National Penn Bancshares (NPBC) in Boyertown, Pa., lost more than $17 million in the first quarter after restructuring its debt.

The $8.3 billion-asset company would have earned $23 million absent management's decision to restructure $400 million of fixed-rate borrowing and redeem certain trust-preferred securities. National Penn took those measures as part of a series of steps to reduce interest expense and widen its net interest margin. The loan restructuring, which the company announced in August, resulted in a prepayment penalty of roughly $65 million.

National Penn's net interest income fell 3.4% from a year earlier, to $61.6 million. The net interest margin was essentially flat from a year earlier, to 3.49%.

Noninterest income rose 5.8% from a year earlier, to $25.6 million. Noninterest expense, excluding the prepayment penalty, was $52.4 million.

National Penn's loan book grew roughly 1% from a year earlier, to $5.2 billion.

"We have strong fundamentals as we move forward," Scott Fainor, National Penn's chief executive, told American Banker. "We also are trying to set the company up to continue to navigate through these low interest rates and this still soft economy.

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