more than one year; (b) has been issued within the past 10 years a non-appealable cease and desist order by a federal or state bank regulatory agency related to conduct involving dishonesty or breach of trust; (c) has been found guilty in a final decision, either by any federal or state regulatory agency of: (i) committing a willful violation of any law governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency, or (ii) breaching a fiduciary duty involving personal profit; or (d) has been nominated by someone who is ineligible to serve as a director of the Company under requirements (a)-(c) listed above. No recommendations were received by the Nominating and Governance Committee in connection with this Annual Meeting from shareholders or others, nor, as of the date of this proxy statement, had any candidates been nominated by shareholders in accordance with the procedures set forth in the bylaws. Any future nominations should be submitted in writing addressed to Orrstown Financial Services, Inc., 4750 Lindle Road, Harrisburg, Pennsylvania 17111, Attn: Nominating and Governance Committee. Shareholder nominations must be made in accordance with the procedures set forth in the Company’s bylaws and must include a statement setting forth the background, education and business experience of the nominee. A copy of the Nominating and Governance Committee Charter is posted in the investor relations section of the Company’s website at www.orrstown.com.
Biographical Summaries of Nominees and Directors
Biographical Summaries of Nominees and Directors The Board of Directors believes that each of the nominees and directors possess such professional experience, recognized achievement in his or her respective field, involvement in the communities served by the Bank, ability to contribute to some aspect of the Company’s business and a willingness to make the commitment of time and effort required of a Company director. Information about the nominees for election as directors at the Annual Meeting and information about the continuing directors demonstrating these characteristics is set forth below. There are no family relationships among any of our directors. Unless otherwise stated, each director has held his or her current occupation for the last five years. Nominees for Director:
CLASS A DIRECTORS - TERM EXPIRES IN 2026
CLASS A DIRECTORS - TERM EXPIRES IN 2026 Brian D. Brunner - 69, was appointed to the Board of Directors of the Company and the Bank in 2024 concurrent with the closing of the Company's merger with Codorus Valley Bancorp. Mr. Brunner previously served on the Board of Codorus Valley Bancorp and its banking subsidiary, PeoplesBank, from 2016 through 2024. Prior to that, he served on the Board of Directors of Madison Bancorp, Inc., a Maryland-based financial institution. Until his retirement in 2022, Mr. Brunner served as Division President of Account and Item Processing Sales within the Global Sales Organization of Fiserv, Inc., a global fintech and payments company. He currently serves as a director of Movemint, a digital marketing and embedded finance platform that enables financial institutions to drive loans, deposits, and non-interest income growth through personalized, efficient data-driven experiences. He is a member of the Association for Financial Technology, a resource for networking and professional development in the financial technology industry. Mr. Brunner was also an organizer and founding director of Bay Net Community Bank, a de novo bank established in the Baltimore, Maryland region. Mr. Brunner was appointed as a director because his 30-plus years of experience in the financial services industry, extensive knowledge of the Maryland markets and expertise in financial services technology enable Mr. Brunner to provide unique expertise to the Board. Scott V. Fainor - 64, was appointed to the Board of Directors of the Company and the Bank in 2024 concurrent with the Company's merger with Codorus Valley Bancorp. He previously served on the Board of Directors of Codorus Valley Bancorp and its banking subsidiary, PeoplesBank, from 2022 through 2024. Mr. Fainor is also currently a director of Everbank Financial Corporation and Everbank, N.A. where he is Chair of the Nominating and Governance Committee and member of the Risk and Audit Committees. From April 2016 through February 2019, Mr. Fainor served as Group Executive at BB&T Bank (now Truist Bank, as a result of the merger with Truist Bank) where he was responsible for all banking activities and financial results across a ten-state region. From February 2008 through April 2016, Mr. Fainor was President, CEO and a member of the Board of Directors of National Penn Bancshares, Inc., headquartered in Allentown, Pennsylvania, and from January 2002 to February 2008, Mr. Fainor was President and CEO of KNBT Bancorp Inc. and First Colonial Bancorp, Inc., both headquartered in Bethlehem, Pennsylvania. Mr. Fainor has also served on the Federal Advisory Council of the Board of Governors of the Federal Reserve System and various committees of The Federal Reserve Bank of Philadelphia. Mr. Fainor was appointed as a director because of his extensive experience in the banking industry, including as CEO leading several publicly traded regional bank holding companies, and his skills and personal attributes, make him ideally suited to serve as a director of the Corporation. Cindy J. Joiner, CPA - 64, was appointed to the Boards of Directors of the Company and the Bank in 2016. Since 2007, she has served as the Chief Financial Officer of The Bowman Group, LLC, a privately held corporation located in Williamsport, Maryland specializing in transportation, logistics, hospitality and real estate development. The Board of Directors values Ms. Joiner’s accounting expertise and knowledge of multiple industries that align with the Bank’s lending businesses. In addition, the Board believes her familiarity and knowledge of the Maryland market adds significant value to the Company. Eric A. Segal - 68, was appointed to the Boards of Directors of the Company and the Bank in 2013. Since 2012, Mr. Segal has been Managing Director, and head of the Banking and Financial Institutions Group at CFO Consulting Partners LLC in Princeton, New Jersey. In his role at CFO Consulting Partners, Mr. Segal periodically serves as the interim chief financial officer for public and private companies, including out-of-market financial institutions. The Board of Directors values Mr. Segal’s strong financial acumen and the knowledge and experience he has gained through his consulting experience in many banking organizations in the Mid-Atlantic and other regions. Continuing Directors:
CLASS C DIRECTORS - TERM EXPIRES IN 2027
CLASS C DIRECTORS - TERM EXPIRES IN 2027 Sarah M. Brown - 44, was appointed to the Board of Directors of the Company and the Bank in 2024 concurrent with the Company's merger with Codorus Valley Bancorp. She previously served on the Board of Directors of Codorus Valley Bancorp and its banking subsidiary, PeoplesBank, from 2019 through 2024. Ms. Brown currently serves as President and Chief Executive Officer of Keller-Brown Insurance Services, a fifth generation, family-owned insurance agency located in York County, Pennsylvania, and Chair of the Insurance Agents and Brokers Services Group, Inc. Ms. Brown was appointed as a director because the attributes, skills and qualifications Ms. Brown has developed through her professional experiences as a business leader and insurance specialist, as well as the knowledge and experience she gained as a director of PeoplesBank, enable her to provide valued business expertise to the Board. John W. Giambalvo - 56, was appointed to the Board of Directors of the Company and the Bank in 2024 concurrent with the Company's merger with Codorus Valley Bancorp. He previously served on the Board of Directors of Codorus Valley Bancorp and its banking subsidiary, PeoplesBank, from 2017 through 2024. Mr. Giambalvo is President and CEO of Jack Giambalvo Motor Co., Inc., an automotive dealership, and has over 25 years of experience in the auto industry. Mr. Giambalvo started his professional career as a law clerk for the Honorable John C. Uhler, and then became an Assistant District Attorney in York, Pennsylvania. Mr. Giambalvo previously served as a member of the Board of Directors of the Pennsylvania Automobile Dealers Association, which advocates on behalf of car and truck dealers in the Commonwealth of Pennsylvania. Mr. Giambalvo was appointed as a director because the attributes, skills and qualifications Mr. Giambalvo has developed through his professional experiences as a business leader and lawyer, as well as the knowledge and experience he gained as a director of PeoplesBank, enable him to provide valued business expertise to the Board. Glenn W. Snoke - 77, has been a member of the Boards of Directors of the Company and the Bank since 1999. Mr. Snoke is retired. He previously served as the President and Chief Executive Officer of Snoke’s Excavating & Paving, Inc. The Board of Directors values Mr. Snoke’s knowledge, experience and perspective as an entrepreneur and owner of a small business involved in the construction industry and the insight it provides him into the financial services needs and business issues facing many of the Bank’s construction industry clients. Joel R. Zullinger - 77, is Chairman of the Boards of Directors of the Company and the Bank. Mr. Zullinger has served as a director since 1981. He is an attorney, of counsel, with Zullinger-Davis-Trinh, P.C., with offices in Chambersburg and Shippensburg, Pennsylvania. The Board of Directors values the knowledge, experience and perspective Mr. Zullinger has obtained through his long tenure as a director of the Company and the Bank. The Board of Directors also values the leadership and communication skills manifested by Mr. Zullinger’s service as Chairman.
Compensation of Directors
Compensation of Directors The following table sets forth compensation received by directors of the Company in 2025, other than Thomas R. Quinn, Jr., President and Chief Executive Officer, of the Company and the Bank. As an officer of the Company and the Bank in 2025, Mr. Quinn did not receive compensation in his capacity as a director.
2025 DIRECTOR COMPENSATION TABLE
2025 DIRECTOR COMPENSATION TABLE
2025 DIRECTOR COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (2) | All Other Compensation ($)(3) | Total ($) | | Barbara E. Brobst | 27,417 | 45,255 | — | — | — | — | 72,672 | | Sarah M. Brown | 30,000 | 81,655 | — | — | — | — | 111,655 | | Brian D. Brunner (4) | 30,000 | 81,655 | — | — | — | — | 111,655 | | Scott V. Fainor | 30,000 | 81,655 | — | — | — | — | 111,655 | | John W. Giambalvo | 30,000 | 81,655 | — | — | — | — | 111,655 | | Cindy J. Joiner, CPA | 30,000 | 81,655 | — | — | — | 7,850 | 119,505 | | Mark K. Keller | 30,000 | 81,655 | — | — | 12,214 | — | 123,869 | | J. Rodney Messick | 30,000 | 81,655 | — | — | — | — | 111,655 | | Michael J. Rice | 30,000 | 81,655 | — | — | — | — | 111,655 | | Eric A. Segal | 30,000 | 81,655 | — | — | — | 10,500 | 122,155 | | Glenn W. Snoke | 30,000 | 81,655 | — | — | 8,357 | — | 120,012 | | Joel R. Zullinger | 52,000 | 151,242 | — | — | 11,440 | — | 214,682 |
2025 DIRECTOR COMPENSATION TABLE
| (1) The grant date fair value of stock awards was calculated by multiplying the number of shares subject to the award by the fair value of Company Common Stock on the grant date ($36.40 per share on January 30, 2025 and $30.17 per share on May 6, 2025). Each director, other than Mr. Zullinger, received grants of 1,000 and 1,500 shares of Company Common Stock, respectively, on these dates. Mr. Zullinger received grants of 2,000 and 2,600 shares of Company Common Stock, respectively, on these dates. | | (2) Represents the annual expense impact related to the value of the directors’ accumulated benefit under defined benefit and supplemental plans for the year ended December 31, 2025. | | (3) Represents amounts contributed by the Company into the Deferred Compensation Plan. | | (4) Mr. Brunner received cash distributions of $90,958 from his participation in Codorus Valley Bancorp's director deferred fee plan. |
2025 DIRECTOR COMPENSATION TABLE
Director Fees To further align director compensation with shareholder interests, and in response to direct shareholder input arising from shareholder engagement with members of both management and the Compensation Committee, the Compensation Committee has determined that the Company's non-employee directors shall be paid an annual retainer, with approximately 50% being paid in cash and 50% being paid in restricted shares of Company Common Stock. Each non-employee director is also granted restricted shares of Company Common Stock at each year's annual meeting of shareholders. Cash Compensation. During 2025, the cash portion of the annual retainer paid to each non-employee director of the Company and the Bank was $30,000, except for Ms. Brobst, who received a prorated amount of $27,417, due to her appointment to the Board of Directors of the Company and the Bank on February 1, 2025. Mr. Zullinger received an additional $22,000 in cash in recognition of the services he provided as Board Chairman. Fees are paid quarterly in arrears on the last day of each calendar quarter. Restricted Stock Awards. On January 30, 2025, as part of the equity portion of his or her annual retainer, each non-employee director was granted 1,000 shares of restricted Company Common Stock with a 16-month vesting period. Mr. Zullinger received an additional 1,000 shares of restricted Company Common Stock with a 16-month vesting period in recognition of the services he provided as Board Chairman. In addition, on May 6, 2025, each non-employee director was granted 1,500 restricted shares of Company Common Stock with a 13-month vesting period and a grant date fair value of $45,255. Mr. Zullinger was granted an additional 1,100 restricted shares of Company Common Stock with a 13-month vesting period and grant date fair value of $33,187 to compensate him for his role as Board Chairman. Deferred Compensation Plan In 1995, the Company and the Bank established a non-qualified deferred compensation plan for directors and executive officers. Participation in the plan is voluntary and, for directors, is limited to directors who joined the Board prior to September 1, 2018. Each participant may elect each year to defer all or a portion of his or her directors’ fees or, in the case of an executive officer, compensation. Directors deferring compensation must begin withdrawals from the plan by age 75 or termination of service as a director, whichever occurs later. Executive officers must begin withdrawals by age 65 or retirement, whichever occurs later. Payments may be made in equal annual or monthly installments over ten years. Immediate distributions are to be made in the event the Company would experience a hostile takeover. If a participant were to die before payment of his or her entire account, the Company will pay the balance to his or her beneficiary in a single lump sum payment. The amounts deferred are invested in a rabbi trust with the trust department of the Bank as trustee. The participants direct the investment of their own accounts among various publicly available mutual funds designated by the Bank’s Trust Investment Policy Committee. Growth of each participant’s account is a result of investment performance and the public markets and is not a result of an interest factor or interest formula established by the participant or by the Company or the Bank. The Company may make contributions on behalf of directors to this rabbi trust from time to time. The Company’s accrued benefit obligations related to this plan totaled $7.9 million at December 31, 2025. Director Retirement Plan The Bank has entered into director retirement agreements with Messrs. Keller, Snoke and Zullinger. Each director retirement agreement provides the respective director with a normal retirement benefit in a specified amount, payable in 120 consecutive monthly installments commencing the month following the director’s termination of service as a director after having reached the normal retirement age of 65. Generally, the amount of a director’s annual normal retirement benefit is determined using his or her directors’ fees during the year in which he or she became a party to a director retirement agreement, projected to the normal retirement age of 65 with annual increases of 4%. For every complete plan year after normal retirement age and before termination of service, the amount of the annual benefit will increase by 4%. In 2018, the Board of Directors determined there would be no new benefits offered to current or future directors under the Director Retirement Plan. A director will forfeit his or her benefits under his or her director retirement agreement if the Bank terminates his or her service as a director for gross negligence or gross neglect of duties, commission of a felony or gross misdemeanor involving moral turpitude or fraud, disloyalty or willful violation of any law or policy committed in connection with the director’s service resulting in an adverse effect on the Bank or if the director, after termination of service (other than following a change in control of the Bank), competes with the Bank in violation of the restrictive covenants included in his or her director retirement agreement. The Bank would not be obligated to pay any benefit under a director retirement agreement to the extent the benefit would constitute an excess parachute payment under Section 280G of the Internal Revenue Code. If a director is in active service of the Bank at the time of a change in control of the Bank, as defined in Section 409A of the Internal Revenue Code, the director will be entitled to begin receiving his or her normal retirement benefit following the later of the director’s termination of service as a director or attaining normal retirement age. The director retirement agreement provides for an early termination benefit in a specified amount in the event of an early termination of service as a director before normal retirement age, a disability benefit in the event of an early termination of service as a director due to disability and a death benefit. The amount of the expense associated with the Director Retirement Plan includes increases in 2025 in the net present value of the accrued benefit under the directors’ retirement agreement and is reported in the 2025 Director Compensation Table for each participating director in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column. The Company's accrued benefit obligations related to this plan totaled $1.6 million at December 31, 2025.
Our 2025 Compensation Outcomes
Our 2025 Compensation Outcomes Base Salary Base salary increases for 2025 were 11.1% for the Chief Executive Officer and 2.0% for each other NEO, except for Mr. Metz and Ms. Doll. Mr. Metz received a base salary increase of 54.5% following his promotion from Chief Revenue Officer to Senior Executive Vice President and Chief Operating Officer and designation as successor to the Chief Executive Officer with the associated increase in duties and responsibilities. Ms. Doll received a base salary increase of 23% following her promotion from Chief Technology and Operations Officer to Chief Administrative Officer with the associated increase in duties and responsibilities. 2025 Incentive Compensation Incentive awards link annual compensation to annual Company performance and link the long-term compensatory interests of NEOs to the interests of shareholders in the long-term success and growth of the Company. Our incentive compensation program for 2025 provided cash opportunities through the STIP and equity opportunities through the LTIP, which consists of time-vested and performance-vested equity awards. Incentive compensation to our NEOs in 2025 was targeted evenly between cash and equity award opportunities, with actual awards initially earned based on our Net Income and ROAE performance in 2025. When designing the Company's 2025 incentive compensation program, the Compensation Committee determined that it would be appropriate to exclude non-recurring merger related expenses (including certain required purchase accounting adjustments) from the calculation of 2025 Net Income and ROAE when reviewing actual performance results for calculation of initial STIP and LTIP awards, as the committee believed that the merger would drive long-term growth and profitability in future years, and therefore enhance long-term shareholder value. As a result, approximately $2.6 million of pre-tax merger-related expenses were excluded from the calculation of Net Income and ROAE when reviewing actual performance results for calculation of initial STIP and LTIP awards. These adjusted figures are sometimes referred to in this proxy statement as Adjusted Net Income and Adjusted ROAE, respectively. For the year ended December 31, 2025, Adjusted Net Income was $82.6 million compared to $82.5 million at target, and Adjusted ROAE was 15.07% compared to 14.81% at target. STIP awards were additionally contingent on the Company maintaining an acceptable level of credit quality, a condition which was satisfied for 2025. As a result, STIP awards were paid in cash as described in more detail below. Time-vested restricted stock awards will vest 33% on each of the first three anniversaries of the grant date, provided the NEO is employed by the Company on the vesting date. Performance-vested restricted stock units will vest 100% after three years, with the number of restricted stock units that vest dependent on performance against pre-established goals during the three-year performance period from 2026-2028, as well as continued employment. The performance measurement on these awards uses a two-step measurement process: 1.First, the Company’s Return on Average Assets (“ROAA”) is tracked against internal expectations that are communicated at the time of grant based on budgeted performance expectations at that time. 2.After determining the initial vesting amount based on the Company's performance relative to ROAA targets, the Company’s total shareholder return will be measured against an index of similarly-sized banks determined on the date of the award. The number of restricted stock units earned using the ROAA performance measures then will be adjusted upward or downward by up to 20% based on the Company’s total shareholder return performance against the index. Subjective Performance Evaluation. If the Company’s performance is at or above threshold for a given performance goal, following the calculation of awards earned based on objective performance, the Compensation Committee has the ability to adjust STIP and/or LTIP awards upward or downward by up to 20% of the earned award. This adjustment potential is intended to provide the Compensation Committee with a flexible but limited tool to recognize company or individual performance results, whether positive or negative, outside of the two objective performance measures. The Compensation Committee has the flexibility to consider any factors it deems relevant to its adjustment of earned awards, including but not limited to growth, risk, compliance and technology factors, special projects or initiatives, and other factors. 2025 Awards under the STIP and LTIP The Board of Directors is focused on driving the long-term growth and profitability of the Company in future years and believes that executive compensation should be aligned with Company performance and shareholder interests. Therefore, in making decisions for 2025 incentive compensation, the Compensation Committee considered several factors, including the following: •The Company reported the highest annual net income in its history during 2025; •The Company achieved and exceeded several key profitability metrics and capital ratios faster than initially projected since completing the merger with Codorus Valley Bancorp; •The Company's results have significantly enhanced shareholder value as evidenced by increasing its dividend four times, or 50% in the aggregate, in the 18 months since completing the merger with Codorus Valley Bancorp; •The Company’s total shareholder return has increased 68.7% over the three-year performance period from 2023 through 2025, the highest return of any bank in the Company’s compensation peer group and 49.6% above the median (see “Benchmarking of Compensation Levels” below). Based on its review of these factors, the Compensation Committee concluded that the Company’s efforts to drive long-term shareholder value in 2025 were successful and that 2025 compensation decisions should reflect this success. In addition, when discussing the Company's financial performance during 2025, the Compensation Committee noted the significant headwinds faced by the Company during the year. These headwinds included, without limitation, interest rate reductions promulgated by the Federal Reserve; economic uncertainty and stock market volatility resulting from the implementation of tariffs and other factors; and management's intense focus on the integration of Codorus Valley Bancorp and achieving and exceeding the previously announced cost save target of 18% for the go-forward normalized operating run rate as of December 31, 2024. Integration efforts negatively impacted 2025 financial results not only by increasing operating expenses but also by diverting management's time and attention, as well as the Company's resources, from initiatives which could otherwise have increased 2025 earnings. The Board of Directors believes that the successful integration of the two companies and achievement of cost savings will drive long-term growth in 2026 and future years and therefore enhance long-term shareholder value.
Our 2025 Compensation Outcomes
For the year ended December 31, 2025, Adjusted Net Income was $82.6 million compared to $82.5 million at target, and Adjusted ROAE was 15.07% compared to 14.81% at target, resulting in equity awards payable, before any discretionary adjustment, under both the STIP and LTIP at 111% of the target level of the performance range. However, in light of the Company's strong financial performance despite the aforementioned headwinds and the Company’s successful efforts to drive long-term shareholder value, the Compensation Committee concluded that the Company’s financial performance in 2025 (particularly, the achievement of the highest net income in the Company's history) was indicative of an exceptional performance year. For these reasons, the Compensation Committee utilized the adjustment mechanism within the plans to adjust both STIP and LTIP awards upward by 20% of the earned award. Additional Equity Awards In light of the strong financial results achieved by the Company despite the aforementioned headwinds as well as the Company’s successful efforts to drive long-term shareholder value during 2025, the Compensation Committee made additional equity awards to the Chief Executive Officer, Chief Financial Officer and Maryland Market President to reflect their contributions to the Company’s success during the year. To ensure that executive compensation continues to be aligned with the interests of shareholders, these additional equity awards consisted exclusively of performance-vested restricted stock units. Mr. Metz and Ms. Doll were not granted additional equity awards due to their significant increase in annual base salary during the year.
Role of Compensation Consultant
Role of Compensation Consultant Pursuant to its charter, the Compensation Committee may, in its sole discretion, retain or obtain the advice and assistance of a compensation consultant, legal counsel or other adviser. The Compensation Committee may retain or obtain the advice of an adviser only after taking into consideration factors related to that person’s independence from management, including each of the factors it is required to take into consideration under the Corporate Governance Standards under NASDAQ Rule 5600, subject to limited exceptions. The Compensation Committee is responsible for the appointment, compensation, and oversight of any adviser it retains. The Company is obligated to provide appropriate funding for the compensation of any such adviser. For 2025, the Company, at the behest of the Compensation Committee, retained the services of Aon, which is an independent executive compensation consulting firm. In 2025, Aon did not provide any other services to the Company and worked with the Company’s executive management team only on matters for which the Compensation Committee is responsible. The Compensation Committee assessed the independence of Aon in 2025 pursuant to SEC and NASDAQ requirements and concluded that no conflict of interest exists that would prevent Aon from serving as an independent consultant to the Compensation Committee. The Compensation Committee periodically seeks input from Aon on a range of external market factors, including evolving compensation trends, appropriate peer group companies, and market survey data. Aon also provides general observations on the Company’s compensation programs, but it does not determine or recommend the amount or form of compensation for the NEOs.
Overview
| Element of Pay | Description | Purpose | | Base Salary | Fixed cash compensation | To attract and retain key executive talent by providing a stable source of compensation for services rendered during the fiscal year | | Short-Term Incentive Plan | Performance-based cash payment based on financial, operational, and strategic metrics | To motivate executive officers to achieve the Company’s annual strategic and financial goals and reward individual performance | | Long-Term Incentive Plan—Time-Vesting | Performance-based share awards with multi-year vesting periods; award sizes are based on financial metrics | To align long-term interests of executives and shareholders and provide appropriate balance of at-risk compensation that incentivizes long-term value creation and retention | | Long-Term Incentive Plan—Performance-Vesting | Restricted Stock Unit (RSU) grants with multi-year vesting and performance periods; RSUs vest based on achievement of specific financial metrics | To align long-term interests of executives and shareholders and provide appropriate balance of at-risk compensation that incentivizes executives to achieve long-term performance goals | | Deferred Compensation Plans | Include deferred compensation plans and salary continuation plans | To provide NEOs an economic incentive for long-term service to the Company | | Perquisites | Housing and car allowances and/or club membership dues | To defray the NEOs’ expenses for recruitment or client entertainment and reduce the Company’s mileage reimbursement expense |
Benchmarking of Compensation Levels
Benchmarking of Compensation Levels In making compensation decisions for 2025, the Compensation Committee reviewed market data related to base salary, annual bonus and total compensation from the most recent public information available for the peer group identified in the table below. The Compensation Committee selected a peer group of banks which met the following basic criteria: •Commercial banks; •Having assets of approximately $3.0 billion to $11.0 billion at December 31, 2024, compared to the Company, which had approximately $5.4 billion in assets as of December 31, 2024; •Domiciled in the states of DC, DE, MD, NJ, NY, OH, PA, VA, WV (excluding New York City MSA for NY/NJ); •At least ten branches; and •Insider ownership of less than 30%. Applying these criteria resulted in the following 20 institutions, which the Compensation Committee determined to be most closely comparable to the Company:
Benchmarking of Compensation Levels
| Arrow Financial Corporation | Burke & Herbert Financial Services Corp. | Carter Bankshares, Inc. | | Civista Bancshares Inc. | City Holding Co. | Farmers & Merchants Bancorp | | CNB Financial Corp. | Farmers National Banc Corp. | Financial Institutions Inc. | | First Bank | First Community Bankshares Inc. | Mid Penn Bancorp Inc. | | Park National Corp. | Peoples Bancorp Inc. | Peoples Financial Services, Inc. | | Primis Financial Corp. | S&T Bancorp Inc. | Tompkins Financial Corporation | | TrustCo Bank Corp NY | Univest Financial Corp. | |
Benchmarking of Compensation Levels
The Compensation Committee reviewed both the data from this peer group and other industry surveys. When comparing the Company and its peers, the committee did not use a formulaic approach to benchmarking compensation for individual job positions, due primarily to the lack of direct comparability among job functions and responsibilities, and individual experience. In making compensation decisions for 2025 incentive compensation, the Compensation Committee considered that the Company’s total shareholder return compared favorably to the total shareholder return of its peers over the past three years. Specifically, over the three year performance period beginning January 1, 2023 and ending on December 31, 2025, the Company’s total shareholder return was at the 100th percentile of the compensation peer group.
Incentive Compensation
Incentive Compensation General Incentive awards link annual compensation to annual Company performance and link the long-term compensatory interests of NEOs to the interests of shareholders in the long-term success and growth of the Company. Our incentive compensation program for 2025 provided cash opportunities through the STIP and equity opportunities through the LTIP, which provides for both time-vested restricted stock awards and performance-vested restricted stock units awards. Incentive compensation to our NEOs based on 2025 performance was targeted evenly between cash opportunities under the STIP and equity award opportunities under the LTIP, with actual awards in both programs initially earned based on our Net Income and ROAE performance in 2025. Awards under the STIP and LTIP are made early each year based on the Company’s performance in the previous year. Upon completion of each fiscal year, the Compensation Committee determines each NEO’s STIP award and LTIP award relative to corporate performance against the pre-established metrics and targets. For 2025, the Compensation Committee selected Net Income and ROAE as the financial metrics that determined initial award amounts for both STIP and LTIP awards. The Compensation Committee further selected ROAA and total shareholder return as the performance metrics to determine the vesting, if any, of the portion of LTIP awards that are subject to future performance vesting. These metrics were selected because the Compensation Committee considers them the most significant indicators of the Company’s financial performance. Objective Performance Evaluation Under both the STIP and the LTIP, each of the two objective performance goals of Net Income and ROAE represented 50% of each NEOs’ total target incentive payout between the two plans. The target performance for these goals equaled the Company’s budgeted Net Income and ROAE for 2025. Each NEO’s STIP award and initial LTIP award is targeted at a specified percentage of base salary based on the specific tier to which the officer is assigned. For 2025, Messrs. Quinn and Metz were in Tier 1 and Messrs. Kalani and Holt and Ms. Doll were in Tier 2. The following table represents the Net Income and ROAE targets for 2025 as approved by the Compensation Committee and the corresponding payout scale as a percentage of base salary.
Incentive Compensation
| | Net Income | | | Return on Average Equity | | | | | | Total Incentive Payout % of Base | | | Total Incentive Payout % of Base | | | | Performance Level | Tier 1 | Tier 2 | Performance | Tier 1 | Tier 2 | | | ($000) | (Messrs. Quinn and Metz) | (Other NEOs) | Level | (Messrs. Quinn and Metz) | (Other NEOs) | | Threshold | 78,500 | 25.0% | 20.0% | 14.1% | 25.0% | 20.0% | | Target | 82,500 | 50.0% | 40.0% | 14.8% | 50.0% | 40.0% | | Maximum | 86,000 | 75.0% | 60.0% | 15.4% | 75.0% | 60.0% |
Incentive Compensation
| 2025 Incentive Plan Performance | | | | | | | Dollars in thousands | Threshold | Target | Maximum | 2025 GAAP Results | 2025 Adjusted Results(1) | | Net Income | $78,500 | $82,500 | $86,000 | $80,855 | $82,553 | | Return on Average Equity | 14.09% | 14.81% | 15.44% | 14.76% | 15.07% |
Short-Term Incentive Plan (STIP) Awards with Credit Quality Modifier
Short-Term Incentive Plan (STIP) Awards with Credit Quality Modifier STIP awards are paid in cash. Each NEO’s STIP award is targeted at a specified percentage of base salary based on the specific tier to which the officer is assigned, as described above. The base salary used in incentive calculations will generally be the NEO’s annualized salary rate as of the last day of the relevant fiscal year. In the case of a mid-year salary increase associated with a change in role, the Compensation Committee retains the discretion to pro-rate the salary used in the calculation based on the date of the salary increase. Any incentive awards under the STIP are contingent on the Company maintaining an acceptable level of credit quality, as defined by the ratio of non-performing assets to total assets. If the ratio of non-performing assets to total assets is greater than 2%, STIP awards will be reduced by 30%. If the ratio of non-performing assets to total assets is greater than 4%, STIP awards will be eliminated. For the year ended December 31, 2025, Adjusted Net Income was $82.6 million compared to $82.5 million at target, and Adjusted ROAE was 15.07% compared to 14.81% at target, resulting in cash awards payable, before any subjective adjustment, under the STIP at 111% of the target of the performance range. As discussed above, the Compensation Committee adjusted awards under the STIP upward by 20% of the earned award based on 2025 performance. The ratio of non-performing assets to total assets was 0.51% for 2025, resulting in no adjustment to STIP awards. The following table summarizes the STIP opportunities available, and actual payments made, to NEOs for 2025 performance.
Short-Term Incentive Plan (STIP) Awards with Credit Quality Modifier
| | % of Base Salary | | | Potential Payout Amounts ($) | | | Actual | | Name | Threshold | Target | Maximum | Threshold | Target | Maximum | Cash Incentive Award ($) | | Thomas R. Quinn, Jr. | 25% | 50% | 75% | 206,250 | 412,500 | 618,750 | 549,054 | | Neelesh Kalani | 20% | 40% | 60% | 68,979 | 137,957 | 206,936 | 183,594 | | Adam L. Metz | 25% | 50% | 75% | 118,750 | 237,500 | 356,250 | 316,122 | | Amy L. Doll | 20% | 40% | 60% | 75,000 | 150,000 | 225,000 | 191,350 | | Christopher D. Holt | 20% | 40% | 60% | 73,876 | 147,752 | 221,628 | 196,628 |
Long-Term Incentive Plan (LTIP)
Long-Term Incentive Plan (LTIP) The Compensation Committee believes that equity awards under the LTIP effectively align the interests of executives with those of our shareholders by providing individuals who have responsibility for management and growth of the Company with an opportunity to increase their ownership of Company Common Stock, to have a meaningful interest in the future of the Company and sustained shareholder value creation and to receive compensation that varies based on multi-year performance. As discussed in the “Incentive Compensation” section above, the initial value of each NEO’s LTIP award is targeted at a specified percentage of base salary based on the specific tier to which the officer is assigned and is subsequently expressed as a number of shares of Company Common Stock valued on the date of grant. Fractional shares cannot be distributed. The base salary used in incentive calculations will generally be the NEO’s annualized salary rate as of the last day of the relevant fiscal year. In the case of a mid-year salary increase associated with a change in role, the Compensation Committee retains the discretion to pro-rate the salary used in the calculation based on the date of the salary increase. Awards initially earned under the LTIP based on performance against the plan’s Net Income and ROAE goals are granted early in the following year and consist of 50% time-vested restricted stock awards and 50% performance-vested restricted stock units. Time-Vested Restricted Stock Awards Time-vested restricted stock awards vest 33% in each of the first three years following the grant date, provided the NEO is employed on the vesting date. Performance-Vested Restricted Stock Units With Total Shareholder Return Modifier. Performance-vested restricted stock units vest 100% after three years, with the number of restricted stock units that vest dependent on the Company’s performance against pre-established goals during the performance period from beginning in the year of grant and ending following two additional fiscal years, as well as the NEO’s continued employment through the vesting date. The performance measurement on these awards uses a two-step measurement process, which considers the Company's performance against a ROAA goal, as well as the Company’s total shareholder return: 1.First, the Company’s ROAA is tracked against internal expectations that are communicated at the time of grant based on budgeted performance expectations at that time. 2.After determining the initial vesting amount based on the Company's performance relative to ROAA targets, the Company’s total shareholder return will be measured against an index of similarly-sized banks determined on the date of the award. The number of restricted stock units earned using the ROAA performance measures then will be adjusted upward or downward formulaically by up to 20% based on the Company’s total shareholder return performance against the index. The three-year ROAA goal has defined threshold and target performance levels based on budgeted ROAA levels at the time the plan was established. We have elected not to disclose these performance levels until the conclusion of the applicable performance period for competitive reasons. The table below illustrates the payout relationships between threshold and target for the ROAA goal.
Long-Term Incentive Plan (LTIP)
| % of Target Payout | | | Threshold Performance | Target Performance | | 50% | 100% |
Long-Term Incentive Plan (LTIP)
Performance between threshold and target will result in interpolated vesting on a straight-line basis. If performance is below threshold, no restricted stock units will vest. Performance above target will result in vesting at target. After determining the initial vesting amount based on the Company's performance relative to ROAA targets, the Company’s total shareholder return will be measured against an index of 118 publicly-traded banks between $2.7 billion and $10 billion in total assets selected by the Compensation Committee on the date of the grant. The number of restricted stock units earned using the ROAA performance measures then will be adjusted upward or downward by up to 20% based on the Company’s total shareholder return performance against the above referenced index. The following table illustrates the percentage of payout modified under the total shareholder return modifier for restricted stock units performance-vesting under the LTIP:
Long-Term Incentive Plan (LTIP)
| Three-Year Total Shareholder Return | | | Orrstown Total Shareholder Return Compared to Index 50th Percentile | Modifier | | Underperform the 50th by 20% or more | (20)% | | Perform at the 50th | —% | | Outperform the 50th by 20% or more | 20% |
Long-Term Incentive Plan (LTIP)
Performance that varies upward or downward from the 50th percentile by less than 20% will result in an upward or downward award adjustment equal to that variance. Unlike restricted stock awards, performance-vested restricted stock units are not eligible to vote or receive dividends until vested and settled into shares of Company Common Stock. The Compensation Committee views the bifurcation of a) the metrics to determine the grant of STIP awards and LTIP awards and b) the vesting metrics of the performance-vested restricted stock units as consistent with feedback from shareholders that they prefer incentive plans to consider a variety of performance measures and time horizons. Incentive awards link annual compensation to annual Company performance and link the compensatory interests of NEOs to the interests of shareholders in the long-term success and growth of the Company. Equity Awarded in 2026 for 2025 Performance LTIP. For the year ended December 31, 2025, Adjusted Net Income was $82.6 million compared to $82.5 million at target, and Adjusted ROAE was 15.07% compared to 14.81% at target, resulting in equity awards payable, before any discretionary adjustment, under the LTIP at 111% of the target level of the performance range. All LTIP awards granted in early 2026 consisted of 50% time-vested restricted stock awards and 50% performance-vested restricted stock units. As discussed above, the Compensation Committee adjusted awards under the LTIP upward by 20% of the earned award based on 2025 performance. The following table summarizes the equity awards made pursuant to the terms of the LTIP to NEOs in 2026 based on 2025 performance. In accordance with SEC reporting rules, these awards will be disclosed as 2026 compensation in the Summary Compensation Table of the Company’s 2027 proxy statement.
Long-Term Incentive Plan (LTIP)
| Name | Target Opportunity ($) | Payout as % of Target(1) | Total Value of Equity Incentive Award ($) | Time-Vested Restricted Stock Award(2)($) | Time-Vested Restricted Stock Award(2) (#) | Performance-Vested Restricted Stock Unit Award(3)($) | Performance-Vested Restricted Stock Unit Award(3) (#) | | Thomas R. Quinn, Jr. | 412,500 | 133% | 549,055 | 274,546 | 7,294 | 274,509 | 7,293 | | Neelesh Kalani | 137,957 | 133% | 183,608 | 91,804 | 2,439 | 91,804 | 2,439 | | Adam L. Metz | 237,500 | 133% | 316,101 | 158,050 | 4,199 | 158,050 | 4,199 | | Amy L. Doll | 150,000 | 128% | 191,324 | 95,681 | 2,542 | 95,643 | 2,541 | | Christopher D. Holt | 147,752 | 133% | 196,631 | 98,316 | 2,612 | 98,316 | 2,612 |
Long-Term Incentive Plan (LTIP)
| (1) At December 31, 2025, the Company exceeded the Target after excluding the effects of the merger-related expenses, resulting in the Tier 1 NEOs receiving 67% of their base salaries and Tier 2 NEOs receiving between 51% and 53% of their base salaries. The payouts include the 20% upward adjustment, ranging between 7% and 11% of the NEOs base salaries, to the earned awards under the terms of the LTIP based on the Company's 2025 performance. The Payout as a % of Target is calculated as the percentage of the Total Value of Equity Incentive Award divided by the percentage for Target Opportunity. | | (2) Granted on February 17, 2026. Restricted stock awards vest 33% on February 17, 2027, 2028 and 2029, provided the NEO is employed by the Company on the vesting date. | | (3) Granted on February 17, 2026. Restricted stock units vest on February 17, 2029 contingent on performance against pre-established goals during the three-year performance period (2026-2028) using the two-step measurement process described above as well as continued service through the vesting date. |
Long-Term Incentive Plan (LTIP)
As discussed earlier, the performance-vested restricted stock units are subject to future performance conditions on pre-established performance metrics, including an internal ROAA goal and the Company’s TSR compared to an index of 118 publicly-traded banks between $2.7 billion and $10 billion in total assets selected by the Compensation Committee on the date of the grant. Additional Equity Awards. In light of the strong financial results achieved by the Company despite the aforementioned headwinds as well as the Company’s successful efforts to drive long-term shareholder value during 2025, the Compensation Committee made additional equity awards to the Chief Executive Officer, Chief Financial Officer and Maryland Market President to reflect their contributions to the Company’s success during the year. To ensure that executive compensation continues to be aligned with the interests of shareholders, these additional equity awards consisted exclusively of performance-vested restricted stock units. The following table summarizes the additional performance-vested equity awards made in 2026 based on 2025 performance. In accordance with SEC reporting rules, these awards will be disclosed as 2026 compensation in the Summary Compensation Table of the Company’s 2027 proxy statement.
Long-Term Incentive Plan (LTIP)
| Name | Amount ($) | Performance-Vested Restricted Stock Unit Award (#) | | Thomas R. Quinn, Jr. | $350,000 | 9,298 | | Neelesh Kalani | 35,000 | 929 | | Adam L. Metz | — | 0 | | Amy L. Doll | — | 0 | | Christopher D. Holt | 65,000 | 1,726 |
Long-Term Incentive Plan (LTIP)
Mr. Metz and Ms. Doll were not granted additional equity awards due to their significant increase in annual base salary during the year. Vesting of Equity Awarded in 2023 Time-Vested Restricted Stock Awards. The time-vested restricted stock awards granted in 2023 based on 2022 performance vested 33% on each of the first three anniversaries of the grant date, provided the NEO was employed on the vesting date. The vesting of these awards did not require further action by the Compensation Committee. Performance-Vested Restricted Stock Units With Total Shareholder Return Modifier. The restricted stock units granted to executive officers in 2023 vested on the third anniversary of the date of the grant, with the number of restricted stock units that vest dependent on the two-step measurement process discussed above, as well as the executive’s continued employment through the vesting date. For restricted stock units granted in 2023, the Company's ROAA averaged over the three-year period beginning on January 1, 2023 and ending on December 31, 2025 was measured against the following ROAA targets:
Long-Term Incentive Plan (LTIP)
| | Threshold(%) | Target(%) | Maximum(%) | | ROAA | 1.14 | 1.2 | 1.26 |
Long-Term Incentive Plan (LTIP)
Performance between threshold and target or between target and maximum would result in interpolated vesting on a straight-line basis. If performance is below threshold, no restricted stock units would vest. Performance above maximum would result in vesting at maximum. The table below illustrates the payout relationships between threshold, target and maximum for the ROAA goal.
Long-Term Incentive Plan (LTIP)
| % of Target Payout | | | | Threshold Performance | Target Performance | Maximum Performance | | 50% | 100% | 200% |
Long-Term Incentive Plan (LTIP)
The Company’s average annual ROAA for the performance period, adjusted to exclude merger and certain other non-recurring charges excluded from prior year calculations, was above the maximum of the performance range. However, the Company’s unadjusted average annual ROAA for the Performance Period was below the threshold of the performance range. Given the disparity between adjusted and unadjusted ROAA over the performance period, as well as the additional share utilization and expense that would be incurred if awards were to vest at the maximum level, the Compensation Committee determined that the 2023 performance-vested restricted stock units would vest at target, subject to the total return modifier discussed below. The Compensation Committee also determined that the ability to earn shares above the target of the performance range should be limited to the total shareholder return modifier and removed the maximum threshold payout ratio from future vesting criteria, beginning with the awards granted in early 2026 based on 2025 performance. The number of restricted stock units to be vested using the formula above then was to be adjusted upward or downward by up to 20% based on the Company’s total shareholder return for the performance period relative to the total shareholder return over the performance period of an index of 91 publicly-traded banks between $2 and $5 billion in total assets recommended by the Company’s independent compensation consultant, Aon, and selected by the Compensation Committee on the date of the grant. Over the performance period, the Company’s total shareholder return was at the 87th percentile of the peer group and outperformed the median of the index by 47%, resulting in a 20% increase in the number of restricted stock units vesting. The number of performance-vested restricted stock units that vested based on the formula above for each NEO is set forth in the table below:
Long-Term Incentive Plan (LTIP)
| Name | Initial RSU Award at Target | RSUs Earned at Target | RSUs Earned After TSR Modifier | | Thomas R. Quinn, Jr. | 9,479 | 9,479 | 11,375 | | Neelesh Kalani | 3,724 | 3,724 | 4,469 | | Adam L. Metz | 3,386 | 3,386 | 4,063 | | Amy L. Doll | N/A | N/A | N/A | | Christopher D. Holt | 3,988 | 3,988 | 4,786 |
Long-Term Incentive Plan (LTIP)
Vesting of Equity Integration Awards The Board of Directors, upon the recommendation of the Compensation Committee, approved equity integration awards for the Company’s executive leadership team, including each of the Company’s NEOs, on July 1, 2024. The primary purposes of the equity integration awards was to motivate and reward performance and the achievement of certain cost savings relating to the merger with Codorus Valley Bancorp, foster alignment with the interests of the Company’s shareholders and support retention of certain key leaders of the Company. The equity integration awards consisted of performance-based restricted stock granted pursuant to the Company’s 2011 Stock Incentive Plan vesting on July 28, 2025 contingent upon the Company’s achievement of successful integration and 18% (target) to 20% (maximum) cost savings as determined based on the going forward annual expense run rate at June 30, 2025 compared to the combined reported expenses of Orrstown Financial Services, Inc. and Codorus Valley Bancorp for the year ended December 31, 2023 (excluding merger-related and other extraordinary expenses in both cases). The Compensation Committee determined that vesting criteria was met, resulting in the vesting of the equity integration awards at the maximum award level. The number of equity integration awards granted to our NEOs that vested in 2025 is set forth in the table below:
Long-Term Incentive Plan (LTIP)
| Name | Shares Vested (#) | | Thomas R. Quinn, Jr. | 24,000 | | Neelesh Kalani | 10,000 | | Adam L. Metz | 6,667 | | Amy L. Doll | 6,667 | | Christopher D. Holt | 6,667 |
2025 SUMMARY COMPENSATION TABLE
2025 SUMMARY COMPENSATION TABLE
2025 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Cash Bonus ($) | Stock & RSU Awards ($)(1)(2) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | Thomas R. Quinn, Jr. | 2025 | 812,317 | — | 599,969 | — | 549,054 | 2,217,238 | 44,039 | 4,222,617 | | President and | 2024 | 732,674 | 270,000 | 1,299,226 | — | 556,920 | 1,801,847 | 46,967 | 4,707,634 | | Chief Executive Officer | 2023 | 709,154 | — | 454,992 | — | 428,400 | 1,022,734 | 22,737 | 2,638,017 | | Neelesh Kalani | 2025 | 342,552 | — | 202,849 | — | 183,594 | 78,663 | 27,119 | 834,777 | | Executive Vice President and | 2024 | 335,835 | — | 512,275 | — | 202,878 | — | 24,402 | 1,075,390 | | Chief Financial Officer | 2023 | 329,250 | — | 178,752 | — | 159,120 | — | 9,309 | 676,431 | | Adam L. Metz | 2025 | 449,227 | — | 184,448 | — | 316,122 | 116,369 | 25,515 | 1,091,681 | | Senior Executive Vice President and | 2024 | 305,384 | 115,517 | 372,309 | — | 184,478 | 100,253 | 25,177 | 1,103,118 | | Chief Operating Officer | 2023 | 299,396 | — | 162,552 | — | 144,692 | 85,372 | 24,817 | 716,829 | | Amy L. Doll | 2025 | 364,231 | — | 182,968 | — | 191,350 | 46,225 | 8,287 | 793,061 | | Executive Vice President and | 2024 | — | — | — | — | — | — | — | — | | Chief Administrative Officer | 2023 | — | — | — | — | — | — | — | — | | Christopher D. Holt | 2025 | 366,873 | — | 217,281 | — | 196,628 | 416,504 | 13,244 | 1,210,530 | | Executive Vice President and | 2024 | 359,679 | 40,000 | 406,042 | — | 217,282 | 358,821 | 13,911 | 1,395,735 | | Market President | 2023 | 352,627 | — | 191,448 | — | 170,418 | 280,044 | 13,464 | 1,008,001 |
2025 SUMMARY COMPENSATION TABLE
| (1) Stock and option awards are valued based on the aggregate grant date fair value of awards granted during the year computed for financial reporting purposes pursuant to FASB ASC Topic 718. There is no assurance the value realized by an executive officer will be at or near the value estimated by ASC Topic 718. The actual value, if any, an executive officer may realize will depend upon the excess of the stock price over the exercise price on the date the option is exercised or the value of stock awards when they vest. Please see the 2025 Outstanding Equity Awards at Fiscal Year-End Table below for more information regarding stock awards and options outstanding at December 31, 2025. | | (2) Includes awards issued in 2025 based on the Company’s performance in 2024, as described in the definitive proxy statement filed by the Company on April 4, 2025. | | (3) Represents the aggregate increase in the present value of the officer’s accumulated benefit under the salary continuation plan and/or deferred compensation agreement. | | (4) See 2025 All Other Compensation Table below. |
2025 SUMMARY COMPENSATION TABLE
The compensation represented by the amounts set forth in the “All Other Compensation” column in the 2025 Summary Compensation Table is detailed in the following table.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning plan-based awards made to the NEOs during the last fiscal year based on the Company's performance in 2024 as described in the definitive proxy statement filed by the Company on April 4, 2025.
2025 GRANT OF PLAN-BASED AWARDS TABLE
2025 GRANT OF PLAN-BASED AWARDS TABLE
2025 GRANT OF PLAN-BASED AWARDS TABLE
| | | Payouts under non-equity incentive plan awards (1) | | | Estimated future payments of restricted stock awards | | | | | | Name | Grant date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All other stock awards: number of shares of stock or units (#) | Grant date fair value of stock and option awards (4) ($) | | Thomas R. Quinn, Jr. | | 239,988 | 599,969 | 1,439,927 | — | — | — | — | — | | | 2/16/2025 (2) | — | — | — | 3,567 | 8,918 | 21,402 | — | 299,968 | | | 2/16/2025 (3) | — | — | — | — | — | — | 8,918 | 300,002 | | Neelesh Kalani | | 81,140 | 202,849 | 486,838 | — | — | — | — | — | | | 2/16/2025 (2) | — | — | — | 1,206 | 3,015 | 7,236 | — | 101,425 | | | 2/16/2025 (3) | — | — | — | — | — | — | 3,015 | 101,425 | | Adam L. Metz | | 73,779 | 184,448 | 442,675 | — | — | — | — | — | | | 2/16/2025 (2) | — | — | — | 1,097 | 2,742 | 6,580 | — | 92,207 | | | 2/16/2025 (3) | — | — | — | — | — | — | 2,742 | 92,241 | | Amy L. Doll | | 73,187 | 182,968 | 439,123 | — | — | — | — | — | | | 2/16/2025 (2) | — | — | — | 1,088 | 2,720 | 6,527 | — | 91,467 | | | 2/16/2025 (3) | — | — | — | — | — | — | 2,720 | 91,501 | | Christopher D. Holt | | 86,912 | 217,281 | 521,474 | — | — | — | — | — | | | 2/16/2025 (2) | — | — | — | 1,292 | 3,230 | 7,751 | — | 108,624 | | | 2/16/2025 (3) | — | — | — | — | — | — | 3,230 | 108,657 |
2025 GRANT OF PLAN-BASED AWARDS TABLE
| (1) These amounts illustrate the threshold, target, and maximum cash awards payable under the annual incentive compensation plan. Cash awards were paid out at between 150% and 162% of target. | | (2) Represents performance-vested restricted stock units which vest, if at all, three years from the date of the grant, subject to performance on pre-established ROAA and TSR goals. | | (3) Represents time-vested restricted stock awards which vest, if at all, 33% in each of the first three years following the grant date. | | (4) The fair value of the award is the fair value of the Company Common Stock on the date of grant multiplied by the number of shares granted. |
2025 GRANT OF PLAN-BASED AWARDS TABLE
During 2025, our Compensation Committee did not take into account any material nonpublic information when determining the timing and terms of equity incentive awards, and we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. During 2025, we did not grant stock options to our named executive officers during any period beginning four business days before and ending one business day after the filing or furnishing of a Form 10-Q, 10-K or 8-K that discloses material nonpublic information.
2025 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2025 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2025 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | | Option Awards | | | Restricted Stock Awards / Units | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Option Exercise Price ($) (2) | Option Expiration Date (2) | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) (3)(4) | Equity incentive plan awards: number of unearned shares that have not vested (#) (5) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) (3)(4) | | Thomas R. Quinn, Jr. | 2/10/2023 | — | — | — | 9,479 | 335,746 | 9,479 | 335,746 | | | 2/16/2024 | — | — | — | 11,620 | 411,580 | 11,620 | 411,580 | | | 2/16/2025 | — | — | — | 17,835 | 631,716 | 17,835 | 631,716 | | Neelesh Kalani | 2/10/2023 | — | — | — | 3,724 | 131,904 | 3,724 | 131,904 | | | 2/16/2024 | — | — | — | 4,316 | 152,873 | 4,316 | 152,873 | | | 2/16/2025 | — | — | — | 6,030 | 213,583 | 6,030 | 213,583 | | Adam L. Metz | 2/10/2023 | — | — | — | 3,386 | 119,932 | 3,386 | 119,932 | | | 2/16/2024 | — | — | — | 3,434 | 121,632 | 3,434 | 121,632 | | | 2/16/2025 | — | — | — | 5,483 | 194,208 | 5,483 | 194,208 | | Amy L. Doll | 2/16/2025 | — | — | — | 5,439 | 192,649 | 5,439 | 192,649 | | | Various | 7,441 | 25.04 | Various | — | — | — | — | | Christopher D. Holt | 2/10/2023 | — | — | — | 3,988 | 141,255 | 3,988 | 141,255 | | | 2/16/2024 | — | — | — | 4,044 | 143,238 | 4,044 | 143,238 | | | 2/16/2025 | — | — | — | 6,459 | 228,778 | 6,459 | 228,778 |
2025 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (1) The Company assumed vested and exercisable stock options in connection with the merger with Codorus Valley Bancorp. | | (2) The expiration dates of the vested, unexercised stock options granted to the NEO, range from November 15, 2026 to December 11, 2028. The option exercise prices range from $21.23 per common share to $29.92 per common share. | | (3) Calculated using the December 31, 2025 closing stock price of $35.42 per share. | | (4) Mr. Quinn’s unvested shares of restricted stock and unvested restricted stock units are expected to vest upon his retirement on June 1, 2026. | | (5) Equity incentive plan awards earned under the LTIP based on performance against the plan's goals consist of 50% time-vested restricted stock awards and 50% performance-vested restricted stock units. |
2025 OPTION EXERCISES AND STOCK VESTED TABLE
2025 OPTION EXERCISES AND STOCK VESTED TABLE
2025 OPTION EXERCISES AND STOCK VESTED TABLE
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) (2) | Value Realized on Vesting ($) (1)(2) | | Thomas R. Quinn, Jr. | — | — | 31,300 | 1,074,772 | | Neelesh Kalani | — | — | 12,848 | 441,307 | | Adam L. Metz | — | — | 9,564 | 327,800 | | Amy L. Doll | 5,596 | 192,111 | 6,667 | 230,345 | | Christopher D. Holt | — | — | 10,078 | 345,091 |
2025 OPTION EXERCISES AND STOCK VESTED TABLE
| (1) Calculated using the closing market price of the Company's Common Stock on the date of vesting or exercise. | | (2) Includes performance-vested restricted stock units awarded under the LTIP in 2022 for 2021 performance and equity integration awards in the form of performance-based restricted stock awarded in connection with the merger with Codorus Valley Bancorp on July 1, 2024. |
2025 PENSION BENEFITS TABLE
2025 PENSION BENEFITS TABLE
2025 PENSION BENEFITS TABLE
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Thomas R. Quinn, Jr. | Salary Continuation Agreement | 16 | 4,237,739 | — | | | Deferred Compensation Agreement | 6 | 5,975,727 | — | | Neelesh Kalani | Deferred Compensation Agreement | 1 | 78,663 | — | | Adam L. Metz | Deferred Compensation Agreement | 3 | 321,994 | — | | Amy L. Doll | Deferred Compensation Agreement | 1 | 46,225 | — | | Christopher D. Holt | Deferred Compensation Agreement | 5 | 1,644,558 | — |
2025 PENSION BENEFITS TABLE
In this table: •The present value of accumulated benefits shown in the table above has been determined using the assumptions set forth in the audited consolidated financial statements for the year ended December 31, 2025. •No amounts were actually paid or provided to the NEOs during 2025.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Company provides the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1)(2) | Total Shareholder Return ($)(3) | Peer Total Shareholder Return ($) (4) | Net Income ($)(5) | Return on Average Equity (%)(6) | | 2025 | 4,222,617 | 4,158,135 | 982,512 | 963,871 | 251.78 | 160.37 | 80,855,000 | 14.76 | | 2024 | 4,707,634 | 5,096,643 | 1,182,928 | 1,298,923 | 251.89 | 145.82 | 22,050,000 | 5.62 | | 2023 | 2,638,016 | 2,903,210 | 788,596 | 898,562 | 197.31 | 123.35 | 35,663,000 | 14.66 | | 2022 | 2,526,698 | 2,451,820 | 743,683 | 714,211 | 149.23 | 122.74 | 22,037,000 | 9.02 | | 2021 | 1,967,057 | 2,225,978 | 631,930 | 722,902 | 157.55 | 139.21 | 32,881,000 | 12.54 |
Pay Versus Performance Table
(1) From 2021 to 2024, Mr. Quinn was the Company’s PEO and our remaining NEOs consisted of Messrs. Kalani, Coradi, Metz and Holt. For 2025, Mr. Quinn was the Company's PEO and our remaining NEOs consisted of Messrs. Kalani, Metz and Holt and Ms. Doll. (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with the following adjustments:
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO ($) | Summary Compensation Table Value of Equity Awards ($) | Equity Award Adjustments($)(a) | Compensation Actually Paid to PEO ($) | | 2025 | 4,222,617 | (599,969) | 535,487 | 4,158,135 | | 2024 | 4,707,634 | (1,299,226) | 1,688,235 | 5,096,643 | | 2023 | 2,638,016 | (454,992) | 720,186 | 2,903,210 | | 2022 | 2,526,698 | (365,121) | 290,243 | 2,451,820 | | 2021 | 1,967,057 | (159,604) | 418,525 | 2,225,978 |
Pay Versus Performance Table
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Summary Compensation Table Value of Equity Awards for Non-PEO NEOs ($) | Equity Award Adjustments($)(a) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2025 | 982,512 | (196,887) | 178,245 | 963,871 | | 2024 | 1,182,928 | (445,209) | 561,204 | 1,298,923 | | 2023 | 788,596 | (173,748) | 283,714 | 898,562 | | 2022 | 743,683 | (147,965) | 118,493 | 714,211 | | 2021 | 631,930 | (94,720) | 185,692 | 722,902 |
Pay Versus Performance Table
(a) The following table sets forth the adjustments made during each year represented in the Pay Versus Performance Table to arrive at compensation “actually paid” to our PEO and non-PEO NEOs during each of the years in question. Equity values are calculated in accordance with FASB ASC Topic 718. In 2024, the equity awards include the fair value of the integration awards, which consisted of performance-based restricted stock granted upon the closing of the merger with Codorus Valley Bancorp, Inc. on July 1, 2024 and vesting conditioned upon on the achievement of certain cost savings relating to the merger.
Pay Versus Performance Table
| Year | Year End Fair Value of Equity Awards in the Year for PEO ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years for PEO ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year for PEO ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year for PEO ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year for PEO ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation for PEO ($) | Total Equity Award Adjustments for PEO ($) | | 2025 | 631,716 | (25,108) | — | (71,121) | — | — | 535,487 | | 2024 | 1,304,048 | 119,299 | 317,923 | (53,035) | — | — | 1,688,235 | | 2023 | 559,261 | 147,792 | — | 13,133 | — | — | 720,186 | | 2022 | 338,113 | (42,250) | — | (5,620) | — | — | 290,243 | | 2021 | 219,542 | 176,348 | — | 22,635 | — | — | 418,525 |
Pay Versus Performance Table
| Year | Average Year End Fair Value of Equity Awards for Non-PEO NEOs ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years for Non-PEO NEOs ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year Non-PEO NEOs ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year Non-PEO NEOs ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year Non-PEO NEOs ($) | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation Non-PEO NEOs ($) | Total Equity Award Adjustments ($) | | 2025 | 207,304 | (6,810) | — | (22,249) | — | | 178,245 | | 2024 | 448,885 | 46,768 | 107,463 | (41,912) | — | — | 561,204 | | 2023 | 213,565 | 68,608 | — | 1,541 | — | — | 283,714 | | 2022 | 137,020 | (15,328) | — | (3,199) | — | — | 118,493 | | 2021 | 123,606 | 54,655 | — | 7,431 | — | — | 185,692 |
Pay Versus Performance Table
(3) Represents the total shareholder return of an investment of $100 in Company Common Stock on December 31, 2020 through the end of the end of the listed year, assuming the reinvestment of dividends on the date of payment without commissions (“Total Shareholder Return”) in accordance with Item 201(e) of Regulation S-K. Shareholder returns on Company Common Stock are based on trades on the NASDAQ Stock Market. Past performance is not necessarily indicative of future stock performance. (4) Represents the Peer Group Total Shareholder Return, which utilizes the S&P U.S. SmallCap Banks Index in accordance with Item 201(e) of Regulation S-K. The comparison assumes an investment of $100 on December 31, 2020 through the end of the listed year. Past performance is not necessarily indicative of future stock performance. (5) Excluding the impact of certain merger and other non-recurring expenses, Adjusted Net Income was $82.6 million, $52.0 million, $36.6 million and $34.8 million for the years ended December 31, 2025, 2024, 2023 and 2022, respectively. For the year ended December 31, 2021, the Company did not incur merger or other non-recurring expenses. See Annex A for a reconciliation of 2025, 2024, 2023 and 2022 Adjusted Net Income to GAAP. (6) Excluding the impact of certain merger and other non-recurring expenses, Adjusted Return on Average Equity was 15.07%, 13.25%, 15.06% and 14.25% for the years ended December 31, 2025, 2024, 2023 and 2022, respectively. For the year ended December 31, 2021, the Company did not incur merger or other non-recurring expenses. See Annex A for a reconciliation of 2025, 2024, 2023 and 2022 Adjusted Return on Average Equity to GAAP. The following graph displays the relationship between compensation actually paid to the PEO, the average actual compensation paid to the non-PEO NEOs, the Company's total shareholder return, and the peer group cumulative total shareholder return. The following graph displays the relationship between compensation actually paid to the PEO, the average actual compensation paid to the non-PEO NEOs, and net income (on a GAAP and adjusted basis). The following graph displays the relationship between compensation actually paid to the PEO, the average actual compensation paid to the non-PEO NEOs, and return on average equity (on a GAAP and adjusted basis).
2025 PAY RATIO DISCLOSURE
2025 PAY RATIO DISCLOSURE
2025 PAY RATIO DISCLOSURE
| | 2025 | | Median annual compensation of all employees, excluding CEO | $72,381 | | Annual compensation of CEO | $4,222,617 | | Ratio of CEO total pay to median pay of all employees | 58.3x |