National Penn Bancshares, Inc. Reports Third Quarter 2012 Results

  National Penn Bancshares, Inc. Reports Third Quarter 2012 Results

  *Quarterly earnings per common share increases to $0.17 from $0.15 for the
    second quarter
  *Year-to-date earnings per common share increases to $0.49 from $0.42 for
    the prior year period
  *Third quarter net interest margin increases to 3.50%
  *Quarterly return on assets 1.23%; year-to-date 1.17%
  *Quarterly cash dividend increased to $0.10 per common share

Business Wire

BOYERTOWN, Pa. -- October 26, 2012

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income available to
common shareholders of $26.0 million for the third quarter 2012, an increase
of 16% compared to $22.4 million for the second quarter of 2012. Diluted
earnings per share were $0.17, compared to $0.15 per diluted share for the
second quarter of 2012. Year-to-date net income available to common
shareholders also increased 16% to $73.8 million from $63.7 million for the
prior year period. Diluted earnings per share were $0.49, compared to $0.42
per diluted share for the nine months ended September 30, 2011.

Return on average assets was 1.23% for the third quarter and 1.17% for the
nine months ended September 30, 2012. National Penn’s capital remained strong
at September 30, 2012, as the ratio of tangible common equity to tangible
assets was 11.56%^1 and the tier 1 common and total capital ratios were 15.07%
and 18.70%, respectively. Strong earnings and capital levels provided the
basis for a cash dividend increase to $0.10 per common share in the fourth
quarter of 2012.

Net interest income increased, and the net interest margin expanded to 3.50%
from 3.48% in the prior quarter, benefitting from the previously announced
restructuring of FHLB advances. Period-end total loans and leases increased by
$46 million, while total average loans for the third quarter of 2012 were
comparable to the second quarter. For the nine months ended September 30,
2012, net interest margin was 3.51%, as compared to 3.52% a year ago.

“I am very pleased with the strength of National Penn’s financial
performance,” said Scott V. Fainor, president and CEO of National Penn. “We
will continue to operate with a sense of urgency and accountability to provide
consistent returns for our shareholders and utilize the strength of our
balance sheet as a competitive advantage.”

Asset quality remained strong as the level of classified loans continued to
improve in the third quarter and declined by $74.2 million, or 20%,
year-to-date. Net charge-offs totaled $5.1 million for the third quarter of
2012, as compared to $6.8 million in the second quarter. Annualized net
charge-offs totaled 0.39% of average loans for the quarter and 0.49% for
year-to-date 2012. Based in part on these metrics, the provision for loan and
lease losses for the third quarter was $2.0 million, equal to the provision
for the second quarter of 2012. Year-to-date provision expense totaled $6.0
million, as compared to $13.0 million of provision expense for the prior year
period. At September 30, 2012, the allowance for loan and lease losses to
non-performing loans was 195% and represented 2.16% of total loans and leases.

The current interest rate environment enhanced non-interest income in the
third quarter of 2012 due to an increase in customer interest rate swap and
mortgage activity. Total operating expenses continued to be well controlled
and resulted in an efficiency ratio of 56.3%^1 for the quarter, compared to
58.4% in the prior quarter.

Scott V. Fainor stated “The increasingly positive trends in the difficult
current economic environment are a result of the dedication of National Penn’s
team. Our consistent performance and continued returns of capital through
share repurchases and dividend increases evidence our commitment to enhancing
long term shareholder value.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.4 billion in assets, is
a bank holding company based in Pennsylvania. Headquartered in Boyertown,
National Penn operates 120 branch offices comprising 119 branches in
Pennsylvania and one branch in Maryland through National Penn Bank and its
KNBT and Nittany Bank divisions.

National Penn’s financial services affiliates are National Penn Wealth
Management, N.A., including its National Penn Investors Trust Company
division; National Penn Capital Advisors, Inc.; Institutional Advisors LLC;
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 also adjusted to exclude items that management believes are not
    comparable among the periods presented. Efficiency ratio is used as a
    method for management to assess its operating expense level and to compare
    to financial institutions of varying sizes.

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

Cautionary Statement Regarding Forward-Looking Information:

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

National Penn’s business and operations are subject to a variety of risks,
uncertainties and other factors. Consequently, actual results and experience
may materially differ from those contained in any forward-looking statements.
Such risks, uncertainties and other factors that could cause actual results
and experience to differ from those projected include, but are not limited to,
the following: regulatory requirements or other actions mandated by National
Penn’s regulators, recent and ongoing changes to the state and federal
regulatory schemes under which National Penn and other financial services
companies operate (including the Dodd-Frank Act and regulations adopted or to
be adopted to implement that Act), deterioration in the credit quality of
loans, the effect of credit risk exposure, the geographic concentration of
National Penn’s operations, declines in the value of National Penn’s assets
and the effect of any resulting impairment charges, National Penn’s ability to
raise capital and maintain capital levels, increases in operating costs
(including those mandated by National Penn’s regulators), competition for
personnel and from other financial institutions, variations in interest rates,
interruptions or breaches of National Penn’s security systems, the development
and maintenance of National Penn’s information technology, the ability of
National Penn and its subsidiaries to pay dividends, and the nature and
frequency of litigation and other similar proceedings to which National Penn
may be a party. These risks and others are described in greater detail in
National Penn’s Annual Report on Form 10-K for the fiscal year ended December
31, 2011, as well as in National Penn’s Quarterly Reports on Form 10-Q and
other documents filed by National Penn with the SEC after the date thereof.
National Penn makes no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances occurring or existing
after the date any forward-looking statement is made.


Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                                                                   
Unaudited, dollars in thousands except share and per share data
                                                                                         
                 As of
                 9/30/2012        6/30/2012        9/30/2011
SUMMARY                                         
BALANCE SHEET
Total assets     $ 8,435,526       $ 8,395,864       $ 8,611,641
Investment
securities and     2,310,459         2,316,894         2,373,278
other
securities
Total loans        5,256,854         5,210,767         5,161,275
and leases
Deposits           5,947,744         5,845,543         5,992,991
Borrowings         1,216,707         1,298,477         1,410,212
Shareholders'      1,214,330         1,199,760         1,164,204
equity
Tangible book
value per        $ 6.29            $ 6.18            $ 5.86
common share
(2)
Tangible
common equity      11.56       %     11.43       %     10.66       %
/ tangible
assets (2)
                                                                                         
                 Three Months Ended                                    Nine Months Ended
                 9/30/2012        6/30/2012        9/30/2011         9/30/2012        9/30/2011
EARNINGS                                                                         
Total interest   $ 78,344          $ 79,896          $ 86,055          $ 239,654         $ 263,153
income
Total interest    14,790         16,697         21,638          49,083         67,771      
expense
Net interest       63,554            63,199            64,417            190,571           195,382
income
Provision for
loan and lease    2,000          2,000          -               6,000          13,000      
losses
Net interest
income after
provision for      61,554            61,199            64,417            184,571           182,382
loan and lease
losses
Loss on sale       -                 -                 (1,000      )     -                 (1,000      )
of building
Loss on debt       -                 -                 (998        )     -                 (998        )
extinguishment
Net gains
(losses) from
fair value         101               (810        )     (506        )     936               (987        )
changes on
subordinated
debentures
Net (losses)
gains on           -                 (277        )     1,022             (277        )     1,022
investment
securities
Other
non-interest       26,664            21,543            24,623            70,803            71,676
income
Other
non-interest      53,339         52,269         55,053          158,048        166,011     
expense
Income before      34,980            29,386            32,505            97,985            86,084
income taxes
Income tax        8,964          6,938          7,692           24,219         19,283      
expense
Net income        26,016         22,448         24,813          73,766         66,801      
Preferred
dividends and
accretion of       -                 -                 -                 -                 (1,691      )
preferred
discount
Accelerated
accretion from
redemption of     -              -              -               -              (1,452      )
preferred
stock
Net income
available to     $ 26,016        $ 22,448        $ 24,813         $ 73,766        $ 63,658      
common
shareholders
                                                                                         
PERFORMANCE                                                                      
RATIOS
Net interest       3.50        %     3.48        %     3.46        %     3.51        %     3.52        %
margin
Return on          1.23        %     1.07        %     1.15        %     1.17        %     1.03        %
average assets
Adjusted
return on          1.23        %     1.09        %     1.15        %     1.16        %     1.02        %
average assets
(3)
Return on
average total      8.60        %     7.50        %     8.59        %     8.22        %     7.77        %
shareholders'
equity
Return on
average
tangible           11.10       %     9.69        %     11.33       %     10.64       %     10.24       %
common equity
(1)
Efficiency         56.26       %     58.42       %     58.54       %     57.36       %     58.81       %
ratio (4)
                                                                                         
PER SHARE                                                                        
Basic earnings
available to     $ 0.17            $ 0.15            $ 0.16            $ 0.49            $ 0.42
common
shareholders
Diluted
earnings
available to       0.17              0.15              0.16              0.49              0.42
common
shareholders
Dividends per      0.09              0.07              0.03              0.21              0.05
common share
Average shares     150,157,622       151,732,402       151,693,223       151,325,579       151,256,293
- basic
Average shares     150,454,749       152,011,995       151,927,269       151,615,435       151,513,773
- diluted
                                                                               
                                                                                         
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES
                                                                       
                 Three Months Ended                                    Nine Months Ended
                 9/30/2012        6/30/2012        9/30/2011         9/30/2012        9/30/2011
Return on
average
tangible
common equity
Return on
average            8.60        %     7.50        %     8.59        %     8.22        %     7.77        %
shareholders'
equity
Effect of
preferred          -           %     -           %     -           %     -           %     (0.10       )%
equity
Effect of
goodwill and      2.50        %    2.19        %    2.74        %    2.42        %    2.57        %
intangibles
Return on
average           11.10       %    9.69        %    11.33       %    10.64       %    10.24       %
tangible
common equity
Average
tangible
equity:
Average
shareholders'    $ 1,203,072       $ 1,203,757       $ 1,145,679       $ 1,198,422       $ 1,149,458
equity
Average
preferred          -                 -                 -                 -                 (40,251     )
equity
Average
goodwill and      (270,720    )    (271,990    )    (276,439    )    (272,019    )    (278,018    )
intangibles
Average total
tangible         $ 932,352        $ 931,767        $ 869,240        $ 926,403        $ 831,189     
common equity
                                                                                         
Adjusted net
income
reconciliation
Net income
available to     $ 26,016          $ 22,448          $ 24,813          $ 73,766          $ 63,658
common
shareholders
After tax
unrealized
fair market        (66         )     527               329               (608        )     642
(gain) loss on
subordinated
debentures
Accelerated
accretion from
redemption of     -               -               -               -               1,452       
preferred
stock
Adjusted net
income
available to     $ 25,950         $ 22,975         $ 25,142         $ 73,158         $ 65,752      
common
shareholders
                                                                                         
Earnings per
share
Net income
available to     $ 0.17            $ 0.15            $ 0.16            $ 0.49            $ 0.42
common
shareholders
After tax
unrealized
fair value         -                 -                 -                 -                 -
(gain) loss on
subordinated
debentures
Accelerated
accretion from
redemption of     -               -               -               -               0.01        
preferred
stock
Adjusted net
income
available to     $ 0.17           $ 0.15           $ 0.16           $ 0.49           $ 0.43        
common
shareholders

                                                                                           
Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                                      
Unaudited, dollars in thousands except share and per share data
                                                                                              
                      As of
                      9/30/2012        6/30/2012        3/31/2012        12/31/2011       9/30/2011
BALANCE SHEET -
ASSETS
Cash and due from     $ 120,421         $ 115,564         $ 108,752         $ 129,637         $ 116,057
banks
Interest-earning       211,943         221,419         344,427         321,885         422,942     
deposits with banks
Total cash and cash     332,364           336,983           453,179           451,522           538,999
equivalents
                                                                                              
                                                                                              
Investment
securities              1,773,579         1,769,359         1,779,613         1,747,019         1,790,654
available-for-sale,
at fair value
Investment
securities              472,884           481,341           487,507           496,574           509,773
held-to-maturity
Other securities        63,996            66,194            68,301            70,518            72,851
Loans held-for-sale     22,703            16,908            16,909            12,216            17,144
                                                                                              
Loans and leases        5,234,151         5,193,859         5,184,747         5,175,885         5,144,131
Allowance for loan     (113,542    )    (116,650    )    (121,452    )    (126,640    )    (131,073    )
and lease losses
Loans and leases,       5,120,609         5,077,209         5,063,295         5,049,245         5,013,058
net
                                                                                              
Premises and            96,349            96,566            95,937            96,198            100,880
equipment, net
Accrued interest        31,448            30,511            31,241            30,991            33,110
receivable
Bank owned life         141,991           140,747           139,507           138,274           137,017
insurance
Other real estate
owned and other         7,174             7,201             7,647             7,716             8,029
repossessed assets
Goodwill                258,279           258,279           258,279           258,279           258,279
Other intangible        11,852            13,085            14,408            15,770            17,370
assets, net
Unconsolidated          11,337            10,109            11,699            12,173            11,927
investments
Other assets           90,961          91,372          96,513          99,786          102,550     
TOTAL ASSETS          $ 8,435,526      $ 8,395,864      $ 8,524,035      $ 8,486,281      $ 8,611,641   
                                                                                              
BALANCE SHEET -
LIABILITIES
Non-interest          $ 902,295         $ 903,766         $ 884,025         $ 863,703         $ 833,311
bearing deposits
Interest bearing       5,045,449       4,941,777       5,004,358       5,011,116       5,159,680   
deposits
Total deposits          5,947,744         5,845,543         5,888,383         5,874,819         5,992,991
                                                                                              
Customer repurchase     534,613           533,389           542,706           523,978           500,099
agreements
Structured
repurchase              75,000            85,000            85,000            85,000            140,000
agreements
Short-term              -                 -                 -                 -                 6,400
borrowings
Federal Home Loan
Bank advances, net      462,720           535,613           615,863           616,111           619,946
of prepayment fees
incurred
Subordinated            144,374           144,475           143,666           145,310           143,767
debentures
Accrued interest
payable and other      56,745          52,084          47,587          60,376          44,234      
liabilities
TOTAL LIABILITIES      7,221,196       7,196,104       7,323,205       7,305,594       7,447,437   
                                                                                              
BALANCE SHEET - SHAREHOLDERS' EQUITY
Common stock            1,387,073         1,386,177         1,384,657         1,383,082         1,380,728
Accumulated deficit     (181,225    )     (193,715    )     (205,497    )     (223,189    )     (237,862    )
Accumulated other
comprehensive           28,617            25,435            21,670            20,794            21,338
income
Treasury stock         (20,135     )    (18,137     )    -               -               -           
TOTAL SHAREHOLDERS'    1,214,330       1,199,760       1,200,830       1,180,687       1,164,204   
EQUITY
                                                                                              
TOTAL LIABILITIES
AND SHAREHOLDERS'     $ 8,435,526      $ 8,395,864      $ 8,524,035      $ 8,486,281      $ 8,611,641   
EQUITY
                                                                                              
                                                                                              
COMMON SHARE AND PER SHARE DATA
Book value            $ 8.09            $ 7.98            $ 7.88            $ 7.77            $ 7.67
Tangible book value   $ 6.29            $ 6.18            $ 6.09            $ 5.97            $ 5.86
(2)
Dividends             $ 0.09            $ 0.07            $ 0.05            $ 0.04            $ 0.03
Shares outstanding
(end of period, net     150,048,383       150,258,232       152,295,895       151,883,036       151,714,696
of treasury)
                                                                                    
                                                                                              
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
                                                                                              
Total shareholders'   $ 1,214,330       $ 1,199,760       $ 1,200,830       $ 1,180,687       $ 1,164,204
equity
Goodwill and           (270,131    )    (271,364    )    (272,687    )    (274,049    )    (275,649    )
intangibles
Tangible common       $ 944,199        $ 928,396        $ 928,143        $ 906,638        $ 888,555     
equity
Common shares           150,048,383       150,258,232       152,295,895       151,883,036       151,714,696
outstanding
Tangible book value   $ 6.29            $ 6.18            $ 6.09            $ 5.97            $ 5.86
per share
                                                                                              
Total assets          $ 8,435,526       $ 8,395,864       $ 8,524,035       $ 8,486,281       $ 8,611,641
Goodwill and           (270,131    )    (271,364    )    (272,687    )    (274,049    )    (275,649    )
intangibles
Tangible assets       $ 8,165,395      $ 8,124,500      $ 8,251,348      $ 8,212,232      $ 8,335,992   
Tangible common
equity/tangible         11.56       %     11.43       %     11.25       %     11.04       %     10.66       %
assets
                                                                                              
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
                                                                                              
Adjusted net income
available to common   $ 25,950          $ 22,975          $ 24,233          $ 23,176          $ 24,813
shareholders (1)
Average assets        $ 8,386,342       $ 8,473,164       $ 8,397,381       $ 8,525,271       $ 8,588,269
Adjusted return on
average assets          1.23        %     1.09        %     1.16        %     1.08        %     1.15        %
(annualized)

                                                                                                                        
Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                                 
Unaudited, dollars in thousands except share and per share data
                                                                                                           
                 For the Quarter Ended                                                                     For the Nine Months Ended
                 9/30/2012        6/30/2012        3/31/2012        12/31/2011       9/30/2011         9/30/2012        9/30/2011
INTEREST
INCOME
Loans and
leases,          $ 60,269          $ 61,116          $ 62,291          $ 64,040          $ 65,795          $ 183,676         $ 202,576
including fees
Investment
securities
Taxable            10,525            10,941            11,209            11,310            11,591            32,675            34,500
Tax-exempt         7,402             7,636             7,781             8,076             8,337             22,819            25,231
Deposits with     148             203             133             255             332             484             846         
banks
Total interest    78,344          79,896          81,414          83,681          86,055          239,654         263,153     
income
INTEREST
EXPENSE
Deposits           6,472             6,879             7,294             8,272             9,881             20,645            32,262
Customer
repurchase         511               545               550               556               593               1,606             1,950
agreements
Structured
repurchase         843               915               915               1,316             1,697             2,673             5,081
agreements
Short-term         -                 -                 -                 -                 -                 -                 -
borrowings
Federal Home
Loan Bank          5,105             6,501             6,967             6,987             7,073             18,573            21,329
advances
Subordinated      1,859           1,857           1,870           2,029           2,394           5,586           7,149       
debentures
Total interest    14,790          16,697          17,596          19,160          21,638          49,083          67,771      
expense
Net interest       63,554            63,199            63,818            64,521            64,417            190,571           195,382
income
Provision for
loan and lease    2,000           2,000           2,000           2,000           -               6,000           13,000      
losses
Net interest
income after
provision for     61,554          61,199          61,818          62,521          64,417          184,571         182,382     
loan and lease
losses
NON-INTEREST
INCOME
Wealth
management         6,239             6,005             6,161             5,616             6,227             18,405            18,007
income
Service
charges on         4,147             3,753             3,823             4,608             4,880             11,723            14,160
deposit
accounts
Insurance
commissions        3,238             3,211             3,296             3,107             3,406             9,745             10,147
and fees
Cash
management and     4,626             4,707             4,420             4,613             4,590             13,753            13,606
electronic
banking fees
Mortgage           2,296             1,511             1,335             1,481             1,349             5,142             3,443
banking income
Bank owned
life insurance     1,319             1,255             1,209             1,288             1,733             3,783             4,186
income
Earnings
(losses) of        1,315             108               (74         )     246               99                1,349             1,915
unconsolidated
investments
Other
operating          3,484             993               2,426             2,019             2,339             6,903             6,212
income
Loss on sale       -                 -                 -                 -                 (1,000      )     -                 (1,000      )
of building
Net gains
(losses) from
fair value         101               (810        )     1,645             (1,543      )     (506        )     936               (987        )
changes on
subordinated
debentures
Loss on debt       -                 -                 -                 (1,635      )     (998        )     -                 (998        )
extinguishment
Net (losses)
gains on sales     -                 (123        )     -                 1,697             1,022             (123        )     1,022
of investment
securities
Impairment
losses on
investment
securities:
Impairment
related losses     -                 (154        )     -                 -                 -                 (154        )     -
on investment
securities
Non
credit-related
losses on
securities not
expected to be
sold              -               -               -               -               -               -               -           
recognized in
other
comprehensive
loss before
tax
Net impairment
losses on         -               (154        )    -               -               -               (154        )    -           
investment
securities
Total
non-interest      26,765          20,456          24,241          21,497          23,141          71,462          69,713      
income
NON-INTEREST
EXPENSE
Salaries,
wages and          31,555            31,234            31,381            29,598            30,809            94,170            92,666
employee
benefits
Premises and       7,226             7,349             6,853             7,652             7,228             21,428            21,287
equipment
FDIC insurance     1,259             1,211             1,264             1,442             2,213             3,734             8,396
Corporate
reorganization     -                 -                 -                 2,200             -                 -                 -
expense
Other
operating         13,299          12,475          12,942          16,494          14,803          38,716          43,662      
expenses
Total
non-interest      53,339          52,269          52,440          57,386          55,053          158,048         166,011     
expense
Income before      34,980            29,386            33,619            26,632            32,505            97,985            86,084
income taxes
Income tax        8,964           6,938           8,317           5,889           7,692           24,219          19,283      
expense
NET INCOME        26,016          22,448          25,302          20,743          24,813          73,766          66,801      
Preferred
dividends and
accretion of       -                 -                 -                 -                 -                 -                 (1,691      )
preferred
discount
Accelerated
accretion from
redemption of     -               -               -               -               -               -               (1,452      )
preferred
stock
NET INCOME
AVAILABLE TO     $ 26,016         $ 22,448         $ 25,302         $ 20,743         $ 24,813         $ 73,766         $ 63,658      
COMMON
SHAREHOLDERS
                                                                                                                             
PER SHARE OF
COMMON STOCK
Basic earnings
available to     $ 0.17            $ 0.15            $ 0.17            $ 0.14            $ 0.16            $ 0.49            $ 0.42
common
shareholders
Diluted
earnings
available to     $ 0.17            $ 0.15            $ 0.17            $ 0.14            $ 0.16            $ 0.49            $ 0.42
common
shareholders
Average shares     150,157,622       151,732,402       152,099,546       151,773,327       151,693,223       151,325,579       151,256,293
- basic
Average shares     150,454,749       152,011,995       152,392,315       152,068,706       151,927,269       151,615,435       151,513,773
- diluted
                                                                                                                             
SUPPLEMENTAL DATA (annualized,
average)
Return on          1.23        %     1.07        %     1.21        %     0.97        %     1.15        %     1.17        %     1.03        %
assets
Adjusted
return on          1.23        %     1.09        %     1.16        %     1.08        %     1.15        %     1.16        %     1.02        %
assets (3)
Return on          8.60        %     7.50        %     8.56        %     7.02        %     8.59        %     8.22        %     7.77        %
total equity
Return on          8.60        %     7.50        %     8.56        %     7.02        %     8.59        %     8.22        %     7.67        %
common equity
Return on
tangible           11.10       %     9.69        %     11.12       %     9.17        %     11.33       %     10.64       %     10.24       %
common equity
(1)
Efficiency         56.26       %     58.42       %     57.47       %     59.73       %     58.54       %     57.36       %     58.81       %
ratio (4)
                                                                                                               
                                                                                                                             
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
                                                                                                                             
Efficiency
Ratio
Calculation
Non-interest     $ 53,339          $ 52,269          $ 52,440          $ 57,386          $ 55,053          $ 158,048         $ 166,011
expense
Less:
Corporate
reorganization    -               -               -               2,200           -               -               -           
expense
Operating        $ 53,339         $ 52,269         $ 52,440         $ 55,186         $ 55,053         $ 158,048        $ 166,011     
expenses
                                                                                                                             
Net interest
income           $ 68,139          $ 67,929          $ 68,645          $ 69,409          $ 69,426          $ 204,713         $ 210,625
(taxable
equivalent)
                                                                                                                             
Non-interest       26,765            20,456            24,241            21,497            23,141            71,462            69,713
income
Less:
Loss on sale       -                 -                 -                 -                 (1,000      )     -                 (1,000      )
of building
Loss on debt       -                 -                 -                 (1,635      )     (998        )     -                 (998        )
extinguishment
Net gains
(losses) from
fair value         101               (810        )     1,645             (1,543      )     (506        )     936               (987        )
changes on
subordinated
debentures
Net (losses)
gains on          -               (277        )    -               1,697           1,022           (277        )    1,022       
investment
securities
Adjusted         $ 94,803         $ 89,472         $ 91,241         $ 92,387         $ 94,049         $ 275,516        $ 282,301     
revenue
                                                                                                                             
Efficiency        56.26       %    58.42       %    57.47       %    59.73       %    58.54       %    57.36       %    58.81       %
Ratio

                                                                                                                
Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                      
Unaudited, dollars in thousands except share and per share data
                                                                                                                      
                         For the Quarter Ended                                                           For the Nine Months
                                                                                                         Ended
CHARGE-OFFS              9/30/2012      6/30/2012      3/31/2012      12/31/2011     9/30/2011       9/30/2012   9/30/2011
                                                                                                                      
Loan charge-offs         $ 5,993        $ 7,907        $ 8,722        $ 9,896        $ 8,374        $ 22,622    $ 37,639 
Recoveries on loans       (885      )    (1,105    )    (1,534    )    (3,463    )    (1,538    )    (3,524 )    (5,658 )
Net loan charge-offs     $ 5,108        $ 6,802        $ 7,188        $ 6,433        $ 6,836        $ 19,098    $ 31,981 
Net loan charge-offs
to average loans          0.39      %    0.53      %    0.56      %    0.50      %    0.53      %    0.49   %    0.82   %
(annualized)
                                                                                                                      
NET CHARGE-OFF DETAIL
Commercial and
industrial loans and     $ 1,116         $ 5,196         $ 1,925         $ 2,648         $ 1,962         $ 8,237      $ 16,347
leases
                                                                                                                      
Commercial real            481             595             1,933           517             83              3,009        5,271
estate-permanent
Commercial real           1,755         (148      )    673           (1,337    )    2,637         2,280      4,338  
estate-construction
Total commercial real      2,236           447             2,606           (820      )     2,720           5,289        9,609
estate loans
                                                                                                                      
Residential mortgages      742             328             560             993             998             1,630        3,124
Home equity lines and      517             404             1,855           2,429           596             2,776        2,587
loans
All other consumer        497           427           242           1,183         560           1,166      314    
loans
Total consumer loans      1,756         1,159         2,657         4,605         2,154         5,572      6,025  
                                                                                                                      
Net loans charged-off    $ 5,108        $ 6,802        $ 7,188        $ 6,433        $ 6,836        $ 19,098    $ 31,981 
                                                                                                                      
                         As of
ASSET QUALITY AND        9/30/2012      6/30/2012      3/31/2012      12/31/2011     9/30/2011
OTHER DATA
                                                                                                                      
Non-accrual commercial
and industrial loans     $ 31,109        $ 33,984        $ 32,485        $ 31,081        $ 29,995
and leases
                                                                                                                      
Non-accrual commercial     3,780           2,999           5,156           7,403           8,314
real estate-permanent
Non-accrual commercial
real                      5,149         6,959         14,336        12,218        14,549    
estate-construction
Total non-accrual
commercial real estate     8,929           9,958           19,492          19,621          22,863
loans
                                                                                                                      
Non-accrual                6,242           4,301           4,077           4,504           4,472
residential mortgages
Non-accrual home           3,458           2,555           2,110           3,046           1,763
equity lines and loans
All other non-accrual     1,823         1,753         1,695         3,176         1,907     
consumer loans
Total non-accrual          11,523          8,609           7,882           10,726          8,142
consumer loans
                                                                                     
Total non-accrual          51,561          52,551          59,859          61,428          61,000
loans
                                                                                                                      
Restructured loans        6,726         6,468         6,506         5,548         4,372     
Total non-performing       58,287          59,019          66,365          66,976          65,372
loans
                                                                                                                      
Other real estate
owned and repossessed     7,174         7,201         7,647         7,716         8,029     
assets
Total non-performing      65,461        66,220        74,012        74,692        73,401    
assets
                                                                                                                      
Loans 90+ days past       2,628         3,426         1,588         2,010         1,408     
due & still accruing
Total non-performing
assets and loans 90+     $ 68,089       $ 69,646       $ 75,600       $ 76,702       $ 74,809    
days past due
                                                                                     
Allowance for loan and   $ 113,542      $ 116,650      $ 121,452      $ 126,640      $ 131,073   
lease losses
Allowance for loan and
lease                     194.8     %    197.6     %    183.0     %    189.1     %    200.5     %
losses/non-performing
loans
Allowance for loan and
lease
losses/non-performing     166.8     %    167.5     %    160.7     %    165.1     %    175.2     %
assets and loans 90+
days past due
Allowance for loan and
lease losses/total        2.16      %    2.24      %    2.33      %    2.44      %    2.54      %
loans and leases
Provision/charge-offs,    39.2      %    29.4      %    27.8      %    31.1      %    -         %
net
Classified loans         $ 296,213      $ 301,542      $ 347,033      $ 370,439      $ 374,850   
Classified loans/total    5.63      %    5.79      %    6.67      %    7.14      %    7.26      %
loans and leases
Delinquent loans (a)     $ 23,519       $ 24,144       $ 24,068       $ 24,801       $ 28,824    
Delinquent loans/total    0.45      %    0.46      %    0.46      %    0.48      %    0.56      %
loans and leases
                                                                                                                      
                                                                                                                      
                         As of
REGULATORY CAPITAL       9/30/2012      6/30/2012      3/31/2012      12/31/2011     9/30/2011
DATA
                                                                                                                      
Tier 1 Capital           $ 1,024,888    $ 1,008,052    $ 1,005,009    $ 978,302      $ 955,766   
Tier 1 Leverage Ratio     12.78     %    12.44     %    12.53     %    12.00     %    11.63     %
Tier 1 Ratio (%)          17.45     %    17.45     %    17.46     %    17.12     %    16.85     %
Total Capital            $ 1,098,814    $ 1,080,807    $ 1,077,587    $ 1,050,417    $ 1,027,393 
Total Capital Ratio       18.70     %    18.71     %    18.72     %    18.38     %    18.12     %
(%)
Total Risk-Weighted      $ 5,874,448    $ 5,776,537    $ 5,757,306    $ 5,714,643    $ 5,670,722 
Assets
                                                                                                                      
(a) Includes loans 30-89 days past due and loans 90+ days past due and still accruing

                                                                    
Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                         
Unaudited, dollars in thousands except share and per share data
                                                                        
                As of
PERIOD END      9/30/2012    6/30/2012    3/31/2012    12/31/2011   9/30/2011
BALANCES:
                                                                        
Earning
Assets /
Liabilities
Loan
portfolio
composition
(regulatory):
Commercial /    $ 846,484     $ 856,237     $ 853,379     $ 833,534     $ 813,356
industrial
Commercial
real estate       1,803,532     1,759,792     1,753,986     1,737,383     1,697,975
(a)
Residential       1,262,897     1,262,633     1,269,505     1,270,896     1,272,478
mortgage
Real estate
construction      189,293       194,942       210,976       212,306       216,250
and land
development
Home equity       776,023       765,902       756,803       771,792       766,299
Consumer          207,333       207,999       210,069       209,082       213,014
Other loans      171,292      163,262      146,938      153,108      181,903
Total loans       5,256,854     5,210,767     5,201,656     5,188,101     5,161,275
                                                                        
Investment
securities        2,310,459     2,316,894     2,335,421     2,314,111     2,373,278
and other
securities
Other earning    211,943      221,419      344,427      321,885      422,942
assets
Total earning
assets (net     $ 7,665,714   $ 7,632,430   $ 7,760,052   $ 7,697,457   $ 7,826,422
of loan loss
reserve)
(a) Includes
owner
occupied
                                                                        
Loan
portfolio
composition
(internal):
Commercial &
industrial
loans and
leases
Business
purpose, real   $ 879,326     $ 879,413     $ 864,284     $ 895,028     $ 892,952
estate
secured
Business
purpose, not      979,042       975,852       963,641       919,720       927,631
secured by
real estate
Owner
occupied
commercial
real estate
Permanent         572,298       572,686       572,103       563,963       566,732
Construction      31,181        36,451        38,546        36,631        28,927
/ development
Leasing          2,102        2,670        3,330        4,685        5,796
Total
commercial &
industrial        2,463,949     2,467,072     2,441,904     2,420,027     2,422,038
loans and
leases
                                                                        
Commercial
real estate
Non-owner
occupied
Permanent         918,511       874,570       878,499       855,524       798,106
Construction     140,889      140,751      151,697      156,064      168,537
/ development
Total
commercial        1,059,400     1,015,321     1,030,196     1,011,588     966,643
real estate
                                                                        
Consumer
loans
Residential
mortgage
(personal
purpose)
Permanent         683,694       688,171       686,974       704,655       709,342
Construction     6,079        6,806        7,835        5,667        7,606
Total
residential       689,773       694,977       694,809       710,322       716,948
mortgages
                                                                        
Home equity
loans and
direct            273,359       291,383       315,419       337,242       362,808
installment
loans
Home equity
lines of         478,628      452,599      421,897      410,316      394,386
credit
Total home
equity lines      751,987       743,982       737,316       747,558       757,194
and loans
                                                                        
Private
banking           103,006       107,398       114,667       121,296       112,011
credit lines
Indirect
vehicle loans    166,036      165,109      165,855      165,094      169,297
and other
All other
consumer         269,042      272,507      280,522      286,390      281,308
loans
Total
consumer         1,710,802    1,711,466    1,712,647    1,744,270    1,755,450
loans
                                                                        
Loans and         5,234,151     5,193,859     5,184,747     5,175,885     5,144,131
leases
                                                                        
Loans             22,703        16,908        16,909        12,216        17,144
held-for-sale
                                                                    
Total loans     $ 5,256,854   $ 5,210,767   $ 5,201,656   $ 5,188,101   $ 5,161,275
and leases
                                                                        
Deposit
composition:
Savings         $ 485,283     $ 497,640     $ 495,191     $ 454,003     $ 451,767
NOW accounts      1,498,344     1,317,399     1,294,591     1,293,148     1,311,819
Money market      1,600,164     1,641,947     1,698,427     1,686,909     1,651,185
accounts
CDs less than     1,036,112     1,063,688     1,089,601     1,138,908     1,213,798
$100k
CDs $100k or     425,546      421,103      426,548      438,148      531,111
greater
Total
interest         5,045,449    4,941,777    5,004,358    5,011,116    5,159,680
bearing
deposits
                                                                        
Non-interest
bearing          902,295      903,766      884,025      863,703      833,311
deposits
                                                                        
Total           $ 5,947,744   $ 5,845,543   $ 5,888,383   $ 5,874,819   $ 5,992,991
deposits

                                                                                                                                                               
Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012
                                                                       
Unaudited, dollars in thousands except share and per share data
                                                                                                                                                                         
                 Quarterly, as of                                                                                                   Nine Months, as of
                 9/30/2012             6/30/2012             3/31/2012             12/31/2011            9/30/2011              9/30/2012             9/30/2011
                 Avg Bal       Yield    Avg Bal       Yield    Avg Bal       Yield    Avg Bal       Yield    Avg Bal       Yield    Avg Bal       Yield    Avg Bal       Yield
                                                                                                                                                                         
Total loans*     $ 5,191,136   4.66 %   $ 5,196,803   4.78 %   $ 5,179,220   4.89 %   $ 5,149,546   4.99 %   $ 5,122,557   5.15 %   $ 5,189,061   4.78 %   $ 5,220,018   5.24 %
Investment         2,309,646   3.77 %     2,319,392   3.93 %     2,318,109   4.02 %     2,355,178   3.97 %     2,287,630   4.21 %     2,315,694   3.91 %     2,263,955   4.30 %
securities*
Interest
earning           255,121     0.23 %    334,935     0.24 %    278,140     0.19 %    390,228     0.26 %    543,410     0.24 %    289,272     0.22 %    506,544     0.22 %
deposits
                                                                                                                                                                         
Total earning     7,755,903   4.25 %    7,851,130   4.34 %    7,775,469   4.46 %    7,894,952   4.45 %    7,953,597   4.54 %    7,794,027   4.35 %    7,990,517   4.66 %
assets
Total assets      8,386,342             8,473,164             8,397,381             8,525,271             8,588,269             8,418,843             8,629,532
                                                                                                                                                                         
Savings            490,020     0.11 %     494,800     0.12 %     471,562     0.13 %     454,688     0.15 %     456,271     0.18 %     485,477     0.12 %     454,039     0.18 %
NOW accounts       1,402,593   0.14 %     1,343,961   0.15 %     1,238,704   0.15 %     1,269,670   0.17 %     1,211,663   0.18 %     1,328,690   0.15 %     1,183,329   0.21 %
Money market       1,623,102   0.32 %     1,664,315   0.37 %     1,679,232   0.40 %     1,669,090   0.44 %     1,647,975   0.59 %     1,655,431   0.36 %     1,647,559   0.59 %
accounts
CDs               1,468,539   1.23 %    1,499,016   1.27 %    1,542,539   1.31 %    1,668,098   1.36 %    1,798,414   1.47 %    1,503,237   1.27 %    1,848,153   1.63 %
                                                                                                                                                                         
Total interest
bearing           4,984,254   0.52 %    5,002,092   0.55 %    4,932,037   0.59 %    5,061,546   0.65 %    5,114,323   0.77 %    4,972,835   0.55 %    5,133,080   0.84 %
deposits
                                                                                                                                                                         
Non-interest
bearing           897,017               891,739               852,730               835,699               837,953               880,556               829,853
deposits
Total deposits    5,881,271   0.44 %    5,893,831   0.47 %    5,784,767   0.51 %    5,897,245   0.56 %    5,952,276   0.66 %    5,853,391   0.47 %    5,962,933   0.72 %
                                                                                                                                                                         
Customer
repurchase         532,065     0.38 %     525,142     0.42 %     524,575     0.42 %     514,961     0.43 %     512,847     0.46 %     527,278     0.41 %     526,909     0.49 %
agreements
Structured
repurchase         78,370      4.28 %     85,000      4.33 %     85,000      4.33 %     128,968     4.05 %     163,098     4.13 %     82,774      4.31 %     164,359     4.13 %
agreements
Short-term         272         -    %     -           -    %     -           -    %     6,638       -    %     6,732       -    %     91          -    %     6,765       -    %
borrowings
Federal Home
Loan Bank
advances, net      496,438     4.09 %     575,725     4.54 %     615,983     4.55 %     616,411     4.50 %     623,713     4.50 %     562,474     4.41 %     634,048     4.50 %
of prepayment
fees incurred
Subordinated      144,472     5.12 %    143,683     5.20 %    145,274     5.18 %    143,800     5.60 %    143,266     6.63 %    144,476     5.16 %    142,963     6.69 %
debentures
Total deposits    7,132,888   0.82 %    7,223,381   0.93 %    7,155,599   0.99 %    7,308,023   1.04 %    7,401,932   1.16 %    7,170,484   0.91 %    7,437,977   1.22 %
and borrowings
Total interest
bearing          $ 6,235,871   0.94 %   $ 6,331,642   1.06 %   $ 6,302,869   1.12 %   $ 6,472,324   1.17 %   $ 6,563,979   1.31 %   $ 6,289,928   1.04 %   $ 6,608,124   1.37 %
liabilities
                                                                                                                                                                         
Net interest                   3.50 %                 3.48 %                 3.55 %                 3.49 %                 3.46 %                 3.51 %                 3.52 %
margin (FTE)
                                                                                                                                                                         
Wealth assets:
Assets under     $ 4,500,843            $ 4,361,134            $ 4,382,922            $ 4,197,612            $ 4,067,918
administration
Assets under       2,319,220              2,284,489              2,269,351              2,141,737              2,118,076
management
(included
above)
                                                                                                                                                                         
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.

*Story too large*

Financial Update for National Penn Bancshares, Inc. (NPBC) for 9/30/2012

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

[TRUNCATED]