Orrstown in Pennsylvania to close branches, cut jobs
Orrstown Financial Services in Shippensburg, Pa., plans to cut branches and jobs and reduce office space in an effort to lower expenses.
The $2.8 billion-asset company said in a press release Thursday that it will shutter six branches, roughly a fifth of its network, and eliminate excess office space. It also plans to reduce headcount by 8%, or roughly 35 positions, based on data from the Federal Deposit Insurance Corp.
Orrstown closed five branches last year.
Orrstown said the moves will reduce it annual pretax expenses by about $4 million. It will incur a pretax charge of $1.5 million in the third quarter tied to the initiatives.
The company also said it would pursue new strategies in 2021 to support fee-based revenue and offset what is expected to be a protracted period of historically low interest rates.
"All of these changes are designed to proactively prepare for a challenging operating environment in 2021," Thomas Quinn Jr., Orrstown’s president and CEO, said in the release. He said the company is also bracing for higher credit costs next year.
Orrstown also provided an update on forbearance trends, noting that deferrals had fallen from 15.1% of total loans on June 30 to 5.8% on Aug. 31.