...By: Dinaa Orkoubi Rzan Albakr Sarah Asali Vivian Yadi Wang Orrstown Financial Services 2 In this assignment, we focus on Orrstown Financial Services vs. DNB Financial Corporations. Both institutions have similar financials and sizes of entities. The first part of the assignment is about, studying both institutions and compare them to each other. After that there will be an analysis and general study about the health of ORRF as an overall entity. All data are taken from UBPR reports, 10 k reports, Bloomberg, Yahoo, and Banks main website. Common Size Net Income Statement This section of the analysis is about computing common size income statement for both ORRF and DNBFC. It seems that ORRF net income have decreased in value and resulted in huge loss in 2012 as (63%) of net revenue. This dramatic change of the net income value started in 2011 due to the real estate low prices that have been an issue since the financial crisis started. This conclusion is supported by looking at the provision of loan losses that increased in 2011, showing the cause of the huge net loss. On the other side, DNBFC provision for loan losses have increased reasonably in 2008 to become (10%). In addition, the net income increased steadily after 2008 too. It appears, so far, from the Net Income Statement that DNBFC is doing much better than ORRF. Common Size Balance Sheet Statement Based on the common size balance sheet statement...
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...Orrstown Bank vs. DNB Financial Corporation Orrstown Bank Financial Statement Analysis In this assignment, we focus on Orrstown Financial Services vs. DNB Financial Corporations. Both institutions have similar financials and sizes of entities. The first part of the assignment is about, studying both institutions and compare them to each other. After that there will be an analysis and general study about the health of ORRF as an overall entity. All data are taken from UBPR reports, 10 k reports, Bloomberg, Yahoo, and Banks main website Common Size Net Income Statement This section of the analysis is about computing common size income statement for both ORRF and DNBFC. It seems that ORRF net income have decreased in value and resulted in huge loss in 2012 as (-63%) of net revenue. This dramatic change of the net income value started in 2011 due to the real estate low prices that have been an issue since the financial crisis started. This conclusion is supported by looking at the provision of loan losses that increased in 2011, showing the cause of the huge net loss. On the other side, DNBFC provision for loan losses have increased reasonably in 2008 to become (10%). In addition, the net income increased steadily after 2008 too. It appears, so far, from the Net Income Statement that DNBFC is doing much better than ORRF. Common Size Balance Sheet Statement Based on the common size balance sheet statement of ORRF, we can see that the total loans used to be very high before...
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...FINA 6273 Section 10 Table of Contents VALUATION OF ORRSTOWN BANK 4 EQUITY FORECAST 6 ORRSTOWN SEPTA ASSESSMENT 9 [This page intentionally left blank] VALUATION OF ORRSTOWN BANK To consider valuing any enterprise an analyst must make several assumptions based on their understanding of the firm. In considering the valuation of Orrstown Bank there are several difficult aspects to cover and consider. In this report, Orrstown bank is valuated in two ways. A valuation based on discounted cash flows, in this case Net Income. And a valuation based on market multiples. Both of these multipliers suffer in an examination of Orrstown and its unique problems. This will be covered in the conclusion. Valuation based on discounted Cash flows: This valuation is basically considering the future of the firm as a project that can be discounted back to the present using the standard NPV formula: NPV = ∑ CFn/(1+r)n Forecasted Net Income is considered the future cash flows, the period (n) is five years. As Orrstown is forecasted to go bankrupt in 2015 a longer time scale did not seem necessary. The chosen discount rate is the Weighted Average Cost of Capital (WACC). In calculating NPV the discount rate is essential. WACC is a standard in determining the cost of financing (debt and equity) future cash flows and appeared most appropriate in this case. The WACC for Orrstown bank is a paltry .92%. This number is markedly below the value expected...
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...Orrstown Financial Analysis Report -----Pro forma forecasting Contents 1 Intoduction 1 2 Balance Sheet Pro Forma 2 2.1 Asset Forecasting 2 2.2 Liabilities Forecasting 4 2.3 Equity 5 3 Income Statement Pro Forma 6 4 Statement of Cash Flow Pro Forma 11 5 Financial Ratios Pro Forma 12 Abstract Based on the former two analysis reports, this assignment focuses on forecasting financial statements for 2013-2017. Every subject in Balance Sheet, Income Statement, and Statement of Cash Flow is predicted by using pro forma analysis. Before that, several assumptions are made for the convenience of forecasting. Furthermore, financial ratios for the upcoming five years are also calculated with the numbers provided in the three pro forma financial statements. Key words: Pro forma, financial statements forecasting 1 Intoduction The method that is using in this assignment is called pro forma financial analysis. Pro forma is the forecast financial statements based on either anticipated future events or potentially changing business performance in upcoming periods. This is in contrast to regular financial statements that are financial summaries on a business's past. Businesses use pro forma statements to assist in their planning activities, both short term and long term. Normally, a pro forma forecasting will cover three to five years into the future; and five-year pro forma can provide a fuller view into how a business might fare under various assumptions. The...
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