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8-K - NATIONAL PENN BANCSHARES, INC. FORM 8-K - NATIONAL PENN BANCSHARES INCnpb8k.htm
 
 
 
 
EXHIBIT 99.1
   
   
News Release
 
 
 
National Penn Bancshares, Inc. Reports
Fourth Quarter and Full Year 2011 Results

Company Release – January 26, 2012

·
Quarterly adjusted net income1 of $0.16 per share, reported net income of $0.14 per share
·
Full-year adjusted net income1 of $0.59 per share resulting in adjusted ROA1 of 1.05%
·
Solid asset quality metrics sustained and capital levels further enhanced
·
2012 first quarter common stock cash dividend increased to $0.05 per share

BOYERTOWN, PA., January 26, 2012 -- National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $20.7 million, or $0.14 per diluted common share, for the fourth quarter of 2011, compared to a net income available to common shareholders of $6.6 million, or $0.05 per diluted common share, for the fourth quarter of 2010. On an adjusted basis1, net income for the quarter totaled $23.2 million, or $0.16 per diluted common share, compared to $13.5 million, or $0.10 per diluted common share, for the fourth quarter of 2010.  Fourth quarter 2011 adjusted net income¹ excludes an after-tax unrealized fair value adjustment on National Penn’s trust preferred securities (Nasdaq:NPBCO) of $1.0 million and after-tax reorganization expenses of $1.4 million.  For the year ended December 31, 2011, diluted earnings per common share were $0.56, while adjusted earnings per common share1 were $0.59, compared to $0.10 and $0.30, respectively, for 2010.

“Enhanced profitability in 2011 supplemented an already strong capital base and further strengthened our financial position,” said Scott Fainor, president and CEO of National Penn. “I am proud of our team, which has remained focused on achieving our strategic goals and on sustaining improvement in asset quality metrics. The strength of our balance sheet is a competitive advantage that has been recognized by Forbes Magazine which recently ranked National Penn 15th of the 100 largest banks on its list of America’s Best Banks2.”

Asset quality in 2011 improved steadily and remained strong relative to peers with all key measures improving from 2010 levels. During 2011, classified loans declined by 23%,  total non-performing assets declined by 16%, and the ratio of net loan charge-offs to average loans improved to 0.74% from 1.57%. These asset quality trends resulted in a provision for loan losses of $15.0 million for 2011, compared to $95.0 million for 2010.  While the provision declined, the allowance for loan and lease losses to non-performing loans remained strong at 184% at December 31, 2011, compared to 179% at year-end 2010.

Actions taken to maintain the net interest margin in a prolonged low interest rate environment, including managed reductions in higher-cost deposits, improvements in deposit mix and balance sheet restructuring initiatives, resulted in a relatively stable net interest margin throughout 2011.  Net interest margin for the full year 2011 was 3.52%, compared to 3.45% in 2010 and was 3.49% in the fourth quarter of 2011, as compared to 3.46% in the previous quarter.
 
 
 


 
2 Forbes December 2011 “America’s Best and Worst Banks.”
 
 
 
 
 
 
 
5

 
 


Despite the increased costs of regulatory compliance, National Penn’s operating expenses remained well-controlled throughout 2011.  Operating expenses1 totaled $55.2 million in the fourth quarter and $221 million for the full year. Compared to 2010, expenses were relatively flat and resulted in an efficiency ratio of 59.03%1 for 2011.

Internal generation of capital and the benefit of the previously announced Warburg Pincus investment increased the tangible common equity to tangible assets ratio to 11.04% from 8.27% at period-end 2010. The total risk based capital ratio at December 31, 2011 was 18.38% compared to 17.38% at December 31, 2010.

The strength of these fundamentals provided the basis for an increase in the common stock cash dividend to $0.05 per share for the first quarter of 2012, payable on February 17, 2012 to shareholders of record on February 4, 2012.

Scott Fainor stated, “Given the accomplishments of 2011, National Penn is a clean, strong and efficient company positioned for growth.  Three consecutive common stock dividend increases, combined with our strong fundamentals and financial performance, resulted in improved returns to our shareholders.”

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 $8.5 billion in assets, is a bank holding company based in Pennsylvania.  Headquartered in Boyertown, National Penn operates 122 branch offices comprising 121 branches in Pennsylvania and one branch in Maryland through National Penn Bank and its HomeTowne Heritage Bank, KNBT and Nittany Bank divisions.
 
National Penn’s financial services affiliates are 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.

 
 
 
 
 
 
 
 
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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 and return on assets exclude the effects of certain gains and losses, adjusted for taxes when applicable. Adjusted net income and returns provide methods 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.
 
 
 
 

 
 
7

 
 
 
 
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 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 Dodd-Frank Act and regulations adopted or 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.

 
 
 
 
 
 
8

 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                       
                               
Unaudited, dollars in thousands except share and per share data
                         
   
As of
         
   
12/31/2011
   
9/30/2011
   
12/31/2010
             
SUMMARY BALANCE SHEET
                             
Total assets
  $ 8,486,281     $ 8,611,641     $ 8,844,620              
Investment securities and other securities
    2,314,111       2,373,278       2,259,690              
Total loans and leases
    5,188,101       5,161,275       5,326,723              
Deposits
    5,874,819       5,992,991       6,059,173              
Borrowings
    1,370,399       1,410,212       1,590,996              
Shareholders' equity
    1,180,687       1,164,204       1,137,437              
Tangible book value per common share (2)
  $ 5.97     $ 5.86     $ 5.18              
Tangible common equity / tangible assets (2)
    11.04 %     10.66 %     8.27 %            
                                     
   
Three Months Ended
 
Twelve Months Ended
 
   
12/31/2011
   
9/30/2011
   
12/31/2010
   
12/31/2011
   
12/31/2010
 
EARNINGS
                                   
Total interest income
  $ 83,681     $ 86,055     $ 93,745     $ 346,834     $ 387,249  
Total interest expense
    19,160       21,638       26,104       86,931       116,017  
Net interest income
    64,521       64,417       67,641       259,903       271,232  
Provision for loan and lease losses
    2,000       -       17,500       15,000       95,000  
Net interest income after provision for loan and lease losses
    62,521       64,417       50,141       244,903       176,232  
          Loss on sale of building
    -       (1,000 )     -       (1,000 )     -  
          Net (losses) from fair value changes on subordinated debentures
    (1,543 )     (506 )     (2,049 )     (2,530 )     (10,373 )
          Loss on debt extinguishment
    (1,635 )     (998 )     -       (2,633 )     -  
          Net gains on sales of investment securities
    1,697       1,022       -       2,719       214  
Other non-interest income
    22,978       24,623       25,707       94,654       108,381  
          Goodwill impairment
    -       -       -       -       8,250  
          Corporate reorganization expense
    2,200       -       -       2,200       -  
Other non-interest expense
    55,186       55,053       59,493       221,197       233,426  
Income before income taxes
    26,632       32,505       14,306       112,716       32,778  
Income tax expense
    5,889       7,692       5,664       25,172       11,441  
Net income
    20,743       24,813       8,642       87,544       21,337  
          Preferred dividends and accretion of preferred discount
    -       -       (2,005 )     (1,691 )     (8,021 )
          Accelerated accretion from redemption of preferred stock
    -       -       -       (1,452 )     -  
Net income available to common shareholders
  $ 20,743     $ 24,813     $ 6,637     $ 84,401     $ 13,316  
                                         
PERFORMANCE RATIOS
                                       
Net interest margin
    3.49 %     3.46 %     3.43 %     3.52 %     3.45 %
Return on average assets
    0.97 %     1.15 %     0.38 %     1.02 %     0.23 %
Return on average total shareholders' equity
    7.02 %     8.59 %     3.00 %     7.58 %     1.95 %
Return on average tangible common equity (1)
    9.17 %     11.33 %     3.76 %     9.95 %     2.07 %
                                         
PER SHARE
                                       
Basic earnings available to common shareholders
  $ 0.14     $ 0.16     $ 0.05     $ 0.56     $ 0.10  
Diluted earnings available to common shareholders
    0.14       0.16       0.05       0.56       0.10  
Dividends per common share
    0.04       0.03       0.01       0.09       0.04  
Average shares - basic
    151,773,327       151,693,223       134,380,086       151,386,614       128,118,298  
Average shares - diluted
    152,068,706       151,927,269       134,471,788       151,653,646       128,186,651  
                                         
                                         
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES
 
Three Months Ended
   
Twelve Months Ended
 
   
12/31/2011
   
9/30/2011
   
12/31/2010
   
12/31/2011
   
12/31/2010
 
Return on average tangible common equity
                                       
Return on average shareholders' equity
    7.02 %     8.59 %     3.00 %     7.58 %     1.95 %
     Effect of preferred equity
    -       -       -0.35 %     -0.08 %     -0.54 %
     Effect of goodwill and intangibles
    2.15 %     2.74 %     1.11 %     2.45 %     0.66 %
     Return on average tangible common equity
    9.17 %     11.33 %     3.76 %     9.95 %     2.07 %
Average tangible equity:
                                       
     Average shareholders' equity
  $ 1,172,273     $ 1,145,679     $ 1,141,979     $ 1,155,209     $ 1,094,642  
     Average preferred equity
    -       -       (148,377 )     (30,106 )     (148,184 )
     Average goodwill and intangibles
    (274,827 )     (276,439 )     (292,855 )     (277,214 )     (303,541 )
     Average total tangible common equity
  $ 897,446     $ 869,240     $ 700,747     $ 847,889     $ 642,917  
                                         
Adjusted net income reconciliation
                                       
Net income available to common shareholders
  $ 20,743     $ 24,813     $ 6,637     $ 84,401     $ 13,316  
     After tax gain on pension plan curtailment
    -       -       -       -       (2,643 )
     After tax unrealized fair market value loss on subordinated debentures
                                       
     Corporate reorganization expense
    1,430       -       -       1,430       -  
     Accelerated accretion from redemption of preferred stock
    -       -       -       1,452       -  
     Tax expense from sale of Christiana
    -       -       5,486       -       5,486  
     BOLI tax expense
    -       -       -       -       8,081  
     Goodwill impairment
    -       -       -       -       8,250  
Adjusted net income available to common shareholders
  $ 23,176     $ 24,813     $ 13,455     $ 88,928     $ 39,233  
                                         
Earnings per share
                                       
Net income available to common shareholders
  $ 0.14     $ 0.16     $ 0.05     $ 0.56     $ 0.10  
     After tax gain on pension plan curtailment
    -       -       -       -       (0.02 )
     After tax unrealized fair market value loss on subordinated debentures
                                       
     Corporate reorganization expense
    0.01       -       -       0.01       -  
     Accelerated accretion from redemption of preferred stock
    -       -       -       0.01       -  
     Tax expense from sale of Christiana
    -       -       0.04       -       0.05  
     BOLI tax expense
    -       -       -       -       0.06  
     Goodwill impairment
    -       -       -       -       0.06  
Adjusted net income available to common shareholders
  $ 0.16     $ 0.16     $ 0.10     $ 0.59     $ 0.30  
 
 
9

 
 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                         
                               
                               
Unaudited, dollars in thousands except share and per share data
 
As of
   
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
 
BALANCE SHEET - ASSETS
                             
Cash and due from banks
  $ 129,637     $ 116,057     $ 105,918     $ 113,031     $ 90,283  
Interest-earning deposits with banks
    321,885       422,942       513,132       392,337       612,099  
Total cash and cash equivalents
    451,522       538,999       619,050       505,368       702,382  
                                         
Investment securities available for sale, at fair value
    1,747,019       1,790,654       1,696,682       1,622,395       1,632,118  
Investment securities held to maturity
    496,574       509,773       518,578       535,488       546,957  
Other securities
    70,518       72,851       75,308       77,894       80,615  
Loans held for sale
    12,216       17,144       8,852       5,561       12,785  
                                         
Loans and leases
    5,175,885       5,144,131       5,170,074       5,239,585       5,313,938  
Allowance for loan and lease losses
    (126,640 )     (131,073 )     (137,909 )     (142,960 )     (150,054 )
Loans and leases, net
    5,049,245       5,013,058       5,032,165       5,096,625       5,163,884  
                                         
Premises and equipment, net
    96,198       100,880       103,017       103,771       105,483  
Accrued interest receivable
    30,991       33,110       31,862       34,264       33,829  
Bank owned life insurance
    138,274       137,017       136,606       135,373       134,154  
Other real estate owned and other repossessed assets
    7,716       8,029       8,407       7,653       7,453  
Goodwill
    258,279       258,279       258,279       258,279       258,279  
Other intangible assets, net
    15,770       17,370       18,970       20,530       22,217  
Unconsolidated investments under the equity method
    12,173       11,927       12,327       12,211       11,482  
Other assets
    99,786       102,550       113,038       127,855       132,982  
TOTAL ASSETS
  $ 8,486,281     $ 8,611,641     $ 8,633,141     $ 8,543,267     $ 8,844,620  
                                         
BALANCE SHEET - LIABILITIES
                                       
Non-interest bearing deposits
  $ 863,703     $ 833,311     $ 839,811     $ 834,321     $ 808,835  
Interest bearing deposits
    5,011,116       5,159,680       5,104,350       5,098,695       5,250,338  
Total deposits
    5,874,819       5,992,991       5,944,161       5,933,016       6,059,173  
                                         
Customer repurchase agreements
    523,978       500,099       573,628       531,256       569,455  
Structured repurchase agreements
    85,000       140,000       165,000       165,000       165,000  
Short-term borrowings
    -       6,400       6,390       6,184       10,000  
Federal Home Loan Bank advances
    616,111       619,946       627,332       627,716       703,761  
Subordinated debentures
    145,310       143,767       143,261       142,831       142,780  
Accrued interest payable and other liabilities
    60,376       44,234       39,856       39,655       57,014  
TOTAL LIABILITIES
    7,305,594       7,447,437       7,499,628       7,445,658       7,707,183  
                                         
BALANCE SHEET - SHAREHOLDERS' EQUITY
                                       
Preferred stock
    -       -       -       -       148,441  
Common stock
    1,383,082       1,380,728       1,379,690       1,379,014       1,292,342  
Retained deficit
    (223,189 )     (237,862 )     (258,125 )     (279,817 )     (293,940 )
Accumulated other comprehensive income/(loss)
    20,794       21,338       11,948       (1,588 )     (9,406 )
TOTAL SHAREHOLDERS' EQUITY
    1,180,687       1,164,204       1,133,513       1,097,609       1,137,437  
                                         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 8,486,281     $ 8,611,641     $ 8,633,141     $ 8,543,267     $ 8,844,620  
                                         
                                         
COMMON SHARE AND PER SHARE DATA
                                       
Book Value
  $ 7.77     $ 7.67     $ 7.47     $ 7.24     $ 7.23  
Tangible Book Value (2)
  $ 5.97     $ 5.86     $ 5.65     $ 5.40     $ 5.18  
Dividends
  $ 0.04     $ 0.03     $ 0.01     $ 0.01     $ 0.01  
Shares Outstanding (end of period, net of treasury)
    151,883,036       151,714,696       151,660,444       151,506,511       136,792,414  
                                         
                                         
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
                                 
Total shareholders' equity
  $ 1,180,687     $ 1,164,204     $ 1,133,513     $ 1,097,609     $ 1,137,437  
Total preferred shareholders' equity
    -       -       -       -       (148,441 )
Goodwill and intangibles
    (274,049 )     (275,649 )     (277,249 )     (278,809 )     (280,496 )
Tangible common equity
  $ 906,638     $ 888,555     $ 856,264     $ 818,800     $ 708,500  
Common shares outstanding
    151,883,036       151,714,696       151,660,444       151,506,511       136,792,414  
Tangible book value per share
  $ 5.97     $ 5.86     $ 5.65     $ 5.40     $ 5.18  
                                         
Total assets
  $ 8,486,281     $ 8,611,641     $ 8,633,141     $ 8,543,267     $ 8,844,620  
Goodwill and intangibles
    (274,049 )     (275,649 )     (277,249 )     (278,809 )     (280,496 )
Tangible assets
  $ 8,212,232     $ 8,335,992     $ 8,355,892     $ 8,264,458     $ 8,564,124  
Tangible common equity/tangible assets
    11.04 %     10.66 %     10.25 %     9.91 %     8.27 %
 
 
 
 
 
 
 
10

 
 
 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                               
                                           
                                           
Unaudited, dollars in thousands except share and per share data
 
For the Quarter
 Ended
   
For the Twelve Months Ended
 
   
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
   
12/31/2011
   
12/31/2010
 
INTEREST INCOME
                                         
Loans and leases, including fees
  $ 64,040     $ 65,795     $ 67,553     $ 69,228     $ 73,496     $ 266,616     $ 306,207  
Investment securities
                                                       
Taxable
    11,310       11,591       11,552       11,357       11,272       45,810       44,984  
Tax-exempt
    8,076       8,337       8,401       8,493       8,569       33,307       34,906  
Deposits with banks
    255       332       234       280       408       1,101       1,152  
Total interest income
    83,681       86,055       87,740       89,358       93,745       346,834       387,249  
INTEREST EXPENSE
                                                       
Deposits
    8,272       9,881       10,974       11,407       13,411       40,534       63,929  
Customer repurchase agreements
    556       593       645       712       847       2,506       4,180  
Structured repurchase agreements
    1,316       1,697       1,701       1,683       1,720       6,397       6,826  
Short-term borrowings
    -       -       -       -       -       -       -  
Federal Home Loan Bank advances
    6,987       7,073       7,039       7,217       7,732       28,316       31,537  
Subordinated debentures
    2,029       2,394       2,386       2,369       2,394       9,178       9,545  
Total interest expense
    19,160       21,638       22,745       23,388       26,104       86,931       116,017  
Net interest income
    64,521       64,417       64,995       65,970       67,641       259,903       271,232  
Provision for loan and lease losses
    2,000       -       3,000       10,000       17,500       15,000       95,000  
Net interest income after provision for loan and lease losses
    62,521       64,417       61,995       55,970       50,141       244,903       176,232  
NON-INTEREST INCOME
                                                       
Wealth management income
    5,616       6,227       5,856       5,924       6,917       23,623       28,253  
Service charges on deposit accounts
    4,608       4,880       4,616       4,664       5,358       18,768       21,564  
Insurance commissions and fees
    3,107       3,406       3,520       3,221       3,423       13,254       14,332  
Cash management and electronic banking fees
    4,613       4,590       4,645       4,371       4,584       18,219       17,904  
Mortgage banking income
    1,481       1,349       1,014       1,080       2,590       4,924       7,398  
Bank owned life insurance income
    1,288       1,733       1,233       1,220       1,501       5,474       5,932  
Earnings of unconsolidated investments
    246       99       116       1,700       140       2,161       799  
Other operating income
    2,019       2,339       1,818       2,055       1,638       8,231       9,523  
Gain on pension plan curtailment
    -       -       -       -       -       -       4,066  
Loss on sale of building
    -       (1,000 )     -       -       -       (1,000 )     -  
Net (losses) from fair value changes on subordinated debentures
    (1,543 )     (506 )     (430 )     (51 )     (2,049 )     (2,530 )     (10,373 )
Loss on debt extinguishment
    (1,635 )     (998 )     -       -       -       (2,633 )     -  
Net gains on sales of investment securities
    1,697       1,022       -       -       -       2,719       214  
Impairment losses on investment securities:
                                                       
Impairment losses on investment securities
    -       -       -       -       (444 )     -       (1,390 )
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 )     -       (1,390 )
Total non-interest income
    21,497       23,141       22,388       24,184       23,658       91,210       98,222  
NON-INTEREST EXPENSE
                                                       
Salaries, wages and employee benefits
    29,598       30,809       30,408       31,449       31,499       122,264       123,471  
Net premises and equipment
    7,652       7,228       6,787       7,272       7,460       28,939       29,923  
FDIC insurance
    1,442       2,213       2,726       3,457       3,411       9,838       15,205  
Corporate reorganization expense
    2,200       -       -       -       -       2,200       -  
Goodwill impairment
    -       -       -       -       -       -       8,250  
Other operating expenses
    16,494       14,803       14,200       14,659       17,123       60,156       64,827  
Total non-interest expense
    57,386       55,053       54,121       56,837       59,493       223,397       241,676  
Income before income taxes
    26,632       32,505       30,262       23,317       14,306       112,716       32,778  
Income tax expense
    5,889       7,692       7,054       4,537       5,664       25,172       11,441  
NET INCOME
    20,743       24,813       23,208       18,780       8,642       87,544       21,337  
Preferred dividends and accretion of preferred discount
    -       -       -       (1,691 )     (2,005 )     (1,691 )     (8,021 )
Accelerated accretion from redemption of preferred stock
    -       -       -       (1,452 )     -       (1,452 )     -  
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
  $ 20,743     $ 24,813     $ 23,208     $ 15,637     $ 6,637     $ 84,401     $ 13,316  
                                                         
PER SHARE OF COMMON STOCK
                                                       
Basic earnings available to common shareholders
  $ 0.14     $ 0.16     $ 0.15     $ 0.10     $ 0.05     $ 0.56     $ 0.10  
Diluted earnings available to common shareholders
  $ 0.14     $ 0.16     $ 0.15     $ 0.10     $ 0.05     $ 0.56     $ 0.10  
Average Shares Basic
    151,773,327       151,693,223       151,601,052       150,461,063       134,380,086       151,386,614       128,118,298  
Average Shares Diluted
    152,068,706       151,927,269       151,835,402       150,765,883       134,471,788       151,653,646       128,186,651  
                                                         
SUPPLEMENTAL DATA  (annualized, average)
                                                       
Return on Assets
    0.97 %     1.15 %     1.08 %     0.88 %     0.38 %     1.02 %     0.23 %
Return on Total Equity
    7.02 %     8.59 %     8.37 %     6.39 %     3.00 %     7.58 %     1.95 %
Return on Common Equity
    7.02 %     8.59 %     8.37 %     5.93 %     2.65 %     7.50 %     1.41 %
Return on Tangible Common Equity (1)
    9.17 %     11.33 %     11.16 %     8.03 %     3.76 %     9.95 %     2.07 %
Efficiency Ratio (3)
    59.73 %     58.54 %     58.25 %     59.61 %     60.36 %     59.03 %     58.78 %
                                                         
                                                         
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
                                         
                                                         
Efficiency Ratio Calculation
                                                       
Non-interest expense
  $ 57,386     $ 55,053     $ 54,121     $ 56,837     $ 59,493     $ 223,397     $ 241,676  
Less:
                                                       
Corporate reorganization expense
    2,200       -       -       -       -       2,200       -  
Goodwill impairment
    -       -       -       -       -       -       8,250  
Operating expenses
  $ 55,186     $ 55,053     $ 54,121     $ 56,837     $ 59,493     $ 221,197     $ 233,426  
                                                         
Net interest income (taxable equivalent)
  $ 69,409     $ 69,426     $ 70,087     $ 71,112     $ 72,849     $ 280,034     $ 292,615  
                                                         
Non-interest income (loss)
    21,497       23,141       22,388       24,184       23,658       91,210       98,222  
Less:
                                                       
Gain on pension plan curtailment
    -       -       -       -       -       -       4,066  
Loss on sale of building
    -       (1,000 )     -       -       -       (1,000 )     -  
Loss on debt extinguishment
    (1,635 )     (998 )     -       -       -       (2,633 )     -  
Net (losses) from fair value changes on subordinated debentures
    (1,543 )     (506 )     (430 )     (51 )     (2,049 )     (2,530 )     (10,373 )
Net gains on sales of investment securities
    1,697       1,022       -       -       -       2,719       -  
Adjusted revenue
  $ 92,387     $ 94,049     $ 92,905     $ 95,347     $ 98,556     $ 374,688     $ 397,144  
                                                         
Efficiency Ratio
    59.73 %     58.54 %     58.25 %     59.61 %     60.36 %     59.03 %     58.78 %
 
 
 
 
 
 
 
 
11

 
 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                             
                                           
                                           
Unaudited, dollars in thousands except share and per share data
                               
   
As of and for the Quarter Ended
   
For the Twelve Months Ended
 
CHARGE-OFFS
 
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
   
12/31/2011
   
12/31/2010
 
                                           
Loan Charge-offs
  $ 9,896     $ 8,374     $ 10,512     $ 18,753     $ 22,456     $ 47,535     $ 100,560  
Recoveries on Loans
    (3,463 )     (1,538 )     (2,461 )     (1,659 )     (2,443 )     (9,121 )     (10,251 )
Net Loan Charge-offs
  $ 6,433     $ 6,836     $ 8,051     $ 17,094     $ 20,013     $ 38,414     $ 90,309  
Net Loan Charge-offs to Average Loans (annualized)
    0.50 %     0.53 %     0.61 %     1.31 %     1.44 %     0.74 %     1.57 %
                                                         
NET CHARGE OFF DETAIL
                                                       
Commercial and Industrial Loans and Leases
  $ 2,648     $ 1,962     $ 5,066     $ 9,319     $ 7,363     $ 18,995     $ 20,402  
                                                         
Commercial Real Estate-Permanent
    517       83       1,242       3,946       2,903       5,788       6,427  
Commercial Real Estate-Construction
    (1,337 )     2,637       828       873       1,973       3,001       39,626  
Total Commercial Real Estate Loans
    (820 )     2,720       2,070       4,819       4,876       8,789       46,053  
                                                         
Residential Mortgages
    993       998       483       1,643       5,620       4,117       15,156  
Home Equity Lines and Loans
    2,429       596       833       1,158       1,280       5,016       3,338  
All other Consumer Loans
    1,183       560       (401 )     155       874       1,497       5,360  
Total Consumer Loans
    4,605       2,154       915       2,956       7,774       10,630       23,854  
                                                         
Net Loans Charged-off
  $ 6,433     $ 6,836     $ 8,051     $ 17,094     $ 20,013     $ 38,414     $ 90,309  
                                                         
   
As of
               
ASSET QUALITY AND OTHER DATA
 
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
                 
                                                         
Non-Accrual Commercial and Industrial Loans and Leases
  $ 31,081     $ 29,995     $ 31,275     $ 34,122     $ 34,869                  
                                                         
Non-Accrual Commercial Real Estate-Permanent
    7,403       8,314       11,879       15,407       17,821                  
Non-Accrual Commercial Real Estate-Construction
    12,218       14,549       15,844       18,012       19,392                  
Total Non-Accrual Commercial Real Estate Loans
    19,621       22,863       27,723       33,419       37,213                  
                                                         
Non-Accrual Residential Mortgages
    4,504       4,472       5,196       5,303       5,802                  
Non-Accrual Home Equity Lines and Loans
    3,046       1,763       1,527       1,965       2,133            
 
 
All other Non-Accrual Consumer Loans
    3,176       1,907       2,062       1,810       2,094                  
Total Non-Accrual Consumer Loans
    10,726       8,142       8,785       9,078       10,029                  
                                                         
Total Non-Accrual Loans
    61,428       61,000       67,783       76,619       82,111                  
                                                         
Restructured Loans
    5,548       4,372       3,833       351       -                  
Loans 90+ Days Past Due & Still Accruing
    2,010       1,408       1,567       2,183       1,753                  
Total Non-performing Loans
    68,986       66,780       73,183       79,153       83,864                  
                                                         
Other Real Estate Owned & Repossessed Assets
    7,716       8,029       8,407       7,653       7,453                  
Total Non-performing Assets
  $ 76,702     $ 74,809     $ 81,590     $ 86,806     $ 91,317                  
                                                         
Allowance for Loan and Lease Losses
  $ 126,640     $ 131,073     $ 137,909     $ 142,960     $ 150,054                  
Allowance for Loan and Lease Losses/Non-Performing Loans
    183.6 %     196.3 %     188.4 %     180.6 %     178.9 %                
Allowance for Loan and Lease Losses/Non-Performing Assets
    165.1 %     175.2 %     169.0 %     164.7 %     164.3 %                
Provision/Charge-Offs, net
    31.1 %     0.0 %     37.3 %     58.5 %     87.4 %                
Classified Loans
  $ 370,439     $ 374,850     $ 403,145     $ 438,275     $ 479,336                  
Classified Loans/Total Loans and Leases
    7.14 %     7.26 %     7.78 %     8.36 %     9.00 %                
Delinquent Loans
  $ 24,801     $ 28,824     $ 20,413     $ 25,342     $ 27,806                  
Delinquent Loans/Total Loans and Leases
    0.48 %     0.56 %     0.39 %     0.48 %     0.52 %                
                                                         
                                                         
   
As of
               
REGULATORY CAPITAL DATA
 
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
                 
                                                         
Tier 1 Capital
  $ 978,302     $ 955,766     $ 922,457     $ 889,473     $ 924,143                  
Tier 1 Leverage Ratio
    12.00 %     11.63 %     11.20 %     10.66 %     10.59 %                
Tier 1 Ratio (%)
    17.12 %     16.85 %     16.43 %     15.66 %     16.12 %                
Total Capital
  $ 1,050,417     $ 1,027,393     $ 992,729     $ 960,459     $ 996,288                  
Total Capital Ratio (%)
    18.38 %     18.12 %     17.68 %     16.91 %     17.38 %                
Total Risk-Weighted Assets
  $ 5,714,643     $ 5,670,722     $ 5,615,341     $ 5,679,123     $ 5,732,730                  
 
 
 
 
 
 
 
 
 
12

 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                         
                               
                               
Unaudited, dollars in thousands except share and per share data
                         
   
As of
 
PERIOD END BALANCES:
 
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
 
                               
Earning Assets / Liabilities
                             
Loan Breakdown:  (Regulatory)
                             
Commercial/Industrial
  $ 833,534     $ 813,356     $ 838,489     $ 808,118     $ 804,602  
Commercial Real Estate (1)
    1,737,383       1,697,975       1,715,616       1,749,215       1,740,029  
Residential Mortgage
    1,270,896       1,272,478       1,295,463       1,295,014       1,294,751  
Real Estate Construction and Land Development
    212,306       216,250       207,643       270,584       339,242  
Home Equity
    771,792       766,299       764,467       738,629       755,829  
Consumer
    209,082       213,014       213,570       228,904       236,107  
Other Loans
    153,108       181,903       143,678       154,682       156,163  
Total Loans
    5,188,101       5,161,275       5,178,926       5,245,146       5,326,723  
                                         
Allowance for Loan and Lease Losses/Total Loans and Leases
    2.44 %     2.54 %     2.66 %     2.73 %     2.82 %
                                         
Investment Securities and Other Securities
    2,314,111       2,373,278       2,290,568       2,235,777       2,259,690  
Other Earning Assets
    321,885       422,942       513,132       392,337       612,099  
Total Earning Assets (net of loan loss reserve)
  $ 7,697,457     $ 7,826,422     $ 7,844,717     $ 7,730,300     $ 8,048,458  
(1) Includes owner occupied
                                       
                                         
Loan Breakdown: (Internal)
                                       
Commercial & Industrial Loans and Leases
                                       
Business Purpose, Real Estate secured
  $ 895,028     $ 892,952     $ 884,606     $ 896,521     $ 948,506  
Business Purpose, not secured by Real Estate
    919,720       927,631       913,115       888,249       886,692  
Owner Occupied Commercial Real Estate
                                       
- Permanent
    563,963       566,732       577,092       578,332       552,129  
- Construction / Development
    36,631       28,927       27,003       38,775       37,196  
Leasing
    4,685       5,796       7,125       9,054       10,437  
Total Commercial & Industrial Loans & Leases
    2,420,027       2,422,038       2,408,941       2,410,931       2,434,960  
                                         
Commercial Real Estate
                                       
Non Owner Occupied
                                       
- Permanent
    855,524       798,106       818,564       819,875       768,988  
- Construction / Development
    156,064       168,537       171,063       206,924       281,056  
Total Commercial Real Estate
    1,011,588       966,643       989,627       1,026,799       1,050,044  
                                         
Consumer Loans
                                       
Residential Mortgage (personal purpose)
                                       
Permanent
    704,655       709,342       719,578       736,862       745,516  
Construction
    5,667       7,606       5,909       4,505       7,113  
Total Residential Mortgages
    710,322       716,948       725,487       741,367       752,629  
                                         
Home Equity Loans and Direct Installment Loans
    337,242       362,808       388,173       415,599       423,755  
Home Equity Lines of Credit
    410,316       394,386       367,127       325,186       321,369  
Total Home Equity Lines and Loans
    747,558       757,194       755,300       740,785       745,124  
                                         
Private Banking Credit Lines
    121,296       112,011       119,850       139,721       150,811  
Indirect Vehicle Loans and Other
    165,094       169,297       170,869       179,982       180,370  
All Other Consumer Loans
    286,390       281,308       290,719       319,703       331,181  
Total Consumer Loans
    1,744,270       1,755,450       1,771,506       1,801,855       1,828,934  
                                         
Loans and Leases
    5,175,885       5,144,131       5,170,074       5,239,585       5,313,938  
                                         
Loans Held for Sale
    12,216       17,144       8,852       5,561       12,785  
                                         
Total Loans and Leases
  $ 5,188,101     $ 5,161,275     $ 5,178,926     $ 5,245,146     $ 5,326,723  
                                         
Deposit Breakdown:
                                       
Savings
  $ 454,003     $ 451,767     $ 464,055     $ 457,395     $ 438,879  
NOW Accounts
    1,293,148       1,311,819       1,158,161       1,128,644       1,181,850  
Money Market Accounts
    1,686,909       1,651,185       1,631,779       1,655,115       1,664,620  
CDs less than $100k
    1,138,908       1,213,798       1,261,026       1,433,808       1,378,060  
CDs $100k or greater
    438,148       531,111       589,329       423,733       586,929  
Total Interest Bearing Deposits
    5,011,116       5,159,680       5,104,350       5,098,695       5,250,338  
                                         
Non-Interest Bearing Deposits
    863,703       833,311       839,811       834,321       808,835  
                                         
Total Deposits
  $ 5,874,819     $ 5,992,991     $ 5,944,161     $ 5,933,016     $ 6,059,173  
 
 
 
 
 
 
 
13

 
 
 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                       
                                                                                     
                                                                                     
Unaudited, dollars in thousands except share and per share data
   
Quarterly, as of
         
Twelve Months, as of
       
   
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
 
12/31/2010
 
12/31/2011
 
12/31/2010
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
   
Avg Bal
   
Yield
 
                                                                                     
Total Loans
  $ 5,149,546       4.99 %   $ 5,122,557       5.15 %   $ 5,228,365       5.24 %   $ 5,311,204       5.34 %   $ 5,506,513       5.35 %   $ 5,202,255       5.18 %   $ 5,761,647       5.37 %
Investment Securities
    2,355,178       3.97 %     2,287,630       4.21 %     2,258,355       4.32 %     2,245,416       4.39 %     2,274,090       4.24 %     2,286,948       4.22 %     2,234,045       4.39 %
Interest Earning Deposits
    390,228       0.26 %     543,410       0.24 %     467,157       0.20 %     508,684       0.22 %     642,204       0.25 %     477,226       0.23 %     495,042       0.23 %
                                                                                                                 
Total Earning Assets
    7,894,952       4.45 %     7,953,597       4.54 %     7,953,877       4.68 %     8,065,304       4.75 %     8,422,807       4.66 %     7,966,429       4.61 %     8,490,734       4.81 %
Total Assets
    8,525,271       3.89 %     8,588,269       3.98 %     8,599,923       4.09 %     8,701,649       4.16 %     9,122,895       4.30 %     8,603,252       4.03 %     9,220,791       4.43 %
                                                                                                                 
Savings
    454,688       0.15 %     456,271       0.18 %     462,870       0.18 %     442,830       0.19 %     435,069       0.20 %     454,203       0.18 %     437,796       0.27 %
NOW Accounts
    1,269,670       0.17 %     1,211,663       0.18 %     1,188,644       0.22 %     1,148,991       0.22 %     1,265,646       0.23 %     1,205,092       0.20 %     1,195,331       0.32 %
Money Market Accounts
    1,669,090       0.44 %     1,647,975       0.59 %     1,638,733       0.60 %     1,656,059       0.59 %     1,682,091       0.60 %     1,652,986       0.55 %     1,715,233       0.81 %
CDs
    1,668,098       1.36 %     1,798,414       1.47 %     1,857,969       1.66 %     1,889,073       1.76 %     2,124,910       1.85 %     1,802,769       1.57 %     2,311,017       1.95 %
                                                                                                                 
Total Interest Bearing Deposits
    5,061,546       0.65 %     5,114,323       0.77 %     5,148,216       0.85 %     5,136,953       0.90 %     5,507,716       0.97 %     5,115,050       0.79 %     5,659,377       1.13 %
                                                                                                                 
Non-Interest Bearing Deposits
    835,699               837,953               837,635               813,704               818,330               831,326               812,275          
Total Deposits
    5,897,245       0.56 %     5,952,276       0.66 %     5,985,851       0.74 %     5,950,657       0.78 %     6,326,046       0.84 %     5,946,376       0.68 %     6,471,652       0.99 %
                                                                                                                 
Customer repurchase agreements
    514,961       0.43 %     512,847       0.46 %     522,147       0.50 %     546,100       0.53 %     592,234       0.57 %     523,898       0.48 %     578,409       0.72 %
Structured repurchase agreements
    128,968       4.05 %     163,098       4.13 %     165,000       4.13 %     165,000       4.14 %     165,000       4.14 %     155,438       4.12 %     165,000       4.14 %
Short-term borrowings
    6,638       0.00 %     6,732       0.00 %     6,713       0.00 %     6,850       0.00 %     7,080       0.00 %     6,733       0.00 %     6,900       0.00 %
Federal Home Loan Bank advances
    616,411       4.50 %     623,713       4.50 %     627,525       4.50 %     651,208       4.49 %     704,670       4.35 %     629,603       4.50 %     725,651       4.35 %
Subordinated debentures
    143,800       5.60 %     143,266       6.63 %     142,836       6.70 %     142,781       6.73 %     140,753       6.75 %     143,174       6.41 %     137,785       6.93 %
Total Deposits and borrowings
    7,308,023       1.04 %     7,401,932       1.16 %     7,450,072       1.22 %     7,462,596       1.27 %     7,935,783       1.31 %     7,405,222       1.17 %     8,085,397       1.43 %
Total Interest Bearing Liabilities
  $ 6,472,324       1.17 %   $ 6,563,979       1.31 %   $ 6,612,437       1.38 %   $ 6,648,892       1.43 %   $ 7,117,453       1.46 %   $ 6,573,896       1.32 %     7,273,122       1.60 %
                                                                                                                 
Net Yield on Earning Assets: (Margin)
            3.49 %             3.46 %             3.53 %             3.58 %             3.43 %             3.52 %             3.45 %
                                                                                                                 
Wealth Assets:
                                                                                                               
Assets under administration
  $ 4,197,612             $ 4,067,918             $ 4,364,447             $ 4,057,142             $ 3,973,910                                          
Assets under management
    2,141,737               2,118,076               2,247,042               2,136,596               2,092,149                                          
(included above)
                                                                                                               
Christiana Bank and Trust
                                                                                                               
Trust Revenues
  $ -             $ -             $ -             $ -             $ 862    
(a)
    $ -             $ 5,563    
(a)
 
                                                                                                             
(a) Through December 3, 2010
                                                                                               
 
 
 
 
 
 
 
14

 
 
 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2011
                   
                               
                               
Unaudited, dollars in thousands except share and per share data
                   
   
Quarterly, as of
 
   
12/31/2011
   
9/30/2011
   
6/30/2011
   
3/31/2011
   
12/31/2010
 
STATES OF OPERATION AND BANKING OFFICES
                         
BY STATE (LATEST AVAILABLE DATA)
                             
                               
PA
                             
Total Number of Banking Offices
    121       122       122       122       124  
Total Number of Insured Subsidiaries
                                       
(Bank & Thrift Subsidiaries)
    1       1       1       1       1  
Total Number of ATMs
    128       129       131       132       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  
                                         
TOTAL
                                       
Total Number of Banking Offices
    122       123       123       123       125  
Total Number of Insured Subsidiaries
                                       
(Bank & Thrift Subsidiaries)
    1       1       1       1       1  
Total Number of ATMs
    129       130       132       133       134  
                                         
EOP Employees (Full Time Equivalent)
    1,688       1,683       1,700       1,676       1,728  
 
 
 
 
 
 
 
15