National Penn Bancshares Inc. (NPBC) filed Quarterly Report for the period ended 2009-09-30.
NATIONAL PENN BANCSHARES INC is a bank holding company engaged in general banking business. National Penn Bancshares Inc. has a market cap of $720.8 million; its shares were traded at around $5.89 with and P/S ratio of 1.4. The dividend yield of National Penn Bancshares Inc. stocks is 3.3%. National Penn Bancshares Inc. had an annual average earning growth of 5.4% over the past 10 years. GuruFocus rated National Penn Bancshares Inc. the business predictability rank of 2.5-star.
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On October 3, 2008, the Emergency Economic Stabilization Act of 2008, or the EESA, was signed into law. Under EESA, the U.S. Treasury has the authority to, among other things, invest in financial institutions for the purpose of stabilizing and providing liquidity to the U.S. financial markets. Pursuant to this authority, the U.S. Treasury announced its Capital Purchase Program (the “CPP”), under which it is purchasing preferred stock and warrants in eligible institutions, including National Penn, to increase the flow of credit to businesses and consumers and to support the economy. In accordance with the terms of the CPP, National Penn issued to the U.S. Treasury shares of Series B Preferred Stock and a Warrant to purchase 1,470,588 shares of National Penn common stock at $15.30 a share (the “Warrant”), for an aggregate purchase price of $150 million. (The number of shares subject to the Warrant was reduced to 735,294 after National Penn's completion in the third quarter 2009 of a "qualifying equity offering" of more than $150 million.)
In October 2009, National Penn's board of directors approved a fourth quarter 2009 cash dividend of $0.01 per share, which was a reduction from the $0.05 per share amount paid in the third quarter of 2009. The board reduced the common stock cash dividend to preserve capital and strengthen National Penn's tangible common equity levels. There can be no assurance that National Penn will pay dividends to its shareholders in the future, or if dividends are paid, that National Penn will increase its dividend to historical levels or otherwise. National Penn's ability to pay dividends to its shareholders is not only subject to limitations imposed by the terms of the CPP, but also to guidance issued by the Board of Governors of the Federal Reserve System, or the Federal Reserve. Under this guidance, bank holding companies like National Penn are advised to consult in advance with the Federal Reserve before declaring dividends, and to strongly consider reducing, deferring or eliminating dividends, in certain situations—for example, when declaring or paying a dividend that would exceed earnings for the fiscal quarter for which the dividend is being paid, or when declaring or paying a dividend that could result in a material adverse change to the organization's capital structure. Importantly, this Federal Reserve guidance is relevant not only to dividends paid on National Penn's common stock, but also to those payable in respect of National Penn's preferred stock held by the U.S. Treasury. National Penn's failure to pay dividends on its preferred stock or common stock could have a material adverse effect on its business, operations, financial condition, access to funding and the market price of its common stock.
NPBC is in the portfolios of David Dreman of Dreman Value Management.
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