NATIONAL PENN BANCSHARES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - NATIONAL PENN BANCSHARES, INC. FORM 8-K - NATIONAL PENN BANCSHARES INC	npb8k.htm

EXHIBIT 99.1

News Release

National Penn Bancshares, Inc. Reports

First Quarter 2011 Results

Continued profitability enhancement

· Net income increases to 10 cents per share

· Adjusted net income increases to 11 cents per share1

Net interest margin expands

Effective expense management continues

Asset quality improved for 5th consecutive quarter

Quarterly loan loss provision declines 43% to $10 million

Classified loans, non-performing loans and charge-offs continue to decline

Loan loss reserve to non-performing loans increases to 181%

Balance sheet strength further enhanced

$150 million total investment by Warburg Pincus LLC completed

TARP Capital Purchase Program investment repaid in full

TARP warrant repurchased

BOYERTOWN, PA., April 21, 2011 -- National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $15.6 million, or $0.10 per diluted common share, for the first quarter of 2011 compared to $6.6 million, or $0.05 per diluted common share, for the fourth quarter of 2010. For the first quarter of 2010, net income available to common shareholders totaled $1.9 million or $0.02 per diluted common share. On an adjusted basis1, net income for the quarter ended March 31, 2011 totaled $17.1 million, or $0.11 per diluted common share, which represents an increase of 27% from the fourth quarter of 2010. First quarter 2011 adjusted net income¹ excludes the impact of $1.5 million of accelerated accretion due to the March 16, 2011 redemption of all preferred stock issued to the U.S. Treasury under its TARP Capital Purchase Program.

“Our increasing profitability in the quarter is indicative of the strength of our balance sheet, strong core fundamentals and improving asset quality” said Scott V. Fainor, president and CEO of National Penn. “The first quarter of 2011 also marked the achievement of two key strategic objectives - the completion of the $150 million investment in our Company by Warburg Pincus LLC and the repayment in full of the U.S. Treasury’s preferred stock investment. Additionally, on April 13, 2011 we repurchased the associated warrant, ending our participation in the TARP program.”

Asset quality trends continued to improve for the fifth consecutive quarter, resulting in a decline in the provision for loan and lease losses to $10.0 million for the first quarter of 2011 from $17.5 million for the fourth quarter of 2010. Non-performing loans, classified loans and net charge-offs declined by 6%, 9%, and 15%, respectively. Despite a reduction in the provision for loan losses in the quarter, the loan loss reserve to non-performing loans remained a strong 181% at March 31, 2011.

Solid core operating performance resulted in an increase in the net interest margin to 3.58% for the first quarter of 2011 from 3.43% for the fourth quarter 2010. Contributing to the margin expansion was a continued shift in the deposit mix toward core deposits, which increased to 69% of total deposits as of March 31, 2011 from 64% as of March 31, 2010. Relatively higher-cost certificates of deposit and FHLB advances declined by $107 million and $76 million, respectively, in the first quarter 2011 from fourth quarter 2010. The cost of total interest-bearing deposits declined to 0.90% from 0.97% during this same period. Expenses in the first quarter 2011 continued to be well-controlled.

Loans to new and existing customers were approximately $206 million during the first quarter of 2011. While runoff within the portfolio has begun to slow, total loans and leases declined to $5.2 billion as of March 31, 2011, as a result of on-going challenges in the regional economy.

Capital levels were further strengthened during the first quarter 2011 resulting in a tangible common equity to tangible assets ratio of 9.9%1 and a total capital ratio of 16.9%.

National Penn’s Board of Directors approved a second quarter cash dividend of $0.01 per share, payable on May 17, 2011 to shareholders of record on May 7, 2011, consistent with the $0.01 per share paid in the previous quarter.

Scott V. Fainor stated, “While the economy is gaining traction, it is uneven throughout our marketplace. However, with the strength of our balance sheet, including our solid capital and reserve levels, we are well-positioned to continue to build on our profitability in future quarters. We remain on the offense and are focused on positioning National Penn to take advantage of opportunities that present themselves.”

Media Contact:	Catharine S. Bower, Corporate Communications
	(610) 369-6618 or catharine.bower@nationalpenn.com

Investor Contact:	Michelle H. Debkowski, Investor Relations
	(610) 369-6461 or michelle.debkowski@nationalpenn.com

# # #

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $9 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 123 branch banking offices, comprising 122 branches in Pennsylvania and one office in Maryland through National Penn Bank and its HomeTowne Heritage Bank, KNBT and Nittany Bank divisions.

National Penn’s financial services affiliates consist of National Penn Wealth Management, N.A., including its National Penn Investors Trust Company division; National Penn Capital Advisors, Inc.; Institutional Advisors LLC; National Penn Insurance Services Group, Inc., including its Higgins Insurance division; and Caruso Benefits Group, Inc.

National Penn Bancshares, Inc. common stock is traded on the Nasdaq Stock Market under the symbol “NPBC”. Please visit our Web site at www.nationalpennbancshares.com to see our regularly posted material information.

1Statement Regarding Non-GAAP Financial Measures:

This release, including the attached Financial Highlights and financial data tables, contains supplemental financial information determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”). National Penn’s management uses these non-GAAP measures in its analysis of National Penn’s performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the following non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of National Penn.

Tangible common equity excludes goodwill and intangible assets and preferred equity. Banking and financial institution regulators also exclude goodwill and intangible assets from shareholders’ equity when assessing the capital adequacy of a financial institution. Tangible common equity provides a method to assess the company’s tangible capital trends.

Tangible book value expresses tangible common equity on a per-share basis. Tangible book value provides a method to assess the level of tangible net assets on a per-share basis.

Adjusted net income excludes the effects of certain gains and losses, adjusted for applicable taxes. Adjusted net income provides a method to assess earnings performance by excluding items that management believes are not comparable among the periods presented.

Efficiency ratio expresses operating expenses as a percentage of fully-taxable equivalent net interest income plus non-interest income. Operating expenses exclude items from non-interest expense that management believes are not comparable among the periods presented. Non-interest income is adjusted to also exclude items that management believes are not comparable among the periods presented. Efficiency ratio is used as a method for management to assess its operating expense level and to compare to financial institutions of varying sizes.

Management believes the use of non-GAAP measures will help readers compare National Penn’s current results to those of prior periods as presented in the accompanying Financial Highlights and financial data tables.

Cautionary Statement Regarding Forward-Looking Information:

This release contains forward-looking information about National Penn Bancshares, Inc. that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,’’ “project,” ”could,” “plan,’’ “goal,” “potential,” “pro forma,” “seek,” “intend,’’ or “anticipate’’ or the negative thereof or comparable terminology, and include discussions of strategy, financial projections, guidance and estimates (including their underlying assumptions), statements regarding plans, objectives, expectations or consequences of announced transactions, and statements about the future performance, operations, products and services of National Penn and its subsidiaries. National Penn cautions readers not to place undue reliance on these statements.

National Penn’s business and operations are subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: increased capital requirements and other requirements or actions mandated by National Penn’s regulators, National Penn’s inability to meet the requirements of the memorandum of understanding or the individual minimum capital ratio requirements issued by its primary regulator, National Penn’s ability to raise capital and maintain capital levels, variations in interest rates, deterioration in the credit quality of loans, the effect of credit risk exposure, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, recent and ongoing changes to the state and federal regulatory schemes under which National Penn and other financial services companies operate (including the recently passed Dodd-Frank Act and regulations to be adopted to implement that Act), competition from other financial institutions, interruptions or breaches of National Penn’s security systems, and the development and maintenance of National Penn’s information technology. These risks and others are described in greater detail in National Penn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as well as in National Penn’s Quarterly Reports on Form 10-Q and other documents filed by National Penn with the SEC after the date thereof. National Penn makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Financial Highlights
Unaudited, numbers in thousands except share and per share data

	3/31/2011			12/31/2010			% Change
SUMMARY BALANCE SHEET
Total assets	$	8,543,267		$	8,844,620			-3.41	%
Investment securities and other securities		2,235,777			2,259,690			-1.06	%
Total loans and leases		5,245,146			5,326,723			-1.53	%
Deposits		5,933,016			6,059,173			-2.08	%
Borrowings		1,472,987			1,590,996			-7.42	%
Shareholders' equity		1,097,609			1,137,437			-3.50	%
Tangible book value per common share	$	5.40		$	5.18			4.25	%
Tangible common equity / tangible assets		9.91	%		8.27	%

	Three Months Ended
	3/31/2011			12/31/2010			3/31/2010
EARNINGS
Total interest income	$	89,358		$	93,745		$	98,837
Total interest expense		23,388			26,104			31,578
Net interest income		65,970			67,641			67,259
Provision for loan and lease losses		10,000			17,500			32,500
Net interest income after provision
for loan and lease losses		55,970			50,141			34,759
Net (losses) gains from fair value changes of subordinated debentures		(51	)		(2,049	)		(7,261	)
Other non-interest income		24,235			25,707			29,835
Other non-interest expense		56,837			59,493			57,657
Income (loss) before income taxes		23,317			14,306			(324	)
Income tax expense (benefit)		4,537			5,664			(4,250	)
Net income (loss)		18,780			8,642			3,926
Preferred dividends and accretion of preferred discount		(1,691	)		(2,005	)		(2,005	)
Accelerated accretion from redemption of preferred stock		(1,452	)		-			-
Net income (loss) available to common shareholders	$	15,637		$	6,637		$	1,921

PERFORMANCE RATIOS
Net interest margin		3.58	%		3.43	%		3.44	%
Return on average assets		0.73	%		0.29	%		0.08	%
Return on average assets (pre-TARP)		0.88	%		0.38	%		0.17	%
Return on average total shareholders' equity		6.39	%		3.00	%		1.48	%
Return on average tangible common equity (1)		8.03	%		3.76	%		1.27	%

PER SHARE
Basic earnings (loss) available to common shareholders	$	0.10		$	0.05		$	0.02
Diluted earnings (loss) available to common shareholders		0.10			0.05			0.02
Dividends per common share		0.01			0.01			0.01
Average shares - basic		150,461,063			134,380,086			125,875,061
Average shares - diluted		150,765,883			134,471,788			126,039,112

(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES	Three Months Ended
	3/31/2011			12/31/2010			3/31/2010
Return on average tangible common equity
Return on average shareholders' equity		6.39	%		3.00	%		1.48	%
Effect of preferred equity		-0.46	%		-0.35	%		-0.64	%
Effect of goodwill and intangibles		2.10	%		1.11	%		0.43	%
Return on average tangible common equity		8.03	%		3.76	%		1.27	%
Average tangible equity:
Average shareholders' equity	$	1,191,080		$	1,141,979		$	1,075,052
Average preferred equity		(122,095	)		(148,377	)		(147,990	)
Average goodwill and intangibles		(279,627	)		(292,855	)		(311,784	)
Average total tangible common equity	$	789,358		$	700,747		$	615,278

Adjusted net income reconciliation
Net income (loss) available to common shareholders	$	15,637		$	6,637		$	1,921
After tax gain on pension plan curtailment		-			-			(2,643	)
After tax unrealized fair market value loss (gain) on
subordinated debentures		-			1,332			4,720
Accelerated accretion from redemption of preferred stock		1,452			-			-
Tax expense from sale of Christiana		-			5,486			-
Adjusted net income available to common shareholders	$	17,089		$	13,455		$	3,998

Earnings per share
Net income (loss) available to common shareholders	$	0.10		$	0.05		$	0.02
After tax gain on pension plan curtailment		-			-			(0.02	)
After tax unrealized fair market value loss (gain) on
subordinated debentures		-			0.01			0.03
Accelerated accretion from redemption of preferred stock		0.01			-			-
Tax expense from sale of Christiana		-			0.04			-
Adjusted net income available to common shareholders	$	0.11		$	0.10		$	0.03

(a) Changes greater than 100% are expressed as not meaningful or "NM"

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 1 of 6
Unaudited, numbers in thousands except share and per share data	As of
	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010
BALANCE SHEET - ASSETS
Cash and due from banks	$	113,031		$	90,283		$	103,279		$	106,059		$	103,666
Interest-earning deposits with banks		392,337			612,099			609,733			496,282			239,757
Total cash and cash equivalents		505,368			702,382			713,012			602,341			343,423

Investment securities available for sale, at fair value		1,622,395			1,632,118			1,603,849			1,554,349			1,569,062
Investment securities held to maturity		535,488			546,957			567,740			579,572			591,315
Other securities		77,894			80,615			83,676			83,676			83,676
Loans held for sale		5,561			12,785			30,081			15,944			6,561

Loans and leases		5,239,585			5,313,938			5,611,749			5,740,291			5,908,658
Allowance for loan and lease losses		(142,960	)		(150,054	)		(153,475	)		(154,039	)		(153,850	)
Loans and leases, net		5,096,625			5,163,884			5,458,274			5,586,252			5,754,808

Premises and equipment, net		103,771			105,483			108,496			109,792			112,376
Accrued interest receivable		34,264			33,829			36,127			35,745			37,175
Bank owned life insurance, redeemed but not settled		-			-			64,387			64,387			-
Bank owned life insurance		135,373			134,154			136,093			134,925			198,392
Other real estate owned and other repossessed assets		7,653			7,453			7,818			8,974			2,386
Goodwill		258,279			258,279			273,468			273,468			281,718
Other intangible assets, net		20,530			22,217			25,587			27,360			29,130
Unconsolidated investments under the equity method		12,211			11,482			12,428			12,736			12,842
Other assets		127,855			132,982			127,193			132,606			148,897
TOTAL ASSETS	$	8,543,267		$	8,844,620		$	9,248,229		$	9,222,127		$	9,171,761

BALANCE SHEET - LIABILITIES
Non-interest bearing deposits	$	834,321		$	808,835		$	815,193		$	834,297		$	800,467
Interest bearing deposits		5,098,695			5,250,338			5,690,284			5,661,908			5,610,897
Total deposits		5,933,016			6,059,173			6,505,477			6,496,205			6,411,364

Securities sold under repurchase agreements		696,256			734,455			752,428			752,314			758,828
Short-term borrowings		6,184			10,000			6,974			7,000			7,165
Federal Home Loan Bank advances		627,716			703,761			705,278			706,784			743,781
Subordinated debentures		142,831			142,780			140,731			138,125			139,668
Accrued interest payable and other liabilities		39,655			57,014			45,323			44,811			40,167
TOTAL LIABILITIES		7,445,658			7,707,183			8,156,211			8,145,239			8,100,973

BALANCE SHEET - SHAREHOLDERS' EQUITY
Preferred stock		-			148,441			148,310			148,180			148,050
Common stock		1,379,014			1,292,342			1,227,639			1,227,354			1,226,481
Retained deficit		(279,817	)		(293,940	)		(299,209	)		(308,252	)		(301,459	)
Accumulated other comprehensive income/(loss)		(1,588	)		(9,406	)		15,278			9,606			(2,284	)
TOTAL SHAREHOLDERS' EQUITY		1,097,609			1,137,437			1,092,018			1,076,888			1,070,788

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	8,543,267		$	8,844,620		$	9,248,229		$	9,222,127		$	9,171,761


COMMON SHARE AND PER SHARE DATA
Book Value	$	7.24		$	7.23		$	7.48		$	7.37		$	7.32
Tangible Book Value (2)	$	5.40		$	5.18		$	5.11		$	4.98		$	4.86
Dividends	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01
Shares Outstanding (end of period, net of treasury)		151,506,511			136,792,414			126,115,073			126,064,075			126,004,409


(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity	$	1,097,609		$	1,137,437		$	1,092,018		$	1,076,888		$	1,070,788
Total preferred shareholders' equity		-			(148,441	)		(148,310	)		(148,180	)		(148,050	)
Goodwill and intangibles		(278,809	)		(280,496	)		(299,055	)		(300,828	)		(310,848	)
Tangible common equity	$	818,800		$	708,500		$	644,653		$	627,880		$	611,890
Common shares outstanding		151,506,511			136,792,414			126,115,073			126,064,075			126,004,409
Tangible book value per share	$	5.40		$	5.18		$	5.11		$	4.98		$	4.86

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 2 of 6
Unaudited, numbers in thousands except share and per share data	For the Quarter Ended
	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010
INTEREST INCOME
Loans and leases, including fees	$	69,228		$	73,496		$	76,227		$	77,830		$	78,654
Investment securities
Taxable		11,357			11,272			11,157			11,457			11,098
Tax-exempt		8,493			8,569			8,697			8,803			8,838
Federal funds sold and deposits in banks		280			408			279			218			247
Total interest income		89,358			93,745			96,360			98,308			98,837
INTEREST EXPENSE
Deposits		11,407			13,411			15,773			16,464			18,281
Securities sold under repurchase agreements		2,395			2,567			2,757			2,808			2,874
FHLB advances and subordinated debentures		9,586			10,126			10,140			10,393			10,423
Total interest expense		23,388			26,104			28,670			29,665			31,578
Net interest income		65,970			67,641			67,690			68,643			67,259
Provision for loan and lease losses		10,000			17,500			20,000			25,000			32,500
Net interest income after provision for loan and lease losses		55,970			50,141			47,690			43,643			34,759
NON-INTEREST INCOME
Wealth management income		5,924			6,917			6,997			7,238			7,101
Service charges on deposit accounts		4,664			5,358			5,419			5,446			5,341
Insurance commissions and fees		3,221			3,423			3,499			3,639			3,771
Cash management and electronic banking fees		4,371			4,584			4,548			4,614			4,158
Mortgage banking income		1,080			2,590			2,424			1,231			1,153
Bank owned life insurance income		1,220			1,501			1,168			1,280			1,983
Equity in undistributed net earnings of unconsolidated investments		1,700			140			(41	)		537			163
Gain on pension plan curtailment		-			-			-			-			4,066
Other operating income		2,055			1,638			2,381			2,771			2,733
Net (losses) gains from fair value changes of subordinated debentures		(51	)		(2,049	)		(2,606	)		1,543			(7,261	)
Net gains (losses) on sales of investment securities		-			-			-			214			-
Impairment losses on investment securities:
Impairment losses on investment securities		-			(444	)		(312	)		-			(634	)
Non credit-related losses on securities not expected to be sold recognized
in other comprehensive loss before tax		-			-			-			-			-
Net impairment losses on investment securities		-			(444	)		(312	)		-			(634	)
Total non-interest income (loss)		24,184			23,658			23,477			28,513			22,574
NON-INTEREST EXPENSE
Salaries, wages and employee benefits		31,449			31,499			31,544			30,999			29,429
Net premises and equipment		7,272			7,460			7,256			7,209			7,998
Goodwill impairment		-			-			-			8,250			-
FDIC insurance		3,457			3,411			3,641			4,056			4,097
Other operating expenses		14,659			17,123			15,524			16,049			16,133
Total non-interest expense		56,837			59,493			57,965			66,563			57,657
Income (loss) before income taxes		23,317			14,306			13,202			5,593			(324	)
Income tax expense (benefit)		4,537			5,664			895			9,132			(4,250	)
NET INCOME (LOSS)		18,780			8,642			12,307			(3,539	)		3,926
Preferred dividends and accretion of preferred discount		(1,691	)		(2,005	)		(2,006	)		(2,005	)		(2,005	)
Accelerated accretion from redemption of preferred stock		(1,452	)		-			-			-			-
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	15,637		$	6,637		$	10,301		$	(5,544	)	$	1,921

PER SHARE OF COMMON STOCK
Basic earnings (loss) available to common shareholders	$	0.10		$	0.05		$	0.08		$	(0.04	)	$	0.02
Diluted earnings (loss) available to common shareholders	$	0.10		$	0.05		$	0.08		$	(0.04	)	$	0.02
Average Shares Basic		150,461,063			134,380,086			126,102,037			126,045,667			125,875,061
Average Shares Diluted		150,765,883			134,471,788			126,255,249			126,045,667			126,039,112

SUPPLEMENTAL DATA (annualized, average) (b)
Return on Assets		0.88	%		0.38	%		0.53	%	NM				0.17	%
Return on Total Equity		6.39	%		3.00	%		4.50	%	NM				1.48	%
Return on Common Equity		5.93	%		2.65	%		4.36	%	NM				0.84	%
Return on Tangible Common Equity (1)		8.03	%		3.76	%		6.42	%	NM				1.27	%
Efficiency Ratio (3)		59.61	%		60.36	%		58.51	%		57.72	%		58.54	%

(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES

Efficiency Ratio Calculation
Non-interest expense	$	56,837		$	59,493		$	57,965		$	66,563		$	57,657
Less:
Goodwill impairment		-			-			-			8,250			-
Operating expenses	$	56,837		$	59,493		$	57,965		$	58,313		$	57,657

Net interest income (taxable equivalent)	$	71,112		$	72,849		$	72,985		$	74,055		$	72,727

Non-interest income (loss)		24,184			23,658			23,477			28,513			22,574
Less:
Gain on pension plan curtailment		-			-			-			-			4,066
Net (losses) gains from fair value changes		(51	)		(2,049	)		(2,606	)		1,543			(7,261	)
Adjusted revenue	$	95,347		$	98,556		$	99,068		$	101,025		$	98,496

Efficiency Ratio		59.61	%		60.36	%		58.51	%		57.72	%		58.54	%

(b) Ratios less than 0% are expressed as not meaningful or "NM"

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 3 of 6
Unaudited, numbers in thousands except share and per share data
	As of and for the Quarter Ended
CHARGE-OFFS	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010

Loan Charge-offs	$	18,753		$	22,456		$	23,306		$	27,316		$	27,482
Recoveries on Loans		(1,659	)		(2,443	)		(2,742	)		(2,505	)		(2,561	)
Net Loan Charge-offs	$	17,094		$	20,013		$	20,564		$	24,811		$	24,921
Net Loan Charge-offs to Average Loans (annualized)		1.31	%		1.44	%		1.43	%		1.70	%		1.69	%

NET CHARGE OFF DETAIL
Commercial and Industrial Loans and Leases	$	9,319		$	7,363		$	2,166		$	8,613		$	2,261

Commercial Real Estate-Permanent		3,946			2,903			1,655			1,509			359
Commercial Real Estate-Construction		873			1,973			12,899			6,327			18,426
Total Commercial Real Estate Loans		4,819			4,876			14,554			7,836			18,785

Residential Mortgages		1,643			5,620			1,467			5,367			2,701
Home Equity Lines and Loans		1,158			1,280			935			658			466
All other Consumer Loans		155			874			1,442			2,337			708
Total Consumer Loans		2,956			7,774			3,844			8,362			3,875

Net Loans Charged-off	$	17,094		$	20,013		$	20,564		$	24,811		$	24,921

	As of
ASSET QUALITY AND OTHER DATA	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010

Non-Accrual Commercial and Industrial Loans and Leases	$	34,122		$	34,870		$	29,878		$	33,923		$	38,675

Non-Accrual Commercial Real Estate-Permanent		15,407			17,820			15,510			12,700			13,361
Non-Accrual Commercial Real Estate-Construction		18,012			19,393			29,866			34,281			40,622
Total Non-Accrual Commercial Real Estate Loans		33,419			37,213			45,376			46,981			53,983

Non-Accrual Residential Mortgages		5,303			5,801			4,543			3,743			11,715
Non-Accrual Home Equity Lines and Loans		1,965			2,133			2,008			1,757			2,197
All other Non-Accrual Consumer Loans		1,810			2,094			1,845			2,471			4,494
Total Non-Accrual Consumer Loans		9,078			10,028			8,396			7,971			18,406

Total Non-Accrual Loans		76,619			82,111			83,650			88,875			111,064

Restructured Loans		351			-			8,544			7,324			6,653
Loans 90+ Days Past Due & Still Accruing		2,183			1,753			2,237			2,997			2,651
Total Non-performing Loans		79,153			83,864			94,431			99,196			120,368

Other Real Estate Owned & Repossessed Assets		7,653			7,453			7,818			8,974			2,386
Total Non-performing Assets	$	86,806		$	91,317		$	102,249		$	108,170		$	122,754

Allowance for Loan and Lease Losses	$	142,960		$	150,054		$	153,475		$	154,039		$	153,850
Allowance for Loan and Lease Losses/Non-Performing Loans		180.6	%		178.9	%		162.5	%		155.3	%		127.8	%
Allowance for Loan and Lease Losses/Non-Performing Assets		164.7	%		164.3	%		150.1	%		142.4	%		125.3	%
Provision/Charge-Offs, net		58.5	%		87.4	%		97.3	%		100.8	%		130.4	%
Classified Loans	$	438,275		$	479,336		$	498,631		$	512,628		$	532,048
Classified Loans/Total Loans		8.36	%		9.00	%		8.84	%		8.91	%		8.99	%
Delinquent Loans	$	25,342		$	27,807		$	33,676		$	33,171		$	31,891
Delinquent Loans/Total Loans		0.48	%		0.52	%		0.60	%		0.58	%		0.54	%


	As of
REGULATORY CAPITAL DATA	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010

Tier 1 Capital	$	889,473		$	924,143		$	850,185		$	833,526		$	810,119
Tier 1 Leverage Ratio		10.66	%		10.59	%		9.67	%		9.41	%		9.06	%
Tier 1 Ratio (%)		15.66	%		16.12	%		14.00	%		13.64	%		12.88	%
Total Capital	$	960,459		$	996,288		$	926,499		$	910,857		$	889,675
Total Capital Ratio (%)		16.91	%		17.38	%		15.26	%		14.91	%		14.15	%
Total Risk-Weighted Assets	$	5,679,122		$	5,732,730		$	6,070,678		$	6,109,763		$	6,289,618

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 4 of 6
Unaudited, numbers in thousands except share and per share data
	As of
PERIOD END BALANCES:	3/31/2011			12/31/2010			9/30/2010			6/30/2010			3/31/2010

Earning Assets / Liabilities
Loan Breakdown: (Regulatory)
Commercial/Industrial	$	808,118		$	804,602		$	878,790		$	925,661		$	972,132
Commercial Real Estate (4)		1,749,215			1,740,029			1,810,442			1,804,073			1,852,838
Residential Mortgage		1,295,014			1,294,751			1,381,117			1,412,218			1,398,640
Real Estate Construction and Land Development		270,584			339,242			375,341			404,292			463,833
Home Equity		738,629			755,829			792,496			800,378			800,394
Consumer		228,904			236,107			244,878			247,113			251,611
Other Loans		154,682			156,163			158,766			162,500			175,771
Total Loans		5,245,146			5,326,723			5,641,830			5,756,235			5,915,219

Allowance for Loan and Lease Losses/Total Loans and Leases		2.73	%		2.82	%		2.72	%		2.68	%		2.60	%

Investment Securities and Other Securities		2,235,777			2,259,690			2,255,265			2,217,597			2,244,053
Other Earning Assets		392,337			612,099			609,733			496,282			239,757
Total Earning Assets (net of loan loss reserve)	$	7,730,300		$	8,048,458		$	8,353,353		$	8,316,075		$	8,245,178
(4) Includes owner occupied

Loan Breakdown: (Internal)
Commercial & Industrial Loans and Leases
Business Purpose, Real Estate secured	$	896,521		$	948,506		$	987,551		$	991,075		$	1,024,362
Business Purpose, not secured by Real Estate		888,249			886,692			953,645			1,005,189			1,075,058
Owner Occupied Commercial Real Estate
- Permanent		578,332			552,129			556,738			556,201			570,659
- Construction / Development		38,775			37,196			38,902			38,858			42,122
Leasing		9,054			10,437			12,230			13,810			15,942
Total Commercial & Industrial Loans & Leases		2,410,931			2,434,960			2,549,066			2,605,133			2,728,143

Commercial Real Estate
Non Owner Occupied
- Permanent		819,875			768,988			855,777			868,405			865,003
- Construction / Development		206,924			281,056			312,086			335,799			365,641
Total Commercial Real Estate		1,026,799			1,050,044			1,167,863			1,204,204			1,230,644

Residential Mortgage (personal purpose)
Permanent		742,423			758,301			795,420			813,042			822,373
Construction		4,505			7,113			9,966			10,925			10,486
Total Residential Mortgages		746,928			765,414			805,386			823,967			832,859

Consumer Loans
Home Equity Loans and Direct Installment Loans		415,599			423,755			446,866			458,803			466,611
Home Equity Lines of Credit		325,186			321,369			332,074			317,469			303,246
Total Home Equity Lines and Loans		740,785			745,124			778,940			776,272			769,857

Private Banking Credit Lines		139,721			150,811			159,991			163,526			167,954
Indirect Vehicle Loans		121,014			131,416			133,297			136,177			138,536
Other		58,968			48,954			47,287			46,956			47,226
All Other Consumer Loans		319,703			331,181			340,575			346,659			353,716
Total Consumer Loans		1,060,488			1,076,305			1,119,515			1,122,931			1,123,573

Total Loans	$	5,245,146		$	5,326,723		$	5,641,830		$	5,756,235		$	5,915,219

Deposit Breakdown:
Savings	$	457,395		$	438,879		$	430,806		$	455,061		$	433,669
NOW Accounts		1,128,644			1,181,850			1,294,582			1,130,026			1,114,539
Money Market Accounts		1,655,115			1,664,620			1,714,771			1,763,631			1,724,852
CDs $100k or less		1,433,808			1,378,060			1,512,573			1,543,947			1,565,238
CDs greater than $100k		423,733			586,929			737,552			769,243			772,599
Total Interest Bearing Deposits		5,098,695			5,250,338			5,690,284			5,661,908			5,610,897
Borrowings		1,472,987			1,590,996			1,605,411			1,604,223			1,649,442
Total Interest Bearing Liabilities	$	6,571,682		$	6,841,334		$	7,295,695		$	7,266,131		$	7,260,339

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 5 of 6
Unaudited, numbers in thousands except share and per share data
	Quarterly, as of
	3/31/2011					12/31/2010					9/30/2010					6/30/2010					3/31/2010
	Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield

Total Loans	$	5,311,204		5.34	%	$	5,506,513		5.35	%	$	5,703,685		5.35	%	$	5,856,738		5.39	%	$	5,985,554		5.39	%
Investment Securities		2,245,416		4.39	%		2,274,090		4.24	%		2,227,732		4.34	%		2,248,560		4.43	%		2,184,886		4.56	%
Interest Earning Deposits and
Fed Funds Sold		508,684		0.22	%		642,204		0.25	%		535,446		0.21	%		388,434		0.23	%		411,100		0.24	%

Total Earning Assets		8,065,304		4.75	%		8,422,807		4.66	%		8,466,862		4.76	%		8,493,732		4.90	%		8,581,540		4.93	%
Total Assets		8,701,649		4.16	%		9,122,895		4.30	%		9,197,254		4.39	%		9,228,295		4.51	%		9,337,334		4.53	%

Savings		442,830		0.19	%		435,069		0.20	%		445,327		0.27	%		446,347		0.29	%		421,503		0.33	%
NOW Accounts		1,148,991		0.22	%		1,265,646		0.23	%		1,203,831		0.28	%		1,156,191		0.35	%		1,170,886		0.43	%
Money Market Accounts		1,656,059		0.59	%		1,682,091		0.60	%		1,728,823		0.82	%		1,726,437		0.87	%		1,710,084		0.97	%
CDs		1,889,073		1.76	%		2,124,910		1.85	%		2,279,366		1.92	%		2,322,483		1.97	%		2,522,020		2.03	%

Total Interest Bearing Deposits		5,136,953		0.90	%		5,507,716		0.97	%		5,657,347		1.11	%		5,651,458		1.17	%		5,824,493		1.27	%

Non-Interest Bearing Deposits		813,704					818,330					831,484					831,119					767,398
Total Deposits		5,950,657		0.78	%		6,326,046		0.84	%		6,488,831		0.96	%		6,482,577		1.02	%		6,591,891		1.12	%

Short-Term Borrowings		717,950		1.35	%		764,314		1.33	%		734,904		1.49	%		752,907		1.50	%		749,114		1.56	%
Long-Term Borrowings		793,989		4.90	%		845,423		4.75	%		844,336		4.76	%		879,339		4.74	%		885,293		4.77	%
Total Interest Bearing Liabilities
(including non-interest bearing deposits)		7,462,596		1.27	%		7,935,783		1.31	%		8,068,071		1.41	%		8,114,823		1.47	%		8,226,298		1.56	%
Total Interest Bearing Liabilities	$	6,648,892		1.43	%	$	7,117,453		1.46	%	$	7,236,587		1.57	%	$	7,283,704		1.63	%	$	7,458,900		1.72	%

Net Yield on Earning Assets: (Margin)				3.58	%				3.43	%				3.42	%				3.50	%				3.44	%

Wealth Assets:
Assets under administration	$	4,057,142				$	3,973,910				$	10,616,931				$	9,942,778				$	9,229,435
Assets under management		2,136,596					2,092,149					2,394,916					2,252,299					2,285,178
(included above)
Christiana Bank and Trust
Trust Revenues	$	-				$	862	(c)			$	1,539				$	1,607				$	1,555

(c) Through December 3, 2010

Financial Update for National Penn Bancshares (NPBC) for 3/31/2011

Page 6 of 6
Unaudited, numbers in thousands except share and per share data
		Quarterly, as of
		3/31/2011	12/31/2010	9/30/2010	6/30/2010	3/31/2010
STATES OF OPERATION AND BANKING OFFICES
	BY STATE (LATEST AVAILABLE DATA)

	PA
Total Number of Banking Offices		122	124	124	124	124
Total Number of Insured Subsidiaries
	(Bank & Thrift Subsidiaries)	1	1	1	1	1
Total Number of ATMs		132	133	132	133	133

	MD
Total Number of Banking Offices		1	1	1	1	1
Total Number of Insured Subsidiaries
	(Bank & Thrift Subsidiaries)	-	-	-	-	-
Total Number of ATMs		1	1	1	1	1

	DE
Total Number of Banking Offices		-	-	2	2	2
Total Number of Insured Subsidiaries
	(Bank & Thrift Subsidiaries)	-	-	1	1	1
Total Number of ATMs		-	-	2	2	2

	TOTAL
Total Number of Banking Offices		123	125	127	127	127
Total Number of Insured Subsidiaries
	(Bank & Thrift Subsidiaries)	1	1	2	2	2
Total Number of ATMs		133	134	135	136	136

EOP Employees (Full Time Equivalent)		1,676	1,728	1,771	1,792	1,753

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