National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $25.3 million, or $0.17 per diluted common share, for the first quarter of 2012 compared to $20.7 million, or $0.14 per diluted common share, for the fourth quarter of 2011. Net income available to common shareholders increased 62% from $15.6 million, or $0.10 per diluted common share, for the first quarter of 2011. On an adjusted basis 1, net income for the quarter totaled $24.2 million, or $0.16 per diluted common share, consistent with the fourth quarter of 2011 and a 45% increase over the prior year period. First quarter 2012 adjusted net income¹ excluded an after-tax unrealized fair value gain on National Penn’s trust preferred securities (Nasdaq: NPBCO) of $1.1 million.
“National Penn reported another quarter of consistent earnings resulting in a strong return on assets of 1.16% 1,” said Scott V. Fainor, president and CEO of National Penn. “The strength of the balance sheet, as reflected by our asset quality metrics and capital levels, allowed for our fourth consecutive quarterly dividend increase and the previously announced share repurchase authorization. We believe these results and the continued execution of our strategic initiatives position us well for future opportunities.”
The net interest margin for the first quarter of 2012 increased 6 basis points to 3.55% from 3.49% in the prior quarter, while net interest income remained stable and totaled $63.8 million. Total loans and leases increased $13.6 million from December 31, 2011 with growth attributable to a focus on commercial lending which increased by $40.5 million, or 4.7% on an annualized basis. Total consumer loans, including residential mortgage loans, declined $26.9 million during the first quarter of 2012, primarily due to prepayments and the sale of a majority of new mortgage originations in the secondary market. The first quarter net interest margin benefitted from a reduction of higher-cost deposits, and as a result the cost of deposits decreased five basis points during the quarter to 0.51%. Deposit mix also continued to improve as transaction and savings accounts increased $297 million from March 31, 2011 and comprised 74% of total deposits compared to 69%. Additionally, the full-quarter effect of the previously announced actions taken late in the fourth quarter of 2011 to terminate certain higher-costing structured repurchase agreements contributed to the improvement in the net interest margin.
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