Orrstown Financial Services in Shippensburg, Pa., has agreed to buy Mercersburg Financial in Pennsylvania.

The $1.6 billion-asset Orrstown said in a press release Thursday that it will pay $32.4 million in cash and stock for the $180 million-asset parent of First Community Bank of Mercersburg. The deal, which is expected to close in the fourth quarter, priced Mercersburg at 153% of its tangible book value.

Mercersburg has six branches, $150 million in loans and $161 million in deposits.

Including merger-related benefits and charges, the transaction is expected to be 8.7% accretive to Orrstown’s 2019 earnings per share. It should take three years to earn back the expected 3.6% dilution to Orrstown’s tangible book value.

Orrstown said it plans to cut about 45% of Mercersburg’s annual noninterest expenses, or roughly $2.6 million. The company said it should incur about $3 million in merger-related costs.

One of Mercersburg’s directors will join Orrstown’s board. Bob Fignar, Mercersburg’s president and CEO, will become Orrstown’s market president for Franklin and Perry counties in Pennsylvania and Washington County in Maryland.

Fignar’s “leadership and vision, combined with our increased market share, will serve as a great benefit to our customers,” Thomas Quinn Jr., Orrstown’s president and CEO, said in the release.

Hovde Group and Goodwin Procter advised Orrstown. Ambassador Financial Group and Stevens & Lee advised Mercersburg.

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