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National Penn Bancshares, Inc. Reports First Quarter 2013 Results

  National Penn Bancshares, Inc. Reports First Quarter 2013 Results

  *Strong quarterly adjusted net income^1 of $0.16 per share; reported net
    loss of $0.12 per share
  *Net interest margin expands to 3.49% from 3.46%
  *Operating expense and asset quality focus continues
  *Redemption of 7.85% Trust Preferred securities completed
  *$400 million of FHLB advances repaid and refinanced
  *Second quarter cash dividend of $0.10 per common share declared

Business Wire

BOYERTOWN, Pa. -- April 19, 2013

National Penn Bancshares, Inc. (Nasdaq: NPBC) reported adjusted net income^1
of $23.4 million, or $0.16 per diluted share, for the first quarter of 2013,
which excludes the impact of two previously announced strategic initiatives.
Specifically, adjusted net income^1 excludes an after-tax expense of $0.29 per
diluted share associated with the repayment of $400 million of FHLB advances
and an after-tax gain of $0.01 per diluted share from the redemption of
National Penn’s retail trust preferred securities (formerly Nasdaq: NPBCO).
Inclusive of these items, the first quarter of 2013 resulted in a net loss of
$17.4 million, or $0.12 per diluted share. For the fourth quarter of 2012, net
income was $25.1 million, or $0.17 per diluted share.

“The theme of consistent earnings with strong operating fundamentals and
performance metrics continued in the quarter,” said Scott V. Fainor, president
and CEO of National Penn. “The strength of our balance sheet and capital
afforded us the opportunity to reduce higher-cost borrowings and eliminate
higher-rate trust preferred securities, which will benefit our net interest
margin in this prolonged low interest rate environment while maintaining our
ability to manage our capital position in the future.”

Asset quality continued to be strong in the first quarter of 2013 and the
provision for loan losses declined to $1.5 million from $2.0 million in the
previous quarter. Classified loans further declined by 7% during the quarter
to $243 million and declined by 30% compared to the prior year period.
Non-performing loans and annualized net charge-offs were comparable on a
linked-quarter basis with net charge-offs representing 0.41% and 0.35% of
total loans, respectively. The allowance for loan losses represented
approximately 2% of total loans outstanding and 200% of non-performing loans
at both March 31, 2013 and December 31, 2012.

Net interest margin increased in the quarter to 3.49% from 3.46% in the fourth
quarter of 2012. The partial quarter benefit of the redemption of 7.85% trust
preferred securities and the repayment and refinance of $400 million of
longer-term borrowings offset the impact of assets repricing at lower rates.
These initiatives reduced the cost of interest-bearing liabilities to 0.72%
from 0.87%. A disciplined approach to growing loans in the current economic
and interest rate environment continued as longer-term fixed rate mortgages
were sold into the secondary market and credit underwriting focused on
generating quality commercial loans, which increased in the quarter at an
annualized rate of approximately 5%.

Operating expenses, which declined 5% in 2012, totaled $52.4 million in the
first quarter of 2013 and were comparable to the operating expenses in the
fourth quarter and the first quarter of 2012. The efficiency ratio^1 was 58.6%
in the quarter and was modestly impacted by the seasonality of some revenue
items. Mortgage banking revenue declined in the quarter to $1.9 million,
compared to $2.5 million in the fourth quarter, driven by both seasonality and
lower refinance activity. Adjusted for the number of calendar days in the
quarter, net interest income was comparable.

Continued strong performance and capital levels provided the basis for
National Penn’s Board of Directors to declare a second quarter 2013 cash
dividend of ten cents per common share payable on May 17, 2013 to shareholders
of record as of May 3, 2013. At March 31, 2013, the Company’s tier 1 common
and tangible common equity to tangible assets ratios were 14.17% and 10.79%,
respectively.

Scott V. Fainor stated, “The strategies we implemented during the quarter are
consistent with our risk management appetite for addressing the impact of the
low rate environment on the industry’s net interest margin. These initiatives
provided a better risk-reward proposition than other alternatives such as
assuming the interest rate risk associated with longer-term fixed rate
lending.”

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with approximately $8.3 billion in assets, is
a bank holding company based in Pennsylvania. Headquartered in Boyertown,
National Penn Bank operates 119 branch offices comprising 118 branches in
Pennsylvania and one branch in Maryland.

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

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

^1Statement Regarding Non-GAAP Financial Measures:

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

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

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

Cautionary Statement Regarding Forward-Looking Information:

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

National Penn’s business and operations are subject to a variety of risks,
uncertainties and other factors. Consequently, actual results and experience
may materially differ from those contained in any forward-looking statements.
Such risks, uncertainties and other factors that could cause actual results
and experience to differ from those projected include, but are not limited to,
the following: 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, unanticipated costs from
our corporate relocation plan, 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, 2012, as well as in National
Penn’s Quarterly Reports on Form 10-Q and other documents filed by National
Penn with the SEC after the date thereof. National Penn makes no commitment to
revise or update any forward-looking statements in order to reflect events or
circumstances occurring or existing after the date any forward-looking
statement is made.


Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                          
Unaudited,
dollars in
thousands
except share
and per share
data
                   As of
                   3/31/2013           12/31/2012          3/31/2012
SUMMARY                                                        
BALANCE SHEET
Total assets       $ 8,323,777           $ 8,529,522           $ 8,524,035
Investment
securities and       2,333,548             2,334,739             2,335,421
other
securities
Total loans          5,249,773             5,240,882             5,201,656
Deposits             6,184,060             5,935,565             5,888,383
Borrowings           922,092               1,344,324             1,387,235
Shareholders'        1,136,798             1,161,292             1,200,830
equity
Tangible book
value per          $ 5.97                $ 6.15                $ 6.09
common share
(2)
Tangible
common equity        10.79       %         10.80       %         11.25       %
/ tangible
assets (2)
                                                                             
                   Three Months Ended
                   3/31/2013           12/31/2012          3/31/2012
EARNINGS                                                       
Total interest     $ 72,595              $ 77,174              $ 81,414
income
Total interest      10,971            13,739            17,596      
expense
Net interest         61,624                63,435                63,818
income
Provision for       1,500             2,000             2,000       
loan losses
Net interest
income after         60,124                61,435                61,818
provision for
loan losses
Net gains
(losses) from
fair value           2,111                 (253        )         1,645
changes of
subordinated
debentures
Net gains on
investment           25                    4                     -
securities
Other
non-interest         23,441                24,755                22,596
income
Loss on debt         64,888                -                     -
extinguishment
Other
non-interest        52,434            52,262            52,440      
expense
Income (loss)
before income        (31,621     )         33,679                33,619
taxes
Income tax
expense             (14,217     )      8,535             8,317       
(benefit)
Net income         $ (17,404     )     $ 25,144           $ 25,302      
(loss)
                                                                             
PERFORMANCE                                                    
RATIOS
Net interest         3.49        %         3.46        %         3.55        %
margin
Return on            NM                    1.19        %         1.21        %
average assets
Adjusted
return on            1.14        %         1.19        %         1.16        %
average assets
(3)
Return on
average total        NM                    8.33        %         8.56        %
shareholders'
equity
Return on
average
tangible             NM                    10.74       %         11.12       %
common equity
(1)
Efficiency           58.61       %         56.40       %         57.47       %
ratio (4)
                                                                             
PER SHARE                                                      
Basic earnings     $ (0.12       )       $ 0.17                $ 0.17
Diluted              (0.12       )         0.17                  0.17
earnings
Dividends            -             (a)     0.20          (a)     0.05
Average shares       145,394,967           148,304,167           152,099,546
- basic
Average shares       145,394,967           148,610,097           152,392,315
- diluted
                                                              
                                                                             
(1)
RECONCILIATION
TABLES FOR         Three Months Ended
NON-GAAP
FINANCIAL
MEASURES
                   3/31/2013           12/31/2012          3/31/2012
Return on
average
tangible
common equity
Return on
average              NM                    8.33        %         8.56        %
shareholders'
equity
Effect of
goodwill and        NM                  2.41        %        2.56        %
intangibles
Return on
average             NM                  10.74       %        11.12       %
tangible
common equity
Average
tangible
equity:
Average
shareholders'      $ 1,142,829           $ 1,200,514           $ 1,188,384
equity
Average
goodwill and        (268,336    )        (269,495    )        (273,360    )
intangibles
Average total
tangible           $ 874,493            $ 931,019            $ 915,024     
common equity
                                                                             
Adjusted net
income
reconciliation
Net income         $ (17,404     )       $ 25,144              $ 25,302
After tax
unrealized
fair value           (1,372      )         164                   (1,069      )
(gain) loss on
subordinated
debentures
After tax loss
on debt             42,177              -                   -           
extinguishment
Adjusted net       $ 23,401             $ 25,308             $ 24,233      
income
                                                                             
Earnings per
share
Net income         $ (0.12       )       $ 0.17                $ 0.17
After tax
unrealized
fair value           (0.01       )         -                     (0.01       )
gain on
subordinated
debentures
After tax loss
on debt             0.29                -                   -           
extinguishment
Adjusted net       $ 0.16               $ 0.17               $ 0.16        
income
                                                                             
(a) The 4th quarter of 2012 includes payment of the 1st quarter 2013 cash
dividend of $0.10 per common share
"NM" - Denotes a value displayed as a percentage is not meaningful



Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                                                                   
Unaudited, dollars
in thousands except     As of
share and per share
data
                        3/31/2013           12/31/2012          9/30/2012         6/30/2012         3/31/2012
BALANCE SHEET -
ASSETS
Cash and due from       $ 87,588              $ 145,688             $ 120,421           $ 115,564           $ 108,752
banks
Interest-earning         93,024              282,440             211,943           221,419           344,427     
deposits with banks
Total cash and cash       180,612               428,128               332,364             336,983             453,179
equivalents
                                                                                                                          
Investment
securities                1,813,348             1,802,213             1,773,579           1,769,359           1,779,613
available-for-sale,
at fair value
Investment
securities                458,041               464,166               472,884             481,341             487,507
held-to-maturity
Other securities          62,159                68,360                63,996              66,194              68,301
Loans held-for-sale       14,934                14,330                22,703              16,908              16,909
                                                                                                                          
Loans                     5,234,839             5,226,552             5,234,151           5,193,859           5,184,747
Allowance for loan       (107,164    )        (110,955    )        (113,542    )      (116,650    )      (121,452    )
losses
Loans, net                5,127,675             5,115,597             5,120,609           5,077,209           5,063,295
                                                                                                                          
Premises and              95,592                96,334                96,349              96,566              95,937
equipment, net
Accrued interest          29,524                28,526                31,448              30,511              31,241
receivable
Bank owned life           144,452               143,242               141,991             140,747             139,507
insurance
Other real estate
owned and other           2,729                 3,029                 7,174               7,201               7,647
repossessed assets
Goodwill                  258,279               258,279               258,279             258,279             258,279
Other intangible          9,533                 10,614                11,852              13,085              14,408
assets, net
Unconsolidated            9,354                 11,347                11,337              10,109              11,699
investments
Other assets             117,545             85,357              90,961            91,372            96,513      
TOTAL ASSETS            $ 8,323,777          $ 8,529,522          $ 8,435,526        $ 8,395,864        $ 8,524,035   
                                                                                                                          
BALANCE SHEET -
LIABILITIES
Non-interest            $ 919,783             $ 891,401             $ 902,295           $ 903,766           $ 884,025
bearing deposits
Interest bearing         5,264,277           5,044,164           5,045,449         4,941,777         5,004,358   
deposits
Total deposits            6,184,060             5,935,565             5,947,744           5,845,543           5,888,383
                                                                                                                          
Customer repurchase       549,894               560,065               534,613             533,389             542,706
agreements
Structured
repurchase                175,000               75,000                75,000              85,000              85,000
agreements
Short-term                -                     100,000               -                   -                   -
borrowings
Federal Home Loan         119,877               464,632               462,720             535,613             615,863
Bank advances (b)
Subordinated              77,321                144,627               144,374             144,475             143,666
debentures
Accrued interest
payable and other        80,827              88,341              56,745            52,084            47,587      
liabilities
TOTAL LIABILITIES        7,186,979           7,368,230           7,221,196         7,196,104         7,323,205   
                                                                                                                          
BALANCE SHEET -
SHAREHOLDERS'
EQUITY
Common stock              1,385,255             1,387,644             1,387,073           1,386,177           1,384,657
Accumulated deficit       (203,084    )         (185,680    )         (181,225    )       (193,715    )       (205,497    )
Accumulated other
comprehensive             15,981                24,329                28,617              25,435              21,670
income
Treasury stock           (61,354     )        (65,001     )        (20,135     )      (18,137     )      -           
TOTAL SHAREHOLDERS'      1,136,798           1,161,292           1,214,330         1,199,760         1,200,830   
EQUITY
                                                                                                                          
TOTAL LIABILITIES
AND SHAREHOLDERS'       $ 8,323,777          $ 8,529,522          $ 8,435,526        $ 8,395,864        $ 8,524,035   
EQUITY
                                                                                                                          
                                                                                                                          
PER SHARE DATA
Book value              $ 7.81                $ 8.00                $ 8.09              $ 7.98              $ 7.88
Tangible book value     $ 5.97                $ 6.15                $ 6.29              $ 6.18              $ 6.09
(2)
Dividends -             $ -             (a)   $ 0.20          (a)   $ 0.09              $ 0.07              $ 0.05
quarterly
Shares outstanding
(end of period, net       145,551,796           145,163,585           150,048,383         150,258,232         152,295,895
of treasury)
                                                                                                 
                                                                                                                          
(2) RECONCILIATION
TABLE FOR NON-GAAP
FINANCIAL MEASURES
Total shareholders'     $ 1,136,798           $ 1,161,292           $ 1,214,330         $ 1,199,760         $ 1,200,830
equity
Goodwill and             (267,812    )        (268,893    )        (270,131    )      (271,364    )      (272,687    )
intangibles
Tangible common         $ 868,986            $ 892,399            $ 944,199          $ 928,396          $ 928,143     
equity
Shares outstanding        145,551,796           145,163,585           150,048,383         150,258,232         152,295,895
Tangible book value     $ 5.97                $ 6.15                $ 6.29              $ 6.18              $ 6.09
per share
                                                                                                                          
Total assets            $ 8,323,777           $ 8,529,522           $ 8,435,526         $ 8,395,864         $ 8,524,035
Goodwill and             (267,812    )        (268,893    )        (270,131    )      (271,364    )      (272,687    )
intangibles
Tangible assets         $ 8,055,965          $ 8,260,629          $ 8,165,395        $ 8,124,500        $ 8,251,348   
Tangible common
equity/tangible           10.79       %         10.80       %         11.56       %       11.43       %       11.25       %
assets
                                                                                                                          
(3) RECONCILIATION
TABLE FOR NON-GAAP
FINANCIAL MEASURES
Adjusted net income     $ 23,401              $ 25,308              $ 25,950            $ 22,975            $ 24,233
(1)
Average assets          $ 8,298,815           $ 8,440,642           $ 8,386,342         $ 8,473,164         $ 8,397,381
Adjusted return on
average assets            1.14        %         1.19        %         1.23        %       1.09        %       1.16        %
(annualized)
                                                                                                                          
(a) The 4th quarter of 2012 includes payment of the 1st quarter 2013 cash dividend of $0.10 per common share
(b) Net of unamortized prepayment fees of $65.5 million and $67.6 million at December 31, 2012 and September 30, 2012,
respectively



Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                                                        
Unaudited,
dollars in
thousands          For the Quarter Ended
except share
and per share
data
                   3/31/2013         12/31/2012        9/30/2012         6/30/2012         3/31/2012
INTEREST
INCOME
Loans,             $ 55,721            $ 59,005            $ 60,269            $ 61,116            $ 62,291
including fees
Investment
securities
Taxable              9,685               10,050              10,525              10,941              11,209
Tax-exempt           7,114               7,233               7,402               7,636               7,781
Deposits with       75                886               148               203               133         
banks
Total interest      72,595            77,174            78,344            79,896            81,414      
income
INTEREST
EXPENSE
Deposits             5,914               6,177               6,472               6,879               7,294
Customer
repurchase           498                 510                 511                 545                 550
agreements
Structured
repurchase           719                 802                 843                 915                 915
agreements
Short-term           41                  1                   -                   -                   -
borrowings
Federal Home
Loan Bank            2,334               4,410               5,105               6,501               6,967
advances
Subordinated        1,465             1,839             1,859             1,857             1,870       
debentures
Total interest      10,971            13,739            14,790            16,697            17,596      
expense
Net interest         61,624              63,435              63,554              63,199              63,818
income
Provision for       1,500             2,000             2,000             2,000             2,000       
loan losses
Net interest
income after        60,124            61,435            61,554            61,199            61,818      
provision for
loan losses
NON-INTEREST
INCOME
Wealth
management           6,831               6,224               6,239               6,005               6,161
income
Service
charges on           3,770               4,140               4,147               3,753               3,823
deposit
accounts
Insurance
commissions          3,267               3,113               3,238               3,211               3,296
and fees
Cash
management and       4,451               4,761               4,626               4,707               4,420
electronic
banking fees
Mortgage             1,855               2,498               2,296               1,511               1,335
banking income
Bank owned
life insurance       1,228               1,326               1,319               1,255               1,209
income
(Losses)
earnings of          (14         )       138                 1,315               108                 (74         )
unconsolidated
investments
Other
operating            2,053               2,555               3,484               993                 2,426
income
Net gains
(losses) from
fair value           2,111               (253        )       101                 (810        )       1,645
changes of
subordinated
debentures
Net gains
(losses) on
sales of             25                  4                   -                   (123        )       -
investment
securities
Impairment
losses on
investment
securities:
Impairment
related losses       -                   -                   -                   (154        )       -
on investment
securities
Non
credit-related
losses on
securities not
expected to be
sold                -                 -                 -                 -                 -           
recognized in
other
comprehensive
income before
tax
Net impairment
losses on           -                 -                 -                 (154        )      -           
investment
securities
Total
non-interest        25,577            24,506            26,765            20,456            24,241      
income
NON-INTEREST
EXPENSE
Salaries,
wages and            30,873              30,789              31,555              31,234              31,381
employee
benefits
Premises and         7,491               7,396               7,226               7,349               6,853
equipment
FDIC insurance       1,213               1,162               1,259               1,211               1,264
Other
operating            12,857              12,915              13,299              12,475              12,942
expenses
Loss on debt        64,888            -                 -                 -                 -           
extinguishment
Total
non-interest        117,322           52,262            53,339            52,269            52,440      
expense
Income (loss)
before income        (31,621     )       33,679              34,980              29,386              33,619
taxes
Income tax
expense             (14,217     )      8,535             8,964             6,938             8,317       
(benefit)
NET INCOME         $ (17,404     )     $ 25,144           $ 26,016           $ 22,448           $ 25,302      
(LOSS)
                                                                                                                 
PER SHARE
Basic earnings     $ (0.12       )     $ 0.17              $ 0.17              $ 0.15              $ 0.17
Diluted            $ (0.12       )     $ 0.17              $ 0.17              $ 0.15              $ 0.17
earnings
Average shares       145,394,967         148,304,167         150,157,622         151,732,402         152,099,546
- basic
Average shares       145,394,967         148,610,097         150,454,749         152,011,995         152,392,315
- diluted
                                                                                                                 
SUPPLEMENTAL
DATA
(annualized,
average)
Return on            NM                  1.19        %       1.23        %       1.07        %       1.21        %
assets
Adjusted
return on            1.14        %       1.19        %       1.23        %       1.09        %       1.16        %
assets (3)
Return on            NM                  8.33        %       8.60        %       7.50        %       8.56        %
total equity
Return on            NM                  8.33        %       8.60        %       7.50        %       8.56        %
common equity
Return on
tangible             NM                  10.74       %       11.10       %       9.69        %       11.12       %
common equity
(1)
Efficiency           58.61       %       56.40       %       56.26       %       58.42       %       57.47       %
ratio (4)
                                                                                        
                                                                                                                 
(4)
RECONCILIATION
TABLE FOR
NON-GAAP
FINANCIAL
MEASURES
                                                                                                                 
Efficiency
Ratio
Calculation
Non-interest       $ 117,322           $ 52,262            $ 53,339            $ 52,269            $ 52,440
expense
Less:
Loss on debt        64,888            -                 -                 -                 -           
extinguishment
Operating          $ 52,434           $ 52,262           $ 53,339           $ 52,269           $ 52,440      
expenses
                                                                                                                 
Net interest
income             $ 66,015            $ 67,909            $ 68,139            $ 67,929            $ 68,645
(taxable
equivalent)
                                                                                                                 
Non-interest         25,577              24,506              26,765              20,456              24,241
income
Less:
Net gains
(losses) from
fair value           2,111               (253        )       101                 (810        )       1,645
changes of
subordinated
debentures
Net gains
(losses) on         25                4                 -                 (277        )      -           
investment
securities
Adjusted           $ 89,456           $ 92,664           $ 94,803           $ 89,472           $ 91,241      
revenue
                                                                                                                 
Efficiency          58.61       %      56.40       %      56.26       %      58.42       %      57.47       %
Ratio
                                                                                                                 


Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                                                        
Unaudited, dollars in
thousands except share
and per share data
                           For the Quarter Ended
CHARGE-OFFS                3/31/2013       12/31/2012      9/30/2012       6/30/2012       3/31/2012
                                                                                                               
Loan charge-offs           $ 6,382          $ 5,876          $ 5,993          $ 7,907          $ 8,722     
Recoveries on loans         (1,091    )      (1,289    )      (885      )      (1,105    )      (1,534    )
Net loan charge-offs       $ 5,291          $ 4,587          $ 5,108          $ 6,802          $ 7,188     
Net loan charge-offs
to average loans            0.41      %      0.35      %      0.39      %      0.53      %      0.56      %
(annualized)
                                                                                                               
NET CHARGE-OFF DETAIL
Commercial and             $ 1,869           $ 2,029           $ 1,116           $ 5,196           $ 1,925
industrial loans
                                                                                                               
Commercial real              282               301               481               595               1,933
estate-permanent
Commercial real             318             266             1,755           (148      )      673       
estate-construction
Total commercial real        600               567               2,236             447               2,606
estate loans
                                                                                                               
Residential mortgages        1,333             988               742               328               560
Home equity lines and        747               515               517               404               1,855
loans
All other consumer          742             488             497             427             242       
loans
Total consumer loans        2,822           1,991           1,756           1,159           2,657     
                                                                                                               
Net loans charged-off      $ 5,291          $ 4,587          $ 5,108          $ 6,802          $ 7,188     
                                                                                                               
                           As of
ASSET QUALITY AND          3/31/2013       12/31/2012      9/30/2012       6/30/2012       3/31/2012
OTHER DATA
                                                                                                               
Non-accrual commercial     $ 23,323          $ 24,653          $ 31,109          $ 33,984          $ 32,485
and industrial loans
                                                                                                               
Non-accrual commercial       5,489             2,984             3,780             2,999             5,156
real estate-permanent
Non-accrual commercial
real                        6,067           5,446           5,149           6,959           14,336    
estate-construction
Total non-accrual
commercial real estate       11,556            8,430             8,929             9,958             19,492
loans
                                                                                                               
Non-accrual                  5,608             7,066             6,242             4,301             4,077
residential mortgages
Non-accrual home             4,364             3,692             3,458             2,555             2,110
equity lines and loans
All other non-accrual       1,595           1,705           1,823           1,753           1,695     
consumer loans
Total non-accrual            11,567            12,463            11,523            8,609             7,882
consumer loans
                                                                                                 
Total non-accrual            46,446            45,546            51,561            52,551            59,859
loans
                                                                                                               
Restructured loans          7,314           8,362           6,726           6,468           6,506     
Total non-performing         53,760            53,908            58,287            59,019            66,365
loans
                                                                                                               
Other real estate
owned and repossessed       2,729           3,029           7,174           7,201           7,647     
assets
Total non-performing        56,489          56,937          65,461          66,220          74,012    
assets
                                                                                                               
Loans 90+ days past         2,324           2,027           2,628           3,426           1,588     
due & still accruing
Total non-performing
assets and loans 90+       $ 58,813         $ 58,964         $ 68,089         $ 69,646         $ 75,600    
days past due
                                                                                                 
Allowance for loan         $ 107,164        $ 110,955        $ 113,542        $ 116,650        $ 121,452   
losses
Allowance for loan
losses/non-performing       199.3     %      205.8     %      194.8     %      197.6     %      183.0     %
loans
Allowance for loan
losses/non-performing       182.2     %      188.2     %      166.8     %      167.5     %      160.7     %
assets and loans 90+
days past due
Allowance for loan          2.04      %      2.12      %      2.16      %      2.24      %      2.33      %
losses/total loans
Provision/charge-offs,      28.4      %      43.6      %      39.2      %      29.4      %      27.8      %
net
Classified loans           $ 242,560        $ 261,293        $ 296,213        $ 301,542        $ 347,033   
Classified loans/total      4.62      %      4.99      %      5.63      %      5.79      %      6.67      %
loans
Delinquent loans (c)       $ 24,110         $ 24,048         $ 23,519         $ 24,144         $ 24,068    
Delinquent loans/total      0.46      %      0.46      %      0.45      %      0.46      %      0.46      %
loans
                                                                                                               
                                                                                                               
                           As of
REGULATORY CAPITAL         3/31/2013       12/31/2012      9/30/2012       6/30/2012       3/31/2012
DATA
                                                                                                               
Tier 1 Capital             $ 927,397        $ 982,148        $ 1,024,888      $ 1,008,052      $ 1,005,009 
Tier 1 Leverage Ratio       11.63     %      12.16     %      12.78     %      12.44     %      12.53     %
Tier 1 Ratio (%)            15.41     %      16.54     %      17.45     %      17.45     %      17.46     %
Total Capital              $ 1,002,999      $ 1,056,835      $ 1,098,814      $ 1,080,807      $ 1,077,587 
Total Capital Ratio         16.67     %      17.80     %      18.70     %      18.71     %      18.72     %
(%)
Total Risk-Weighted        $ 6,016,630      $ 5,938,708      $ 5,874,448      $ 5,776,537      $ 5,757,306 
Assets
                                                                                                               
(c) 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 3/31/2013
                                                                       
Unaudited, dollars in thousands except share and per share data
                                                                                    
PERIOD END        As of
BALANCES:
                  3/31/2013     12/31/2012    9/30/2012     6/30/2012     3/31/2012
Earning
Assets /
Liabilities
Loan
portfolio
composition
(regulatory):
Commercial /      $ 857,728       $ 868,135       $ 846,484       $ 856,237       $ 853,379
industrial
Commercial
real estate         1,863,381       1,838,681       1,803,532       1,759,792       1,753,986
(d)
Residential         1,191,075       1,234,425       1,262,897       1,262,633       1,269,505
mortgage
Real estate
construction        180,298         161,341         189,293         194,942         210,976
and land
development
Home equity         776,166         782,717         776,023         765,902         756,803
Consumer            201,349         208,856         207,333         207,999         210,069
Other loans        179,776        146,727        171,292        163,262        146,938
Total loans         5,249,773       5,240,882       5,256,854       5,210,767       5,201,656
                                                                                    
                                                                                    
Investment
securities          2,333,548       2,334,739       2,310,459       2,316,894       2,335,421
and other
securities
Other earning      93,024         282,440        211,943        221,419        344,427
assets
Total earning
assets (net       $ 7,569,181     $ 7,747,106     $ 7,665,714     $ 7,632,430     $ 7,760,052
of loan loss
reserve)
(d) Includes
owner
occupied
                                                                                    
Loan
portfolio
composition
(internal):
Commercial &
industrial
loans
Business
purpose, real     $ 891,229       $ 886,160       $ 879,326       $ 879,413       $ 864,284
estate
secured
Business
purpose, not        1,000,141       977,875         979,042         975,852         963,641
secured by
real estate
Owner
occupied
commercial
real estate
Permanent           604,278         599,729         572,298         572,686         572,103
Construction        32,603          30,523          31,181          36,451          38,546
/ development
Leasing            1,128          1,568          2,102          2,670          3,330
Total
commercial &        2,529,379       2,495,855       2,463,949       2,467,072       2,441,904
industrial
loans
                                                                                    
Commercial
real estate
Non-owner
occupied
Permanent           898,519         907,760         918,511         874,570         878,499
Construction       145,324        125,878        140,889        140,751        151,697
/ development
Total
commercial          1,043,843       1,033,638       1,059,400       1,015,321       1,030,196
real estate
                                                                                    
Consumer
loans
Residential
mortgage
(personal
purpose)
Permanent           649,522         666,274         683,694         688,171         686,974
Construction       6,009          5,498          6,079          6,806          7,835
Total
residential         655,531         671,772         689,773         694,977         694,809
mortgages
                                                                                    
Home equity
loans and
direct              237,088         254,014         273,359         291,383         315,419
installment
loans
Home equity
lines of           507,347        500,372        478,628        452,599        421,897
credit
Total home
equity lines        744,435         754,386         751,987         743,982         737,316
and loans
                                                                                    
Private
banking             99,154          103,806         103,006         107,398         114,667
credit lines
Indirect
vehicle loans      162,497        167,095        166,036        165,109        165,855
and other
All other
consumer           261,651        270,901        269,042        272,507        280,522
loans
Total
consumer           1,661,617      1,697,059      1,710,802      1,711,466      1,712,647
loans
                                                                                    
Loans               5,234,839       5,226,552       5,234,151       5,193,859       5,184,747
                                                                                    
Loans               14,934          14,330          22,703          16,908          16,909
held-for-sale
                                                                           
Total loans       $ 5,249,773     $ 5,240,882     $ 5,256,854     $ 5,210,767     $ 5,201,656
                                                                                    
Deposit
composition:
Savings           $ 520,223       $ 493,386       $ 485,283       $ 497,640       $ 495,191
NOW accounts        1,471,185       1,472,985       1,498,344       1,317,399       1,294,591
Money market        1,647,863       1,642,803       1,600,164       1,641,947       1,698,427
accounts
CDs less than       991,380         1,017,925       1,036,112       1,063,688       1,089,601
$100k
CDs $100k or       633,626        417,065        425,546        421,103        426,548
greater
Total
interest           5,264,277      5,044,164      5,045,449      4,941,777      5,004,358
bearing
deposits
                                                                                    
Non-interest
bearing            919,783        891,401        902,295        903,766        884,025
deposits
                                                                                    
Total             $ 6,184,060     $ 5,935,565     $ 5,947,744     $ 5,845,543     $ 5,888,383
deposits
                                                                                    


Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                                                                                          
Unaudited, dollars in thousands except share and per share data
                   Quarterly, as of
                   3/31/2013                12/31/2012               9/30/2012                6/30/2012                3/31/2012
                   Avg Bal         Yield      Avg Bal         Yield      Avg Bal         Yield      Avg Bal         Yield      Avg Bal         Yield
                                                                                                                                                    
Total loans*       $ 5,223,015     4.37 %     $ 5,206,227     4.55 %     $ 5,191,136     4.66 %     $ 5,196,803     4.78 %     $ 5,179,220     4.89 %
Investment           2,325,225     3.60 %       2,323,243     3.63 %       2,309,646     3.77 %       2,319,392     3.93 %       2,318,109     4.02 %
securities*
Interest
earning             119,834       0.25 %      276,078       1.28 %      255,121       0.23 %      334,935       0.24 %      278,140       0.19 %
deposits
                                                                                                                                                    
Total earning       7,668,074     4.07 %      7,805,548     4.16 %      7,755,903     4.25 %      7,851,130     4.34 %      7,775,469     4.46 %
assets
Total assets        8,298,815                 8,440,642                 8,386,342                 8,473,164                 8,397,381
                                                                                                                                                    
Savings              505,513       0.11 %       488,195       0.11 %       490,020       0.11 %       494,800       0.12 %       471,562       0.13 %
NOW accounts         1,439,387     0.14 %       1,463,488     0.14 %       1,402,593     0.14 %       1,343,961     0.15 %       1,238,704     0.15 %
Money market         1,645,838     0.30 %       1,630,449     0.30 %       1,623,102     0.32 %       1,664,315     0.37 %       1,679,232     0.40 %
accounts
CDs                 1,507,667     1.10 %      1,454,415     1.17 %      1,468,539     1.23 %      1,499,016     1.27 %      1,542,539     1.31 %
                                                                                                                                                    
Total interest
bearing             5,098,405     0.47 %      5,036,547     0.49 %      4,984,254     0.52 %      5,002,092     0.55 %      4,932,037     0.59 %
deposits
                                                                                                                                                    
Non-interest
bearing             876,700                   886,858                   897,017                   891,739                   852,730
deposits
Total deposits      5,975,105     0.40 %      5,923,405     0.41 %      5,881,271     0.44 %      5,893,831     0.47 %      5,784,767     0.51 %
                                                                                                                                                    
Customer
repurchase           547,706       0.37 %       551,334       0.37 %       532,065       0.38 %       525,142       0.42 %       524,575       0.42 %
agreements
Structured
repurchase           135,454       2.15 %       75,000        4.25 %       78,370        4.28 %       85,000        4.33 %       85,000        4.33 %
agreements
Short-term           39,200        0.42 %       1,087         0.37 %       272           0.00 %       -             0.00 %       -             0.00 %
borrowings
Federal Home
Loan Bank            262,067       3.61 %       463,397       3.79 %       496,438       4.09 %       575,725       4.54 %       615,983       4.55 %
advances (b)
Subordinated        125,207       4.75 %      144,377       5.07 %      144,472       5.12 %      143,683       5.20 %      145,274       5.18 %
debentures
Total deposits      7,084,739     0.63 %      7,158,600     0.76 %      7,132,888     0.82 %      7,223,381     0.93 %      7,155,599     0.99 %
and borrowings
Total interest
bearing            $ 6,208,039     0.72 %     $ 6,271,742     0.87 %     $ 6,235,871     0.94 %     $ 6,331,642     1.06 %     $ 6,302,869     1.12 %
liabilities
                                                                                                                                                    
Net interest                       3.49 %                     3.46 %                     3.50 %                     3.48 %                     3.55 %
margin (FTE)
                                                                                                                                                    
Wealth assets:
Assets under       $ 4,615,379                $ 4,445,086                $ 4,500,843                $ 4,361,134                $ 4,382,922
administration
Assets under         2,328,042                  2,256,319                  2,319,220                  2,284,489                  2,269,351
management
(included
above)
                                                                                                                                                    
*Fully taxable equivalent ("FTE") basis, using a 35% effective tax rate.



Financial Update for National Penn Bancshares, Inc. (NPBC) for 3/31/2013
                                                                
Unaudited
                                                                           
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
                                                                           
                  Quarterly, as of
                  3/31/2013   12/31/2012   9/30/2012   6/30/2012   3/31/2012
                                                                           
PA
Total number
of retail         118           119            119           120           120
branch
offices
Total number
of insured
subsidiaries
(Bank &
Thrift            1             1              1             1             1
subsidiaries)
Total number      124           124            124           122           122
of ATMs
                                                                           
MD
Total number
of retail         1             1              1             1             1
branch
offices
Total number
of insured
subsidiaries
(Bank &
Thrift            -             -              -             -             -
subsidiaries)
Total number      1             1              1             1             1
of ATMs

TOTAL
Total number
of retail         119           120            120           121           121
branch
offices
Total number
of insured
subsidiaries
(Bank &
Thrift            1             1              1             1             1
subsidiaries)
Total number      125           125            125           123           123
of ATMs
                                                                           
EOP employees
(full-time        1,657         1,648          1,661         1,690         1,681
equivalent)
                                                                           

Contact:

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

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