The president and CEO of Lake Shore Bancorp in Dunkirk, New York, will resign following an Office of the Comptroller of the Currency consent order that labeled the company as being in "troubled condition."
The $700 million-asset Lake Shore said Daniel Reininga, 64, will step down from the bank's top management position on March 10 — ahead of his planned retirement in May. The company appointed Jeffrey Werdein, executive vice president of the bank's commercial division, to be interim principal executive officer.
Lake Shore, which agreed to a consent order on Feb. 9, previously suspended its quarterly dividend and vowed to use capital to address "operational, compliance and governance deficiencies described in the order."
A week after the order, Lake Shore said Reininga, a 29-year veteran of the bank and its CEO for 12 years, would retire in May. It said in a press release that it would conduct a national search to find a permanent replacement. The regulatory filing this week, dated March 6, accelerated the timeline.
The OCC consent order replaced a written agreement between the bank and the regulator dated July 13, 2022.
The OCC said in the agreement that it found unsafe or unsound practices at the bank, including information technology security weaknesses. Regulators ordered the bank to create a special compliance committee and submit quarterly reports to the board and the OCC.
In March of last year, Lake Shore disclosed in a filing with the Securities and Exchange Commission that hackers had
The OCC disclosed in the consent order that it found Lake Shore Savings Bank in "substantial noncompliance" with the written agreement. The regulator said the bank engaged in unsafe and unsound practices, including running afoul of rules related to the Bank Secrecy Act. The bank did not admit to or deny the OCC's conclusions.
The consent order also requires the bank to ensure it has competent management in place, including in the CEO position. The bank must now get the OCC's approval before making changes to its board or senior management team.
As of 2022, the bank had nearly $600 million of deposits from customers mostly in western New York, including Buffalo.
