EX-99.1 2 earningsrelease7-25x13ex991.htm EXHIBIT 99.1 Earnings Release 7-25-13 Ex 99.1


Exhibit 99.1
News Release

National Penn Bancshares, Inc. Reports
Second Quarter 2013 Results

Company Release - July 25, 2013

Quarterly net income of $0.17 per diluted share
Adjusted net income1 per diluted share increases 10% for the first six months of 2013
Quarterly return on assets increases to 1.21%
Net interest margin expands to 3.53% from 3.49% in the prior quarter
Strong asset quality sustained
Focus on operating expense management continues

BOYERTOWN, PA., July 25, 2013 -- 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 income1 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 earnings1 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 expenses1. Operating expenses1 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 ratio1 was 58% for the first six months of 2013 with operating expenses1 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 equity1 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.”

 
Media Contact:
Jacklyn Bingaman, Marketing
 
 
 
(610) 369-6002 or jacklyn.bingaman@nationalpenn.com
 
 
 
 
 
 
Investor Contact:
Michelle H. Debkowski, Investor Relations
 
 
 
(610) 369-6461 or michelle.debkowski@nationalpenn.com
 
__________
# # #    

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.

1Statement 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