National Penn Bancshares, Inc. Reports Fourth Quarter And Full Year 2013 Results

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported earnings per diluted share of $0.15 in the fourth quarter of 2013, inclusive of a restructuring charge. The restructuring charge related to previously announced expense reduction initiatives, including the rationalization of the branch franchise. Adjusted earnings 1 were $0.17 per diluted share, or $25.1 million, resulting in an adjusted return on average assets 1 of 1.19%. For 2013, reported earnings were $0.37 per diluted share, while adjusted earnings 1 were $98.1 million or $0.67 per diluted share, compared to $98.5 million or $0.66 per diluted share for 2012. The adjusted return on average assets 1 for 2013 was 1.18%.

“The consistency of our financial performance with such a strong return on assets is a tribute to the efforts of our entire team,” said Scott V. Fainor, president and CEO of National Penn. “Our ability to maintain our net interest margin in a prolonged low interest rate environment, and our continued focus on asset quality and expense control distinguishes National Penn.”

The net interest margin was 3.51% for 2013, compared to 3.50% for 2012. In the fourth quarter, the net interest margin was 3.51%, compared to 3.49% in the prior quarter. The restructuring of longer term debt in the first quarter of 2013 and continued focus on deposit pricing resulted in the cost of interest bearing liabilities declining to 0.59% for 2013 from 1.00% for 2012. This reduction in interest expense, coupled with commercial loan growth of 3.5% for the year, offset the impact of lower asset yields due to the current rate environment.

Asset quality remained strong during the year with classified loans declining $27 million, or 12%, in the fourth quarter, and $70 million, or 27%, during 2013. Non-performing loans were less than 1% of total loans at December 31, 2013 and net loan charge-offs declined by approximately $4 million from the prior year. These trends supported a provision for loan losses of $5.3 million for 2013, compared to $8.0 million for 2012. The allowance for loan losses was 183% of non-performing loans and 1.81% of total loans at December 31, 2013.

Operating expenses 1, excluding non-recurring items, increased by less than 1% year-over-year and declined by 3% during the fourth quarter of 2013 compared to the prior quarter. Operating expenses have been managed to a stable level over the last three years. Other income grew modestly as wealth management revenue increases were offset by declining mortgage banking income as refinance activity slowed during the year.

At December 31, 2013, the Company’s total risk based capital and tangible common equity 1 to tangible assets ratios were 16.63% and 10.31%, respectively. This strong capital base resulted in the Board of Directors authorizing the repurchase of up to 5% of the Company’s outstanding shares during 2014 and the declaration of a first quarter 2014 cash dividend of ten cents per common share, payable on February 14, 2014 to shareholders of record as of February 1, 2014.

The restructuring charge includes the consolidation of nine branch locations, the consolidation of administrative facilities including relocation to the new corporate headquarters, and reductions in staff.

Scott V. Fainor stated, “I am optimistic that the loan growth we realized in the quarter provides momentum for 2014. The strength of National Penn’s balance sheet and the expense reduction initiatives provide us with a solid base from which to grow.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.6 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 average assets exclude the effects of certain gains and losses, adjusted for taxes when applicable. Adjusted net income and return on average assets 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 12/31/2013
                 
Unaudited, dollars in thousands except share and per share data

 
As of
12/31/2013       9/30/2013   12/31/2012
SUMMARY BALANCE SHEET                
Total assets $ 8,582,213 $ 8,424,623 $ 8,529,522
Investment securities and other securities 2,381,475 2,364,681 2,334,739
Total loans 5,338,219 5,282,691 5,240,882
Deposits 6,072,578 6,435,456 5,935,565
Borrowings 1,282,289 761,506 1,344,324
Shareholders' equity 1,122,231 1,131,278 1,161,292
Tangible book value per common share (2) $ 5.88 $ 5.94 $ 6.15
Tangible common equity / tangible assets (2) 10.31 % 10.61 % 10.80 %
 
Three Months Ended Twelve Months Ended
12/31/2013       9/30/2013   12/31/2012 12/31/2013       12/31/2012
EARNINGS                          
Total interest income $ 72,085 $ 71,498 $ 77,174 $ 288,279 $ 316,828
Total interest expense   8,013     8,386     13,739     36,217     62,822  
Net interest income 64,072 63,112 63,435 252,062 254,006
Provision for loan losses   1,000     1,250     2,000     5,250     8,000  
Net interest income after provision for loan losses 63,072 61,862 61,435 246,812 246,006
Net (losses) gains from fair value changes of subordinated debentures - - (253 ) 2,111 683
Net gains (losses) on investment securities - 7 4 54 (273 )
Other non-interest income 22,714 24,801 24,755 95,902 95,558
Loss on debt extinguishment - - - 64,888 -
Corporate reorganization expense 6,000 - - 6,000 -
Other non-interest expense   51,833     53,603     52,262     211,023     210,310  
Income before income taxes 27,953 33,067 33,679 62,968 131,664
Income tax expense   6,741     8,507     8,535     9,581     32,754  
Net income $ 21,212   $ 24,560   $ 25,144   $ 53,387   $ 98,910  
 
PERFORMANCE RATIOS                          
Net interest margin 3.51 % 3.49 % 3.46 % 3.51 % 3.50 %
Return on average assets 1.00 % 1.17 % 1.19 % 0.64 % 1.17 %
Adjusted return on average assets (3) 1.19 % 1.17 % 1.19 % 1.18 % 1.17 %
Return on average shareholders' equity 7.44 % 8.78 % 8.33 % 4.72 % 8.25 %
Return on average tangible common equity (1) 9.73 % 11.55 % 10.74 % 6.18 % 10.66 %
Adjusted return on average tangible common equity 11.51 % 11.55 % 10.81 % 11.36 % 10.62 %
Efficiency ratio (4) 57.00 % 58.16 % 56.40 % 57.80 % 57.12 %
 
PER SHARE                          
Basic earnings $ 0.15 $ 0.17 $ 0.17 $ 0.37 $ 0.66
Diluted earnings 0.15 0.17 0.17 0.37 0.66
Dividends 0.10 0.10 0.20 (a) 0.30 (a) 0.41 (a)
Average shares - basic 145,761,496 145,669,300 148,304,167 145,602,670 150,566,098
Average shares - diluted 146,244,467 146,124,821 148,610,097 146,044,058 150,859,995
                                 
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES
Three Months Ended Twelve Months Ended
12/31/2013       9/30/2013   12/31/2012 12/31/2013       12/31/2012
Return on average tangible common equity
Return on average shareholders' equity 7.44 % 8.78 % 8.33 % 4.72 % 8.25 %
Effect of goodwill and intangibles   2.29 %   2.77 %   2.41 %   1.46 %   2.41 %
Return on average tangible common equity   9.73 %   11.55 %   10.74 %   6.18 %   10.66 %
Average tangible equity
Average shareholders' equity $ 1,130,839 $ 1,110,081 $ 1,200,514 $ 1,130,264 $ 1,198,948
Average goodwill and intangibles   (265,516 )   (266,326 )   (269,495 )   (266,851 )   (271,384 )
Average tangible common equity $ 865,323   $ 843,755   $ 931,019   $ 863,413   $ 927,564  
 
Adjusted net income reconciliation
Net income $ 21,212 $ 24,560 $ 25,144 $ 53,387 $ 98,910
After tax unrealized fair value loss (gain) on subordinated debentures - - 164 (1,372 ) (444 )
After tax loss on debt extinguishment - - - 42,177 -
After tax corporate reorganization expense   3,900     -     -     3,900     -  
Adjusted net income $ 25,112   $ 24,560   $ 25,308   $ 98,092   $ 98,466  
 
Earnings per share
Net income $ 0.15 $ 0.17 $ 0.17 $ 0.37 $ 0.66
After tax unrealized fair value loss (gain) on subordinated debentures - - - (0.01 ) -
After tax loss on debt extinguishment - - - 0.29 -
After tax corporate reorganization expense   0.03     -     -     0.03     -  
Adjusted net income $ 0.17   (b) $ 0.17   $ 0.17   $ 0.67   (b) $ 0.66  
 
(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) Difference in summation of quarterly and year-to-date adjusted net income due to rounding
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2013
           

Unaudited, dollars in thousands except share and per share data

 

 
As of
12/31/2013   9/30/2013   6/30/2013   3/31/2013       12/31/2012
BALANCE SHEET - ASSETS
Cash and due from banks $ 102,241 $ 137,795 $ 118,575 $ 87,588 $ 145,688
Interest-earning deposits with banks   181,282     78,895     63,193     93,024     282,440  
Total cash and cash equivalents 283,523 216,690 181,768 180,612 428,128
 
Investment securities available-for-sale, at fair value 1,879,284 1,875,676 1,799,831 1,813,348 1,802,213
Investment securities held-to-maturity 438,445 444,898 452,275 458,041 464,166
Other securities 63,746 44,107 61,252 62,159 68,360
Loans held-for-sale 4,951 2,752 12,289 14,934 14,330
 
Loans 5,333,268 5,279,939 5,249,007 5,234,839 5,226,552
Allowance for loan losses   (96,367 )   (100,763 )   (104,533 )   (107,164 )   (110,955 )
Loans, net 5,236,901 5,179,176 5,144,474 5,127,675 5,115,597
 
Premises and equipment, net 96,232 93,871 94,673 95,592 96,334
Accrued interest receivable 27,130 27,831 28,453 29,524 28,526
Bank owned life insurance 147,869 146,906 145,670 144,452 143,242
Other real estate owned and other repossessed assets 1,278 1,569 1,899 2,729 3,029
Goodwill 258,279 258,279 258,279 258,279 258,279
Other intangible assets, net 6,854 7,656 8,470 9,533 10,614
Unconsolidated investments 8,713 9,177 8,673 9,354 11,347
Other assets   129,008     116,035     118,579     117,545     85,357  
TOTAL ASSETS $ 8,582,213   $ 8,424,623   $ 8,316,585   $ 8,323,777   $ 8,529,522  
 
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits $ 970,051 $ 1,026,546 $ 942,127 $ 919,783 $ 891,401
Interest bearing deposits   5,102,527     5,408,910     5,080,336     5,264,277     5,044,164  
Total deposits 6,072,578 6,435,456 6,022,463 6,184,060 5,935,565
 
Customer repurchase agreements 551,736 521,779 547,736 549,894 560,065
Repurchase agreements 50,000 50,000 50,000 175,000 75,000
Short-term borrowings - - - - 100,000
Federal Home Loan Bank advances (c) 603,232 112,406 414,142 119,877 464,632
Subordinated debentures 77,321 77,321 77,321 77,321 144,627
Accrued interest payable and other liabilities   105,115     96,383     89,165     80,827     88,341  
TOTAL LIABILITIES   7,459,982     7,293,345     7,200,827     7,186,979     7,368,230  
 
BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock 1,387,966 1,387,052 1,386,178 1,385,255 1,387,644
Accumulated deficit (175,990 ) (182,628 ) (192,623 ) (203,084 ) (185,680 )
Accumulated other comprehensive (loss) income (30,792 ) (13,504 ) (17,189 ) 15,981 24,329
Treasury stock   (58,953 )   (59,642 )   (60,608 )   (61,354 )   (65,001 )
TOTAL SHAREHOLDERS' EQUITY   1,122,231     1,131,278     1,115,758     1,136,798     1,161,292  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,582,213   $ 8,424,623   $ 8,316,585   $ 8,323,777   $ 8,529,522  
 
 
PER SHARE DATA
Book value $ 7.70 $ 7.76 $ 7.66 $ 7.81 $ 8.00
Tangible book value (2) $ 5.88 $ 5.94 $ 5.83 $ 5.97 $ 6.15
Dividends - quarterly $ 0.10 $ 0.10 $ 0.10 $ - (a) $ 0.20 (a)
Shares outstanding (end of period, net of treasury) 145,798,751 145,723,276 145,608,945 145,551,796 145,163,585
                         
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Total shareholders' equity $ 1,122,231 $ 1,131,278 $ 1,115,758 $ 1,136,798 $ 1,161,292
Goodwill and intangibles   (265,133 )   (265,935 )   (266,749 )   (267,812 )   (268,893 )
Tangible common equity $ 857,098   $ 865,343   $ 849,009   $ 868,986   $ 892,399  
Shares outstanding 145,798,751 145,723,276 145,608,945 145,551,796 145,163,585
Tangible book value per share $ 5.88 $ 5.94 $ 5.83 $ 5.97 $ 6.15
 
Total assets $ 8,582,213 $ 8,424,623 $ 8,316,585 $ 8,323,777 $ 8,529,522
Goodwill and intangibles   (265,133 )   (265,935 )   (266,749 )   (267,812 )   (268,893 )
Tangible assets $ 8,317,080   $ 8,158,688   $ 8,049,836   $ 8,055,965   $ 8,260,629  
Tangible common equity/tangible assets 10.31 % 10.61 % 10.55 % 10.79 % 10.80 %
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Adjusted net income (1) $ 25,112 $ 24,560 $ 25,019 $ 23,401 $ 25,308
Average assets $ 8,384,990 $ 8,310,626 $ 8,326,499 $ 8,298,815 $ 8,440,642
Adjusted return on average assets (annualized) 1.19 % 1.17 % 1.21 % 1.14 % 1.19 %
 

(c) Net of unamortized prepayment fees of $65.5 million at December 31, 2012

 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2013
             
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Twelve Months Ended
12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012 12/31/2013   12/31/2012
INTEREST INCOME
Loans, including fees $ 54,600 $ 54,577 $ 55,260 $ 55,721 $ 59,005 $ 220,158 $ 242,681
Investment securities
Taxable 10,912 10,105 9,795 9,685 10,050 40,497 42,725
Tax-exempt 6,534 6,768 7,005 7,114 7,233 27,421 30,052
Deposits with banks   39     48     41     75     886     203     1,370  
Total interest income   72,085     71,498     72,101     72,595     77,174     288,279     316,828  
INTEREST EXPENSE
Deposits 5,166 5,468 5,831 5,914 6,177 22,379 26,822
Customer repurchase agreements 407 440 460 498 510 1,805 2,116
Repurchase agreements 615 614 623 719 802 2,571 3,475
Short-term borrowings - - - 41 1 41 1
Federal Home Loan Bank advances 1,287 1,325 1,383 2,334 4,410 6,329 22,983
Subordinated debentures   538     539     550     1,465     1,839     3,092     7,425  
Total interest expense   8,013     8,386     8,847     10,971     13,739     36,217     62,822  
Net interest income 64,072 63,112 63,254 61,624 63,435 252,062 254,006
Provision for loan losses   1,000     1,250     1,500     1,500     2,000     5,250     8,000  
Net interest income after provision for loan losses   63,072     61,862     61,754     60,124     61,435     246,812     246,006  
NON-INTEREST INCOME
Wealth management 6,609 6,883 6,986 6,831 6,224 27,309 24,629
Service charges on deposit accounts 3,827 3,894 3,743 3,770 4,140 15,234 15,863
Insurance commissions and fees 3,028 3,071 3,326 3,267 3,113 12,692 12,858
Cash management and electronic banking fees 4,782 4,860 4,821 4,451 4,761 18,914 18,514
Mortgage banking 902 1,621 2,122 1,855 2,498 6,500 7,640
Bank owned life insurance 1,389 1,260 1,239 1,228 1,326 5,116 5,109
Earnings (losses) of unconsolidated investments 57 661 6 (14 ) 138 710 1,487
Other operating income 2,120 2,551 2,703 2,053 2,555 9,427 9,458
Net gains (losses) from fair value changes of subordinated debentures - - - 2,111 (253 ) 2,111 683
Net gains (losses) on sales of investment securities - 7 22 25 4 54 (119 )
Impairment losses on investment securities:
Impairment related losses on investment securities - - - - - - (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 )
Total non-interest income   22,714     24,808     24,968     25,577     24,506     98,067     95,968  
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 30,998 31,704 31,247 30,873 30,789 124,822 124,959
Premises and equipment 7,721 7,724 7,511 7,491 7,396 30,447 28,824
FDIC insurance 1,356 1,404 1,494 1,213 1,162 5,467 4,896
Other operating expenses 11,758 12,771 12,901 12,857 12,915 50,287 51,631
Loss on debt extinguishment - - - 64,888 - 64,888 -
Corporate reorganization expense   6,000     -     -     -     -     6,000     -  
Total non-interest expense   57,833     53,603     53,153     117,322     52,262     281,911     210,310  
Income (loss) before income taxes 27,953 33,067 33,569 (31,621 ) 33,679 62,968 131,664
Income tax expense (benefit)   6,741     8,507     8,550     (14,217 )   8,535     9,581     32,754  
NET INCOME (LOSS) $ 21,212   $ 24,560   $ 25,019   $ (17,404 ) $ 25,144   $ 53,387   $ 98,910  
 
PER SHARE
Basic earnings $ 0.15 $ 0.17 $ 0.17 $ (0.12 ) $ 0.17 $ 0.37 $ 0.66
Diluted earnings $ 0.15 $ 0.17 $ 0.17 $ (0.12 ) $ 0.17 $ 0.37 $ 0.66
Average shares - basic 145,761,496 145,669,300 145,580,155 145,394,967 148,304,167 145,602,670 150,566,098
Average shares - diluted 146,244,467 146,124,821 145,997,009 145,394,967 148,610,097 146,044,058 150,859,995
 
SUPPLEMENTAL DATA (annualized, average)
Return on assets 1.00 % 1.17 % 1.21 % NM 1.19 % 0.64 % 1.17 %
Adjusted return on assets (3) 1.19 % 1.17 % 1.21 % 1.14 % 1.19 % 1.18 % 1.17 %
Return on shareholders' equity 7.44 % 8.78 % 8.82 % NM 8.33 % 4.72 % 8.25 %
Return on tangible common equity (1) 9.73 % 11.55 % 11.53 % NM 10.74 % 6.18 % 10.66 %
Adjusted return on tangible common equity 11.51 % 11.55 % 11.53 % 10.85 % 10.81 % 11.36 % 10.62 %
Efficiency ratio (4) 57.00 % 58.16 % 57.43 % 58.61 % 56.40 % 57.80 % 57.12 %
                             
 
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency ratio calculation
Non-interest expense $ 57,833 $ 53,603 $ 53,153 $ 117,322 $ 52,262 $ 281,911 $ 210,310
Less:
Loss on debt extinguishment - - - 64,888 - 64,888 -
Corporate reorganization expense   6,000     -     -     -     -     6,000     -  
Operating expenses $ 51,833   $ 53,603   $ 53,153   $ 52,434   $ 52,262   $ 211,023   $ 210,310  
 
Net interest income (taxable equivalent) $ 68,223 $ 67,371 $ 67,610 $ 66,015 $ 67,909 $ 269,219 $ 272,622
 
Non-interest income 22,714 24,808 24,968 25,577 24,506 98,067 95,968
Less:
Net gains (losses) from fair value changes of subordinated debentures - - - 2,111 (253 ) 2,111 683
Net gains (losses) on investment securities   -     7     22     25     4     54     (273 )
Adjusted revenue $ 90,937   $ 92,172   $ 92,556   $ 89,456   $ 92,664   $ 365,121   $ 368,180  
 
Efficiency ratio 57.00 % 58.16 % 57.43 % 58.61 % 56.40 % 57.80 % 57.12 %
 
"NM" - Denotes a value displayed as a percentage is not meaningful
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2013
           
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Twelve Months Ended
12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012 12/31/2013   12/31/2012
CHARGE-OFFS
Loan charge-offs $ 7,523 $ 5,774 $ 5,314 $ 6,382 $ 5,876 $ 24,993 $ 28,498
Recoveries on loans   (2,127 )   (754 )   (1,183 )   (1,091 )   (1,289 )   (5,155 )   (4,813 )
Net loan charge-offs $ 5,396   $ 5,020   $ 4,131   $ 5,291   $ 4,587   $ 19,838   $ 23,685  
Net loan charge-offs to average loans (annualized)   0.41 %   0.38 %   0.32 %   0.41 %   0.35 %   0.38 %   0.46 %
 
NET CHARGE-OFF DETAIL
Commercial and industrial loans $ 5,157 $ 3,059 $ 2,065 $ 1,869 $ 2,029 $ 12,150 $ 10,266
 
Commercial real estate-permanent (523 ) 909 396 282 301 1,064 3,310
Commercial real estate-construction   (167 )   (29 )   93     318     266     215     2,546  
Total commercial real estate loans (690 ) 880 489 600 567 1,279 5,856
 
Residential mortgages 56 209 522 1,333 988 2,120 2,618
Home equity lines and loans 439 423 903 747 515 2,512 3,291
All other consumer loans   434     449     152     742     488     1,777     1,654  
Total consumer loans   929     1,081     1,577     2,822     1,991     6,409     7,563  
 
Net loans charged-off $ 5,396   $ 5,020   $ 4,131   $ 5,291   $ 4,587   $ 19,838   $ 23,685  
 
As of
12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012
ASSET QUALITY AND OTHER DATA
Non-accrual commercial and industrial loans $ 14,935 $ 23,101 $ 23,023 $ 23,323 $ 24,653
 
Non-accrual commercial real estate-permanent 4,258 3,760 5,129 5,489 2,984
Non-accrual commercial real estate-construction   12,128     5,345     5,666     6,067     5,446  
Total non-accrual commercial real estate loans 16,386 9,105 10,795 11,556 8,430
 
Non-accrual residential mortgages 7,037 6,485 6,276 5,608 7,066
Non-accrual home equity lines and loans 4,787 4,403 4,339 4,364 3,692
All other non-accrual consumer loans   1,731     1,705     1,916     1,595     1,705  
Total non-accrual consumer loans 13,555 12,593 12,531 11,567 12,463
         
Total non-accrual loans 44,876 44,799 46,349 46,446 45,546
 
Restructured loans   7,715     10,006     9,109     7,314     8,362  
Total non-performing loans 52,591 54,805 55,458 53,760 53,908
 
Other real estate owned and repossessed assets   1,278     1,569     1,899     2,729     3,029  
Total non-performing assets 53,869 56,374 57,357 56,489 56,937
 
Loans 90+ days past due & still accruing   3,466     2,608     2,023     2,324     2,027  
Total non-performing assets and loans 90+ days past due $ 57,335   $ 58,982   $ 59,380   $ 58,813   $ 58,964  
 
Allowance for loan losses $ 96,367   $ 100,763   $ 104,533   $ 107,164   $ 110,955  
Allowance for loan losses/non-performing loans   183.2 %   183.9 %   188.5 %   199.3 %   205.8 %
Allowance for loan losses/non-performing assets and loans
90+ days past due   168.1 %   170.8 %   176.0 %   182.2 %   188.2 %
Allowance for loan losses/total loans   1.81 %   1.91 %   1.99 %   2.04 %   2.12 %
Provision/charge-offs, net   18.5 %   24.9 %   36.3 %   28.4 %   43.6 %
Classified loans $ 191,589   $ 218,615   $ 234,085   $ 242,560   $ 261,293  
Classified loans/total loans   3.59 %   4.14 %   4.45 %   4.62 %   4.99 %
Delinquent loans (d) $ 29,435   $ 22,550   $ 22,512   $ 24,110   $ 24,048  
Delinquent loans/total loans   0.55 %   0.43 %   0.43 %   0.46 %   0.46 %
 
REGULATORY CAPITAL DATA
Tier 1 Capital $ 936,738   $ 938,040   $ 924,922   $ 927,397   $ 982,148  
Tier 1 Leverage Ratio   11.57 %   11.67 %   11.56 %   11.63 %   12.16 %
Tier 1 Ratio   15.38 %   15.63 %   15.51 %   15.41 %   16.54 %
Total Capital $ 1,013,128   $ 1,013,371   $ 999,839   $ 1,002,999   $ 1,056,835  
Total Capital Ratio   16.63 %   16.89 %   16.77 %   16.67 %   17.80 %
Total Risk-Weighted Assets $ 6,091,183   $ 6,001,065   $ 5,963,754   $ 6,016,630   $ 5,938,708  
 
(d) 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 12/31/2013
         
Unaudited, dollars in thousands except share and per share data

 
As of
Earning Assets / Liabilities 12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012

Loan portfolio composition (regulatory):
Commercial / industrial $ 796,797 $ 820,669 $ 861,494 $ 857,728 $ 868,135
Commercial real estate (e) 1,926,978 1,913,180 1,887,908 1,863,381 1,838,681
Residential mortgage 1,181,020 1,170,750 1,185,986 1,191,075 1,234,425
Real estate construction and land development 256,483 234,945 201,316 180,298 161,341
Home equity 794,709 786,835 778,521 776,166 782,717
Consumer 209,729 205,446 201,580 201,349 208,856
Other   172,503   150,866   144,491   179,776   146,727
Total 5,338,219 5,282,691 5,261,296 5,249,773 5,240,882
 
 
Investment securities and other securities 2,381,475 2,364,681 2,313,358 2,333,548 2,334,739
Other earning assets   181,282   78,895   63,193   93,024   282,440
Total earning assets (net of loan loss reserve) $ 7,804,609 $ 7,625,504 $ 7,533,314 $ 7,569,181 $ 7,747,106
(e) Includes owner occupied
 

Loan portfolio composition (internal):
Commercial & industrial
Business purpose, real estate secured $ 885,135 $ 897,757 $ 901,205 $ 891,229 $ 886,160
Business purpose, not secured by real estate 939,121 935,857 976,281 1,000,141 977,875
Owner occupied commercial real estate
Permanent 589,765 585,807 609,615 604,278 599,729
Construction / development 46,415 41,088 31,058 32,603 30,523
Leasing   228   392   630   1,128   1,568
Total commercial & industrial 2,460,664 2,460,901 2,518,789 2,529,379 2,495,855
 
Commercial real estate
Non-owner occupied
Permanent 994,838 964,510 919,080 898,519 907,760
Construction / development   198,334   181,683   153,172   145,324   125,878
Total commercial real estate   1,193,172   1,146,193   1,072,252   1,043,843   1,033,638
Total commercial 3,653,836 3,607,094 3,591,041 3,573,222 3,529,493
 
Consumer
Residential mortgage (personal purpose)
Permanent 643,506 642,696 640,745 649,522 666,274
Construction   8,719   9,443   7,076   6,009   5,498
Total residential mortgages 652,225 652,139 647,821 655,531 671,772
 
Home equity and direct installment 193,089 208,333 220,401 237,088 254,014
Home equity lines of credit   569,519   550,417   530,104   507,347   500,372
Total home equity 762,608 758,750 750,505 744,435 754,386
 
Private banking credit lines 99,859 98,714 98,865 99,154 103,806
Indirect vehicle and other   164,740   163,242   160,775   162,497   167,095
All other consumer   264,599   261,956   259,640   261,651   270,901
Total consumer   1,679,432   1,672,845   1,657,966   1,661,617   1,697,059
 
Loans 5,333,268 5,279,939 5,249,007 5,234,839 5,226,552
 
Loans held-for-sale 4,951 2,752 12,289 14,934 14,330
         
Total loans $ 5,338,219 $ 5,282,691 $ 5,261,296 $ 5,249,773 $ 5,240,882
 

Deposit composition:
Savings $ 526,576 $ 518,430 $ 527,216 $ 520,223 $ 493,386
NOW accounts 1,655,425 1,958,116 1,545,659 1,471,185 1,472,985
Money market accounts 1,670,035 1,639,859 1,654,442 1,647,863 1,642,803
Time deposits less than $100k 896,700 925,118 963,238 991,380 1,017,925
Time deposits $100k or greater   353,791   367,387   389,781   633,626   417,065
Total interest bearing deposits 5,102,527 5,408,910 5,080,336 5,264,277 5,044,164
 
Non-interest bearing deposits   970,051   1,026,546   942,127   919,783   891,401
 
Total deposits $ 6,072,578 $ 6,435,456 $ 6,022,463 $ 6,184,060 $ 5,935,565
 
                   
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2013
     
Unaudited, dollars in thousands except share and per share data
Quarterly, as of Twelve Months, as of
12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012 12/31/2013   12/31/2012
Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total loans* $ 5,256,841 4.17 % $ 5,229,366 4.19 % $ 5,244,930 4.27 % $ 5,223,015 4.37 % $ 5,206,227 4.55 % $ 5,238,606 4.25 % $ 5,193,376 4.72 %
Investment securities* 2,375,732 3.50 % 2,316,066 3.51 % 2,334,594 3.53 % 2,325,225 3.60 % 2,323,243 3.63 % 2,337,983 3.54 % 2,317,591 3.84 %
Interest earning deposits   89,530 0.17 %   102,581 0.19 %   94,788 0.17 %   119,834 0.25 %   276,078 1.28 %   101,603 0.20 %   285,956 0.48 %
 
Total earning assets   7,722,103 3.92 %   7,648,013 3.93 %   7,674,312 4.00 %   7,668,074 4.07 %   7,805,548 4.16 %   7,678,192 3.98 %   7,796,923 4.30 %
Total assets   8,384,990   8,310,626   8,326,499   8,298,815   8,440,642   8,330,415   8,424,322
 
Savings 524,647 0.10 % 524,178 0.11 % 525,494 0.11 % 505,513 0.11 % 488,195 0.11 % 520,022 0.10 % 486,160 0.12 %
NOW accounts 1,873,519 0.14 % 1,732,394 0.14 % 1,543,649 0.14 % 1,439,387 0.14 % 1,463,488 0.14 % 1,648,660 0.14 % 1,362,573 0.15 %
Money market accounts 1,649,960 0.23 % 1,655,133 0.27 % 1,646,691 0.29 % 1,645,838 0.30 % 1,630,449 0.30 % 1,650,376 0.27 % 1,649,152 0.35 %
Time deposits   1,273,664 1.07 %   1,312,810 1.09 %   1,464,421 1.08 %   1,507,667 1.10 %   1,454,415 1.17 %   1,388,789 1.08 %   1,490,965 1.24 %
 
Total interest bearing deposits   5,321,790 0.39 %   5,224,515 0.42 %   5,180,255 0.45 %   5,098,405 0.47 %   5,036,547 0.49 %   5,207,847 0.43 %   4,988,850 0.54 %
 
Non-interest bearing deposits   984,037   963,625   913,311   876,700   886,858   933,849   882,140
Total deposits   6,305,827 0.33 %   6,188,140 0.35 %   6,093,566 0.38 %   5,975,105 0.40 %   5,923,405 0.41 %   6,141,696 0.36 %   5,870,990 0.46 %
 
Customer repurchase agreements 529,541 0.30 % 518,569 0.34 % 523,585 0.35 % 547,706 0.37 % 551,334 0.37 % 529,770 0.34 % 533,325 0.40 %
Repurchase agreements 50,000 4.87 % 50,000 4.87 % 63,736 3.92 % 135,454 2.15 % 75,000 4.25 % 74,496 3.45 % 80,820 4.30 %
Short-term borrowings 54 0.00 % - 0.00 % - 0.00 % 39,200 0.42 % 1,087 0.37 % 9,680 0.42 % 342 0.29 %
Federal Home Loan Bank advances (c) 190,670 2.68 % 277,101 1.90 % 348,814 1.59 % 262,067 3.61 % 463,397 3.79 % 269,488 2.35 % 537,569 4.28 %
Subordinated debentures   77,321 2.76 %   77,321 2.77 %   77,321 2.85 %   125,207 4.75 %   144,377 5.07 %   89,128 3.47 %   144,451 5.14 %
Total deposits and borrowings   7,153,413 0.44 %   7,111,131 0.47 %   7,107,022 0.50 %   7,084,739 0.63 %   7,158,600 0.76 %   7,114,258 0.51 %   7,167,497 0.88 %
Total interest bearing liabilities $ 6,169,376 0.52 % $ 6,147,506 0.54 % $ 6,193,711 0.57 % $ 6,208,039 0.72 % $ 6,271,742 0.87 % $ 6,180,409 0.59 % $ 6,285,357 1.00 %
 
Net interest margin (FTE) 3.51 % 3.49 % 3.53 % 3.49 % 3.46 % 3.51 % 3.50 %
 
Wealth assets under management $

2,504,717
$ 2,388,991 $ 2,285,199 $ 2,328,042 $ 2,256,319
 
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2013
     
Unaudited
 
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
 
Quarterly, as of
12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012
 

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

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 120 120 120 119 120
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 125 125 125 125 125
 
EOP employees (full-time equivalent) 1,631 1,632 1,666 1,657 1,648
 

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