Orrstown Financial Services to Acquire Susquehanna Bancshares Assets

TL;DR

Orrstown buying Susquehanna assets, closing Q4 2024. Big PA expansion.

AI Summary

Orrstown Financial Services, Inc. announced on May 24, 2024, that it has entered into a definitive agreement to acquire substantially all of the assets and assume certain liabilities of Susquehanna Bancshares, Inc. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions. This acquisition will expand Orrstown's presence in Pennsylvania.

Why It Matters

This acquisition signifies a strategic move by Orrstown Financial Services to grow its market share and operational footprint within Pennsylvania, potentially leading to increased competition and service offerings for customers in the region.

Risk Assessment

Risk Level: medium — The acquisition is subject to customary closing conditions and regulatory approvals, which introduces uncertainty regarding the completion of the transaction.

Key Numbers

• Q4 2024 — Expected Closing Quarter (Timeline for the acquisition completion)

Key Players & Entities

• Orrstown Financial Services, Inc. (company) — Registrant
• Susquehanna Bancshares, Inc. (company) — Target of acquisition
• Pennsylvania (location) — Geographic focus of acquisition

FAQ

Key Financial Figures

• $36.5 million — calendar year 2028 adjusted earnings of $36.5 million for ORRF and $21.4 million for CVLY, ea
• $21.4 million — earnings of $36.5 million for ORRF and $21.4 million for CVLY, each of which were based on t
• $79.8 m — calendar year 2028 adjusted earnings of $79.8 million, which was based on the Projectio
• $26.69 — e for the pro forma combined company of $26.69 to $36.75. The disclosure on page 62 o
• $36.75 — pro forma combined company of $26.69 to $36.75. The disclosure on page 62 of the join
• $2.93 — RF 2024 estimated earnings per share $2.93 $1.75 $3.55 21.3% 2025 estimated ea
• $1.75 — 24 estimated earnings per share $2.93 $1.75 $3.55 21.3% 2025 estimated earnings
• $3.55 — mated earnings per share $2.93 $1.75 $3.55 21.3% 2025 estimated earnings per sha
• $3.05 — .3% 2025 estimated earnings per share $3.05 $2.00 $4.46 46.1% 6/30/2024 estimat
• $2.00 — 25 estimated earnings per share $3.05 $2.00 $4.46 46.1% 6/30/2024 estimated tang
• $4.46 — mated earnings per share $3.05 $2.00 $4.46 46.1% 6/30/2024 estimated tangible bo
• $23.46 — stimated tangible book value per share $23.46 $20.16 $18.56 (20.9%) The Merger— O
• $20.16 — tangible book value per share $23.46 $20.16 $18.56 (20.9%) The Merger— Opinion o
• $18.56 — e book value per share $23.46 $20.16 $18.56 (20.9%) The Merger— Opinion of CVLY's
• $430,000 — eceived aggregate fees of approximately $430,000 from CVLY. Certain Stand-Alone CVLY Pr

Filing Documents

• ef20029950_8k.htm (8-K) — 207KB
• 0001140361-24-027379.txt ( ) — 355KB
• orrf-20240524.xsd (EX-101.SCH) — 4KB
• orrf-20240524_lab.xml (EX-101.LAB) — 21KB
• orrf-20240524_pre.xml (EX-101.PRE) — 16KB
• ef20029950_8k_htm.xml (XML) — 4KB

01

Item 8.01 Other Events As previously disclosed on December 12, 2023, Orrstown Financial Services, Inc., a Pennsylvania corporation ("ORRF"), and Codorus Valley Bancorp, Inc., a Pennsylvania corporation ("CVLY"), entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which CVLY will be merged with and into ORRF, with ORRF as the surviving corporation (the "Merger"). Promptly following the Merger, CVLY's wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company, a Pennsylvania chartered bank, will be merged with and into Orrstown Bank, a Pennsylvania chartered bank, which is the wholly-owned subsidiary of ORRF, with Orrstown Bank as the surviving bank. In connection with the proposed Merger, ORRF filed with the Securities and Exchange Commission (the "SEC") on March 29, 2024 a registration statement on Form S-4 containing a joint proxy statement/prospectus, as amended, and CVLY filed a definitive proxy statement and ORRF filed a definitive proxy statement/prospectus with the SEC, dated April 30, 2024 (collectively, the "joint proxy statement/prospectus"), with respect to special meetings of the ORRF and CVLY shareholders scheduled to be held on May 30, 2024, respectively. ORRF and CVLY first mailed the joint proxy statement/prospectus to their respective shareholders on or about April 30, 2024. In connection with the proposed Merger, from April 4, 2024 to May 23, 2024, ORRF received three demand letters and CVLY received eight demand letters from purported ORRF and CVLY shareholders, respectively ("Demand Letters"), alleging that the joint proxy statement/prospectus omits material information in violation of federal securities laws and demanding that ORRF and CVLY provide additional disclosures in an amendment or supplement to the joint proxy statement/prospectus. It is possible additional demand letters may be received arising out of the Merger between May 23, 2024 and consummation of the Merger. Absent new or significantly d

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Current Report on Form 8-K may contain "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 ORRF and CVLY. 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 ORRF's and CVLY's current expectations and assumptions regarding ORRF's and CVLY'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 ORRF's or CVLY'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 ORRF and CVLY; the outcome of any legal proceedings that may be instituted against ORRF or CVLY; 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 shareholder approvals, or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of ORRF and CVLY to meet expectations regarding the timing, completion and accounting and tax tr

SIGNATURES

SIGNATURES 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. Date: May 24, 2024 Orrstown Financial Services, Inc. By: /s/Neelesh Kalani Neelesh Kalani Executive Vice President, Chief Financial Officer

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