It’s been a long time since Orrstown Financial Services Inc. could think about the future. It’s been too busy devoting its present to erasing the oversights of the past.
But free from the shackles of consent orders from the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking and Securities, Orrstown, the holding company for Shippensburg-based Orrstown Bank, now is looking somewhere it hasn’t looked in years: Tomorrow.
“We have robust capital levels, which will allow us to expand our balance sheet without having to raise capital,” said Thomas R. Quinn Jr., Orrstown’s president and CEO. “And we have the ability to deploy it.”
The state eased its consent order a year ago, dropping it completely in February, and the Fed dropped its consent order on April 2, freeing Orrstown to conduct business as usual without seeking approval of regulators. As part of the consent order, it could not issue stockholder dividends or make acquisitions, among other restrictions.
Where it is
Now, the bank has between $125 million and $130 million in capital and already has applied to begin taking deposits at its Lancaster County branch — currently a loan production office only — making it a full-service branch location.
This year, it revamped its website to attract a more youthful customer base and started dropping morsels of how it plans to attack the future. In an investor presentation in February, the company said simply shedding the Fed order will save between $1 million and $1.5 million in fees for consultants and lawyers and from reduced insurance costs from the Federal Deposit Insurance Corp. Orrstown Chief Financial Officer David Boyle said that remains a reasonable target for savings.
Acquisition could be a possibility, but bank officials aren’t identifying any targets just yet.
“It could be branch expansion, it could be an acquisition, it could be (acquisition of) small boutique firms,” Quinn said, adding that he hasn’t gotten any calls about the bank’s availability to be acquired.
The dropping of the consent order is the light at the end of the tunnel Orrstown and its customers had been waiting on for more than three years.
“You could almost hear the town’s sigh of relief,” said Ronald K. Taylor, a professor of marketing at Shippensburg University, concerning the lifting of the order. “Overall, (Orrstown) kept (its) image and reputation intact through the process. But there were pockets of customers who took pause about the future of the bank and wondered if they should change banks. Now (Orrstown) can get back to doing what (it does) best, and that’s being the hometown bank.”