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

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8-K - NATIONAL PENN BANCSHARES, INC. - NATIONAL PENN BANCSHARES INC	nationalpenn8k.htm

EXHIBIT 99.1

News Release

National Penn Bancshares, Inc. Reports

First Quarter 2012 Results

Company Release – April 20, 2012

· Quarterly net income of $0.17 per common share

· Adjusted net income1 of $0.16 per common share resulting in return on assets1 of 1.16%

· Sustained improvement in asset quality metrics and accretion of strong capital levels

· Second quarter 2012 common stock cash dividend increased from $0.05 to $0.07 per share

· Share repurchase authorized for approximately 5% of outstanding common shares

BOYERTOWN, PA., April 20, 2012 -- National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to common shareholders of $25.3 million, or $0.17 per diluted common share, for the first quarter of 2012 compared to $20.7 million, or $0.14 per diluted common share, for the fourth quarter of 2011. Net income available to common shareholders increased 62% from $15.6 million, or $0.10 per diluted common share, for the first quarter of 2011. On an adjusted basis1, net income for the quarter totaled $24.2 million, or $0.16 per diluted common share, consistent with the fourth quarter of 2011 and a 45% increase over the prior year period. First quarter 2012 adjusted net income¹ excluded an after-tax unrealized fair value gain on National Penn’s trust preferred securities (Nasdaq: NPBCO) of $1.1 million.

“National Penn reported another quarter of consistent earnings resulting in a strong return on assets of 1.16%1,” said Scott V. Fainor, president and CEO of National Penn. “The strength of the balance sheet, as reflected by our asset quality metrics and capital levels, allowed for our fourth consecutive quarterly dividend increase and the previously announced share repurchase authorization. We believe these results and the continued execution of our strategic initiatives position us well for future opportunities.”

The net interest margin for the first quarter of 2012 increased 6 basis points to 3.55% from 3.49% in the prior quarter, while net interest income remained stable and totaled $63.8 million. Total loans and leases increased $13.6 million from December 31, 2011 with growth attributable to a focus on commercial lending which increased by $40.5 million, or 4.7% on an annualized basis. Total consumer loans, including residential mortgage loans, declined $26.9 million during the first quarter of 2012, primarily due to prepayments and the sale of a majority of new mortgage originations in the secondary market. The first quarter net interest margin benefitted from a reduction of higher-cost deposits, and as a result the cost of deposits decreased five basis points during the quarter to 0.51%. Deposit mix also continued to improve as transaction and savings accounts increased $297 million from March 31, 2011 and comprised 74% of total deposits compared to 69%. Additionally, the full-quarter effect of the previously announced actions taken late in the fourth quarter of 2011 to terminate certain higher-costing structured repurchase agreements contributed to the improvement in the net interest margin.

Asset quality continued to improve, as evidenced by classified loans declining $23.4 million, or 6.3%, as compared to December 31, 2011 and 21% from the prior year. The reduction in classified loans and stable net charge-offs and non-performing loans resulted in a provision for loan and lease losses of $2.0 million for the first quarter of 2012, consistent with the $2.0 million provision for the fourth quarter of 2011, and a decrease of $8.0 million from the prior year first quarter. The allowance to non-performing loans remained strong at 183% at March 31, 2012.

Capital levels were further strengthened during the first quarter of 2012, resulting in a tangible common equity to tangible assets ratio of 11.25%1 and a total risk-based capital ratio of 18.72%. Based upon strong and improving capital levels, National Penn’s Board of Directors increased the cash dividend to $0.07 per share for the second quarter from $0.05 per share, payable on May 17, 2012 to shareholders of record on May 5, 2012. Additionally, a common stock repurchase program was announced on April 2, 2012, allowing for up to 7.5 million common shares to be repurchased, as market conditions permit, throughout the year.

Scott V. Fainor stated, “Maintaining our net interest margin and growing loans in a difficult interest rate and economic environment are terrific accomplishments for the National Penn team. Our entire team remains focused on enhancing long-term shareholder value.”

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 $8.5 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 3/31/2012



Unaudited, dollars in thousands except share and per share data
	As of
	3/31/2012			12/31/2011			3/31/2011
SUMMARY BALANCE SHEET
Total assets	$	8,524,035		$	8,486,281		$	8,543,267
Investment securities and other securities		2,335,421			2,314,111			2,235,777
Total loans and leases		5,201,656			5,188,101			5,245,146
Deposits		5,888,383			5,874,819			5,933,016
Borrowings		1,387,235			1,370,399			1,472,987
Shareholders' equity		1,200,830			1,180,687			1,097,609
Tangible book value per common share (2)	$	6.09		$	5.97		$	5.40
Tangible common equity / tangible assets (2)		11.25	%		11.04	%		9.91	%

	Three Months Ended
	3/31/2012			12/31/2011			3/31/2011
EARNINGS
Total interest income	$	81,414		$	83,681		$	89,358
Total interest expense		17,596			19,160			23,388
Net interest income		63,818			64,521			65,970
Provision for loan and lease losses		2,000			2,000			10,000
Net interest income after provision for loan and lease losses		61,818			62,521			55,970
Net gains (losses) from fair value changes on subordinated debentures		1,645			(1,543	)		(51	)
Loss on debt extinguishment		-			(1,635	)		-
Net gains on sales of investment securities		-			1,697			-
Other non-interest income		22,596			22,978			24,235
Corporate reorganization expense		-			2,200			-
Other non-interest expense		52,440			55,186			56,837
Income before income taxes		33,619			26,632			23,317
Income tax expense		8,317			5,889			4,537
Net income		25,302			20,743			18,780
Preferred dividends and accretion of preferred discount		-			-			(1,691	)
Accelerated accretion from redemption of preferred stock		-			-			(1,452	)
Net income available to common shareholders	$	25,302		$	20,743		$	15,637

PERFORMANCE RATIOS
Net interest margin		3.55	%		3.49	%		3.58	%
Return on average assets		1.21	%		0.97	%		0.88	%
Adjusted return on average assets (3)		1.16	%		1.08	%		0.80	%
Return on average total shareholders' equity		8.56	%		7.02	%		6.39	%
Return on average tangible common equity (1)		11.12	%		9.17	%		8.03	%
Efficiency ratio (4)		57.47	%		59.73	%		59.61	%

PER SHARE
Basic earnings available to common shareholders	$	0.17		$	0.14		$	0.10
Diluted earnings available to common shareholders		0.17			0.14			0.10
Dividends per common share		0.05			0.04			0.01
Average shares - basic		152,099,546			151,773,327			150,461,063
Average shares - diluted		152,392,315			152,068,706			150,765,883


(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES	Three Months Ended
	3/31/2012			12/31/2011			3/31/2011
Return on average tangible common equity
Return on average shareholders' equity		8.56	%		7.02	%		6.39	%
Effect of preferred equity		-			-			-0.46	%
Effect of goodwill and intangibles		2.56	%		2.15	%		2.10	%
Return on average tangible common equity		11.12	%		9.17	%		8.03	%
Average tangible equity:
Average shareholders' equity	$	1,188,384		$	1,172,273		$	1,191,080
Average preferred equity		-			-			(122,095	)
Average goodwill and intangibles		(273,360	)		(274,827	)		(279,627	)
Average total tangible common equity	$	915,024		$	897,446		$	789,358

Adjusted net income reconciliation
Net income available to common shareholders	$	25,302		$	20,743		$	15,637
After tax unrealized fair market value (gain) loss on subordinated debentures		(1,069	)		1,003			-
Corporate reorganization expense		-			1,430			-
Accelerated accretion from redemption of preferred stock		-			-			1,452
Adjusted net income available to common shareholders	$	24,233		$	23,176		$	17,089

Earnings per share
Net income available to common shareholders	$	0.17		$	0.14		$	0.10
After tax unrealized fair market value (gain) loss on subordinated debentures		(0.01	)		0.01			-
Corporate reorganization expense		-			0.01			-
Accelerated accretion from redemption of preferred stock		-			-			0.01
Adjusted net income available to common shareholders	$	0.16		$	0.16		$	0.11

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012



Unaudited, dollars in thousands except share and per share data	As of
	3/31/2012			12/31/2011			9/30/2011			6/30/2011			3/31/2011
BALANCE SHEET - ASSETS
Cash and due from banks	$	108,752		$	129,637		$	116,057		$	105,918		$	113,031
Interest-earning deposits with banks		344,427			321,885			422,942			513,132			392,337
Total cash and cash equivalents		453,179			451,522			538,999			619,050			505,368

Investment securities available-for-sale, at fair value		1,779,613			1,747,019			1,790,654			1,696,682			1,622,395
Investment securities held-to-maturity		487,507			496,574			509,773			518,578			535,488
Other securities		68,301			70,518			72,851			75,308			77,894
Loans held-for-sale		16,909			12,216			17,144			8,852			5,561

Loans and leases		5,184,747			5,175,885			5,144,131			5,170,074			5,239,585
Allowance for loan and lease losses		(121,452	)		(126,640	)		(131,073	)		(137,909	)		(142,960	)
Loans and leases, net		5,063,295			5,049,245			5,013,058			5,032,165			5,096,625

Premises and equipment, net		95,937			96,198			100,880			103,017			103,771
Accrued interest receivable		31,241			30,991			33,110			31,862			34,264
Bank owned life insurance		139,507			138,274			137,017			136,606			135,373
Other real estate owned and other repossessed assets		7,647			7,716			8,029			8,407			7,653
Goodwill		258,279			258,279			258,279			258,279			258,279
Other intangible assets, net		14,408			15,770			17,370			18,970			20,530
Unconsolidated investments under the equity method		11,699			12,173			11,927			12,327			12,211
Other assets		96,513			99,786			102,550			113,038			127,855
TOTAL ASSETS	$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141		$	8,543,267

BALANCE SHEET - LIABILITIES
Non-interest bearing deposits	$	884,025		$	863,703		$	833,311		$	839,811		$	834,321
Interest bearing deposits		5,004,358			5,011,116			5,159,680			5,104,350			5,098,695
Total deposits		5,888,383			5,874,819			5,992,991			5,944,161			5,933,016

Customer repurchase agreements		542,706			523,978			500,099			573,628			531,256
Structured repurchase agreements		85,000			85,000			140,000			165,000			165,000
Short-term borrowings		-			-			6,400			6,390			6,184
Federal Home Loan Bank advances		615,863			616,111			619,946			627,332			627,716
Subordinated debentures		143,666			145,310			143,767			143,261			142,831
Accrued interest payable and other liabilities		47,587			60,376			44,234			39,856			39,655
TOTAL LIABILITIES		7,323,205			7,305,594			7,447,437			7,499,628			7,445,658

BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock		1,384,657			1,383,082			1,380,728			1,379,690			1,379,014
Retained deficit		(205,497	)		(223,189	)		(237,862	)		(258,125	)		(279,817	)
Accumulated other comprehensive income (loss)		21,670			20,794			21,338			11,948			(1,588	)
TOTAL SHAREHOLDERS' EQUITY		1,200,830			1,180,687			1,164,204			1,133,513			1,097,609

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141		$	8,543,267


COMMON SHARE AND PER SHARE DATA
Book value	$	7.88		$	7.77		$	7.67		$	7.47		$	7.24
Tangible book value (2)	$	6.09		$	5.97		$	5.86		$	5.65		$	5.40
Dividends	$	0.05		$	0.04		$	0.03		$	0.01		$	0.01
Shares outstanding (end of period, net of treasury)		152,295,895			151,883,036			151,714,696			151,660,444			151,506,511


(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity	$	1,200,830		$	1,180,687		$	1,164,204		$	1,133,513		$	1,097,609
Goodwill and intangibles		(272,687	)		(274,049	)		(275,649	)		(277,249	)		(278,809	)
Tangible common equity	$	928,143		$	906,638		$	888,555		$	856,264		$	818,800
Common shares outstanding		152,295,895			151,883,036			151,714,696			151,660,444			151,506,511
Tangible book value per share	$	6.09		$	5.97		$	5.86		$	5.65		$	5.40

Total assets	$	8,524,035		$	8,486,281		$	8,611,641		$	8,633,141		$	8,543,267
Goodwill and intangibles		(272,687	)		(274,049	)		(275,649	)		(277,249	)		(278,809	)
Tangible assets	$	8,251,348		$	8,212,232		$	8,335,992		$	8,355,892		$	8,264,458
Tangible common equity/tangible assets		11.25	%		11.04	%		10.66	%		10.25	%		9.91	%

(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income available to common shareholders (1)	$	24,233		$	23,176		$	24,813		$	23,208		$	17,089
Average assets	$	8,397,381		$	8,525,271		$	8,588,269		$	8,599,923		$	8,701,649
Adjusted return on average assets (annualized)		1.16	%		1.08	%		1.15	%		1.08	%		0.80	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012


Unaudited, dollars in thousands except share and per share data	For the Quarter Ended
	3/31/2012			12/31/2011			9/30/2011			6/30/2011			3/31/2011
INTEREST INCOME
Loans and leases, including fees	$	62,291		$	64,040		$	65,795		$	67,553		$	69,228
Investment securities
Taxable		11,209			11,310			11,591			11,552			11,357
Tax-exempt		7,781			8,076			8,337			8,401			8,493
Deposits with banks		133			255			332			234			280
Total interest income		81,414			83,681			86,055			87,740			89,358
INTEREST EXPENSE
Deposits		7,294			8,272			9,881			10,974			11,407
Customer repurchase agreements		550			556			593			645			712
Structured repurchase agreements		915			1,316			1,697			1,701			1,683
Short-term borrowings		-			-			-			-			-
Federal Home Loan Bank advances		6,967			6,987			7,073			7,039			7,217
Subordinated debentures		1,870			2,029			2,394			2,386			2,369
Total interest expense		17,596			19,160			21,638			22,745			23,388
Net interest income		63,818			64,521			64,417			64,995			65,970
Provision for loan and lease losses		2,000			2,000			-			3,000			10,000
Net interest income after provision for loan and lease losses		61,818			62,521			64,417			61,995			55,970
NON-INTEREST INCOME
Wealth management income		6,161			5,616			6,227			5,856			5,924
Service charges on deposit accounts		3,823			4,608			4,880			4,616			4,664
Insurance commissions and fees		3,296			3,107			3,406			3,520			3,221
Cash management and electronic banking fees		4,420			4,613			4,590			4,645			4,371
Mortgage banking income		1,335			1,481			1,349			1,014			1,080
Bank owned life insurance income		1,209			1,288			1,733			1,233			1,220
(Losses) earnings of unconsolidated investments		(74	)		246			99			116			1,700
Other operating income		2,426			2,019			2,339			1,818			2,055
Loss on sale of building		-			-			(1,000	)		-			-
Net gains (losses) from fair value changes on subordinated debentures		1,645			(1,543	)		(506	)		(430	)		(51	)
Loss on debt extinguishment		-			(1,635	)		(998	)		-			-
Net gains on sales of investment securities		-			1,697			1,022			-			-
Total non-interest income		24,241			21,497			23,141			22,388			24,184
NON-INTEREST EXPENSE
Salaries, wages and employee benefits		31,381			29,598			30,809			30,408			31,449
Premises and equipment		6,853			7,652			7,228			6,787			7,272
FDIC insurance		1,264			1,442			2,213			2,726			3,457
Corporate reorganization expense		-			2,200			-			-			-
Other operating expenses		12,942			16,494			14,803			14,200			14,659
Total non-interest expense		52,440			57,386			55,053			54,121			56,837
Income before income taxes		33,619			26,632			32,505			30,262			23,317
Income tax expense		8,317			5,889			7,692			7,054			4,537
NET INCOME		25,302			20,743			24,813			23,208			18,780
Preferred dividends and accretion of preferred discount		-			-			-			-			(1,691	)
Accelerated accretion from redemption of preferred stock		-			-			-			-			(1,452	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	25,302		$	20,743		$	24,813		$	23,208		$	15,637

PER SHARE OF COMMON STOCK
Basic earnings available to common shareholders	$	0.17		$	0.14		$	0.16		$	0.15		$	0.10
Diluted earnings available to common shareholders	$	0.17		$	0.14		$	0.16		$	0.15		$	0.10
Average shares - basic		152,099,546			151,773,327			151,693,223			151,601,052			150,461,063
Average shares - diluted		152,392,315			152,068,706			151,927,269			151,835,402			150,765,883

SUPPLEMENTAL DATA (annualized, average)
Return on assets		1.21	%		0.97	%		1.15	%		1.08	%		0.88	%
Adjusted return on assets (3)		1.16	%		1.08	%		1.15	%		1.08	%		0.80	%
Return on total equity		8.56	%		7.02	%		8.59	%		8.37	%		6.39	%
Return on common equity		8.56	%		7.02	%		8.59	%		8.37	%		5.93	%
Return on tangible common equity (1)		11.12	%		9.17	%		11.33	%		11.16	%		8.03	%
Efficiency ratio (4)		57.47	%		59.73	%		58.54	%		58.25	%		59.61	%


(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES

Efficiency Ratio Calculation
Non-interest expense	$	52,440		$	57,386		$	55,053		$	54,121		$	56,837
Less:
Corporate reorganization expense		-			2,200			-			-			-
Operating expenses	$	52,440		$	55,186		$	55,053		$	54,121		$	56,837

Net interest income (taxable equivalent)	$	68,645		$	69,409		$	69,426		$	70,087		$	71,112

Non-interest income		24,241			21,497			23,141			22,388			24,184
Less:
Loss on sale of building		-			-			(1,000	)		-			-
Loss on debt extinguishment		-			(1,635	)		(998	)		-			-
Net gains (losses) from fair value changes on subordinated debentures		1,645			(1,543	)		(506	)		(430	)		(51	)
Net gains on sales of investment securities		-			1,697			1,022			-			-
Adjusted revenue	$	91,241		$	92,387		$	94,049		$	92,905		$	95,347

Efficiency Ratio		57.47	%		59.73	%		58.54	%		58.25	%		59.61	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012



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

Loan charge-offs	$	8,722		$	9,896		$	8,374		$	10,512		$	18,753
Recoveries on loans		(1,534	)		(3,463	)		(1,538	)		(2,461	)		(1,659	)
Net loan charge-offs	$	7,188		$	6,433		$	6,836		$	8,051		$	17,094
Net loan charge-offs to average loans (annualized)		0.56	%		0.50	%		0.53	%		0.61	%		1.31	%

NET CHARGE-OFF DETAIL
Commercial and industrial loans and leases	$	1,925		$	2,648		$	1,962		$	5,066		$	9,319

Commercial real estate-permanent		1,933			517			83			1,242			3,946
Commercial real estate-construction		673			(1,337	)		2,637			828			873
Total commercial real estate loans		2,606			(820	)		2,720			2,070			4,819

Residential mortgages		560			993			998			483			1,643
Home equity lines and loans		1,855			2,429			596			833			1,158
All other consumer loans		242			1,183			560			(401	)		155
Total consumer loans		2,657			4,605			2,154			915			2,956

Net loans charged-off	$	7,188		$	6,433		$	6,836		$	8,051		$	17,094

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

Non-accrual commercial and industrial loans and leases	$	32,485		$	31,081		$	29,995		$	31,275		$	34,122

Non-accrual commercial real estate-permanent		5,156			7,403			8,314			11,879			15,407
Non-accrual commercial real estate-construction		14,336			12,218			14,549			15,844			18,012
Total non-accrual commercial real estate loans		19,492			19,621			22,863			27,723			33,419

Non-accrual residential mortgages		4,077			4,504			4,472			5,196			5,303
Non-accrual home equity lines and loans		2,110			3,046			1,763			1,527			1,965
All other non-accrual consumer loans		1,695			3,176			1,907			2,062			1,810
Total non-accrual consumer loans		7,882			10,726			8,142			8,785			9,078

Total non-accrual loans		59,859			61,428			61,000			67,783			76,619

Restructured loans		6,506			5,548			4,372			3,833			351
Total non-performing loans		66,365			66,976			65,372			71,616			76,970

Other real estate owned and repossessed assets		7,647			7,716			8,029			8,407			7,653
Total non-performing assets		74,012			74,692			73,401			80,023			84,623

Loans 90+ days past due & still accruing		1,588			2,010			1,408			1,567			2,183
Total non-performing assets and loans 90+ days past due	$	75,600		$	76,702		$	74,809		$	81,590		$	86,806

Allowance for loan and lease losses	$	121,452		$	126,640		$	131,073		$	137,909		$	142,960
Allowance for loan and lease losses/non-performing loans		183.0	%		189.1	%		200.5	%		192.6	%		185.7	%
Allowance for loan and lease losses/non-performing assets and loans 90+ days past due		160.7	%		165.1	%		175.2	%		169.0	%		164.7	%
Allowance for loan and lease losses/total loans and leases		2.33	%		2.44	%		2.54	%		2.66	%		2.73	%
Provision/charge-offs, net		27.8	%		31.1	%		0.0	%		37.3	%		58.5	%
Classified loans	$	347,033		$	370,439		$	374,850		$	403,145		$	438,275
Classified loans/total loans and leases		6.67	%		7.14	%		7.26	%		7.78	%		8.36	%
Delinquent loans	$	24,068		$	24,801		$	28,824		$	20,413		$	25,342
Delinquent loans/total loans and leases		0.46	%		0.48	%		0.56	%		0.39	%		0.48	%


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

Tier 1 Capital	$	1,005,009		$	978,302		$	955,766		$	922,457		$	889,473
Tier 1 Leverage Ratio		12.53	%		12.00	%		11.63	%		11.20	%		10.66	%
Tier 1 Ratio (%)		17.46	%		17.12	%		16.85	%		16.43	%		15.66	%
Total Capital	$	1,077,587		$	1,050,417		$	1,027,393		$	992,729		$	960,459
Total Capital Ratio (%)		18.72	%		18.38	%		18.12	%		17.68	%		16.91	%
Total Risk-Weighted Assets	$	5,757,306		$	5,714,643		$	5,670,722		$	5,615,341		$	5,679,123

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012



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

Earning Assets / Liabilities
Loan portfolio composition (regulatory):
Commercial / industrial	$	853,379	$	833,534	$	813,356	$	838,489	$	808,118
Commercial real estate (a)		1,753,986		1,737,383		1,697,975		1,715,616		1,749,215
Residential mortgage		1,269,505		1,270,896		1,272,478		1,295,463		1,295,014
Real estate construction and land development		210,976		212,306		216,250		207,643		270,584
Home equity		756,803		771,792		766,299		764,467		738,629
Consumer		210,069		209,082		213,014		213,570		228,904
Other loans		146,938		153,108		181,903		143,678		154,682
Total loans		5,201,656		5,188,101		5,161,275		5,178,926		5,245,146


Investment securities and other securities		2,335,421		2,314,111		2,373,278		2,290,568		2,235,777
Other earning assets		344,427		321,885		422,942		513,132		392,337
Total earning assets (net of loan loss reserve)	$	7,760,052	$	7,697,457	$	7,826,422	$	7,844,717	$	7,730,300
(a) Includes owner occupied

Loan portfolio composition (internal):
Commercial & industrial loans and leases
Business purpose, real estate secured	$	864,284	$	895,028	$	892,952	$	884,606	$	896,521
Business purpose, not secured by real estate		963,641		919,720		927,631		913,115		888,249
Owner occupied commercial real estate
- Permanent		572,103		563,963		566,732		577,092		578,332
- Construction / development		38,546		36,631		28,927		27,003		38,775
Leasing		3,330		4,685		5,796		7,125		9,054
Total commercial & industrial loans and leases		2,441,904		2,420,027		2,422,038		2,408,941		2,410,931

Commercial real estate
Non-owner occupied
- Permanent		878,499		855,524		798,106		818,564		819,875
- Construction / development		151,697		156,064		168,537		171,063		206,924
Total commercial real estate		1,030,196		1,011,588		966,643		989,627		1,026,799

Consumer loans
Residential mortgage (personal purpose)
Permanent		686,974		704,655		709,342		719,578		736,862
Construction		7,835		5,667		7,606		5,909		4,505
Total residential mortgages		694,809		710,322		716,948		725,487		741,367

Home equity loans and direct installment loans		315,419		337,242		362,808		388,173		415,599
Home equity lines of credit		421,897		410,316		394,386		367,127		325,186
Total home equity lines and loans		737,316		747,558		757,194		755,300		740,785

Private banking credit lines		114,667		121,296		112,011		119,850		139,721
Indirect vehicle loans and other		165,855		165,094		169,297		170,869		179,982
All other consumer loans		280,522		286,390		281,308		290,719		319,703
Total consumer loans		1,712,647		1,744,270		1,755,450		1,771,506		1,801,855

Loans and leases		5,184,747		5,175,885		5,144,131		5,170,074		5,239,585

Loans held-for-sale		16,909		12,216		17,144		8,852		5,561

Total loans and leases	$	5,201,656	$	5,188,101	$	5,161,275	$	5,178,926	$	5,245,146

Deposit composition:
Savings	$	495,191	$	454,003	$	451,767	$	464,055	$	457,395
NOW accounts		1,294,591		1,293,148		1,311,819		1,158,161		1,128,644
Money market accounts		1,698,427		1,686,909		1,651,185		1,631,779		1,655,115
CDs less than $100k		1,089,601		1,138,908		1,213,798		1,261,026		1,433,808
CDs $100k or greater		426,548		438,148		531,111		589,329		423,733
Total interest bearing deposits		5,004,358		5,011,116		5,159,680		5,104,350		5,098,695

Non-interest bearing deposits		884,025		863,703		833,311		839,811		834,321

Total deposits	$	5,888,383	$	5,874,819	$	5,992,991	$	5,944,161	$	5,933,016

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012



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

Total loans*	$	5,179,220		4.89	%	$	5,149,546		4.99	%	$	5,122,557		5.15	%	$	5,228,365		5.24	%	$	5,311,204		5.34	%
Investment securities*		2,318,109		4.02	%		2,355,178		3.97	%		2,287,630		4.21	%		2,258,355		4.32	%		2,245,416		4.39	%
Interest earning deposits		278,140		0.19	%		390,228		0.26	%		543,410		0.24	%		467,157		0.20	%		508,684		0.22	%

Total earning assets		7,775,469		4.46	%		7,894,952		4.45	%		7,953,597		4.54	%		7,953,877		4.68	%		8,065,304		4.75	%
Total assets		8,397,381					8,525,271					8,588,269					8,599,923					8,701,649

Savings		471,562		0.13	%		454,688		0.15	%		456,271		0.18	%		462,870		0.18	%		442,830		0.19	%
NOW accounts		1,238,704		0.15	%		1,269,670		0.17	%		1,211,663		0.18	%		1,188,644		0.22	%		1,148,991		0.22	%
Money market accounts		1,679,232		0.40	%		1,669,090		0.44	%		1,647,975		0.59	%		1,638,733		0.60	%		1,656,059		0.59	%
CDs		1,542,539		1.31	%		1,668,098		1.36	%		1,798,414		1.47	%		1,857,969		1.66	%		1,889,073		1.76	%

Total interest bearing deposits		4,932,037		0.59	%		5,061,546		0.65	%		5,114,323		0.77	%		5,148,216		0.85	%		5,136,953		0.90	%

Non-interest bearing deposits		852,730					835,699					837,953					837,635					813,704
Total deposits		5,784,767		0.51	%		5,897,245		0.56	%		5,952,276		0.66	%		5,985,851		0.74	%		5,950,657		0.78	%

Customer repurchase agreements		524,575		0.42	%		514,961		0.43	%		512,847		0.46	%		522,147		0.50	%		546,100		0.53	%
Structured repurchase agreements		85,000		4.33	%		128,968		4.05	%		163,098		4.13	%		165,000		4.13	%		165,000		4.14	%
Short-term borrowings		-		0.00	%		6,638		0.00	%		6,732		0.00	%		6,713		0.00	%		6,850		0.00	%
Federal Home Loan Bank advances		615,983		4.55	%		616,411		4.50	%		623,713		4.50	%		627,525		4.50	%		651,208		4.49	%
Subordinated debentures		145,274		5.18	%		143,800		5.60	%		143,266		6.63	%		142,836		6.70	%		142,781		6.73	%
Total deposits and borrowings		7,155,599		0.99	%		7,308,023		1.04	%		7,401,932		1.16	%		7,450,072		1.22	%		7,462,596		1.27	%
Total interest bearing liabilities	$	6,302,869		1.12	%	$	6,472,324		1.17	%	$	6,563,979		1.31	%	$	6,612,437		1.38	%	$	6,648,892		1.43	%

Net interest margin (FTE)				3.55	%				3.49	%				3.46	%				3.53	%				3.58	%

Wealth assets:
Assets under administration	$	4,382,922				$	4,197,612				$	4,067,918				$	4,364,447				$	4,057,142
Assets under management		2,269,351					2,141,737					2,118,076					2,247,042					2,136,596
(included above)

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

Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2012



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

	PA
Total number of retail branch offices		120	121	122	122	122
Total number of insured subsidiaries
	(Bank & Thrift subsidiaries)	1	1	1	1	1
Total number of ATMs		122	128	129	131	132

	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	122	123	123	123
Total number of insured subsidiaries
	(Bank & Thrift subsidiaries)	1	1	1	1	1
Total number of ATMs		123	129	130	132	133

EOP employees (full-time equivalent)		1,681	1,688	1,683	1,700	1,676

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NATIONAL PENN BANCSHARES INC Reports