- Key takeaway: Newly appointed CEO Adam Metz said he is taking over a well-positioned company with solid earnings power.
- Supporting data: Days before Metz took the helm, Orrstown announced plans to retire $31 million in subordinated debt linked to its 2024 merger with Codorus Valley Bancorp.
- Expert quote: Adam Metz is "a proven and respected leader who understands our markets, our clients, and the importance of our commitment to community banking." — Orrstown Chairman Joel Zullinger
Adam Metz spent the past year preparing to take over as president and CEO of the Harrisburg, Pennsylvania-based Orrstown Financial. It was an apprenticeship that checked all the boxes — literally.
"There were 36 items to cross off on a checklist to make sure I was ready for this day," Metz told American Banker. "Tom and the board were very engaged in that process."
Metz, who succeeded the retiring Thomas Quinn on June 2, is a familiar name at the $5.6 billion-asset Orrstown. He spent the year prior to taking over as CEO as chief operating officer. Before that, Metz served as chief revenue officer for six years.
Joel Zullinger, who chairs Orrstown's board, described Metz in a press release as "a proven and respected leader who understands our markets, our clients, and the importance of our commitment to community banking."
Metz is "exceptionally well-suited to lead Orrstown Bank," Zullinger added.
The 107-year-old Orrstown Bank is Orrstown Financial's bank subsidiary.
Orrstown operated as a one-branch institution for more than 60 years. It opened its first branch outside of Orrstown, in Shippensburg, Pennsylvania, in 1981. The bank expanded gradually over the next three decades through de novo branches and small acquisitions.
Orrstown struggled with a surge in problem commercial loans in the wake of the Great Recession, but moved back into growth mode after resolving the credit issues. Under Quinn's leadership, it acquired
Orrstown's biggest deal, a
Quinn, who led Orrstown for 17 years, "left an incredible legacy at this company," Metz said. "We're indebted to him. He's been a tremendous mentor to me, personally."
Craig Stevens, a managing partner at Boyden, a Tarrytown, New York-based executive-search consulting firm, said he recently worked with a large regional bank that also prepared a checklist during its CEO succession process, although its list was shorter than Orrstown's.
"I don't even think a car tuneup has 36 points," Stevens told American Banker. "There's definitely some granularity to [Orrstown's] planning. That sounds like a very robust process."
Stevens said boards need to ensure that executives who previously occupied jobs with limited, defined mandates are capable of making the jump to the top role.
"It is validating the candidate's strategic acumen," Stevens said.
Metz, who worked at Harrisburg-based Metro Bank prior to joining Orrstown in 2016, spent much of his career in commercial lending roles, including serving as chief lending officer at both Metro and Orrstown. Metz said his chief role as CEO will be determining long-term strategy and ensuring its execution, but added that he intends to "remain in touch" with clients to keep abreast of their needs and challenges.
"I think that's an incredibly important aspect of the job," Metz said.
Orrstown reported first-quarter net income of $21.8 million, up 20% from the prior year. On May 29, the company announced plans to retire $31 million in fixed-to-floating rate subordinated notes assumed as part of the Codorus merger at the end of June. Though the move reduces Orrstown's capital at the start of his CEO tenure, the bank has the earnings power to replenish its position "pretty quickly," according to Metz.
"We feel like we're in a really strong position," he said.
