Thursday, January 28, 2010

NPBC -- Regional Bank Mover

Ouch. According to the Philadelphia Inquirer, National Penn took a big loss and sacked the CEO.

National Penn posts $283.3M loss, replaces CEO

By Harold Brubaker

National Penn Bancshares Inc. lost $283.3 million in the fourth quarter, replaced its chief executive, and signed an informal agreement with regulators, the Boyertown bank said today.
The loss included a $275 million noncash write-down of goodwill, a $47 million set-aside for anticipated losses on loans, and a $6 million loss on the sale of certain loans.

Effective yesterday, Scott V. Fainor took over as president and CEO, and joined the board of directors. Fainor, who came to National Penn in 2008 through the bank's purchase of Bethlehem-based KNBT Bancorp Inc., replaced Glenn Moyer.

Fainor said in an interview that the bank's problems are concentrated in its $406 million portfolio of commercial real estate construction loans, most of which are to homebuilders. "That's where the concentration of the risk is," said Fainor, 48.

He said that 31 percent of those loans are at risk, with the biggest problems in southern Montgomery County, southern Bucks County, eastern Chester County and Philadelphia. "There was more growth in that region, so you can imagine there is more stress in that region," he said.

National Penn's regulatory agreement is a memorandum of understanding. It requires the bank to "maintain our capital ratios until we get these classified loans reduced," Fainor said. Classified loans are still paying, but they have an elevated risk of not paying in the future.

National Penn's level of classified loans soared to $500 million on Dec. 31 from $196 million a year earlier, but the rate of growth slowed "tremendously" toward the end of the year, Fainor said.

National Penn's shares were off 13.97 percent, or $1, at $6.16 in early trading on Nasdaq.