The Bank Slate

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Orrstown lowers 3Q earnings to reflect legal settlement

Orrstown Financial in Shippensburg, Pa., has revised its third-quarter earnings downward to reflect the settlement of a class-action lawsuit.

The $2.8 billion-asset company on Monday agreed to pay $13 million to a group led by the Southeastern Pennsylvania Transit Authority. The lawsuit, filed in 2012, took issues with statements the company made in association with a 2010 public offering.

The payout reduced Orrstown’s third-quarter net income by $10.3 million. The company noted that prior earnings did not include a legal reserve for the lawsuit’s claims because management believed that it was “unlikely that a probable and reasonably estimable loss would be incurred.”

The settlement included a mutual release of claims against all parties and a stipulation that the lawsuit will be dismissed with prejudice. Orrstown did not admit any wrongdoing.

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