National Penn Bancshares, Inc. Reports Second Quarter 2012 Results

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $22.4 million, or $0.15 per diluted share, for the second quarter of 2012, compared to $25.3 million, or $0.17 per diluted share, for the first quarter of 2012. First quarter 2012 included an after tax unrealized fair value gain of $0.01 per common share on National Penn’s trust preferred securities (Nasdaq: NPBCO). For the second quarter of 2011, net income available to common shareholders totaled $23.2 million, or $0.15 per diluted share. Year-to-date 2012 net income available to common shareholders totaled $47.8 million, or $0.31 per diluted share, an increase of 23% from $38.8 million, or $0.26 per diluted share, in the prior year.

Return on average assets was 1.14% for the first six months of 2012. Supported by the strength of National Penn’s capital position, the quarterly common stock cash dividend was increased for the fifth consecutive quarter to $0.09 per share for the third quarter. Also during the second quarter, National Penn repurchased approximately 2.2 million common shares under the previously announced program authorizing the repurchase of up to 7.5 million shares.

“The consistency of our financial results is a reflection of our culture of delivering on our strategic objectives every day with a sense of urgency and accountability,” said Scott V. Fainor, president and CEO of National Penn. “The strength of our balance sheet continues to provide opportunities to enhance shareholder value through increasing dividends and returning capital to our shareholders.”

Due to the continued low interest rate environment, net interest income contracted slightly for the quarter ended June 30, 2012 and totaled $63.2 million compared to $63.8 million in the first quarter. Net interest margin for the second quarter was 3.48% compared to 3.55% for the first quarter of 2012 and 3.53% a year ago. Average loans and leases grew by $17.6 million in the second quarter of 2012. The increase was primarily attributable to growth in commercial loans. The balance of total consumer loans, including residential mortgages, was stable on a linked-quarter basis as a result of prepayments and the sale of residential mortgage loans in the secondary market. A decline in loan and investment yields due to lower reinvestment rates was mitigated by continued efforts to manage funding costs, as total deposit costs declined by four basis points during the second quarter to 0.47%. The maturity of $80 million of FHLB advances during the second quarter 2012 also provided some benefit to net interest margin.

A significant decline in classified loans contributed to National Penn’s strong asset quality metrics. Classified loans declined 25% since June 30, 2011, of which 13% occurred during the second quarter of 2012. The continuing positive trend in classified loans, as well as an 11% decline in non-performing loans and stable net charge-offs in the second quarter, resulted in a provision for loan and lease losses of $2.0 million, consistent with the provision in the prior quarter. The coverage ratio of allowance for loan and lease losses to non-performing loans was 198% at June 30, 2012.

Total fee income from banking, wealth and insurance operations remained stable on a linked-quarter basis. Ongoing evaluation and management of expenses resulted in a stable efficiency ratio at 58.4% 1 for the quarter ended June 30, 2012.

Strong internal generation of capital provided the basis for the increased quarterly dividend and share repurchases in the quarter and continued to support National Penn’s substantial capital position. As of June 30, 2012, the ratio of tangible common equity to tangible assets was 11.43% 1 and the tier 1 common and total capital ratios were 15.04% and 18.71%, respectively.

Scott V. Fainor stated “The National Penn team has once again delivered solid returns during this period of slow economic recovery. We remain competitively positioned and focused on utilizing the significant strength of our balance sheet to continue to enhance shareholder value going forward.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.4 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 121 branch offices comprising 120 branches in Pennsylvania and one branch in Maryland through National Penn Bank and its 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.

1 Statement 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.

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: regulatory requirements or other actions mandated by National Penn’s regulators, 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), deterioration in the credit quality of loans, the effect of credit risk exposure, the geographic concentration of National Penn’s operations, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, National Penn’s ability to raise capital and maintain capital levels; increases in operating costs (including those mandated by National Penn’s regulators), competition for personnel and from other financial institutions, variations in interest rates, interruptions or breaches of National Penn’s security systems, the development and maintenance of National Penn’s information technology, the ability of National Penn and its subsidiaries to pay dividends, and the nature and frequency of litigation and other similar proceedings to which National Penn may be a party . 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, 2011, 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, Inc. (NPBC) for 6/30/2012
         
 
 
Unaudited, dollars in thousands except share and per share data
As of
  6/30/2012       3/31/2012       6/30/2011  
SUMMARY BALANCE SHEET            
Total assets $ 8,395,864 $ 8,524,035 $ 8,633,141
Investment securities and other securities 2,316,894 2,335,421 2,290,568
Total loans and leases 5,210,767 5,201,656 5,178,926
Deposits 5,845,543 5,888,383 5,944,161
Borrowings 1,298,477 1,387,235 1,515,611
Shareholders' equity 1,199,760 1,200,830 1,133,513
Tangible book value per common share (2) $ 6.18 $ 6.09 $ 5.65
Tangible common equity / tangible assets (2) 11.43 % 11.25 % 10.25 %
 
Three Months Ended Six Months Ended
  6/30/2012       3/31/2012       6/30/2011     6/30/2012       6/30/2011  
EARNINGS                  
Total interest income $ 79,896 $ 81,414 $ 87,740 $ 161,310 $ 177,098
Total interest expense   16,697       17,596       22,745     34,293       46,133  
Net interest income 63,199 63,818 64,995 127,017 130,965
Provision for loan and lease losses   2,000       2,000       3,000     4,000       13,000  
Net interest income after provision for loan and lease losses 61,199 61,818 61,995 123,017 117,965
Net (losses) gains from fair value changes on subordinated debentures (810 ) 1,645 (430 ) 835 (481 )
Net (losses) gains on investment securities (277 ) - - (277 ) -
Other non-interest income 21,543 22,596 22,818 44,139 47,053
Other non-interest expense   52,269       52,440       54,121     104,709       110,958  
Income before income taxes 29,386 33,619 30,262 63,005 53,579
Income tax expense   6,938       8,317       7,054     15,255       11,591  
Net income   22,448       25,302       23,208     47,750       41,988  
Preferred dividends and accretion of preferred discount - - - - (1,691 )
Accelerated accretion from redemption of preferred stock   -       -       -     -       (1,452 )
Net income available to common shareholders $ 22,448     $ 25,302     $ 23,208   $ 47,750     $ 38,845  
 
PERFORMANCE RATIOS                  
Net interest margin 3.48 % 3.55 % 3.53 % 3.52 % 3.56 %
Return on average assets 1.07 % 1.21 % 1.08 % 1.14 % 0.98 %
Adjusted return on average assets (3) 1.09 % 1.16 % 1.08 % 1.13 % 0.95 %
Return on average total shareholders' equity 7.50 % 8.56 % 8.37 % 8.03 % 7.35 %
Return on average tangible common equity (1) 9.69 % 11.12 % 11.16 % 10.40 % 9.65 %
Efficiency ratio (4) 58.42 % 57.47 % 58.25 % 57.94 % 58.94 %
 
PER SHARE                  
Basic earnings available to common shareholders $ 0.15 $ 0.17 $ 0.15 $ 0.31 $ 0.26
Diluted earnings available to common shareholders 0.15 0.17 0.15 0.31 0.26
Dividends per common share 0.07 0.05 0.01 0.12 0.02
Average shares - basic 151,732,402 152,099,546 151,601,052 151,915,974 151,034,207
Average shares - diluted 152,011,995 152,392,315 151,835,402 152,202,155 151,303,597
                     
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES Three Months Ended Six Months Ended
  6/30/2012       3/31/2012       6/30/2011     6/30/2012       6/30/2011  
Return on average tangible common equity
Return on average shareholders' equity 7.50 % 8.56 % 8.37 % 8.03 % 7.35 %
Effect of preferred equity - - - - -0.17 %
Effect of goodwill and intangibles   2.19 %   2.56 %   2.79 %   2.37 %   2.47 %
Return on average tangible common equity   9.69 %   11.12 %   11.16 %   10.40 %   9.65 %
Average tangible equity:
Average shareholders' equity $ 1,203,757 $ 1,188,384 $ 1,112,114 $ 1,196,071 $ 1,151,379
Average preferred equity - - - - (60,710 )
Average goodwill and intangibles   (271,990 )   (273,360 )   (278,022 )   (272,675 )   (278,820 )
Average total tangible common equity $ 931,767   $ 915,024   $ 834,092   $ 923,396   $ 811,849  
 
Adjusted net income reconciliation
Net income available to common shareholders $ 22,448 $ 25,302 $ 23,208 $ 47,750 $ 38,845
After tax unrealized fair market value loss (gain) on subordinated debentures 527 (1,069 ) 280 (543 ) 313
Accelerated accretion from redemption of preferred stock   -     -     -     -     1,452  
Adjusted net income available to common shareholders $ 22,975   $ 24,233   $ 23,488   $ 47,207   $ 40,610  
 
Earnings per share
Net income available to common shareholders $ 0.15 $ 0.17 $ 0.15 $ 0.31 $ 0.26
After tax unrealized fair market value loss (gain) on subordinated debentures - (0.01 ) - (0.01 ) -
Accelerated accretion from redemption of preferred stock   -     -     -     -     0.01  
Adjusted net income available to common shareholders $ 0.15   $ 0.16   $ 0.15   $ 0.30   $ 0.27  
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
         
 
 
Unaudited, dollars in thousands except share and per share data As of
  6/30/2012       3/31/2012       12/31/2011       9/30/2011       6/30/2011  
BALANCE SHEET - ASSETS
Cash and due from banks $ 115,564 $ 108,752 $ 129,637 $ 116,057 $ 105,918
Interest-earning deposits with banks   221,419     344,427     321,885     422,942     513,132  
Total cash and cash equivalents 336,983 453,179 451,522 538,999 619,050
 
Investment securities available-for-sale, at fair value 1,769,359 1,779,613 1,747,019 1,790,654 1,696,682
Investment securities held-to-maturity 481,341 487,507 496,574 509,773 518,578
Other securities 66,194 68,301 70,518 72,851 75,308
Loans held-for-sale 16,908 16,909 12,216 17,144 8,852
 
Loans and leases 5,193,859 5,184,747 5,175,885 5,144,131 5,170,074
Allowance for loan and lease losses   (116,650 )   (121,452 )   (126,640 )   (131,073 )   (137,909 )
Loans and leases, net 5,077,209 5,063,295 5,049,245 5,013,058 5,032,165
 
Premises and equipment, net 96,566 95,937 96,198 100,880 103,017
Accrued interest receivable 30,511 31,241 30,991 33,110 31,862
Bank owned life insurance 140,747 139,507 138,274 137,017 136,606
Other real estate owned and other repossessed assets 7,201 7,647 7,716 8,029 8,407
Goodwill 258,279 258,279 258,279 258,279 258,279
Other intangible assets, net 13,085 14,408 15,770 17,370 18,970
Unconsolidated investments under the equity method 10,109 11,699 12,173 11,927 12,327
Other assets   91,372     96,513     99,786     102,550     113,038  
TOTAL ASSETS $ 8,395,864   $ 8,524,035   $ 8,486,281   $ 8,611,641   $ 8,633,141  
 
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits $ 903,766 $ 884,025 $ 863,703 $ 833,311 $ 839,811
Interest bearing deposits   4,941,777     5,004,358     5,011,116     5,159,680     5,104,350  
Total deposits 5,845,543 5,888,383 5,874,819 5,992,991 5,944,161
 
Customer repurchase agreements 533,389 542,706 523,978 500,099 573,628
Structured repurchase agreements 85,000 85,000 85,000 140,000 165,000
Short-term borrowings - - - 6,400 6,390
Federal Home Loan Bank advances 535,613 615,863 616,111 619,946 627,332
Subordinated debentures 144,475 143,666 145,310 143,767 143,261
Accrued interest payable and other liabilities   52,084     47,587     60,376     44,234     39,856  
TOTAL LIABILITIES   7,196,104     7,323,205     7,305,594     7,447,437     7,499,628  
 
BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock 1,386,177 1,384,657 1,383,082 1,380,728 1,379,690
Accumulated deficit (193,715 ) (205,497 ) (223,189 ) (237,862 ) (258,125 )
Accumulated other comprehensive income 25,435 21,670 20,794 21,338 11,948
Treasury stock   (18,137 )   -     -     -     -  
TOTAL SHAREHOLDERS' EQUITY   1,199,760     1,200,830     1,180,687     1,164,204     1,133,513  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,395,864   $ 8,524,035   $ 8,486,281   $ 8,611,641   $ 8,633,141  
 
 
COMMON SHARE AND PER SHARE DATA
Book value $ 7.98 $ 7.88 $ 7.77 $ 7.67 $ 7.47
Tangible book value (2) $ 6.18 $ 6.09 $ 5.97 $ 5.86 $ 5.65
Dividends $ 0.07 $ 0.05 $ 0.04 $ 0.03 $ 0.01
Shares outstanding (end of period, net of treasury) 150,258,232 152,295,895 151,883,036 151,714,696 151,660,444
                     
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity $ 1,199,760 $ 1,200,830 $ 1,180,687 $ 1,164,204 $ 1,133,513
Goodwill and intangibles   (271,364 )   (272,687 )   (274,049 )   (275,649 )   (277,249 )
Tangible common equity $ 928,396   $ 928,143   $ 906,638   $ 888,555   $ 856,264  
Common shares outstanding 150,258,232 152,295,895 151,883,036 151,714,696 151,660,444
Tangible book value per share $ 6.18 $ 6.09 $ 5.97 $ 5.86 $ 5.65
 
Total assets $ 8,395,864 $ 8,524,035 $ 8,486,281 $ 8,611,641 $ 8,633,141
Goodwill and intangibles   (271,364 )   (272,687 )   (274,049 )   (275,649 )   (277,249 )
Tangible assets $ 8,124,500   $ 8,251,348   $ 8,212,232   $ 8,335,992   $ 8,355,892  
Tangible common equity/tangible assets 11.43 % 11.25 % 11.04 % 10.66 % 10.25 %
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income available to common shareholders (1) $ 22,975 $ 24,233 $ 23,176 $ 24,813 $ 23,208
Average assets $ 8,473,164 $ 8,397,381 $ 8,525,271 $ 8,588,269 $ 8,599,923
Adjusted return on average assets (annualized) 1.09 % 1.16 % 1.08 % 1.15 % 1.08 %
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
             
 
 
Unaudited, dollars in thousands except share and per share data For the Quarter Ended For the Six Months Ended
  6/30/2012       3/31/2012       12/31/2011       9/30/2011       6/30/2011     6/30/2012       6/30/2011  
INTEREST INCOME
Loans and leases, including fees $ 61,116 $ 62,291 $ 64,040 $ 65,795 $ 67,553 $ 123,407 $ 136,781
Investment securities
Taxable 10,941 11,209 11,310 11,591 11,552 22,150 22,909
Tax-exempt 7,636 7,781 8,076 8,337 8,401 15,417 16,894
Deposits with banks   203     133     255     332     234     336     514  
Total interest income   79,896     81,414     83,681     86,055     87,740     161,310     177,098  
INTEREST EXPENSE
Deposits 6,879 7,294 8,272 9,881 10,974 14,173 22,381
Customer repurchase agreements 545 550 556 593 645 1,095 1,357
Structured repurchase agreements 915 915 1,316 1,697 1,701 1,830 3,384
Short-term borrowings - - - - - - -
Federal Home Loan Bank advances 6,501 6,967 6,987 7,073 7,039 13,468 14,256
Subordinated debentures   1,857     1,870     2,029     2,394     2,386     3,727     4,755  
Total interest expense   16,697     17,596     19,160     21,638     22,745     34,293     46,133  
Net interest income 63,199 63,818 64,521 64,417 64,995 127,017 130,965
Provision for loan and lease losses   2,000     2,000     2,000     -     3,000     4,000     13,000  
Net interest income after provision for loan and lease losses   61,199     61,818     62,521     64,417     61,995     123,017     117,965  
NON-INTEREST INCOME
Wealth management income 6,005 6,161 5,616 6,227 5,856 12,166 11,780
Service charges on deposit accounts 3,753 3,823 4,608 4,880 4,616 7,576 9,280
Insurance commissions and fees 3,211 3,296 3,107 3,406 3,520 6,507 6,741
Cash management and electronic banking fees 4,707 4,420 4,613 4,590 4,645 9,127 9,016
Mortgage banking income 1,511 1,335 1,481 1,349 1,014 2,846 2,094
Bank owned life insurance income 1,255 1,209 1,288 1,733 1,233 2,464 2,453
Earnings (losses) of unconsolidated investments 108 (74 ) 246 99 116 34 1,816
Other operating income 993 2,426 2,019 2,339 1,818 3,419 3,873
Loss on sale of building - - - (1,000 ) - - -
Net (losses) gains from fair value changes on subordinated debentures (810 ) 1,645 (1,543 ) (506 ) (430 ) 835 (481 )
Loss on debt extinguishment - - (1,635 ) (998 ) - - -
Net (losses) gains on sales of investment securities (123 ) - 1,697 1,022 - (123 ) -
Impairment losses on investment securities:
Credit related losses on investment securities (154 ) - - - - (154 ) -

Non credit-related losses on securities not expected to be sold recognized in other comprehensive loss before tax
  -     -     -     -     -     -     -  
Net impairment losses on investment securities   (154 )   -     -     -     -     (154 )   -  
Total non-interest income   20,456     24,241     21,497     23,141     22,388     44,697     46,572  
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 31,234 31,381 29,598 30,809 30,408 62,615 61,857
Premises and equipment 7,349 6,853 7,652 7,228 6,787 14,202 14,059
FDIC insurance 1,211 1,264 1,442 2,213 2,726 2,475 6,183
Corporate reorganization expense - - 2,200 - - - -
Other operating expenses   12,475     12,942     16,494     14,803     14,200     25,417     28,859  
Total non-interest expense   52,269     52,440     57,386     55,053     54,121     104,709     110,958  
Income before income taxes 29,386 33,619 26,632 32,505 30,262 63,005 53,579
Income tax expense   6,938     8,317     5,889     7,692     7,054     15,255     11,591  
NET INCOME   22,448     25,302     20,743     24,813     23,208     47,750     41,988  
Preferred dividends and accretion of preferred discount - - - - - - (1,691 )
Accelerated accretion from redemption of preferred stock   -     -     -     -     -     -     (1,452 )
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 22,448   $ 25,302   $ 20,743   $ 24,813   $ 23,208   $ 47,750   $ 38,845  
 
PER SHARE OF COMMON STOCK
Basic earnings available to common shareholders $ 0.15 $ 0.17 $ 0.14 $ 0.16 $ 0.15 $ 0.31 $ 0.26
Diluted earnings available to common shareholders $ 0.15 $ 0.17 $ 0.14 $ 0.16 $ 0.15 $ 0.31 $ 0.26
Average shares - basic 151,732,402 152,099,546 151,773,327 151,693,223 151,601,052 151,915,974 151,034,207
Average shares - diluted 152,011,995 152,392,315 152,068,706 151,927,269 151,835,402 152,202,155 151,303,597
 
SUPPLEMENTAL DATA (annualized, average)
Return on assets 1.07 % 1.21 % 0.97 % 1.15 % 1.08 % 1.14 % 0.98 %
Adjusted return on assets (3) 1.09 % 1.16 % 1.08 % 1.15 % 1.08 % 1.13 % 0.95 %
Return on total equity 7.50 % 8.56 % 7.02 % 8.59 % 8.37 % 8.03 % 7.35 %
Return on common equity 7.50 % 8.56 % 7.02 % 8.59 % 8.37 % 8.03 % 7.18 %
Return on tangible common equity (1) 9.69 % 11.12 % 9.17 % 11.33 % 11.16 % 10.40 % 9.65 %
Efficiency ratio (4) 58.42 % 57.47 % 59.73 % 58.54 % 58.25 % 57.94 % 58.94 %
                             
 
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency Ratio Calculation
Non-interest expense $ 52,269 $ 52,440 $ 57,386 $ 55,053 $ 54,121 $ 104,709 $ 110,958
Less:

Corporate reorganization expense
  -     -     2,200     -     -     -     -  
Operating expenses $ 52,269   $ 52,440   $ 55,186   $ 55,053   $ 54,121   $ 104,709   $ 110,958  
 
Net interest income (taxable equivalent) $ 67,929 $ 68,645 $ 69,409 $ 69,426 $ 70,087 $ 136,574 $ 141,199
 
Non-interest income 20,456 24,241 21,497 23,141 22,388 44,697 46,572
Less:
Loss on sale of building - - - (1,000 ) - - -
Loss on debt extinguishment - - (1,635 ) (998 ) - - -
Net (losses) gains from fair value changes on subordinated debentures (810 ) 1,645 (1,543 ) (506 ) (430 ) 835 (481 )
Net (losses) gains on investment securities   (277 )   -     1,697     1,022     -     (277 )   -  
Adjusted revenue $ 89,472   $ 91,241   $ 92,387   $ 94,049   $ 92,905   $ 180,713   $ 188,252  
 
Efficiency Ratio   58.42 %   57.47 %   59.73 %   58.54 %   58.25 %   57.94 %   58.94 %
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
             
 
 
Unaudited, dollars in thousands except share and per share data
As of and for the Quarter Ended For the Six Months Ended
CHARGE-OFFS   6/30/2012       3/31/2012       12/31/2011       9/30/2011       6/30/2011     6/30/2012       6/30/2011  
 
Loan charge-offs $ 7,907   $ 8,722   $ 9,896   $ 8,374   $ 10,512   $ 16,629   $ 29,265  
Recoveries on loans   (1,105 )   (1,534 )   (3,463 )   (1,538 )   (2,461 )   (2,639 )   (4,120 )
Net loan charge-offs $ 6,802   $ 7,188   $ 6,433   $ 6,836   $ 8,051   $ 13,990   $ 25,145  
Net loan charge-offs to average loans (annualized)   0.53 %   0.56 %   0.50 %   0.53 %   0.61 %   0.54 %   0.96 %
 
NET CHARGE-OFF DETAIL
Commercial and industrial loans and leases $ 5,196 $ 1,925 $ 2,648 $ 1,962 $ 5,066 $ 7,121 $ 14,385
 
Commercial real estate-permanent 595 1,933 517 83 1,242 2,528 5,188
Commercial real estate-construction   (148 )   673     (1,337 )   2,637     828     525     1,701  
Total commercial real estate loans 447 2,606 (820 ) 2,720 2,070 3,053 6,889
 
Residential mortgages 328 560 993 998 483 888 2,126
Home equity lines and loans 404 1,855 2,429 596 833 2,259 1,991
All other consumer loans   427     242     1,183     560     (401 )   669     (246 )
Total consumer loans   1,159     2,657     4,605     2,154     915     3,816     3,871  
 
Net loans charged-off $ 6,802   $ 7,188   $ 6,433   $ 6,836   $ 8,051   $ 13,990   $ 25,145  
 
As of
ASSET QUALITY AND OTHER DATA   6/30/2012       3/31/2012       12/31/2011       9/30/2011       6/30/2011  
 
Non-accrual commercial and industrial loans and leases $ 33,984 $ 32,485 $ 31,081 $ 29,995 $ 31,275
 
Non-accrual commercial real estate-permanent 2,999 5,156 7,403 8,314 11,879
Non-accrual commercial real estate-construction   6,959     14,336     12,218     14,549     15,844  
Total non-accrual commercial real estate loans 9,958 19,492 19,621 22,863 27,723
 
Non-accrual residential mortgages 4,301 4,077 4,504 4,472 5,196
Non-accrual home equity lines and loans 2,555 2,110 3,046 1,763 1,527
All other non-accrual consumer loans   1,753     1,695     3,176     1,907     2,062  
Total non-accrual consumer loans 8,609 7,882 10,726 8,142 8,785
         
Total non-accrual loans 52,551 59,859 61,428 61,000 67,783
 
Restructured loans   6,468     6,506     5,548     4,372     3,833  
Total non-performing loans 59,019 66,365 66,976 65,372 71,616
 
Other real estate owned and repossessed assets   7,201     7,647     7,716     8,029     8,407  
Total non-performing assets   66,220     74,012     74,692     73,401     80,023  
 
Loans 90+ days past due & still accruing   3,426     1,588     2,010     1,408     1,567  
Total non-performing assets and loans 90+ days past due $ 69,646   $ 75,600   $ 76,702   $ 74,809   $ 81,590  
         
Allowance for loan and lease losses $ 116,650   $ 121,452   $ 126,640   $ 131,073   $ 137,909  
Allowance for loan and lease losses/non-performing loans   197.6 %   183.0 %   189.1 %   200.5 %   192.6 %
Allowance for loan and lease losses/non-performing assets and loans 90+ days past due   167.5 %   160.7 %   165.1 %   175.2 %   169.0 %
Allowance for loan and lease losses/total loans and leases   2.24 %   2.33 %   2.44 %   2.54 %   2.66 %
Provision/charge-offs, net   29.4 %   27.8 %   31.1 %   0.0 %   37.3 %
Classified loans $ 301,542   $ 347,033   $ 370,439   $ 374,850   $ 403,145  
Classified loans/total loans and leases   5.79 %   6.67 %   7.14 %   7.26 %   7.78 %
Delinquent loans (a) $ 24,144   $ 24,068   $ 24,801   $ 28,824   $ 20,413  
Delinquent loans/total loans and leases   0.46 %   0.46 %   0.48 %   0.56 %   0.39 %
 
 
As of
REGULATORY CAPITAL DATA   6/30/2012       3/31/2012       12/31/2011       9/30/2011       6/30/2011  
 
Tier 1 Capital $ 1,008,052   $ 1,005,009   $ 978,302   $ 955,766   $ 922,457  
Tier 1 Leverage Ratio   12.44 %   12.53 %   12.00 %   11.63 %   11.20 %
Tier 1 Ratio (%)   17.45 %   17.46 %   17.12 %   16.85 %   16.43 %
Total Capital $ 1,080,807   $ 1,077,587   $ 1,050,417   $ 1,027,393   $ 992,729  
Total Capital Ratio (%)   18.71 %   18.72 %   18.38 %   18.12 %   17.68 %
Total Risk-Weighted Assets $ 5,776,537   $ 5,757,306   $ 5,714,643   $ 5,670,722   $ 5,615,341  
 
(a) Includes loans 30-89 days past due and loans 90+ days past due and still accruing
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
         
 
 
Unaudited, dollars in thousands except share and per share data
As of
PERIOD END BALANCES:   6/30/2012     3/31/2012     12/31/2011     9/30/2011     6/30/2011
 
Earning Assets / Liabilities
Loan portfolio composition (regulatory):
Commercial / industrial $ 856,237 $ 853,379 $ 833,534 $ 813,356 $ 838,489
Commercial real estate (a) 1,759,792 1,753,986 1,737,383 1,697,975 1,715,616
Residential mortgage 1,262,633 1,269,505 1,270,896 1,272,478 1,295,463
Real estate construction and land development 194,942 210,976 212,306 216,250 207,643
Home equity 765,902 756,803 771,792 766,299 764,467
Consumer 207,999 210,069 209,082 213,014 213,570
Other loans   163,262   146,938   153,108   181,903   143,678
Total loans 5,210,767 5,201,656 5,188,101 5,161,275 5,178,926
 
 
Investment securities and other securities 2,316,894 2,335,421 2,314,111 2,373,278 2,290,568
Other earning assets   221,419   344,427   321,885   422,942   513,132
Total earning assets (net of loan loss reserve) $ 7,632,430 $ 7,760,052 $ 7,697,457 $ 7,826,422 $ 7,844,717
(a) Includes owner occupied
 
Loan portfolio composition (internal):
Commercial & industrial loans and leases
Business purpose, real estate secured $ 879,413 $ 864,284 $ 895,028 $ 892,952 $ 884,606
Business purpose, not secured by real estate 975,852 963,641 919,720 927,631 913,115
Owner occupied commercial real estate
- Permanent 572,686 572,103 563,963 566,732 577,092
- Construction / development 36,451 38,546 36,631 28,927 27,003
Leasing   2,670   3,330   4,685   5,796   7,125
Total commercial & industrial loans and leases 2,467,072 2,441,904 2,420,027 2,422,038 2,408,941
 
Commercial real estate
Non-owner occupied
- Permanent 874,570 878,499 855,524 798,106 818,564
- Construction / development   140,751   151,697   156,064   168,537   171,063
Total commercial real estate 1,015,321 1,030,196 1,011,588 966,643 989,627
 
Consumer loans
Residential mortgage (personal purpose)
Permanent 688,171 686,974 704,655 709,342 719,578
Construction   6,806   7,835   5,667   7,606   5,909
Total residential mortgages 694,977 694,809 710,322 716,948 725,487
 
Home equity loans and direct installment loans 291,383 315,419 337,242 362,808 388,173
Home equity lines of credit   452,599   421,897   410,316   394,386   367,127
Total home equity lines and loans 743,982 737,316 747,558 757,194 755,300
 
Private banking credit lines 107,398 114,667 121,296 112,011 119,850
Indirect vehicle loans and other   165,109   165,855   165,094   169,297   170,869
All other consumer loans   272,507   280,522   286,390   281,308   290,719
Total consumer loans 1,711,466 1,712,647 1,744,270 1,755,450 1,771,506
 
Loans and leases 5,193,859 5,184,747 5,175,885 5,144,131 5,170,074
 
Loans held-for-sale 16,908 16,909 12,216 17,144 8,852
         
Total loans and leases $ 5,210,767 $ 5,201,656 $ 5,188,101 $ 5,161,275 $ 5,178,926
 
Deposit composition:
Savings $ 497,640 $ 495,191 $ 454,003 $ 451,767 $ 464,055
NOW accounts 1,317,399 1,294,591 1,293,148 1,311,819 1,158,161
Money market accounts 1,641,947 1,698,427 1,686,909 1,651,185 1,631,779
CDs less than $100k 1,063,688 1,089,601 1,138,908 1,213,798 1,261,026
CDs $100k or greater   421,103   426,548   438,148   531,111   589,329
Total interest bearing deposits   4,941,777   5,004,358   5,011,116   5,159,680   5,104,350
 
Non-interest bearing deposits   903,766   884,025   863,703   833,311   839,811
 
Total deposits $ 5,845,543 $ 5,888,383 $ 5,874,819 $ 5,992,991 $ 5,944,161
 
                           
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
 
 
 
Unaudited, dollars in thousands except share and per share data
 
Quarterly, as of Six Months, as of
6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011 6/30/2012   6/30/2011
Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total loans* $ 5,196,803 4.78 % $ 5,179,220 4.89 % $ 5,149,546 4.99 % $ 5,122,557 5.15 % $ 5,228,365 5.24 % $ 5,188,012 4.83 % $ 5,269,556 5.29 %
Investment securities* 2,319,392 3.93 % 2,318,109 4.02 % 2,355,178 3.97 % 2,287,630 4.21 % 2,258,355 4.32 % 2,318,751 3.98 % 2,251,921 4.35 %
Interest earning deposits   334,935 0.24 %   278,140 0.19 %   390,228 0.26 %   543,410 0.24 %   467,157 0.20 %   306,537 0.22 %   487,806 0.21 %
 
Total earning assets   7,851,130 4.34 %   7,775,469 4.46 %   7,894,952 4.45 %   7,953,597 4.54 %   7,953,877 4.68 %   7,813,300 4.40 %   8,009,283 4.72 %
Total assets   8,473,164   8,397,381   8,525,271   8,588,269   8,599,923   8,435,272   8,650,505
 
Savings 494,800 0.12 % 471,562 0.13 % 454,688 0.15 % 456,271 0.18 % 462,870 0.18 % 483,181 0.13 % 452,905 0.19 %
NOW accounts 1,343,961 0.15 % 1,238,704 0.15 % 1,269,670 0.17 % 1,211,663 0.18 % 1,188,644 0.22 % 1,291,332 0.15 % 1,168,927 0.22 %
Money market accounts 1,664,315 0.37 % 1,679,232 0.40 % 1,669,090 0.44 % 1,647,975 0.59 % 1,638,733 0.60 % 1,671,773 0.38 % 1,647,348 0.59 %
CDs   1,499,016 1.27 %   1,542,539 1.31 %   1,668,098 1.36 %   1,798,414 1.47 %   1,857,969 1.66 %   1,520,777 1.29 %   1,873,435 1.71 %
 
Total interest bearing deposits   5,002,092 0.55 %   4,932,037 0.59 %   5,061,546 0.65 %   5,114,323 0.77 %   5,148,216 0.85 %   4,967,063 0.57 %   5,142,615 0.88 %
 
Non-interest bearing deposits   891,739   852,730   835,699   837,953   837,635   872,234   825,736
Total deposits   5,893,831 0.47 %   5,784,767 0.51 %   5,897,245 0.56 %   5,952,276 0.66 %   5,985,851 0.74 %   5,839,297 0.49 %   5,968,351 0.76 %
 
Customer repurchase agreements 525,142 0.42 % 524,575 0.42 % 514,961 0.43 % 512,847 0.46 % 522,147 0.50 % 524,859 0.42 % 534,057 0.51 %
Structured repurchase agreements 85,000 4.33 % 85,000 4.33 % 128,968 4.05 % 163,098 4.13 % 165,000 4.13 % 85,000 4.33 % 165,000 4.14 %
Short-term borrowings - 0.00 % - 0.00 % 6,638 0.00 % 6,732 0.00 % 6,713 0.00 % - 0.00 % 6,781 0.00 %
Federal Home Loan Bank advances 575,725 4.54 % 615,983 4.55 % 616,411 4.50 % 623,713 4.50 % 627,525 4.50 % 595,854 4.55 % 639,301 4.50 %
Subordinated debentures   143,683 5.20 %   145,274 5.18 %   143,800 5.60 %   143,266 6.63 %   142,836 6.70 %   144,479 5.19 %   142,808 6.72 %
Total deposits and borrowings   7,223,381 0.93 %   7,155,599 0.99 %   7,308,023 1.04 %   7,401,932 1.16 %   7,450,072 1.22 %   7,189,489 0.96 %   7,456,298 1.25 %
Total interest bearing liabilities $ 6,331,642 1.06 % $ 6,302,869 1.12 % $ 6,472,324 1.17 % $ 6,563,979 1.31 % $ 6,612,437 1.38 % $ 6,317,255 1.09 %   6,630,562 1.40 %
 
Net interest margin (FTE) 3.48 % 3.55 % 3.49 % 3.46 % 3.53 % 3.52 % 3.56 %
 
Wealth assets:
Assets under administration $ 4,361,134 $ 4,382,922 $ 4,197,612 $ 4,067,918 $ 4,364,447
Assets under management 2,284,489 2,269,351 2,141,737 2,118,076 2,247,042
(included above)
 
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.
 
         
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012
 
 
 
Unaudited
Quarterly, as of
6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
STATES OF OPERATION AND BANKING OFFICES
BY STATE (LATEST AVAILABLE DATA)
 

PA
Total number of retail branch offices 120 120 121 122 122
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 122 122 128 129 131

 

MD
Total number of retail branch 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 retail branch offices 121 121 122 123 123
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 123 123 129 130 132
 
EOP employees (full-time equivalent) 1,690 1,681 1,688 1,683 1,700
 

Copyright Business Wire 2010

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