0000826154False00008261542024-08-052024-08-05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 5, 2024
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ORRSTOWN FINANCIAL SERVICES, INC. |
(Exact name of registrant as specified in its charter) |
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Pennsylvania | 001-34292 | 23-2530374 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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| 4750 Lindle Road, | | Harrisburg, | Pennsylvania | 17111 |
| (Address of Principal Executive Offices) | (Zip Code) |
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Registrant’s Telephone Number, Including Area Code: | (717) | 532-6114 | |
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Not Applicable |
(Former name or former address, if changed since last report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
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Securities registered pursuant to Section 12(b) of the Act: |
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Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Common Stock, no par value | | ORRF | | Nasdaq Stock Market |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
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☐ | Emerging growth company |
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☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.05 Costs Associated with Exit or Disposal Activities
Orrstown Financial Services, Inc. (the “Company”), the holding company for Orrstown Bank (the “Bank”), intends to close six branch locations (the “Branch Closures”).
The Branch Closures will result in a one-time pre-tax charge of approximately $534 thousand. Once completed, the Branch Closures are expected to generate approximately $1.7 million of pre-tax annual expense savings.
Five of the Branch Closures are subject to regulatory approval and are expected to be completed in the fourth quarter of 2024. One of the Branch Closures qualifies as a branch consolidation and will be completed in the third quarter of 2024. These changes are designed to align the Bank’s resources with the evolving needs of its local clients and the broader banking landscape. While the Orrstown Bank and PeoplesBank branch network is highly complementary, there are some instances where branches currently serve the same local area. Clients will continue to have access to online and mobile banking, telephone banking, ATMs and neighboring branch locations.
The branches expected to be closed are located in Lancaster, PA (Oregon Pike), Camp Hill, PA (PeoplesBank Camp Hill branch), Mechanicsburg, PA (Bethany Village), Spring Grove, PA (Jefferson), Lancaster, PA (Centerville) and Parkton, MD (Hereford). After the Branch Closures are complete, based on deposits as of June 30, 2024, the Bank will have 38 full service branches (with an average of $123 million in deposits) and 7 limited service branches.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company's management with respect to, among other things, future events and the Company's financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company's industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, successful merger and acquisition activity and cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company's operations to differ materially from expectations include, but are not limited to: general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company's strategic growth plan due to changes in current or future market conditions; changes in interest rates; the diversion of management's attention from ongoing business operations and opportunities; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities
markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus Valley Bancorp (the “Merger”) are not realized when expected or at all; the possibility that the Merger may be more expensive to complete than anticipated; the possibility that revenues following the Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the ability to complete the integration of the two companies successfully; the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the Merger; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.
The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company's behalf may issue.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is furnished as part of this Current Report on Form 8-K:
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| Exhibit No. | Description |
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| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
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SIGNATURES |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. |
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| | ORRSTOWN FINANCIAL SERVICES, INC. |
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Date: August 5, 2024 | | By: | /s/ Neelesh Kalani |
| | | Neelesh Kalani Executive Vice President and Chief Financial Officer (Duly Authorized Representative) |
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ORRSTOWN FINANCIAL SERVICES, INC.
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PA
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4750 Lindle Road,
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