Orrstown Financial Services and Codorus Valley Bancorp have secured the required regulatory approvals for their previously announced all-stock merger worth nearly $207m.

The American financial services companies have also received waivers from the board of governors of the Federal Reserve System and the Pennsylvania Department of Banking and Securities for their transaction.

Announced in December last year, the merger is expected to create a leading Pennsylvania and Maryland community bank with about $5.2bn in assets and a market capitalisation of nearly $460m.

The combined entity will operate 51 branches to cater to markets throughout a footprint in Central and Eastern Pennsylvania as well as the Greater Baltimore in Maryland area.

According to the terms of the definitive agreement signed between the companies, each outstanding share of Codorus Valley Bancorp common stock will be exchanged for the right to receive 0.875 shares of Orrstown Financial Services common stock.

Following the completion of the deal, shareholders of Orrstown Financial Services will own nearly 56% of the combined company while shareholders of Codorus Valley Bancorp will own the remaining 44%.

The newly merged company will trade its shares on the Nasdaq Global Select Market. It will operate under the name Orrstown Financial Services.

Last month, Orrstown Financial Services and Codorus Valley Bancorp obtained shareholder approval for the merger.

Headquartered in York, Pennsylvania, Codorus Valley Bancorp mainly operates through its financial services subsidiary PeoplesBank. PeoplesBank provides a wide range of consumer, business, wealth management, and mortgage services.

Orrstown Financial Services and its fully owned subsidiary Orrstown Bank offer a broad array of consumer as well as business financial services.

Subject to the satisfaction of customary conditions, the deal is anticipated to be completed on 1 July 2024.