UPDATE 1-Amcore Financial shares fall on Q1 loss

* Posts fifth straight quarterly loss

* Q1 loss $1.34/shr

* Cuts 9 pct jobs

* Eliminates COO position

* Shares down as much as 19 pct (Recasts, adds conference call details, analyst comments)

By Supantha Mukherjee

BANGALORE, April 28 (Reuters) - Shares of Amcore Financial Inc (AMFI.O) fell as much as 19 percent Tuesday, a day after the lender posted its fifth straight quarterly loss and said it would cut 116 positions, including that of the chief operating officer.

Late on Monday, the company also said it will reduce its workforce by 9 percent, cut executive salaries by 5 percent and decrease its contribution to the 401(k) plan as it continues to struggle with its construction loan portfolio.

The credit performance was pretty weak as the construction portfolio was under stress, and the margin was under pressure because of liquidity needs and high non-performing assets, Keefe, Bruyette & Woods analyst Christopher McGratty said.

The holding company for Amcore Bank is seeking to substantially lower its concentration in construction and development loans, Chief Financial Officer Judith Sutfin said in a conference call with analysts on Tuesday.

Amcore's portfolio is heavily concentrated on construction and land development loans and non-residential commercial real estate loans.

A large number of banks in the United States have taken a hit from their exposure to real estate and construction loans due to rising defaults.

"Our annualized operating expenses of about $175 million were too high for the realities of today's marketplace," Chief Executive William McManaman said on the call.

The cost-cutting initiatives help, but the company's problems are pretty significant, analyst McGratty said.

The company, which had cut staff positions by 11 percent in the fourth quarter, expects to record a charge of $2 million related to restructuring in the second quarter.

Amcore expects to save $20 million annually from the restructuring and said the total annual cost reductions from actions taken during the last five quarters were about $26 million, or about 15 percent of its 2008 operating expense run rate.