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NATL PENN BANCSHARES INC
Symbol U : NPBC
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National Penn Bancshares, Inc. Reports Fourth Quarter and Full Year 2012 Results

2013-01-24 06:39 ET - News Release

  • Full-year net income increases 17% to $0.66 per common share from $0.56 for the prior year
  • Quarterly net income of $0.17 per share resulting in return on assets of 1.19%
  • Strong asset quality metrics further enhanced
  • 7.5 million common share repurchase program completed


Company Website: http://www.nationalpennbancshares.com
BOYERTOWN, Pa. -- (Business Wire)

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $98.9 million, or $0.66 per diluted common share, for the year ended December 31, 2012, a 17% increase compared to net income available to common shareholders of $84.4 million, or $0.56 per diluted common share, for 2011. For the fourth quarter of 2012, diluted earnings per common share were $0.17 compared to $0.14 per diluted common share for the fourth quarter of 2011.

“With a return on average assets of 1.19%, the fourth quarter was another strong quarter, consistent with our solid performance for the year,” said Scott Fainor, president and CEO of National Penn. “Our ability to maintain our net interest margin in an unprecedented low interest rate environment, coupled with the continuation of exceptional asset quality metrics and our focused efforts on expense control, enabled us to deliver these positive results.”

Asset quality remained strong as the level of classified assets continued to improve, declining $34.9 million or 12% in the fourth quarter 2012 and $109 million or 29% during the year. Non-performing loans declined during 2012 by 20%, and the ratio of net loan charge-offs to average loans improved to 0.46% in 2012 from 0.74% in 2011. These trends resulted in a provision for loan losses of $8.0 million for 2012, compared to $15.0 million for 2011. At December 31, 2012, the allowance for loan and lease losses was 206% of non-performing loans and 2.12% of total loans and leases.

Strategies undertaken to address the low interest rate environment resulted in a stable net interest margin throughout 2012. Net interest margin for the full year 2012 was 3.50%, compared to 3.52% in 2011, and was 3.46% in the fourth quarter of 2012, as compared to 3.50% in the previous quarter. Net interest income for 2012 and 2011 totaled $254 million and $260 million, respectively. During 2012, commercial loans grew by approximately 3%. A reduction in asset yields was mitigated by initiatives throughout the year to improve the mix and cost of interest-bearing liabilities. These initiatives contributed to an improvement in overall funding costs of 32 basis points during the year.

Despite the economic and regulatory environment, total fee income from banking, wealth and insurance operations increased slightly in 2012. National Penn’s operating expenses1 were well-controlled throughout 2012, declining 5% from 2011 levels. The efficiency ratio1 improved to 57.12% for 2012 from 59.03% for the prior year.

During the fourth quarter, National Penn repurchased five million common shares, completing the previously announced 7.5 million share repurchase program. Additionally, the Board of Directors declared a quarterly cash dividend of ten cents per common share for the first quarter of 2013. In order to return capital to shareholders in a tax effective manner, the cash dividend was paid on December 28, 2012 to shareholders of record as of December 13, 2012.

Scott Fainor stated, “We believe our Company is well positioned for the future based upon the strength of our balance sheet. Classified loans declined 45% over the last two years. We also successfully completed the repurchase of approximately 5% of our outstanding shares, while capital levels remained strong with a tier 1 common ratio of 14.19%. The majority of our capital management initiatives, including the stock repurchase, a quarterly dividend increase in each quarter of 2012, and the advance payment of our first quarter 2013 dividend were funded by the strong earnings of 2012.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.5 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 120 branch offices comprising 119 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; and National Penn Insurance Services Group, Inc., including its Higgins Insurance and Caruso Benefits Group divisions.

National Penn Bancshares, Inc. common stock is traded on the Nasdaq Stock Market under the symbol “NPBC”. Please visit our Web site at www.nationalpennbancshares.com to see our regularly posted material information.

1Statement Regarding Non-GAAP Financial Measures:

This release, including the attached Financial Highlights and financial data tables, contains supplemental financial information determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”).National Penn’s management uses these non-GAAP measures in its analysis of National Penn’s performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the following non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of National Penn.

  • Tangible common equity excludes goodwill and intangible assets and preferred equity. Banking and financial institution regulators also exclude goodwill and intangible assets from shareholders’ equity when assessing the capital adequacy of a financial institution. Tangible common equity provides a method to assess the Company’s tangible capital trends.
  • Tangible book value expresses tangible common equity on a per share basis. Tangible book value provides a method to assess the level of tangible net assets on a per share basis.
  • Adjusted net income and return on assets exclude the effects of certain gains and losses, adjusted for taxes when applicable. Adjusted net income and returns provide methods to assess earnings performance by excluding items that management believes are not comparable among the periods presented.
  • Efficiency ratio expresses operating expenses as a percentage of fully-taxable equivalent net interest income plus non-interest income. Operating expenses exclude items from non-interest expense that management believes are not comparable among the periods presented. Non-interest income is also adjusted to exclude items that management believes are not comparable among the periods presented. Efficiency ratio is used as a method for management to assess its operating expense level and to compare to financial institutions of varying sizes.

Management believes the use of non-GAAP measures will help readers compare National Penn’s current results to those of prior periods as presented in the accompanying Financial Highlights and financial data tables.

Cautionary Statement Regarding Forward-Looking Information:

This release contains forward-looking information about National Penn Bancshares, Inc. that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” ”could,” “plan,” “goal,” “potential,” “pro forma,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, financial projections, guidance and estimates (including their underlying assumptions), statements regarding plans, objectives, expectations or consequences of announced transactions, and statements about the future performance, operations, products and services of National Penn and its subsidiaries. National Penn cautions readers not to place undue reliance on these statements.

National Penn’s business and operations are subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: 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 12/31/2012
 
Unaudited, dollars in thousands except share and per share data
 
As of
  12/31/2012           9/30/2012           12/31/2011  
SUMMARY BALANCE SHEET                    
Total assets $ 8,529,522 $ 8,435,526 $ 8,486,281
Investment securities and other securities 2,334,739 2,310,459 2,314,111
Total loans and leases 5,240,882 5,256,854 5,188,101
Deposits 5,935,565 5,947,744 5,874,819
Borrowings 1,344,324 1,216,707 1,370,399
Shareholders' equity 1,161,292 1,214,330 1,180,687
Tangible book value per common share (2) $ 6.15 $ 6.29 $ 5.97
Tangible common equity / tangible assets (2) 10.80 % 11.56 % 11.04 %
 
Three Months EndedTwelve Months Ended
  12/31/2012           9/30/2012           12/31/2011     12/31/2012           12/31/2011  
EARNINGS                              
Total interest income $ 77,174 $ 78,344 $ 83,681 $ 316,828 $ 346,834
Total interest expense   13,739           14,790           19,160     62,822           86,931  
Net interest income 63,435 63,554 64,521 254,006 259,903
Provision for loan and lease losses   2,000           2,000           2,000     8,000           15,000  
Net interest income after provision for loan and lease losses 61,435 61,554 62,521 246,006 244,903
Loss on sale of building - - - - (1,000 )
Loss on debt extinguishment - - (1,635 ) - (2,633 )
Net (losses) gains from fair value changes on subordinated debentures (253 ) 101 (1,543 ) 683 (2,530 )
Net gains (losses) on investment securities 4 - 1,697 (273 ) 2,719
Corporate reorganization expense - - 2,200 - 2,200
Other non-interest income 24,755 26,664 22,978 95,558 94,654
Other non-interest expense   52,262           53,339           55,186     210,310           221,197  
Income before income taxes 33,679 34,980 26,632 131,664 112,716
Income tax expense   8,535           8,964           5,889     32,754           25,172  
Net income   25,144           26,016           20,743     98,910           87,544  
Preferred dividends and accretion of preferred discount - - - - (1,691 )
Accelerated accretion from redemption of preferred stock   -           -           -     -           (1,452 )
Net income available to common shareholders $ 25,144         $ 26,016         $ 20,743   $ 98,910         $ 84,401  
 
PERFORMANCE RATIOS                              
Net interest margin 3.46 % 3.50 % 3.49 % 3.50 % 3.52 %
Return on average assets 1.19 % 1.23 % 0.97 % 1.17 % 1.02 %
Adjusted return on average assets (3) 1.19 % 1.23 % 1.08 % 1.17 % 1.03 %
Return on average total shareholders' equity 8.33 % 8.60 % 7.02 % 8.25 % 7.58 %
Return on average tangible common equity (1) 10.74 % 11.10 % 9.17 % 10.66 % 9.95 %
Efficiency ratio (4) 56.40 % 56.26 % 59.73 % 57.12 % 59.03 %
 
PER SHARE                              
Basic earnings available to common shareholders $ 0.17 $ 0.17 $ 0.14 $ 0.66 $ 0.56
Diluted earnings available to common shareholders 0.17 0.17 0.14 0.66 0.56
Dividends per common share 0.20 (a) 0.09 0.04 0.41 (a) 0.09
Average shares - basic 148,304,167 150,157,622 151,773,327 150,566,098 151,386,614
Average shares - diluted 148,610,097 150,454,749 152,068,706 150,859,995 151,653,646
                                   
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES Three Months EndedTwelve Months Ended
  12/31/2012           9/30/2012           12/31/2011     12/31/2012           12/31/2011  
Return on average tangible common equity
Return on average shareholders' equity 8.33 % 8.60 % 7.02 % 8.25 % 7.58 %
Effect of preferred equity - - - - -0.08 %
Effect of goodwill and intangibles   2.41 %   2.50 %   2.15 %   2.41 %   2.45 %
Return on average tangible common equity   10.74 %   11.10 %   9.17 %   10.66 %   9.95 %
Average tangible equity:
Average shareholders' equity $ 1,200,514 $ 1,203,072 $ 1,172,273 $ 1,198,948 $ 1,155,209
Average preferred equity - - - - (30,106 )
Average goodwill and intangibles   (269,495 )   (270,720 )   (274,827 )   (271,384 )   (277,214 )
Average total tangible common equity $ 931,019   $ 932,352   $ 897,446   $ 927,564   $ 847,889  
 
Adjusted net income reconciliation
Net income available to common shareholders $ 25,144 $ 26,016 $ 20,743 $ 98,910 $ 84,401
After tax unrealized fair value loss (gain) on subordinated debentures 164 (66 ) 1,003 (444 ) 1,645
Corporate reorganization expense - - 1,430 - 1,430
Accelerated accretion from redemption of preferred stock   -     -     -     -     1,452  
Adjusted net income available to common shareholders $ 25,308   $ 25,950   $ 23,176   $ 98,466   $ 88,928  
 
Earnings per share
Net income available to common shareholders $ 0.17 $ 0.17 $ 0.14 $ 0.66 $ 0.56
After tax unrealized fair value loss (gain) on subordinated debentures - - 0.01 - 0.01
Corporate reorganization expense - - 0.01 - 0.01
Accelerated accretion from redemption of preferred stock   -     -     -     -     0.01  
Adjusted net income available to common shareholders $ 0.17   $ 0.17   $ 0.16   $ 0.66   $ 0.59  
 
(a) The 4th quarter of 2012 includes payment of the 1st quarter 2013 cash dividend of $0.10 per common share
           
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
 
Unaudited, dollars in thousands except share and per share data As of
12/31/2012       9/30/2012   6/30/2012   3/31/2012   12/31/2011
BALANCE SHEET - ASSETS
Cash and due from banks $ 145,688 $ 120,421 $ 115,564 $ 108,752 $ 129,637
Interest-earning deposits with banks   282,440     211,943     221,419     344,427     321,885  
Total cash and cash equivalents 428,128 332,364 336,983 453,179 451,522
 
Investment securities available-for-sale, at fair value 1,802,213 1,773,579 1,769,359 1,779,613 1,747,019
Investment securities held-to-maturity 464,166 472,884 481,341 487,507 496,574
Other securities 68,360 63,996 66,194 68,301 70,518
Loans held-for-sale 14,330 22,703 16,908 16,909 12,216
 
Loans and leases 5,226,552 5,234,151 5,193,859 5,184,747 5,175,885
Allowance for loan and lease losses   (110,955 )   (113,542 )   (116,650 )   (121,452 )   (126,640 )
Loans and leases, net 5,115,597 5,120,609 5,077,209 5,063,295 5,049,245
 
Premises and equipment, net 96,334 96,349 96,566 95,937 96,198
Accrued interest receivable 28,526 31,448 30,511 31,241 30,991
Bank owned life insurance 143,242 141,991 140,747 139,507 138,274
Other real estate owned and other repossessed assets 3,029 7,174 7,201 7,647 7,716
Goodwill 258,279 258,279 258,279 258,279 258,279
Other intangible assets, net 10,614 11,852 13,085 14,408 15,770
Unconsolidated investments 11,347 11,337 10,109 11,699 12,173
Other assets   85,357     90,961     91,372     96,513     99,786  
TOTAL ASSETS $ 8,529,522   $ 8,435,526   $ 8,395,864   $ 8,524,035   $ 8,486,281  
 
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits $ 891,401 $ 902,295 $ 903,766 $ 884,025 $ 863,703
Interest bearing deposits   5,044,164     5,045,449     4,941,777     5,004,358     5,011,116  
Total deposits 5,935,565 5,947,744 5,845,543 5,888,383 5,874,819
 
Customer repurchase agreements 560,065 534,613 533,389 542,706 523,978
Structured repurchase agreements 75,000 75,000 85,000 85,000 85,000
Short-term borrowings 100,000 - - - -
Federal Home Loan Bank advances, net of prepayment fees incurred 464,632 462,720 535,613 615,863 616,111
Subordinated debentures 144,627 144,374 144,475 143,666 145,310
Accrued interest payable and other liabilities   88,341     56,745     52,084     47,587     60,376  
TOTAL LIABILITIES   7,368,230     7,221,196     7,196,104     7,323,205     7,305,594  
 
BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock 1,387,644 1,387,073 1,386,177 1,384,657 1,383,082
Accumulated deficit (185,680 ) (181,225 ) (193,715 ) (205,497 ) (223,189 )
Accumulated other comprehensive income 24,329 28,617 25,435 21,670 20,794
Treasury stock   (65,001 )   (20,135 )   (18,137 )   -     -  
TOTAL SHAREHOLDERS' EQUITY   1,161,292     1,214,330     1,199,760     1,200,830     1,180,687  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,529,522   $ 8,435,526   $ 8,395,864   $ 8,524,035   $ 8,486,281  
 
 
COMMON SHARE AND PER SHARE DATA
Book value $ 8.00 $ 8.09 $ 7.98 $ 7.88 $ 7.77
Tangible book value (2) $ 6.15 $ 6.29 $ 6.18 $ 6.09 $ 5.97
Dividends $ 0.20 (a) $ 0.09 $ 0.07 $ 0.05 $ 0.04
Shares outstanding (end of period, net of treasury) 145,163,585 150,048,383 150,258,232 152,295,895 151,883,036
                         
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity $ 1,161,292 $ 1,214,330 $ 1,199,760 $ 1,200,830 $ 1,180,687
Goodwill and intangibles   (268,893 )   (270,131 )   (271,364 )   (272,687 )   (274,049 )
Tangible common equity $ 892,399   $ 944,199   $ 928,396   $ 928,143   $ 906,638  
Common shares outstanding 145,163,585 150,048,383 150,258,232 152,295,895 151,883,036
Tangible book value per share $ 6.15 $ 6.29 $ 6.18 $ 6.09 $ 5.97
 
Total assets $ 8,529,522 $ 8,435,526 $ 8,395,864 $ 8,524,035 $ 8,486,281
Goodwill and intangibles   (268,893 )   (270,131 )   (271,364 )   (272,687 )   (274,049 )
Tangible assets $ 8,260,629   $ 8,165,395   $ 8,124,500   $ 8,251,348   $ 8,212,232  
Tangible common equity/tangible assets 10.80 % 11.56 % 11.43 % 11.25 % 11.04 %
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income available to common shareholders (1) $ 25,308 $ 25,950 $ 22,975 $ 24,233 $ 23,176
Average assets $ 8,440,642 $ 8,386,342 $ 8,473,164 $ 8,397,381 $ 8,525,271
Adjusted return on average assets (annualized) 1.19 % 1.23 % 1.09 % 1.16 % 1.08 %
         
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
   
Unaudited, dollars in thousands except share and per share data For the Quarter Ended For the Twelve Months Ended
12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011 12/31/2012   12/31/2011
INTEREST INCOME
Loans and leases, including fees $ 59,005 $ 60,269 $ 61,116 $ 62,291 $ 64,040 $ 242,681 $ 266,616
Investment securities
Taxable 10,050 10,525 10,941 11,209 11,310 42,725 45,810
Tax-exempt 7,233 7,402 7,636 7,781 8,076 30,052 33,307
Deposits with banks   886     148     203     133     255     1,370     1,101  
Total interest income   77,174     78,344     79,896     81,414     83,681     316,828     346,834  
INTEREST EXPENSE
Deposits 6,177 6,472 6,879 7,294 8,272 26,822 40,534
Customer repurchase agreements 510 511 545 550 556 2,116 2,506
Structured repurchase agreements 802 843 915 915 1,316 3,475 6,397
Short-term borrowings 1 - - - - 1 -
Federal Home Loan Bank advances 4,410 5,105 6,501 6,967 6,987 22,983 28,316
Subordinated debentures   1,839     1,859     1,857     1,870     2,029     7,425     9,178  
Total interest expense   13,739     14,790     16,697     17,596     19,160     62,822     86,931  
Net interest income 63,435 63,554 63,199 63,818 64,521 254,006 259,903
Provision for loan and lease losses   2,000     2,000     2,000     2,000     2,000     8,000     15,000  
Net interest income after provision for loan and lease losses   61,435     61,554     61,199     61,818     62,521     246,006     244,903  
NON-INTEREST INCOME
Wealth management income 6,224 6,239 6,005 6,161 5,616 24,629 23,623
Service charges on deposit accounts 4,140 4,147 3,753 3,823 4,608 15,863 18,768
Insurance commissions and fees 3,113 3,238 3,211 3,296 3,107 12,858 13,254
Cash management and electronic banking fees 4,761 4,626 4,707 4,420 4,613 18,514 18,219
Mortgage banking income 2,498 2,296 1,511 1,335 1,481 7,640 4,924
Bank owned life insurance income 1,326 1,319 1,255 1,209 1,288 5,109 5,474
Earnings (losses) of unconsolidated investments 138 1,315 108 (74 ) 246 1,487 2,161
Other operating income 2,555 3,484 993 2,426 2,019 9,458 8,231
Loss on sale of building - - - - - - (1,000 )
Net (losses) gains from fair value changes on subordinated debentures (253 ) 101 (810 ) 1,645 (1,543 ) 683 (2,530 )
Loss on debt extinguishment - - - - (1,635 ) - (2,633 )
Net gains (losses) on sales of investment securities 4 - (123 ) - 1,697 (119 ) 2,719
Impairment losses on investment securities:
Impairment related losses on investment securities - - (154 ) - - (154 ) -

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

  -     -     -     -     -     -     -  
Net impairment losses on investment securities   -     -     (154 )   -     -     (154 )   -  
Total non-interest income   24,506     26,765     20,456     24,241     21,497     95,968     91,210  
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 30,789 31,555 31,234 31,381 29,598 124,959 122,264
Premises and equipment 7,396 7,226 7,349 6,853 7,652 28,824 28,939
FDIC insurance 1,162 1,259 1,211 1,264 1,442 4,896 9,838
Corporate reorganization expense - - - - 2,200 - 2,200
Other operating expenses   12,915     13,299     12,475     12,942     16,494     51,631     60,156  
Total non-interest expense   52,262     53,339     52,269     52,440     57,386     210,310     223,397  
Income before income taxes 33,679 34,980 29,386 33,619 26,632 131,664 112,716
Income tax expense   8,535     8,964     6,938     8,317     5,889     32,754     25,172  
NET INCOME   25,144     26,016     22,448     25,302     20,743     98,910     87,544  
Preferred dividends and accretion of preferred discount - - - - - - (1,691 )
Accelerated accretion from redemption of preferred stock   -     -     -     -     -     -     (1,452 )
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 25,144   $ 26,016   $ 22,448   $ 25,302   $ 20,743   $ 98,910   $ 84,401  
 
PER SHARE OF COMMON STOCK
Basic earnings available to common shareholders $ 0.17 $ 0.17 $ 0.15 $ 0.17 $ 0.14 $ 0.66 $ 0.56
Diluted earnings available to common shareholders $ 0.17 $ 0.17 $ 0.15 $ 0.17 $ 0.14 $ 0.66 $ 0.56
Average shares - basic 148,304,167 150,157,622 151,732,402 152,099,546 151,773,327 150,566,098 151,386,614
Average shares - diluted 148,610,097 150,454,749 152,011,995 152,392,315 152,068,706 150,859,995 151,653,646
 
SUPPLEMENTAL DATA (annualized, average)
Return on assets 1.19 % 1.23 % 1.07 % 1.21 % 0.97 % 1.17 % 1.02 %
Adjusted return on assets (3) 1.19 % 1.23 % 1.09 % 1.16 % 1.08 % 1.17 % 1.03 %
Return on total equity 8.33 % 8.60 % 7.50 % 8.56 % 7.02 % 8.25 % 7.58 %
Return on common equity 8.33 % 8.60 % 7.50 % 8.56 % 7.02 % 8.25 % 7.50 %
Return on tangible common equity (1) 10.74 % 11.10 % 9.69 % 11.12 % 9.17 % 10.66 % 9.95 %
Efficiency ratio (4) 56.40 % 56.26 % 58.42 % 57.47 % 59.73 % 57.12 % 59.03 %
                             
 
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency Ratio Calculation
Non-interest expense $ 52,262 $ 53,339 $ 52,269 $ 52,440 $ 57,386 $ 210,310 $ 223,397
Less:
Corporate reorganization expense   -     -     -     -     2,200     -     2,200  
Operating expenses $ 52,262   $ 53,339   $ 52,269   $ 52,440   $ 55,186   $ 210,310   $ 221,197  
 
Net interest income (taxable equivalent) $ 67,909 $ 68,139 $ 67,929 $ 68,645 $ 69,409 $ 272,622 $ 280,034
 
Non-interest income 24,506 26,765 20,456 24,241 21,497 95,968 91,210
Less:
Loss on sale of building - - - - - - (1,000 )
Loss on debt extinguishment - - - - (1,635 ) - (2,633 )
Net (losses) gains from fair value changes on subordinated debentures (253 ) 101 (810 ) 1,645 (1,543 ) 683 (2,530 )
Net gains (losses) on investment securities   4     -     (277 )   -     1,697     (273 )   2,719  
Adjusted revenue $ 92,664   $ 94,803   $ 89,472   $ 91,241   $ 92,387   $ 368,180   $ 374,688  
 
Efficiency Ratio   56.40 %   56.26 %   58.42 %   57.47 %   59.73 %   57.12 %   59.03 %
             
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
 
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Twelve Months Ended
CHARGE-OFFS 12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011 12/31/2012   12/31/2011
 
Loan charge-offs $ 5,876   $ 5,993   $ 7,907   $ 8,722   $ 9,896   $ 28,498   $ 47,535  
Recoveries on loans   (1,289 )   (885 )   (1,105 )   (1,534 )   (3,463 )   (4,813 )   (9,121 )
Net loan charge-offs $ 4,587   $ 5,108   $ 6,802   $ 7,188   $ 6,433   $ 23,685   $ 38,414  
Net loan charge-offs to average loans (annualized)   0.35 %   0.39 %   0.53 %   0.56 %   0.50 %   0.46 %   0.74 %
 
NET CHARGE-OFF DETAIL
Commercial and industrial loans and leases $ 2,029 $ 1,116 $ 5,196 $ 1,925 $ 2,648 $ 10,266 $ 18,995
 
Commercial real estate-permanent 301 481 595 1,933 517 3,310 5,788
Commercial real estate-construction   266     1,755     (148 )   673     (1,337 )   2,546     3,001  
Total commercial real estate loans 567 2,236 447 2,606 (820 ) 5,856 8,789
 
Residential mortgages 988 742 328 560 993 2,618 4,117
Home equity lines and loans 515 517 404 1,855 2,429 3,291 5,016
All other consumer loans   488     497     427     242     1,183     1,654     1,497  
Total consumer loans   1,991     1,756     1,159     2,657     4,605     7,563     10,630  
 
Net loans charged-off $ 4,587   $ 5,108   $ 6,802   $ 7,188   $ 6,433   $ 23,685   $ 38,414  
 
As of
ASSET QUALITY AND OTHER DATA 12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011
 
Non-accrual commercial and industrial loans and leases $ 24,653 $ 31,109 $ 33,984 $ 32,485 $ 31,081
 
Non-accrual commercial real estate-permanent 2,984 3,780 2,999 5,156 7,403
Non-accrual commercial real estate-construction   5,446     5,149     6,959     14,336     12,218  
Total non-accrual commercial real estate loans 8,430 8,929 9,958 19,492 19,621
 
Non-accrual residential mortgages 7,066 6,242 4,301 4,077 4,504
Non-accrual home equity lines and loans 3,692 3,458 2,555 2,110 3,046
All other non-accrual consumer loans   1,705     1,823     1,753     1,695     3,176  
Total non-accrual consumer loans 12,463 11,523 8,609 7,882 10,726
         
Total non-accrual loans 45,546 51,561 52,551 59,859 61,428
 
Restructured loans   8,362     6,726     6,468     6,506     5,548  
Total non-performing loans 53,908 58,287 59,019 66,365 66,976
 
Other real estate owned and repossessed assets   3,029     7,174     7,201     7,647     7,716  
Total non-performing assets   56,937     65,461     66,220     74,012     74,692  
 
Loans 90+ days past due & still accruing   2,027     2,628     3,426     1,588     2,010  
Total non-performing assets and loans 90+ days past due $ 58,964   $ 68,089   $ 69,646   $ 75,600   $ 76,702  
         
Allowance for loan and lease losses $ 110,955   $ 113,542   $ 116,650   $ 121,452   $ 126,640  
Allowance for loan and lease losses/non-performing loans   205.8 %   194.8 %   197.6 %   183.0 %   189.1 %
Allowance for loan and lease losses/non-performing assets and loans 90+ days past due   188.2 %   166.8 %   167.5 %   160.7 %   165.1 %
Allowance for loan and lease losses/total loans and leases   2.12 %   2.16 %   2.24 %   2.33 %   2.44 %
Provision/charge-offs, net   43.6 %   39.2 %   29.4 %   27.8 %   31.1 %
Classified loans $ 261,293   $ 296,213   $ 301,542   $ 347,033   $ 370,439  
Classified loans/total loans and leases   4.99 %   5.63 %   5.79 %   6.67 %   7.14 %
Delinquent loans (b) $ 24,048   $ 23,519   $ 24,144   $ 24,068   $ 24,801  
Delinquent loans/total loans and leases   0.46 %   0.45 %   0.46 %   0.46 %   0.48 %
 
 
As of
REGULATORY CAPITAL DATA 12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011
 
Tier 1 Capital $ 982,148   $ 1,024,888   $ 1,008,052   $ 1,005,009   $ 978,302  
Tier 1 Leverage Ratio   12.16 %   12.78 %   12.44 %   12.53 %   12.00 %
Tier 1 Ratio (%)   16.54 %   17.45 %   17.45 %   17.46 %   17.12 %
Total Capital $ 1,056,835   $ 1,098,814   $ 1,080,807   $ 1,077,587   $ 1,050,417  
Total Capital Ratio (%)   17.80 %   18.70 %   18.71 %   18.72 %   18.38 %
Total Risk-Weighted Assets $ 5,938,708   $ 5,874,448   $ 5,776,537   $ 5,757,306   $ 5,714,643  
 
(b) Includes loans 30-89 days past due and loans 90+ days past due and still accruing
         
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
 
Unaudited, dollars in thousands except share and per share data
As of
PERIOD END BALANCES: 12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011
 
Earning Assets / Liabilities
Loan portfolio composition (regulatory):
Commercial / industrial $ 868,135 $ 846,484 $ 856,237 $ 853,379 $ 833,534
Commercial real estate (c) 1,838,681 1,803,532 1,759,792 1,753,986 1,737,383
Residential mortgage 1,234,425 1,262,897 1,262,633 1,269,505 1,270,896
Real estate construction and land development 161,341 189,293 194,942 210,976 212,306
Home equity 782,717 776,023 765,902 756,803 771,792
Consumer 208,856 207,333 207,999 210,069 209,082
Other loans   146,727   171,292   163,262   146,938   153,108
Total loans 5,240,882 5,256,854 5,210,767 5,201,656 5,188,101
 
 
Investment securities and other securities 2,334,739 2,310,459 2,316,894 2,335,421 2,314,111
Other earning assets   282,440   211,943   221,419   344,427   321,885
Total earning assets (net of loan loss reserve) $ 7,747,106 $ 7,665,714 $ 7,632,430 $ 7,760,052 $ 7,697,457
(c) Includes owner occupied
 
Loan portfolio composition (internal):
Commercial & industrial loans and leases
Business purpose, real estate secured $ 886,160 $ 879,326 $ 879,413 $ 864,284 $ 895,028
Business purpose, not secured by real estate 977,875 979,042 975,852 963,641 919,720
Owner occupied commercial real estate
Permanent 599,729 572,298 572,686 572,103 563,963
Construction / development 30,523 31,181 36,451 38,546 36,631
Leasing   1,568   2,102   2,670   3,330   4,685
Total commercial & industrial loans and leases 2,495,855 2,463,949 2,467,072 2,441,904 2,420,027
 
Commercial real estate
Non-owner occupied
Permanent 907,760 918,511 874,570 878,499 855,524
Construction / development   125,878   140,889   140,751   151,697   156,064
Total commercial real estate 1,033,638 1,059,400 1,015,321 1,030,196 1,011,588
 
Consumer loans
Residential mortgage (personal purpose)
Permanent 666,274 683,694 688,171 686,974 704,655
Construction   5,498   6,079   6,806   7,835   5,667
Total residential mortgages 671,772 689,773 694,977 694,809 710,322
 
Home equity loans and direct installment loans 254,014 273,359 291,383 315,419 337,242
Home equity lines of credit   500,372   478,628   452,599   421,897   410,316
Total home equity lines and loans 754,386 751,987 743,982 737,316 747,558
 
Private banking credit lines 103,806 103,006 107,398 114,667 121,296
Indirect vehicle loans and other   167,095   166,036   165,109   165,855   165,094
All other consumer loans   270,901   269,042   272,507   280,522   286,390
Total consumer loans   1,697,059   1,710,802   1,711,466   1,712,647   1,744,270
 
Loans and leases 5,226,552 5,234,151 5,193,859 5,184,747 5,175,885
 
Loans held-for-sale 14,330 22,703 16,908 16,909 12,216
         
Total loans and leases $ 5,240,882 $ 5,256,854 $ 5,210,767 $ 5,201,656 $ 5,188,101
 
Deposit composition:
Savings $ 493,386 $ 485,283 $ 497,640 $ 495,191 $ 454,003
NOW accounts 1,472,985 1,498,344 1,317,399 1,294,591 1,293,148
Money market accounts 1,642,803 1,600,164 1,641,947 1,698,427 1,686,909
CDs less than $100k 1,017,925 1,036,112 1,063,688 1,089,601 1,138,908
CDs $100k or greater   417,065   425,546   421,103   426,548   438,148
Total interest bearing deposits   5,044,164   5,045,449   4,941,777   5,004,358   5,011,116
 
Non-interest bearing deposits   891,401   902,295   903,766   884,025   863,703
 
Total deposits $ 5,935,565 $ 5,947,744 $ 5,845,543 $ 5,888,383 $ 5,874,819
                           
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
 
Unaudited, dollars in thousands except share and per share data
Quarterly, as of Twelve Months, as of
12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011 12/31/2012   12/31/2011
Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total loans* $ 5,206,227 4.55 % $ 5,191,136 4.66 % $ 5,196,803 4.78 % $ 5,179,220 4.89 % $ 5,149,546 4.99 % $ 5,193,376 4.72 % $ 5,202,255 5.18 %
Investment securities* 2,323,243 3.63 % 2,309,646 3.77 % 2,319,392 3.93 % 2,318,109 4.02 % 2,355,178 3.97 % 2,317,591 3.84 % 2,286,948 4.22 %
Interest earning deposits   276,078 1.28 %   255,121 0.23 %   334,935 0.24 %   278,140 0.19 %   390,228 0.26 %   285,956 0.48 %   477,226 0.23 %
 
Total earning assets   7,805,548 4.16 %   7,755,903 4.25 %   7,851,130 4.34 %   7,775,469 4.46 %   7,894,952 4.45 %   7,796,923 4.30 %   7,966,429 4.61 %
Total assets   8,440,642   8,386,342   8,473,164   8,397,381   8,525,271   8,424,322   8,603,252
 
Savings 488,195 0.11 % 490,020 0.11 % 494,800 0.12 % 471,562 0.13 % 454,688 0.15 % 486,160 0.12 % 454,203 0.18 %
NOW accounts 1,463,488 0.14 % 1,402,593 0.14 % 1,343,961 0.15 % 1,238,704 0.15 % 1,269,670 0.17 % 1,362,573 0.15 % 1,205,092 0.20 %
Money market accounts 1,630,449 0.30 % 1,623,102 0.32 % 1,664,315 0.37 % 1,679,232 0.40 % 1,669,090 0.44 % 1,649,152 0.35 % 1,652,986 0.55 %
CDs   1,454,415 1.17 %   1,468,539 1.23 %   1,499,016 1.27 %   1,542,539 1.31 %   1,668,098 1.36 %   1,490,965 1.24 %   1,802,769 1.57 %
 
Total interest bearing deposits   5,036,547 0.49 %   4,984,254 0.52 %   5,002,092 0.55 %   4,932,037 0.59 %   5,061,546 0.65 %   4,988,850 0.54 %   5,115,050 0.79 %
 
Non-interest bearing deposits   886,858   897,017   891,739   852,730   835,699   882,140   831,326
Total deposits   5,923,405 0.41 %   5,881,271 0.44 %   5,893,831 0.47 %   5,784,767 0.51 %   5,897,245 0.56 %   5,870,990 0.46 %   5,946,376 0.68 %
 
Customer repurchase agreements 551,334 0.37 % 532,065 0.38 % 525,142 0.42 % 524,575 0.42 % 514,961 0.43 % 533,325 0.40 % 523,898 0.48 %
Structured repurchase agreements 75,000 4.25 % 78,370 4.28 % 85,000 4.33 % 85,000 4.33 % 128,968 4.05 % 80,820 4.30 % 155,438 4.12 %
Short-term borrowings 1,087 0.37 % 272 0.00 % - 0.00 % - 0.00 % 6,638 0.00 % 342 0.29 % 6,733 0.00 %
Federal Home Loan Bank advances, net of prepayment fees incurred 463,397 3.79 % 496,438 4.09 % 575,725 4.54 % 615,983 4.55 % 616,411 4.50 % 537,569 4.28 % 629,603 4.50 %
Subordinated debentures   144,377 5.07 %   144,472 5.12 %   143,683 5.20 %   145,274 5.18 %   143,800 5.60 %   144,451 5.14 %   143,174 6.41 %
Total deposits and borrowings   7,158,600 0.76 %   7,132,888 0.82 %   7,223,381 0.93 %   7,155,599 0.99 %   7,308,023 1.04 %   7,167,497 0.88 %   7,405,222 1.17 %
Total interest bearing liabilities $ 6,271,742 0.87 % $ 6,235,871 0.94 % $ 6,331,642 1.06 % $ 6,302,869 1.12 % $ 6,472,324 1.17 % $ 6,285,357 1.00 % $ 6,573,896 1.32 %
 
Net interest margin (FTE) 3.46 % 3.50 % 3.48 % 3.55 % 3.49 % 3.50 % 3.52 %
 
Wealth assets:
Assets under administration $ 4,445,086 $ 4,500,843 $ 4,361,134 $ 4,382,922 $ 4,197,612
Assets under management 2,256,319 2,319,220 2,284,489 2,269,351 2,141,737
(included above)
 
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.
         
Financial Update for National Penn Bancshares, Inc. (NPBC) for 12/31/2012
 
Unaudited
 
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
 
Quarterly, as of
12/31/2012   9/30/2012   6/30/2012   3/31/2012   12/31/2011
 

PA

Total number of retail branch offices 119 119 120 120 121
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 124 124 122 122 128
 

MD

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

TOTAL

Total number of retail branch offices 120 120 121 121 122
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 125 125 123 123 129
 
EOP employees (full-time equivalent) 1,648 1,661 1,690 1,681 1,688

Contacts:

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

Source: National Penn Bancshares, Inc.

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