SecProbe.io

October 4, 2012

Via E -mail
Mr. Thomas R, Quinn, Jr.
President and Chief Executive Officer
Orrstown Financial Services, Inc.
77 East King Street, P. O. Box 250
Shippensburg, Pennsylvania  17257

Re: Orrstown Financial Services, Inc.
Form 10 -K for the Fiscal Year Ended December 31 , 2011
Filed March  23, 2012
Form 10 -Q for the Quarter  Ended June 30, 2012
Filed August 9, 2012
File No. 00 1-34292

Dear Mr. Quinn :

We have reviewed your response letter dated September 14, 2012 and have the following
comments.  In some of our  comments, we may ask you to provid e us with information so we
may better understand your  disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response. If yo u do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these commen ts, we may have additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2011

Notes to Consolidated Financial Statements

Note 8. Income Taxes, page 107

1. We note your response to prior comment two  from our letter dated August 23, 2012 .
Please provide us with the following additional information regarding your deferred tax
asset valuation analysis at December 31, 2011, March 31, 2012 and June 30, 2012:

Mr. Thomas R. Quinn, Jr.
Orrstown Financial Services, Inc.
October 4, 2012
Page 2

  Tell us how you determined the company was not in a cumulative pretax loss position
at December 31, 2011.  Tell us your conclusions with respect to March 31, 2012 and
June 30, 2012.

 Tell us the specific positive and negative evidence you considered when d etermining
a valuation allowance was not needed at December 31, 2011, March 31, 2012 and
June 30, 2012.  In addition, t ell us the weight given to each piece of evidence  and
explain h ow you determined each weight is commensurate with the extent to which it
can be objectively verified.

 Provide us with your detailed projections regarding future taxable income.  In regard
to any projections and assumptions utilized, provide us with specific evidence to
support the assumptions such as the number of years in the  projections, estimated
growth rates, net interest margins considered, estimated loan loss provision rates as
well as revenue and expense growth rates utilized.

2. We note the Company considered several of the taxable income sources listed in ASC
740-10-30-18 to determine the deferred tax asset was fully realizable at December 31,
2011, March 31, 2012 and June 30, 2012.  Please provide us with a table that quantifies
and sufficiently describes each of these taxable income sources for each of the above
referen ced periods.  Explain how you determined future realization of each item,
including how you concluded sufficient taxable income existed within the carry back or
carry forward period available under the tax law.

3. We note the Company projected a two yea r forecast as of December 31, 2011, which it
believes provided sufficient future taxable income to absorb the remaining deferred tax
asset after application of income in carry back years.  Please explain to us whether your
forecast changed for the quarters  ended March 31, 2012 and June 30, 2012 considering
the pretax losses recorded during those quarters.  Tell us whether you believe your
forecast was accurate at December 31, 2011, and if not, tell us how your future forecasts
were adjusted to compensate fo r any inaccuracies.

4. We note as a result of increased credit losses and increased regulatory oversight, the
Company reconsidered its strategic plan resulting in tax planning strategies, previously
considered not to be prudent or feasible, becoming part of the Company’s analysis of
deferred tax assets at March 31, 2012 and June 30, 2012.  Please provide us with a
description of each tax planning strategy used to support your analysis and explain to us
why you did not consider these strategies prudent or feas ible at December 31, 2011, but
did consider them prudent and feasible at March 31, 2012 and June 30, 2012.

Form 10 -Q for the Quarter Ended June 30, 2012

Item 4. Controls and Procedures

(a)Evaluation of disclosure controls and procedures, page 71

Mr. Thomas R. Quinn, Jr.
Orrstown Financial Services, Inc.
October 4, 2012
Page 3

 5. We note your response to prior comment three from our letter dated August 23, 2012 .
You state that  the Company had determined that “due to the existence of this material
weakness in the Company’s internal controls over financial reporting, the Chief
Executive Officer and Chief Financial Officer concluded that as of December 31, 2011,
the Company’s disclosure controls and procedures were not effective .”  In light of the
fact that the Company had not fully remediated the material weaknesses in internal
control over financial reporting relating to loan ratings and its impact on the allowance
for loan losses as of March 31, 2012 and June 30, 2012, it is unclear to us how the
company was able to conclude that the disclosure control and procedures were effective
at those respective dates.  Please tell us and revise to disclose in specific detail the basis
for the officers’ conclusions that the company’s disclosure controls and procedures were
effective as of these dates.

 Please address questions regarding all comments to Marc Thomas, Staff Accountant, at
(202) 551 -3452 or, if you thereafter need further ass istance, to me at (202) 551 -3474 .

Sincerely,

 /s/ Sharon Blume

Sharon Blume
Assistant Chief  Accountant