NATIONAL PENN BANCSHARES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - NATIONAL PENN BANCSHARES, INC. FORM 8-K - NATIONAL PENN BANCSHARES INC	npb8k.htm
EX-99.2 - EXHIBIT 99.2 - NATIONAL PENN BANCSHARES INC	ex99-2.htm

EXHIBIT 99.1

News Release

National Penn Bancshares, Inc. Reports

Second Quarter 2011 Results

Company Release – July 28, 2011

· Net income increases 48% from Q1 2011 to $23.2 million or 15 cents per share

· Year-to-date net income of $38.8 million or 26 cents per share resulting in ROA of 0.98%

· Quarterly loan loss provision declines 70% to $3 million from $10 million in Q1 2011

· Tangible common equity / tangible assets increases to 10.25%

· Common stock cash dividend increased to $0.03 per share

BOYERTOWN, PA., July 28, 2011 -- National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $23.2 million, or $0.15 per diluted share, for the second quarter of 2011, compared to $15.6 million, or $0.10 per diluted share, for the first quarter of 2011. For the second quarter of 2010, net loss available to common shareholders totaled $(5.5) million or $(0.04) per diluted share resulting from certain non-recurring items. Year-to-date net income available to common shareholders totaled $38.8 million, or $0.26 per diluted share, compared to a loss of $(3.6) million, or $(0.03) per diluted share, for the prior year period. On an adjusted basis1, net income totaled $40.3 million, or $0.27 per diluted share, for year-to-date 2011, compared to $13.8 million, or $0.11 per diluted share, for the same period in 2010.

Return on average assets increased to 1.08% for the second quarter of 2011 from 0.88% for the first quarter of 2011. Earnings further enhanced National Penn’s capital position and provided the basis for increasing the common stock cash dividend to $0.03 per share in the third quarter. The ratio of tangible common equity to tangible assets increased to 10.25%1, and the total capital ratio increased to 17.7% as of June 30, 2011.

“The strong performance in the quarter is consistent with our focus on improving trends over the last several quarters. Our capital and asset quality positions provide a strong base from which to grow,” said Scott V. Fainor, president and CEO of National Penn. “We continue to be focused on opportunities to recruit high quality banking professionals to enhance revenue generation in the current economic environment.”

Asset quality improved for the sixth consecutive quarter. Classified loans declined 16% in 2011 and 8% during the second quarter, while nonperforming assets totaled less than one percent of total assets at the end of the second quarter. Annualized net charge-offs totaled 0.62% for the second quarter, a 53% decrease compared to the first quarter of 2011 and a 68% decrease compared to the second quarter of 2010. Year-to-date, annualized net charge-offs totaled less than one percent of average loans. Asset quality coverage ratios remained strong as the allowance for loan and lease losses to non-performing loans increased to 188% and the allowance totaled 2.66% of total loans and leases. The improvement in asset quality during the quarter resulted in a provision for loan and lease losses of $3.0 million, as compared to $10.0 million for the first quarter of 2011 and $25.0 million for the prior year period.

Net interest margin for the second quarter of 2011 was 3.53% compared to 3.58% for the first quarter of 2011. For the six months ended June 30, 2011, net interest margin was 3.56%, an improvement of 9 basis points as compared to the prior year period. A managed reduction in the level of interest earning assets has been mitigated by management’s ongoing efforts to reduce higher-cost, non-relationship based deposits and improve the deposit mix.

Absent charge-offs and pay-downs related to classified loans totaling approximately $50 million during the second quarter, loan balances were stable, declining by 0.3% from the prior quarter-end. Loans to new and existing customers increased 33% compared to the first quarter of 2011 and were approximately $280 million during the second quarter of 2011 and $490 million year-to-date. National Penn remains focused on the core franchise and building customer relationships that will maintain and enhance long-term profitability and shareholder value.

Total fee income from banking, wealth and insurance operations remained stable on a linked-quarter basis. National Penn’s efficiency ratio of 58.3%1 for the quarter ended June 30, 2011 is indicative of the Company’s continued focus on effective expense management.

Scott V. Fainor stated “As a result of the work and dedication of our employees, we are operating as a clean, strong and efficient company. We believe that the strength of our balance sheet provides us with a key competitive advantage for future growth and profitability.”

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 $9 billion in assets, is a bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 123 branch offices comprising 122 branches in Pennsylvania and one branch in Maryland through National Penn Bank and its HomeTowne Heritage Bank, KNBT and Nittany Bank divisions.

National Penn’s financial services affiliates consist of National Penn Wealth Management, N.A., including its National Penn Investors Trust Company division; National Penn Capital Advisors, Inc.; Institutional Advisors LLC; National Penn Insurance Services Group, Inc., including its Higgins Insurance division; and Caruso Benefits Group, Inc.

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

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 excludes the effects of certain gains and losses, adjusted for applicable taxes. Adjusted net income provides a method to assess earnings performance by excluding items that management believes are not comparable among the periods presented.

Efficiency ratio expresses operating expenses as a percentage of fully-taxable equivalent net interest income plus non-interest income. Operating expenses exclude items from non-interest expense that management believes are not comparable among the periods presented. Non-interest income is adjusted to also exclude items that management believes are not comparable among the periods presented. Efficiency ratio is used as a method for management to assess its operating expense level and to compare to financial institutions of varying sizes.

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

Cautionary Statement Regarding Forward-Looking Information:

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

National Penn’s business and operations 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 ability to raise capital and maintain capital levels, variations in interest rates, deterioration in the credit quality of loans, the effect of credit risk exposure, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, recent and ongoing changes to the state and federal regulatory schemes under which National Penn and other financial services companies operate (including the Dodd-Frank Act and regulations adopted or to be adopted to implement that Act), competition from other financial institutions, interruptions or breaches of National Penn’s security systems, and the development and maintenance of National Penn’s information technology. These risks and others are described in greater detail in National Penn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, 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 (NPBC) for 6/30/2011


Financial Highlights
Unaudited, numbers in thousands except share and per share data
				As of
	6/30/2011			3/31/2011			12/31/2010
SUMMARY BALANCE SHEET
Total assets	$	8,633,141		$	8,543,267		$	8,844,620
Investment securities and other securities		2,290,568			2,235,777		$	2,259,690
Total loans and leases		5,178,926			5,245,146			5,326,723
Deposits		5,944,161			5,933,016			6,059,173
Borrowings		1,515,611			1,472,987			1,590,996
Shareholders' equity		1,133,513			1,097,609			1,137,437
Tangible book value per common share (2)	$	5.65		$	5.40		$	5.18
Tangible common equity / tangible assets (2)		10.25	%		9.91	%		8.27	%

	Three Months Ended									Six Months Ended June 30,
	6/30/2011			3/31/2011			6/30/2010			2011			2010
EARNINGS
Total interest income	$	87,740		$	89,358		$	98,308		$	177,098		$	197,145
Total interest expense		22,745			23,388			29,665			46,133			61,243
Net interest income		64,995			65,970			68,643			130,965			135,902
Provision for loan and lease losses		3,000			10,000			25,000			13,000			57,500
Net interest income after provision
for loan and lease losses		61,995			55,970			43,643			117,965			78,402
Net (losses) gains from fair value changes on subordinated debentures		(430	)		(51	)		1,543			(481	)		(5,718	)
Other non-interest income		22,818			24,235			26,970			47,053			56,805
Goodwill impairment		-			-			8,250			-			8,250
Other non-interest expense		54,121			56,837			58,313			110,958			115,970
Income (loss) before income taxes		30,262			23,317			5,593			53,579			5,269
Income tax expense (benefit)		7,054			4,537			9,132			11,591			4,882
Net income (loss)		23,208			18,780			(3,539	)		41,988			387
Preferred dividends and accretion of preferred discount		-			(1,691	)		(2,005	)		(1,691	)		(4,010	)
Accelerated accretion from redemption of preferred stock		-			(1,452	)		-			(1,452	)		-
Net income (loss) available to common shareholders	$	23,208		$	15,637		$	(5,544	)	$	38,845		$	(3,623	)

PERFORMANCE RATIOS (a)
Net interest margin		3.53	%		3.58	%		3.50	%		3.56	%		3.47	%
Return on average assets		1.08	%		0.88	%	NM				0.98	%	NM
Return on average total shareholders' equity		8.37	%		6.39	%	NM				7.35	%		0.07	%
Return on average tangible common equity (1)		11.16	%		8.03	%	NM				9.65	%	NM

PER SHARE
Basic earnings (loss) available to common shareholders	$	0.15		$	0.10		$	(0.04	)	$	0.26		$	(0.03	)
Diluted earnings (loss) available to common shareholders		0.15			0.10			(0.04	)		0.26			(0.03	)
Dividends per common share		0.01			0.01			0.01			0.02			0.02
Average shares - basic		151,601,052			150,461,063			126,045,667			151,034,207			125,960,351
Average shares - diluted		151,835,402			150,765,883			126,045,667			151,303,597			125,960,351

(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES	Three Months Ended									Six Months Ended
	6/30/2011			3/31/2011			6/30/2010			6/30/2011			6/30/2010
Return on average tangible common equity
Return on average shareholders' equity		8.37	%		6.39	%	NM				7.35	%	NM
Effect of preferred equity		-			-0.46	%	NM				-0.17	%	NM
Effect of goodwill and intangibles		2.79	%		2.10	%	NM				2.47	%	NM
Return on average tangible common equity		11.16	%		8.03	%	NM				9.65	%	NM
Average tangible equity:
Average shareholders' equity	$	1,112,114		$	1,191,080		$	1,076,188		$	1,151,379		$	1,075,623
Average preferred equity		-			(122,095	)		(148,117	)		(60,710	)		(148,054	)
Average goodwill and intangibles		(278,022	)		(279,627	)		(309,851	)		(278,820	)		(310,812	)
Average total tangible common equity	$	834,092		$	789,358		$	618,220		$	811,849		$	616,757

Adjusted net income reconciliation
Net income (loss) available to common shareholders	$	23,208		$	15,637		$	(5,544	)	$	38,845		$	(3,623	)
After tax gain on pension plan curtailment		-			-			-			-			(2,643	)
After tax unrealized fair market value loss (gain) on
subordinated debentures		-			-			(1,003	)		-			3,717
Accelerated accretion from redemption of preferred stock		-			1,452			-			1,452			-
BOLI tax expense		-			-			8,081			-			8,081
Goodwill impairment		-			-			8,250			-			8,250
Adjusted net income available to common shareholders	$	23,208		$	17,089		$	9,784		$	40,297		$	13,782

Earnings per share
Net income (loss) available to common shareholders	$	0.15		$	0.10		$	(0.04	)	$	0.26		$	(0.03	)
After tax gain on pension plan curtailment		-			-			-			-			(0.02	)
After tax unrealized fair market value loss (gain) on
subordinated debentures		-			-			(0.01	)		-			0.03
Accelerated accretion from redemption of preferred stock		-			0.01			-			0.01
BOLI tax expense								0.06						0.06
Goodwill impairment		-			-			0.07			-			0.07
Adjusted net income available to common shareholders	$	0.15		$	0.11		$	0.08		$	0.27		$	0.11

(a) Ratios less than 0% are expressed as not meaningful or "NM"

Financial Update for National Penn Bancshares (NPBC) for 6/30/2011

Page 1 of 6
Unaudited, numbers in thousands except share and per share data	As of
	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010
BALANCE SHEET - ASSETS
Cash and due from banks	$	105,918		$	113,031		$	90,283		$	103,279		$	106,059
Interest-earning deposits with banks		513,132			392,337			612,099			609,733			496,282
Total cash and cash equivalents		619,050			505,368			702,382			713,012			602,341

Investment securities available for sale, at fair value		1,696,682			1,622,395			1,632,118			1,603,849			1,554,349
Investment securities held to maturity		518,578			535,488			546,957			567,740			579,572
Other securities		75,308			77,894			80,615			83,676			83,676
Loans held for sale		8,852			5,561			12,785			30,081			15,944

Loans and leases		5,170,074			5,239,585			5,313,938			5,611,749			5,740,291
Allowance for loan and lease losses		(137,909	)		(142,960	)		(150,054	)		(153,475	)		(154,039	)
Loans and leases, net		5,032,165			5,096,625			5,163,884			5,458,274			5,586,252

Premises and equipment, net		103,017			103,771			105,483			108,496			109,792
Accrued interest receivable		31,862			34,264			33,829			36,127			35,745
Bank owned life insurance, redeemed but not settled		-			-			-			64,387			64,387
Bank owned life insurance		136,606			135,373			134,154			136,093			134,925
Other real estate owned and other repossessed assets		8,407			7,653			7,453			7,818			8,974
Goodwill		258,279			258,279			258,279			273,468			273,468
Other intangible assets, net		18,970			20,530			22,217			25,587			27,360
Unconsolidated investments under the equity method		12,327			12,211			11,482			12,428			12,736
Other assets		113,038			127,855			132,982			127,193			132,606
TOTAL ASSETS	$	8,633,141		$	8,543,267		$	8,844,620		$	9,248,229		$	9,222,127

BALANCE SHEET - LIABILITIES
Non-interest bearing deposits	$	839,811		$	834,321		$	808,835		$	815,193		$	834,297
Interest bearing deposits		5,104,350			5,098,695			5,250,338			5,690,284			5,661,908
Total deposits		5,944,161			5,933,016			6,059,173			6,505,477			6,496,205

Securities sold under repurchase agreements		738,628			696,256			734,455			752,428			752,314
Short-term borrowings		6,390			6,184			10,000			6,974			7,000
Federal Home Loan Bank advances		627,332			627,716			703,761			705,278			706,784
Subordinated debentures		143,261			142,831			142,780			140,731			138,125
Accrued interest payable and other liabilities		39,856			39,655			57,014			45,323			44,811
TOTAL LIABILITIES		7,499,628			7,445,658			7,707,183			8,156,211			8,145,239

BALANCE SHEET - SHAREHOLDERS' EQUITY
Preferred stock		-			-			148,441			148,310			148,180
Common stock		1,379,690			1,379,014			1,292,342			1,227,639			1,227,354
Retained deficit		(258,125	)		(279,817	)		(293,940	)		(299,209	)		(308,252	)
Accumulated other comprehensive income/(loss)		11,948			(1,588	)		(9,406	)		15,278			9,606
TOTAL SHAREHOLDERS' EQUITY		1,133,513			1,097,609			1,137,437			1,092,018			1,076,888

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	8,633,141		$	8,543,267		$	8,844,620		$	9,248,229		$	9,222,127


COMMON SHARE AND PER SHARE DATA
Book Value	$	7.47		$	7.24		$	7.23		$	7.48		$	7.37
Tangible Book Value (2)	$	5.65		$	5.40		$	5.18		$	5.11		$	4.98
Dividends	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01
Shares Outstanding (end of period, net of treasury)		151,660,444			151,506,511			136,792,414			126,115,073			126,064,075


(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity	$	1,133,513		$	1,097,609		$	1,137,437		$	1,092,018		$	1,076,888
Total preferred shareholders' equity		-			-			(148,441	)		(148,310	)		(148,180	)
Goodwill and intangibles		(277,249	)		(278,809	)		(280,496	)		(299,055	)		(300,828	)
Tangible common equity	$	856,264		$	818,800		$	708,500		$	644,653		$	627,880
Common shares outstanding		151,660,444			151,506,511			136,792,414			126,115,073			126,064,075
Tangible book value per share	$	5.65		$	5.40		$	5.18		$	5.11		$	4.98

Total assets	$	8,633,141		$	8,543,267		$	8,844,620		$	9,248,229		$	9,222,127
Goodwill and intangibles		(277,249	)		(278,809	)		(280,496	)		(299,055	)		(300,828	)
Tangible assets	$	8,355,892		$	8,264,458		$	8,564,124		$	8,949,174		$	8,921,299
Tangible common equity/tangible assets		10.25	%		9.91	%		8.27	%		7.20	%		7.04	%

Financial Update for National Penn Bancshares (NPBC) for6/30/2011

Page 2 of 6
Unaudited, numbers in thousands except share and per share data	For the Quarter Ended															For the Six Months Ended
	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010			6/30/2011			6/30/2010
INTEREST INCOME
Loans and leases, including fees	$	67,553		$	69,228		$	73,496		$	76,227		$	77,830		$	136,781		$	156,484
Investment securities
Taxable		11,552			11,357			11,272			11,157			11,457			22,909			22,555
Tax-exempt		8,401			8,493			8,569			8,697			8,803			16,894			17,641
Federal funds sold and deposits in banks		234			280			408			279			218			514			465
Total interest income		87,740			89,358			93,745			96,360			98,308			177,098			197,145
INTEREST EXPENSE
Deposits		10,974			11,407			13,411			15,773			16,464			22,381			34,745
Securities sold under repurchase agreements		2,346			2,395			2,567			2,757			2,808			4,741			5,682
Short-term borrowings		-			-			-			-			-			-			-
Federal Home Loan Bank advances		7,039			7,217			7,732			7,742			8,010			14,256			16,063
Subordinated debentures		2,386			2,369			2,394			2,398			2,383			4,755			4,753
Total interest expense		22,745			23,388			26,104			28,670			29,665			46,133			61,243
Net interest income		64,995			65,970			67,641			67,690			68,643			130,965			135,902
Provision for loan and lease losses		3,000			10,000			17,500			20,000			25,000			13,000			57,500
Net interest income after provision for loan and lease losses		61,995			55,970			50,141			47,690			43,643			117,965			78,402
NON-INTEREST INCOME
Wealth management income		5,856			5,924			6,917			6,997			7,238			11,780			14,339
Service charges on deposit accounts		4,616			4,664			5,358			5,419			5,446			9,280			10,787
Insurance commissions and fees		3,520			3,221			3,423			3,499			3,639			6,741			7,410
Cash management and electronic banking fees		4,645			4,371			4,584			4,548			4,614			9,016			8,772
Mortgage banking income		1,014			1,080			2,590			2,424			1,231			2,094			2,384
Bank owned life insurance income		1,233			1,220			1,501			1,168			1,280			2,453			3,263
Equity in undistributed net earnings of unconsolidated investments		116			1,700			140			(41	)		537			1,816			700
Gain on pension plan curtailment		-			-			-			-			-			-			4,066
Other operating income		1,818			2,055			1,638			2,381			2,771			3,873			5,504
Net (losses) gains from fair value changes on subordinated debentures		(430	)		(51	)		(2,049	)		(2,606	)		1,543			(481	)		(5,718	)
Net gains (losses) on sales of investment securities		-			-			-			-			214			-			214
Impairment losses on investment securities:
Impairment losses on investment securities		-			-			(444	)		(312	)		-			-			(634	)
Non credit-related losses on securities not expected to be sold recognized
in other comprehensive loss before tax		-			-			-			-			-			-			-
Net impairment losses on investment securities		-			-			(444	)		(312	)		-			-			(634	)
Total non-interest income (loss)		22,388			24,184			23,658			23,477			28,513			46,572			51,087
NON-INTEREST EXPENSE
Salaries, wages and employee benefits		30,408			31,449			31,499			31,544			30,999			61,857			60,428
Net premises and equipment		6,787			7,272			7,460			7,256			7,209			14,059			15,207
Goodwill impairment		-			-			-			-			8,250			-			8,250
FDIC insurance		2,726			3,457			3,411			3,641			4,056			6,183			8,153
Other operating expenses		14,200			14,659			17,123			15,524			16,049			28,859			32,182
Total non-interest expense		54,121			56,837			59,493			57,965			66,563			110,958			124,220
Income (loss) before income taxes		30,262			23,317			14,306			13,202			5,593			53,579			5,269
Income tax expense (benefit)		7,054			4,537			5,664			895			9,132			11,591			4,882
NET INCOME (LOSS)		23,208			18,780			8,642			12,307			(3,539	)		41,988			387
Preferred dividends and accretion of preferred discount		-			(1,691	)		(2,005	)		(2,006	)		(2,005	)		(1,691	)		(4,010	)
Accelerated accretion from redemption of preferred stock		-			(1,452	)		-			-			-			(1,452	)		-
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	23,208		$	15,637		$	6,637		$	10,301		$	(5,544	)	$	38,845		$	(3,623	)

PER SHARE OF COMMON STOCK
Basic earnings (loss) available to common shareholders	$	0.15		$	0.10		$	0.05		$	0.08		$	(0.04	)	$	0.26		$	(0.03	)
Diluted earnings (loss) available to common shareholders	$	0.15		$	0.10		$	0.05		$	0.08		$	(0.04	)	$	0.26		$	(0.03	)
Average Shares Basic		151,601,052			150,461,063			134,380,086			126,102,037			126,045,667			151,034,207			125,960,351
Average Shares Diluted		151,835,402			150,765,883			134,471,788			126,255,249			126,045,667			151,303,597			125,960,351

SUPPLEMENTAL DATA (annualized, average) (a)
Return on Assets		1.08	%		0.88	%		0.38	%		0.53	%	NM				0.98	%		0.01	%
Return on Total Equity		8.37	%		6.39	%		3.00	%		4.50	%	NM				7.35	%		0.07	%
Return on Common Equity		8.37	%		5.93	%		2.65	%		4.36	%	NM				7.18	%	NM
Return on Tangible Common Equity (1)		11.16	%		8.03	%		3.76	%		6.42	%	NM				9.65	%	NM
Efficiency Ratio (3)		58.25	%		59.61	%		60.36	%		58.51	%		57.72	%		58.94	%		58.12	%


(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES

Efficiency Ratio Calculation
Non-interest expense	$	54,121		$	56,837		$	59,493		$	57,965		$	66,563		$	110,958		$	124,220
Less:
Goodwill impairment		-			-			-			-			8,250			-			8,250
Operating expenses	$	54,121		$	56,837		$	59,493		$	57,965		$	58,313		$	110,958		$	115,970

Net interest income (taxable equivalent)	$	70,087		$	71,112		$	72,849		$	72,985		$	74,055		$	141,199		$	146,782

Non-interest income (loss)		22,388			24,184			23,658			23,477			28,513			46,572			51,087
Less:
Gain on pension plan curtailment		-			-			-			-			-			-			4,066
Net (losses) gains from fair value changes		(430	)		(51	)		(2,049	)		(2,606	)		1,543			(481	)		(5,718	)
Adjusted revenue	$	92,905		$	95,347		$	98,556		$	99,068		$	101,025		$	188,252		$	199,521

Efficiency Ratio		58.25	%		59.61	%		60.36	%		58.51	%		57.72	%		58.94	%		58.12	%

(a) Ratios less than 0% are expressed as not meaningful or "NM"

Financial Update for National Penn Bancshares (NPBC) for 6/30/2011


Page 3 of 6
Unaudited, numbers in thousands except share and per share data
	As of and for the Quarter Ended															For the Six Months Ended
CHARGE-OFFS	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010			6/30/2011			6/30/2010

Loan Charge-offs	$	10,512		$	18,753		$	22,456		$	23,306		$	27,316		$	29,265		$	54,798
Recoveries on Loans	$	(2,461	)		(1,659	)		(2,443	)		(2,742	)		(2,505	)		(4,120	)		(5,066	)
Net Loan Charge-offs	$	8,051		$	17,094		$	20,013		$	20,564		$	24,811		$	25,145		$	49,732
Net Loan Charge-offs to Average Loans (annualized)		0.62	%		1.31	%		1.44	%		1.43	%		1.70	%		0.96	%		1.69	%

NET CHARGE OFF DETAIL
Commercial and Industrial Loans and Leases	$	5,066		$	9,319		$	7,363		$	2,166		$	8,613		$	14,385		$	10,873

Commercial Real Estate-Permanent		1,242			3,946			2,903			1,655			1,509			5,188			1,869
Commercial Real Estate-Construction		828			873			1,973			12,899			6,327			1,701			24,754
Total Commercial Real Estate Loans		2,070			4,819			4,876			14,554			7,836			6,889			26,623

Residential Mortgages		483			1,643			5,620			1,467			5,367			2,126			8,068
Home Equity Lines and Loans		833			1,158			1,280			935			658			1,991			1,118
All other Consumer Loans		(401	)		155			874			1,442			2,337			(246	)		3,050
Total Consumer Loans		915			2,956			7,774			3,844			8,362			3,871			12,236

Net Loans Charged-off	$	8,051		$	17,094		$	20,013		$	20,564		$	24,811		$	25,145		$	49,732

	As of
ASSET QUALITY AND OTHER DATA	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010

Non-Accrual Commercial and Industrial Loans and Leases	$	31,275		$	34,122		$	34,870		$	29,878		$	33,923

Non-Accrual Commercial Real Estate-Permanent		11,879			15,407			17,820			15,510			12,700
Non-Accrual Commercial Real Estate-Construction		15,844			18,012			19,393			29,866			34,281
Total Non-Accrual Commercial Real Estate Loans		27,723			33,419			37,213			45,376			46,981

Non-Accrual Residential Mortgages		5,196			5,303			5,801			4,543			3,743
Non-Accrual Home Equity Lines and Loans		1,527			1,965			2,133			2,008			1,757
All other Non-Accrual Consumer Loans		2,062			1,810			2,094			1,845			2,471
Total Non-Accrual Consumer Loans		8,785			9,078			10,028			8,396			7,971

Total Non-Accrual Loans		67,783			76,619			82,111			83,650			88,875

Restructured Loans		3,833			351			-			8,544			7,324
Loans 90+ Days Past Due & Still Accruing		1,567			2,183			1,753			2,237			2,997
Total Non-performing Loans		73,183			79,153			83,864			94,431			99,196

Other Real Estate Owned & Repossessed Assets		8,407			7,653			7,453			7,818			8,974
Total Non-performing Assets	$	81,590		$	86,806		$	91,317		$	102,249		$	108,170

Allowance for Loan and Lease Losses	$	137,909		$	142,960		$	150,054		$	153,475		$	154,039
Allowance for Loan and Lease Losses/Non-Performing Loans		188.4	%		180.6	%		178.9	%		162.5	%		155.3	%
Allowance for Loan and Lease Losses/Non-Performing Assets		169.0	%		164.7	%		164.3	%		150.1	%		142.4	%
Provision/Charge-Offs, net		37.3	%		58.5	%		87.4	%		97.3	%		100.8	%
Classified Loans	$	403,145		$	438,275		$	479,336		$	498,631		$	512,628
Classified Loans/Total Loans		7.78	%		8.36	%		9.00	%		8.84	%		8.91	%
Delinquent Loans	$	20,413		$	25,342		$	27,807		$	33,676		$	33,171
Delinquent Loans/Total Loans		0.39	%		0.48	%		0.52	%		0.60	%		0.58	%


	As of
REGULATORY CAPITAL DATA	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010

Tier 1 Capital	$	922,457		$	889,473		$	924,143		$	850,185		$	833,526
Tier 1 Leverage Ratio		11.20	%		10.66	%		10.59	%		9.67	%		9.41	%
Tier 1 Ratio (%)		16.43	%		15.66	%		16.12	%		14.00	%		13.64	%
Total Capital	$	992,729		$	960,459		$	996,288		$	926,499		$	910,857
Total Capital Ratio (%)		17.68	%		16.91	%		17.38	%		15.26	%		14.91	%
Total Risk-Weighted Assets	$	5,615,341		$	5,679,123		$	5,732,730		$	6,070,678		$	6,109,763

Financial Update for National Penn Bancshares (NPBC) for 6/30/2011

Page 4 of 6
Unaudited, numbers in thousands except share and per share data
	As of
PERIOD END BALANCES:	6/30/2011			3/31/2011			12/31/2010			9/30/2010			6/30/2010

Earning Assets / Liabilities
Loan Breakdown: (Regulatory)
Commercial/Industrial	$	838,489		$	808,118		$	804,602		$	878,790		$	925,661
Commercial Real Estate (1)		1,715,616			1,749,215			1,740,029			1,810,442			1,804,073
Residential Mortgage		1,295,463			1,295,014			1,294,751			1,381,117			1,412,218
Real Estate Construction and Land Development		207,643			270,584			339,242			375,341			404,292
Home Equity		764,467			738,629			755,829			792,496			800,378
Consumer		213,570			228,904			236,107			244,878			247,113
Other Loans		143,678			154,682			156,163			158,766			162,500
Total Loans		5,178,926			5,245,146			5,326,723			5,641,830			5,756,235

Allowance for Loan and Lease Losses/Total Loans and Leases		2.66	%		2.73	%		2.82	%		2.72	%		2.68	%

Investment Securities and Other Securities		2,290,568			2,235,777			2,259,690			2,255,265			2,217,597
Other Earning Assets		513,132			392,337			612,099			609,733			496,282
Total Earning Assets (net of loan loss reserve)	$	7,844,717		$	7,730,300		$	8,048,458		$	8,353,353		$	8,316,075
(1) Includes owner occupied

Loan Breakdown: (Internal)
Commercial & Industrial Loans and Leases
Business Purpose, Real Estate secured	$	884,606		$	896,521		$	948,506		$	987,551		$	991,075
Business Purpose, not secured by Real Estate		913,115			888,249			886,692			953,645			1,005,189
Owner Occupied Commercial Real Estate
- Permanent		577,092			578,332			552,129			556,738			556,201
- Construction / Development		27,003			38,775			37,196			38,902			38,858
Leasing		7,125			9,054			10,437			12,230			13,810
Total Commercial & Industrial Loans & Leases		2,408,941			2,410,931			2,434,960			2,549,066			2,605,133

Commercial Real Estate
Non Owner Occupied
- Permanent		818,564			819,875			768,988			855,777			868,405
- Construction / Development		171,063			206,924			281,056			312,086			335,799
Total Commercial Real Estate		989,627			1,026,799			1,050,044			1,167,863			1,204,204

Consumer Loans
Residential Mortgage (personal purpose)
Permanent		728,430			742,423			758,301			795,420			813,042
Construction		5,909			4,505			7,113			9,966			10,925
Total Residential Mortgages		734,339			746,928			765,414			805,386			823,967

Home Equity Loans and Direct Installment Loans		388,173			415,599			423,755			446,866			458,803
Home Equity Lines of Credit		367,127			325,186			321,369			332,074			317,469
Total Home Equity Lines and Loans		755,300			740,785			745,124			778,940			776,272

Private Banking Credit Lines		119,850			139,721			150,811			159,991			163,526
Indirect Vehicle Loans		125,796			121,014			131,416			133,297			136,177
Other		45,073			58,968			48,954			47,287			46,956
All Other Consumer Loans		290,719			319,703			331,181			340,575			346,659
Total Consumer Loans		1,780,358			1,807,416			1,841,719			1,924,901			1,946,898

Total Loans	$	5,178,926		$	5,245,146		$	5,326,723		$	5,641,830		$	5,756,235

Deposit Breakdown:
Savings	$	464,055		$	457,395		$	438,879		$	430,806		$	455,061
NOW Accounts		1,158,161			1,128,644			1,181,850			1,294,582			1,130,026
Money Market Accounts		1,631,779			1,655,115			1,664,620			1,714,771			1,763,631
CDs $100k or less		1,261,026			1,433,808			1,378,060			1,512,573			1,543,947
CDs greater than $100k		589,329			423,733			586,929			737,552			769,243
Total Interest Bearing Deposits		5,104,350			5,098,695			5,250,338			5,690,284			5,661,908
Borrowings		1,515,611			1,472,987			1,590,996			1,605,411			1,604,223
Total Interest Bearing Liabilities	$	6,619,961		$	6,571,682		$	6,841,334		$	7,295,695		$	7,266,131

Financial Update for National Penn Bancshares (NPBC) for 6/30/2011

Page 5 of 6
Unaudited, numbers in thousands except share and per share data
	Quarterly, as of																									Six Months, as of
	6/30/2011					3/31/2011					12/31/2010					9/30/2010					6/30/2010					6/30/2011					6/30/2010
	Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield

Total Loans	$	5,228,365		5.24	%	$	5,311,204		5.34	%	$	5,506,513		5.35	%	$	5,703,685		5.35	%	$	5,856,738		5.39	%	$	5,269,556		5.29	%	$	5,920,790		5.39	%
Investment Securities		2,258,355		4.32	%		2,245,416		4.39	%		2,274,090		4.24	%		2,227,732		4.34	%		2,248,560		4.43	%		2,251,921		4.35	%		2,216,899		4.49	%
Interest Earning Deposits and
Fed Funds Sold		467,157		0.20	%		508,684		0.22	%		642,204		0.25	%		535,446		0.21	%		388,434		0.23	%		487,806		0.21	%		399,704		0.23	%

Total Earning Assets		7,953,877		4.68	%		8,065,304		4.75	%		8,422,807		4.66	%		8,466,862		4.76	%		8,493,732		4.90	%		8,009,283		4.72	%		8,537,393		4.91	%
Total Assets		8,599,923		4.09	%		8,701,649		4.16	%		9,122,895		4.30	%		9,197,254		4.39	%		9,228,295		4.51	%		8,650,505		4.13	%		9,282,513		4.52	%

Savings		462,870		0.18	%		442,830		0.19	%		435,069		0.20	%		445,327		0.27	%		446,347		0.29	%		452,905		0.19	%		432,468		0.31	%
NOW Accounts		1,188,644		0.22	%		1,148,991		0.22	%		1,265,646		0.23	%		1,203,831		0.28	%		1,156,191		0.35	%		1,168,927		0.22	%		1,158,159		0.39	%
Money Market Accounts		1,638,733		0.60	%		1,656,059		0.59	%		1,682,091		0.60	%		1,728,823		0.82	%		1,726,437		0.87	%		1,647,348		0.59	%		1,725,171		0.91	%
CDs		1,857,969		1.66	%		1,889,073		1.76	%		2,124,910		1.85	%		2,279,366		1.92	%		2,322,483		1.97	%		1,873,435		1.71	%		2,421,700		2.00	%

Total Interest Bearing Deposits		5,148,216		0.85	%		5,136,953		0.90	%		5,507,716		0.97	%		5,657,347		1.11	%		5,651,458		1.17	%		5,142,615		0.88	%		5,737,498		1.22	%

Non-Interest Bearing Deposits		837,635					813,704					818,330					831,484					831,119					825,736					799,434
Total Deposits		5,985,851		0.74	%		5,950,657		0.78	%		6,326,046		0.84	%		6,488,831		0.96	%		6,482,577		1.02	%		5,968,351		0.76	%		6,536,932		1.07	%

Securities sold under repurchase agreements		687,147		1.37	%		711,100		1.37	%		757,234		1.35	%		728,235		1.50	%		746,079		1.51	%		699,057		1.37	%		744,095		1.54	%
Short-term borrowings		6,713		0.00	%		6,850		0.00	%		7,080		0.00	%		6,669		0.00	%		6,828		0.00	%		6,781		0.00	%		6,926		0.00	%
Federal Home Loan Bank advances		627,525		4.50	%		651,208		4.49	%		704,670		4.35	%		706,183		4.35	%		739,688		4.34	%		639,301		4.50	%		746,210		4.34	%
Subordinated debentures		142,836		6.70	%		142,781		6.73	%		140,753		6.75	%		138,153		6.89	%		139,651		6.84	%		142,808		6.72	%		136,090		7.04	%
Total Interest Bearing Liabilities
(including non-interest bearing deposits)		7,450,072		1.22	%		7,462,596		1.27	%		7,935,783		1.31	%		8,068,071		1.41	%		8,114,823		1.47	%		7,456,298		1.25	%		8,170,253		1.51	%
Total Interest Bearing Liabilities	$	6,612,437		1.38	%	$	6,648,892		1.43	%	$	7,117,453		1.46	%	$	7,236,587		1.57	%	$	7,283,704		1.63	%	$	6,630,562		1.40	%		7,370,819		1.68	%

Net Yield on Earning Assets: (Margin)				3.53	%				3.58	%				3.43	%				3.42	%				3.50	%				3.56	%				3.47	%

Wealth Assets:
Assets under administration	$	4,364,447				$	4,057,142				$	3,973,910				$	10,616,931				$	9,942,778
Assets under management		2,247,042					2,136,596					2,092,149					2,394,916					2,252,299
(included above)
Christiana Bank and Trust
Trust Revenues	$	-				$	-				$	862	(a)			$	1,539				$	1,607

(a) Through December 3, 2010

Financial Update for National Penn Bancshares (NPBC) for 6/30/2011


Page 6 of 6
Unaudited, numbers in thousands except share and per share data
	Quarterly, as of
	6/30/2011		3/31/2011		12/31/2010		9/30/2010		6/30/2010
STATES OF OPERATION AND BANKING OFFICES
BY STATE (LATEST AVAILABLE DATA)

PA
Total Number of Banking Offices		122		122		124		124		124
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		1		1		1		1		1
Total Number of ATMs		131		132		133		132		133

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

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

TOTAL
Total Number of Banking Offices		123		123		125		127		127
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		1		1		1		2		2
Total Number of ATMs		132		133		134		135		136

EOP Employees (Full Time Equivalent)		1,700		1,676		1,728		1,771		1,792

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NATIONAL PENN BANCSHARES INC Reports