EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
 
News Release

 
National Penn Bancshares, Inc. Reports Fourth Quarter
And Full Year 2009 Financial Results

Scott V. Fainor Appointed President & CEO and Director;
Reports Fourth Quarter Core Loss of $0.04 Per Share After Increase in Loan Loss Reserve;
One-time Non-cash Charge of $275 Million to Strengthen Balance Sheet

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

BOYERTOWN, PA., January 28, 2010 -- Thomas A. Beaver, Chairman of the Board of National Penn Bancshares, Inc. (Nasdaq: NPBC)  announced that Scott V. Fainor has been appointed President & CEO of National Penn and has been elected to the Board of Directors, effective January 27, 2010. Glenn E. Moyer, as a transition to retirement, will continue with National Penn as a special advisor to Mr. Fainor for a period of time.

“The Board and I wish to thank Glenn Moyer for his contributions to National Penn over the past years,” said Mr. Beaver.  “The strategies that he and his team developed and executed helped make National Penn the respected financial institution that it is today.”  Mr. Fainor said, “I thank Glenn for his executive leadership, his dedication and involvement in business and the community, and I look forward to his ongoing support in his transition to retirement.”

For the fourth quarter 2009, National Penn recorded a loss totaling $283.3 million, representing a loss of $2.25 per common share.  The $275 million non-cash goodwill impairment charge resulted in $2.19 of the loss.   Exclusive of all non-core items, the fourth quarter core loss was $0.04 per common share.  For the full year 2009, National Penn reported a net loss of $356.4 million.  After payment of dividends on preferred stock issued to the U.S. Treasury under its Capital Purchase Program, this represents a loss of $3.61 per common share, compared to net income of $31.9 million, or $0.42 per diluted common share, for the year 2008.
 
 
1

 
Mr. Fainor commented that National Penn’s strong capital levels allowed it to take the following proactive steps to strengthen the balance sheet:
·  
A non-cash goodwill impairment charge of $275.0 million.  While this charge affected short-term earnings, it has no impact on National Penn’s regulatory capital ratios or tangible book value. Based upon its periodic testing, National Penn took this action as a result of several factors, including continued trading value of its stock relative to book value and certain events in the quarter more fully described in this release.  This charge is not directly attributed to any specific National Penn acquisition.
·  
A provision for loan losses of $47.0 million, which resulted in an overall increase in the allowance for loan and lease losses to $146.3 million, representing 2.43% of total loans and 116.29% of non-performing loans.
·  
The sale of a portfolio of underperforming shared national credit loans, which resulted in a pre-tax loss of $6.0 million ($3.9 million after tax).  National Penn has improved its overall credit quality through the divestiture of $47.4 million of lower quality assets as part of the $63.8 million of loan commitments sold.

In regard to National Penn’s performance, Mr. Fainor commented, “With the support of our Board of Directors, we are focused on shareholder value.  The actions we took in 2009 had a negative impact on short-term profitability, but have significantly strengthened our balance sheet and positioned National Penn for improved results in 2010 and beyond.”  He noted that National Penn remains in a strong capital position following the $225 million in common equity raised in 2009.

The net interest margin, as reclassified, increased during the fourth quarter 2009 to 3.29% from 3.24% in the third quarter 2009.  Fee income categories continued to perform well, and expenses remained well controlled, aside from significant increases in FDIC insurance premiums.

Considering the conversion of certain business money market deposits to cash management accounts, deposit growth was higher for the full year 2009 by 7.7%.  Our deposit market share in Pennsylvania improved to 9th rank versus 11th rank in 2008.  Additionally, National Penn improved to rank 1st in Berks and Centre counties, and maintained the 1st and 2nd ranks in Northampton and Lehigh counties, respectively.   This performance continues to reflect management’s execution of its funding strategies and customer confidence in the overall strength of National Penn.
 
 
 
2

 
For the full year 2009, National Penn was an active lender, originating loans to new and existing customers in excess of $1.0 billion. However,  total loans outstanding declined from year end 2008 by 4.6% due to repayments of loans from existing borrowers, sales of mortgage production in the secondary market, lower levels of loan demand, and loan charge-offs.  National Penn has a strong cross-sell culture between its banking subsidiaries, wealth affiliates, and insurance affiliates which is expected to accelerate growth in fee income, loans, and deposits.

National Penn’s Board of Directors approved a first quarter cash dividend of one cent per share, payable on February 17, 2010 to shareholders of record on February 6, 2010.  This compares to one cent per share paid in the fourth quarter 2009.

On January 27, 2010, National Penn Bank entered into a memorandum of understanding with its primary regulator principally due to its current level of classified assets.  Under this informal agreement, National Penn Bank has agreed to develop and implement initiatives to enhance the oversight of problem assets, enhance its process for the allowance for loan and lease losses, and strengthen its internal loan review and credit administration functions.  Many of these initiatives are in various stages of completion.  Additionally, National Penn Bank has agreed to achieve (by March 31, 2010) and maintain a Tier 1 leverage ratio of at least 8.0%, and to maintain a Tier 1 risk-based capital ratio of at least 10.0% and a total risk-based capital ratio of at least 12.0%.  At December 31, 2009, National Penn Bank’s capital ratios were 7.86%, 11.21% and 12.47% respectively.

“National Penn’s board and senior management remain committed to taking proactive steps to address the challenges that National Penn, like others in our industry, continue to face,” Mr. Fainor commented.  He noted that National Penn has a focused effort to enhance the strength of its balance sheet, as illustrated by the disposal of its entire CDO portfolio, the strengthening of its loan and lease loss reserve during the year, and the raising of $225 million in common equity.  Additionally, over the past several months, National Penn has developed an enterprise-wide “self-improvement plan” that is intended to define, guide, coordinate and oversee the execution of strategies to improve the financial strength of the company.  Through these initiatives, National Penn has already begun taking the steps to provide the financial strength necessary for its future success and growth.

__________
# # #


 
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About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with $9.5 billion in assets, is the fourth largest bank holding company based in Pennsylvania.  In addition, wealth assets under administration or management amount to $9.0 billion.

Headquartered in Boyertown, National Penn operates 127 offices. It has 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 also has two offices in Delaware through its wholly-owned subsidiary Christiana Bank & Trust Company.

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 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.  One such measure, annualized return on average tangible equity, excludes the average balance of acquisition-related goodwill and intangibles in determining average tangible shareholders’ equity.  Banking and financial institution regulators also exclude goodwill and intangibles from shareholders’ equity when assessing the capital adequacy of a financial institution. The other such measure, core net income (or core earnings), excludes the effects of non-cash, after-tax unrealized gains and losses.  Management believes the presentation of these financial measures excluding the impact of the specified items provides useful supplemental information that is essential to a proper understanding of the financial results of National Penn.  In the case of annualized return on average tangible equity, it provides a method to assess management’s success in utilizing the company’s tangible capital.  In the case of core net income (or core earnings), it provides a method to assess earnings performance, which excludes discretionary and/or infrequently occurring items.  This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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.

 
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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: 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, continued deterioration in the credit quality of certain 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, 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, 2008, 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.

 
 

 
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National Penn Bancshares, Inc.
                                    
                                     
Exchange Listing Nasdaq "NPBC"
                                    
                                     
Financial Highlights (unaudited)
                                    
(Dollars in thousands, except per share data)
                                    
   
Three Months Ended December 31,
    
Twelve Months Ended December 31,
  
   
2009
    
2008
    
% Change
    
2009
    
2008
    
% Change
  
STATEMENTS OF CONDITION
                                    
Total assets
                     $ 9,483,910     $ 9,403,431       0.86 %
Investment securites
                       2,180,541     $ 1,919,889       13.58 %
Loans and leases
                       6,024,501       6,315,874       -4.61 %
Deposits
                       6,738,852       6,389,886       5.46 %
Short-term borrowings
                       744,223       651,307       14.27 %
Long-term borrowings
                       889,211       1,083,963       -17.97 %
Shareholders' equity
                       1,069,468       1,179,995       -9.37 %
Book value per share
                       8.51       14.62       -41.80 %
Common book value per share
                       7.33       12.83       -42.87 %
EARNINGS
                                          
Total interest income
   $ 103,948     $ 115,613       -10.09 %   $ 421,143     $ 466,236       -9.67 %
Total interest expense
     36,503       52,515       -30.49 %     168,634       213,498       -21.01 %
Net interest income
   $ 67,445       63,098       6.89 %   $ 252,509       252,738       -0.09 %
Provision for loan and lease losses
     47,000       18,500       154.05 %     154,025       32,497       373.97 %
Net interest income after provision
                                                
  for loan and lease losses
   $ 20,445       44,598       -54.16 %   $ 98,484       220,241       -55.28 %
Other income
     26,247       (46,204 )     -156.81 %     (1,520 )     22,758       -106.68 %
Other expenses
     337,119       59,704       464.65 %     508,616       216,531       134.89 %
Income (loss) before income taxes
   $ (290,427 )     (61,310 )     373.70 %     (411,652 )     26,468       -1655.28 %
Income taxes
     (9,227 )     (25,546 )     -63.88 %     (63,613 )     (5,803 )     996.24 %
Net income (loss)
     (281,200 )     (35,764 )     686.26 %     (348,039 )     32,271       -1178.49 %
Preferred dividends/accretion of preferred discount
     (2,095 )     (417 )     402.40 %     (8,340 )     (417 )     1900.00 %
Net income (loss) available to common shareholders
   $ (283,295 )   $ (36,181 )     682.99 %   $ (356,379 )   $ 31,854       -1218.79 %
                                                 
PERFORMANCE RATIOS
                                                
Net yield on earning assets
     3.29 %     3.33 %     -0.95 %     3.18 %     3.47 %     -8.41 %
Return on average assets
     -11.41 %     -1.53 %     646.97 %     -3.59 %     0.36 %     -1088.11 %
Return on average total shareholders' equity
     -82.16 %     -13.20 %     522.40 %     -27.92 %     3.28 %     -950.15 %
Return on average total tangible equity (1)
     -144.25 %     -28.83 %     400.37 %     -52.94 %     7.51 %     -804.64 %
                                                 
PER SHARE
                                                
Basic earnings available to common shareholders
   $ (2.25 )   $ (0.45 )     400.84 %   $ (3.61 )   $ 0.42       -962.54 %
Diluted earnings available to common shareholders
     (2.25 )     (0.45 )     400.84 %     (3.61 )     0.42       -968.83 %
Dividends per common share
     0.01       0.17       -94.12 %     0.28       0.68       -59.00 %
Average shares - basic
     125,697,822       79,341,618       58.43 %     98,818,526       76,185,375       29.71 %
Average shares - diluted
     125,697,822       79,341,618       58.43 %     98,818,526       76,740,859       28.77 %
                                                 
(1) Reconciliation Tables for Non-GAAP Financial Measures
                                          
                                                 
Return on average shareholders' equity
     -82.16 %     -13.20 %             -27.92 %     3.28 %        
Effect of goodwill and intangibles
     -62.08 %      -15.62 %             -25.02 %     4.23 %        
Return on average tangible equity
     -144.25 %     -28.82 %             -52.94 %     7.51 %        
Average tangible equity excludes acquisition
                                                
related average goodwill and intangibles:
                                                
Average shareholders' equity
   $ 1,357,801     $ 1,077,773             $ 1,246,537     $ 982,619          
Average goodwill and intangibles
     (584,375 )     (584,221 )             (589,133 )     (553,098 )        
Average total tangible equity
   $ 773,426     $ 493,552             $ 657,405     $ 429,521          
                                                 
                                                 
Net Income available to common shareholders
   $ (283,295 )   $ (36,181 )           $ (356,379 )   $ 31,854          
After tax goodwill impairment charge
     275,000       -               275,000       -          
After tax other than temporary impairment
                                                
charge on investments
     1,407       51,672               66,164       64,672          
After tax (gain) loss on investment securities
     (188 )     (8 )             1,858       (437 )        
After tax unrealized fair market value (gain) loss on
                                          
NPB Capital Trust II Preferred Securities
     (2,385 )     (4,243 )             2,878       (7,811 )        
After tax fraud loss
     -       2,925               -       2,925          
After tax insurance proceeds
     -       -               (2,618 )     -          
After tax FDIC special assessment
     -       -               3,006       -          
After tax (gain) loss on sale of wealth unit
     (797 )     -               (797 )     -          
After tax (gain) loss on sale of SNC loans
     3,921       -               3,921       -          
After tax SERP accrual
     1,300       -               1,300       -          
Core net income (loss) available to common shareholders
   $ (5,037 )   $ 14,165             $ (5,667 )   $ 91,203          
                                                 
Earnings per share
   $ (2.25 )   $ (0.45 )           $ (3.61 )   $ 0.42          
After tax goodwill impairment charge
     2.19       -               2.78       -          
After tax other than temporary impairment
                                                
charge on investments
     0.01       0.65               0.67       0.84          
After tax (gain) loss on investment securities
     (0.00 )     (0.00 )             0.02       (0.01 )        
After tax unrealized fair market value (gain) loss on
                                          
NPB Capital Trust II Preferred Securities
     (0.02 )     (0.05 )             0.03       (0.10 )        
After tax fraud loss
     -       0.04               -       0.04          
After tax insurance proceeds
     -       -               (0.03 )     -          
After tax FDIC special assessment
     -       -               0.03       -          
After tax (gain) loss on sale of wealth unit
     (0.01 )     -               (0.01 )     -          
After tax (gain) loss on sale of SNC loans
     0.03       -               0.04       -          
After tax SERP accrual
     0.01       -               0.01       -          
Core net income (loss) available to common shareholders
   $ (0.04 )   $ 0.18             $ (0.06 )   $ 1.19          
 
 
 

 
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Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/09
                          
                               
PAGE:  1 OF 5
  
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
BALANCE SHEET - ASSETS ($000s)
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
  
Cash & Cash Equivalents
   $ 603,257     $ 400,191     $ 348,371     $ 389,024     $ 195,830  
Held to Maturity Securities
     601,923       612,214       653,184       299,645       326,090  
Securities Available for Sale
     1,578,618       1,636,023       1,504,155       1,614,393       1,593,799  
Total Securities
     2,180,541       2,248,237       2,157,339       1,914,038       1,919,889  
Total Cash and Securities
     2,783,798       2,648,428       2,505,710       2,303,062       2,115,719  
Loans & Leases Held for Sale
     18,028       9,279       23,326       17,806       3,605  
Loans & Leases Held for Investment
     6,006,473       6,190,405       6,283,523       6,347,246       6,312,269  
Total Loans and Leases
     6,024,501       6,199,684       6,306,849       6,365,052       6,315,874  
Loan and Lease Loss Reserve
     (146,271 )     (125,490 )     (98,313 )     (86,273 )     (84,006 )
Premises and Equipment, net
     112,744       113,712       114,635       116,885       119,924  
Premises Held for Sale
     812       812       812       812       3,768  
Bank Owned Life Insurance
     198,131       197,132       196,001       194,883       193,811  
Goodwill
     281,624       555,789       555,964       556,031       558,252  
Other Intangibles
     30,943       32,854       33,654       35,557       37,496  
Total Intangible Assets
     312,567       588,643       589,618       591,588       595,748  
Unconsolidated Investments Under the Equity Method
     12,821       11,718       13,279       12,966       11,874  
Other Real Estate Owned and Repossessed Assets
     4,208       826       1,359       1,862       1,552  
Other Assets
     180,599       104,845       127,963       132,205       129,167  
Total Assets
   $ 9,483,910     $ 9,740,310     $ 9,757,913     $ 9,633,042     $ 9,403,431  
                                         
BALANCE SHEET - LIABILITIES ($000s)
                                        
Interest-bearing Deposits
   $ 5,985,202     $ 6,080,203     $ 6,070,056     $ 5,929,420     $ 5,596,617  
Noninterest-bearing Deposits
     753,650       718,459       741,598       730,814       793,269  
Borrowings
     1,501,027       1,414,817       1,525,578       1,584,684       1,607,290  
Subordinated Debt (Trust Preferred Securities)
     132,407       136,076       129,827       129,877       127,980  
Other Liabilities
     42,156       30,649       74,231       82,145       98,280  
Total Liabilities
   $ 8,414,442     $ 8,380,204     $ 8,541,290     $ 8,456,940     $ 8,223,436  
                                         
BALANCE SHEET - EQUITY ($000s)
                                        
Preferred Stock
   $ 147,920     $ 144,738     $ 144,517     $ 144,297     $ 144,076  
Common Stock
     1,225,636       1,227,032       1,072,921       1,019,548       1,003,110  
Retained (Deficit) Earnings
     (302,121 )     (16,908 )     52,143       65,765       65,194  
Accumulated Other Comprehensive income (loss)
     (1,967 )     5,244       (52,958 )     (53,508 )     (32,385 )
 Treasury Stock
     -       -       -       -       -  
Total Shareholders Equity
   $ 1,069,468     $ 1,360,106     $ 1,216,623     $ 1,176,102     $ 1,179,995  
                                         
MEMO ITEMS
                                        
Held to Maturity Securities (Fair Value)
   $ 603,915     $ 635,398     $ 618,282     $ 271,423     $ 284,608  
Common Book Value Per Share
   $ 7.33     $ 9.67     $ 11.23     $ 12.43     $ 12.83  
Total Book Value Per Share
   $ 8.51     $ 10.82     $ 12.74     $ 14.17     $ 14.62  
Tangible Common Book Value Per Share
   $ 4.84     $ 4.99     $ 5.05     $ 5.30     $ 5.45  
Tangible Total Book Value Per Share
   $ 6.02     $ 6.14     $ 6.57     $ 7.04     $ 7.24  
EOP Common Shares Outstanding (excluding Treasury shares)
     125,713,668       125,658,738       95,507,091       83,005,701       80,731,751  
Treasury Shares Held By Company
     -       -       -       -       -  
Common Stock Dividends (total $ in period)
   $ 1,257     $ 4,085     $ 4,199     $ 13,800     $ 13,805  
Dividends per Common Share
   $ 0.0100     $ 0.0500     $ 0.0500     $ 0.1700     $ 0.1725  
Number of Shares to be Repurchased in Plans
     -       -       -       -       -  
Number of Shares Repurchased During Period
     -       -       -       -       -  
Average Price of Repurchased Shares
   $ -     $ -     $ -     $ -     $ -  
 
 

 
 
 

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/09
                                      
PAGE:  2 OF 5
                                          
   
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
YEAR
    
YEAR
  
   
ENDED
    
ENDED
    
ENDED
    
ENDED
    
ENDED
    
TO DATE
    
TO DATE
  
INCOME STATEMENT ($000s)
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
    
12/30/2009
    
12/30/2008
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
  
Interest Income
   $ 103,948     $ 105,385     $ 105,848     $ 105,962     $ 115,613     $ 421,143     $ 466,236  
Interest Expense
     36,503       40,042       44,768       47,321       52,515       168,634       213,498  
Net Interest Income
     67,445       65,343       61,080       58,641       63,098       252,509       252,738  
Provision for Loan and Lease Losses
     47,000       52,000       37,500       17,525       18,500       154,025       32,497  
Net Interest Income after Provision for Loan and Lease Losses
     20,445       13,343       23,580       41,116       44,598       98,484       220,241  
Wealth Management Income
     7,406       7,670       7,232       6,615       7,543       28,923       31,905  
Service Charges on Deposits
     6,141       6,247       6,071       5,800       6,685       24,259       25,150  
Cash Management and Electronic Banking Fees
     4,237       4,041       3,995       3,648       3,826       15,921       14,386  
Mortgage Banking Income
     1,337       1,884       2,834       2,420       856       8,475       3,307  
Insurance Commissions and Fees
     3,970       3,771       4,016       3,957       3,691       15,714       15,378  
Bank Owned Life Insurance Income
     1,441       1,131       1,275       1,072       1,217       4,919       6,341  
Equity in Unconsolidated Investments
     1,706       (525 )     314       1,091       1,550       2,586       4,546  
Net gains (losses) from Fair Value changes
     3,669       (6,249 )     51       (1,898 )     6,527       (4,427 )     12,017  
Net gains (losses) on Investment Securities
     289       (863 )     -       (2,284 )     12       (2,858 )     672  
Total Impairment Losses on Investment Securities
     (2,165 )     (84,704 )     (7,136 )     (7,785 )     n/a       (101,790 )     -  
Non Credit-related Impairment on Securities not Expected to be Sold
     -       -       -       -       n/a       -       -  
Net Impairment Losses on Investment Securities
     (2,165 )     (84,704 )     (7,136 )     (7,785 )     (79,496 )     (101,790 )     (99,496 )
Other Non-Interest Income
     (1,784 )     3,315       2,659       2,568       1,385       6,758       8,552  
Total Non-Interest Income (Loss)
     26,247       (64,282 )     21,311       15,204       (46,204 )     (1,520 )     22,758  
Salaries, Wages and Employee Benefits
     30,864       30,505       32,249       32,017       30,807       125,635       123,332  
Net Premises and Equipment Expense
     7,962       8,104       7,335       8,598       7,108       31,999       32,550  
Amortization of Intangibles
     1,912       1,899       1,903       1,940       1,996       7,654       7,523  
Goodwill Impairment
     275,000       -       -       -       -       275,000       -  
Other Non-Interest Expense
     21,381       15,672       16,540       14,138       15,293       67,731       48,626  
FDIC Insurance special assessment
     -       -       4,625       -       -       4,625       -  
Fraud Expense (Recovery)
     -       (4,028 )     -       -       4,500       (4,028 )     4,500  
Total Non-Interest Expense
     337,119       52,152       62,652       56,693       59,704       508,616       216,531  
Net Income (Loss) Before Taxes
     (290,427 )     (103,091 )     (17,761 )     (373 )     (61,310 )     (411,652 )     26,468  
Income Tax (Benefit) Expense
     (9,227 )     (40,000 )     (10,213 )     (4,173 )     (25,546 )     (63,613 )     (5,803 )
Net Income (Loss)
     (281,200 )     (63,091 )     (7,548 )     3,800       (35,764 )     (348,039 )     32,271  
Preferred dividends/accretion of preferred discount
     (2,095 )     (2,096 )     (2,095 )     (2,054 )     (417 )     (8,340 )     (417 )
Net Income (Loss) available to Common Shareholders
   $ (283,295 )   $ (65,187 )   $ (9,643 )   $ 1,746     $ (36,181 )   $ (356,379 )   $ 31,854  
                                                         
Net Interest Income (FTE)
   $ 73,007     $ 70,972     $ 66,777     $ 64,437     $ 68,952     $ 275,192     $ 273,659  
                                                         
EARNINGS PER SHARE:
                                                        
                                                         
Basic earnings (loss)
   $ (2.24 )   $ (0.63 )   $ (0.09 )   $ 0.05     $ (0.45 )   $ (3.52 )   $ 0.42  
Basic earnings (loss) available to common shareholders
   $ (2.25 )   $ (0.65 )   $ (0.11 )   $ 0.02     $ (0.45 )   $ (3.61 )   $ 0.42  
Diluted earnings (loss)
   $ (2.24 )   $ (0.63 )   $ (0.09 )   $ 0.05     $ (0.45 )   $ (3.52 )   $ 0.42  
Diluted earnings (loss) available to common shareholders
   $ (2.25 )   $ (0.65 )   $ (0.11 )   $ 0.02     $ (0.45 )   $ (3.61 )   $ 0.42  
Average Shares Basic
     125,697,822       100,064,355       87,415,723       81,497,806       79,341,618       98,818,526       76,185,375  
Average Shares Diluted
     125,697,822       100,064,355       87,415,723       81,891,272       79,341,618       98,818,526       76,740,859  
                                                         
SUPPLEMENTAL DATA ($000s)
                                                        
Return on Avg. Assets (annualized)
     -11.41 %     -2.57 %     -0.31 %     0.16 %     -1.53 %     -3.59 %     0.36 %
Return on Avg.Total Equity (annualized)
     -82.16 %     -20.01 %     -2.52 %     1.31 %     -13.20 %     -27.92 %     3.28 %
Return on Avg. Common Equity (annualized)
     -91.98 %     -22.63 %     -2.87 %     1.49 %     -13.61 %     -31.59 %     3.31 %
Return on Avg. Total Tangible Equity (annualized)
     -144.25 %     -37.82 %     -4.97 %     2.64 %     -28.83 %     -52.94 %     7.51 %
Return on Avg. Common Tangible Equity (annualized)
     -177.50 %     -48.40 %     -6.52 %     3.51 %     -30.86 %     -67.87 %     7.66 %
 

Reconciliation Table for Non-GAAP Financial Measures
                                      
               Return on average total shareholders' equity
     -82.16 %     -20.01 %     -2.52 %     1.31 %     -13.20 %     -27.92 %     3.28 %
               Effect of goodwill and intangibles
     -62.08 %     -17.81 %     -2.45 %     1.33 %     -15.62 %     -25.02 %     4.23 %
               Return on average total tangible equity
     -144.25 %     -37.82 %     -4.97 %     2.64 %     -28.83 %     -52.94 %     7.51 %
Average total tangible equity excludes acquisition related average goodwill and intangibles:
                                  
               Average total shareholders' equity
   $ 1,357,801     $ 1,250,619     $ 1,199,198     $ 1,176,494     $ 1,077,773     $ 1,246,537     $ 982,619  
               Average goodwill and intangibles
     (584,375 )     (588,842 )     (590,593 )     (592,816 )     (584,221 )     (589,133 )     (553,098 )
               Average total tangible equity
   $ 773,426     $ 661,777     $ 608,605     $ 583,678     $ 493,552     $ 657,405     $ 429,521  
                                                         
Return on average common shareholders' equity
     -91.98 %     -22.63 %     -2.87 %     1.49 %     -13.61 %     -31.59 %     3.31 %
               Effect of goodwill and intangibles
     -85.52 %     -25.77 %     -3.65 %     2.02 %     -17.25 %     -36.29 %     4.35 %
               Return on average common tangible equity
     -177.50 %     -48.40 %     -6.52 %     3.51 %     -30.86 %     -67.87 %     7.66 %
Average common tangible equity excludes acquisition related average goodwill and intangibles:
                                  
               Average common shareholders' equity
   $ 1,212,916     $ 1,105,988     $ 1,054,790     $ 1,031,883     $ 1,045,212     $ 1,101,903     $ 974,435  
               Average goodwill and intangibles
     (584,375 )     (588,842 )     (590,593 )     (592,816 )     (584,221 )     (589,133 )     (553,098 )
               Average common tangible equity
   $ 628,541     $ 517,146     $ 464,197     $ 439,067     $ 460,991     $ 512,770     $ 421,337  
 
 

 
 
 

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/09
                                      
                                           
PAGE:  3 of 5
                                          
   
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
FOR QUARTER
    
YEAR
    
YEAR
  
   
ENDED
    
ENDED
    
ENDED
    
ENDED
    
ENDED
    
TO DATE
    
TO DATE
  
CHARGEOFFS ($000s)
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
    
12/31/2009
    
12/31/2008
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
  
Loan Chargeoffs
   $ 28,524     $ 29,202     $ 27,759     $ 16,044     $ 18,946     $ 101,529     $ 33,552  
Recoveries on Loans
     (2,305 )     (4,379 )     (2,299 )     (786 )     (756 )     (9,769 )     (4,280 )
Net Loan Chargeoffs
   $ 26,219     $ 24,823     $ 25,460     $ 15,258     $ 18,190     $ 91,760     $ 29,272  
Net Loan Chargeoffs to Average Loans (non-annualized)
     0.43 %     0.40 %     0.40 %     0.24 %     0.29 %     1.46 %     0.49 %
                                                         
NET CHARGE OFF ASSETS-DETAIL
                                                        
Commercial, Financial and Agricultural
   $ (11,529 )   $ (11,819 )   $ (14,791 )   $ (6,597 )   $ (10,901 )                
Real Estate-Permanent
     (8,522 )     (2,485 )     (3,029 )     6       (378 )                
Real Estate-Construction
     (3,493 )     (7,835 )     (5,038 )     (1,234 )     (4,103 )                
Leases
     (38 )     19       (274 )     (88 )     -                  
Residential Mortgages
     (1,089 )     (860 )     (978 )     (565 )     (1,534 )                
Consumer
     (1,322 )     (1,688 )     (1,235 )     (6,633 )     (1,048 )                
Overdraft
     (226 )     (155 )     (115 )     (147 )     (226 )                
Net Loans Charged-off
   $ (26,219 )   $ (24,823 )   $ (25,460 )   $ (15,258 )   $ (18,190 )                
                                                         
   
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
                  
ASSET QUALITY AND OTHER DATA ($000s)
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
                  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
                  
Nonaccrual Loans
   $ 122,516     $ 116,418     $ 119,615     $ 59,871     $ 31,972                  
Renegotiated Loans
     576       589       603       614       623                  
Loans 90+ Days Past Due & Still Accruing
     2,694       3,113       2,763       2,659       2,991                  
Total Non-performing Loans
   $ 125,786     $ 120,120     $ 122,981     $ 63,144     $ 35,586                  
Other Real Estate Owned & Repossessed Assets
     4,208       826       1,359       1,862       1,552                  
Total Non-performing Assets
   $ 129,994     $ 120,946     $ 124,340     $ 65,006     $ 37,138                  
Allowance for Loan and Lease Losses
   $ 146,271     $ 125,490     $ 98,313     $ 86,273     $ 84,006                  
Coverage Ratio
     116.3 %     104.5 %     79.9 %     136.6 %     236.1 %                
Classified Loans
   $ 501,485     $ 483,163     $ 375,842     $ 263,332     $ 196,349                  
Classified Loans to Total Loans
     8.32 %     7.79 %     5.96 %     4.14 %     3.11 %                
                                                         
NON PERFORMING ASSETS-DETAIL
                                                        
Commercial, Financial and Agricultural
   $ 40,618     $ 42,226     $ 38,416     $ 26,479     $ 11,657                  
Real Estate-Permanent
     19,277       15,255       10,332       2,327       1,730                  
Real Estate-Construction
     46,832       43,497       56,567       18,357       10,884                  
Leases
     396       461       445       789       600                  
Residential Mortgages
     12,800       8,934       7,543       6,155       3,950                  
Consumer
     6,842       6,796       7,624       7,402       4,557                  
Loans Past Due 90+Days
     2,694       3,113       2,763       2,659       2,991                  
Total Other Repossessed Assets
     535       664       650       838       769                  
Total Non-performing Assets + Loans 90 Days Past Due
   $ 129,994     $ 120,946     $ 124,340     $ 65,006     $ 37,138                  
                                                         
                                                         
   
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
                  
REGULATORY CAPITAL DATA ($000s)
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
                  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
                  
Tier 1 Capital
   $ 809,218     $ 827,685     $ 809,600     $ 764,426     $ 741,622                  
Tier 1 Ratio (%)
     12.65 %     12.46 %     11.31 %     10.44 %     10.65 %                
Total Capital (Tier 1 + Tier 2)
   $ 889,968     $ 911,234     $ 899,239     $ 854,019     $ 825,628                  
Total Capital Ratio (%)
     13.92 %     13.72 %     12.56 %     11.61 %     11.85 %                
Total Risk-Adjusted Assets
   $ 6,394,468     $ 6,642,041     $ 7,160,809     $ 7,324,455     $ 6,965,197                  
Tier 1 Leverage Ratio
     8.88 %     9.00 %     8.80 %     8.62 %     8.50 %                
Tangible Common Equity to Tangible Assets
     6.64 %     6.85 %     5.26 %     4.87 %     5.00 %                
Tangible Equity to Tangible Assets Ratio
     8.25 %     8.43 %     6.84 %     6.46 %     6.84 %                
 
 

 
 
 

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/09
                              
                               
PAGE:  4 of 5
  
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
PERIOD END BALANCES:
  
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
  
Earning Assets / Liabilities
                              
Loan Breakdown:  (Regulatory)
                              
Commercial/Industrial
   $ 985,357     $ 1,098,501     $ 1,139,020     $ 1,182,486     $ 1,192,357  
Commercial Real Estate
     1,833,069       1,787,829       1,845,085       1,840,278       1,808,017  
Residential Mortgage (including multi-family)
     1,430,027       1,443,030       1,481,807       1,515,548       1,526,276  
Real Estate Construction and Land Development
     534,315       637,231       626,816       617,853       588,458  
Home Equity (revolving and 2nd lien)
     806,556       804,415       800,122       800,304       791,975  
Consumer (Loans to Individuals)
     252,028       254,909       244,048       235,228       228,438  
Other Loans
     183,149       173,769       169,951       173,355       180,353  
Total Loans (net of unearned)
     6,024,501       6,199,684       6,306,849       6,365,052       6,315,874  
Investment Securities
     2,180,541       2,248,237       2,157,339       1,914,038       1,919,889  
Other Earning Assets
     496,535       289,670       245,328       299,645       38,946  
Total Earning Assets (net of loan loss reserve)
   $ 8,555,306     $ 8,612,101     $ 8,611,203     $ 8,492,462     $ 8,190,703  
                                         
Deposit Breakdown:
                                        
Savings
   $ 414,886     $ 395,965     $ 393,163     $ 382,705     $ 362,709  
NOW Accounts
     1,284,143       1,221,170       1,127,352       967,221       1,010,532  
Money Market Accounts
     1,675,369       1,700,338       1,666,807       1,719,492       1,591,130  
CDs $100m or less
     1,615,569       1,630,528       1,709,667       1,730,061       1,760,030  
CDs greater than $100m
     995,235       1,132,202       1,173,067       1,129,941       872,216  
Total Int. Bearing Deposits
     5,985,202       6,080,203       6,070,056       5,929,420       5,596,617  
Short-Term Borrowings
     744,223       635,911       683,409       653,805       651,307  
Long-Term Debt
     889,211       914,982       971,996       1,060,756       1,083,963  
Total Int. Bearing Liabilities
   $ 7,618,636     $ 7,631,096     $ 7,725,461     $ 7,643,981     $ 7,331,887  
                                         
Loan Breakdown: (Internal)
                                        
Commercial Real Estate
                                        
   Non Owner Occupied
                                        
   - Permanent
   $ 831,127     $ 836,718     $ 846,291     $ 782,840     $ 770,663  
   - Construction / Development
     406,331       443,775       481,965       494,224       453,462  
Commercial & Industrial
                                        
   Business Purpose, Real Estate secured
     1,052,096       1,046,236       1,041,668       1,112,769       1,140,578  
   Business Purpose, not secured by Real Estate
     1,091,578       1,202,023       1,240,604       1,292,103       1,291,629  
   Owner Occupied Commercial Real Estate
                                        
   - Permanent
     589,455       595,849       609,192       582,611       553,720  
   - Construction / Development
     52,710       53,976       58,453       46,036       40,952  
Leasing
     17,304       18,351       18,442       19,205       20,246  
Residential Mortgage (personal purpose)
                                        
   Perm
     833,721       839,459       868,149       891,142       907,125  
   Construction
     12,275       14,037       14,305       17,583       19,073  
Retail
                                        
   Home Equity Loans and Direct Installment loans
     487,793       510,178       531,757       565,284       606,625  
   Home Equity Lines of Credit
     297,652       280,813       262,521       239,794       212,468  
   Private Banking Credit Lines
     171,582       172,113       166,542       157,734       159,774  
   Indirect Vehicle loans
     141,829       144,158       138,017       130,279       125,276  
   Other
     39,045       41,998       28,944       33,448       14,283  
Total Loans
   $ 6,024,501     $ 6,199,684     $ 6,306,849     $ 6,365,052     $ 6,315,874  
 

 
 
 

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/09
                                      
 
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BALANCE AND YIELD/COST ANALYSIS:
  
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
YTD
    
YTD
  
     
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
    
12/31/2008
    
12/31/2009
    
12/31/2008
  
     
(unaudited)
    
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Qtr Avg Bal
  
Yield
    
Qtr Avg Bal
  
Yield
    
Qtr Avg Bal
  
Yield
    
Qtr Avg Bal
  
Yield
    
Qtr Avg Bal
  
Yield
    
YTD Avg Bal
  
Yield
    
YTD Avg Bal
  
Yield
  
                                                                                       
Total Loans (net of unearned)
   $ 6,137,362       5.42 %   $ 6,280,351       5.38 %   $ 6,365,343       5.39 %   $ 6,366,859       5.47 %   $ 6,267,958       6.10 %   $ 6,286,831       5.41 %   $ 5,939,448       6.42 %
Investment Securities
     2,244,878       4.51 %     2,167,261       4.72 %     1,972,633       5.24 %     1,946,768       5.39 %     1,953,569       5.16 %     2,083,933       4.94 %     1,919,549       5.48 %
Interest Bearing Deposits and Fed Funds Sold
     410,679       0.22 %     243,596       0.25 %     400,828       0.21 %     92,227       0.14 %     26,811       0.83 %     284,855       0.22 %     24,964       2.53 %
                                                                                                                   
Total Earning Assets
     8,792,919       4.94 %     8,691,208       5.07 %     8,738,804       5.12 %     8,405,854       5.39 %     8,248,338       5.86 %     8,655,619       5.13 %     7,883,961       6.18 %
Total Earning Assets (net of loan loss reserve)
     8,661,393       5.02 %     8,582,628       5.13 %     8,645,644       5.17 %     8,316,706       5.45 %     8,163,407       5.92 %     8,550,469       5.19 %     7,803,165       6.24 %
Total Assets
     9,775,612       4.45 %     9,724,872       4.53 %     9,790,331       4.57 %     9,461,229       4.79 %     9,312,607       5.19 %     9,686,673       4.58 %     8,874,914       5.49 %
                                                                                                                   
Savings
     405,132       0.33 %     396,626       0.28 %     387,596       0.27 %     370,302       0.35 %     365,925       0.47 %     390,028       0.31 %     362,185       0.56 %
NOW Accounts
     1,212,744       0.56 %     1,162,730       0.58 %     1,110,985       0.82 %     973,386       0.83 %     973,959       1.18 %     1,115,747       0.69 %     900,092       1.31 %
Money Market Accounts
     1,704,247       1.11 %     1,695,479       1.10 %     1,708,680       1.25 %     1,672,706       1.63 %     1,592,120       2.14 %     1,693,218       1.27 %     1,585,939       2.37 %
Certificates
     2,730,493       2.34 %     2,822,447       2.72 %     2,935,996       3.08 %     2,722,419       3.37 %     2,594,983       3.50 %     2,802,915       2.87 %     2,367,451       3.87 %
                                                                                                                   
Total Int. Bearing Deposits
     6,052,616       1.50 %     6,077,282       1.70 %     6,143,257       1.98 %     5,738,813       2.24 %     5,526,987       2.50 %     6,001,908       1.85 %     5,215,667       2.74 %
                                                                                                                   
Non-Interest Bearing Deposits
     741,254               737,745               736,155               709,490               762,598               731,122               731,142          
Total Deposits
     6,793,870       1.34 %     6,815,027       1.52 %     6,879,412       1.77 %     6,448,303       1.99 %     6,289,585       2.20 %     6,733,030       1.65 %     5,946,809       2.40 %
                                                                                                                   
Short-Term Borrowings
     694,000       1.74 %     644,753       1.83 %     634,077       1.92 %     670,436       2.19 %     766,184       2.68 %     660,825       1.92 %     726,708       2.89 %
Long-Term Borrowings
     904,083       4.66 %     946,017       4.62 %     995,619       4.58 %     1,072,044       4.56 %     1,105,217       4.53 %     978,889       4.60 %     1,117,499       4.44 %
Total Int. Bearing Liabilities (incl. non-int bearing deposits)
     8,391,953       1.73 %     8,405,797       1.89 %     8,509,108       2.11 %     8,190,783       2.34 %     8,160,986       2.56 %     8,372,744       2.01 %     7,791,016       2.74 %
Total Int. Bearing Liabilities
     7,650,699       1.89 %     7,668,052       2.07 %     7,772,953       2.31 %     7,481,293       2.57 %     7,398,388       2.82 %     7,641,622       2.21 %     7,059,874       3.02 %
                                                                                                                   
Net Yield on Earning Assets (net of loan loss reserve): (Margin)
       3.34 %             3.28 %             3.10 %             3.14 %             3.36 %             3.22 %             3.51 %
Net Yield on Earning Assets: (Margin)
             3.29 %             3.24 %             3.06 %             3.11 %             3.33 %             3.18 %             3.47 %
                                                                                                                   
                                                                                                                   
Pro Forma - Net Yield on Earning Assets (net of loan loss reserve): (Margin) prior to reclass of Federal Reserve Bank balances to Interest Bearing Deposits
     3.48 %             3.35 %             3.22 %             3.16 %             3.36 %             3.31 %             3.51 %
Pro Forma - Net Yield on Earning Assets: (Margin) prior to reclass of Federal Reserve Bank balances to Interest Bearing Deposits
     3.43 %             3.31 %             3.19 %             3.13 %             3.33 %             3.27 %             3.47 %
                                                                                                                   
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
                                                                          
                                                                                                                   
State
Number of Full Service Banking Offices (Domestic and in the U.S. Territories)
                                                                        
                                                                                                                   
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               136               138               138               138                                          
                                                                                                                   
MD
                                                                                                                  
Total Number of Banking Offices
     1               1               1               1               1                                          
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)
     0               0               0               0               0                                          
Total Number of ATMs
     1               1               1               1               1                                          
                                                                                                                   
DE
                                                                                                                  
Total Number of Banking Offices
     2               2               2               2               2                                          
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)
     1               1               1               1               1                                          
Total Number of ATMs
     2               2               2               2               2                                          
                                                                                                                   
TOTAL
                                                                                                                  
Total Number of Banking Offices
     127               127               127               127               127                                          
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)
     2               2               2               2               2                                          
Total Number of ATMs
     136               139               141               141               141                                          
                                                                                                                   
EOP Employees (Full Time Equivalent)
     1,756               1,779               1,825               1,785               1,780                                          
                                                                                                                   
Wealth Assets:
                                                                                                                
Assets under administration
     8,989,419               8,471,813               8,133,044               7,851,843               7,912,771                                          
Assets under management (included above)
     2,199,946               2,549,386               2,426,525               2,280,512               2,414,271