National Penn Bancshares, Inc. Reports Second Quarter 2013 Results

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income of $25.0 million, or $0.17 per diluted share, for the second quarter of 2013. Net income increased 7%, or $0.01 per diluted share, compared to adjusted net income 1 of $23.4 million, or $0.16 per diluted share exclusive of the first quarter 2013 debt extinguishment and retail trust preferred redemption. Year-to-date, adjusted earnings 1 per diluted share increased 10% to $0.33 from $0.30 in the prior year period.

“The second quarter continued the trend of consistent, strong performance with a return on assets of 1.21%,” said Scott V. Fainor, president and CEO of National Penn. “We managed to increase the net interest margin by the actions we took in the first quarter to reduce our non-deposit funding costs, and we remain disciplined in re-risking the balance sheet in this low growth environment.”

Net interest margin increased during the quarter to 3.53% from 3.49%, primarily due to the benefit of the previously reported repayment of $400 million of longer-term borrowings and redemption of National Penn’s 7.85% trust preferred securities. Total funding costs declined to 0.50% from 0.63%, and the cost of deposits further decreased to 0.38% during the quarter. Net interest margin for the first six months of 2013 was 3.51%, as compared to 3.52% in the prior year period. Stronger loan originations in the second quarter offset the impact of prepayments and refinance activity as commercial loans grew modestly by 2% on an annualized basis.

Other non-interest income increased to $24.9 million during the quarter from $23.4 million in the first quarter. Contributing to the improvement were increases in income from interest rate swaps, mortgage banking, and wealth management services. National Penn’s focus on expense management continues to result in a stable level of operating expenses 1. Operating expenses 1 for the second quarter of 2013 were comparable to the first quarter after adjusting for the difference in payroll days in each period. The efficiency ratio 1 was 58% for the first six months of 2013 with operating expenses 1 increasing 1% compared to the prior year period.

Credit quality remains strong as annualized net loan charge-offs declined to 0.32% of average loans, and classified loans have declined 10% during 2013 and 22% since June 30, 2012. Indicative of the low-risk profile of National Penn’s balance sheet, non-performing loans were 1.05% of total loans, and the allowance for loan loss coverage of non-performing loans was 189% at June 30, 2013. During the second quarter, the Company recorded a provision for loan losses of $1.5 million, equal to the provision in the first quarter of 2013.

National Penn’s Board of Directors declared a third quarter 2013 cash dividend of ten cents per common share payable on August 16, 2013 to shareholders of record as of August 3, 2013. At June 30, 2013, the Company’s tier 1 common and tangible common equity 1 to tangible assets ratios remained strong at 14.25% and 10.55%, respectively.

Scott V. Fainor stated, “National Penn remains well-positioned to build upon our solid fundamentals and performance. As the economy continues to improve and the environment in which we operate evolves, we will continue to be proactive in appropriately leveraging the strength of our franchise.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.3 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn Bank operates 120 branch offices comprising 119 branches in Pennsylvania and one branch in Maryland.

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; and National Penn Insurance Services Group, Inc., including its Higgins Insurance and Caruso Benefits Group divisions.

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 also adjusted to 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: difficult conditions in the capital markets and the economy generally, 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), delayed improvement in the credit quality of loans, the effect of credit risk exposure, the ability to strategically manage our capital position and to raise capital, allowance for loan losses may prove inadequate, variations in interest rates, unanticipated costs from our corporate relocation plan, 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, competition for personnel and from other financial institutions, interruptions or breaches of National Penn’s security systems, the development and maintenance of National Penn’s information technology, potential dilution of National Penn’s shareholders, the ability of National Penn and its subsidiaries to pay dividends, severe weather and natural disasters, 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, 2012, 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 6/30/2013
     
Unaudited, dollars in thousands except share and per share data
As of
6/30/2013   3/31/2013     6/30/2012
SUMMARY BALANCE SHEET              
Total assets $ 8,316,585 $ 8,323,777 $ 8,395,864
Investment securities and other securities 2,313,358 2,333,548 2,316,894
Total loans 5,261,296 5,249,773 5,210,767
Deposits 6,022,463 6,184,060 5,845,543
Borrowings 1,089,199 922,092 1,298,477
Shareholders' equity 1,115,758 1,136,798 1,199,760
Tangible book value per common share (2) $ 5.83 $ 5.97 $ 6.18
Tangible common equity / tangible assets (2) 10.55 % 10.79 % 11.43 %
 
Three Months Ended Six Months Ended
6/30/2013   3/31/2013     6/30/2012 6/30/2013     6/30/2012
EARNINGS                      
Total interest income $ 72,101 $ 72,595 $ 79,896 $ 144,696 $ 161,310
Total interest expense   8,847       10,971         16,697     19,818         34,293  
Net interest income 63,254 61,624 63,199 124,878 127,017
Provision for loan losses   1,500       1,500         2,000     3,000         4,000  
Net interest income after provision for loan losses 61,754 60,124 61,199 121,878 123,017
Net gains (losses) from fair value changes of subordinated debentures - 2,111 (810 ) 2,111 835
Net gains (losses) on investment securities 22 25 (277 ) 47 (277 )
Other non-interest income 24,946 23,441 21,543 48,387 44,139
Loss on debt extinguishment - 64,888 - 64,888 -
Other non-interest expense   53,153       52,434         52,269     105,587         104,709  
Income (loss) before income taxes 33,569 (31,621 ) 29,386 1,948 63,005
Income tax expense (benefit)   8,550       (14,217 )       6,938     (5,667 )       15,255  
Net income (loss) $ 25,019     $ (17,404 )     $ 22,448   $ 7,615       $ 47,750  
 
PERFORMANCE RATIOS                      
Net interest margin 3.53 % 3.49 % 3.48 % 3.51 % 3.52 %
Return on average assets 1.21 % NM 1.07 % 0.18 % 1.14 %
Adjusted return on average assets (3) 1.21 % 1.14 % 1.09 % 1.17 % 1.13 %
Return on average shareholders' equity 8.82 % NM 7.50 % 1.35 % 8.03 %
Return on average tangible common equity (1) 11.53 % NM 9.69 % 1.76 % 10.40 %
Adjusted return on average tangible common equity 11.53 % 10.85 % 9.92 % 11.19 % 10.28 %
Efficiency ratio (4) 57.43 % 58.61 % 58.42 % 58.01 % 57.94 %
 
PER SHARE                      
Basic earnings $ 0.17 $ (0.12 ) $ 0.15 $ 0.05 $ 0.31
Diluted earnings 0.17 (0.12 ) 0.15 0.05 0.31
Dividends 0.10 - (a) 0.07 0.10 (a) 0.12
Average shares - basic 145,580,155 145,394,967 151,732,402 145,488,073 151,915,974
Average shares - diluted 145,997,009 145,394,967 152,011,995 145,900,726 152,202,155
                         
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES Three Months Ended Six Months Ended
6/30/2013   3/31/2013     6/30/2012 6/30/2013     6/30/2012
Return on average tangible common equity
Return on average shareholders' equity 8.82 % NM 7.50 % 1.35 % 8.03 %
Effect of goodwill and intangibles   2.71 %   NM     2.19 %   0.41 %   2.37 %
Return on average tangible common equity   11.53 %   NM     9.69 %   1.76 %   10.40 %
Average tangible equity
Average shareholders' equity $ 1,137,659 $ 1,142,829 $ 1,203,757 $ 1,140,230 $ 1,196,071
Average goodwill and intangibles   (267,264 )   (268,336 )   (271,990 )   (267,797 )   (272,675 )
Average total tangible common equity $ 870,395   $ 874,493   $ 931,767   $ 872,433   $ 923,396  
 
Adjusted net income reconciliation
Net income (loss) $ 25,019 $ (17,404 ) $ 22,448 $ 7,615 $ 47,750
After tax unrealized fair value (gain) loss on subordinated debentures - (1,372 ) 527 (1,372 ) (543 )
After tax loss on debt extinguishment   -     42,177     -     42,177     -  
Adjusted net income $ 25,019   $ 23,401   $ 22,975   $ 48,420   $ 47,207  
 
Earnings per share
Net income (loss) $ 0.17 $ (0.12 ) $ 0.15 $ 0.05 $ 0.31
After tax unrealized fair value gain on subordinated debentures - (0.01 ) - (0.01 ) (0.01 )
After tax loss on debt extinguishment   -     0.29     -     0.29     -  
Adjusted net income $ 0.17   $ 0.16   $ 0.15   $ 0.33   $ 0.30  
 
(a) In lieu of a first quarter 2013 cash dividend, the Company paid an additional dividend of $0.10 per share in the fourth quarter of 2012
"NM" - Denotes a value displayed as a percentage is not meaningful
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2013
 
Unaudited, dollars in thousands except share and per share data  

As of
6/30/2013   3/31/2013     12/31/2012     9/30/2012   6/30/2012
BALANCE SHEET - ASSETS        
Cash and due from banks $ 118,575 $ 87,588 $ 145,688 $ 120,421 $ 115,564
Interest-earning deposits with banks   63,193     93,024     282,440     211,943     221,419  
Total cash and cash equivalents 181,768 180,612 428,128 332,364 336,983
 
Investment securities available-for-sale, at fair value 1,799,831 1,813,348 1,802,213 1,773,579 1,769,359
Investment securities held-to-maturity 452,275 458,041 464,166 472,884 481,341
Other securities 61,252 62,159 68,360 63,996 66,194
Loans held-for-sale 12,289 14,934 14,330 22,703 16,908
 
Loans 5,249,007 5,234,839 5,226,552 5,234,151 5,193,859
Allowance for loan losses   (104,533 )   (107,164 )   (110,955 )   (113,542 )   (116,650 )
Loans, net 5,144,474 5,127,675 5,115,597 5,120,609 5,077,209
 
Premises and equipment, net 94,673 95,592 96,334 96,349 96,566
Accrued interest receivable 28,453 29,524 28,526 31,448 30,511
Bank owned life insurance 145,670 144,452 143,242 141,991 140,747
Other real estate owned and other repossessed assets 1,899 2,729 3,029 7,174 7,201
Goodwill 258,279 258,279 258,279 258,279 258,279
Other intangible assets, net 8,470 9,533 10,614 11,852 13,085
Unconsolidated investments 8,673 9,354 11,347 11,337 10,109
Other assets   118,579     117,545     85,357     90,961     91,372  
TOTAL ASSETS $ 8,316,585   $ 8,323,777   $ 8,529,522   $ 8,435,526   $ 8,395,864  
 
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits $ 942,127 $ 919,783 $ 891,401 $ 902,295 $ 903,766
Interest bearing deposits   5,080,336     5,264,277     5,044,164     5,045,449     4,941,777  
Total deposits 6,022,463 6,184,060 5,935,565 5,947,744 5,845,543
 
Customer repurchase agreements 547,736 549,894 560,065 534,613 533,389
Repurchase agreements 50,000 175,000 75,000 75,000 85,000
Short-term borrowings - - 100,000 - -
Federal Home Loan Bank advances (b) 414,142 119,877 464,632 462,720 535,613
Subordinated debentures 77,321 77,321 144,627 144,374 144,475
Accrued interest payable and other liabilities   89,165     80,827     88,341     56,745     52,084  
TOTAL LIABILITIES   7,200,827     7,186,979     7,368,230     7,221,196     7,196,104  
 
BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock 1,386,178 1,385,255 1,387,644 1,387,073 1,386,177
Accumulated deficit (192,623 ) (203,084 ) (185,680 ) (181,225 ) (193,715 )
Accumulated other comprehensive (loss) income (17,189 ) 15,981 24,329 28,617 25,435
Treasury stock   (60,608 )   (61,354 )   (65,001 )   (20,135 )   (18,137 )
TOTAL SHAREHOLDERS' EQUITY   1,115,758     1,136,798     1,161,292     1,214,330     1,199,760  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,316,585   $ 8,323,777   $ 8,529,522   $ 8,435,526   $ 8,395,864  
 
 
PER SHARE DATA
Book value $ 7.66 $ 7.81 $ 8.00 $ 8.09 $ 7.98
Tangible book value (2) $ 5.83 $ 5.97 $ 6.15 $ 6.29 $ 6.18
Dividends - quarterly $ 0.10 $ - (a) $ 0.20 (a) $ 0.09 $ 0.07
Shares outstanding (end of period, net of treasury) 145,608,945 145,551,796 145,163,585 150,048,383 150,258,232
                         
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity $ 1,115,758 $ 1,136,798 $ 1,161,292 $ 1,214,330 $ 1,199,760
Goodwill and intangibles   (266,749 )   (267,812 )   (268,893 )   (270,131 )   (271,364 )
Tangible common equity $ 849,009   $ 868,986   $ 892,399   $ 944,199   $ 928,396  
Shares outstanding 145,608,945 145,551,796 145,163,585 150,048,383 150,258,232
Tangible book value per share $ 5.83 $ 5.97 $ 6.15 $ 6.29 $ 6.18
 
Total assets $ 8,316,585 $ 8,323,777 $ 8,529,522 $ 8,435,526 $ 8,395,864
Goodwill and intangibles   (266,749 )   (267,812 )   (268,893 )   (270,131 )   (271,364 )
Tangible assets $ 8,049,836   $ 8,055,965   $ 8,260,629   $ 8,165,395   $ 8,124,500  
Tangible common equity/tangible assets 10.55 % 10.79 % 10.80 % 11.56 % 11.43 %
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income (1) $ 25,019 $ 23,401 $ 25,308 $ 25,950 $ 22,975
Average assets $ 8,326,499 $ 8,298,815 $ 8,440,642 $ 8,386,342 $ 8,473,164
Adjusted return on average assets (annualized) 1.21 % 1.14 % 1.19 % 1.23 % 1.09 %
 

(a)
 

In lieu of a first quarter 2013 cash dividend, the Company paid an additional dividend of $0.10 per share in the fourth quarter of 2012

(b)

Net of unamortized prepayment fees of $65.5 million and $67.6 million at December 31, 2012 and September 30, 2012, respectively
 
         
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2013
         
Unaudited, dollars in thousands except share and per share data For the Quarter Ended For the Six Months Ended
  6/30/2013       3/31/2013       12/31/2012       9/30/2012       6/30/2012     6/30/2013       6/30/2012  
INTEREST INCOME
Loans, including fees $ 55,260 $ 55,721 $ 59,005 $ 60,269 $ 61,116 $ 110,981 $ 123,407
Investment securities
Taxable 9,795 9,685 10,050 10,525 10,941 19,480 22,150
Tax-exempt 7,005 7,114 7,233 7,402 7,636 14,119 15,417
Deposits with banks   41     75     886     148     203     116     336  
Total interest income   72,101     72,595     77,174     78,344     79,896     144,696     161,310  
INTEREST EXPENSE
Deposits 5,831 5,914 6,177 6,472 6,879 11,745 14,173
Customer repurchase agreements 460 498 510 511 545 958 1,095
Repurchase agreements 623 719 802 843 915 1,342 1,830
Short-term borrowings - 41 1 - - 41 -
Federal Home Loan Bank advances 1,383 2,334 4,410 5,105 6,501 3,717 13,468
Subordinated debentures   550     1,465     1,839     1,859     1,857     2,015     3,727  
Total interest expense   8,847     10,971     13,739     14,790     16,697     19,818     34,293  
Net interest income 63,254 61,624 63,435 63,554 63,199 124,878 127,017
Provision for loan losses   1,500     1,500     2,000     2,000     2,000     3,000     4,000  
Net interest income after provision for loan losses   61,754     60,124     61,435     61,554     61,199     121,878     123,017  
NON-INTEREST INCOME
Wealth management 6,986 6,831 6,224 6,239 6,005 13,817 12,166
Service charges on deposit accounts 3,743 3,770 4,140 4,147 3,753 7,513 7,576
Insurance commissions and fees 3,326 3,267 3,113 3,238 3,211 6,593 6,507
Cash management and electronic banking fees 4,821 4,451 4,761 4,626 4,707 9,272 9,127
Mortgage banking 2,122 1,855 2,498 2,296 1,511 3,977 2,846
Bank owned life insurance 1,239 1,228 1,326 1,319 1,255 2,467 2,464
Earnings (losses) of unconsolidated investments 6 (14 ) 138 1,315 108 (8 ) 34
Other operating income 2,703 2,053 2,555 3,484 993 4,756 3,419
Net gains (losses) from fair value changes of subordinated debentures - 2,111 (253 ) 101 (810 ) 2,111 835
Net gains (losses) on sales of investment securities 22 25 4 - (123 ) 47 (123 )
Impairment losses on investment securities:
Impairment related losses on investment securities - - - - (154 ) - (154 )

Non credit-related losses on securities not expected to be sold recognized in other comprehensive income before tax
  -     -     -     -     -     -     -  
Net impairment losses on investment securities   -     -     -     -     (154 )   -     (154 )
Total non-interest income   24,968     25,577     24,506     26,765     20,456     50,545     44,697  
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 31,247 30,873 30,789 31,555 31,234 62,120 62,615
Premises and equipment 7,511 7,491 7,396 7,226 7,349 15,002 14,202
FDIC insurance 1,494 1,213 1,162 1,259 1,211 2,707 2,475
Other operating expenses 12,901 12,857 12,915 13,299 12,475 25,758 25,417
Loss on debt extinguishment   -     64,888     -     -     -     64,888     -  
Total non-interest expense   53,153     117,322     52,262     53,339     52,269     170,475     104,709  
Income (loss) before income taxes 33,569 (31,621 ) 33,679 34,980 29,386 1,948 63,005
Income tax expense (benefit)   8,550     (14,217 )   8,535     8,964     6,938     (5,667 )   15,255  
NET INCOME (LOSS) $ 25,019   $ (17,404 ) $ 25,144   $ 26,016   $ 22,448   $ 7,615   $ 47,750  
 
PER SHARE
Basic earnings $ 0.17 $ (0.12 ) $ 0.17 $ 0.17 $ 0.15 $ 0.05 $ 0.31
Diluted earnings $ 0.17 $ (0.12 ) $ 0.17 $ 0.17 $ 0.15 $ 0.05 $ 0.31
Average shares - basic 145,580,155 145,394,967 148,304,167 150,157,622 151,732,402 145,488,073 151,915,974
Average shares - diluted 145,997,009 145,394,967 148,610,097 150,454,749 152,011,995 145,900,726 152,202,155
 
SUPPLEMENTAL DATA (annualized, average)
Return on assets 1.21 % NM 1.19 % 1.23 % 1.07 % 0.18 % 1.14 %
Adjusted return on assets (3) 1.21 % 1.14 % 1.19 % 1.23 % 1.09 % 1.17 % 1.13 %
Return on shareholders' equity 8.82 % NM 8.33 % 8.60 % 7.50 % 1.35 % 8.03 %
Return on tangible common equity (1) 11.53 % NM 10.74 % 11.10 % 9.69 % 1.76 % 10.40 %
Adjusted return on tangible common equity 11.53 % 10.85 % 10.81 % 11.07 % 9.92 % 11.19 % 10.28 %
Efficiency ratio (4) 57.43 % 58.61 % 56.40 % 56.26 % 58.42 % 58.01 % 57.94 %
                                   
 
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency ratio calculation
Non-interest expense $ 53,153 $ 117,322 $ 52,262 $ 53,339 $ 52,269 $ 170,475 $ 104,709
Less:
Loss on debt extinguishment   -     64,888     -     -     -     64,888     -  
Operating expenses $ 53,153   $ 52,434   $ 52,262   $ 53,339   $ 52,269   $ 105,587   $ 104,709  
 
Net interest income (taxable equivalent) $ 67,610 $ 66,015 $ 67,909 $ 68,139 $ 67,929 $ 133,625 $ 136,574
 
Non-interest income 24,968 25,577 24,506 26,765 20,456 50,545 44,697
Less:
Net gains (losses) from fair value changes of subordinated debentures - 2,111 (253 ) 101 (810 ) 2,111 835
Net gains (losses) on investment securities   22     25     4     -     (277 )   47     (277 )
Adjusted revenue $ 92,556   $ 89,456   $ 92,664   $ 94,803   $ 89,472   $ 182,012   $ 180,713  
 
Efficiency ratio 57.43 % 58.61 % 56.40 % 56.26 % 58.42 % 58.01 % 57.94 %
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2013
                   
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Six Months Ended
CHARGE-OFFS   6/30/2013       3/31/2013       12/31/2012       9/30/2012       6/30/2012     6/30/2013       6/30/2012  
 
Loan charge-offs $ 5,314   $ 6,382   $ 5,876   $ 5,993   $ 7,907   $ 11,696   $ 16,629  
Recoveries on loans   (1,183 )   (1,091 )   (1,289 )   (885 )   (1,105 )   (2,274 )   (2,639 )
Net loan charge-offs $ 4,131   $ 5,291   $ 4,587   $ 5,108   $ 6,802   $ 9,422   $ 13,990  
Net loan charge-offs to average loans (annualized)   0.32 %   0.41 %   0.35 %   0.39 %   0.53 %   0.36 %   0.54 %
 
NET CHARGE-OFF DETAIL
Commercial and industrial loans $ 2,065 $ 1,869 $ 2,029 $ 1,116 $ 5,196 $ 3,934 $ 7,121
 
Commercial real estate-permanent 396 282 301 481 595 678 2,528
Commercial real estate-construction   93     318     266     1,755     (148 )   411     525  
Total commercial real estate loans 489 600 567 2,236 447 1,089 3,053
 
Residential mortgages 522 1,333 988 742 328 1,855 888
Home equity lines and loans 903 747 515 517 404 1,650 2,259
All other consumer loans   152     742     488     497     427     894     669  
Total consumer loans   1,577     2,822     1,991     1,756     1,159     4,399     3,816  
 
Net loans charged-off $ 4,131   $ 5,291   $ 4,587   $ 5,108   $ 6,802   $ 9,422   $ 13,990  
 
As of
ASSET QUALITY AND OTHER DATA   6/30/2013       3/31/2013       12/31/2012       9/30/2012       6/30/2012  
 
Non-accrual commercial and industrial loans $ 23,023 $ 23,323 $ 24,653 $ 31,109 $ 33,984
 
Non-accrual commercial real estate-permanent 5,129 5,489 2,984 3,780 2,999
Non-accrual commercial real estate-construction   5,666     6,067     5,446     5,149     6,959  
Total non-accrual commercial real estate loans 10,795 11,556 8,430 8,929 9,958
 
Non-accrual residential mortgages 6,276 5,608 7,066 6,242 4,301
Non-accrual home equity lines and loans 4,339 4,364 3,692 3,458 2,555
All other non-accrual consumer loans   1,916     1,595     1,705     1,823     1,753  
Total non-accrual consumer loans 12,531 11,567 12,463 11,523 8,609
         
Total non-accrual loans 46,349 46,446 45,546 51,561 52,551
 
Restructured loans   9,109     7,314     8,362     6,726     6,468  
Total non-performing loans 55,458 53,760 53,908 58,287 59,019
 
Other real estate owned and repossessed assets   1,899     2,729     3,029     7,174     7,201  
Total non-performing assets 57,357 56,489 56,937 65,461 66,220
 
Loans 90+ days past due & still accruing   2,023     2,324     2,027     2,628     3,426  
Total non-performing assets and loans 90+ days past due $ 59,380   $ 58,813   $ 58,964   $ 68,089   $ 69,646  
 
Allowance for loan losses $ 104,533   $ 107,164   $ 110,955   $ 113,542   $ 116,650  
Allowance for loan losses/non-performing loans   188.5 %   199.3 %   205.8 %   194.8 %   197.6 %
Allowance for loan losses/non-performing assets and loans 90+ days past due   176.0 %   182.2 %   188.2 %   166.8 %   167.5 %
Allowance for loan losses/total loans   1.99 %   2.04 %   2.12 %   2.16 %   2.24 %
Provision/charge-offs, net   36.3 %   28.4 %   43.6 %   39.2 %   29.4 %
Classified loans $ 234,085   $ 242,560   $ 261,293   $ 296,213   $ 301,542  
Classified loans/total loans   4.45 %   4.62 %   4.99 %   5.63 %   5.79 %
Delinquent loans (c) $ 22,512   $ 24,110   $ 24,048   $ 23,519   $ 24,144  
Delinquent loans/total loans   0.43 %   0.46 %   0.46 %   0.45 %   0.46 %
 
 
As of
REGULATORY CAPITAL DATA   6/30/2013       3/31/2013       12/31/2012       9/30/2012       6/30/2012  
 
Tier 1 Capital $ 924,922   $ 927,397   $ 982,148   $ 1,024,888   $ 1,008,052  
Tier 1 Leverage Ratio   11.56 %   11.63 %   12.16 %   12.78 %   12.44 %
Tier 1 Ratio (%)   15.51 %   15.41 %   16.54 %   17.45 %   17.45 %
Total Capital $ 999,839   $ 1,002,999   $ 1,056,835   $ 1,098,814   $ 1,080,807  
Total Capital Ratio (%)   16.77 %   16.67 %   17.80 %   18.70 %   18.71 %
Total Risk-Weighted Assets $ 5,963,754   $ 6,016,630   $ 5,938,708   $ 5,874,448   $ 5,776,537  
 
(c) 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 6/30/2013
           
Unaudited, dollars in thousands except share and per share data
 
PERIOD END BALANCES: As of
  6/30/2013     3/31/2013     12/31/2012     9/30/2012     6/30/2012
Earning Assets / Liabilities

Loan portfolio composition (regulatory):
Commercial / industrial $ 861,494 $ 857,728 $ 868,135 $ 846,484 $ 856,237
Commercial real estate (d) 1,887,908 1,863,381 1,838,681 1,803,532 1,759,792
Residential mortgage 1,185,986 1,191,075 1,234,425 1,262,897 1,262,633
Real estate construction and land development 201,316 180,298 161,341 189,293 194,942
Home equity 778,521 776,166 782,717 776,023 765,902
Consumer 201,580 201,349 208,856 207,333 207,999
Other   144,491   179,776   146,727   171,292   163,262
Total 5,261,296 5,249,773 5,240,882 5,256,854 5,210,767
 
 
Investment securities and other securities 2,313,358 2,333,548 2,334,739 2,310,459 2,316,894
Other earning assets   63,193   93,024   282,440   211,943   221,419
Total earning assets (net of loan loss reserve) $ 7,533,314 $ 7,569,181 $ 7,747,106 $ 7,665,714 $ 7,632,430
(d) Includes owner occupied
 

Loan portfolio composition (internal):
Commercial & industrial
Business purpose, real estate secured $ 901,205 $ 891,229 $ 886,160 $ 879,326 $ 879,413
Business purpose, not secured by real estate 976,281 1,000,141 977,875 979,042 975,852
Owner occupied commercial real estate
Permanent 609,615 604,278 599,729 572,298 572,686
Construction / development 31,058 32,603 30,523 31,181 36,451
Leasing   630   1,128   1,568   2,102   2,670
Total commercial & industrial 2,518,789 2,529,379 2,495,855 2,463,949 2,467,072
 
Commercial real estate
Non-owner occupied
Permanent 919,080 898,519 907,760 918,511 874,570
Construction / development   153,172   145,324   125,878   140,889   140,751
Total commercial real estate   1,072,252   1,043,843   1,033,638   1,059,400   1,015,321
Total commercial 3,591,041 3,573,222 3,529,493 3,523,349 3,482,393
 
Consumer
Residential mortgage (personal purpose)
Permanent 640,745 649,522 666,274 683,694 688,171
Construction   7,076   6,009   5,498   6,079   6,806
Total residential mortgages 647,821 655,531 671,772 689,773 694,977
 
Home equity and direct installment 220,401 237,088 254,014 273,359 291,383
Home equity lines of credit   530,104   507,347   500,372   478,628   452,599

Total home equity
750,505 744,435 754,386 751,987 743,982
 
Private banking credit lines 98,865 99,154 103,806 103,006 107,398
Indirect vehicle and other   160,775   162,497   167,095   166,036   165,109
All other consumer   259,640   261,651   270,901   269,042   272,507
Total consumer   1,657,966   1,661,617   1,697,059   1,710,802   1,711,466
 
Loans 5,249,007 5,234,839 5,226,552 5,234,151 5,193,859
 
Loans held-for-sale 12,289 14,934 14,330 22,703 16,908
         
Total loans $ 5,261,296 $ 5,249,773 $ 5,240,882 $ 5,256,854 $ 5,210,767
 

Deposit composition:
Savings $ 527,216 $ 520,223 $ 493,386 $ 485,283 $ 497,640
NOW accounts 1,545,659 1,471,185 1,472,985 1,498,344 1,317,399
Money market accounts 1,654,442 1,647,863 1,642,803 1,600,164 1,641,947
Time deposits less than $100k 963,238 991,380 1,017,925 1,036,112 1,063,688
Time deposits $100k or greater   389,781   633,626   417,065   425,546   421,103
Total interest bearing deposits   5,080,336   5,264,277   5,044,164   5,045,449   4,941,777
 
Non-interest bearing deposits   942,127   919,783   891,401   902,295   903,766
 
Total deposits $ 6,022,463 $ 6,184,060 $ 5,935,565 $ 5,947,744 $ 5,845,543
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2013
                             
Unaudited, dollars in thousands except share and per share data
Quarterly, as of Six Months, as of
6/30/2013     3/31/2013     12/31/2012     9/30/2012     6/30/2012   6/30/2013     6/30/2012  
Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total loans* $ 5,244,930 4.27 % $ 5,223,015 4.37 % $ 5,206,227 4.55 % $ 5,191,136 4.66 % $ 5,196,803 4.78 % $ 5,234,033 4.32 % $ 5,188,012 4.83 %
Investment securities* 2,334,594 3.53 % 2,325,225 3.60 % 2,323,243 3.63 % 2,309,646 3.77 % 2,319,392 3.93 % 2,329,936 3.57 % 2,318,751 3.98 %
Interest earning deposits   94,788 0.17 %   119,834 0.25 %   276,078 1.28 %   255,121 0.23 %   334,935 0.24 %   107,242 0.22 %   306,537 0.22 %
 
Total earning assets   7,674,312 4.00 %   7,668,074 4.07 %   7,805,548 4.16 %   7,755,903 4.25 %   7,851,130 4.34 %   7,671,211 4.03 %   7,813,300 4.40 %
Total assets   8,326,499   8,298,815   8,440,642   8,386,342   8,473,164   8,312,734   8,435,272
 
Savings 525,494 0.11 % 505,513 0.11 % 488,195 0.11 % 490,020 0.11 % 494,800 0.12 % 515,559 0.11 % 483,181 0.13 %
NOW accounts 1,543,649 0.14 % 1,439,387 0.14 % 1,463,488 0.14 % 1,402,593 0.14 % 1,343,961 0.15 % 1,491,805 0.14 % 1,291,332 0.15 %
Money market accounts 1,646,691 0.29 % 1,645,838 0.30 % 1,630,449 0.30 % 1,623,102 0.32 % 1,664,315 0.37 % 1,646,267 0.29 % 1,671,773 0.38 %
Time deposits   1,464,421 1.08 %   1,507,667 1.10 %   1,454,415 1.17 %   1,468,539 1.23 %   1,499,016 1.27 %   1,485,924 1.09 %   1,520,777 1.29 %
 
Total interest bearing deposits   5,180,255 0.45 %   5,098,405 0.47 %   5,036,547 0.49 %   4,984,254 0.52 %   5,002,092 0.55 %   5,139,555 0.46 %   4,967,063 0.57 %
 
Non-interest bearing deposits   913,311   876,700   886,858   897,017   891,739   895,107   872,234
Total deposits   6,093,566 0.38 %   5,975,105 0.40 %   5,923,405 0.41 %   5,881,271 0.44 %   5,893,831 0.47 %   6,034,662 0.39 %   5,839,297 0.49 %
 
Customer repurchase agreements 523,585 0.35 % 547,706 0.37 % 551,334 0.37 % 532,065 0.38 % 525,142 0.42 % 535,579 0.36 % 524,859 0.42 %
Repurchase agreements 63,736 3.92 % 135,454 2.15 % 75,000 4.25 % 78,370 4.28 % 85,000 4.33 % 99,397 2.72 % 85,000 4.33 %
Short-term borrowings - 0.00 % 39,200 0.42 % 1,087 0.37 % 272 0.00 % - 0.00 % 18,939 0.44 % - 0.00 %
Federal Home Loan Bank advances (b) 348,814 1.59 % 262,067 3.61 % 463,397 3.79 % 496,438 4.09 % 575,725 4.54 % 306,233 2.45 % 595,854 4.55 %
Subordinated debentures   77,321 2.85 %   125,207 4.75 %   144,377 5.07 %   144,472 5.12 %   143,683 5.20 %   101,131 4.02 %   144,479 5.19 %
Total deposits and borrowings   7,107,022 0.50 %   7,084,739 0.63 %   7,158,600 0.76 %   7,132,888 0.82 %   7,223,381 0.93 %   7,095,941 0.56 %   7,189,489 0.96 %
Total interest bearing liabilities $ 6,193,711 0.57 % $ 6,208,039 0.72 % $ 6,271,742 0.87 % $ 6,235,871 0.94 % $ 6,331,642 1.06 % $ 6,200,834 0.64 % $ 6,317,255 1.09 %
 
Net interest margin (FTE) 3.53 % 3.49 % 3.46 % 3.50 % 3.48 % 3.51 % 3.52 %
 
Wealth assets:
Assets under management $ 2,285,199 $ 2,328,042 $ 2,256,319 $ 2,319,220 $ 2,284,489

 
 
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2013
         
Unaudited
 
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
 
Quarterly, as of
6/30/2013   3/31/2013   12/31/2012   9/30/2012   6/30/2012
 

PA
Total number of retail branch offices 119 118 119 119 120
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 124 124 124 124 122
 

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 120 119 120 120 121
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 125 125 125 125 123
 
EOP employees (full-time equivalent) 1,666 1,657 1,648 1,661 1,690

Copyright Business Wire 2010

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