National Penn Bancshares, Inc. Reports Second Quarter 2015 Results

  • Earnings per diluted share of $0.19 for the second quarter of 2015 compared to $0.19 for the prior quarter
  • Earnings per diluted share of $0.38 for the first half of 2015 increases 8.6% from the same period last year
  • Return on average assets of 1.14% and return on tangible common equity of 13.32% for the second quarter of 2015
  • Commercial loans increased approximately 5% on an annualized basis from the prior quarter
  • Operating expenses remain well controlled; second quarter efficiency ratio of 57%
  • Sustained strength in asset quality and capital levels
  • Third quarter 2015 cash dividend of $0.11 cents per common share declared

ALLENTOWN, Pa.--()--National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income of $27.2 million, or $0.19 per diluted share, for the second quarter of 2015, compared to $26.7 million or $0.19 per diluted share in the first quarter of 2015. Net income for the first half of 2015 was $54.0 million compared to $48.9 million in the prior year period, while earnings per diluted share of $0.38 for the first half of 2015 increased 8.6% from the comparable period last year. Return on average assets was 1.14% and return on tangible common equity was 13.14%, for the first six months of 2015.

“We are pleased with the consistency of our operating performance in this continued low interest rate environment,” said Scott V. Fainor, president and CEO of National Penn. “The strength of our balance sheet continues to position us well to manage capital and to create long-term shareholder value.”

Net Interest Margin

Net interest income was $66.8 million for the second quarter of 2015, compared to $68.7 million for the first quarter of 2015. Excluding the benefit of a non-recurring investment income last quarter, our net interest margin of 3.24% for the second quarter of 2015 declined 8 basis points from the prior quarter. The net interest margin was further impacted by increased mortgage prepayment speeds and refinancing, as mortgage rates declined further towards the latter part of the first quarter.

On an annualized basis, period end commercial loans increased approximately 5% while consumer loans increased approximately 3% from last quarter. Based upon the higher level of mortgage refinance activity and the low interest rate environment, our mortgage originations increased by approximately one third in the first half of 2015. However, consistent with our interest rate risk profile and our strategy to sell long-term fixed rate mortgage loans, balances in the mortgage loan portfolio decreased approximately 9% (annualized basis) during this quarter and consistent with the trend for the first six months of 2015.

Asset Quality

Non-performing loans decreased 19% from last quarter, resulting in the allowance for loan losses to increase to 180% of non-performing loans at June 30, 2015, compared to 154% at the end of last quarter. While non-performing loans to loans decreased to 0.76% at the end of the second quarter from 0.95% at the end of last quarter, net charge-offs totaled $5.9 million this quarter compared to $1.9 million last quarter, as the second quarter reflects the resolution of a large non-performing commercial loan for which a specific loan loss reserve was recorded in the fourth quarter of last year. The provision for loan losses of $1.0 million for the second quarter was consistent with the prior quarter.

Other Income and Operating Expenses

Non-interest income totaled $24.7 million in the second quarter of 2015, compared to $22.9 million in the first quarter of 2015, driven primarily by the increase in the previously discussed mortgage banking activity, coupled with increases in wealth management income and electronic banking fees.

National Penn continues to effectively manage its operating expenses, as evidenced by an efficiency ratio of 57% this quarter and for the first six months of 2015. The level of full-time equivalent employees for the second quarter of 2015 remained at the same level as the second quarter of 2014, despite the acquisition of TF Financial in the fourth quarter of 2014.

Capital

At June 30, 2015, the strength of National Penn’s balance sheet was further evidenced by Tier 1 common and tangible common equity to tangible assets ratios of 12.06% and 8.90%, respectively.

As previously announced, National Penn’s Board of Directors declared a third quarter cash dividend of eleven cents ($0.11) per common share, to shareholders of record as of Monday, August 3, 2015, payable on Monday, August 17, 2015.

“Although the net interest margin compression was greater than anticipated this quarter due to the mortgage refinance activity, we remain focused on managing our net interest margin and controlling operating expenses while leveraging capital based on the strength of our balance sheet,” said Scott V. Fainor. “Our team remains focused on executing on strategies to enhance long-term shareholder value.”

About National Penn Bancshares, Inc.:

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

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

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

Statement Regarding Non-GAAP Financial Measures

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

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

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

Cautionary Statement Regarding Forward-Looking Information

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

National Penn’s business and operations are subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: difficult conditions in the capital markets and the economy generally, regulatory requirements or other actions mandated by National Penn’s regulators, recent and ongoing changes to the state and federal regulatory schemes under which National Penn and other financial services companies operate (including the Dodd-Frank Act and regulations adopted or to be adopted to implement that Act), delayed improvement in the credit quality of loans, the effect of credit risk exposure, the ability to strategically manage our capital position and to raise capital, allowance for loan losses may prove inadequate, variations in interest rates, the geographic concentration of National Penn’s operations, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, competition for personnel and from other financial institutions, interruptions or breaches of National Penn’s security systems, the development and maintenance of National Penn’s information technology, potential dilution of National Penn’s shareholders, the ability of National Penn and its subsidiaries to pay dividends, severe weather and natural disasters, and the nature and frequency of litigation and other similar proceedings to which National Penn may be a party. These risks and others are described in greater detail in National Penn’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as well as in National Penn’s Quarterly Reports on Form 10-Q and other documents filed by National Penn with the SEC after the date thereof. National Penn makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.

 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
                   
Unaudited, dollars in thousands except share and per share data
As of
6/30/2015 3/31/2015 6/30/2014
SUMMARY BALANCE SHEET
Total assets $ 9,604,314 $ 9,597,954 $ 8,618,373
Investment securities and other securities 2,507,615 2,537,170 2,420,509
Total loans 6,168,481 6,131,444 5,406,031
Deposits 6,733,484 6,697,262 6,108,483
Borrowings 1,631,537 1,660,576 1,316,253
Shareholders' equity 1,137,678 1,131,095 1,101,408
Tangible book value per common share (2) $ 5.90 $ 5.86 $ 6.02
Tangible common equity / tangible assets (2) 8.90 % 8.83 % 10.03 %
 
 
Three Months Ended Six Months Ended
6/30/2015 3/31/2015 6/30/2014 6/30/2015 6/30/2014
EARNINGS
Total interest income $ 75,417 $ 77,094 $ 70,528 $ 152,511 $ 140,661
Total interest expense   8,582     8,412     7,577     16,994     15,421  
Net interest income 66,835 68,682 62,951 135,517 125,240
Provision for loan losses   1,000     1,000     -     2,000     1,251  
Net interest income after provision for loan losses 65,835 67,682 62,951 133,517 123,989
Net gains on investment securities - - - - 8
Other non-interest income 24,687 22,930 24,396 47,617 45,866
Other non-interest expense   53,960     54,582     52,114     108,542     104,451  
Income before income taxes 36,562 36,030 35,233 72,592 65,412
Income tax expense   9,324     9,303     9,034     18,627     16,503  
Net income $ 27,238   $ 26,727   $ 26,199   $ 53,965   $ 48,909  
 
PERFORMANCE RATIOS
Net interest margin 3.24 % 3.36 % 3.43 % 3.30 % 3.43 %
Return on average assets 1.14 % 1.14 % 1.23 % 1.14 % 1.16 %
Return on average shareholders' equity 9.66 % 9.45 % 9.67 % 9.55 % 9.04 %
Return on average tangible common equity (1) 13.32 % 12.96 % 12.77 % 13.14 % 11.94 %
Efficiency ratio (4) 56.59 % 57.10 % 57.02 % 56.85 % 58.28 %
 
PER SHARE
Basic earnings $ 0.19 $ 0.19 $ 0.19 $ 0.38 $ 0.35
Diluted earnings 0.19 0.19 0.19 0.38 0.35
Dividends 0.11 0.11 0.10 0.22 0.20
Average shares - basic 140,126,314 142,911,230 139,191,923 141,511,079 140,270,062
Average shares - diluted 140,752,713 143,513,420 139,719,980 142,125,440 140,792,564
                                                   
 
(1) RECONCILIATION TABLES FOR NON-GAAP FINANCIAL MEASURES
Three Months Ended Six Months Ended
6/30/2015 3/31/2015 6/30/2014 6/30/2015 6/30/2014
Return on average tangible common equity
Return on average shareholders' equity 9.66 % 9.45 % 9.67 % 9.55 % 9.04 %
Effect of goodwill and intangibles   3.66 %   3.51 %   3.10 %   3.59 %   2.90 %
Return on average tangible common equity   13.32 %   12.96 %   12.77 %   13.14 %   11.94 %
Average tangible equity
Average shareholders' equity $ 1,130,896 $ 1,147,152 $ 1,087,204 $ 1,138,979 $ 1,090,482
Average goodwill and intangibles   (310,601 )   (310,812 )   (264,082 )   (310,706 )   (264,426 )
Average tangible common equity $ 820,295   $ 836,340   $ 823,122   $ 828,273   $ 826,056  
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
                   
Unaudited, dollars in thousands except share and per share data
As of
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
ASSETS
Cash and due from banks $ 120,010 $ 102,500 $ 110,784 $ 96,856 $ 138,530
Interest-earning deposits with banks   118,375     131,166     303,055     98,512     73,384  
Total cash and cash equivalents 238,385 233,666 413,839 195,368 211,914
 
Investment securities available-for-sale, at fair value 1,598,351 1,585,671 1,530,661 1,461,586 1,463,479
Investment securities held-to-maturity 842,192 884,211 921,042 864,234 892,536
Other securities 67,072 67,288 67,512 55,931 64,494
Loans held-for-sale 9,693 11,239 4,178 3,890 2,275
 
Loans 6,158,788 6,120,205 6,142,279 5,465,952 5,403,756
Allowance for loan losses   (84,816 )   (89,729 )   (90,675 )   (88,927 )   (89,848 )
Loans, net 6,073,972 6,030,476 6,051,604 5,377,025 5,313,908
 
Premises and equipment, net 111,353 113,217 116,414 110,392 110,972
Accrued interest receivable 29,066 30,018 29,491 27,839 26,953
Bank owned life insurance 199,656 198,123 171,775 151,443 150,237
Other real estate owned and other repossessed assets 5,186 5,474 4,867 1,561 1,758
Goodwill 302,940 302,940 302,244 258,279 258,279
Other intangible assets, net 7,353 7,985 8,757 4,803 5,476
Unconsolidated investments 8,582 8,101 8,124 8,167 8,205
Other assets   110,513     119,545     120,357     112,482     107,887  
TOTAL ASSETS $ 9,604,314   $ 9,597,954   $ 9,750,865   $ 8,633,000   $ 8,618,373  
 
LIABILITIES
Non-interest bearing deposits $ 1,200,631 $ 1,142,192 $ 1,085,158 $ 990,438 $ 1,031,271
Interest bearing deposits   5,532,853     5,555,070     5,644,587     5,297,498     5,077,212  

Total deposits

6,733,484 6,697,262 6,729,745 6,287,936 6,108,483
 
Customer repurchase agreements 539,850 603,880 607,705 580,290 587,686
Repurchase agreements - - - - 50,000
Federal Home Loan Bank advances and other borrowings 889,366 854,375 910,378 359,155 601,246
Senior long-term debt 125,000 125,000 125,000 125,000 -
Subordinated debentures 77,321 77,321 77,321 77,321 77,321
Accrued interest payable and other liabilities   101,615     109,021     112,077     96,114     92,229  
TOTAL LIABILITIES   8,466,636     8,466,859     8,562,226     7,525,816     7,516,965  
 
SHAREHOLDERS' EQUITY
Common stock 1,388,341 1,387,136 1,390,130 1,388,513 1,387,304
Accumulated deficit (112,913 ) (124,740 ) (135,246 ) (143,514 ) (154,909 )
Accumulated other comprehensive loss (11,686 ) (3,989 ) (10,991 ) (7,922 ) (474 )
Treasury stock   (126,064 )   (127,312 )   (55,254 )   (129,893 )   (130,513 )
TOTAL SHAREHOLDERS' EQUITY   1,137,678     1,131,095     1,188,639     1,107,184     1,101,408  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,604,314   $ 9,597,954   $ 9,750,865   $ 8,633,000   $ 8,618,373  
 
 
PER SHARE DATA
Book value $ 8.12 $ 8.08 $ 8.08 $ 7.95 $ 7.91
Tangible book value (2) $ 5.90 $ 5.86 $ 5.96 $ 6.06 $ 6.02
Dividends - quarterly $ 0.11 $ 0.11 $ 0.11 $ 0.10 $ 0.10
Shares outstanding (end of period, net of treasury) 140,184,234 140,068,761 147,136,084 139,305,117 139,240,318
                                                   
 
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Total shareholders' equity $ 1,137,678 $ 1,131,095 $ 1,188,639 $ 1,107,184 $ 1,101,408
Goodwill and intangibles   (310,293 )   (310,925 )   (311,001 )   (263,082 )   (263,755 )
Tangible common equity $ 827,385   $ 820,170   $ 877,638   $ 844,102   $ 837,653  
Shares outstanding 140,184,234 140,068,761 147,136,084 139,305,117 139,240,318
Tangible book value per share $ 5.90 $ 5.86 $ 5.96 $ 6.06 $ 6.02
 
Total assets $ 9,604,314 $ 9,597,954 $ 9,750,865 $ 8,633,000 $ 8,618,373
Goodwill and intangibles   (310,293 )   (310,925 )   (311,001 )   (263,082 )   (263,755 )
Tangible assets $ 9,294,021   $ 9,287,029   $ 9,439,864   $ 8,369,918   $ 8,354,618  
Tangible common equity/tangible assets 8.90 % 8.83 % 9.30 % 10.08 % 10.03 %
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
                           
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Six Months Ended
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014 6/30/2015 6/30/2014
INTEREST INCOME
Loans, including fees $ 58,077 $ 58,424 $ 58,532 $ 53,857 $ 52,476 $ 116,501 $ 105,058
Investment securities
Taxable 11,457 12,512 11,273 11,365 11,694 23,969 22,815
Tax-exempt 5,843 6,120 6,129 6,114 6,329 11,963 12,733
Deposits with banks   40     38     56     32     29     78     55  
Total interest income   75,417     77,094     75,990     71,368     70,528     152,511     140,661  
INTEREST EXPENSE
Deposits 4,618 4,521 4,616 4,483 4,671 9,139 9,444
Customer repurchase agreements 402 405 432 399 400 807 793
Repurchase agreements - - - 197 608 - 1,209
Federal Home Loan Bank advances and other borrowings 1,659 1,593 1,398 1,297 1,370 3,252 2,918
Senior long-term debt 1,366 1,366 1,365 227 - 2,732 -
Subordinated debentures   537     527     535     535     528     1,064     1,057  
Total interest expense   8,582     8,412     8,346     7,138     7,577     16,994     15,421  
Net interest income 66,835 68,682 67,644 64,230 62,951 135,517 125,240
Provision for loan losses   1,000     1,000     3,500     1,000     -     2,000     1,251  
Net interest income after provision for loan losses   65,835     67,682     64,144     63,230     62,951     133,517     123,989  
NON-INTEREST INCOME
Wealth management 6,854 6,650 7,123 6,945 7,133 13,504 13,999
Service charges on deposit accounts 3,328 3,307 3,725 3,826 3,534 6,635 6,918
Insurance commissions and fees 3,219 3,182 2,979 3,029 3,209 6,401 6,806
Cash management and electronic banking fees 5,153 4,714 4,951 4,720 4,869 9,867 9,395
Mortgage banking 1,652 1,374 1,213 987 936 3,026 1,652
Bank owned life insurance 1,563 1,374 1,341 1,238 1,218 2,937 2,416
Earnings (losses) of unconsolidated investments 589 - (43 ) (20 ) (9 ) 589 (486 )
Gain on sale of non-performing loans - - - - 946 - 946
Other operating income 2,329 2,329 2,128 2,146 2,560 4,658 4,220
Net gains on sales of investment securities   -     -     13     -     -     -     8  
Total non-interest income   24,687     22,930     23,430     22,871     24,396     47,617     45,874  
NON-INTEREST EXPENSE
Salaries, wages and employee benefits 30,123 29,998 27,836 29,655 28,887 60,121 58,088
Premises and equipment 8,508 9,147 8,254 7,769 7,709 17,655 15,921
FDIC insurance 1,313 1,458 1,344 1,140 1,200 2,771 2,517
Other operating expenses 14,016 13,979 14,402 13,594 14,318 27,995 27,925
Acquisition related expenses   -     -     2,878     -     -     -     -  
Total non-interest expense   53,960     54,582     54,714     52,158     52,114     108,542     104,451  
Income before income taxes 36,562 36,030 32,860 33,943 35,233 72,592 65,412
Income tax expense   9,324     9,303     8,383     8,623     9,034     18,627     16,503  
NET INCOME $ 27,238   $ 26,727   $ 24,477   $ 25,320   $ 26,199   $ 53,965   $ 48,909  
 
PER SHARE
Basic earnings $ 0.19 $ 0.19 $ 0.17 $ 0.18 $ 0.19 $ 0.38 $ 0.35
Diluted earnings $ 0.19 $ 0.19 $ 0.17 $ 0.18 $ 0.19 $ 0.38 $ 0.35
Adjusted diluted earnings $ 0.19 $ 0.19 $ 0.18 $ 0.18 $ 0.19 $ 0.38 $ 0.35
Average shares - basic 140,126,314 142,911,230 145,277,964 139,275,683 139,191,923 141,511,079 140,270,062
Average shares - diluted 140,752,713 143,513,420 145,850,861 139,825,134 139,719,980 142,125,440 140,792,564
 
SUPPLEMENTAL DATA (annualized, average)
Return on assets 1.14 % 1.14 % 1.05 % 1.17 % 1.23 % 1.14 % 1.16 %
Adjusted return on assets (3) 1.14 % 1.14 % 1.14 % 1.17 % 1.23 % 1.14 % 1.16 %
Return on shareholders' equity 9.66 % 9.45 % 8.30 % 9.11 % 9.67 % 9.55 % 9.04 %
Return on tangible common equity (1) 13.32 % 12.96 % 11.09 % 11.97 % 12.77 % 13.14 % 11.94 %
Adjusted return on tangible common equity 13.32 % 12.96 % 12.02 % 11.97 % 12.77 % 13.14 % 11.94 %
Efficiency ratio (4) 56.59 % 57.10 % 54.53 % 57.29 % 57.02 % 56.85 % 58.28 %
                                                                       
 
(3) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Adjusted net income reconciliation
Net income $ 27,238 $ 26,727 $ 24,477 $ 25,320 $ 26,199 $ 53,965 $ 48,909
After tax acquisition related expenses   -     -     2,054     -     -     -     -  
Adjusted net income $ 27,238   $ 26,727   $ 26,531   $ 25,320   $ 26,199   $ 53,965   $ 48,909  
 
Adjusted diluted earnings per share
Diluted earnings per share $ 0.19 $ 0.19 $ 0.17 $ 0.18 $ 0.19 $ 0.38 $ 0.35
After tax acquisition related expenses   -     -     0.01     -     -     -     -  
Adjusted diluted earnings per share $ 0.19   $ 0.19   $ 0.18   $ 0.18   $ 0.19   $ 0.38   $ 0.35  
 
Adjusted net income $ 27,238 $ 26,727 $ 26,531 $ 25,320 $ 26,199 $ 53,965 $ 48,909
Average assets $ 9,544,673 $ 9,524,279 $ 9,269,113 $ 8,569,734 $ 8,512,845 $ 9,534,532 $ 8,496,357
Adjusted return on average assets (annualized) 1.14 % 1.14 % 1.14 % 1.17 % 1.23 % 1.14 % 1.16 %
 
(4) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
 
Efficiency ratio calculation
Non-interest expense $ 53,960 $ 54,582 $ 54,714 $ 52,158 $ 52,114 $ 108,542 $ 104,451
Less:
Acquisition related expenses   -     -     2,878     -     -     -     -  
Operating expenses $ 53,960   $ 54,582   $ 51,836   $ 52,158   $ 52,114   $ 108,542   $ 104,451  
 
Net interest income (taxable equivalent) $ 70,660 $ 72,654 $ 71,641 $ 68,166 $ 66,992 $ 143,314 $ 133,343
 
Non-interest income 24,687 22,930 23,430 22,871 24,396 47,617 45,874
Less:
Net gains on investment securities   -     -     13     -     -     -     8  
Adjusted revenue $ 95,347   $ 95,584   $ 95,058   $ 91,037   $ 91,388   $ 190,931   $ 179,209  
 
Efficiency ratio 56.59 % 57.10 % 54.53 % 57.29 % 57.02 % 56.85 % 58.28 %
 
 
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
                           
Unaudited, dollars in thousands except share and per share data
For the Quarter Ended For the Six Months Ended
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014 6/30/2015 6/30/2014
CHARGE-OFFS
Loan charge-offs $ 7,789 $ 3,074 $ 3,781 $ 3,097 $ 5,125 $ 10,863 $ 10,143
Recoveries on loans   (1,876 )   (1,128 )   (2,029 )   (1,176 )   (1,721 )   (3,004 )   (2,373 )
Net loan charge-offs $ 5,913   $ 1,946   $ 1,752   $ 1,921   $ 3,404   $ 7,859   $ 7,770  
Net loan charge-offs to average total loans (annualized) 0.39 % 0.13 % 0.12 % 0.14 % 0.25 % 0.26 % 0.29 %
 
NET CHARGE-OFF DETAIL
Commercial and industrial loans $ 4,874 $ 422 $ (537 ) $ 19 $ 2,049 $ 5,296 $ 3,199
 
Commercial real estate-permanent (308 ) 601 245 1,072 599 293 1,022
Commercial real estate-construction   (92 )   (95 )   (628 )   (221 )   90     (187 )   120  
Total commercial real estate loans (400 ) 506 (383 ) 851 689 106 1,142
 
Residential mortgages 70 248 1,139 138 162 318 1,843
Home equity lines and loans 1,064 230 723 355 389 1,294 1,173
All other consumer loans   305     540     810     558     115     845     413  
Total consumer loans   1,439     1,018     2,672     1,051     666     2,457     3,429  
 
Net loans charged-off $ 5,913   $ 1,946   $ 1,752   $ 1,921   $ 3,404   $ 7,859   $ 7,770  
 
As of
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
ASSET QUALITY AND OTHER DATA
Non-accrual commercial and industrial loans $ 8,923 $ 21,107 $ 21,931 $ 11,205 $ 9,641
 
Non-accrual commercial real estate-permanent 7,160 6,781 7,915 2,887 4,811
Non-accrual commercial real estate-construction   8,443     8,204     8,113     8,547     9,674  
Total non-accrual commercial real estate loans 15,603 14,985 16,028 11,434 14,485
 
Non-accrual residential mortgages 8,307 8,326 7,706 6,803 6,265
Non-accrual home equity lines and loans 4,027 3,762 3,426 3,961 3,631
All other non-accrual consumer loans   1,387     1,458     1,746     1,467     1,495  
Total non-accrual consumer loans 13,721 13,546 12,878 12,231 11,391
                             
Total non-accrual loans 38,247 49,638 50,837 34,870 35,517
 
Restructured loans   8,792     8,557     8,255     7,996     7,969  
Total non-performing loans 47,039 58,195 59,092 42,866 43,486
 
Acquired other real estate owned 3,450 3,450 3,675 - -
Other real estate owned and repossessed assets   1,736     2,024     1,192     1,561     1,758  
Total other real estate owned and repossessed assets   5,186     5,474     4,867     1,561     1,758  
Total non-performing assets 52,225 63,669 63,959 44,427 45,244
 
Loans 90+ days past due & still accruing   1,903     2,230     2,183     2,961     2,097  
Total non-performing assets and loans 90+ days past due $ 54,128   $ 65,899   $ 66,142   $ 47,388   $ 47,341  
 
Allowance for loan losses $ 84,816   $ 89,729   $ 90,675   $ 88,927   $ 89,848  
Allowance for loan losses/non-performing loans   180.3 %   154.2 %   153.4 %   207.5 %   206.6 %

Allowance for loan losses/non-performing assets and loans 90+ days past due (excluding acquired other real estate owned)

  167.4 %   143.7 %   145.2 %   187.7 %   189.8 %

Allowance for loan losses/non-performing assets and loans 90+ days past due

  156.7 %   136.2 %   137.1 %   187.7 %   189.8 %
Allowance for loan losses/total originated loans   1.50 %   1.61 %   1.63 %   1.63 %   1.66 %
Allowance for loan losses/total loans   1.37 %   1.46 %   1.48 %   1.63 %   1.66 %
Provision/charge-offs, net   16.9 %   51.4 %   199.8 %   52.1 %   0.0 %
 
 
Originated classified loans $ 124,837 $ 142,892 $ 153,255 $ 169,790 $ 173,610
Acquired classified loans   2,671     1,715     9,534     -     -  
Total classified loans $ 127,508   $ 144,607   $ 162,789   $ 169,790   $ 173,610  
 
Originated classified loans/total originated loans   2.21 %   2.56 %   2.75 %   3.10 %   3.21 %
Total classified loans/total loans   2.07 %   2.36 %   2.65 %   3.10 %   3.21 %
Delinquent loans (a) $ 16,943   $ 15,968   $ 22,300   $ 20,171   $ 17,316  
Delinquent loans/total loans   0.27 %   0.26 %   0.36 %   0.37 %   0.32 %
Non-performing loans/total loans   0.76 %   0.95 %   0.96 %   0.78 %   0.80 %
 
REGULATORY CAPITAL DATA (b)
Tier 1 capital $ 906,281   $ 887,854   $ 963,629   $ 927,023   $ 913,126  
Common equity tier 1 capital   838,602     822,511                    
Total capital   991,097     976,043     1,050,295     1,005,629     991,235  
Risk-weighted assets   6,953,013     7,053,656     6,929,235     6,278,140     6,237,016  
Tier 1 leverage ratio   9.85 %   9.67 %   10.78 %   11.18 %   11.09 %
Tier 1 ratio   13.03 %   12.59 %   13.91 %   14.77 %   14.64 %
Common equity tier 1 ratio   12.06 %   11.66 %                  
Total capital ratio   14.25 %   13.84 %   15.16 %   16.02 %   15.89 %
 
(a) Includes loans 30-89 days past due and loans 90+ days past due and still accruing
(b) 2015 Regulatory Capital Data calculated in accordance with BASEL III
 
       
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
 
Unaudited, dollars in thousands except share and per share data
 
As of
Earning Assets / Liabilities 6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014

Loan portfolio composition (regulatory):

Commercial / industrial $ 890,890 $ 895,356 $ 852,804 $ 804,283 $ 815,168
Commercial real estate (c) 2,281,023 2,186,626 2,172,858 1,994,773 1,993,408
Residential mortgage 1,471,769 1,508,968 1,550,378 1,181,503 1,155,551
Real estate construction and land development 188,473 229,428 261,916 260,054 242,047
Home equity 874,386 867,784 875,903 817,723 803,553
Consumer 246,645 238,320 239,807 224,614 216,478
Other   215,295   204,962   192,791   186,892   179,826
Total 6,168,481 6,131,444 6,146,457 5,469,842 5,406,031
 
Investment securities and other securities 2,507,615 2,537,170 2,519,215 2,381,751 2,420,509
Other earning assets   118,375   131,166   303,055   98,512   73,384
Total earning assets (net of loan loss reserve) $ 8,709,655 $ 8,710,051 $ 8,878,052 $ 7,861,178 $ 7,810,076
 

Loan portfolio composition (internal):

Commercial & industrial
Business purpose, real estate secured $ 922,413 $ 918,985 $ 929,999 $ 897,812 $ 884,697
Business purpose, not secured by real estate 1,054,746 1,046,875 995,051 944,207 968,183
Commercial real estate (owner occupied)
Permanent 658,457 635,880 623,712 566,007 590,148
Construction / development 35,006 53,635 51,105 49,826 45,924
Leasing   -   -   -   18   41
Total commercial & industrial 2,670,622 2,655,375 2,599,867 2,457,870 2,488,993
 
Commercial real estate (non-owner occupied)
Permanent 1,291,059 1,226,847 1,229,318 1,086,346 1,042,928
Construction / development   137,351   169,271   203,542   208,728   182,506
Total commercial real estate   1,428,410   1,396,118   1,432,860   1,295,074   1,225,434
Total commercial 4,099,032 4,051,493 4,032,727 3,752,944 3,714,427
 
Consumer
Residential mortgage (personal purpose)
Permanent 856,976 869,562 893,732 644,919 644,322
Construction   10,192   15,384   14,625   16,004   13,128
Total residential mortgages 867,168 884,946 908,357 660,923 657,450
 
Home equity and direct installment 223,573 239,903 253,358 162,188 172,785
Home equity lines of credit   679,754   661,368   660,472   614,298   591,331
Total home equity 903,327 901,271 913,830 776,486 764,116
 
Private banking credit lines 90,946 90,919 96,689 95,049 95,324
Indirect vehicle and other   198,315   191,576   190,676   180,550   172,439
All other consumer   289,261   282,495   287,365   275,599   267,763
Total consumer   2,059,756   2,068,712   2,109,552   1,713,008   1,689,329
 
Loans 6,158,788 6,120,205 6,142,279 5,465,952 5,403,756
 
Loans held-for-sale 9,693 11,239 4,178 3,890 2,275
         
Total loans $ 6,168,481 $ 6,131,444 $ 6,146,457 $ 5,469,842 $ 5,406,031
 

Deposit composition:

Savings $ 722,051 $ 711,375 $ 678,294 $ 544,625 $ 552,885
NOW accounts 1,886,405 1,880,649 1,913,399 1,981,608 1,689,381
Money market accounts 1,734,059 1,755,276 1,827,233 1,658,815 1,684,410
Time deposits less than $100k 859,472 872,906 891,964 797,535 831,390
Time deposits $100k or greater   330,866   334,864   333,697   314,915   319,146
Total interest bearing deposits 5,532,853 5,555,070 5,644,587 5,297,498 5,077,212
 
Non-interest bearing deposits   1,200,631   1,142,192   1,085,158   990,438   1,031,271
 
Total deposits $ 6,733,484 $ 6,697,262 $ 6,729,745 $ 6,287,936 $ 6,108,483
 
(c) Includes owner occupied
 
                     
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
     
Unaudited, dollars in thousands except share and per share data
 
Quarterly, as of Six Months, as of
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014 6/30/2015 6/30/2014
Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield Avg Bal Yield
 
Total loans* $ 6,146,507 3.83 % $ 6,131,280 3.91 % $ 5,932,806 3.96 % $ 5,406,073 4.00 % $ 5,360,641 3.97 % $ 6,138,935 3.87 % $ 5,351,694 4.01 %
Investment securities* 2,515,825 3.26 % 2,529,343 3.52 % 2,470,862 3.32 % 2,400,867 3.43 % 2,414,063 3.56 % 2,522,547 3.39 % 2,411,689 3.55 %
Interest earning deposits   92,867 0.17 %   97,917 0.16 %   124,710 0.18 %   85,310 0.15 %   67,112 0.17 %   95,378 0.16 %   68,161 0.16 %
 
Total earning assets   8,755,199 3.63 %   8,758,540 3.75 %   8,528,378 3.72 %   7,892,250 3.79 %   7,841,816 3.81 %   8,756,860 3.69 %   7,831,544 3.83 %
Total assets   9,544,673   9,524,279   9,269,113   8,569,734   8,512,845   9,534,532   8,496,357
 
Savings 714,135 0.10 % 693,482 0.11 % 638,913 0.10 % 549,589 0.10 % 550,336 0.10 % 703,865 0.10 % 542,561 0.10 %
NOW accounts 1,908,400 0.14 % 1,864,261 0.14 % 1,987,346 0.15 % 1,845,595 0.15 % 1,717,629 0.14 % 1,886,453 0.14 % 1,668,362 0.14 %
Money market accounts 1,761,906 0.22 % 1,836,268 0.22 % 1,788,019 0.22 % 1,681,361 0.22 % 1,687,193 0.21 % 1,798,882 0.22 % 1,679,241 0.21 %
Time deposits   1,199,076 0.94 %   1,210,270 0.90 %   1,210,685 0.88 %   1,132,513 0.96 %   1,179,576 1.03 %   1,204,642 0.92 %   1,206,535 1.05 %
 
Total interest bearing deposits   5,583,517 0.33 %   5,604,281 0.33 %   5,624,963 0.33 %   5,209,058 0.34 %   5,134,734 0.36 %   5,593,842 0.33 %   5,096,699 0.37 %
 
Non-interest bearing deposits   1,143,551   1,091,409   1,078,218   1,005,457   1,006,120   1,117,624   987,230
Total deposits   6,727,068 0.28 %   6,695,690 0.27 %   6,703,181 0.27 %   6,214,515 0.29 %   6,140,854 0.31 %   6,711,466 0.27 %   6,083,929 0.31 %
 
Customer repurchase agreements 556,813 0.29 % 568,750 0.29 % 589,944 0.29 % 546,119 0.29 % 546,284 0.29 % 562,748 0.29 % 543,677 0.29 %
Repurchase agreements - 0.00 % - 0.00 % - 0.00 % 16,032 4.87 % 50,000 4.87 % - 0.00 % 50,000 4.87 %
Federal Home Loan Bank advances and other borrowings 824,456 0.81 % 805,516 0.80 % 503,081 1.10 % 505,349 1.02 % 522,160 1.05 % 815,038 0.80 % 559,282 1.05 %
Senior long-term debt 125,000 4.38 % 125,000 4.43 % 125,000 4.33 % 20,380 4.42 % - 0.00 % 125,000 4.41 % - 0.00 %
Subordinated debentures   77,321 2.79 %   77,321 2.76 %   77,321 2.75 %   77,321 2.75 %   77,321 2.74 %   77,321 2.77 %   77,321 2.76 %
Total deposits and borrowings   8,310,658 0.41 %   8,272,277 0.41 %   7,998,527 0.41 %   7,379,716 0.38 %   7,336,619 0.41 %   8,291,573 0.41 %   7,314,209 0.43 %
Total interest bearing liabilities $ 7,167,107 0.48 % $ 7,180,868 0.48 % $ 6,920,309 0.48 % $ 6,374,259 0.44 % $ 6,330,499 0.48 % $ 7,173,949 0.48 % $ 6,326,979 0.49 %
 
Net interest margin (FTE) 3.24 % 3.36 % 3.33 % 3.43 % 3.43 % 3.30 % 3.43 %
 
Wealth assets under management, at period end $ 2,587,907 $ 2,609,834 $ 2,501,015 $ 2,411,463 $ 2,574,509
 
*Fully taxable equivalent ("FTE") basis, using a 35% statutory tax rate
 
   
Financial Update for National Penn Bancshares, Inc. (NPBC) for 6/30/2015
       
Unaudited
 
STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)
 
Quarterly, as of
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
 

PA

Total number of retail branch offices 116 119 119 110 110
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 126 128 127 120 117
 

NJ

Total number of retail branch offices 7 7 7 - -
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) - - - - -
Total number of ATMs 6 6 6 - -
 

MD

Total number of retail branch offices 1 1 1 1 1
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) - - - - -
Total number of ATMs 1 1 1 1 1
 

TOTAL

Total number of retail branch offices 124 127 127 111 111
Total number of insured subsidiaries
(Bank & Thrift subsidiaries) 1 1 1 1 1
Total number of ATMs 133 135 134 121 118
 
EOP employees (full-time equivalent) 1,573 1,596 1,658 1,549 1,574
 

Contacts

National Penn Bancshares, Inc.
Investor Contact:
Michael J. Hughes, 484-709-3305
michael.hughes@nationalpenn.com
or
Media Contact:
Jacklyn Bingaman, 610-674-1325
jacklyn.bingaman@nationalpenn.com

Release Summary

National Penn Bancshares, Inc. Reports Second Quarter 2015 Results

Contacts

National Penn Bancshares, Inc.
Investor Contact:
Michael J. Hughes, 484-709-3305
michael.hughes@nationalpenn.com
or
Media Contact:
Jacklyn Bingaman, 610-674-1325
jacklyn.bingaman@nationalpenn.com