First Bank earnings fall 29 percent

Good lawyers and bad loans are expensive.

First Bank Monday reported 2006 net income of $84.6 million, down from $114.6 million in earnings in 2005. The bank blames lower earnings on more charge offs for bad loans, higher expenses, including higher salaries for its employees, and legal costs.

First Bank, which is restating four years worth of earnings, agreed earlier this year to settle a shareholder lawsuit over its mortgage-related accounting errors for more than $74 million.  It also agreed this year to a submit to oversight by U.S. banking regulators.

First Bank’s lower earnings aren’t from lack of business. The bank’s loans grew by a billion dollars last year, including $426 million in residential mortgages and $374 million in construction loans.

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