National Penn Bancshares, Inc.
National Penn Bancshares, Inc. (Nasdaq: NPBC) reported net income of $1.9 million or $0.02 per diluted common share for the first quarter 2010, after payment of dividends on preferred stock compared to net income available to common shareholders of $1.7 million or $0.02 per diluted share for the quarter ended March 31, 2009 and a loss of $2.25 per diluted share for the quarter ended December 31, 2009. Fundamentals improved and led to core net income of $0.03 per diluted share, as the Company continues to improve pricing and control expenses in order to mitigate the negative impact the economy has had on the region.rnrn”We have executed on our goals of enhancing our capital ratios in a shareholder friendly manner while improving our profitability profile,” commented Scott Fainor, President and CEO of National Penn. “Although economic conditions may continue to impact asset quality, our level of non-performing assets and net charge-offs has been relatively stable over the last several quarters, and our credit metrics continued to improve.”rnrnThe provision for loan losses declined to $32.5 million in the quarter compared to $47.0 million in the fourth quarter of 2009. The allowance for loan and lease losses was increased to $153.9 million at March 31, 2010 from $146.3 million at December 31, 2009, improving the coverage at March 31, 2010 to 128% of non-performing loans compared to 116% at December 31, 2009, and the ratio of the allowance to loans increased to 2.60% from 2.43%. Non-performing assets decreased $7.2 million to $122.8 million at March 31, 2010 compared to $130.0 million at December 31, 2009 despite an additional $6.7 million related to loans restructured upon the commencement of a voluntary mortgage loan modification program.rnrnThe underlying fundamentals improved as the net interest margin expanded to 3.44% from 3.29% in the fourth quarter of 2009 and operating expenses declined. Disciplined deposit pricing led to the expansion of net interest margin and a reduction to the balance of higher-cost certificates of deposit. The average balance of certificates of deposit declined by $208 million during the quarter to $2.5 billion at March 31, 2010. Loans to new and existing customers were approximately $180 million, however average loans declined during the quarter by $152 million which is reflective of current economic conditions. During this challenging economic environment, National Penn has continued to develop and implement strategies to improve profitability while effectively and efficiently allocating capital.rnrnOperating expenses remained a focus and were well controlled in the quarter declining to $57.7 million from $62.1 million in the fourth quarter of 2009, exclusive of the goodwill impairment charge in the previous quarter. National Penn elected to freeze future benefits on its defined benefit pension plan in addition to the continuation of other expense control initiatives. Non-interest income declined from the continued impact of the soft economic environment and the timing of the recognition of fee-based income. Total non-interest income declined to $22.6 million for the quarter ended March 31, 2010 compared to $26.2 million in the previous quarter. The decline in non-interest income was primarily due to an increase in the value of the Company’s subordinated debentures accounted for at fair value which resulted in a loss of $7.3 million during the first quarter of 2010 compared to a gain of $3.7 million during the fourth quarter of 2009. Also, during the first quarter, the Company recorded a gain of $4.1 million as a result of the previously reported curtailment of its pension plan.rnrnNational Penn’s Board of Directors approved a second quarter cash dividend of $0.01 per share, payable on May 17, 2010 to shareholders of record on May 8, 2010, consistent with the $0.01 per share paid in the previous quarter.rnrnMr. Fainor commented, “National Penn’s balance sheet remains strong with capital levels exceeding all regulatory requirements; a further increase in the loan loss reserve, which compares very favorably with banks of our size; and enhanced capital ratios in the quarter. The first quarter provides a strong basis from which to build shareholder value.”rnrnAbout National Penn Bancshares, Inc.:rnrnNational Penn Bancshares, Inc., with $9.2 billion in assets, is the fourth largest bank holding company based in Pennsylvania. Headquartered in Boyertown, National Penn operates 127 offices. It has 124 community banking offices in Pennsylvania and one office in Maryland through National Penn Bank and its HomeTowne Heritage Bank, KNBT and Nittany Bank divisions. National Penn also has two offices in Delaware through its wholly-owned subsidiary Christiana Bank & Trust Company.rnrnNational Penn’s financial services affiliates consist of National Penn Wealth Management, N.A., including its National Penn Investors Trust Company division; National Penn Capital Advisors, Inc.; Institutional Advisors LLC; National Penn Insurance Services Group, Inc., including its Higgins Insurance division; and Caruso Benefits Group, Inc.rnrnNational 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.
