Press release
Orrstown Financial Services, Inc. Announces Focus on Strategic Investments and Operational Efficiencies
SHIPPENSBURG, Pa., Sept. 24, 2020 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. ("Orrstown"), the holding company for Orrstown Bank (the "Bank") is
About this update from Orrstown Financial Services, Inc.
[{"type":"text","content":"SHIPPENSBURG, Pa., Sept. 24, 2020 (GLOBE NEWSWIRE) -- Orrstown Financial Services, Inc. (\"Orrstown\"), the holding company for Orrstown Bank (the \"Bank\") is announcing a series of steps to adjust its near-term tactical plans due to the COVID-19 pandemic. These changes involve the consolidation of six branch locations, the elimination of excess back office space and certain staffing model adjustments. These initiatives are expected to generate approximately $4 million of pre-tax annual expense savings once completed, with a one-time pre-tax charge of approximately $1.5 million to be incurred in the third quarter of 2020. Additional strategies are being developed for 2021 to maintain fee-based revenue at levels above historical trends and to continue to optimize the balance sheet mix during an anticipated prolonged period of low interest rates.\n “We continuously review our business model, operations, and delivery channels to ensure that we are operating as efficiently as possible,” commented Thomas R. Quinn, Jr., Orrstown’s President and Chief Executive Officer. “As the banking habits of consumers and our clients evolve, we have seen these habits accelerated during the COVID-19 pandemic. Clients are becoming more reliant on our digital services, and as such, we will continue to invest the resources necessary to ensure a robust online, mobile, and ATM experience. We still believe in the value of our branch delivery channel, and the personal touch and relationship that it fosters, as clients continue to visit our branches for sound advice and assistance with complex financial situations.” Quinn continued, “Further, all of these changes are designed to proactively prepare for a challenging operating environment in 2021, which forecasts a lower net interest margin due to historically low interest rates and anticipated higher asset quality related costs. Fortunately, Orrstown has made significant investments in technology in recent years, which enables the Bank to adjust its physical branch footprint and staffing model at this time. In short, we are investing in the future direction of the company which best positions us to meet the growing needs of our clients.” Orrstown anticipates that the savings generated from the staffing model adjustments will be approximately $2.5 million annually (pre-tax) and will be fully phased in by th...