Orrstown Financial Services ORRF Number of real estate loans transferred to OREO

OREO property acquired through foreclosure is initially recorded at the fair value of the property at the transfer date less estimated selling cost. Subsequently, OREO is carried at the lower of its carrying value or the fair value less estimated selling cost. Fair value is usually determined based upon an independent third-party appraisal of the property or occasionally upon a recent sales offer. During the six months ended June 30, 2026, the Company transferred two loans into OREO with a total fair value of $1.1 million, to which there have been no subsequent write-downs. There were no loans transferred into OREO during the three months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company sold its OREO with a fair value of $138 thousand. The Company did not sell OREO during the three and six months ended June 30, 2026. At June 30, 2026 and December 31, 2025, the OREO balance was $1.1 million and zero, respectively.