Orrstown in Pa. to expand in Baltimore with Hamilton acquisition

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Orrstown Financial Services in Shippensburg, Pa., has agreed to buy Hamilton Bancorp in Towson, Md.

The $1.9 billion-asset Orrstown said in a press release Tuesday that it will pay $58.5 million in cash and stock for the $523 million-asset Hamilton. The deal, which is expected to close in the second quarter, priced Hamilton at 131% of its tangible book value.

Hamilton has seven branches around Baltimore.

Orrstown said it expects the deal to be 8% accretive to its 2020 earnings per share. It should take a little more than a year for Orrstown to earn back an expected 1.7% dilution to its tangible book value.

Orrstown plans to cut 40% of Hamilton’s annual noninterest expense, or about $5.2 million. Orrstown expects to incur about $7.4 million in merger-related costs.

One Hamilton director will join Orrstown’s board. Ellen Fish, an executive vice president at Hamilton, will join Orrstown as an executive vice president and senior lender for the greater Baltimore region.

“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,” Thomas Quinn Jr., Orrstown’s president and CEO, said in the release.

Hovde Group and Goodwin Procter advised Orrstown. Keefe, Bruyette & Woods and Luse Gorman advised Hamilton.

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