National Penn Bancshares, Inc. Reports Third Quarter 2015 Results

ALLENTOWN, Pa.--(BUSINESS WIRE)--

National Penn Bancshares, Inc. NPBC reported net income of $27.9 million, or $0.20 per diluted share, for the third quarter of 2015, compared to $27.2 million or $0.19 per diluted share in the second quarter of 2015. Net income for the three quarters ending September 30, 2015 was $81.8 million compared to $74.2 million in the prior year period, while earnings per diluted share of $0.58 through the three quarters of 2015 increased 9.4% from the comparable period last year. The third quarter of 2015 and year-to-date 2015 results include after-tax merger related expenses totaling $1.4 million or $0.01 per diluted share. Excluding the impact of merger-related expenses, return on average assets was 1.22% and return on average tangible common equity was 13.94%, for the third quarter of 2015.

"We are pleased with our continued strong and consistent financial performance, especially in this challenging interest rate environment," said Scott V. Fainor, president and CEO of National Penn. "In addition, we are moving forward to obtain the necessary approvals for our merger with BB&T, and look forward to our affiliation with BB&T and the strength of our combined franchise."

Net Interest Margin

Net interest income was $67.9 million for the third quarter of 2015, compared to $66.8 million last quarter. Our net interest margin of 3.25% for the third quarter of 2015 remained stable compared to 3.24% for the prior quarter. Total loan outstandings of $6.2 billion at September 30, 2015 were comparable to the end of the second quarter of 2015. The year-to-date loan growth was impacted by our continued strategy to sell long-term fixed rate residential mortgage loans.

Asset Quality

The strong trend in asset quality continued in the third quarter as non-performing loans decreased 5% from last quarter. The ratio of allowance for loan losses to non-performing loans increased to 186% at September 30, 2015, compared to 180% at the end of last quarter. Net charge-offs decreased to $2.7 million or 0.17% of average total loans (annualized) this quarter, compared to $5.9 million or 0.39% last quarter, as the second quarter reflects the resolution of a large non-performing commercial loan for which a specific loan loss reserve was recorded in the fourth quarter of last year. The provision for loan losses of $1.0 million for the third quarter was consistent with the prior quarter and commensurate with the strong credit quality profile of our loan portfolio.

Other Income and Operating Expenses

Despite fluctuations in the components of non-interest income during the quarter, total non-interest income aggregated to $25.0 million in the third quarter of 2015, compared to $24.7 million in the prior quarter.

Total non-interest expense of $54.2 million, for the third quarter of 2015, included merger-related costs of $1.8 million. Excluding the impact of merger-related costs, our efficiency ratio of 54% this quarter compared to 57% in the prior quarter.

Capital

At September 30, 2015, our capital ratios remained strong as common equity tier 1 and tangible common equity to tangible assets ratios were 12.27% and 9.15%.

As previously announced, National Penn's Board of Directors declared a fourth quarter cash dividend of eleven cents ($0.11) per common share, to shareholders of record as of Monday, November 2, 2015, payable on Tuesday, November 17, 2015.

"Our consistent strong financial performance is a reflection of the continued efforts of all of our team members here at National Penn," said Scott V. Fainor.

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $9.6 billion in assets, is a bank holding company headquartered in Allentown, Pennsylvania. National Penn Bank operates 124 branch offices throughout Pennsylvania, New Jersey and Maryland.

National Penn's financial services affiliates include its National Penn Investors Trust Company division; Institutional Advisors LLC; and National Penn Insurance Services Group, Inc.

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

Statement Regarding Non-GAAP Financial Measures

This release, including the attached Financial Highlights and financial data tables, contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("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 adjusted return on average assets exclude the effects of certain gains and losses, adjusted for taxes when applicable. Adjusted net income and adjusted return on average assets 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: Risks, uncertainties and other factors relating to the merger of National Penn with and into BB&T Corporation, including the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by National Penn shareholders, and delay in closing the merger, difficult conditions in the capital markets and the economy generally, 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), delayed improvement in the credit quality of loans, the effect of credit risk exposure, the ability to strategically manage our capital position and to raise capital, allowance for loan losses may prove inadequate, variations in interest rates, 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, competition for personnel and from other financial institutions, interruptions or breaches of National Penn's security systems, the development and maintenance of National Penn's information technology, potential dilution of National Penn's shareholders, the ability of National Penn and its subsidiaries to pay dividends, severe weather and natural disasters, 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, 2014, 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 9/30/2015
Unaudited, dollars in thousands except share and per share data
		As of
		9/30/2015				6/30/2015				9/30/2014
SUMMARY BALANCE SHEET
Total assets		$	9,587,459			$	9,604,314			$	8,633,000
Investment securities and other securities			2,503,203				2,507,615				2,381,751
Total loans			6,168,528				6,168,481				5,469,842
Deposits			6,959,275				6,733,484				6,287,936
Borrowings			1,359,657				1,631,537				1,141,766
Shareholders' equity			1,158,423				1,137,678				1,107,184
Tangible book value per common share (2)		$	6.05			$	5.90			$	6.06
Tangible common equity / tangible assets (2)			9.15	%			8.90	%			10.08	%
		Three Months Ended												Nine Months Ended
		9/30/2015				6/30/2015				9/30/2014				9/30/2015				9/30/2014
EARNINGS
Total interest income		$	76,529			$	75,417			$	71,368			$	229,040			$	212,029
Total interest expense			8,662				8,582				7,138				25,656				22,559
Net interest income			67,867				66,835				64,230				203,384				189,470
Provision for loan losses			1,000				1,000				1,000				3,000				2,251
Net interest income after provision for loan losses			66,867				65,835				63,230				200,384				187,219
Net gains on investment securities			-				-				-				-				8
Other non-interest income			25,026				24,687				22,871				72,643				68,737
Merger related expenses			1,840				-				-				1,840				-
Other non-interest expense			52,377				53,960				52,158				160,919				156,609
Income before income taxes			37,676				36,562				33,943				110,268				99,355
Income tax expense			9,800				9,324				8,623				28,427				25,126
Net income		$	27,876			$	27,238			$	25,320			$	81,841			$	74,229
PERFORMANCE RATIOS
Net interest margin			3.25	%			3.24	%			3.43	%			3.28	%			3.43	%
Return on average assets			1.16	%			1.14	%			1.17	%			1.15	%			1.16	%
Adjusted return on average assets (3)			1.22	%			1.14	%			1.17	%			1.17	%			1.16	%
Return on average shareholders' equity			9.69	%			9.66	%			9.11	%			9.60	%			9.07	%
Return on average tangible common equity (1)			13.30	%			13.32	%			11.97	%			13.19	%			11.95	%
Adjusted return on average tangible common equity			13.94	%			13.32	%			11.97	%			13.41	%			11.95	%
Efficiency ratio (4)			54.23	%			56.59	%			57.29	%			55.97	%			57.95	%
PER SHARE
Basic earnings		$	0.20			$	0.19			$	0.18			$	0.58			$	0.53
Diluted earnings			0.20				0.19				0.18				0.58				0.53
Adjusted diluted earnings			0.21				0.19				0.18				0.59				0.53
Dividends			0.11				0.11				0.10				0.33				0.30
Average shares - basic			140,235,094				140,126,314				139,275,683				141,081,076				139,934,960
Average shares - diluted			140,916,194				140,752,713				139,825,134				141,717,928				140,466,437
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES
		Three Months Ended												Nine Months Ended
		9/30/2015				6/30/2015				9/30/2014				9/30/2015				9/30/2014
Return on average tangible common equity
Return on average shareholders' equity			9.69	%			9.66	%			9.11	%			9.60	%			9.07	%
Effect of goodwill and intangibles			3.61	%			3.66	%			2.86	%			3.59	%			2.88	%
Return on average tangible common equity			13.30	%			13.32	%			11.97	%			13.19	%			11.95	%
Average tangible equity
Average shareholders' equity		$	1,141,586			$	1,130,896			$	1,102,608			$	1,139,858			$	1,094,569
Average goodwill and intangibles			(309,969	)			(310,601	)			(263,410	)			(310,458	)			(264,084	)
Average tangible common equity		$	831,617			$	820,295			$	839,198			$	829,400			$	830,485

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited, dollars in thousands except share and per share data
		As of
		9/30/2015				6/30/2015				3/31/2015				12/31/2014				9/30/2014
ASSETS
Cash and due from banks		$	101,975			$	120,010			$	102,500			$	110,784			$	96,856
Interest-earning deposits with banks			119,616				118,375				131,166				303,055				98,512
Total cash and cash equivalents			221,591				238,385				233,666				413,839				195,368
Investment securities available-for-sale, at fair value			1,641,230				1,598,351				1,585,671				1,530,661				1,461,586
Investment securities held-to-maturity			807,574				842,192				884,211				921,042				864,234
Other securities			54,399				67,072				67,288				67,512				55,931
Loans held-for-sale			6,239				9,693				11,239				4,178				3,890
Loans			6,162,289				6,158,788				6,120,205				6,142,279				5,465,952
Allowance for loan losses			(83,148	)			(84,816	)			(89,729	)			(90,675	)			(88,927	)
Loans, net			6,079,141				6,073,972				6,030,476				6,051,604				5,377,025
Premises and equipment, net			109,181				111,353				113,217				116,414				110,392
Accrued interest receivable			29,697				29,066				30,018				29,491				27,839
Bank owned life insurance			196,643				199,656				198,123				171,775				151,443
Other real estate owned and other repossessed assets			4,719				5,186				5,474				4,867				1,561
Goodwill			302,940				302,940				302,940				302,244				258,279
Other intangible assets, net			6,725				7,353				7,985				8,757				4,803
Unconsolidated investments			8,552				8,582				8,101				8,124				8,167
Other assets			118,828				110,513				119,545				120,357				112,482
TOTAL ASSETS		$	9,587,459			$	9,604,314			$	9,597,954			$	9,750,865			$	8,633,000
LIABILITIES
Non-interest bearing deposits		$	1,169,922			$	1,200,631			$	1,142,192			$	1,085,158			$	990,438
Interest bearing deposits			5,789,353				5,532,853				5,555,070				5,644,587				5,297,498
Total deposits			6,959,275				6,733,484				6,697,262				6,729,745				6,287,936
Customer repurchase agreements			573,986				539,850				603,880				607,705				580,290
Federal Home Loan Bank advances and other borrowings			583,350				889,366				854,375				910,378				359,155
Senior long-term debt			125,000				125,000				125,000				125,000				125,000
Subordinated debentures			77,321				77,321				77,321				77,321				77,321
Accrued interest payable and other liabilities			110,104				101,615				109,021				112,077				96,114
TOTAL LIABILITIES			8,429,036				8,466,636				8,466,859				8,562,226				7,525,816
SHAREHOLDERS' EQUITY
Common stock			1,389,602				1,388,341				1,387,136				1,390,130				1,388,513
Accumulated deficit			(100,459	)			(112,913	)			(124,740	)			(135,246	)			(143,514	)
Accumulated other comprehensive loss			(5,727	)			(11,686	)			(3,989	)			(10,991	)			(7,922	)
Treasury stock			(124,993	)			(126,064	)			(127,312	)			(55,254	)			(129,893	)
TOTAL SHAREHOLDERS' EQUITY			1,158,423				1,137,678				1,131,095				1,188,639				1,107,184
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	9,587,459			$	9,604,314			$	9,597,954			$	9,750,865			$	8,633,000
PER SHARE DATA
Book value		$	8.26			$	8.12			$	8.08			$	8.08			$	7.95
Tangible book value (2)		$	6.05			$	5.90			$	5.86			$	5.96			$	6.06
Dividends - quarterly		$	0.11			$	0.11			$	0.11			$	0.11			$	0.10
Shares outstanding (end of period, net of treasury)			140,283,395				140,184,234				140,068,761				147,136,084				139,305,117
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity		$	1,158,423			$	1,137,678			$	1,131,095			$	1,188,639			$	1,107,184
Goodwill and intangibles			(309,665	)			(310,293	)			(310,925	)			(311,001	)			(263,082	)
Tangible common equity		$	848,758			$	827,385			$	820,170			$	877,638			$	844,102
Shares outstanding			140,283,395				140,184,234				140,068,761				147,136,084				139,305,117
Tangible book value per share		$	6.05			$	5.90			$	5.86			$	5.96			$	6.06
Total assets		$	9,587,459			$	9,604,314			$	9,597,954			$	9,750,865			$	8,633,000
Goodwill and intangibles			(309,665	)			(310,293	)			(310,925	)			(311,001	)			(263,082	)
Tangible assets		$	9,277,794			$	9,294,021			$	9,287,029			$	9,439,864			$	8,369,918
Tangible common equity/tangible assets			9.15	%			8.90	%			8.83	%			9.30	%			10.08	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited, dollars in thousands except share and per share data
		For the Quarter Ended																				For the Nine Months Ended
		9/30/2015				6/30/2015				3/31/2015				12/31/2014				9/30/2014				9/30/2015				9/30/2014
INTEREST INCOME
Loans, including fees		$	59,735			$	58,077			$	58,424			$	58,532			$	53,857			$	176,236			$	158,915
Investment securities
Taxable			11,180				11,457				12,512				11,273				11,365				35,149				34,180
Tax-exempt			5,577				5,843				6,120				6,129				6,114				17,540				18,847
Deposits with banks			37				40				38				56				32				115				87
Total interest income			76,529				75,417				77,094				75,990				71,368				229,040				212,029
INTEREST EXPENSE
Deposits			4,740				4,618				4,521				4,616				4,483				13,879				13,927
Customer repurchase agreements			403				402				405				432				399				1,210				1,192
Repurchase agreements			-				-				-				-				197				-				1,406
Federal Home Loan Bank advances and other borrowings			1,606				1,659				1,593				1,398				1,297				4,858				4,215
Senior long-term debt			1,366				1,366				1,366				1,365				227				4,098				227
Subordinated debentures			547				537				527				535				535				1,611				1,592
Total interest expense			8,662				8,582				8,412				8,346				7,138				25,656				22,559
Net interest income			67,867				66,835				68,682				67,644				64,230				203,384				189,470
Provision for loan losses			1,000				1,000				1,000				3,500				1,000				3,000				2,251
Net interest income after provision for loan losses			66,867				65,835				67,682				64,144				63,230				200,384				187,219
NON-INTEREST INCOME
Wealth management			6,654				6,854				6,650				7,123				6,945				20,158				20,944
Service charges on deposit accounts			3,468				3,328				3,307				3,725				3,826				10,103				10,744
Insurance commissions and fees			3,128				3,219				3,182				2,979				3,029				9,529				9,835
Cash management and electronic banking fees			5,068				5,153				4,714				4,951				4,720				14,935				14,115
Mortgage banking			1,617				1,652				1,374				1,213				987				4,643				2,639
Bank owned life insurance			2,746				1,563				1,374				1,341				1,238				5,683				3,654
Earnings (losses) of unconsolidated investments			133				589				-				(43	)			(20	)			722				(506	)
Gain on sale of non-performing loans			-				-				-				-				-				-				946
Other operating income			2,212				2,329				2,329				2,128				2,146				6,870				6,366
Net gains on sales of investment securities			-				-				-				13				-				-				8
Total non-interest income			25,026				24,687				22,930				23,430				22,871				72,643				68,745
NON-INTEREST EXPENSE
Salaries, wages and employee benefits			29,570				30,123				29,998				27,836				29,655				89,691				87,743
Premises and equipment			8,189				8,508				9,147				8,254				7,769				25,844				23,690
FDIC insurance			1,220				1,313				1,458				1,344				1,140				3,991				3,657
Other operating expenses			13,398				14,016				13,979				14,402				13,594				41,393				41,519
Merger related expenses			1,840				-				-				2,878				-				1,840				-
Total non-interest expense			54,217				53,960				54,582				54,714				52,158				162,759				156,609
Income before income taxes			37,676				36,562				36,030				32,860				33,943				110,268				99,355
Income tax expense			9,800				9,324				9,303				8,383				8,623				28,427				25,126
NET INCOME		$	27,876			$	27,238			$	26,727			$	24,477			$	25,320			$	81,841			$	74,229
PER SHARE
Basic earnings		$	0.20			$	0.19			$	0.19			$	0.17			$	0.18			$	0.58			$	0.53
Diluted earnings		$	0.20			$	0.19			$	0.19			$	0.17			$	0.18			$	0.58			$	0.53
Adjusted diluted earnings		$	0.21			$	0.19			$	0.19			$	0.18			$	0.18			$	0.59			$	0.53
Average shares - basic			140,235,094				140,126,314				142,911,230				145,277,964				139,275,683				141,081,076				139,934,960
Average shares - diluted			140,916,194				140,752,713				143,513,420				145,850,861				139,825,134				141,717,928				140,466,437
SUPPLEMENTAL DATA (annualized, average)
Return on assets			1.16	%			1.14	%			1.14	%			1.05	%			1.17	%			1.15	%			1.16	%
Adjusted return on assets (3)			1.22	%			1.14	%			1.14	%			1.14	%			1.17	%			1.17	%			1.16	%
Return on shareholders' equity			9.69	%			9.66	%			9.45	%			8.30	%			9.11	%			9.60	%			9.07	%
Return on tangible common equity (1)			13.30	%			13.32	%			12.96	%			11.09	%			11.97	%			13.19	%			11.95	%
Adjusted return on tangible common equity			13.94	%			13.32	%			12.96	%			12.02	%			11.97	%			13.41	%			11.95	%
Efficiency ratio (4)			54.23	%			56.59	%			57.10	%			54.53	%			57.29	%			55.97	%			57.95	%
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Adjusted net income reconciliation
Net income		$	27,876			$	27,238			$	26,727			$	24,477			$	25,320			$	81,841			$	74,229
After tax merger related expenses			1,350				-				-				2,054				-				1,350				-
Adjusted net income		$	29,226			$	27,238			$	26,727			$	26,531			$	25,320			$	83,191			$	74,229
Adjusted diluted earnings per share reconciliation
Diluted earnings per share		$	0.20			$	0.19			$	0.19			$	0.17			$	0.18			$	0.58			$	0.53
After tax merger related expenses			0.01				-				-				0.01				-				0.01				-
Adjusted diluted earnings per share		$	0.21			$	0.19			$	0.19			$	0.18			$	0.18			$	0.59			$	0.53
Adjusted net income		$	29,226			$	27,238			$	26,727			$	26,531			$	25,320			$	83,191			$	74,229
Average assets		$	9,526,850			$	9,544,673			$	9,524,279			$	9,269,113			$	8,569,734			$	9,531,944			$	8,521,085
Adjusted return on average assets (annualized)			1.22	%			1.14	%			1.14	%			1.14	%			1.17	%			1.17	%			1.16	%
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Efficiency ratio calculation
Non-interest expense		$	54,217			$	53,960			$	54,582			$	54,714			$	52,158			$	162,759			$	156,609
Less:
Merger related expenses			1,840				-				-				2,878				-				1,840				-
Operating expenses		$	52,377			$	53,960			$	54,582			$	51,836			$	52,158			$	160,919			$	156,609
Net interest income (taxable equivalent)		$	71,563			$	70,660			$	72,654			$	71,641			$	68,166			$	214,877			$	201,509
Non-interest income			25,026				24,687				22,930				23,430				22,871				72,643				68,745
Less:
Net gains on investment securities			-				-				-				13				-				-				8
Adjusted revenue		$	96,589			$	95,347			$	95,584			$	95,058			$	91,037			$	287,520			$	270,246
Efficiency ratio			54.23	%			56.59	%			57.10	%			54.53	%			57.29	%			55.97	%			57.95	%

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited, dollars in thousands except share and per share data
		For the Quarter Ended																				For the Nine Months Ended
		9/30/2015				6/30/2015				3/31/2015				12/31/2014				9/30/2014				9/30/2015				9/30/2014
CHARGE-OFFS
Loan charge-offs		$	4,418			$	7,789			$	3,074			$	3,781			$	3,097			$	15,281			$	13,240
Recoveries on loans			(1,750	)			(1,876	)			(1,128	)			(2,029	)			(1,176	)			(4,754	)			(3,549	)
Net loan charge-offs		$	2,668			$	5,913			$	1,946			$	1,752			$	1,921			$	10,527			$	9,691
Net loan charge-offs to average total loans (annualized)			0.17	%			0.39	%			0.13	%			0.12	%			0.14	%			0.23	%			0.24	%
NET CHARGE-OFF DETAIL
Commercial and industrial loans		$	1,444			$	4,874			$	422			$	(537	)		$	19			$	6,740			$	3,218
Commercial real estate-permanent			(58	)			(308	)			601				245				1,072				235				2,094
Commercial real estate-construction			(196	)			(92	)			(95	)			(628	)			(221	)			(383	)			(101	)
Total commercial real estate loans			(254	)			(400	)			506				(383	)			851				(148	)			1,993
Residential mortgages			598				70				248				1,139				138				916				1,981
Home equity lines and loans			407				1,064				230				723				355				1,701				1,528
All other consumer loans			473				305				540				810				558				1,318				971
Total consumer loans			1,478				1,439				1,018				2,672				1,051				3,935				4,480
Net loans charged-off		$	2,668			$	5,913			$	1,946			$	1,752			$	1,921			$	10,527			$	9,691
		As of
		9/30/2015				6/30/2015				3/31/2015				12/31/2014				9/30/2014
ASSET QUALITY AND OTHER DATA
Non-accrual commercial and industrial loans		$	6,234			$	8,923			$	21,107			$	21,931			$	11,205
Non-accrual commercial real estate-permanent			7,068				7,160				6,781				7,915				2,887
Non-accrual commercial real estate-construction			8,504				8,443				8,204				8,113				8,547
Total non-accrual commercial real estate loans			15,572				15,603				14,985				16,028				11,434
Non-accrual residential mortgages			8,171				8,307				8,326				7,706				6,803
Non-accrual home equity lines and loans			4,234				4,027				3,762				3,426				3,961
All other non-accrual consumer loans			1,387				1,387				1,458				1,746				1,467
Total non-accrual consumer loans			13,792				13,721				13,546				12,878				12,231
Total non-accrual loans			35,598				38,247				49,638				50,837				34,870
Restructured loans			9,047				8,792				8,557				8,255				7,996
Total non-performing loans			44,645				47,039				58,195				59,092				42,866
Acquired other real estate owned			3,450				3,450				3,450				3,675				-
Other real estate owned and repossessed assets			1,269				1,736				2,024				1,192				1,561
Total other real estate owned and repossessed assets			4,719				5,186				5,474				4,867				1,561
Total non-performing assets			49,364				52,225				63,669				63,959				44,427
Loans 90+ days past due & still accruing			1,752				1,903				2,230				2,183				2,961
Total non-performing assets and loans 90+ days past due		$	51,116			$	54,128			$	65,899			$	66,142			$	47,388
Allowance for loan losses		$	83,148			$	84,816			$	89,729			$	90,675			$	88,927
Allowance for loan losses/non-performing loans			186.2	%			180.3	%			154.2	%			153.4	%			207.5	%
Allowance for loan losses/non-performing assets and loans 90+ days past due (excluding acquired other real estate owned)			174.4	%			167.4	%			143.7	%			145.2	%			187.7	%
Allowance for loan losses/non-performing assets and loans 90+ days past due			162.7	%			156.7	%			136.2	%			137.1	%			187.7	%
Allowance for loan losses/total originated loans			1.46	%			1.50	%			1.61	%			1.63	%			1.63	%
Allowance for loan losses/total loans			1.35	%			1.37	%			1.46	%			1.48	%			1.63	%
Provision/charge-offs, net			37.5	%			16.9	%			51.4	%			199.8	%			52.1	%
Originated classified loans		$	124,438			$	124,837			$	142,892			$	153,255			$	169,790
Acquired classified loans			1,121				2,671				1,715				9,534				-
Total classified loans		$	125,559			$	127,508			$	144,607			$	162,789			$	169,790
Originated classified loans/total originated loans			2.19	%			2.21	%			2.56	%			2.75	%			3.10	%
Total classified loans/total loans			2.04	%			2.07	%			2.36	%			2.65	%			3.10	%
Delinquent loans (a)		$	21,293			$	16,943			$	15,968			$	22,300			$	20,171
Delinquent loans/total loans			0.35	%			0.27	%			0.26	%			0.36	%			0.37	%
Non-performing loans/total loans			0.72	%			0.76	%			0.95	%			0.96	%			0.78	%
REGULATORY CAPITAL DATA (b)
Tier 1 capital		$	925,046			$	906,281			$	887,854			$	963,629			$	927,023
Common equity tier 1 capital			855,130				838,602				822,511
Total capital			1,008,194				991,097				976,043				1,050,295				1,005,629
Risk-weighted assets			6,969,855				6,953,013				7,053,656				6,929,235				6,278,140
Tier 1 leverage ratio			10.06	%			9.85	%			9.67	%			10.78	%			11.18	%
Tier 1 ratio			13.27	%			13.03	%			12.59	%			13.91	%			14.77	%
Common equity tier 1 ratio			12.27	%			12.06	%			11.66	%
Total capital ratio			14.47	%			14.25	%			13.84	%			15.16	%			16.02	%
(a) Includes loans 30-89 days past due and loans 90+ days past due and still accruing
(b) 2015 Regulatory Capital Data calculated in accordance with BASEL III

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited, dollars in thousands except share and per share data
			As of
Earning Assets / Liabilities			9/30/2015				6/30/2015				3/31/2015				12/31/2014				9/30/2014
Loan portfolio composition (regulatory):
Commercial / industrial			$	875,974			$	890,890			$	895,356			$	852,804			$	804,283
Commercial real estate (c)				2,293,076				2,281,023				2,186,626				2,172,858				1,994,773
Residential mortgage				1,464,554				1,471,769				1,508,968				1,550,378				1,181,503
Real estate construction and land development				200,645				188,473				229,428				261,916				260,054
Home equity				876,219				874,386				867,784				875,903				817,723
Consumer				253,711				246,645				238,320				239,807				224,614
Other				204,349				215,295				204,962				192,791				186,892
Total				6,168,528				6,168,481				6,131,444				6,146,457				5,469,842
Investment securities and other securities				2,503,203				2,507,615				2,537,170				2,519,215				2,381,751
Other earning assets				119,616				118,375				131,166				303,055				98,512
Total earning assets (net of loan loss reserve)			$	8,708,199			$	8,709,655			$	8,710,051			$	8,878,052			$	7,861,178
Loan portfolio composition (internal):
Commercial & industrial
Business purpose, real estate secured			$	940,869			$	922,413			$	918,985			$	929,999			$	897,812
Business purpose, not secured by real estate				1,030,537				1,054,746				1,046,875				995,051				944,207
Commercial real estate (owner occupied)
Permanent				654,178				658,457				635,880				623,712				566,007
Construction / development				39,119				35,006				53,635				51,105				49,826
Leasing				-				-				-				-				18
Total commercial & industrial				2,664,703				2,670,622				2,655,375				2,599,867				2,457,870
Commercial real estate (non-owner occupied)
Permanent				1,291,107				1,291,059				1,226,847				1,229,318				1,086,346
Construction / development				145,975				137,351				169,271				203,542				208,728
Total commercial real estate				1,437,082				1,428,410				1,396,118				1,432,860				1,295,074
Total commercial				4,101,785				4,099,032				4,051,493				4,032,727				3,752,944
Consumer
Residential mortgage (personal purpose)
Permanent				852,672				856,976				869,562				893,732				644,919
Construction				9,851				10,192				15,384				14,625				16,004
Total residential mortgages				862,523				867,168				884,946				908,357				660,923
Home equity and direct installment				210,455				223,573				239,903				253,358				162,188
Home equity lines of credit				693,674				679,754				661,368				660,472				614,298
Total home equity				904,129				903,327				901,271				913,830				776,486
Private banking credit lines				87,556				90,946				90,919				96,689				95,049
Indirect vehicle and other				206,296				198,315				191,576				190,676				180,550
All other consumer				293,852				289,261				282,495				287,365				275,599
Total consumer				2,060,504				2,059,756				2,068,712				2,109,552				1,713,008
Loans				6,162,289				6,158,788				6,120,205				6,142,279				5,465,952
Loans held-for-sale				6,239				9,693				11,239				4,178				3,890
Total loans			$	6,168,528			$	6,168,481			$	6,131,444			$	6,146,457			$	5,469,842
Deposit composition:
Savings			$	711,544			$	722,051			$	711,375			$	678,294			$	544,625
NOW accounts				2,166,339				1,886,405				1,880,649				1,913,399				1,981,608
Money market accounts				1,746,808				1,734,059				1,755,276				1,827,233				1,658,815
Time deposits less than $100k				838,417				859,472				872,906				891,964				797,535
Time deposits $100k or greater				326,245				330,866				334,864				333,697				314,915
Total interest bearing deposits				5,789,353				5,532,853				5,555,070				5,644,587				5,297,498
Non-interest bearing deposits				1,169,922				1,200,631				1,142,192				1,085,158				990,438
Total deposits			$	6,959,275			$	6,733,484			$	6,697,262			$	6,729,745			$	6,287,936
(c) Includes owner occupied

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited, dollars in thousands except share and per share data
			Quarterly, as of																																								Nine Months, as of
			9/30/2015								6/30/2015								3/31/2015								12/31/2014								9/30/2014								9/30/2015								9/30/2014
			Avg Bal				Yield				Avg Bal				Yield				Avg Bal				Yield				Avg Bal				Yield				Avg Bal				Yield				Avg Bal				Yield				Avg Bal				Yield
Total loans*			$	6,144,998			3.90	%			$	6,146,507			3.83	%			$	6,131,280			3.91	%			$	5,932,806			3.96	%			$	5,406,073			4.00	%			$	6,140,979			3.88	%			$	5,370,019			4.00	%
Investment securities*				2,498,640			3.14	%				2,515,825			3.26	%				2,529,343			3.52	%				2,470,862			3.32	%				2,400,867			3.43	%				2,514,490			3.30	%				2,408,042			3.51	%
Interest earning deposits				91,720			0.16	%				92,867			0.17	%				97,917			0.16	%				124,710			0.18	%				85,310			0.15	%				94,145			0.16	%				73,940			0.16	%
Total earning assets				8,735,358			3.64	%				8,755,199			3.63	%				8,758,540			3.75	%				8,528,378			3.72	%				7,892,250			3.79	%				8,749,614			3.68	%				7,852,001			3.82	%
Total assets				9,526,850								9,544,673								9,524,279								9,269,113								8,569,734								9,531,944								8,521,085
Savings				716,540			0.10	%				714,135			0.10	%				693,482			0.11	%				638,913			0.10	%				549,589			0.10	%				708,136			0.10	%				544,929			0.10	%
NOW accounts				2,012,605			0.14	%				1,908,400			0.14	%				1,864,261			0.14	%				1,987,346			0.15	%				1,845,595			0.15	%				1,928,966			0.14	%				1,728,089			0.14	%
Money market accounts				1,746,975			0.22	%				1,761,906			0.22	%				1,836,268			0.22	%				1,788,019			0.22	%				1,681,361			0.22	%				1,781,389			0.22	%				1,679,955			0.22	%
Time deposits				1,174,011			0.97	%				1,199,076			0.94	%				1,210,270			0.90	%				1,210,685			0.88	%				1,132,513			0.96	%				1,194,320			0.94	%				1,181,590			1.02	%
Total interest bearing deposits				5,650,131			0.33	%				5,583,517			0.33	%				5,604,281			0.33	%				5,624,963			0.33	%				5,209,058			0.34	%				5,612,811			0.33	%				5,134,563			0.36	%
Non-interest bearing deposits				1,179,132								1,143,551								1,091,409								1,078,218								1,005,457								1,138,352								993,372
Total deposits				6,829,263			0.28	%				6,727,068			0.28	%				6,695,690			0.27	%				6,703,181			0.27	%				6,214,515			0.29	%				6,751,163			0.27	%				6,127,935			0.30	%
Customer repurchase agreements				551,603			0.29	%				556,813			0.29	%				568,750			0.29	%				589,944			0.29	%				546,119			0.29	%				558,992			0.29	%				544,500			0.29	%
Repurchase agreements				-			0.00	%				-			0.00	%				-			0.00	%				-			0.00	%				16,032			4.87	%				-			0.00	%				38,553			4.87	%
Federal Home Loan Bank advances and other borrowings				702,424			0.91	%				824,456			0.81	%				805,516			0.80	%				503,081			1.10	%				505,349			1.02	%				777,088			0.84	%				541,108			1.04	%
Senior long-term debt				125,000			4.34	%				125,000			4.38	%				125,000			4.43	%				125,000			4.33	%				20,380			4.42	%				125,000			4.38	%				6,868			4.42	%
Subordinated debentures				77,321			2.81	%				77,321			2.79	%				77,321			2.76	%				77,321			2.75	%				77,321			2.75	%				77,321			2.79	%				77,321			2.75	%
Total deposits and borrowings				8,285,611			0.41	%				8,310,658			0.41	%				8,272,277			0.41	%				7,998,527			0.41	%				7,379,716			0.38	%				8,289,564			0.41	%				7,336,285			0.41	%
Total interest bearing liabilities			$	7,106,479			0.48	%			$	7,167,107			0.48	%			$	7,180,868			0.48	%			$	6,920,309			0.48	%			$	6,374,259			0.44	%			$	7,151,212			0.48	%			$	6,342,913			0.48	%
Net interest margin (FTE)							3.25	%							3.24	%							3.36	%							3.33	%							3.43	%							3.28	%							3.43	%
Wealth assets under management, at period end			$	2,517,888							$	2,587,907							$	2,609,834							$	2,501,015							$	2,411,463
*Fully taxable equivalent ("FTE") basis, using a 35% statutory tax rate

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2015
Unaudited
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
			Quarterly, as of
			9/30/2015			6/30/2015			3/31/2015			12/31/2014			9/30/2014
PA
Total number of retail branch offices			116			116			119			119			110
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)			1			1			1			1			1
Total number of ATMs			127			126			128			127			120
NJ
Total number of retail branch offices			7			7			7			7			-
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)			-			-			-			-			-
Total number of ATMs			6			6			6			6			-
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			124			124			127			127			111
Total number of insured subsidiaries
(Bank & Thrift subsidiaries)			1			1			1			1			1
Total number of ATMs			134			133			135			134			121
EOP employees (full-time equivalent)			1,548			1,573			1,596			1,658			1,549

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