New resigns as CEO and president of F.N.B.

By Don Shilling

HERMITAGE, Pa. — Bob New, president and chief executive of F.N.B. Corp., has agreed to resign with a $990,000 severance payment.

The board of directors of the bank holding company asked for his resignation because it wanted new leadership, said Stephen J. Gurgovits, F.N.B. chairman.

He said the move had nothing to do with F.N.B.’s fourth-quarter loss that was reported two weeks ago and added that there were no issues of wrongdoing.

“It was a matter of chemistry more than anything. They didn’t feel we were all in sync,” said Gurgovits, who will take over as interim president and chief executive of F.N.B. and its subsidiary First National Bank of Pennsylvania.

New and his wife came to Hermitage from Houston and never quite fit into the Midwestern lifestyle, Gurgovits said.

“I think their transition was difficult,” he said.

New declined to discuss the reasons for his leaving.

“I wish absolutely nothing but success for F.N.B.,” he said.

As for his future, he said all options are open.

Gurgovits said the board recently approached New and told him that his leadership “was not working,” and the separation talks began.

F.N.B. agreed to pay New $990,000 in severance, plus buy his home in the area and pay for health insurance for him and his wife for 18 months, according to a document filed Wednesday with the federal Securities and Exchange Commission.

“Mr. New’s resignation does not result from any disagreement he has with us about the operations, policies or practices of F.N.B. Corp. or any of its subsidiaries or affiliates,” the document says.

F.N.B.’s stock fell 46 cents, or 6 percent, to close at $7.23 Thursday. The stock has traded at between $6.79 and $20.70 in the past year.

Gurgovits said the board will name a search committee Wednesday. He said he expects that a national recruiting firm will be hired.

“Hopefully, we’ll find someone with more Midwestern ties,” he said.

New previously was president and chief executive of Green Bank in Houston. When he came to Hermitage, he started as chief executive and president of F.N.B. but later was named to the top posts of First National Bank when Gary Roberts retired.

F.N.B. two weeks ago reported a loss of $18.9 million for the fourth quarter of 2008.

The company blamed the loss on its decision to set aside $51.3 million to cover loan losses, primarily in Florida, and a $20.1 million accounting charge to cover a decline in the value of its investments in other banks.

Gurgovits said the board wasn’t blaming New for the poor quarter. The bank was hurt by a collapse of real estate values in Florida, where it had made loans, and of its investments in other banks.

For all of 2008, F.N.B. earned $35.6 million, compared with $69.7 million in 2007.

Gurgovits said his goal as interim CEO will be to improve the financial performance of the company by strengthening credit quality and earnings of its core banking operations.

He said he expects F.N.B. to have a “decent year” in 2009 and a better year in 2010.