Exhibit 99.1

FOR IMMEDIATE RELEASE:

Contact:

Bradley S. Everly

EVP, Chief Financial Officer

Phone 717.530.2604

77 East King Street | Shippensburg PA

Orrstown Financial Services, Inc. Announces Quarterly Operating Results

and Third Quarter Dividend

SHIPPENSBURG, PA (July 28, 2011)

Orrstown Financial Services, Inc. (NASDAQ: ORRF) announced today a net loss for the quarter ended June 30, 2011 of $10.6 million, compared to net income in the second quarter of 2010 of $3.9 million, and a net loss for the six months ended June 30, 2011 of $6.8 million compared to net income of $7.3 million in 2010. Diluted earnings (loss) per share amounted to ($1.33) for the quarter ended June 30, 2011, as compared to $0.49 during the second quarter of 2010. On a year-to-date basis, diluted earnings (loss) per share totaled ($0.85) in 2011 compared to $1.01 in 2010.

The Company also announced that its Board of Directors declared a third quarter cash dividend of $0.23 per share, an increase of 4.6% over the third quarter of 2010, for shareholders of record on August 12, 2011. The dividend will be paid to shareholders on August 24, 2011.

“It’s very disappointing to report a loss for the quarter and a substantial, but temporary, departure from our historical results,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “After conducting an exhaustive review

of 75% of our commercial loan portfolio over the past few months, and in view of the persistent soft economy, we made the prudent decision to set aside a much larger loan loss provision that should position us well for the future. We have decisively addressed current and future credit quality issues and expect to return our focus to growing the company over the balance of the year.”

“Our key fundamental performance metrics are very solid. The largest component of our revenue, net interest income, improved by 15.6% year to date when compared to the same period in 2010, and our net interest margin has improved from the first to second quarter, from 3.68% to 3.71%, respectively. We also continue to closely monitor our expenses and improved our efficiency ratio from 52.9% for the first quarter to 52.6% for the second quarter.”

“Our capital ratios remain strong and are substantially above all regulatory minimums to be considered well capitalized, including a tier 1 leverage ratio of 8.5%, tier-1 risk based capital ratio of 12.6%, and total risk based capital ratio of 13.9%, and we are pleased to maintain our third quarter dividend at $0.23 per share,” according to Quinn.

QUARTERLY OPERATING RESULTS

Net loss for the quarter ended June 30, 2011 was $10.6 million, compared to net income of $3.9 million in 2010, resulting in diluted earnings (loss) per share of ($1.33) and $0.49 for the periods. As a result of the net loss for the period, the Company’s return on assets and return on tangible equity ratios were negative for the period, compared to 1.18% and 12.02% respectively in 2010.

Net Interest Income

Net interest income totaled $12.8 million for the three months ended June 30, 2011, a $1.5 million, or 13.4%, increase over 2010. The growth in net income came principally through an increase in interest earning assets, which averaged $1.45 billion for the quarter ended June 30, 2011, compared to $1.23 billion in 2010. Slightly offsetting the growth in interest earning assets was a 6 basis point decline in net interest margin. Despite the low interest rate environment, the Company has been able to manage its blend of interest earnings assets and liabilities so that net interest margin has only declined slightly, from 3.77% for the three months ended June 30, 2010 to 3.71% in 2011. The Company has been able to lower its overall cost of funds to 0.76% for the period, an improvement over the prior year’s cost of funds of 1.05% and the prior quarter’s cost of 0.84%.

Provision for Loan Losses

The provision for loan losses for the three months ended June 30, 2011 totaled $21.2 million, an increase over the second quarter 2010 provision of $5.0 million. The increase in the provision for loan losses was attributable to the following factors:

Noninterest Income

Noninterest income, excluding securities gains, totaled $4.7 million for the three months ended June 30, 2011, compared to $5.7 million in 2010. Included in 2010’s income was $239,000 recognized in life insurance death benefits upon the death of a former director and a gain on the sale of fixed rate for floating rate interest rate swaps in the amount of $778,000. Excluding these items, noninterest income remained consistent between the two periods, with some shift to deposit accounts charges, and less loan related fees received on prepayment penalties, letters of credit fees and other loan services. Trust and brokerage income increased 19.2%, the result of additional trust and brokerage assets under management.

Securities gains totaled $469,000 for the three months ended June 30, 2011, compared to $1.781 million in 2010. The difference in gains taken between the two periods was the result of interest rate and market conditions, and the Company’s asset liability management strategies.

Noninterest expenses

Noninterest expenses amounted to $9.7 million for the three months ended June 30, 2011, as compared to $8.5 million for the corresponding prior year period. The increase in expenses can be attributed to increased professional services, including loan review assistance and legal costs associated with loan workouts and foreclosures, and a provision for off-balance sheet losses totaling $250,000 included in other expenses. FDIC insurance costs continue to elevate in light of increased deposits and higher assessments recorded in 2011 compared to 2010. The Company’s efficiency ratio for the second quarter of 2011 was favorable at 52.6%, despite being up slightly from 48.7% during 2^nd quarter 2010, but improved sequentially from 52.9% during first quarter 2011. The efficiency ratio expresses noninterest expense as a percentage of tax equivalent net interest income and noninterest income, excluding securities gains.

YEAR TO DATE OPERATING RESULTS

On a year-to-date basis, the net loss for the six months ended June 30, 2011 was $6.8 million, compared to net income of $7.3 million in 2010, resulting in diluted earnings (loss) per share of ($0.85) and $1.01 for the year-to-date periods. As a result of the net loss for the period, the Company’s return on assets and return on tangible equity ratios were negative for the year, compared to 1.15% and 13.23% respectively in 2010.

Net Interest Income

Net interest income totaled $25.2 million for the six months ended June 30, 2011, a $3.4 million, or 15.6% increase over 2010. The growth in net interest income came principally through growth in volume as interest earning assets averaged $1.4 billion for the six months ended June 30, 2011, compared to $1.2 billion in 2010. Slightly offsetting

the growth in interest earning assets was a 7 basis point decline in net interest margin. Despite the low interest rate environment, the Company has been able to manage its blend of interest earnings assets and liabilities so that the net interest margin has only declined marginally, from 3.77% for the six months ended June 30, 2010 to 3.70% in 2011, which includes the lowering of its overall costs of funds to 0.80% for the six month period.

Provision for Loan Losses

The provision for loan losses for the six months ended June 30, 2011 totaled $24.4 million, an increase over the prior year’s amount of $6.4 million. The factors attributable to the increase in the provision for loan losses were consistent with the factors mentioned above under “Quarterly Operating Results”, and include specifically identifiable charge-offs of two relationships totaling $8.2 million, the establishment of valuation reserves of $5.8 million, determined principally through discounted cash flows, on restructured loans. Additionally, the elevated provision for loan losses resulted from downgrades in internal risk ratings of loans and loans considered impaired, which were influenced by continuing softness in economic conditions and deterioration of underlying collateral securing the loans.

Noninterest Income

Noninterest income, excluding securities gains, totaled $9.4 million for the six months ended June 30, 2011, compared to $9.7 million in 2010. Revenue increases were generated in most business lines, with trust and brokerage income and mortgage banking activities posting 21.9% and 30.0% increases respectively. Results for 2010 were favorably impacted by $239,000 recognized in life insurance death benefits upon the death of a former director and a gain on the sale of an interest rate swap totaling $778,000. A decline in loan related fees has been experienced in 2011, which include prepayment penalties, letters of credit fees and other loan related services.

Securities gains totaled $848,000 for the six months ended June 30, 2011, compared to $2.179 million in 2010. The difference in gains taken between the two periods was the result of interest rate and market conditions, and the Company’s asset liability management strategies.

Noninterest expenses

Noninterest expenses amounted to $19.2 million for the six months ended June 30, 2011, as compared to $17.2 million for the corresponding prior year period. The increase in expenses can be attributed to increased professional services, including loan review assistance and legal costs associated with loan workouts and foreclosures, plus a $250,000 provision for unfunded loan commitments included in other expenses. FDIC insurance costs continue to elevate in light of increased deposits and higher assessments recorded in 2011 compared to 2010. The Company’s efficiency ratio for the six months ended June 30, 2011 was 52.6 %, a slight improvement on 2010’s ratio of 52.9%.

FINANCIAL CONDITION

Assets grew $19.6 million to $1.53 billion at June 30, 2011 from $1.51 billion at December 31, 2010. The Company was able to increase gross loans outstanding by $37.0 million from $966.9 million at year-end to $1.0 billion at June 30, 2011. This asset growth was funded principally through cash flow from available for sale securities, which decreased $10.7 million for the first six months of 2011 and increases in deposits during the period. Deposits increased by 6.0% to $1.3 billion at June 30, 2011, from $1.2 billion at December 31, 2010.

Stockholders’ Equity

Stockholders’ equity decreased $7.0 million for the first six months of 2011, and totaled $153.4 million at June 30, 2011. This decrease was primarily the result of the net loss posted for the period and dividends declared; slightly offset by an increase in accumulated other comprehensive income. Despite the decline in shareholders’ equity, the Company’s regulatory capital ratios remain strong and exceed all minimums to be considered well capitalized, including tier-1 leverage ratio of 8.5%, tier-1 risk-based capital ratio of 12.6% and total risk-based capital ratio of 13.9%.

Asset Quality

The Company continues to monitor its classified loans in light of the continued softness in economic conditions and collateral values. As a result of this monitoring, additional nonperforming assets and other risk elements were identified. Total risk elements, which include nonaccrual loans, other real estate owned, restructured loans still accruing and loans past due 90 days or more still accruing, increased to $54.5 million at June 30, 2011 from $18.8 million and $18.4 million at March 31, 2011 and December 31, 2010, respectively.

The largest increase in risk elements was restructured loans still accruing, which totaled $34.9 million at June 30, 2011, compared to approximately $1.2 million at March 31, 2011 and December 31, 2010. As noted above, the Company designated certain relationships in which management worked with the borrower and modified terms and conditions, principally extension of loan maturities, as restructured loans. Despite the Company’s ability to increase the rate on many of these loans to a floor rate of interest and strengthening of loan quality with additional collateral in certain instances, the loans were designated as restructured as the borrowers were experiencing financial difficulties, and the new rates were below a market rate of interest for similar risk characteristics. The Company proactively took actions with these borrowers to enable them to repay their loans under revised terms and conditions, which were felt to mitigate loss potential to the bank while allowing the borrowers to work through these softened economic times. All restructured notes are performing in accordance with their revised terms.

Nonaccrual loans increased from $13.9 million at December 31, 2010 to $14.8 million at June 30, 2011, an increase of 6.2%, or $866,000. The net increase in nonaccrual loans is the result of $10.3 million of loans, classified as nonaccrual at December 31, 2010, being charged-off and loans totaling $11.2 million being moved to nonaccrual status during the period.

During the quarter ended June 30, 2011, the Company increased the number of personnel in its loan workout and credit review departments and outsourced certain credit review responsibilities in order to mitigate the Company’s risk of loss, and to reduce its level of nonaccrual and classified loans.

Summary of Financial Highlights:

(1) Supplemental Reporting of Non-GAAP-based Financial Measures

Return on average tangible assets and return on average tangible equity are non-GAAP-based financial measures calculated using non-GAAP-based amounts. The most directly comparable GAAP-based measures are return on average assets and return on average equity, which are calculated using GAAP-based amounts. The Company calculates the return on average tangible assets and equity by excluding the balance of intangible assets and their related amortization expense, net of tax, from the calculation of return on average assets and equity. Management uses the return on average tangible assets and equity to assess the Company’s core operating results and believes that this is a better measure of our operating performance, as it is based on the Company’s tangible assets and capital. Further, we believe that by excluding the impact of purchase accounting adjustments it allows for a more meaningful comparison with the Company’s peers; particularly those that may not have acquired other companies. Lastly, the exclusion of goodwill and intangible assets is consistent with the treatment by bank regulatory agencies, which exclude these amounts from the calculation of risk-based capital ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. A reconciliation of return on average assets and equity to the return on average tangible assets and equity, respectively, is set forth below.

Tangible equity is a non-GAAP financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP based measure is shareholders’ equity. In order to calculate tangible equity, Company management subtracts intangible assets from shareholders’ equity. A reconciliation of tangible equity to shareholders’ equity is set forth below.

ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY-OWNED SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

ANALYSIS OF NET INTEREST INCOME

Average Balances and Interest Rates, Taxable Equivalent Basis

For yield calculation purposes, nonaccruing loans are included in the average loan balance.

ANALYSIS OF NET INTEREST INCOME

Average Balances and Interest Rates, Taxable Equivalent Basis