Orrstown Financial Services Inc. is plunging more deeply into Maryland with the acquisition of a Baltimore-area bank.
Shippensburg-based Orrstown said Tuesday it is paying $58.5 million in cash and stock to buy Towson, Maryland-based Hamilton Bank.
The deal, expected to close in the second quarter of 2019, will create a bank with $2.5 billion in assets, $1.7 billion in loans and $2.1 billion in deposits.
And it will extend Orrstown into the Baltimore market. Hamilton has seven branches in and around Baltimore.
Orrstown, which recently bought Mercersburg Financial Corp., already had branches to the west, in Washington County, Maryland.
“We are thrilled to welcome Hamilton Bank to the Orrstown family,” Thomas R. Quinn Jr., president and CEO of Orrstown, said in a statement. “By joining Hamilton and Orrstown together, our institutions, shareholders and customers will benefit greatly from our expanded footprint, enhanced products and services, and robust technology offerings.”
Under the terms of the agreement, Hamilton shareholders will receive 0.54 shares of Orrstown common stock and $4.10 per share in cash for each share of Hamilton common stock they own.
The agreement has been approved by the boards of directors of Orrstown and Hamilton, the banks said in a news release. Completion of the transaction is subject to approval by Hamilton’s stockholders and by regulators. All Hamilton directors who own shares of Hamilton’s outstanding common stock have entered into voting agreements to vote their shares in favor of the transaction.
Following the closing, one of Hamilton’s current directors will be added to the boards of directors of Orrstown and its operating subsidiary, Orrstown Bank. In addition, Ellen R. Fish, executive vice president of Hamilton, will join Orrstown as executive vice president and senior lender for the Greater Baltimore region.
“This merger will result in a stronger competitive bank in the Baltimore area which is focused on providing a great customer experience,” Bob DeAlmeida, president and CEO of Hamilton, said in a statement.
Orrstown Financial Services and its subsidiaries, Orrstown Bank and Wheatland Advisors Inc., have offices in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties in Pennsylvania and in Washington County in Maryland.
The bank reported net income of $4 million for the third quarter of 2018, up from $2.8 million for the same period in 2017, according to filings with the U.S. Securities and Exchange Commission.
Founded in 1915, Hamilton has $525.3 million in assets and 72 full-time equivalent employees.