Orrstown Financial Services Announces Leadership Transition
Orrstown Financial Services Announces Leadership Transition
Orrstown Financial Services Inc. (NASDAQ: ORRF) has shared important news regarding its leadership team. Craig L. Kauffman, who has served diligently as the Executive Vice President, Chief Operating Officer, and Director, will be retiring on September 30, 2024. Kauffman's impressive career included significant roles at Codorus Valley Bancorp and PeoplesBank, A Codorus Valley Company, before their merger with Orrstown.
This retirement, as outlined in a recent SEC filing, is due to personal reasons and does not stem from any disagreements with the direction or operations of the company. The team at Orrstown Financial expressed their heartfelt gratitude for Kauffman's contributions, especially during the critical post-merger period.
Retirement Agreement Details
The arrangements surrounding Kauffman's retirement include the receipt of prorated payments through April 22, 2028, based on an annual salary of $819,170. Furthermore, he will also receive medical and dental coverage for six months under COBRA. Notably, Kauffman will continue to be bound by non-competition clauses from a previous Employment Agreement until April 22, 2028, while also accelerating the vesting of 13,333 shares of restricted stock granted earlier this year.
Orrstown Bank will also cover Kauffman’s legal expenses associated with the retirement proceedings, up to $35,000. The Deferred Compensation Agreement made in February 2019 between PeoplesBank and Kauffman, which was assumed by Orrstown Bank post-merger, will remain valid.
Extension of Leadership Role for CEO
Concurrently, Orrstown Financial's boards have extended the employment agreement of President and CEO Thomas R. Quinn, Jr. to May 25, 2026. Quinn has accepted this extension, which was originally scheduled to end in May 2025.
Recent Financial Performance Insights
In other recent developments, Orrstown Financial Services has reported stable earnings for the second quarter, a positive outcome following its merger with Codorus Valley Bancorp. The company showcased a net income of $7.7 million and diluted earnings per share of $0.73. Notably, the adjusted net income reached $8.7 million after accounting for merger-related expenses, demonstrating strong financial health.
This merger is anticipated to bolster profitability and enhance shareholder value thanks to an increased size and operational scale. There was an observable increase in non-interest income, and the tangible book value per common share also showed progression. In addition, the Board of Directors declared an increased quarterly cash dividend, further emphasizing the company’s commitment to shareholder returns.
New Executive Compensation Definitions
Furthermore, Orrstown has proactively revised executive compensation agreements as highlighted in a recent SEC filing. These updated agreements are designed to encourage the continued service of essential executives, including Craig L. Kauffman and Thomas R. Quinn, Jr. The Salary Continuation Agreement for Kauffman details a benefits package that could extend over a 15-year period post-separation, with an estimated annual benefit of $357,260.
Additionally, Orrstown has updated its existing agreement with CEO Thomas R. Quinn, Jr., which now includes increased annual benefits that will be disbursed upon his separation or death. These revised agreements also detail provisions for early termination, changes in control, disability, and posthumous benefits.
Frequently Asked Questions
What leadership changes were announced by Orrstown Financial?
Orrstown Financial Services announced the retirement of Craig L. Kauffman and the extension of CEO Thomas R. Quinn, Jr.'s contract.
What are the details surrounding Craig L. Kauffman's retirement?
Kauffman will receive prorated payments through April 22, 2028, and will continue to have certain benefits, including six months of COBRA coverage.
How did Orrstown Financial perform financially recently?
The company reported a net income of $7.7 million for Q2, with diluted earnings per share of $0.73, indicating stable financial health.
What changes were made to executive compensation agreements?
New agreements were established to incentivize Kauffman and Quinn, including a 15-year benefits package for Kauffman.
How is Orrstown Financial positioned for future growth?
The merger with Codorus Valley Bancorp is expected to enhance profitability and shareholder value through increased operational scale.
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