National Penn Bancshares (NPBC) 8-K National Penn Bancshares, Inc. Reports First Quarter

EXHIBIT 99.1

  News Release

National Penn Bancshares, Inc. Reports First Quarter

2010 Earnings

National Penn Bancshares returns to profitability

·   Net income available to common shareholders of $0.02 per share

·   Core net income of $0.03 per share

Core fundamentals remain strong

·   Net interest margin expands to 3.44% from 3.29% in the fourth quarter

·   Disciplined expense control

Asset quality metrics improve

·   Declining non-performing loans

·   Increased loan loss reserve

·   Improved coverage of non-performing loans to 128%

Capital ratios enhanced

·   Second quarter dividend declared of $0.01 per share

BOYERTOWN, PA., April 23, 2010 -- 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.

“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.”

The 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.

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The 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.

Operating 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.

National 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.

Mr. 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.”

Media Contact:                     Catharine S. Bower, Corporate Communications

(610) 369-6618 or catharine.bower@nationalpenn.com

Investor Contact:                 Michelle H. Debkowski, Investor Relations

(610) 369-6461 or michelle.debkowski@nationalpenn.com

__________

# # #

6

About National Penn Bancshares, Inc.:

National 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.

National 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.

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 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.  One such measure, annualized return on average tangible common equity, excludes the average balance of acquisition-related goodwill and intangible assets and the average balance of preferred equity in determining average tangible shareholders’ equity. One additional measure, tangible book value, also excludes from total equity goodwill, intangible assets and preferred stock. Banking and financial institution regulators also exclude goodwill and intangible assets from shareholders’ equity when assessing the capital adequacy of a financial institution. Another such measure, core net income (or core earnings), excludes the effects of non-cash, after-tax unrealized gains and losses.  Management believes the presentation of these financial measures excluding the impact of the specified items provides useful supplemental information that is essential to a proper understanding of the financial results of National Penn.  In the case of annualized return on average tangible equity, it provides a method to assess management’s success in utilizing the company’s tangible capital. In the case of tangible book value, it provides a method to assess the level of tangible net assets on a per share basis. In the case of core net income (or core earnings), it provides a method to assess earnings performance, which excludes discretionary and/or infrequently occurring items.  This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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 compar able 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.

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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: increased capital requirements and other requirements or actions mandated by National Penn’s regulators, National Penn’s inability to meet the requirements of the memorandum of understanding or the individual minimum capital ratio requirements issued by its primary regulator, National Penn’s inability to successfully implement its “self-improvement plan”, National Penn’s ability to raise capital and maintain capital levels, variations in interest rates, continued deterioration in the credit quality of certain loans, the effect of credit risk exposure, declines in the value of National Penn’s assets and the effect of any resulting impairment charges, recent and ongoing changes to the state and federal regulatory schemes under which National Penn and other financial services companies operate, competition from other financial institutions, interruptions or breaches of National Penn’s security systems, and the development and maintenance of National Penn’s information technology. 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, 2009, 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 da te 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.

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Financial Update for National Penn Bancshares (NPBC) for 3/31/2010
Exchange Listing Nasdaq "NPBC"
Financial Highlights
Unaudited, numbers in thousands except share and per share data
	As of
	March 31,			December 31,			% Change
SUMMARY BALANCE SHEET
Total assets	$	9,171,761		$	9,483,910			-3.29	%
Investment securites and other securities		2,244,053			2,180,541			2.91	%
Total loans and leases		5,915,219			6,024,500			-1.81	%
Deposits		6,411,364			6,738,852			-4.86	%
Borrowings		1,649,442			1,633,433			0.98	%
Shareholders' equity		1,070,788			1,069,468			0.12	%
Book value per common share	$	7.32		$	7.33			-0.10	%
	Three Months Ended March 31,
		2010			2009		% Change
EARNINGS
Total interest income	$	98,837		$	105,962			-6.72	%
Total interest expense		31,578			47,321			-33.27	%
Net interest income		67,259			58,641			14.70	%
Provision for loan and lease losses		32,500			17,525			85.45	%
Net interest income after provision
for loan and lease losses		34,759			41,116			-15.46	%
Net (losses) gains from fair value changes		(7,261	)		(1,898	)		282.67	%
Other non-interest income		29,835			17,101			74.47	%
Non-interest expense		57,657			56,693			1.70	%
(Loss) income before income taxes		(324	)		(374	)		-13.42	%
Income tax benefit		(4,250	)		(4,173	)		1.85	%
Net income		3,926			3,799			3.36	%
Preferred dividends and accretion of preferred discount		(2,005	)		(2,054	)		-2.38	%
Net income available to common shareholders	$	1,921		$	1,745			10.10	%
PERFORMANCE RATIOS
Net interest margin		3.44	%		3.11	%
Return on average assets		0.17	%		0.16	%
Return on average total shareholders' equity		1.48	%		1.31	%
Return on average tangible common equity (1)		2.59	%		3.51	%
PER SHARE
Basic earnings available to common shareholders	$	0.02		$	0.02
Diluted earnings available to common shareholders		0.02			0.02
Dividends per common share		0.01			0.17
Average shares - basic		125,875,061			81,497,806
Average shares - diluted		126,039,112			81,891,272
(1) Reconciliation Tables for Non-GAAP Financial Measures
Return on average tangible common equity
Return on average shareholders' equity		1.48	%		1.31	%
Effect of preferred equity		0.24	%		0.18	%
Effect of goodwill and intangibles		0.87	%		2.02	%
Return on average tangible common equity		2.59	%		3.51	%
Average tangible equity:
Average shareholders' equity	$	1,075,052		$	1,176,494
Average preferred equity		(147,990	)		(144,611	)
Average goodwill and intangibles		(311,784	)		(592,816	)
Average total tangible common equity	$	615,278		$	439,067
Core net income reconciliation
Net Income available to common shareholders	$	1,921		$	1,745
After tax gain on pension plan curtailment		(2,643	)		-
After tax unrealized fair market value (gain) loss on
NPB Capital Trust II Preferred Securities		4,720			1,234
Securities losses / OTTI					6,545
Core net income available to common shareholders	$	3,998		$	9,524
Earnings per share	$	0.02		$	0.02
Net Income available to common shareholders		-			-
After tax gain on pension plan suspension		(0.02	)		-
After tax unrealized fair market value (gain) loss on
NPB Capital Trust II Preferred Securities		0.03			0.02
Securities losses / OTTI					0.08
Core net income available to common shareholders	$	0.03		$	0.12

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Financial Update for National Penn Bancshares (NPBC) for3/31/2010
Page 1 of 5
Unaudited, numbers in thousands except share and per share data	As of
	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
BALANCE SHEET - ASSETS
Cash and due from banks	$	103,666		$	106,722		$	110,521		$	103,043		$	89,982
Interest-earning deposits with banks		239,757			496,535			289,670			245,328			299,042
Total cash and cash equivalents		343,423			603,257			400,191			348,371			389,024
Investment securities available for sale, at fair value		1,569,062			1,499,667			1,557,072			1,425,204			1,552,402
Investment securities held to maturity		591,315			601,923			612,214			653,184			299,645
Other securities		83,676			78,951			78,951			78,951			61,991
Loans and leases held for sale		6,561			18,028			9,279			23,326			17,806
Loans and leases		5,908,658			6,006,472			6,190,405			6,283,523			6,347,246
Allowance for loan and lease losses		(153,850	)		(146,271	)		(125,490	)		(98,313	)		(86,273	)
Loans and leases, net		5,754,808			5,860,201			6,064,915			6,185,210			6,260,973
Premises and equipment, net		111,564			112,744			113,712			114,635			116,885
Premises held for sale		812			812			812			812			812
Accrued interest receivable		37,175			36,565			38,544			35,995			36,587
Bank owned life insurance		198,392			198,131			197,132			196,001			194,883
Other real estate owned and other repossessed assets		2,386			4,208			826			1,359			1,862
Goodwill		281,718			281,623			555,789			555,964			556,031
Other intangible assets, net		29,130			30,943			32,854			33,654			35,557
Unconsolidated investments under the equity method		12,842			12,821			11,718			13,279			12,966
Other assets		148,897			144,036			66,301			91,968			95,618
TOTAL ASSETS	$	9,171,761		$	9,483,910		$	9,740,310		$	9,757,913		$	9,633,042
BALANCE SHEET - LIABILITIES
Non-interest bearing deposits	$	800,467		$	753,650		$	718,459		$	741,598		$	730,814
Interest bearing deposits		5,610,897			5,985,202			6,080,203			6,070,056			5,929,420
Total deposits		6,411,364			6,738,852			6,798,662			6,811,654			6,660,234
Securities sold under repurchase agreements and federal funds purchased		758,828			737,323			628,711			673,409			645,942
Short-term borrowings		7,165			6,900			7,200			10,000			7,863
Federal Home Loan Bank advances		743,781			756,803			778,906			842,169			930,879
Subordinated debentures		139,668			132,407			136,076			129,827			129,877
Accrued interest payable and other liabilities		40,167			42,157			30,649			74,231			82,145
TOTAL LIABILITIES		8,100,973			8,414,442			8,380,204			8,541,290			8,456,940
BALANCE SHEET - SHAREHOLDERS' EQUITY
Preferred stock		148,050			147,920			144,738			144,517			144,297
Common stock		1,226,481			1,225,635			1,227,032			1,072,921			1,019,548
Retained (deficit) earnings		(301,459	)		(302,120	)		(16,908	)		52,143			65,765
Accumulated other comprehensive income/(loss)		(2,284	)		(1,967	)		5,244			(52,958	)		(53,508	)
TOTAL SHAREHOLDERS' EQUITY		1,070,788			1,069,468			1,360,106			1,216,623			1,176,102
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	9,171,761		$	9,483,910		$	9,740,310		$	9,757,913		$	9,633,042
COMMON SHARE AND PER SHARE DATA
Book Value	$	7.32		$	7.33		$	9.67		$	11.23		$	12.43
Tangible Book Value (2)	$	4.86		$	4.84		$	4.99		$	5.05		$	5.30
Dividends	$	0.01		$	0.01		$	0.05		$	0.05		$	0.17
Shares Oustanding (end of period, net of treasury)		126,004,409			125,713,668			125,658,738			95,507,091			83,005,701
(2) RECONCILIATION TABLE FOR NON-GAAP FINANCIAL MEASURES
Total shareholders' equity		1,070,788			1,069,468			1,360,106			1,216,623			1,176,102
Total preferred shareholders' equity		(148,050	)		(147,920	)		(144,738	)		(144,517	)		(144,297	)
Goodwill and intangibles		(310,848	)		(312,566	)		(588,643	)		(589,618	)		(591,588	)
Tangible common equity		611,890			608,982			626,725			482,488			440,217
Common shares outstanding		126,004,409			125,713,668			125,658,738			95,507,091			83,005,701
Tangible book value per share	$	4.86		$	4.84		$	4.99		$	5.05		$	5.30

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Financial Update for National Penn Bancshares (NPBC) for 3/31/2010
Page 2 of 5
Unaudited, numbers in thousands except share and per share data	For the Quarter Ended
	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
INTEREST INCOME
Loans and leases, including fees	$	78,654		$	82,927		$	84,218		$	84,674		$	84,968
Investment securities
Taxable		11,098			11,871			11,896			11,696			11,614
Tax-exempt		8,838			8,946			9,105			9,251			9,347
Federal funds sold and deposits in banks		247			204			166			227			33
Total interest income		98,837			103,948			105,385			105,848			105,962
INTEREST EXPENSE
Deposits		18,281			22,844			26,069			30,358			31,664
Securities sold under repurchase agreements and federal funds purchased		2,874			3,049			2,965			3,037			3,615
Short-term borrowings		-			-			-			-			-
Long-term borrowings		10,423			10,610			11,008			11,373			12,042
Total interest expense		31,578			36,503			40,042			44,768			47,321
Net interest income		67,259			67,445			65,343			61,080			58,641
Provision for loan and lease losses		32,500			47,000			52,000			37,500			17,525
Net interest income after provision for loan and lease losses		34,759			20,445			13,343			23,580			41,116
NON-INTEREST INCOME
Wealth management income		7,101			7,406			7,670			7,232			6,615
Service charges on deposit accounts		5,341			6,141			6,247			6,071			5,800
Insurance commissions and fees		3,771			3,970			3,771			4,016			3,957
Cash management and electronic banking fees		4,158			4,237			4,041			3,995			3,648
Mortgage banking income		1,153			1,337			1,884			2,834			2,420
Bank owned life insurance income		1,983			1,441			1,131			1,275			1,072
Equity in undistributed net earnings of unconsolidated investments		163			1,706			(525	)		314			1,091
Gain on pension plan curtailment		4,066			-			-			-			-
Other operating income		2,733			(1,783	)		3,315			2,659			2,567
Net (losses) gains from fair value changes		(7,261	)		3,669			(6,249	)		51			(1,898	)
Net gains (losses) on sales of investment securities		-			290			(863	)		-			(2,284	)
Impairment losses on investment securities:
Impairment losses on investment securities		(634	)		(2,166	)		(84,704	)		(14,347	)		(26,595	)
Non credit-related losses on securities not expected to be sold recognized
in other comprehensive loss before tax		-			-			-			7,211			18,810
Net impairment losses on investment securities		(634	)		(2,166	)		(84,704	)		(7,136	)		(7,785	)
Total non-interest income		22,574			26,248			(64,282	)		21,311			15,203
NON-INTEREST EXPENSE
Salaries, wages and employee benefits		29,429			30,864			30,505			32,249			32,017
Net premises and equipment		7,998			7,962			8,104			7,335			8,598
Advertising and marketing expenses		1,609			2,442			1,246			1,893			1,855
Fraud loss (recovery)		-			-			(4,028	)		-			-
Goodwill impairment		-			275,000			-			-			-
FDIC Insurance		4,097			3,910			2,602			6,536			1,867
Other operating expenses		14,524			16,941			13,723			14,639			12,356
Total non-interest expense		57,657			337,119			52,152			62,652			56,693
(Loss) income before income taxes		(324	)		(290,426	)		(103,091	)		(17,761	)		(374	)
Income tax (benefit) expense		(4,250	)		(9,227	)		(40,000	)		(10,213	)		(4,173	)
NET INCOME (LOSS)		3,926			(281,199	)		(63,091	)		(7,548	)		3,799
Preferred dividends and accretion of preferred discount		(2,005	)		(2,095	)		(2,096	)		(2,095	)		(2,054	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	1,921		$	(283,294	)	$	(65,187	)	$	(9,643	)	$	1,745
PER SHARE OF COMMON STOCK
Basic (loss) earnings available to common shareholders	$	0.02		$	(2.25	)	$	(0.65	)	$	(0.11	)	$	0.02
Diluted (loss) earnings available to common shareholders	$	0.02		$	(2.25	)	$	(0.65	)	$	(0.11	)	$	0.02
Average Shares Basic		125,875,061			125,697,822			100,064,355			87,415,723			81,497,806
Average Shares Diluted		126,039,112			125,697,822			100,064,355			87,415,723			81,891,272
SUPPLEMENTAL DATA  (annualized, average)
Return on Assets		0.17	%		-11.41	%		-2.57	%		-0.31	%		0.16	%
Return on Total Equity		1.48	%		-82.16	%		-20.01	%		-2.52	%		1.31	%
Return on Common Equity		1.72	%		-91.98	%		-22.63	%		-2.87	%		1.49	%
Return on Tangible Equity (1)		2.59	%		-177.49	%		-48.40	%		-6.52	%		3.51	%

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Financial Update for National Penn Bancshares (NPBC) for 3/31/2010
Page 3 of 5
Unaudited, numbers in thousands except share and per share data
	As of and For the Quarter Ended
	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
CHARGEOFFS
Loan Chargeoffs	$	27,482		$	28,524		$	29,202		$	27,759		$	16,044
Recoveries on Loans		(2,561	)		(2,305	)		(4,379	)		(2,299	)		(786	)
Net Loan Chargeoffs	$	24,921		$	26,219		$	24,823		$	25,460		$	15,258
Net Loan Chargeoffs to Average Loans (annualized)		1.69	%		1.69	%		1.57	%		1.60	%		0.97	%
NET CHARGE OFF ASSETS-DETAIL
Commercial, Financial and Agricultural	$	(2,162	)	$	(11,529	)	$	(11,819	)	$	(14,791	)	$	(6,597	)
Real Estate-Permanent		(359	)		(8,522	)		(2,485	)		(3,029	)		6
Real Estate-Construction		(18,427	)		(3,493	)		(7,835	)		(5,038	)		(1,234	)
Leases		(98	)		(38	)		19			(274	)		(88	)
Residential Mortgages		(2,700	)		(1,089	)		(860	)		(978	)		(565	)
Consumer		(1,086	)		(1,322	)		(1,688	)		(1,235	)		(6,633	)
Overdraft		(89	)		(226	)		(155	)		(115	)		(147	)
Net Loans Charged-off	$	(24,921	)	$	(26,219	)	$	(24,823	)	$	(25,460	)	$	(15,258	)
	As of
	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
ASSET QUALITY AND OTHER DATA
Nonaccrual Loans	$	111,064		$	122,516		$	116,418		$	119,615		$	59,871
Restructured Loans		6,653			576			589			603			614
Loans 90+ Days Past Due & Still Accruing		2,651			2,694			3,113			2,763			2,659
Total Non-performing Loans	$	120,368		$	125,786		$	120,120		$	122,981		$	63,144
Other Real Estate Owned & Repossessed Assets		2,386			4,208			826			1,359			1,862
Total Non-performing Assets	$	122,754		$	129,994		$	120,946		$	124,340		$	65,006
Allowance for Loan and Lease Losses	$	153,850		$	146,271		$	125,490		$	98,313		$	86,273
Allowance for Loan and Lease Losses/Non-Performing Loans		127.8	%		116.3	%		104.5	%		79.9	%		136.6	%
Allowance for Loan and Lease Losses/Non-Performing Assets		125.3	%		112.5	%		103.8	%		79.1	%		132.7	%
Provision/Charge-Offs, net		130.4	%		179.3	%		209.5	%		147.3	%		114.9	%
Classified Loans	$	532,048		$	501,485		$	483,163		$	375,842		$	263,332
Classified Loans/Total Loans		8.99	%		8.32	%		7.79	%		5.96	%		4.14	%
Delinquent Loans	$	31,891		$	28,158		$	33,998		$	29,723		$	31,201
Delinquent Loans/Total Loans		0.54	%		0.47	%		0.55	%		0.47	%		0.49	%
NON PERFORMING ASSETS-DETAIL
Commercial, Financial and Agricultural	$	38,455		$	40,618		$	42,226		$	38,416		$	26,479
Real Estate-Permanent		14,823			19,277			15,255			10,332			2,327
Real Estate-Construction		40,622			46,832			43,497			56,567			18,357
Leases		580			396			461			445			789
Residential Mortgages		18,368			12,800			8,934			7,543			6,155
Consumer		6,691			6,842			6,796			7,624			7,402
Loans Past Due 90+Days		2,651			2,694			3,113			2,763			2,659
Total Other Repossessed Assets		564			535			664			650			838
Total Non-performing Assets + Loans 90 Days Past Due	$	122,754		$	129,994		$	120,946		$	124,340		$	65,006
	As of
	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
CAPITAL DATA
Tier 1 Capital	$	811,391		$	809,218		$	827,685		$	809,600		$	764,426
Tier 1 Leverage Ratio		9.08	%		8.88	%		9.00	%	��	8.80	%		8.62	%
Tier 1 Ratio (%)		12.90	%		12.66	%		12.46	%		11.31	%		10.44	%
Total Capital	$	890,933		$	889,966		$	911,234		$	899,239		$	854,019
Total Capital Ratio (%)		14.17	%		13.92	%		13.72	%		12.56	%		11.61	%
Total Risk-Weighted Assets	$	6,288,993		$	6,394,468		$	6,642,041		$	7,160,809		$	7,324,455

12

Financial Update for National Penn Bancshares (NPBC) for 3/31/2010
Page 4 of 5
Unaudited, numbers in thousands except share and per share data
	As of
PERIOD END BALANCES:	3/31/2010			12/31/2009			9/30/2009			6/30/2009			3/31/2009
Earning Assets / Liabilities
Loan Breakdown:  (Regulatory)
Commercial/Industrial	$	972,132		$	985,357		$	1,098,501		$	1,139,020		$	1,182,486
Commercial Real Estate (3)		1,852,838			1,833,069			1,787,829			1,845,085			1,840,278
Residential Mortgage		1,398,640			1,430,027			1,443,030			1,481,807			1,515,548
Real Estate Construction and Land Development		463,833			534,315			637,231			626,816			617,853
Home Equity		800,394			806,556			804,415			800,122			800,304
Consumer		251,611			252,028			254,909			244,048			235,228
Other Loans		175,771			183,148			173,769			169,951			173,355
Total Loans		5,915,219			6,024,500			6,199,684			6,306,849			6,365,052
Allowance for Loan and Lease Losses/Total Loans and Leases		2.60	%		2.43	%		2.02	%		1.56	%		1.36	%
Investment Securities and Other Securities		2,244,053			2,180,541			2,248,237			2,157,339			1,914,038
Other Earning Assets		239,757			496,535			289,670			245,328			299,645
Total Earning Assets (net of loan loss reserve)	$	8,245,178		$	8,555,305		$	8,612,101		$	8,611,203		$	8,492,462
(3) Includes owner occupied
Loan Breakdown: (Internal)
Commercial Real Estate
Non Owner Occupied
- Permanent	$	865,003		$	831,127		$	836,718		$	846,291		$	782,840
- Construction / Development		365,641			406,331			443,775			481,965			494,224
Commercial & Industrial
Business Purpose, Real Estate secured		1,024,362			1,052,096			1,046,236			1,041,668			1,112,769
Business Purpose, not secured by Real Estate		1,075,058			1,091,578			1,202,023			1,240,604			1,292,103
Owner Occupied Commercial Real Estate
- Permanent		570,659			589,455			595,849			609,192			582,611
- Construction / Development		42,122			52,710			53,976			58,453			46,036
Leasing		15,942			17,304			18,351			18,442			19,205
Residential Mortgage (personal purpose)
Permanent		822,373			833,721			839,459			868,149			891,142
Construction		10,486			12,275			14,037			14,305			17,583
Retail
Home Equity Loans and Direct Installment loans		466,611			487,793			510,178			531,757			565,284
Home Equity Lines of Credit		303,246			297,652			280,813			262,521			239,794
Private Banking Credit Lines		167,954			171,582			172,113			166,542			157,734
Indirect Vehicle loans		138,536			141,829			144,158			138,017			130,279
Other		47,226			39,047			41,998			28,944			33,448
Total Loans	$	5,915,219		$	6,024,500		$	6,199,684		$	6,306,849		$	6,365,052
Deposit Breakdown:
Savings	$	433,669		$	414,886		$	395,965		$	393,163		$	382,705
NOW Accounts		1,114,539			1,284,143			1,221,170			1,127,352			967,221
Money Market Accounts		1,724,852			1,675,369			1,700,338			1,666,807			1,719,492
CDs $100k or less		1,565,238			1,607,147			1,630,528			1,709,667			1,730,061
CDs greater than $100k		772,599			1,003,657			1,132,202			1,173,067			1,129,941
Total Interest Bearing Deposits		5,610,897			5,985,202			6,080,203			6,070,056			5,929,420
Borrowings		1,649,442			1,633,433			1,550,893			1,655,405			1,714,561
Total Interest Bearing Liabilities	$	7,260,339		$	7,618,635		$	7,631,096		$	7,725,461		$	7,643,981

13

Financial Update for National Penn Bancshares (NPBC) for 3/31/2010
Page 5 of 5
Unaudited, numbers in thousands	Quarterly, as of
except share and per share data	3/31/2010					12/31/2009					9/30/2009					6/30/2009					3/31/2009
	Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield			Avg Bal		Yield
Total Loans (net of unearned)	$	5,985,554		5.39	%	$	6,137,362		5.42	%	$	6,280,351		5.38	%	$	6,365,343		5.39	%	$	6,366,859		5.47	%
Investment Securities		2,184,886		4.56	%		2,244,878		4.51	%		2,167,261		4.72	%		1,972,633		5.24	%		1,946,768		5.39	%
Interest Earning Deposits and
Fed Funds Sold		411,100		0.24	%		410,679		0.22	%		243,596		0.25	%		400,828		0.21	%		92,227		0.14	%
Total Earning Assets		8,581,540		4.93	%		8,792,919		4.94	%		8,691,208		5.07	%		8,738,804		5.12	%		8,405,854		5.39	%
Total Earning Assets (net of loan
loss reserve)		8,420,661		5.02	%		8,661,393		5.02	%		8,582,628		5.13	%		8,645,644		5.17	%		8,316,706		5.45	%
Total Assets		9,337,334		4.53	%		9,775,612		4.45	%		9,724,872		4.53	%		9,790,331		4.57	%		9,461,229		4.79	%
Savings		421,503		0.33	%		405,132		0.33	%		396,626		0.28	%		387,596		0.27	%		370,302		0.35	%
NOW Accounts		1,170,886		0.43	%		1,212,744		0.56	%		1,162,730		0.58	%		1,110,985		0.82	%		973,386		0.83	%
Money Market Accounts		1,710,084		0.97	%		1,704,247		1.11	%		1,695,479		1.10	%		1,708,680		1.25	%		1,672,706		1.63	%
CDs		2,522,020		2.03	%		2,730,493		2.34	%		2,822,447		2.72	%		2,935,996		3.08	%		2,722,419		3.37	%
Total Interest Bearing Deposits		5,824,493		1.27	%		6,052,616		1.50	%		6,077,282		1.70	%		6,143,257		1.98	%		5,738,813		2.24	%
Non-Interest Bearing Deposits		767,398					741,254					737,745					736,155					709,490
Total Deposits		6,591,891		1.12	%		6,793,870		1.34	%		6,815,027		1.52	%		6,879,412		1.77	%		6,448,303		1.99	%
								��
Short-Term Borrowings		749,114		1.56	%		694,000		1.74	%		644,753		1.83	%		634,077		1.92	%		670,436		2.19	%
Long-Term Borrowings		885,293		4.77	%		904,083		4.66	%		946,017		4.62	%		995,619		4.58	%		1,072,044		4.56	%
Total Interest Bearing Liabilities
(including non-interest bearing deposits)		8,226,298		1.56	%		8,391,953		1.73	%		8,405,797		1.89	%		8,509,108		2.11	%		8,190,783		2.34	%
Total Interest Bearing Liabilities		7,458,900		1.72	%		7,650,699		1.89	%		7,668,052		2.07	%		7,772,953		2.31	%		7,481,293		2.57	%
Net Yield on Earning Assets (net of loan
loss reserve): (Margin)				3.50	%				3.34	%				3.28	%				3.10	%				3.14	%
Net Yield on Earning Assets: (Margin)				3.44	%				3.29	%				3.24	%				3.06	%				3.11	%
Pro Forma - Net Yield on Earning Assets
(net of loan loss reserve): (Margin)
prior to reclass of Federal Reserve
Bank balances to Interest Bearing
Deposits				N/A					3.48	%				3.35	%				3.22	%				3.16	%
Pro Forma - Net Yield on Earning Assets:
(Margin) prior to reclass of Federal
Reserve Bank balances to Interest
Bearing Deposits				N/A					3.43	%				3.31	%				3.19	%				3.13	%
STATES OF OPERATION AND BANKING
OFFICES BY STATE
(LATEST AVAILABLE DATA)
Number of Full Service Banking Offices
(Domestic and in the U.S. Territories)
PA
Total Number of Banking Offices		124					124					124					124					124
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		1					1					1					1					1
Total Number of ATMs		133					133					136					138					138
MD
Total Number of Banking Offices		1					1					1					1					1
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		-					-					-					-					-
Total Number of ATMs		1					1					1					1					1
DE
Total Number of Banking Offices		2					2					2					2					2
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		1					1					1					1					1
Total Number of ATMs		2					2					2					2					2
TOTAL
Total Number of Banking Offices		127					127					127					127					127
Total Number of Insured Subsidiaries
(Bank & Thrift Subsidiaries)		2					2					2					2					2
Total Number of ATMs		136					136					139					141					141
EOP Employees (Full Time Equivalent)		1,753					1,756					1,779					1,825					1,785
Wealth Assets:
Assets under administration		9,229,435					8,989,419					8,471,813					8,133,044					7,851,843
Assets under management		2,285,178					2,199,946					2,549,386					2,426,525					2,280,512
(included above)

14