National Penn posts $283.3M loss, replaces CEO

National Penn Bancshares Inc. posted a net loss of $283.3 million in the fourth quarter, replaced its chief executive officer, and signed an informal agreement with regulators, the Boyertown, Pa., bank said yesterday.

The loss included a $275 million noncash goodwill charge, a $47 million provision for loan losses, and a $6 million loss on the sale of $63.8 million in loans.

Effective Wednesday, 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 KNBT Bancorp Inc., of Bethlehem, Pa., replaced Glenn Moyer. Moyer had been CEO for three years.

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

He said 31 percent of those loans were 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, which is less severe than an order. It requires the bank to slightly boost one capital ratio and maintain others "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 $501 million Dec. 31 from $196 million a year earlier, but the rate of growth slowed "tremendously" toward the end of the year, Fainor said. The company had $6 billion in loans at the end of the year.

Shares closed at $5.95, down 16.90 percent, or $1.21 in Nasdaq trading yesterday.