Thomas Quinn, president and CEO at Orrstown Financial Services Inc., has a plan for the future after the Federal Reserve Bank of Philadelphia lifted its consent order against his company.
But that immediate plan doesn’t involve restoring dividends or a quick acquisition.
“I’m going to go home and give my wife a much-needed kiss,” he said of the first item on his agenda. “And my kids. And tell them thank you for putting up with me over the last three or four years. I think that’s what we’re all doing. Kind of taking a step back.”
It’s hard to blame the Orrstown employees for basking in the glow, if only momentarily, of finally being out from under the thumb of a federal consent order that severely limited how the bank could conduct business since its institution in March 2012. The company announced Thursday it has fulfilled all of the stipulations of the Fed and has been released from the consent order that required strict government oversight.
Marilyn Wimp, spokeswoman for the Federal Reserve Bank of Philadelphia, confirmed late Monday the company has been released from the consent order.
“We have a plan for the future, and we’re going to be doing some really exciting things,” Quinn said Thursday. “We’re going to look for the right opportunities to expand the franchise but not forget what we’ve been through. I have tremendous respect for all the people who helped us work through this process and have a great appreciation for what it takes to get back.”
Orrstown has been under the formal watch of the Fed since March 2012 to make it remove its bad loans and to have tighter oversight from its board of directors. The Pennsylvania Department of Banking and Securities had a similar consent order against Orrstown, but loosened its restrictions in April 2014 and in February, terminated the agreement.
During the three years of federal watch, the bank has not been allowed to award stockholder dividends or expand its presence through acquisition, among other things. Most decisions on the direction of the bank had to first be approved by the Fed.
Quinn said the lack of dividend awards likely was the hardest part of the consent order. He said he took calls from shareholders very often who have been asking when they will be restored. He heard stories of retirees who used the dividend check to buy Christmas presents for family and friends.
“I kept a list (of shareholders who contacted him about dividends),” he said. “Today I called many of them, not all of them, but many of them, to tell them where we are today. I think our team has been doing that all day too.”
There has been no announcement of when exactly the company will award dividends.
Free from the federal watch, the bank said in an investor presentation in February that it would see a cost savings of between $1 million and $1.5 million within nine to 12 months of the order’s removal.
Orrstown trades its shares on the NASDAQ exchange under the ticker symbol ORRF and has about $1.2 billion in assets.
When news came down around 11 a.m. of the order termination, the company’s stock sat around $16.71. By about 2:30 p.m., it was at $17.06 and climbing, a rise of about 2 percent.