DUNMORE, Pa., Feb. 18 First National Community Bancorp, Inc. (OTC Bulletin Board: FNCB), the financial holding company of First National Community Bank, today announced a net loss for the year ended December 31, 2009 of $11.3 million.
Results were negatively impacted by the continued weakness in the U.S. economy and declining values supporting many of the institution's commercial real estate loan projects. The company allocated almost $32 million of earnings, both to replenish its reserve and to strengthen its ability to safely absorb possible future losses.
"Challenging times require extraordinary management, and we have allocated the necessary reserves so that problems identified in our loan portfolio will not be an ongoing factor," explained J. David Lombardi, president, chief executive officer.
Also contributing to the year-end financial results were credit losses incurred on investment securities totaling $6.2 million. The company also experienced a $5.4 million rise in operating expenses, including a $2 million increase in FDIC insurance premiums.
Net interest income before the provision for credit losses was 2 % lower than the previous 12-month period due to a decrease in loans outstanding.
Noting that 2009 was an especially difficult year for banking institutions throughout North America, Lombardi expressed confidence that 2010 will be "measurably better" and describes FNCB as "fiscally healthy and secure, as well as organizationally vibrant and dynamic" as the bank enters its second century.
"It will be some time before we see earnings return to their pre-2009 level, and loan problems won't disappear as quickly as the industry would like," he noted. "However, our bank is well-capitalized; we are busy making quality loans, and continue to pay an attractive rate on each of our products; and while others are struggling to survive, FNCB is opening new branch offices to serve more customers in more communities throughout the region."
The company raised more than $23 million through the sale of subordinated notes which will mature on September 1, 2019. The net proceeds of the completed sale will be used to strengthen the institution's capital position, improve liquidity, increase lending capacity and support FNCB's continuing growth objectives. At year-end, the bank’s risk-based capital ratios exceeded the current “well-capitalized” regulatory requirements with a Total Risk Based Capital ratio of 11.82%, a Tier I Capital ratio of 10.56%, and a Tier I Leverage ratio of 9.09%.
Total assets increased $82 million during 2009 as a result of significant growth in deposits, while net loans decreased $29 million as the company tightened credit standards to maintain required capital levels. Cash dividends were reduced from 46 cents per share to 17 cents per share to conserve and maintain capital.
First National Community Bank provides personal, small business and commercial banking services to individuals and businesses from 21 community offices throughout Lackawanna, Luzerne, Monroe and Wayne Counties in Northeastern Pennsylvania. FNCB's newest office, located on Wheeler Ave. in Dunmore, opened in December 2009. The institution was established as a National Banking Association in 1910 as The First National Bank of Dunmore, and has been operating under its current name since 1988.
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