CORRECTING and REPLACING National Penn Bancshares, Inc. Reports Fourth Quarter 2010 Results

Adjusted net income improves to 10 cents per share1

  • Net interest margin of 3.43%

Asset quality continues to improve

  • Quarterly loan loss provision declines to $17.5 million
  • Classified loans and non performing assets continue to decline
  • Loan loss reserve to non-performing loans increased to 179%

Strong capital base further enhanced

  • Completion of Christiana Bank & Trust divestiture
  • January 2011 completion of Warburg Pincus investment
Correction...by National Penn Bancshares, Inc.

BOYERTOWN, Pa.--()--Sixth graph should read: ... shareholders of record on February 6, 2011 (sted February 6, 2010).

The corrected release reads:

NATIONAL PENN BANCSHARES, INC. REPORTS FOURTH QUARTER 2010 RESULTS

Adjusted net income improves to 10 cents per share1

  • Net interest margin of 3.43%

Asset quality continues to improve

  • Quarterly loan loss provision declines to $17.5 million
  • Classified loans and non performing assets continue to decline
  • Loan loss reserve to non-performing loans increased to 179%

Strong capital base further enhanced

  • Completion of Christiana Bank & Trust divestiture
  • January 2011 completion of Warburg Pincus investment

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $6.6 million, or $0.05 per diluted common share, for the fourth quarter of 2010 compared to a net income of $10.3 million, or $0.08 per diluted common share, for the third quarter 2010. On an adjusted basis1, net income totaled $13.5 million, or $0.10 per diluted common share, which represents an increase of 12% from the third quarter of 2010. Fourth quarter adjusted net income¹ excludes the impact of an after-tax unrealized fair value adjustment on National Penn’s traded trust preferred securities (Nasdaq: NPBCO) of $1.3 million and the previously announced tax expense of $5.5 million related to the divestiture of Christiana Bank & Trust. This tax expense was a non-cash charge and did not impact regulatory capital ratios. For the year ended December 31, 2010 diluted earnings per common share were $0.10 while adjusted earnings per common share were $0.30.

“The fourth quarter and full year 2010 results continue to demonstrate the improving profitability trends of National Penn and are indicative of the strength of our balance sheet,” said Scott Fainor, president and CEO of National Penn. “The strategic initiatives of divesting Christiana Bank & Trust and finalizing the $150 million Warburg Pincus investment position National Penn well for the future.”

Fundamental operating performance remained strong as the net interest margin and the efficiency ratio were comparable to previous quarters. The balance sheet contracted by approximately 2% during the quarter, exclusive of the divestiture of Christiana, as disciplined deposit pricing reduced the cost of deposits by 12 basis points through reductions in higher cost time deposits. Loan balances, exclusive of Christiana, declined by $200 million despite $292 million in new originations due to soft loan demand in this economic environment and a planned reduction in classified credits.

Asset quality trends continued to improve for the fourth consecutive quarter. Non-performing loans declined by 11% and classified loans declined by 4%. Despite a reduction in the provision for loan losses, the loan loss reserve to non-performing loans increased to 179%.

The strength of the balance sheet is apparent not only in loan loss reserve levels but also indicated by National Penn’s capital levels. Tangible common equity to tangible assets was 8.27% and risk based capital ratio was 17.38% at December 31, 2010. Pro forma for the Warburg Pincus investment, tangible common equity to tangible assets is 9.18% and the risk based capital ratio is 18.86%. These capital and reserve levels should provide National Penn an ability to accelerate the repayment of TARP.

National Penn’s Board of Directors approved a first quarter cash dividend of $0.01 per share, payable on February 17, 2011 to shareholders of record on February 6, 2011, consistent with the $0.01 per share paid in the previous quarter.

Scott Fainor stated, “I am proud of the efforts of our employees in achieving our strategic initiatives of improving asset quality, enhancing capital levels and improving earnings of National Penn as we focused on reducing risk. As we look forward, we will stay focused on these initiatives as we continue efforts to grow despite the current economic environment.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $9 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 124 community banking offices in Pennsylvania and one office in Maryland through National Penn Bank and its HomeTowne Heritage Bank, KNBT and Nittany Bank divisions.

National Penn’s financial services affiliates consist of 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.

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.

  • Annualized return on average tangible common equity excludes the average balance of acquisition-related goodwill and intangible assets and the average balance of preferred equity in determining average tangible shareholders’ equity. Annualized return on average tangible equity provides a method to assess management’s success in utilizing the company’s tangible common capital.
  • Tangible book value excludes from total equity goodwill, intangible assets and preferred stock. Banking and financial institution regulators also exclude goodwill and intangible assets from shareholders’ equity when assessing the capital adequacy of a financial institution. Tangible book value provides a method to assess the level of tangible net assets on a per share basis.
  • Adjusted net income excludes the effects of certain gains and losses, adjusted for applicable taxes. Adjusted net income provides a method 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, as well as its business and operations following the completion of transactions described in this release, are subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: increased capital requirements and other requirements or actions mandated by National Penn’s regulators, National Penn’s inability to meet the requirements of the memorandum of understanding or the individual minimum capital ratio requirements issued by its primary regulator, National Penn’s inability to successfully implement its “self-improvement plan”, National Penn’s ability to raise capital and maintain capital levels, variations in interest rates, deterioration in the credit quality of loans, the effect of credit risk exposure, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, recent and ongoing changes to the state and federal regulatory schemes under which National Penn and other financial services companies operate (including the recently passed Dodd-Frank Act and regulations to be adopted to implement that Act), competition from other financial institutions, interruptions or breaches of National Penn’s security systems, and the development and maintenance of National Penn’s information technology. These risks and others are described in greater detail in National Penn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, 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.

1 Adjusted net income, as used throughout this release, is a non-GAAP financial measure. Please refer to the Statement Regarding Non-GAAP Financial Measures and the attached Financial Highlights and financial data tables for additional information on this measure and a reconciliation of this measure to net income available to common shareholders, the most comparable GAAP measure.

 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2010
Exchange Listing Nasdaq "NPBC"
         
Financial Highlights
Unaudited, numbers in thousands except share and per share data
Christiana
        12/31/2010       9/30/2010     % Change     12/31/2009       9/30/2010    
SUMMARY BALANCE SHEET                            
Total assets $ 8,844,620 $ 9,248,229 -4.36 % $ 9,483,910 $ 199,447
Investment securities and other securities 2,259,690 2,255,265 0.20 % 2,180,541 3,252
Total loans and leases 5,326,723 5,641,830 -5.59 % 6,024,501 115,233
Deposits 6,059,173 6,505,477 -6.86 % 6,738,852 161,309
Borrowings 1,590,996 1,605,411 -0.90 % 1,633,434 -
Shareholders' equity 1,137,437 1,092,018 4.16 % 1,069,468
Tangible book value per common share $ 5.18 $ 5.11 1.37 % $ 4.84
Tangible common equity / tangible assets 8.27 % 7.20 % 6.64 %
 
Three Months Ended Twelve Months Ended December 31,
        12/31/2010       9/30/2010     % Change (a)     2010       2009     % Change (a)  
EARNINGS                            
Total interest income $ 93,745 $ 96,360 -2.71 % $ 387,249 $ 421,143 -8.05 %
Total interest expense       26,104       28,670     -8.95 %       116,017       168,634     -31.20 %
Net interest income 67,641 67,690 -0.07 % 271,232 252,509 7.41 %
Provision for loan and lease losses       17,500       20,000     -12.50 %       95,000       154,025     -38.32 %

Net interest income after provision for loan and lease losses

50,141 47,690 5.14 % 176,232 98,484 78.94 %
Net (losses) gains from fair value changes (2,049 ) (2,606 ) 21.37 % (10,373 ) (4,427 ) NM
Loss on CDO investments - - 0.00 % - (99,887 ) NM
Other non-interest income 25,707 26,083 -1.44 % 108,595 102,794 5.64 %
Goodwill impairment - - 0.00 % 8,250 275,000 NM
Other non-interest expense       59,493       57,965     2.64 %       233,426       233,616     -0.08 %
Income (loss) before income taxes 14,306 13,202 8.36 % 32,778 (411,652 ) NM
Income tax expense (benefit)       5,664       895     NM         11,441       (63,613 )   NM  
Net income (loss)       8,642       12,307     -29.78 %       21,337       (348,039 )   NM  
Preferred dividends and accretion of preferred discount       (2,005 )     (2,006 )   0.05 %       (8,021 )     (8,340 )   3.82 %
Net income (loss) available to common shareholders     $ 6,637     $ 10,301     -35.57 %     $ 13,316     $ (356,379 )   NM  
                             
PERFORMANCE RATIOS                        
Net interest margin 3.43 % 3.42 % 3.45 % 3.18 %
Return on average assets 0.38 % 0.53 % 0.23 % NM
Return on average total shareholders' equity 3.00 % 4.50 % 1.95 % NM
Return on average tangible common equity (1) 3.76 % 6.42 % 2.07 % NM
                         
PER SHARE                        
Basic earnings (loss) available to common shareholders $ 0.05 $ 0.08 $ 0.10 $ (3.61 )
Diluted earnings (loss) available to common shareholders 0.05 0.08 0.10 (3.61 )
Dividends per common share 0.01 0.01 0.04 0.28
Average shares - basic 134,380,086 126,102,037 128,118,298 98,818,526
Average shares - diluted       134,471,788       126,255,249             128,186,651       98,818,526  
                         
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES Three Months Ended Twelve Month Ended
  12/31/2010       9/30/2010     12/31/2010       12/31/2009  
Return on average tangible common equity
Return on average shareholders' equity 3.00 % 4.50 % 1.95 % NM
Effect of preferred equity -0.35 % -0.14 % -0.54 % NM
Effect of goodwill and intangibles   1.11 %   2.06 %   0.66 %   NM  
Return on average tangible common equity   3.76 %   6.42 %   2.07 %   NM  
Average tangible equity:
Average shareholders' equity $ 1,141,979 $ 1,084,724 $ 1,094,642 $ 1,246,537
Average preferred equity (148,377 ) (148,248 ) (148,184 ) (144,631 )
Average goodwill and intangibles   (292,855 )   (299,919 )   (303,541 )   (589,133 )
Average total tangible common equity $ 700,747   $ 636,557   $ 642,917   $ 512,773  
 
Adjusted net income reconciliation
Net income (loss) available to common shareholders $ 6,637 $ 10,301 $ 13,316 $ (356,379 )
After tax gain on pension plan curtailment - - (2,643 ) -

After tax unrealized fair market value loss (gain) on NPB Capital Trust II Preferred Securities

1,332 1,694 6,743 2,878
After tax loss on investment securities - - - 1,858

After tax other than temporary impairment charge on CDO investment

- - - 66,164
After tax insurance proceeds - - - (2,618 )
After tax FDIC special assessment - - - 3,006
After tax (gain) loss on sale of wealth unit - - - (797 )
After tax loss (gain) on sale of SNC loans - - - 3,921
After tax SERP accrual - - - 1,300
Tax expense from sale of Christiana 5,486 - 5,486 -
BOLI tax expense - - 8,081 -
Goodwill impairment   -     -     8,250     275,000  
Adjusted net income available to common shareholders $ 13,455   $ 11,995   $ 39,233   $ (5,667 )
 
Earnings per share
Net income (loss) available to common shareholders $ 0.05 $ 0.08 $ 0.10 $ (3.61 )
After tax gain on pension plan curtailment - - (0.02 ) -

After tax unrealized fair market value loss (gain) on NPB Capital Trust II Preferred Securities

0.01 0.01 0.05 0.03
After tax loss on investment securities - - - 0.02

After tax other than temporary impairment charge on CDO investment

- - - 0.67
After tax insurance proceeds - - - (0.03 )
After tax FDIC special assessment - - - 0.03
After tax (gain) loss on sale of wealth unit - - - (0.01 )
After tax loss (gain) on sale of SNC loans - - - 0.04
After tax SERP accrual - - - 0.01
Tax expense from sale of Christiana 0.04 - 0.05 -
BOLI tax expense - - 0.06 -
Goodwill impairment   -     -     0.06     2.78  
Adjusted net income available to common shareholders $ 0.10   $ 0.09   $ 0.30   $ (0.06 )
 

(a) Changes greater than 100% are expressed as not meaningful or "NM"

 
 
Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 

       
Unaudited, numbers in thousands except share and per share data As of
12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
BALANCE SHEET - ASSETS
Cash and due from banks $ 90,283 $ 103,279 $ 106,059 $ 103,666 $ 106,722
Interest-earning deposits with banks   612,099     609,733     496,282     239,757     496,535  
Total cash and cash equivalents 702,382 713,012 602,341 343,423 603,257
 
Investment securities available for sale, at fair value 1,632,118 1,603,849 1,554,349 1,569,062 1,499,667
Investment securities held to maturity 546,957 567,740 579,572 591,315 601,923
Other securities 80,615 83,676 83,676 83,676 78,951
Loans held for sale 12,785 30,081 15,944 6,561 18,028
 
Loans and leases 5,313,938 5,611,749 5,740,291 5,908,658 6,006,472
Allowance for loan and lease losses   (150,054 )   (153,475 )   (154,039 )   (153,850 )   (146,271 )
Loans and leases, net 5,163,884 5,458,274 5,586,252 5,754,808 5,860,201
 
Premises and equipment, net 105,483 108,496 109,792 112,376 113,556
Accrued interest receivable 33,829 36,127 35,745 37,175 36,565
Bank owned life insurance, redeemed but not settled - 64,387 64,387 - -
Bank owned life insurance 134,154 136,093 134,925 198,392 198,131
Other real estate owned and other repossessed assets 7,453 7,818 8,974 2,386 4,208
Goodwill 258,279 273,468 273,468 281,718 281,623
Other intangible assets, net 22,217 25,587 27,360 29,130 30,943
Unconsolidated investments under the equity method 11,482 12,428 12,736 12,842 12,821
Other assets   132,982     127,193     132,606     148,897     144,036  
TOTAL ASSETS $ 8,844,620   $ 9,248,229   $ 9,222,127   $ 9,171,761   $ 9,483,910  
 
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits $ 808,835 $ 815,193 $ 834,297 $ 800,467 $ 753,650
Interest bearing deposits   5,250,338     5,690,284     5,661,908     5,610,897     5,985,202  
Total deposits 6,059,173 6,505,477 6,496,205 6,411,364 6,738,852
 
Securities sold under repurchase agreements 734,455 752,428 752,314 758,828 737,323
Short-term borrowings 10,000 6,974 7,000 7,165 6,900
Federal Home Loan Bank advances 703,761 705,278 706,784 743,781 756,803
Subordinated debentures 142,780 140,731 138,125 139,668 132,407
Accrued interest payable and other liabilities   57,014     45,323     44,811     40,167     42,157  
TOTAL LIABILITIES   7,707,183     8,156,211     8,145,239     8,100,973     8,414,442  
 
BALANCE SHEET - SHAREHOLDERS' EQUITY
Preferred stock 148,441 148,310 148,180 148,050 147,920
Common stock 1,292,342 1,227,639 1,227,354 1,226,481 1,225,635
Retained deficit (293,940 ) (299,209 ) (308,252 ) (301,459 ) (302,120 )
Accumulated other comprehensive income/(loss)   (9,406 )   15,278     9,606     (2,284 )   (1,967 )
TOTAL SHAREHOLDERS' EQUITY   1,137,437     1,092,018     1,076,888     1,070,788     1,069,468  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,844,620   $ 9,248,229   $ 9,222,127   $ 9,171,761   $ 9,483,910  
 
 
COMMON SHARE AND PER SHARE DATA
Book Value $ 7.23 $ 7.48 $ 7.37 $ 7.32 $ 7.33
Tangible Book Value (2) $ 5.18 $ 5.11 $ 4.98 $ 4.86 $ 4.84
Dividends $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01
Shares Outstanding (end of period, net of treasury) 136,792,414 126,115,073 126,064,075 126,004,409 125,713,668
 
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity $ 1,137,437 $ 1,092,018 $ 1,076,888 $ 1,070,788 $ 1,069,468
Total preferred shareholders' equity (148,441 ) (148,310 ) (148,180 ) (148,050 ) (147,920 )
Goodwill and intangibles   (280,496 )   (299,055 )   (300,828 )   (310,848 )   (312,566 )
Tangible common equity $ 708,500   $ 644,653   $ 627,880   $ 611,890   $ 608,982  
Common shares outstanding 136,792,414 126,115,073 126,064,075 126,004,409 125,713,668
Tangible book value per share $ 5.18 $ 5.11 $ 4.98 $ 4.86 $ 4.84
 
 

Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 

           
Unaudited, numbers in thousands except share and per share data For the Quarter Ended For the Twelve Months Ended
12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009 12/31/2010 12/31/2009
INTEREST INCOME
Loans and leases, including fees $ 73,496 $ 76,227 $ 77,830 $ 78,654 $ 82,927 $ 306,207 $ 336,787
Investment securities
Taxable 11,272 11,157 11,457 11,098 11,871 44,984 47,077
Tax-exempt 8,569 8,697 8,803 8,838 8,946 34,906 36,649
Federal funds sold and deposits in banks   408     279     218     247     204     1,152     630  
Total interest income   93,745     96,360     98,308     98,837     103,948     387,249     421,143  
INTEREST EXPENSE
Deposits 13,411 15,773 16,464 18,281 22,844 63,929 110,935
Securities sold under repurchase agreements 2,567 2,757 2,808 2,874 3,049 11,006 12,666
FHLB advances and subordinated debentures   10,126     10,140     10,393     10,423     10,610     41,082     45,033  
Total interest expense   26,104     28,670     29,665     31,578     36,503     116,017     168,634  
Net interest income 67,641 67,690 68,643 67,259 67,445 271,232 252,509
Provision for loan and lease losses   17,500     20,000     25,000     32,500     47,000     95,000     154,025  
Net interest income after provision for loan and lease losses   50,141     47,690     43,643     34,759     20,445     176,232     98,484  
NON-INTEREST INCOME
Wealth management income 6,917 6,997 7,238 7,101 7,406 28,253 28,923
Service charges on deposit accounts 5,358 5,419 5,446 5,341 6,141 21,564 24,259
Insurance commissions and fees 3,423 3,499 3,639 3,771 3,970 14,332 15,714
Cash management and electronic banking fees 4,584 4,548 4,614 4,158 4,237 17,904 15,921
Mortgage banking income 2,590 2,424 1,231 1,153 1,337 7,398 8,475
Bank owned life insurance income 1,501 1,168 1,280 1,983 1,441 5,932 4,919
Equity in undistributed net earnings of unconsolidated investments 140 (41 ) 537 163 1,706 799 2,586
Gain on pension plan curtailment - - - 4,066 - 4,066 -
Other operating income 1,638 2,381 2,771 2,733 (1,783 ) 9,523 6,758
Net (losses) gains from fair value changes (2,049 ) (2,606 ) 1,543 (7,261 ) 3,669 (10,373 ) (4,427 )
Net (losses) gains on sales of investment securities - - 214 - 290 214 (2,857 )
Impairment losses on investment securities:
Impairment losses on investment securities (444 ) (312 ) - (634 ) (2,166 ) (1,390 ) (127,812 )

Non credit-related losses on securities not expected to be sold recognized in other comprehensive loss before tax

  -     -     -     -     -     -     26,021  
Net impairment losses on investment securities   (444 )   (312 )   -     (634 )   (2,166 )   (1,390 )   (101,791 )
Total non-interest income (loss)   23,658     23,477     28,513     22,574     26,248     98,222     (1,520 )
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 31,499 31,544 30,999 29,429 30,864 123,471 125,635
Net premises and equipment 7,460 7,256 7,209 7,998 7,962 29,923 31,999
Advertising and marketing expenses 997 982 1,762 1,609 2,442 5,350 7,436
Fraud recovery - - - - - - (4,028 )
Goodwill impairment - - 8,250 - 275,000 8,250 275,000
FDIC insurance 3,411 3,641 4,056 4,097 3,910 15,205 14,915
Other operating expenses   16,126     14,542     14,287     14,524     16,941     59,477     57,659  
Total non-interest expense   59,493     57,965     66,563     57,657     337,119     241,676     508,616  
Income (loss) before income taxes 14,306 13,202 5,593 (324 ) (290,426 ) 32,778 (411,652 )
Income tax expense (benefit)   5,664     895     9,132     (4,250 )   (9,227 )   11,441     (63,613 )
NET INCOME (LOSS)   8,642     12,307     (3,539 )   3,926     (281,199 )   21,337     (348,039 )
Preferred dividends and accretion of preferred discount   (2,005 )   (2,006 )   (2,005 )   (2,005 )   (2,095 )   (8,021 )   (8,340 )
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 6,637   $ 10,301   $ (5,544 ) $ 1,921   $ (283,294 ) $ 13,316   $ (356,379 )
 
PER SHARE OF COMMON STOCK
Basic earnings (loss) available to common shareholders $ 0.05 $ 0.08 $ (0.04 ) $ 0.02 $ (2.25 ) $ 0.10 $ (3.61 )
Diluted earnings (loss) available to common shareholders $ 0.05 $ 0.08 $ (0.04 ) $ 0.02 $ (2.25 ) $ 0.10 $ (3.61 )
Average Shares Basic 134,380,086 126,102,037 126,045,667 125,875,061 125,697,822 128,118,298 98,818,526
Average Shares Diluted 134,471,788 126,255,249 126,045,667 126,039,112 125,697,822 128,186,651 98,818,526
 
SUPPLEMENTAL DATA (annualized, average) (b)
Return on Assets 0.38 % 0.53 % NM 0.17 % NM 0.23 % NM
Return on Total Equity 3.00 % 4.50 % NM 1.48 % NM 1.95 % NM
Return on Common Equity 2.65 % 4.36 % NM 0.84 % NM 1.41 % NM
Return on Tangible Equity (1) 3.76 % 6.42 % NM 1.27 % NM 2.07 % NM
Efficiency Ratio (3) 60.36 % 58.51 % 57.72 % 58.54 % 58.79 % 58.78 % 59.61 %
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency Ratio Calculation
Non-interest expense $ 59,493 $ 57,965 $ 66,563 $ 57,657 $ 337,119 $ 241,676 $ 508,616
Less:
Fraud recovery - - - - - - (4,028 )
Goodwill impairment - - 8,250 - 275,000 8,250 275,000
FDIC Special Assessment - - - - - - 4,625
SERP accrual   -     -     -     -     2,000     -     2,000  
Operating expenses $ 59,493   $ 57,965   $ 58,313   $ 57,657   $ 60,119   $ 233,426   $ 231,019  
 
Net interest income (taxable equivalent) $ 72,849 $ 72,985 $ 74,055 $ 72,727 $ 73,007 $ 292,615 $ 275,192
 
Non-interest income (loss) 23,658 23,477 28,513 22,574 26,248 98,222 (1,520 )
Less:
Gain on pension plan curtailment - - - 4,066 - 4,066 -
Securities loss / impairment / CDO loss - - - - (1,876 ) - (104,648 )
Net (losses) gains from fair value changes (2,049 ) (2,606 ) 1,543 (7,261 ) 3,669 (10,373 ) (4,427 )
Loss on sale of SNC loans - - - - (6,032 ) - (6,032 )
Gain on sale of wealth unit   -     -     -     -     1,226     -     1,226  
Adjusted revenue $ 98,556   $ 99,068   $ 101,025   $ 98,496   $ 102,268   $ 397,144   $ 387,553  
 
Efficiency Ratio   60.36 %   58.51 %   57.72 %   58.54 %   58.79 %   58.78 %   59.61 %
 
(b) Ratios less than 0% are expressed as not meaningful or "NM"
 
 

Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 

           
Unaudited, numbers in thousands except share and per share data
As of and for the Quarter Ended For the Twelve Months Ended
CHARGE-OFFS 12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009 12/31/2010 12/31/2009
 
Loan Charge-offs $ 22,456   $ 23,306   $ 27,316   $ 27,482   $ 28,524   $ 100,560   $ 101,529  
Recoveries on Loans   (2,443 )   (2,742 )   (2,505 )   (2,561 )   (2,305 )   (10,251 )   (9,769 )
Net Loan Charge-offs $ 20,013   $ 20,564   $ 24,811   $ 24,921   $ 26,219   $ 90,309   $ 91,760  
Net Loan Charge-offs to Average Loans (annualized)   1.44 %   1.43 %   1.70 %   1.69 %   1.69 %   1.57 %   1.46 %
 
NET CHARGE OFF ASSETS-DETAIL
Commercial, Financial and Agricultural $ (7,266 ) $ (2,166 ) $ (8,608 ) $ (2,162 ) $ (11,529 ) $ (20,202 ) $ (44,736 )
Real Estate-Permanent (2,903 ) (1,655 ) (1,510 ) (359 ) (8,522 ) (6,427 ) (14,030 )
Real Estate-Construction (1,973 ) (12,899 ) (6,327 ) (18,427 ) (3,493 ) (39,626 ) (17,600 )
Leases (96 ) (1 ) (5 ) (98 ) (38 ) (200 ) (381 )
Residential Mortgages (5,621 ) (1,467 ) (5,368 ) (2,700 ) (1,089 ) (15,156 ) (3,492 )
Consumer (2,038 ) (2,169 ) (2,902 ) (1,086 ) (1,322 ) (8,195 ) (10,878 )
Overdraft   (116 )   (207 )   (91 )   (89 )   (226 )   (503 )   (643 )
Net Loans Charged-off $ (20,013 ) $ (20,564 ) $ (24,811 ) $ (24,921 ) $ (26,219 ) $ (90,309 ) $ (91,760 )
 
As of
ASSET QUALITY AND OTHER DATA 12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
 
Nonaccrual Loans $ 82,111   $ 83,650   $ 88,875   $ 111,064   $ 122,516  
Restructured Loans   -     8,544     7,324     6,653     576  
Loans 90+ Days Past Due & Still Accruing   1,753     2,237     2,997     2,651     2,694  
Total Non-performing Loans $ 83,864     $ 94,431     $ 99,196     $ 120,368     $ 125,786  
Other Real Estate Owned & Repossessed Assets   7,453     7,818     8,974     2,386     4,208  
Total Non-performing Assets $ 91,317   $ 102,249   $ 108,170   $ 122,754   $ 129,994  
Allowance for Loan and Lease Losses $ 150,054   $ 153,475   $ 154,039   $ 153,850   $ 146,271  
Allowance for Loan and Lease Losses/Non-Performing Loans   178.9 %   162.5 %   155.3 %   127.8 %   116.3 %
Allowance for Loan and Lease Losses/Non-Performing Assets   164.3 %   150.1 %   142.4 %   125.3 %   112.5 %
Provision/Charge-Offs, net   87.4 %   97.3 %   100.8 %   130.4 %   179.3 %
Classified Loans $ 479,336   $ 498,631   $ 512,628   $ 532,048   $ 501,485  
Classified Loans/Total Loans   9.00 %   8.84 %   8.91 %   8.99 %   8.32 %
Delinquent Loans $ 27,807   $ 33,676   $ 33,171   $ 31,891   $ 28,158  
Delinquent Loans/Total Loans   0.52 %   0.60 %   0.58 %   0.54 %   0.47 %
 
NON PERFORMING ASSETS-DETAIL
Commercial, Financial and Agricultural $ 34,197 $ 29,227 $ 33,712 $ 38,455 $ 40,618
Real Estate-Permanent 24,079 21,769 18,958 14,823 19,277
Real Estate-Construction 20,048 30,522 35,728 40,622 46,832
Leases 684 651 468 580 396
Residential Mortgages 5,802 13,396 11,422 18,368 12,800
Consumer 4,227 3,853 4,227 6,691 6,842
Loans Past Due 90+Days 1,753 2,237 2,997 2,651 2,694
Total Other Repossessed Assets   527     594     658     564     535  
Total Non-performing Assets + Loans 90 Days Past Due $ 91,317   $ 102,249   $ 108,170   $ 122,754   $ 129,994  
 
 
As of
REGULATORY CAPITAL DATA 12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
 
Tier 1 Capital $ 924,143   $ 850,185   $ 833,526   $ 810,119   $ 809,218  
Tier 1 Leverage Ratio   10.59 %   9.67 %   9.41 %   9.06 %   8.88 %
Tier 1 Ratio (%)   16.12 %   14.00 %   13.64 %   12.88 %   12.66 %
Total Capital $ 996,288   $ 926,499   $ 910,857   $ 889,675   $ 889,966  
Total Capital Ratio (%)   17.38 %   15.26 %   14.91 %   14.15 %   13.92 %
Total Risk-Weighted Assets $ 5,732,730   $ 6,070,678   $ 6,109,763   $ 6,289,618   $ 6,394,468  
 
               

Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 
Unaudited, numbers in thousands except share and per share data
As of
PERIOD END BALANCES: 12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
 
Earning Assets / Liabilities

Loan Breakdown: (Regulatory)

Commercial/Industrial $ 804,602 $ 878,790 $ 925,661 $ 972,132 $ 985,357
Commercial Real Estate (4)   1,653,063   1,810,442   1,804,073   1,852,838   1,833,069
Residential Mortgage   1,294,751   1,381,117   1,412,218   1,398,640   1,430,027
Real Estate Construction and Land Development   426,208   375,341   404,292   463,833   534,315
Home Equity   755,829   792,496   800,378   800,394   806,556
Consumer   236,107   244,878   247,113   251,611   252,028
Other Loans   156,163   158,766   162,500   175,771   183,148
Total Loans   5,326,723   5,641,830   5,756,235   5,915,219   6,024,500
Allowance for Loan and Lease Losses/Total Loans and Leases   2.82%   2.72%   2.68%   2.60%   2.43%
Investment Securities and Other Securities   2,259,690   2,255,265   2,217,597   2,244,053   2,180,541
Other Earning Assets   612,099   609,733   496,282   239,757   496,535
Total Earning Assets (net of loan loss reserve) $ 8,048,458 $ 8,353,353 $ 8,316,075 $ 8,245,178 $ 8,555,305
(4) Includes owner occupied
 

Loan Breakdown: (Internal)

Commercial Real Estate
Non Owner Occupied
- Permanent $ 768,988 $ 855,777 $ 868,405 $ 865,003 $ 831,127
- Construction / Development   281,056   312,086   335,799   365,641   406,331
Commercial & Industrial
Business Purpose, Real Estate secured   948,506   987,551   991,075   1,024,362   1,052,096
Business Purpose, not secured by Real Estate   886,692   953,645   1,005,189   1,075,058   1,091,578
Owner Occupied Commercial Real Estate
- Permanent   552,129   556,738   556,201   570,659   589,455
- Construction / Development   37,196   38,902   38,858   42,122   52,710
Leasing   10,437   12,230   13,810   15,942   17,304
Residential Mortgage (personal purpose)
Permanent   758,301   795,420   813,042   822,373   833,721
Construction   7,113   9,966   10,925   10,486   12,275
Retail
Home Equity Loans and Direct Installment Loans   423,755   446,866   458,803   466,611   487,793
Home Equity Lines of Credit   321,369   332,074   317,469   303,246   297,652
Private Banking Credit Lines   150,811   159,991   163,526   167,954   171,582
Indirect Vehicle Loans   131,416   133,297   136,177   138,536   141,829
Other   48,954   47,287   46,956   47,226   39,047
Total Loans $ 5,326,723 $ 5,641,830 $ 5,756,235 $ 5,915,219 $ 6,024,500
 

Deposit Breakdown:

Savings $ 438,879 $ 430,806 $ 455,061 $ 433,669 $ 414,886
NOW Accounts   1,181,850   1,294,582   1,130,026   1,114,539   1,284,143
Money Market Accounts   1,664,620   1,714,771   1,763,631   1,724,852   1,675,369
CDs $100k or less   1,378,060   1,512,573   1,543,947   1,565,238   1,607,148
CDs greater than $100k   586,929   737,552   769,243   772,599   1,003,656
Total Interest Bearing Deposits   5,250,338   5,690,284   5,661,908   5,610,897   5,985,202
Borrowings   1,590,996   1,605,411   1,604,223   1,649,442   1,633,433
Total Interest Bearing Liabilities $ 6,841,334 $ 7,295,695 $ 7,266,131 $ 7,260,339 $ 7,618,635
 
 

Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 

Unaudited, numbers in thousands except share and per share data
  Quarterly, as of   Twelve Months, as of
12/31/2010   9/30/2010   6/30/2010   3/31/2010   12/31/2009   12/31/2010     12/31/2009  
Avg Bal     Yield Avg Bal     Yield Avg Bal   Yield Avg Bal   Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total Loans (net of unearned) $ 5,506,513 5.35 % $ 5,703,685 5.35 % $ 5,856,738 5.39 % $ 5,985,554 5.39 % $ 6,137,362 5.42 % $ 5,761,647 5.37 % $ 6,286,831 5.41 %
Investment Securities   2,274,090 4.24 %   2,227,732 4.34 %   2,248,560 4.43 %   2,184,886 4.56 %   2,244,878 4.51 %   2,234,045 4.39 %   2,083,933 4.94 %

Interest Earning Deposits and

Fed Funds Sold

  642,204 0.25 %   535,446 0.21 %   388,434 0.23 %   411,100 0.24 %   410,679 0.22 %   495,042 0.23 %   284,855 0.22 %
 
Total Earning Assets   8,422,807 4.66 %   8,466,862 4.76 %   8,493,732 4.90 %   8,581,540 4.93 %   8,792,919 4.94 %   8,490,734 4.81 %   8,655,619 5.13 %
Total Assets   9,122,895 4.30 %   9,197,254 4.39 %   9,228,295 4.51 %   9,337,334 4.53 %   9,775,612 4.45 %   9,220,791 4.43 %   9,686,673 4.58 %
 
Savings   435,069 0.20 %   445,327 0.27 %   446,347 0.29 %   421,503 0.33 %   405,132 0.33 %   437,796 0.27 %   390,028 0.31 %
NOW Accounts   1,265,646 0.23 %   1,203,831 0.28 %   1,156,191 0.35 %   1,170,886 0.43 %   1,212,744 0.56 %   1,195,331 0.32 %   1,115,747 0.69 %
Money Market Accounts   1,682,091 0.60 %   1,728,823 0.82 %   1,726,437 0.87 %   1,710,084 0.97 %   1,704,247 1.11 %   1,715,233 0.81 %   1,693,218 1.27 %
CDs   2,124,910 1.85 %   2,279,366 1.92 %   2,322,483 1.97 %   2,522,020 2.03 %   2,730,493 2.34 %   2,311,017 1.95 %   2,802,915 2.87 %
 
Total Interest Bearing Deposits   5,507,716 0.97 %   5,657,347 1.11 %   5,651,458 1.17 %   5,824,493 1.27 %   6,052,616 1.50 %   5,659,377 1.13 %   6,001,908 1.85 %
 
Non-Interest Bearing Deposits   818,330   831,484   831,119   767,398   741,254   812,275   731,122
Total Deposits   6,326,046 0.84 %   6,488,831 0.96 %   6,482,577 1.02 %   6,591,891 1.12 %   6,793,870 1.34 %   6,471,652 0.99 %   6,733,030 1.65 %
 
Short-Term Borrowings   764,314 1.33 %   734,904 1.49 %   752,907 1.50 %   749,114 1.56 %   694,000 1.74 %   750,309 1.47 %   660,825 1.92 %
Long-Term Borrowings   845,423 4.75 %   844,336 4.76 %   879,339 4.74 %   885,293 4.77 %   904,083 4.66 %   863,436 4.76 %   978,889 4.60 %

Total Interest Bearing Liabilities

(including non-interest bearing deposits)

  7,935,783 1.31 %   8,068,071 1.41 %   8,114,823 1.47 %   8,226,298 1.56 %   8,391,953 1.73 %   8,085,397 1.43 %   8,372,744 2.01 %
Total Interest Bearing Liabilities $ 7,117,453 1.46 % $ 7,236,587 1.57 % $ 7,283,704 1.63 % $ 7,458,900 1.72 % $ 7,650,699 1.89 % $ 7,273,122 1.60 %   7,641,622 2.21 %
 
Net Yield on Earning Assets: (Margin) 3.43 % 3.42 % 3.50 % 3.44 % 3.29 % 3.45 % 3.18 %
 
Wealth Assets:
Assets under administration $ 3,973,910 $ 10,616,931 $ 9,942,778 $ 9,229,435 $ 8,989,419
Assets under management 2,092,149 2,394,916 2,252,299 2,285,178 2,199,946
(included above)
Christiana Bank and Trust
Trust Revenues $ 862 (c) $ 1,539 $ 1,607 $ 1,555 $ 1,870
 
(c) Through December 3, 2010
 
 

Financial Update for National Penn Bancshares (NPBC) for 12/31/2010

 

         
Unaudited, numbers in thousands except share and per share data
Quarterly, as of
12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
STATES OF OPERATION AND BANKING OFFICES
BY STATE (LATEST AVAILABLE DATA)
 

PA

Total Number of Banking Offices 124 124 124 124 124
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries) 1 1 1 1 1
Total Number of ATMs 133 132 133 133 133
 

MD

Total Number of Banking Offices 1 1 1 1 1
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries) - - - - -
Total Number of ATMs 1 1 1 1 1
 

DE

Total Number of Banking Offices - 2 2 2 2
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries) - 1 1 1 1
Total Number of ATMs - 2 2 2 2
 

TOTAL

Total Number of Banking Offices 125 127 127 127 127
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries) 1 2 2 2 2
Total Number of ATMs 134 135 136 136 136
 
EOP Employees (Full Time Equivalent) 1,728 1,771 1,792 1,753 1,756

Contacts

National Penn Bancshares, Inc.
Media Contact:
Catharine S. Bower, Corporate Communications
610-369-6618
catharine.bower@nationalpenn.com
or
Investor Contact:
Michelle H. Debkowski, Investor Relations
610-369-6461
michelle.debkowski@nationalpenn.com

Contacts

National Penn Bancshares, Inc.
Media Contact:
Catharine S. Bower, Corporate Communications
610-369-6618
catharine.bower@nationalpenn.com
or
Investor Contact:
Michelle H. Debkowski, Investor Relations
610-369-6461
michelle.debkowski@nationalpenn.com