Orrstown Financial Services Inc. and Mercersburg Financial Corp. are one step closer to closing a merger and acquisition deal.
Orrstown this week received approvals from regulators and Mercersburg shareholders to complete its acquisition of the holding company for First Community Bank of Mercersburg.
“Mercersburg and Orrstown are community banks with similar cultures and values, and we are dedicated to ensuring this is a seamless transition for our customers,” Thomas R. Quinn Jr., president & CEO of Orrstown Bank, said in a statement.
As part of the agreement, First Community Bank of Mercersburg will merge with and into Orrstown Bank.
The deal was approved by 97 percent of Mercersburg stockholders at a special meeting on Tuesday.
Upon completion of the transaction, the combined bank is expected to have approximately $2 billion in assets, $1.3 billion in loans and $1.6 billion in deposits.
Orrstown said the transaction is intended to qualify as a tax-free reorganization for federal income tax purposes.
It is expected to close Oct. 1, subject to customary closing conditions.
Orrstown announced plans to acquire Mercersburg Financial in June.
Based in Shippensburg, Orrstown Financial has assets of roughly $1.5 billion and offices in Berks, Cumberland, Dauphin, Franklin, Lancaster and Perry counties, as well as in Maryland.
According to its most recent earnings report, Orrstown had a net income of $4 million in the second quarter, up from $3.3 million in the second quarter of last year.
Orrstown’s subsidiaries include Orrstown Bank and Wheatland Advisors Inc., which it bought in 2016.
First Community Bank has approximately $180 million in assets with branches in Mercersburg, Fort Loudon, Greencastle, Chambersburg and Scotland.