Shippensburg, Pa.-based Orrstown Financial Services Inc. is expected to finalize the approvals for the consolidation of five Pennsylvania branches into other larger Orrstown Bank branches, as well as the sale of an operations center.
The company expects that these efforts will improve the profitability of the remaining branches and eliminate approximately 50,000 square feet of excess back-office space. The five branches will be closed Jan. 31, 2020, and the consolidations will be completed within the first quarter of 2020. The operations center is expected to be sold in the fourth quarter of 2019, with about one-third of the space leased back to the bank.
Orrstown Financial expects to incur one-time charges associated with the branch consolidations and operations center sale of $800,000 to $1.2 million in the fourth quarter. Annual post-consolidation cost savings is expected to be between $1.5 million and $2.0 million, beginning in the second quarter of 2020.
Orrstown Financial reported third-quarter net income of $6.9 million, or 62 cents per share, compared to net income of $4.0 million, or 49 cents per share, a year earlier.