Orrstown Financial Services is shedding about 135 jobs as part of its recently closed merger with Codorus Valley Bancorp, with the majority of the cuts landing in back-office areas such as marketing, technology, finance and risk management, according to bank executives.
The cuts stem from overlapping operations of the two banks, Tom Quinn, Orrstown’s president and CEO, said yesterday in an interview at the bank’s new headquarters in Swatara Township, Dauphin County.
However, the boost to the bank’s efficiency from merger-related savings of about 18% — along with the bank’s greater scale — positions it for growth, said Quinn.
“The reality is, we didn’t do this to shrink to greatness. We did this to grow this franchise,” Quinn said.
The bank has not cut any branch staff, he added.
The pre-merger staff at the two banks was 766 people, according to a spokesperson.
What’s the scale: The combined bank has assets of about $5.2 billion and 52 branches in Central Pennsylvania and northern Maryland.
Based on federal data as of June 30, 2023, Orrstown is the fifth-largest bank based on share of customer deposits in Adams, Cumberland, Dauphin, Franklin, Lancaster, Lebanon and York counties.
The larger size allows the bank to make investments in areas like technology, executives said.
Given ongoing changes in how people handle their finances, banks increasingly feel the need for a strong digital presence.
“Our ability to invest in that is really one of the long-term strategic opportunities of the combined company,” said Craig Kauffman, Orrstown’s COO and the former CEO of Codorus Valley, the York County-based parent of PeoplesBank.
While Orrstown moved its headquarters from Shippensburg to the Harrisburg area, the bank is shifting its operations center to the former Codorus Valley HQ in York Township.
In addition, the bank has adopted a market president model throughout its territory.
Harland Carney is head of the York/Adams region; David Hornberger oversees the eastern region; Zachary Khuri heads the central region and Christopher Holt is market president for the Maryland region.
Where’s the opportunity: Plans are still coming together. But Orrstown expects to grow in its existing markets and potentially in new ones, Quinn and Kauffman said.
The bank, for example, could look to move into areas of Lancaster and York counties where it wants to do more business, Quinn said.
The bank also hopes to build on its presence in the Baltimore market, where both Orrstown and Codorus Valley were making inroads prior to the merger.
“We think Baltimore has rewarded both our companies,” Quinn said.
In addition, the bank will continue to have its eye on potential acquisitions, as long as they make sense, he said.
“We have a responsibility to our shareholders to put a company together that has a great return,” he said. “And I think we’re building that.”
What’s next: Bank executives are focused on completing a successful conversion during which they will move both legacy banks to a single system.
The conversion is slated to take place over the weekend leading up to Veterans Day, which falls this year on a Monday.
Over the same weekend, the bank will change all its branches to the Orrstown name. PeoplesBank branches still carry the legacy brand.
Once the transition is complete, executives will begin fleshing out their strategic plan.
The succession plan: Quinn is slated to retire in June 2025 with Kauffman expected to succeed him.
After more than 35 years in banking, Quinn said he is ready to step away but that he remains focused on the conversion and strategic planning. He has led Orrstown since 2009.
“I’m going to work till the day I walk out of here,” he said.
The background: Orrstown and Codorus Valley announced their merger in December.
The deal unites two of the region’s oldest community banks. PeoplesBank was founded in 1864, while Orrstown was established in 1919.
