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"We are a reflection of the customers we serve," Moyer said after the bank released third-quarter earnings.
National Penn reported a net loss of $65.2 million for the quarter, or 65 cents per share; cut its dividend to a penny a share; and announced it would sell a portfolio of collateralized debt obligations.
"I think clearly in our southeastern Pennsylvania region, and Berks County is a key part, from an economic point of view, we hung in there for quite a while (at the beginning of the recession)," Moyer said. "We (the region) certainly caught up and that has put a lot of stress on small and midsized companies that rely on us for really almost all their fi nancial needs.
"When they are stressed out, it stresses out our portfolio."
The bank, which had successive annual dividend increases for about 30 years, cut its dividend in April to 5 cents a share from 17 cents a share.
The 1 cent a share dividend is payable Nov. 17 to shareholders as of Nov. 8.
The board said cutting the dividend will preserve $20 million in equity annually.
The bank also plans to sell a portfolio of collateralized debt obligations, or CDOs, this quarter. These CDOs typically are investment-grade pools of bonds, loans and other assets.
Scott V. Fainor, chief operating officer of National Penn, explained that the bank had invested in CDOs that were trust-preferred pools of banks.
As the economic crisis worsened, some banks in the pool began to defer or default on obligations, further deteriorating that asset, he said. National Penn had been writing off the losses.
The bank also raised $153 million in capital in the third quarter, Fainor said.
"The fact of the matter is, we are going to go through a few additional quarters of slow activity," Moyer said. "We expect a slow recovery, and we took certain proactive steps to position ourselves. We took the difficult action of cutting our cash dividend further, but it's the prudent thing to do. It's a quarter to quarter evaluation."
Contact Karen L. Miller: 610-371-5049 or klmiller@readingeagle.com.
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