Bank directors have had a lot to be nervous about over the last four years, especially at community banks.

Experts in director and officer liability issues suggest, however, that the stigma of being a bank director has lessened as banks' fortunes have risen.

However, fears of being a director remain.

Mark Rosen, a former Federal Deposit Insurance Corp. lawyer now working for Aetna Life & Casualty Co. in its directors and officers insurance unit said that anecdotal evidence suggests banks are having more luck at attracting quality directors now than a year ago.

|Worse for Smaller Banks'

"It's still worse than it was five years ago," Mr. Rosen said. "And worse still for smaller banks. Depending, that is, on the condition of the institution."

An unscientific survey conducted by the American Bankers Association at February's Community Bankers Conference showed less banker angst over their ability to attract qualified directors.

About 30% of the 95 bankers that responded to the survey said they have had difficulty in finding directors in the last year. About 22 percent of the respondents said that at least one of their directors had resigned or not stood for reelection because of concerns over personal liability.

Earlier Survey

That differs with a survey by the American Banker done two years ago indicating three out of four banks with less than $1 billion in assets were having trouble finding qualified directors.

But Josiah Hatch, a lawyer with the Washington office of Gibson, Dunn & Crutcher, said fear of personal liability still pervades community bank board rooms. Concern over regulatory exemption provisions in directors and officers insurance policies and tough policy statements from regulatory agencies in recent months about director culpability are the main reasons.

"I haven't noticed directors' fears going away at the community bank level," Mr. Hatch said."

Weighty Tome

Mr. Hatch, along with fellow Gibson, Dunn lawyer John Olson, recently published an 800-page treatise on director and officer liability. Mr. Hatch said the pair felt a comprehensive text was needed for both lawyers and laymen who deal with the increasingly complex subject.

"People haven't been reassured by the policy decisions issued by the Office of Thrift Supervision and the Federal Deposit Insurance Corp. in recent months," Mr. Hatch said. "The insurance ramifications of the strict liability propounded by the regulators is worrisome to people."

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