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Ailing Orrstown Bank in Shippensburg, Pa., has named a former chief lobbyist at the American Bankers Association to its board of directors.
April 5
Floyd Stoner knows it's not easy being a community bank director, so that's why he just became one.
Stoner, the former chief lobbyist for the American Bankers Association, was approved Tuesday as a director of $1.4 billion-asset Orrstown Financial Services (ORRF) in Shippensburg, Pa. He had
It's important that community banks survive the economic downturn and that people are willing to serve on their boards, Stoner said.
"Community banks everywhere are under tremendous pressure," Stoner said. "They're under pressure from writers [in the media], from competition, from tax-exempt credit unions, from regulators, from outside investor groups."
Orrstown itself has faced some of that pressure. The company prevailed in its say-on-pay vote, held at its Tuesday annual meeting, in spite of a recommendation by proxy advisory firm Institutional Shareholder Services that investors reject its executive pay plan. Problem loans contributed to Orrstown posting a first-quarter net loss of $8.2 million, although nonperforming assets fell 1.6% to $84.5 million, from the previous quarter.
The system of community banks in the U.S. is unparalleled, in terms of its size and impact, and they play a critical role in the U.S. economy, Stoner said.
"No other developed country even comes close," Stoner said. "One can view that as either inefficient, or as serving a function to democratize credit."
Stoner and his wife have had a residence in the Shippensburg area since 1985. Stoner himself grew up in nearby Lancaster County, Pa. Orrstown described Stoner in its proxy statement as having "a nearly unparalleled perspective on the issues facing the banking industry."
Since his retirement in December, Stoner has continued to perform consulting and lobbying work for the ABA. He also serves as a senior adviser at Alliance Partners, a Chevy Chase, Md., firm that helps facilitate loan participations for community banks.
Stoner joined the Orrstown Financial board with Anthony Ceddia, the president emeritus of Shippensburg University of Pennsylvania, and Andrea Pugh, who owns a pharmacy consulting business.
