Orrstown Financial Services, Inc. and Codorus Valley Bancorp, Inc. Announce Receipt of Shareholder Approvals for Merger of Equals
On May 30, 2024, Orrstown Financial Services (NASDAQ: ORRF) and Codorus Valley Bancorp (NASDAQ: CVLY) announced shareholder approvals for their previously announced merger of equals. This approval includes the merger of Codorus Valley into Orrstown, with Orrstown as the surviving entity, under the Merger Agreement dated December 12, 2023. The merger aims to create significant shareholder value, enhance employee and client opportunities, and build a premier community banking franchise in Pennsylvania and Maryland. The merger is expected to close in Q3 2024, pending regulatory approvals.
- Shareholder approval received for the merger of equals between Orrstown and Codorus Valley.
- Merger expected to create significant shareholder value and expand opportunities for employees and clients.
- The merger will establish a stronger community banking presence in Pennsylvania and Maryland.
- Anticipated completion of the merger in Q3 2024, aligning with strategic timelines.
- Completion of the merger is contingent upon the receipt of required regulatory approvals, which introduces uncertainty.
- No immediate financial data or synergies announced, leaving stakeholders uncertain about initial benefits.
The merger announcement between Orrstown Financial Services, Inc. and Codorus Valley Bancorp, Inc. is noteworthy for several reasons. Firstly, a merger of equals often signifies a strategic decision where two companies combine to achieve a larger market share, improve efficiency and pool resources effectively. For investors, this can potentially mean increased shareholder value in the long term, as the combined entity might benefit from scale economies and an expanded customer base.
Financially, the merger can be scrutinized by examining the potential cost synergies and revenue enhancements expected from this integration. Shareholder approval is indicative of confidence in the merger's strategic rationale. The consolidation of their financial services across Pennsylvania and Maryland and potential market expansion into Virginia and West Virginia, means that shareholders could see improved financial performance as a result of a larger geographic footprint and diversified customer base.
However, investors should also be aware of potential integration risks, such as system incompatibilities, cultural clashes and customer attrition, which might offset some of the anticipated benefits. The merger’s success depends significantly on efficient management of these integration processes.
From a market perspective, the merger creates a more robust community banking presence in the Mid-Atlantic region. By combining forces, Orrstown and Codorus Valley are positioned to better compete against larger, more established banks in these markets. The potential for enhanced financial services and improved customer offerings could attract new clients, thereby increasing market share.
The approval from shareholders suggests that both entities have communicated a compelling vision for the future combined company, indicating strong prospects for mutual growth and market penetration. Furthermore, the strategic merger aligns with broader industry trends where regional banks consolidate to stay competitive amidst growing regulatory pressures and technological advancements.
It’s important to consider the competitive dynamics of the banking industry in these regions. If well-executed, the merger could lead to enhanced financial stability and a more comprehensive range of services, which would be beneficial for both existing and potential customers.
SHIPPENSBURG, Pa. and YORK, Pa., May 30, 2024 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (“Orrstown”) (NASDAQ: ORRF), the parent company of Orrstown Bank, and Codorus Valley Bancorp, Inc. (“Codorus Valley”) (NASDAQ: CVLY), the parent company of PeoplesBank, A Codorus Valley Company, today announced that they each received shareholder approval for the previously announced merger of equals. At a special meeting of shareholders held on May 30, 2024, Codorus Valley’s shareholders approved the merger of Codorus Valley with and into Orrstown, with Orrstown as the surviving corporation (the “Merger”), the Agreement and Plan of Merger, dated as of December 12, 2023 (the “Merger Agreement”), by and between Orrstown and Codorus Valley, and the compensation payable to the named executive officers of Codorus Valley in connection with the Merger. At a special meeting of shareholders held on May 30, 2024, Orrstown shareholders approved the issuance of shares of Orrstown common stock to Codorus Valley shareholders pursuant to the Merger Agreement.
Thomas R. Quinn, Jr., Orrstown’s President and Chief Executive Officer, commented “The receipt of shareholder approval marks an important milestone for our merger of equals. Craig and I are proud that each company’s shareholder base overwhelmingly supported the transaction, which we expect will create meaningful shareholder value and expand opportunities for our employees, clients, and communities."
Craig L. Kauffman, President and Chief Executive Officer of Codorus Valley, commented “Today's vote brings us one step closer to providing enhanced financial services to our valued clients. I am eager to get started on building the premier community banking franchise in our Pennsylvania and Maryland markets.”
The Merger and related transactions are expected to close in the third quarter of 2024, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals.
About Orrstown
Orrstown Financial Services, Inc. and its wholly owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on the NASDAQ Global Select Market under the symbol “ORRF”.
About Codorus Valley
Codorus Valley Bancorp, Inc. is the largest independent financial services holding company headquartered in York, Pennsylvania. Codorus Valley primarily operates through its financial services subsidiary, PeoplesBank, A Codorus Valley Company. PeoplesBank offers a full range of consumer, business, wealth management, and mortgage services at financial centers located in communities throughout South Central Pennsylvania and Central Maryland. Codorus Valley Bancorp, Inc.’s Common Stock is listed on the NASDAQ Global Market under the symbol “CVLY”.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Orrstown and Codorus Valley.
Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on Orrstown’s and Codorus Valley’s current expectations and assumptions regarding Orrstown’s and Codorus Valley’s businesses, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Any number of risks, uncertainties, or other factors could affect Orrstown’s or Codorus Valley’s future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive agreement and plan of merger between Orrstown and Codorus Valley; the outcome of any legal proceedings that may be instituted against Orrstown or Codorus Valley; delays in completing the proposed transaction; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction), or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of Orrstown and Codorus Valley to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the possibility that the anticipated benefits of the proposed transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Orrstown and Codorus Valley do business; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the possibility that revenues following the proposed transaction may be lower than expected; the impact of certain restrictions during the pendency of the proposed transaction on the parties’ ability to pursue certain business opportunities and strategic transactions; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; the ability to complete the proposed transaction and integration of Orrstown and Codorus Valley successfully; the dilution caused by Orrstown’s issuance of additional shares of its capital stock in connection with the proposed transaction; and the potential impact of general economic, political or market factors on the companies or the proposed transaction and other factors that may affect future results of Orrstown or Codorus Valley. The foregoing list of factors is not exhaustive. Except to the extent required by applicable law or regulation, each of Orrstown and Codorus Valley disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information regarding Orrstown, Codorus Valley and factors which could affect the forward-looking statements contained herein can be found in Orrstown’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Report on Form 10-Q for the period ended March 31, 2024, and its other filings with the SEC, and in Codorus Valley’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Report on Form 10-Q for the period ended March 31, 2024, and its other filings with the SEC. SEC filings are available free of charge on the SEC’s website at www.sec.gov.
For media inquiries or further information, please contact:
John Moss
SVP, Director of Marketing and Client Experience, PeoplesBank
717-747-1520
jmoss@peoplesbanknet.com
Matthew Dyckman
EVP, General Counsel, Orrstown Bank
717-510-7262
mdyckman@orrstown.com
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