Pennies or Benjamins, it's all good to National Penn Bancshares, the holding company for National Penn Bank, which operates about 120 branches in eastern and central Pennsylvania and one in Maryland. Originally chartered in 1874, the bank courts small to midsized businesses with annual sales of less than $100 million. Business loans, leases, and lines of credit make up nearly half of the bank's loan portfolio, which also includes commercial real estate loans (around 20%), residential mortgages, home equity loans and lines of credit, and consumer loans. Other units offer trust, investment, insurance, wealth management, retirement plan consulting, and health care advisory services.
National Penn Bancshares (NPB) has refocused after suffering tens of millions of dollars worth of losses on credit investments and quadrupling its provisions for loan losses during the financial crisis. Despite stabilization of the banking sector and improvement in the economy, the bank's revenue declined 10% in 2011 vs. 2010, due to lower interest and non-interest income. Interest income, which accounts for about 60% of the bank's total, fell on a decrease in loans and leases, including fees. Net income jumped more than 310% over the same period, marking a second consecutive year of improvement.
At year end 2011 NPB has total assets of $8.5 billion, total loans and leases of $5.2 billion, and total deposits of $5.9 billion.
NPB weathered the banking crisis with the help of a capital infusion from Warburg Pincus and by raising capital by divesting its portfolio of collateralized debt obligations and selling money manager Vantage Investment Advisors. It also sold Christiana Bank & Trust to WSFS Financial, just two years after buying the unit. Looking ahead, its growth strategy is to focus primarily on commercial banking, as well as consumer banking, and wealth management.
Growth initiatives include improving its deposit mix; garnering more fee-based income from cash management, electronic banking, and international services; and cross-selling its suite of insurance, investment, private banking, wealth management, and trust products services to commercial and consumer banking clients.
The company plans to move its headquarters from Boyertown to Allentown, Pennsylvania in 2014 and to open business centers in Lancaster, Philadelphia, and Wyomissing by about early 2015.
Prior to the recession, the bank had been strengthening its presence in existing markets and entering new ones through acquisitions. The purchase of Nittany Financial (2006) moved the company into central Pennsylvania. It bought KNBT Bancorp (2008), adding some 50 branches in eastern Pennsylvania to National Penn's network. Both Nittany Bank and KNBT retained their names and, along with previous acquisition HomeTowne Heritage Bank, are now divisions of NPB.
Investment firm Warburg Pincus Private Equity X, LP owns 17% of National Penn as a result of a $150 million capital infusion in 2010. – less