ex99-1.htm

Exhibit 99.1

News Release

National Penn Bancshares, Inc. Reports

Second Quarter 2012 Results

Company Release – July 26, 2012

· Quarterly net income of $0.15 per common share; year-to-date return on assets of 1.14%

· Fifth consecutive quarterly cash dividend increase from $0.07 to $0.09

· 2.2 million common shares repurchased

· Maintained strong asset quality metrics as classified loans declined by 13% during the quarter

· Consistent earnings complement National Penn’s solid balance sheet

BOYERTOWN, PA., July 26, 2012 -- National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $22.4 million, or $0.15 per diluted share, for the second quarter of 2012, compared to $25.3 million, or $0.17 per diluted share, for the first quarter of 2012. First quarter 2012 included an after tax unrealized fair value gain of $0.01 per common share on National Penn’s trust preferred securities (Nasdaq: NPBCO). For the second quarter of 2011, net income available to common shareholders totaled $23.2 million, or $0.15 per diluted share. Year-to-date 2012 net income available to common shareholders totaled $47.8 million, or $0.31 per diluted share, an increase of 23% from $38.8 million, or $0.26 per diluted share, in the prior year.

Return on average assets was 1.14% for the first six months of 2012. Supported by the strength of National Penn’s capital position, the quarterly common stock cash dividend was increased for the fifth consecutive quarter to $0.09 per share for the third quarter. Also during the second quarter, National Penn repurchased approximately 2.2 million common shares under the previously announced program authorizing the repurchase of up to 7.5 million shares.

“The consistency of our financial results is a reflection of our culture of delivering on our strategic objectives every day with a sense of urgency and accountability,” said Scott V. Fainor, president and CEO of National Penn. “The strength of our balance sheet continues to provide opportunities to enhance shareholder value through increasing dividends and returning capital to our shareholders.”

Due to the continued low interest rate environment, net interest income contracted slightly for the quarter ended June 30, 2012 and totaled $63.2 million compared to $63.8 million in the first quarter. Net interest margin for the second quarter was 3.48% compared to 3.55% for the first quarter of 2012 and 3.53% a year ago. Average loans and leases grew by $17.6 million in the second quarter of 2012. The increase was primarily attributable to growth in commercial loans. The balance of total consumer loans, including residential mortgages, was stable on a linked-quarter basis as a result of prepayments and the sale of residential mortgage loans in the secondary market. A decline in loan and investment yields due to lower reinvestment rates was mitigated by continued efforts to manage funding costs, as total deposit costs declined by four basis points during the second quarter to 0.47%. The maturity of $80 million of FHLB advances during the second quarter 2012 also provided some benefit to net interest margin.

A significant decline in classified loans contributed to National Penn’s strong asset quality metrics. Classified loans declined 25% since June 30, 2011, of which 13% occurred during the second quarter of 2012. The continuing positive trend in classified loans, as well as an 11% decline in non-performing loans and stable net charge-offs in the second quarter, resulted in a provision for loan and lease losses of $2.0 million, consistent with the provision in the prior quarter. The coverage ratio of allowance for loan and lease losses to non-performing loans was 198% at June 30, 2012.

Total fee income from banking, wealth and insurance operations remained stable on a linked-quarter basis. Ongoing evaluation and management of expenses resulted in a stable efficiency ratio at 58.4%1 for the quarter ended June 30, 2012.

Strong internal generation of capital provided the basis for the increased quarterly dividend and share repurchases in the quarter and continued to support National Penn’s substantial capital position. As of June 30, 2012, the ratio of tangible common equity to tangible assets was 11.43%1 and the tier 1 common and total capital ratios were 15.04% and 18.71%, respectively.

Scott V. Fainor stated “The National Penn team has once again delivered solid returns during this period of slow economic recovery. We remain competitively positioned and focused on utilizing the significant strength of our balance sheet to continue to enhance shareholder value going forward.”

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

__________

# # #

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.4 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 121 branch offices comprising 120 branches in Pennsylvania and one branch in Maryland through National Penn Bank and its KNBT and Nittany Bank divisions.

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; 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.

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 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 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: 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), deterioration in the credit quality of loans, the effect of credit risk exposure, 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, National Penn’s ability to raise capital and maintain capital levels; increases in operating costs (including those mandated by National Penn’s regulators), competition for personnel and from other financial institutions, variations in interest rates, interruptions or breaches of National Penn’s security systems, the development and maintenance of National Penn’s information technology, the ability of National Penn and its subsidiaries to pay dividends, 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, 2011, 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 6/30/2012



Unaudited, dollars in thousands except share and per share data
	As of
	6/30/2012			3/31/2012			6/30/2011
SUMMARY BALANCE SHEET
Total assets	$	8,395,864		$	8,524,035		$	8,633,141
Investment securities and other securities		2,316,894			2,335,421			2,290,568
Total loans and leases		5,210,767			5,201,656			5,178,926
Deposits		5,845,543			5,888,383			5,944,161
Borrowings		1,298,477			1,387,235			1,515,611
Shareholders' equity		1,199,760			1,200,830			1,133,513
Tangible book value per common share (2)	$	6.18		$	6.09		$	5.65
Tangible common equity / tangible assets (2)		11.43	%		11.25	%		10.25	%

	Three Months Ended									Six Months Ended
	6/30/2012			3/31/2012			6/30/2011			6/30/2012			6/30/2011
EARNINGS
Total interest income	$	79,896		$	81,414		$	87,740		$	161,310		$	177,098
Total interest expense		16,697			17,596			22,745			34,293			46,133
Net interest income		63,199			63,818			64,995			127,017			130,965
Provision for loan and lease losses		2,000			2,000			3,000			4,000			13,000
Net interest income after provision for loan and lease losses		61,199			61,818			61,995			123,017			117,965
Net (losses) gains from fair value changes on subordinated debentures		(810	)		1,645			(430	)		835			(481	)
Net (losses) gains on investment securities		(277	)		-			-			(277	)		-
Other non-interest income		21,543			22,596			22,818			44,139			47,053
Other non-interest expense		52,269			52,440			54,121			104,709			110,958
Income before income taxes		29,386			33,619			30,262			63,005			53,579
Income tax expense		6,938			8,317			7,054			15,255			11,591
Net income		22,448			25,302			23,208			47,750			41,988
Preferred dividends and accretion of preferred discount		-			-			-			-			(1,691	)
Accelerated accretion from redemption of preferred stock		-			-			-			-			(1,452	)
Net income available to common shareholders	$	22,448		$	25,302		$	23,208		$	47,750		$	38,845

PERFORMANCE RATIOS
Net interest margin		3.48	%		3.55	%		3.53	%		3.52	%		3.56	%
Return on average assets		1.07	%		1.21	%		1.08	%		1.14	%		0.98	%
Adjusted return on average assets (3)		1.09	%		1.16	%		1.08	%		1.13	%		0.95	%
Return on average total shareholders' equity		7.50	%		8.56	%		8.37	%		8.03	%		7.35	%
Return on average tangible common equity (1)		9.69	%		11.12	%		11.16	%		10.40	%		9.65	%
Efficiency ratio (4)		58.42	%		57.47	%		58.25	%		57.94	%		58.94	%

PER SHARE
Basic earnings available to common shareholders	$	0.15		$	0.17		$	0.15		$	0.31		$	0.26
Diluted earnings available to common shareholders		0.15			0.17			0.15			0.31			0.26
Dividends per common share		0.07			0.05			0.01			0.12			0.02
Average shares - basic		151,732,402			152,099,546			151,601,052			151,915,974			151,034,207
Average shares - diluted		152,011,995			152,392,315			151,835,402			152,202,155			151,303,597


(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES	Three Months Ended									Six Months Ended
	6/30/2012			3/31/2012			6/30/2011			6/30/2012			6/30/2011
Return on average tangible common equity
Return on average shareholders' equity		7.50	%		8.56	%		8.37	%		8.03	%		7.35	%
Effect of preferred equity		-			-			-			-			-0.17	%
Effect of goodwill and intangibles		2.19	%		2.56	%		2.79	%		2.37	%		2.47	%
Return on average tangible common equity		9.69	%		11.12	%		11.16	%		10.40	%		9.65	%
Average tangible equity:
Average shareholders' equity	$	1,203,757		$	1,188,384		$	1,112,114		$	1,196,071		$	1,151,379
Average preferred equity		-			-			-			-			(60,710	)
Average goodwill and intangibles		(271,990	)		(273,360	)		(278,022	)		(272,675	)		(278,820	)
Average total tangible common equity	$	931,767		$	915,024		$	834,092		$	923,396		$	811,849

Adjusted net income reconciliation
Net income available to common shareholders	$	22,448		$	25,302		$	23,208		$	47,750		$	38,845
After tax unrealized fair market value loss (gain) on subordinated debentures		527			(1,069	)		280			(543	)		313
Accelerated accretion from redemption of preferred stock		-			-			-			-			1,452
Adjusted net income available to common shareholders	$	22,975		$	24,233		$	23,488		$	47,207		$	40,610

Earnings per share
Net income available to common shareholders	$	0.15		$	0.17		$	0.15		$	0.31		$	0.26
After tax unrealized fair market value loss (gain) on subordinated debentures		-			(0.01	)		-			(0.01	)		-
Accelerated accretion from redemption of preferred stock		-			-			-			-			0.01
Adjusted net income available to common shareholders	$	0.15		$	0.16		$	0.15		$	0.30		$	0.27

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited, dollars in thousands except share and per share data	As of
	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011
BALANCE SHEET - ASSETS
Cash and due from banks	$	115,564		$	108,752		$	129,637		$	116,057		$	105,918
Interest-earning deposits with banks		221,419			344,427			321,885			422,942			513,132
Total cash and cash equivalents		336,983			453,179			451,522			538,999			619,050

Investment securities available-for-sale, at fair value		1,769,359			1,779,613			1,747,019			1,790,654			1,696,682
Investment securities held-to-maturity		481,341			487,507			496,574			509,773			518,578
Other securities		66,194			68,301			70,518			72,851			75,308
Loans held-for-sale		16,908			16,909			12,216			17,144			8,852

Loans and leases		5,193,859			5,184,747			5,175,885			5,144,131			5,170,074
Allowance for loan and lease losses		(116,650	)		(121,452	)		(126,640	)		(131,073	)		(137,909	)
Loans and leases, net		5,077,209			5,063,295			5,049,245			5,013,058			5,032,165

Premises and equipment, net		96,566			95,937			96,198			100,880			103,017
Accrued interest receivable		30,511			31,241			30,991			33,110			31,862
Bank owned life insurance		140,747			139,507			138,274			137,017			136,606
Other real estate owned and other repossessed assets		7,201			7,647			7,716			8,029			8,407
Goodwill		258,279			258,279			258,279			258,279			258,279
Other intangible assets, net		13,085			14,408			15,770			17,370			18,970
Unconsolidated investments under the equity method		10,109			11,699			12,173			11,927			12,327
Other assets		91,372			96,513			99,786			102,550			113,038
TOTAL ASSETS	$	8,395,864		$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141

BALANCE SHEET - LIABILITIES
Non-interest bearing deposits	$	903,766		$	884,025		$	863,703		$	833,311		$	839,811
Interest bearing deposits		4,941,777			5,004,358			5,011,116			5,159,680			5,104,350
Total deposits		5,845,543			5,888,383			5,874,819			5,992,991			5,944,161

Customer repurchase agreements		533,389			542,706			523,978			500,099			573,628
Structured repurchase agreements		85,000			85,000			85,000			140,000			165,000
Short-term borrowings		-			-			-			6,400			6,390
Federal Home Loan Bank advances		535,613			615,863			616,111			619,946			627,332
Subordinated debentures		144,475			143,666			145,310			143,767			143,261
Accrued interest payable and other liabilities		52,084			47,587			60,376			44,234			39,856
TOTAL LIABILITIES		7,196,104			7,323,205			7,305,594			7,447,437			7,499,628

BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock		1,386,177			1,384,657			1,383,082			1,380,728			1,379,690
Accumulated deficit		(193,715	)		(205,497	)		(223,189	)		(237,862	)		(258,125	)
Accumulated other comprehensive income		25,435			21,670			20,794			21,338			11,948
Treasury stock		(18,137	)		-			-			-			-
TOTAL SHAREHOLDERS' EQUITY		1,199,760			1,200,830			1,180,687			1,164,204			1,133,513

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	8,395,864		$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141


COMMON SHARE AND PER SHARE DATA
Book value	$	7.98		$	7.88		$	7.77		$	7.67		$	7.47
Tangible book value (2)	$	6.18		$	6.09		$	5.97		$	5.86		$	5.65
Dividends	$	0.07		$	0.05		$	0.04		$	0.03		$	0.01
Shares outstanding (end of period, net of treasury)		150,258,232			152,295,895			151,883,036			151,714,696			151,660,444


(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity	$	1,199,760		$	1,200,830		$	1,180,687		$	1,164,204		$	1,133,513
Goodwill and intangibles		(271,364	)		(272,687	)		(274,049	)		(275,649	)		(277,249	)
Tangible common equity	$	928,396		$	928,143		$	906,638		$	888,555		$	856,264
Common shares outstanding		150,258,232			152,295,895			151,883,036			151,714,696			151,660,444
Tangible book value per share	$	6.18		$	6.09		$	5.97		$	5.86		$	5.65

Total assets	$	8,395,864		$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141
Goodwill and intangibles		(271,364	)		(272,687	)		(274,049	)		(275,649	)		(277,249	)
Tangible assets	$	8,124,500		$	8,251,348		$	8,212,232		$	8,335,992		$	8,355,892
Tangible common equity/tangible assets		11.43	%		11.25	%		11.04	%		10.66	%		10.25	%

(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income available to common shareholders (1)	$	22,975		$	24,233		$	23,176		$	24,813		$	23,208
Average assets	$	8,473,164		$	8,397,381		$	8,525,271		$	8,588,269		$	8,599,923
Adjusted return on average assets (annualized)		1.09	%		1.16	%		1.08	%		1.15	%		1.08	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited, dollars in thousands except share and per share data	For the Quarter Ended															For the Six Months Ended
	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011			6/30/2012			6/30/2011
INTEREST INCOME
Loans and leases, including fees	$	61,116		$	62,291		$	64,040		$	65,795		$	67,553		$	123,407		$	136,781
Investment securities
Taxable		10,941			11,209			11,310			11,591			11,552			22,150			22,909
Tax-exempt		7,636			7,781			8,076			8,337			8,401			15,417			16,894
Deposits with banks		203			133			255			332			234			336			514
Total interest income		79,896			81,414			83,681			86,055			87,740			161,310			177,098
INTEREST EXPENSE
Deposits		6,879			7,294			8,272			9,881			10,974			14,173			22,381
Customer repurchase agreements		545			550			556			593			645			1,095			1,357
Structured repurchase agreements		915			915			1,316			1,697			1,701			1,830			3,384
Short-term borrowings		-			-			-			-			-			-			-
Federal Home Loan Bank advances		6,501			6,967			6,987			7,073			7,039			13,468			14,256
Subordinated debentures		1,857			1,870			2,029			2,394			2,386			3,727			4,755
Total interest expense		16,697			17,596			19,160			21,638			22,745			34,293			46,133
Net interest income		63,199			63,818			64,521			64,417			64,995			127,017			130,965
Provision for loan and lease losses		2,000			2,000			2,000			-			3,000			4,000			13,000
Net interest income after provision for loan and lease losses		61,199			61,818			62,521			64,417			61,995			123,017			117,965
NON-INTEREST INCOME
Wealth management income		6,005			6,161			5,616			6,227			5,856			12,166			11,780
Service charges on deposit accounts		3,753			3,823			4,608			4,880			4,616			7,576			9,280
Insurance commissions and fees		3,211			3,296			3,107			3,406			3,520			6,507			6,741
Cash management and electronic banking fees		4,707			4,420			4,613			4,590			4,645			9,127			9,016
Mortgage banking income		1,511			1,335			1,481			1,349			1,014			2,846			2,094
Bank owned life insurance income		1,255			1,209			1,288			1,733			1,233			2,464			2,453
Earnings (losses) of unconsolidated investments		108			(74	)		246			99			116			34			1,816
Other operating income		993			2,426			2,019			2,339			1,818			3,419			3,873
Loss on sale of building		-			-			-			(1,000	)		-			-			-
Net (losses) gains from fair value changes on subordinated debentures		(810	)		1,645			(1,543	)		(506	)		(430	)		835			(481	)
Loss on debt extinguishment		-			-			(1,635	)		(998	)		-			-			-
Net (losses) gains on sales of investment securities		(123	)		-			1,697			1,022			-			(123	)		-
Impairment losses on investment securities:
Credit related losses on investment securities		(154	)		-			-			-			-			(154	)		-
Non credit-related losses on securities not expected to be sold
recognized in other comprehensive loss before tax		-			-			-			-			-			-			-
Net impairment losses on investment securities		(154	)		-			-			-			-			(154	)		-
Total non-interest income		20,456			24,241			21,497			23,141			22,388			44,697			46,572
NON-INTEREST EXPENSE
Salaries, wages and employee benefits		31,234			31,381			29,598			30,809			30,408			62,615			61,857
Premises and equipment		7,349			6,853			7,652			7,228			6,787			14,202			14,059
FDIC insurance		1,211			1,264			1,442			2,213			2,726			2,475			6,183
Corporate reorganization expense		-			-			2,200			-			-			-			-
Other operating expenses		12,475			12,942			16,494			14,803			14,200			25,417			28,859
Total non-interest expense		52,269			52,440			57,386			55,053			54,121			104,709			110,958
Income before income taxes		29,386			33,619			26,632			32,505			30,262			63,005			53,579
Income tax expense		6,938			8,317			5,889			7,692			7,054			15,255			11,591
NET INCOME		22,448			25,302			20,743			24,813			23,208			47,750			41,988
Preferred dividends and accretion of preferred discount		-			-			-			-			-			-			(1,691	)
Accelerated accretion from redemption of preferred stock		-			-			-			-			-			-			(1,452	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	22,448		$	25,302		$	20,743		$	24,813		$	23,208		$	47,750		$	38,845

PER SHARE OF COMMON STOCK
Basic earnings available to common shareholders	$	0.15		$	0.17		$	0.14		$	0.16		$	0.15		$	0.31		$	0.26
Diluted earnings available to common shareholders	$	0.15		$	0.17		$	0.14		$	0.16		$	0.15		$	0.31		$	0.26
Average shares - basic		151,732,402			152,099,546			151,773,327			151,693,223			151,601,052			151,915,974			151,034,207
Average shares - diluted		152,011,995			152,392,315			152,068,706			151,927,269			151,835,402			152,202,155			151,303,597

SUPPLEMENTAL DATA (annualized, average)
Return on assets		1.07	%		1.21	%		0.97	%		1.15	%		1.08	%		1.14	%		0.98	%
Adjusted return on assets (3)		1.09	%		1.16	%		1.08	%		1.15	%		1.08	%		1.13	%		0.95	%
Return on total equity		7.50	%		8.56	%		7.02	%		8.59	%		8.37	%		8.03	%		7.35	%
Return on common equity		7.50	%		8.56	%		7.02	%		8.59	%		8.37	%		8.03	%		7.18	%
Return on tangible common equity (1)		9.69	%		11.12	%		9.17	%		11.33	%		11.16	%		10.40	%		9.65	%
Efficiency ratio (4)		58.42	%		57.47	%		59.73	%		58.54	%		58.25	%		57.94	%		58.94	%


(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES

Efficiency Ratio Calculation
Non-interest expense	$	52,269		$	52,440		$	57,386		$	55,053		$	54,121		$	104,709		$	110,958
Less:
Corporate reorganization expense		-			-			2,200			-			-			-			-
Operating expenses	$	52,269		$	52,440		$	55,186		$	55,053		$	54,121		$	104,709		$	110,958

Net interest income (taxable equivalent)	$	67,929		$	68,645		$	69,409		$	69,426		$	70,087		$	136,574		$	141,199

Non-interest income		20,456			24,241			21,497			23,141			22,388			44,697			46,572
Less:
Loss on sale of building		-			-			-			(1,000	)		-			-			-
Loss on debt extinguishment		-			-			(1,635	)		(998	)		-			-			-
Net (losses) gains from fair value changes on subordinated debentures		(810	)		1,645			(1,543	)		(506	)		(430	)		835			(481	)
Net (losses) gains on investment securities		(277	)		-			1,697			1,022			-			(277	)		-
Adjusted revenue	$	89,472		$	91,241		$	92,387		$	94,049		$	92,905		$	180,713		$	188,252

Efficiency Ratio		58.42	%		57.47	%		59.73	%		58.54	%		58.25	%		57.94	%		58.94	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited, dollars in thousands except share and per share data
	As of and for the Quarter Ended															For the Six Months Ended
CHARGE-OFFS	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011			6/30/2012			6/30/2011

Loan charge-offs	$	7,907		$	8,722		$	9,896		$	8,374		$	10,512		$	16,629		$	29,265
Recoveries on loans		(1,105	)		(1,534	)		(3,463	)		(1,538	)		(2,461	)		(2,639	)		(4,120	)
Net loan charge-offs	$	6,802		$	7,188		$	6,433		$	6,836		$	8,051		$	13,990		$	25,145
Net loan charge-offs to average loans (annualized)		0.53	%		0.56	%		0.50	%		0.53	%		0.61	%		0.54	%		0.96	%

NET CHARGE-OFF DETAIL
Commercial and industrial loans and leases	$	5,196		$	1,925		$	2,648		$	1,962		$	5,066		$	7,121		$	14,385

Commercial real estate-permanent		595			1,933			517			83			1,242			2,528			5,188
Commercial real estate-construction		(148	)		673			(1,337	)		2,637			828			525			1,701
Total commercial real estate loans		447			2,606			(820	)		2,720			2,070			3,053			6,889

Residential mortgages		328			560			993			998			483			888			2,126
Home equity lines and loans		404			1,855			2,429			596			833			2,259			1,991
All other consumer loans		427			242			1,183			560			(401	)		669			(246	)
Total consumer loans		1,159			2,657			4,605			2,154			915			3,816			3,871

Net loans charged-off	$	6,802		$	7,188		$	6,433		$	6,836		$	8,051		$	13,990		$	25,145

	As of
ASSET QUALITY AND OTHER DATA	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011

Non-accrual commercial and industrial loans and leases	$	33,984		$	32,485		$	31,081		$	29,995		$	31,275

Non-accrual commercial real estate-permanent		2,999			5,156			7,403			8,314			11,879
Non-accrual commercial real estate-construction		6,959			14,336			12,218			14,549			15,844
Total non-accrual commercial real estate loans		9,958			19,492			19,621			22,863			27,723

Non-accrual residential mortgages		4,301			4,077			4,504			4,472			5,196
Non-accrual home equity lines and loans		2,555			2,110			3,046			1,763			1,527
All other non-accrual consumer loans		1,753			1,695			3,176			1,907			2,062
Total non-accrual consumer loans		8,609			7,882			10,726			8,142			8,785

Total non-accrual loans		52,551			59,859			61,428			61,000			67,783

Restructured loans		6,468			6,506			5,548			4,372			3,833
Total non-performing loans		59,019			66,365			66,976			65,372			71,616

Other real estate owned and repossessed assets		7,201			7,647			7,716			8,029			8,407
Total non-performing assets		66,220			74,012			74,692			73,401			80,023

Loans 90+ days past due & still accruing		3,426			1,588			2,010			1,408			1,567
Total non-performing assets and loans 90+ days past due	$	69,646		$	75,600		$	76,702		$	74,809		$	81,590

Allowance for loan and lease losses	$	116,650		$	121,452		$	126,640		$	131,073		$	137,909
Allowance for loan and lease losses/non-performing loans		197.6	%		183.0	%		189.1	%		200.5	%		192.6	%
Allowance for loan and lease losses/non-performing assets and loans 90+ days past due		167.5	%		160.7	%		165.1	%		175.2	%		169.0	%
Allowance for loan and lease losses/total loans and leases		2.24	%		2.33	%		2.44	%		2.54	%		2.66	%
Provision/charge-offs, net		29.4	%		27.8	%		31.1	%		0.0	%		37.3	%
Classified loans	$	301,542		$	347,033		$	370,439		$	374,850		$	403,145
Classified loans/total loans and leases		5.79	%		6.67	%		7.14	%		7.26	%		7.78	%
Delinquent loans (a)	$	24,144		$	24,068		$	24,801		$	28,824		$	20,413
Delinquent loans/total loans and leases		0.46	%		0.46	%		0.48	%		0.56	%		0.39	%


	As of
REGULATORY CAPITAL DATA	6/30/2012			3/31/2012			12/31/2011			9/30/2011			6/30/2011

Tier 1 Capital	$	1,008,052		$	1,005,009		$	978,302		$	955,766		$	922,457
Tier 1 Leverage Ratio		12.44	%		12.53	%		12.00	%		11.63	%		11.20	%
Tier 1 Ratio (%)		17.45	%		17.46	%		17.12	%		16.85	%		16.43	%
Total Capital	$	1,080,807		$	1,077,587		$	1,050,417		$	1,027,393		$	992,729
Total Capital Ratio (%)		18.71	%		18.72	%		18.38	%		18.12	%		17.68	%
Total Risk-Weighted Assets	$	5,776,537		$	5,757,306		$	5,714,643		$	5,670,722		$	5,615,341

(a) Includes loans 30-89 days past due and loans 90+ days past due and still accruing

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited, dollars in thousands except share and per share data
	As of
PERIOD END BALANCES:	6/30/2012		3/31/2012		12/31/2011		9/30/2011		6/30/2011

Earning Assets / Liabilities
Loan portfolio composition (regulatory):
Commercial / industrial	$	856,237	$	853,379	$	833,534	$	813,356	$	838,489
Commercial real estate (a)		1,759,792		1,753,986		1,737,383		1,697,975		1,715,616
Residential mortgage		1,262,633		1,269,505		1,270,896		1,272,478		1,295,463
Real estate construction and land development		194,942		210,976		212,306		216,250		207,643
Home equity		765,902		756,803		771,792		766,299		764,467
Consumer		207,999		210,069		209,082		213,014		213,570
Other loans		163,262		146,938		153,108		181,903		143,678
Total loans		5,210,767		5,201,656		5,188,101		5,161,275		5,178,926


Investment securities and other securities		2,316,894		2,335,421		2,314,111		2,373,278		2,290,568
Other earning assets		221,419		344,427		321,885		422,942		513,132
Total earning assets (net of loan loss reserve)	$	7,632,430	$	7,760,052	$	7,697,457	$	7,826,422	$	7,844,717
(a) Includes owner occupied

Loan portfolio composition (internal):
Commercial & industrial loans and leases
Business purpose, real estate secured	$	879,413	$	864,284	$	895,028	$	892,952	$	884,606
Business purpose, not secured by real estate		975,852		963,641		919,720		927,631		913,115
Owner occupied commercial real estate
- Permanent		572,686		572,103		563,963		566,732		577,092
- Construction / development		36,451		38,546		36,631		28,927		27,003
Leasing		2,670		3,330		4,685		5,796		7,125
Total commercial & industrial loans and leases		2,467,072		2,441,904		2,420,027		2,422,038		2,408,941

Commercial real estate
Non-owner occupied
- Permanent		874,570		878,499		855,524		798,106		818,564
- Construction / development		140,751		151,697		156,064		168,537		171,063
Total commercial real estate		1,015,321		1,030,196		1,011,588		966,643		989,627

Consumer loans
Residential mortgage (personal purpose)
Permanent		688,171		686,974		704,655		709,342		719,578
Construction		6,806		7,835		5,667		7,606		5,909
Total residential mortgages		694,977		694,809		710,322		716,948		725,487

Home equity loans and direct installment loans		291,383		315,419		337,242		362,808		388,173
Home equity lines of credit		452,599		421,897		410,316		394,386		367,127
Total home equity lines and loans		743,982		737,316		747,558		757,194		755,300

Private banking credit lines		107,398		114,667		121,296		112,011		119,850
Indirect vehicle loans and other		165,109		165,855		165,094		169,297		170,869
All other consumer loans		272,507		280,522		286,390		281,308		290,719
Total consumer loans		1,711,466		1,712,647		1,744,270		1,755,450		1,771,506

Loans and leases		5,193,859		5,184,747		5,175,885		5,144,131		5,170,074

Loans held-for-sale		16,908		16,909		12,216		17,144		8,852

Total loans and leases	$	5,210,767	$	5,201,656	$	5,188,101	$	5,161,275	$	5,178,926

Deposit composition:
Savings	$	497,640	$	495,191	$	454,003	$	451,767	$	464,055
NOW accounts		1,317,399		1,294,591		1,293,148		1,311,819		1,158,161
Money market accounts		1,641,947		1,698,427		1,686,909		1,651,185		1,631,779
CDs less than $100k		1,063,688		1,089,601		1,138,908		1,213,798		1,261,026
CDs $100k or greater		421,103		426,548		438,148		531,111		589,329
Total interest bearing deposits		4,941,777		5,004,358		5,011,116		5,159,680		5,104,350

Non-interest bearing deposits		903,766		884,025		863,703		833,311		839,811

Total deposits	$	5,845,543	$	5,888,383	$	5,874,819	$	5,992,991	$	5,944,161

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited, dollars in thousands except share and per share data
	Quarterly, as of																									Six Months, as of
	6/30/2012					3/31/2012					12/31/2011					9/30/2011					6/30/2011					6/30/2012					6/30/2011
	Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield

Total loans*	$	5,196,803		4.78	%	$	5,179,220		4.89	%	$	5,149,546		4.99	%	$	5,122,557		5.15	%	$	5,228,365		5.24	%	$	5,188,012		4.83	%	$	5,269,556		5.29	%
Investment securities*		2,319,392		3.93	%		2,318,109		4.02	%		2,355,178		3.97	%		2,287,630		4.21	%		2,258,355		4.32	%		2,318,751		3.98	%		2,251,921		4.35	%
Interest earning deposits		334,935		0.24	%		278,140		0.19	%		390,228		0.26	%		543,410		0.24	%		467,157		0.20	%		306,537		0.22	%		487,806		0.21	%

Total earning assets		7,851,130		4.34	%		7,775,469		4.46	%		7,894,952		4.45	%		7,953,597		4.54	%		7,953,877		4.68	%		7,813,300		4.40	%		8,009,283		4.72	%
Total assets		8,473,164					8,397,381					8,525,271					8,588,269					8,599,923					8,435,272					8,650,505

Savings		494,800		0.12	%		471,562		0.13	%		454,688		0.15	%		456,271		0.18	%		462,870		0.18	%		483,181		0.13	%		452,905		0.19	%
NOW accounts		1,343,961		0.15	%		1,238,704		0.15	%		1,269,670		0.17	%		1,211,663		0.18	%		1,188,644		0.22	%		1,291,332		0.15	%		1,168,927		0.22	%
Money market accounts		1,664,315		0.37	%		1,679,232		0.40	%		1,669,090		0.44	%		1,647,975		0.59	%		1,638,733		0.60	%		1,671,773		0.38	%		1,647,348		0.59	%
CDs		1,499,016		1.27	%		1,542,539		1.31	%		1,668,098		1.36	%		1,798,414		1.47	%		1,857,969		1.66	%		1,520,777		1.29	%		1,873,435		1.71	%

Total interest bearing deposits		5,002,092		0.55	%		4,932,037		0.59	%		5,061,546		0.65	%		5,114,323		0.77	%		5,148,216		0.85	%		4,967,063		0.57	%		5,142,615		0.88	%

Non-interest bearing deposits		891,739					852,730					835,699					837,953					837,635					872,234					825,736
Total deposits		5,893,831		0.47	%		5,784,767		0.51	%		5,897,245		0.56	%		5,952,276		0.66	%		5,985,851		0.74	%		5,839,297		0.49	%		5,968,351		0.76	%

Customer repurchase agreements		525,142		0.42	%		524,575		0.42	%		514,961		0.43	%		512,847		0.46	%		522,147		0.50	%		524,859		0.42	%		534,057		0.51	%
Structured repurchase agreements		85,000		4.33	%		85,000		4.33	%		128,968		4.05	%		163,098		4.13	%		165,000		4.13	%		85,000		4.33	%		165,000		4.14	%
Short-term borrowings		-		0.00	%		-		0.00	%		6,638		0.00	%		6,732		0.00	%		6,713		0.00	%		-		0.00	%		6,781		0.00	%
Federal Home Loan Bank advances		575,725		4.54	%		615,983		4.55	%		616,411		4.50	%		623,713		4.50	%		627,525		4.50	%		595,854		4.55	%		639,301		4.50	%
Subordinated debentures		143,683		5.20	%		145,274		5.18	%		143,800		5.60	%		143,266		6.63	%		142,836		6.70	%		144,479		5.19	%		142,808		6.72	%
Total deposits and borrowings		7,223,381		0.93	%		7,155,599		0.99	%		7,308,023		1.04	%		7,401,932		1.16	%		7,450,072		1.22	%		7,189,489		0.96	%		7,456,298		1.25	%
Total interest bearing liabilities	$	6,331,642		1.06	%	$	6,302,869		1.12	%	$	6,472,324		1.17	%	$	6,563,979		1.31	%	$	6,612,437		1.38	%	$	6,317,255		1.09	%		6,630,562		1.40	%

Net interest margin (FTE)				3.48	%				3.55	%				3.49	%				3.46	%				3.53	%				3.52	%				3.56	%

Wealth assets:
Assets under administration	$	4,361,134				$	4,382,922				$	4,197,612				$	4,067,918				$	4,364,447
Assets under management		2,284,489					2,269,351					2,141,737					2,118,076					2,247,042
(included above)

*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.

Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2012



Unaudited
	Quarterly, as of
	6/30/2012		3/31/2012		12/31/2011		9/30/2011		6/30/2011
STATES OF OPERATION AND BANKING OFFICES
BY STATE (LATEST AVAILABLE DATA)

PA
Total number of retail branch offices		120		120		121		122		122
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)		1		1		1		1		1
Total number of ATMs		122		122		128		129		131

MD
Total number of retail branch offices		1		1		1		1		1
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)		-		-		-		-		-
Total number of ATMs		1		1		1		1		1

TOTAL
Total number of retail branch offices		121		121		122		123		123
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)		1		1		1		1		1
Total number of ATMs		123		123		129		130		132

EOP employees (full-time equivalent)		1,690		1,681		1,688		1,683		1,700