National Penn Bancshares 8K Announcement Marks 28th Year of Improved Earnings for Company | NPBC 24 Jan 06

EXHIBIT 99.1

	News Release

National Penn Bancshares, Inc.

Reports Record 2005 Earnings

Announcement Marks 28^th Year of Improved Earnings for Company

Contact:	Catharine S. Bower, Communications Manager
	(610) 369-6618 or csbower@natpennbank.com

BOYERTOWN, Pa., January 24, 2006 -- National Penn Bancshares, Inc. (Nasdaq: NPBC), the parent company of National Penn Bank, today announced financial results for calendar year 2005, including the quarter ended December 31, 2005.

Net income for calendar year 2005 was a record $59.8 million, or $1.36 per diluted share, compared to prior year net income of $47.9 million, or $1.15 per diluted share.

Net income for fourth quarter 2005 was $16.3 million, or $.37 per diluted share, compared to net income of $10.6 million, or $.24 per diluted share, for the same period a year ago.

Included in net income for fourth quarter 2005 was a recovery of $2.288 million, net of taxes, on the fourth quarter 2004 fraud loss. Net income in fourth quarter 2004 included a special charge of $3.369 million, net of taxes and related adjustments, for losses attributable to a fraudulent loan and deposit scheme discovered by National Penn in January 2005. Excluding the fourth quarter 2004 special charge, non-GAAP net income and earnings per diluted share for fourth quarter 2004 were $14.0 million and $.32, respectively.¹

Excluding the fourth quarter 2004 special charge of $3.369 million, net of taxes and related adjustments, non-GAAP net income and earnings per diluted share for calendar year 2004 were $51.3 million and $1.23, respectively.¹

^{__________________________________}

¹ Net income and net income per share excluding the special charge, net of taxes and related adjustments, are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is presented in the reconciliation tables immediately following the text of this press release.

National Penn’s 2005 earnings produced returns on average assets and average shareholders’ equity of 1.31% and 13.7%, respectively. Return on average tangible equity was 25.8% in 2005.²

2005 represents National Penn’s 28^th consecutive year of increased earnings and 28^th consecutive year of increased cash dividends. 2005 also marked the 28^th consecutive year of stock dividends or splits on National Penn stock. All per share information has been restated to reflect the five-for-four stock split effective September 30, 2005.

The company had total assets at December 31, 2005 of $4.60 billion and total deposits of $3.31 billion. The allowance for loan and lease losses as of December 31, 2005 was $56.1 million, which represented 1.84% of total loans and leases outstanding of $3.05 billion. At December 31, 2005, National Penn was in compliance with all applicable regulatory capital requirements. National Penn and National Penn Bank each are considered “well capitalized” as defined by banking regulators.

On November 17, 2005, National Penn paid a quarterly cash dividend of $.165 per share to shareholders of record as of November 2, 2005. National Penn has paid cash dividends without interruption for over 129 years.

__________

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc. is a $4.60 billion asset financial services company operating 73 offices in southeastern Pennsylvania through National Penn Bank and its FirstService Bank, HomeTowne Heritage Bank, and The Peoples Bank of Oxford divisions. The Peoples Bank of Oxford Division also operates one community office in Cecil County, Maryland. National Penn’s investment management units, with combined client assets of $1.65 billion, consist of National Penn Investors Trust Company, which provides trust and investment management services; National Penn Investment Services, which markets brokerage services provided by PrimeVest Financial Services, Inc.; and National Penn Capital Advisors, Inc., which provides investment advisory services. National Penn Bancshares also provides mortgage banking activities through National Penn Mortgage Company; insurance services through National Penn Insurance Agency, Inc.; and equipment leasing services through National Penn Leasing Company. National Penn Bancshares, Inc. common stock is traded on the Nasdaq Stock Market under the symbol “NPBC.” Additional information about the National Penn family is available on the company’s Web site at http://www.nationalpennbancshares.com.

_________

____________

2 Return on average tangible equity is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the comparable GAAP financial measure is presented in the reconciliation tables immediately following the text of this press release.

This press release 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 the company’s performance. One such measure, annualized net income return on average tangible equity, excludes the average balance of acquisition-related goodwill and intangibles in determining average tangible shareholders’ equity. Banking and financial institution regulators also exclude goodwill and intangibles from shareholders' equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results of National Penn, as it provides a method to assess management’s success in utilizing the company’s tangible capital. In addition, non-GAAP net income and earnings per share exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Because these items are not necessarily representative of underlying trends in the company's performance, management believes that presentation of financial measures excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the operating results of the company’s core businesses. This also facilitates comparisons with prior periods. These disclosures should not be viewed as substitutes for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

_________

This press release contains forward-looking statements concerning future events. Actual results could differ materially due to deteriorating economic conditions; increased competition; interest rate movements; market volatility in the securities markets; legislative or regulatory developments; merger-related synergies, savings and integration issues; technological changes; and other risks and uncertainties discussed in National Penn’s reports filed from time to time with the Securities and Exchange Commission, which are incorporated herein by reference. National Penn cautions you not to place undue reliance on these statements. National Penn undertakes no obligation to publicly release or update any of these statements.

Reconciliation Tables for Non-GAAP Financial Measures

	4 Qtr 2004	2004
Net income, excluding special charge for fraud loss and compensation expense adjustment, net of taxes (in millions)	$14.0	$51.3
Special charge for fraud loss, net of taxes (in millions)	(4.3)	(4.3)
Compensation expense adjustment, net of taxes (in millions)	.9	.9
Net income (in millions)	10.6	47.9

Diluted earnings per share, excluding special charge for fraud loss and compensation expense adjustment, net of taxes	.32	1.23
Special charge for fraud loss, net of taxes, per share	(.10)	(.10)
Compensation expense adjustment, net of taxes, per share	.02	.02
Diluted earnings per share	.24	1.15

	2005	2004
Return on average shareholders’ equity	13.7%	13.2 %
Effect of goodwill and intangibles	12.1%	10.6 %
Return on average tangible equity	25.8%	23.8 %
Effect of special charge for fraud loss, net of taxes	-	2.2%
Effect of compensation expense adjustment, net of taxes	-	(.5)%
Return on average tangible equity, excluding special charge for fraud loss and compensation expense adjustment, net of taxes	25.8%	25.5%

Average tangible equity excludes acquisition-related average goodwill and intangibles:
Average shareholders’ equity (in millions)	$436.6	$361.7
Average goodwill and intangibles (in millions)	(205.0)	(160.3)
Average tangible equity (in millions)	231.6	201.4

National Penn Bancshares, Inc.	Financial Highlights

Contact: Gary L. Rhoads, 610-369-6341

Exchange Listing Nasdaq "NPBC"

(Dollars in thousands, except per share data)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2005		2004		2005			2004
STATEMENTS OF CONDITION
Total assets					$	4,600,609		$	4,478,793
Total deposits						3,309,046			3,143,193
Total loans and leases						3,049,808			2,874,439
Total shareholders' equity						444,888			428,125
Book value per share						10.26			9.93

EARNINGS
Total interest income	$	63,448	$	55,243	$	242,586		$	198,775
Total interest expense		26,643		17,955		93,937			60,493
Net Interest Income		36,805		37,288		148,649			138,282
Provision for loan and lease losses		750		612		3,200			4,800
Net interest income after provision
for loan and lease losses		36,055		36,676		145,449			133,482
Other income		14,464		12,521		57,016			46,774
Other expenses		29,439		35,690		123,103			117,491
Income before income taxes		21,080		13,507		79,362			62,765
Income taxes		4,821		2,874		19,607			14,851
Net income	$	16,259	$	10,633	$	59,755		$	47,914

Return on average assets						1.31	%		1.20	%
Return on average shareholders' equity						13.7	%		13.2	%
Return on average tangible equity (1)						25.8	%		23.8	%
Average shares - basic						43,328,813			40,797,270
Average shares - diluted						44,048,486			41,689,071

PER SHARE
Basic earnings:
Net income	$	0.37	$	0.24	$	1.38		$	1.17
Diluted earnings:
Net income	$	0.37	$	0.24	$	1.36		$	1.15
Dividends paid in cash	$	0.17	$	0.15	$	0.65		$	0.62


Financial information restated to include a 5 for 4 stock split issued September 30, 2005.


(1) Reconciliation Table for Non-GAAP Financial Measure
Return on average shareholders' equity						13.7	%		13.2	%
Effect of goodwill and intangibles						12.1	%		10.6	%
Return on average tangible equity						25.8	%		23.8	%
Average tangible equity excludes acquisition related average goodwill and intangibles:
Average shareholders' equity					$	436,602		$	361,697
Average goodwill and intangibles						(204,975	)		(160,332	)
Average tangible equity						231,627			201,365

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/05
Date 1/23/2006
PAGE: 1 OF 5	AS OF			AS OF			AS OF			AS OF			AS OF
BALANCE SHEET - ASSETS ($000s)	12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004
	unaudited			unaudited			unaudited			unaudited			audited
Cash & Cash Equivalents	$	116,522		$	107,431		$	133,578		$	112,847		$	93,894
Trading Account Securities		-			-			-			-			-
Securities Available for Sale		941,106			1,015,648			1,031,070			1,069,293			1,098,836
Held to Maturity Securities		150,608			113,573			117,465			116,663			90,967
Other Securities		-			-			-			-			-
Total Securities		1,091,714			1,129,221			1,148,535			1,185,956			1,189,803
Total Cash and Securities		1,208,236			1,236,652			1,282,113			1,298,803			1,283,697
Loans & Leases Held for Investment*		3,031,225			2,986,629			2,969,344			2,918,338			2,862,638
Loans & Leases Held for Sale*		18,583			25,028			14,701			10,299			11,801
Total Loans and Leases*		3,049,808			3,011,657			2,984,045			2,928,637			2,874,439
*Indicates data net of discount, gross of reserve
Loan Loss Reserve		(56,064	)		(56,255	)		(56,035	)		(57,585	)		(57,590	)
Goodwill		187,995			187,693			187,693			187,741			186,945
Other Intangibles		16,087			16,682			17,276			17,867			18,462
Total Intangible Assets		204,082			204,375			204,969			205,608			205,407
Mortgage Servicing Rights		-			-			-			-			-
Purchased Credit Card Relationships		-			-			-			-			-
Real Estate Owned & Held for Investment		-			16			16			-			-
Assets from Discontinued Operations					-			-			-			-
Other Assets		194,547			178,262			178,792			179,374			172,840
Total Assets	$	4,600,609		$	4,574,707		$	4,593,900		$	4,554,837		$	4,478,793

BALANCE SHEET - LIABILITIES ($000S)
Deposits	$	3,309,046		$	3,292,050		$	3,059,627		$	2,969,549		$	3,143,193
Borrowings		677,183			662,560			928,106			990,151			743,977
Trust Preferred Securities		-			-			-			-			-
Subordinated Debt		127,063			127,063			127,063			127,063			127,063
Liabilities from Discontinued Operations		-			-			-			-			-
Other Liabilities	$	42,429			48,035			40,269			41,581			36,435
Total Liabilities	$	4,155,721		$	4,129,708		$	4,155,065		$	4,128,344		$	4,050,668

BALANCE SHEET - EQUITY ($000s)
Redeemable Preferred Stock	$	-		$	-		$	-		$	-		$	-
Preferred Equity	$	-		$	-		$	-		$	-		$	-
Shareholders Equity	$	444,888		$	444,999		$	438,835		$	426,493		$	428,125

MEMO ITEMS
Accumulated other comprehensive income	$	3,189		$	9,548		$	13,398		$	10,403		$	19,915
Publicly Reported Book Value Per Share (1)	$	10.26		$	10.22		$	10.13		$	9.87		$	9.93
EOP Common Shares Outstanding (excluding Treasury shares)(1)		43,381,790			43,548,941			43,339,590			43,195,304			43,138,498
Treasury Shares Held By Company (1)		275,431			18,658			20,811			117,779			109,950
Did you announce a repurchase plan during this period?		NO			NO			NO			NO			NO
Number of Shares to be Repurchased in Plan (1)		1,562,500			1,562,500			1,562,500			1,562,500			1,562,500
Number of Shares Repurchased During Period (1)		316,835			38,474			33,313			42,491			129,174
Average Price of Repurchased Shares (1)	$	20.06		$	20.28		$	19.15		$	19.38		$	22.03


(1) restated for a 5 for 4 stock split paid September 30, 2004, and a 5 for 4 stock split paid September 30, 2005.

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/05
PAGE: 2 OF 5
	FOR QUARTER			FOR QUARTER			FOR QUARTER			FOR QUARTER			FOR QUARTER						YEAR
	ENDED			ENDED			ENDED			ENDED			ENDED			YTD			ENDED
INCOME STATEMENT ($000s)	12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004			12/31/2005			12/31/2004
	unaudited			unaudited			unaudited			unaudited			unaudited			unaudited			audited
Interest Income	$	63,448		$	62,308		$	59,893		$	56,937		$	55,243		$	242,586		$	198,775
Interest Expense		26,643			24,835			22,508			19,951			17,955			93,937			60,493
Net Interest Income		36,805			37,473			37,385			36,986			37,288			148,649			138,282
FTE adjustment		2,337			2,310			2,337			2,243			2,155			9,227			8,334
Net Interest Income (FTE)		39,142			39,783			39,722			39,229			39,443			157,876			146,616
Loan Loss Provision		750			750			950			750			612			3,200			4,800
Investment Securities Trans.		(235	)		181			646			(37	)		645			555			549
Nonrecurring Income		-			-			-			922			-			922			-
Nonrecurring Expense		(2,954	)		150			600			601			-			(1,603	)		-
Trading Account Income		-			-			-			-			-			-			-
Foreign Exchange Income		-			-			-			-			-			-			-
Wealth Management Income		2,349			2,188			2,341			2,198			2,185			9,076			7,886
Service Charges on Deposits		4,081			4,199			4,075			3,791			4,143			16,146			15,230
Mortgage Banking Income		1,351			1,720			1,284			1,011			809			5,366			3,986
Insurance Income		1,580			1,545			1,833			2,059			1,112			7,017			3,756
Other Noninterest Income		5,338			4,249			4,332			4,015			3,627			17,934			15,367
Total Noninterest Income(excludes securities gains/losses)		14,699			13,901			13,865			13,074			11,876			55,539			46,225
Employee Comp. & Benefit Expense		19,489			18,565			18,218			18,470			16,271			74,742			64,159
Occupancy & Equipment Expense		4,642			4,403			4,176			4,431			4,494			17,652			16,451
Foreclosed Property Expense		-			-			-			-			-			-			-
Amortization of Intangibles		594			594			592			594			594			2,374			1,902
(Excludes Servicing and Credit Card Intangibles)
Other Noninterest Expense		7,668			7,794			7,479			6,997			14,331			29,938			34,979
Total Noninterest Exp.		32,393			31,356			30,465			30,492			35,690			124,706			117,491
Minority Interest Expense		-			-			-			-			-			-			-
Net Income Before Taxes		21,080			19,299			19,881			19,102			13,507			79,362			62,765
Tax Provision		4,821			4,492			5,202			5,092			2,874			19,607			14,851
Net Income	$	16,259		$	14,807		$	14,679		$	14,010		$	10,633		$	59,755		$	47,914

EARNINGS PER SHARE:

Basic
Net income (1)	$	0.37		$	0.34		$	0.34		$	0.33		$	0.24		$	1.38		$	1.17
Diluted
Net income (1)	$	0.37		$	0.34		$	0.33		$	0.32		$	0.24		$	1.36		$	1.15
Average Shares Basic (1)		43,469,727			43,443,927			43,260,106			43,136,566			43,177,699			43,328,813			40,797,270
Average Shares Diluted (1)		44,121,595			44,197,495			43,969,783			44,153,663			44,123,623			44,048,486			41,689,071
Dividends on Preferred Stock ($000s)	$	-		$	-		$	-		$	-		$	-		$	-		$	-


(1) restated for a 5 for 4 stock split paid September 30, 2005 and September 30, 2004.

SUPPLEMENTAL DATA ($000s)
Return on Avg. Assets (annualized)		1.42	%		1.28	%		1.29	%		1.26	%		0.96	%		1.31	%		1.20	%
Return on Avg. Equity (annualized)		14.6	%		13.4	%		13.6	%		13.1	%		10.0	%		13.7	%		13.2	%
Return on Avg. Tangible Equity (annualized) (1)		27.2	%		25.3	%		25.9	%		24.9	%		19.2	%		25.8	%		23.8	%

(1) Average tangible equity excludes acquisition related average goodwill and intangibles: 2004= Net income of$11,368 x 4 divided by the net of average
equity of $299,338 reduced by average goodwill and intangibles of $111,039.


(1) Reconciliation Table for Non-GAAP Financial Measure
Return on average shareholders' equity		14.6	%		13.4	%		13.6	%		13.1	%		10.0	%		13.7	%		13.2	%
Effect of goodwill and intangibles		12.6	%		11.9	%		12.3	%		11.8	%		9.2	%		12.1	%		10.6	%
Return on average tangible equity		27.2	%		25.3	%		25.9	%		24.9	%		19.2	%		25.8	%		23.8	%
Average tangible equity excludes acquisition related average goodwill and intangibles:
Average shareholders' equity	$	441,143		$	437,909		$	432,955		$	434,312		$	422,295		$	436,602		$	361,697
Average goodwill and intangibles		(204,154	)		(204,665	)		(205,267	)		(205,838	)		(202,226	)		(204,975	)		(160,332	)
Average tangible equity		236,989			233,244			227,688			228,474			220,069			231,627			201,365

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/05

PAGE: 3 of 5
	FOR QUARTER			FOR QUARTER			FOR QUARTER			FOR QUARTER			FOR QUARTER			YEAR		YEAR
	ENDED			ENDED			ENDED			ENDED			ENDED			TO DATE		ENDED
CHARGEOFFS ($000s)	12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004			12/31/2005		12/31/2004
	unaudited			unaudited			unaudited			unaudited			unaudited			unaudited		audited
Loan Chargeoffs	$	1,329		$	1,592		$	3,181		$	1,143		$	1,195		$	7,245	$	5,617
Recoveries on Loans	$	388		$	1,062		$	681		$	388		$	782		$	2,519	$	2,978
Net Loan Chargeoffs	$	941		$	530		$	2,500		$	755		$	413		$	4,726	$	2,639

		AS OF			AS OF			AS OF			AS OF			AS OF
ASSET QUALITY AND OTHER DATA ($000s)		12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004
		unaudited			unaudited			unaudited			unaudited			audited
Nonaccrual Loans	$	11,961		$	10,562		$	14,190		$	12,237		$	11,103
Renegotiated Loans					-			-			-			-
Other Real Estate Owned		-			16			16			-			-
Total Nonperforming Assets		11,961			10,578			14,206			12,237			11,103
Loans 90+ Days Past Due & Still Accruing		183			342			191			973			870
NPAs plus Loans over 90	$	12,144		$	10,920		$	14,397		$	13,210		$	11,973

		AS OF			AS OF			AS OF			AS OF			AS OF
REGULATORY CAPITAL DATA ($000s)		12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004
		unaudited			unaudited			unaudited			unaudited			audited
Tier 1 Capital	$	360,866		$	354,324		$	343,716		$	333,733		$	326,053
Tier 1 Ratio (%)		10.47	%		10.39	%		10.14	%		10.07	%		10.02	%
Total Capital (Tier 1 + Tier 2)	$	406,874		$	400,064		$	389,769		$	375,630		$	366,955
Total Capital Ratio (%)		11.81	%		11.73	%		11.49	%		11.33	%		11.27	%
Total Risk-Adjusted Assets	$	3,445,362		$	3,409,728		$	3,391,290		$	3,336,034		$	3,255,459
Tier 1 Leverage Ratio		8.36	%		8.14	%		7.94	%		7.79	%		7.86	%

		AS OF			AS OF			AS OF			AS OF			AS OF
SUPPLEMENTAL DATA ($000s)		12/31/2005			9/30/2005			6/30/2005			3/31/2005			12/31/2004
		unaudited			unaudited			unaudited			unaudited			audited

1-4 Family Mortgage Loans Serviced For Others	$	90,761		$	94,574		$	100,213		$	106,142		$	110,865
Propriety Mutual Fund Balances	$	-		$	-		$	-		$	-		$	-
(Net Asset Value in $000s)
Held to Maturity Securities (Fair Value)	$	147,628		$	111,856		$	116,215		$	115,013		$	90,621
Common Stock Dividends (total $ in period)	$	7,192		$	6,955		$	6,926		$	6,903		$	6,910
Dividends per Common Share	$	0.165		$	0.160		$	0.160		$	0.160		$	0.160
EOP Employees (Full Time Equivalent)		1,141			1,139			1,153			1,135			1,098

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/05

PAGE: 4 of 5	AS OF		AS OF		AS OF		AS OF		AS OF
PERIOD END BALANCES:	12/31/2005		9/30/2005		6/30/2005		3/31/2005		12/31/2004
	unaudited		unaudited		unaudited		unaudited		audited
Loan Breakdown: (REGULATORY)
Commercial/Industrial	$	565,826	$	545,552	$	550,147	$	509,416	$	484,480
Commercial Real Estate		1,141,908		1,119,836		1,105,873		1,104,202		1,086,101
Residential Mortgage (including multi-family)		550,591		557,032		549,141		547,166		556,866
Real Estate Construction (and Land Development)		206,201		210,607		206,916		214,845		201,410
Home Equity (revolving and 2nd lien)		381,869		371,909		368,478		348,610		340,665
Consumer (Loans to Individuals)		60,586		59,603		56,962		57,999		63,843
Bank Card		-		-		-		-		-
Foreign		-		-		-		-		-
Other Loans		142,828		147,118		146,528		146,399		141,074
Total Loans (net of unearned)		3,049,809		3,011,657		2,984,045		2,928,637		2,874,439
Investment Securities (incl. trading assets)		1,091,714		1,129,221		1,148,535		1,185,956		1,189,803
Other Earning Asset		5,937		5,430		9,446		5,512		8,776
Total Earning Assets (net of loan loss reserve)		4,091,396		4,090,053		4,085,991		4,062,519		4,015,428
Total Assets		4,600,609		4,574,707		4,593,900		4,554,837		4,478,793
Deposit Breakdown:
Savings		193,024		202,292		218,540		224,053		229,874
NOW Accounts		741,269		750,903		672,981		716,899		891,456
Money Market Accounts		607,063		591,553		598,510		624,641		644,014
Certificates		776,794		900,698		621,132		623,754		615,001
CDs>$100m		480,975		333,886		417,302		269,163		246,948
Foreign CDs		-		-		-		-
Total Int. Bearing Deposits		2,799,125		2,779,332		2,528,465		2,458,510		2,627,293
Non-Interest Bearing Deposits		509,921		512,718		531,162		511,039		515,900
Total Deposits		3,309,046		3,292,050		3,059,627		2,969,549		3,143,193
Short-Term Borrowings		428,771		413,929		678,277		739,767		514,051
Long-Term Debt		375,475		375,694		376,892		377,447		356,989
Total Int. Bearing Liabilities (incl. non-int bearing deposits)		4,113,292		4,081,673		4,114,796		4,086,763		4,014,233
Total Int. Bearing Liabilities		3,603,371		3,568,955		3,583,634		3,575,724		3,498,333
Total Stockholders Equity	$	444,888	$	444,999	$	438,835	$	426,493	$	428,125


PERIOD END BALANCES:

Loan Breakdown: (internal)
Business Purpose Loans	$	1,391,317	$	1,368,691	$	1,379,919	$	1,351,571	$	1,309,544
Residential Mortgage		282,882		290,210		287,538		287,917		294,641
Commercial Real Estate, Construction and Land Dev		1,011,084		1,003,834		984,510		975,983		961,515
Consumer (loans to Individual)		364,525		348,922		332,078		313,166		315,422
Total Loans (net of unearned)	$	3,049,808	$	3,011,657	$	2,984,045	$	2,928,637	$	2,881,122

Financial Update for NATL PENN BCSHS (NPBC) FOR 12/31/05
PAGE 5 OF 5

BALANCE AND YIELD/COST ANALYSIS:	AS OF					AS OF					AS OF					AS OF					AS OF					YTD
	12/31/2005					9/30/2005					6/30/2005					3/31/2005					12/31/2004					12/31/2005
	Qtr Avg Bal		Yield			Qtr Avg Bal		Yield			Qtr Avg Bal		Yield			Qtr Avg Bal		Yield			Qtr Avg Bal		Yield			YTD Avg Bal		Yield
	unaudited					unaudited					unaudited					unaudited					unaudited					unaudited
Total Loans (net of unearned)	$	3,028,408		6.81	%	$	3,000,486		6.65	%	$	2,965,191		6.47	%	$	2,905,920		6.25	%	$	2,834,453		6.10	%	$	2,975,407		6.55	%
Investment Securities (incl. trading assets)		1,072,424		5.08	%		1,139,463		4.97	%		1,170,563		4.92	%		1,193,928		4.88	%		1,115,338		4.87	%		1,143,749		4.96	%
Other Earning Assets		9,350		3.78	%		9,928		2.16	%		7,838		1.94	%		8,802		2.30	%		23,620		1.65	%		8,983		2.57	%

Total Earning Assets		4,110,182		6.35	%		4,149,877		6.18	%		4,143,592		6.02	%		4,108,650		5.84	%		3,973,411		5.73	%		4,128,139		6.10	%
Total Earning Assets (net of loan loss reserve)		4,053,850		6.44	%		4,093,289		6.26	%		4,086,301		6.11	%		4,050,799		5.92	%		3,915,302		5.82	%		4,071,129		6.19	%
Total Assets		4,529,657		5.76	%		4,573,381		5.61	%		4,554,114		5.48	%		4,520,577		5.31	%		4,381,389		5.20	%		4,544,536		5.54	%

Savings		197,092		0.92	%		209,600		0.93	%		219,782		0.86	%		226,130		0.80	%		227,194		0.74	%		213,062		0.87	%
NOWAccounts		744,684		2.14	%		721,688		1.81	%		708,143		1.55	%		792,962		1.42	%		931,585		1.44	%		741,682		1.73	%
Money Market Accounts		612,719		2.13	%		597,805		1.83	%		613,339		1.58	%		638,215		1.34	%		652,716		1.05	%		615,402		1.71	%
Certificates		1,217,068		3.67	%		1,140,615		3.45	%		964,360		3.22	%		873,433		3.07	%		852,501		2.96	%		1,050,062		3.38	%

Total Int. Bearing Deposits		2,771,563		2.72	%		2,669,708		2.45	%		2,505,624		2.14	%		2,530,740		1.92	%		2,663,996		1.77	%		2,620,208		2.32	%

Non-Interest Bearing Deposits		505,316					514,908					521,630					504,583					517,864					511,620
Total Deposits		3,276,879		2.30	%		3,184,616		2.05	%		3,027,254		1.77	%		3,035,323		1.60	%		3,181,860		1.48	%		3,131,828		1.94	%

Short-Term Borrowings		389,624		2.49	%		525,609		2.66	%		680,342		2.54	%		642,805		2.12	%		385,765		1.49	%		558,808		2.44	%
Long-Term Borrowings		375,541		5.49	%		376,239		5.12	%		377,244		5.15	%		371,415		5.07	%		357,337		5.12	%		375,124		5.21	%
Total Int. Bearing Liabilities(incl. non-int bearing deposits)		4,042,044		2.62	%		4,086,464		2.41	%		4,084,840		2.21	%		4,049,543		2.00	%		3,924,962		1.82	%		4,065,760		2.31	%
Total Int. Bearing Liabilities		3,536,728		2.99	%		3,571,556		2.76	%		3,563,210		2.53	%		3,544,960		2.28	%		3,407,098		2.09	%		3,554,140		2.64	%
Total Shareholder's Equity	$	441,143				$	437,909				$	432,955				$	434,312				$	422,295				$	436,602

Net Yield on Earning Assets (net of loan loss reserve): (Margin)				3.83	%				3.86	%				3.90	%				3.93	%				4.00	%				3.88	%
Net Yield on Earning Assets: (Margin)				3.78	%				3.80	%				3.85	%				3.87	%				3.94	%				3.82	%

STATES OF OPERATION AND BANKING OFFICES BY STATE (LATEST AVAILABLE DATA)

	State	Number of Full Service Banking Offices (Domestic and in the U.S. Territories)

	PA
Total Number of Banking Offices				73	72	72	73	73
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)				1	1	1	1	1
Total Number of ATMs				73	73	75	75	74

	MD
Total Number of Banking Offices				1	1	1	1	1
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)					0	0	0	0
Total Number of ATMs				1	1	1	1	1

	TOTAL
Total Number of Banking Offices				74	73	73	74	74
Total Number of Insured Subsidiaries (Bank & Thrift Subsidiaries)				1	1	1	1	1
Total Number of ATMs				74	74	76	76	75

Have you restated any prior period's financial statements for a pooling of interest and/or a change in
accounting principles?			NO
Periods Restated on this report:			N/A
Reason:			N/A

National Penn Bancshares (NPBC) Inactive 8-KAnnouncement Marks 28th Year of Improved Earnings for Company