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Shareholders' Equity and Regulatory Capital
 3 Months Ended
Mar. 31, 2015
Equity [Abstract]  
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL
On January 8, 2013, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (the "Commission") that provides for the issuance of up to an aggregate of $80,000,000 worth of common stock, preferred stock, and warrants. To date, the Company has not issued any securities under this shelf registration statement.
The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Although applicable to the Bank, prompt corrective action provisions are not applicable to bank holding companies, including financial holding companies.
Quantitative measures established by regulators to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (as set forth in the following table) of total and Tier 1 capital (as defined in regulations) to risk-weighted assets (as defined), common equity Tier 1 capital (as defined) to risk weighted assets, and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of March 31, 2015 and December 31, 2014, the Company and the Bank meet all capital adequacy requirements to which they are subject.
Effective January 1, 2015, the Company and Bank became subject to the final rules previously approved by the FRB establishing a new comprehensive capital framework for U.S. banking organizations, including community banks (the "Basel III Capital Rules"), which substantially revised the risk-based capital requirements in comparison to the existing U.S. risk-based capital rules which were in effect through December 31, 2014. The Basel III Capital Rules, among other things, (i) introduced a new capital measure called “Common Equity Tier 1” (“CET1”), (ii) increased the minimum requirements for Tier 1 Capital ratio as well as the minimum to be considered well capitalized under prompt corrective action; (iii) and introduced the "capital conservation buffer”, designed to absorb losses during periods of economic stress. Institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the conservation buffer may face constraints on dividends, equity repurchases and discretionary bonuses to executive officers based on the amount of the shortfall. The implementation of the capital conservation buffer will begin on January 1, 2016 at the 0.625% level and be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019).
As of March 31, 2015, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the notification that management believes have changed the Bank’s category.
    

The Company and the Bank’s actual capital ratios as of March 31, 2015, under the new Basel III Capital Rules, and December 31, 2014, under the previous U.S. risk based capital rules, are also presented in the table.
 
 
Actual
 
Minimum Capital
Requirement
 
Minimum to Be Well
Capitalized Under Prompt
Corrective Action Provisions
(Dollars in thousands)
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk weighted assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
$
135,008

 
16.8
%
 
$
64,192

 
8.0
%
 
n/a

 
n/a

Orrstown Bank
132,893

 
16.6
%
 
64,161

 
8.0
%
 
$
80,202

 
10.0
%
Tier 1 capital to risk weighted assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
124,847

 
15.6
%
 
48,144

 
6.0
%
 
n/a

 
n/a

Orrstown Bank
122,748

 
15.3
%
 
48,121

 
6.0
%
 
64,161

 
8.0
%
CET1 to risk weighted assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
124,847

 
15.6
%
 
36,108

 
4.5
%
 
n/a

 
n/a

Orrstown Bank
122,748

 
15.3
%
 
36,091

 
4.5
%
 
52,131

 
6.5
%
Tier 1 capital to average assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
124,847

 
10.6
%
 
47,110

 
4.0
%
 
n/a

 
n/a

Orrstown Bank
122,748

 
10.4
%
 
47,169

 
4.0
%
 
58,961

 
5.0
%
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk weighted assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
$
119,713

 
16.8
%
 
$
56,859

 
8.0
%
 
n/a

 
n/a

Orrstown Bank
118,540

 
16.7
%
 
56,835

 
8.0
%
 
$
71,043

 
10.0
%
Tier 1 capital to risk weighted assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
110,750

 
15.6
%
 
28,429

 
4.0
%
 
n/a

 
n/a

Orrstown Bank
109,581

 
15.4
%
 
28,417

 
4.0
%
 
42,626

 
6.0
%
Tier 1 capital to average assets
 
 
 
 
 
 
 
 
 
 
 
Orrstown Financial Services, Inc.
110,750

 
9.5
%
 
46,496

 
4.0
%
 
n/a

 
n/a

Orrstown Bank
109,581

 
9.4
%
 
46,518

 
4.0
%
 
58,148

 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
 

On April 2, 2015, the Federal Reserve Bank of Philadelphia terminated the Written Agreement that it originally entered into with the Company and the Bank on March 22, 2012, thereby terminating all of its enforcement actions against the Company and the Bank. On February 6, 2015, the Bank was released from the Memorandum of Understanding by and between the Bank and the Pennsylvania Department of Banking and Securities ("PDB"), thereby terminating all of the PDB's enforcement actions against the Bank.