The Shippensburg-based bank’s efforts to clean up its loan portfolio and strengthen its management team have paid off, Quinn said, yielding a $1.03 million profit for the fourth quarter of 2012.
Orrstown has been operating under federal and state consent orders since March. It lost $32 million in 2011, the result of commercial real estate loans going sour, primarily in the Hagerstown, Md., market, according to Quinn.
The bank’s corrective actions included two major distressed-loan sales that helped reduce its total risk assets from $113.8 million in December 2011 to $22.9 million a year later. Managerial appointments included a new chief financial officer and chief operating officer and the newly created position of chief risk officer, Quinn said.
“A lot of change took place,” he said, adding: “We feel very, very confident about where we’re going.”
He declined to comment in detail on two shareholder lawsuits pending against Orrstown and its board, but said the company disputes the allegations and will fight them vigorously.
“We’ll let our attorneys deal with this issue,” he said.
Orrstown has $1.3 billion in assets and 21 branches in Cumberland, Franklin and Perry counties in Pennsylvania and Washington County, Md. Its shares trade on the Nasdaq under the ticker symbol ORRF.