Orrstown Financial Services, Inc. (NasdaqCM:ORRF) entered into a definitive agreement to acquire Codorus Valley Bancorp, Inc. (NasdaqGM:CVLY) for approximately $210 million in a merger of equals transaction on December 12, 2023. Pursuant to which Codorus Valley will merge with and into Orrstown in an all-stock transaction valued at approximately $207.0 million, or $21.31 per share of Codorus Valley common stock, based on the $24.35 closing price of Orrstown common stock on December 11, 2023. Under the terms of the definitive agreement, each outstanding share of Codorus Valley common stock will be exchanged for the right to receive 0.875 shares of Orrstown common stock. As a result of the transaction, Orrstown shareholders will own approximately 56% of the outstanding shares of the combined company and Codorus Valley shareholders will own approximately 44% of the outstanding shares of the combined company. Promptly following the Merger, Codorus Valley?s wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company, a Pennsylvania chartered bank (? PeoplesBank ?), will be merged with and into Orrstown Bank, a Pennsylvania chartered bank, which is the wholly-owned subsidiary of Orrstown, with Orrstown Bank as the surviving bank. The combined company will trade on the Nasdaq Global Select Market under the Orrstown ticker symbol ?ORRF?. The combined company will operate under the ?Orrstown Financial Services, Inc.? name, and the combined bank will operate under the ?Orrstown Bank? name. The administrative headquarters of the combined company will be located in Harrisburg, PA while the operations center will be located in York, PA. The combined company?s Board of Directors will consist of seven directors from Orrstown and six directors from Codorus Valley. Joel R. Zullinger, Chairman of Orrstown?s Board of Directors, will serve as Chairman of the Board of the combined company and the combined bank. J. Rodney Messick, Chairman of Codorus Valley?s Board of Directors, will serve as Vice-Chairman of the Board of the combined company and the combined bank. Thomas R. Quinn, Jr., the current President and Chief Executive Officer of Orrstown, will serve as President and Chief Executive Officer of the combined company and the combined bank at closing. Craig L. Kauffman, the current President and Chief Executive Officer of Codorus Valley, will serve as Executive Vice President and Chief Operating Officer of the combined company and the combined bank at closing. Kauffman will be appointed President and Chief Executive Officer of the combined company and combined bank on or about June 1, 2025 upon Quinn?s retirement. Neil Kalani, the current Chief Financial Officer (CFO) of Orrstown Financial Services, Inc. will continue to serve as CFO of the combined company and bank. The remainder of the executive team will be drawn from both Orrstown and Codorus Valley. The Merger Agreement contains certain termination rights for both Orrstown and Codorus Valley. A termination fee in the amount of $8.3 million will be payable by either Codorus Valley or Orrstown, as applicable, if the Merger Agreement is terminated under certain circumstances set forth in the Merger Agreement.

The transaction is expected to close in early third quarter of 2024, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Orrstown and Codorus Valley shareholders. The transaction was unanimously approved by the Boards of Directors of both companies.

Bob Hutchinson, Andrew Stager, and Calvin Chau of Raymond James & Associates, Inc. acted as financial advisor to Orrstown and delivered a fairness opinion to the Board of Directors of Orrstown. Goodwin Procter LLP served as legal counsel to Orrstown. Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to Codorus Valley in the transaction and delivered a fairness opinion to the Board of Directors. Holland & Knight LLP served as legal counsel to Codorus Valley. Vance E. Antonacci of McNees Wallace & Nurick, LLC acted as legal advisor to Craig L. Kauffman.