The over-allotment option was granted in connection with National Penn’s previously announced public offering of 26.7 million shares of its common stock at $5.25 per share.  National Penn expects net proceeds from the offering, including the exercise of the over-allotment option, after deducting underwriting discounts and commissions and estimated offering expenses to be approximately $153.1 million.

Sandler O’Neill + Partners, L.P. acted as sole book-running manager and J.P. Morgan Securities Inc. and Keefe, Bruyette & Woods, Inc. acted as co-managers for the offering.  Reed Smith LLP acted as legal counsel to National Penn, and Kilpatrick Stockton LLP acted as legal counsel to the underwriters.

National Penn has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates.  These documents may be obtained without charge by visiting EDGAR on the SEC website at www.sec.gov.  Alternatively, copies of the prospectus supplement and the prospectus relating to the offering may be obtained from Sandler O’Neill + Partners, L.P., 919 Third Avenue, 6th Floor, New York, NY 10022, (800) 635-6859.

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About National Penn Bancshares, Inc.

National Penn Bancshares, Inc., with $9.8 billion in assets, is the fourth largest bank holding company based in Pennsylvania.  In addition, wealth assets under administration or management amount to $8.1 billion.

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.; Vantage Investment Advisors, LLC; Institutional Advisors LLC; National Penn Leasing Company; 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.

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,” “plan,’’ “goal,” “potential,” “pro forma,” “seek,” “intend,’’ or “anticipate’’ or the negative thereof or comparable 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.

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 increased capital requirements mandated by National Penn’s regulators, National Penn’s ability to raise capital, 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, 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, 2008, 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 date thereof, including the Form 8-K filed with the SEC on September 8, 2009. 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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National Penn Bank will host a free Community Shred Day event from 9:00 a.m. until 1:00 p.m. at its Royersford Community Office located at 793 Main Street in Royersford, PA. Royersford residents can safely shred unwanted personal and confidential documents

Residents are invited to bring personal and confidential items such as receipts and invoices to the community office to be shredded in a secure manner. Paper clips and staples will go through the shredder, but please do not bring plastic binders or black binder spring clips. Limit of 4 boxes (approximately 16-inches long, 13-inches wide, 10-inches high or the size of a file box) per individual.

In addition to safely shredding unwanted personal and confidential documents, attendees can enter a drawing to win a $50 Visa gift card. For more information about the event or identity theft, please visit www.nationalpenn.com.

The event will be held on Saturday, October 10, 2009 – Rain or Shine from 9:00 a.m. to 1:00 p.m. at the Royersford Community Office.  The address is:

793 Main Street,
Royersford, PA
Phone: (610) 948-7045 or 1.800.996.2062

BACKGROUND:   For the fifth consecutive year, National Penn and its divisions will host a series of free Community Shred Day events where area residents are invited to bring personal and confidential items to be shredded in a secure manner. National Penn’s goal is to raise awareness about the importance of keeping personal information safe to avoid becoming a victim of identity theft. Last year nearly 1,750 people shredded 86,000 pounds of personal documents at National Penn Community Shred Day events.

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with $9.8 billion in assets, is the fourth largest bank holding company based in Pennsylvania.  In addition, wealth assets under administration or management amount to $8.1 billion.

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.; Vantage Investment Advisors, LLC; Institutional Advisors LLC; National Penn Leasing Company; 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.

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“This is an important step in the transition to my eventual retirement from the Board of Directors,” said Weidner.  “Tom understands National Penn’s business model as well as the needs of our shareholders and clients. He’s the right person to lead the board as National Penn navigates these challenging times.”

Glenn E. Moyer, National Penn’s President and CEO said, “On behalf of our management team, we support the Board’s focus on corporate governance best practices, we thank Wayne for his leadership and we welcome Tom in his new role.”

Beaver, 57, retired partner in the business consulting group and former CEO of Reinsel Kuntz Lesher LLP (regional CPA and consulting firm), joined the boards of National Penn and National Penn Bank in July 2005.  In February 2008, he was named lead independent director, a position he has held since then.

“I’ve appreciated the opportunity to serve on the National Penn board these last four years and look forward to continuing in the role of chairman,” said Beaver.  “I’m especially honored to follow Wayne, who has been a leader in the community and in banking for nearly 50 years.”

In addition to his role with National Penn, Beaver has served as a director and member of many other business and philanthropic organizations including past president of The Wyomissing Foundation, Inc.; past president of the Hawk Mountain Council, Boy Scouts of America; director and finance committee chairman of The Reading Hospital and Medical Center; and, with his wife, Cathy, former campaign co-chair of the United Way of Berks County.  He received a bachelor of science degree in Civil Engineering and an MBA from Lehigh University.

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About National Penn’s Board of Directors:

National Penn’s board consists of 15 directors, the majority of whom are independent, consistent with the guidelines for Nasdaq-listed companies.  All directors are selected for their character, judgment, business experience and acumen, to give the Board expertise and experience in areas of strategic importance to National Penn.

About National Penn Bancshares, Inc.:

National Penn Bancshares, Inc., with $9.8 billion in assets, is the fourth largest bank holding company based in Pennsylvania.  In addition, wealth assets under administration or management amount to $8.1 billion.

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.; Vantage Investment Advisors, LLC; Institutional Advisors LLC; National Penn Leasing Company; 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.

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National Penn’s donation will be administered through the Kutztown University Foundation to the Pennsylvania Institute for Children’s Environmental Health (PICEH). PICEH, known for the partnerships it has built with a number of public schools, hospitals, doctor’s offices, government agencies and not-for-profit organizations, is assisting with an educational pilot program for Oley Valley School District. A large portion of National Penn’s donation was used to help the school district develop an air monitoring system on the roof of the Oley Valley Middle School. Students from both the middle school and the high school are utilizing the air monitoring system to gather and read air quality data through this hands-on pilot program.

“The funds donated by National Penn are working to further the education of students on the environment”, said Patricia Zong, administrator for PICEH. She added, “The generosity of National Penn and our partnership with Kutztown University and Oley Valley School District are helping us succeed in our mission of understanding the differences between a child and an adult and creating solutions to protect children from environmental harm via education, research and outreach.”

PICEH, which was created through the Berks County Environmental Advisory Council, continually works to promote public education of children’s environmental health issues and is one of only 15 groups recently honored by Governor Edward G. Rendell and the Pennsylvania Department for Environmental Protection for its work on children’s health issues.

“At National Penn we believe we have a social responsibility to our local communities. Part of this responsibility includes starting our youth off on the right educational path. We are pleased to support this pilot program as it not only proves to be a hands-on educational program but also raises environmental awareness among the students and the surrounding community,” said Scott Gruber, National Penn Central Region president.

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About National Penn Bancshares, Inc.

National Penn Bancshares, Inc., with $9.8 billion in assets, is the fourth largest bank holding company based in Pennsylvania.  In addition, wealth assets under administration or management amount to $8.1 billion.

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.; Vantage Investment Advisors, LLC; Institutional Advisors LLC; National Penn Leasing Company; 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.

In this issue:

• “Safe” Treasuries Face Increasing Interest Rate Risk
• Why 401(k) Investments Should Be Monitored Frequently
• Excessive Withdrawal Rates Can Hamstring Retirees
• Assessing Target-Date Funds
• Dynasty Trusts Attract the Interest of Farsighted Families
• Lifetime Income Products

For fixed income investors, the impact that fiscal and monetary stimuli may have on U.S. Treasury debt in the coming years is cause for concern.

The U.S. government, U.S. Treasury and U.S. Federal Reserve have initiated many funding facilities and programs in an effort to stabilize both the lending markets and the U.S. economy.  Record U.S. debt issuance to fund these initiatives will put upward pressure on interest rates as investors attempt to absorb the additional supply.

U.S. Treasuries provided strong returns in 2008 as investors sought safety and liquidity, driving interest rates across the U.S. Treasury yield curve to historic lows.  As fiscal and monetary stimulus measures are effective in stemming the slide of economic conditions, investor confidence will pick up and risk aversion will subside.  Demand for U.S. Treasuries will weaken as investors reposition their portfolios seeking higher yielding securities.

Hampered by weak consumer and business spending, high unemployment, and a housing market that is still in the corrective phase, the U.S. economy has yet to stabilize.  Consistent with past recessions, the U.S. economy will rebound and prosperity will return.  Although inflation is expected and welcomed during economic recoveries, higher than expected inflation is likely due to the historic levels of monetary and fiscal stimuli used to reignite our economy.  Higher inflation erodes the value of fixed income investments and leads to higher U.S. Treasury yields in order to compensate investors for a decline in purchasing power.

Given this confluence of inflationary factors, investors will be wise to avoid long-term Treasury bonds and favor short-duration issues and Treasury Inflation-Protected Securities (TIPS).  Corporate bonds continue to offer value despite the fact that year-to-date 2009 performance is already nearing double digits.  Firm selection will be very important as company fundamentals will ultimately drive future performance.

James D. King, president and chief investment officer

National Penn Investors Trust Company

National Penn Investors Trust Company provides investment management and trust services to individual, corporate and institutional clients.

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Why 401(k) Investments Should Be Monitored Frequently

It is common for 401k plan sponsors to conduct an annual review of their investments ─ the frequency traditionally recommended by advisors ─ but both the plan and its participants may achieve greater benefit from quarterly reviews.

We understand that quarterly reviews may sound unreasonable for many small businesses whose management is already hard pressed for time. However, companies that begin to monitor their plan’s investment options more regularly quickly perceive why this can be advantageous.

For starters, frequent monitoring helps alert plan sponsors to potential problems more quickly and to react in a timely manner. For example, assume that a quarterly review reveals that for the past two quarters a particular fund in the plan has dramatically underperformed its peers. This can enable the plan sponsor to begin to investigate immediately, rather than to find six months later that the fund has lagged its peer group for an entire year.

In our example, the fund’s disappointing performance may be due to a spell of bad luck that will ultimately be overcome. However, it also is possible that other less favorable factors may be at work, such as:

• A key member of the investment team may have departed
• The investment team may be distracted after assuming responsibility for an additional fund
• A new subadvisor may have been hired by the manager
• The overall investment management organization may be experiencing internal instability
• The investment team may have drifted from its stated philosophy and process

There also are many other possibilities – but whatever the problem may be, it is the responsibility of the plan sponsor and the plan’s advisor to address the issue on as timely a basis as possible.

An additional reason to review plan investment options every quarter is that 401(k) participants have become much more active in asking questions about their portfolios. That’s hardly surprising, given the recent dislocation in the markets and the rise in participant concerns. Quarterly investment reviews place the sponsor and its advisor in a far more informed position to answer participant questions.

Frequent monitoring of portfolios also improves the ability of the plan’s advisor to help participants adjust asset allocation models and assess which options might serve them best.

E. Vaughn Landes, president

National Penn Capital Advisors

National Penn Capital Advisors is a registered investment advisor that consults to 401(k) and other defined contribution plans and addresses the personal wealth needs of business owners and their key employees.

Securities provided by National Penn Capital Advisors are offered exclusively through NRP Financial, Inc.

Member FINRA/SIPC

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Excessive Withdrawal Rates Can Hamstring Retirees

Bear markets can do considerable damage to a retiree’s investment portfolio. However, retirees also face considerable peril if they withdraw too much money from their portfolio over time.

Excessive withdrawals are a stealth threat to financial security: By the time retirees realize that they have depleted too much of their retirement savings, the damage often is past repair.

Many retirees mistakenly assume that their withdrawal rate can be the same as the interest rates from a CD or a bond fund – but those rates often are higher than the 4 percent annual withdrawal rate that many financial advisors recommend.

In 1994, a research paper published by William Bengen revealed that retirees who draw down 5 percent a year run a 30 percent chance that their nest egg will “run out of steam before they do.”  Conversely, retirees who draw down no more than 4.2 percent of their portfolio each year are likely to have a sufficient income stream for their entire retirement.  A more recent study confirms this. It found that 4.4 percent is the lowest initial withdrawal rate that survived any rolling 30 year period since 1871.

Retirees often do not consider the relationship between their withdrawal rate and inflation. Twenty years from now, at an average inflation rate, a retiree may require $180,000 to equal the purchasing power of $100,000 today. An optimal retirement portfolio will continue to grow so that the size of annual withdrawals also can grow, even as the withdrawal rate remains the same.

Historically, a portfolio that balances equities and fixed income and has a withdrawal rate in the neighborhood of 4% will enable a retiree to maintain purchasing power. Higher withdrawal rates make this difficult to achieve, especially in periods where inflation is above average or when a portfolio declines in value due to a bear market.

Robert R. Thomas, CFA, CFP®, president & CEO

Vantage Investment Advisors, LLC.

Vantage Investment Advisors, LLC. is a registered investment advisor that provides investment management services to individuals, trusts and qualified plans.

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Assessing Target-Date Funds

Many 401(k) plan participants were deeply disappointed by the 2008 performance of certain target-date funds.  Among 31 funds with a 2010 target-date for retirement, the average loss approached 25 percent. For those investors who plan to retire in the next several years, the damage to their 401(k) nest egg may be long lasting.

The investment performance of the worst performing funds was generally exacerbated by aggressive allocations to riskier assets, such as equities and REITs. In years when these assets performed well, 2010 target-date funds with significant equity/REIT exposure generated higher returns than more conservative 2010 funds. However, the conservative funds subsequently proved to be less vulnerable to the 2008 market downturn.

Many plan sponsors mistakenly assume that funds with the same target-date tend to have similar glide paths, i.e., the progression of a fund’s asset allocation from a more to less risky investment profile over time. In actuality, there can be great dispersion in regard to how target-date funds are managed. For example, some target-date funds emphasize wealth preservation as the investors’ retirement date approaches, to protect against heavy losses in the event of a market downturn. That is especially important if soon-to-retire participants plan to transition their plan assets to an annuity or other income producing vehicle. Other funds may seek to manage the fund to a date well past an investor’s retirement. To help investors remain ahead of inflation during a conceivably long retirement, these funds generally maintain a riskier profile. Both approaches may be reasonable, but both may not be suitable for all participants. Sponsors should decide which philosophy is most appropriate for their employee population.

401(k) participants should not automatically invest in a target-date fund simply because it is one of the options offered by the retirement plan. It is essential for every participant to evaluate the risk and return parameters of their fund.

One of the first questions is whether a target-date fund’s glide path is appropriate. The answer depends to a great extent on the number of years prior to a participant’s expected retirement. A relatively high allocation to historically volatile assets may be fine for an investor whose retirement is a decade or more away. However, if the glide path allows for an aggressive allocation close to the target-date, caution may be advised.

Most 401(k) participants do not have the background or access to data that can enable them to easily make this determination. However, the plan administrator or advisor to the plan should be able to provide perspective on the degree of risk assumed by a target-date fund at any given point in its glide path progression.

Trisha Brambley, president

RESOURCES for Retirement

RESOURCES for Retirement provides investment fiduciary services and plan consulting to retirement plan sponsors.

Securities provided by RESOURCES for Retirement are offered exclusively through NRP Financial, Inc.

Member FINRA/SIPC

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Dynasty Trusts Attract the Interest of Farsighted Families

Delaware is among a number of states that offer dynasty trusts, which are becoming an increasingly popular tool for wealthy families.

For families that seek to create a multi generational legacy, dynasty trusts can remain in force either in perpetuity or for many years.  Like many other trusts, these vehicles enable their creators to:

• control how their money is deployed or managed when grandchildren and successive generations receive it;
• take advantage of estate planning techniques that minimize the impact of federal transfer taxes in future generations; and
• bolster protection from creditors or former spouses.

Personal reasons vary when it comes to establishing dynasty trusts. Sometimes the creators of these vehicles simply seek to protect their assets to the greatest extent possible, so that the fortune remains within the family and can be enjoyed and used productively by multiple generations. Other families of great wealth may be concerned that not every present or future member will handle his or her finances in a prudent manner, or that a family member – perhaps yet unborn – will be impaired by a serious disability.

As noted above, a highly compelling reason to enter into this type of trust is the ability to mitigate family federal transfer taxes across multiple generations. Dynasty trusts leverage the exemption amount that can be placed in trust (currently $3,500,000), as this sum will not be subject to transfer taxes again until trust assets are fully distributed. Creators of Delaware dynasty trusts can choose when the trust terminates as far down the lineal chain as they wish.

Due to their longevity, it is important to build sufficient flexibility into the terms of a dynasty trust.  Delaware’s tax laws, for example, permit trustees to divide duties among several entities or individuals, each of which is considered to be a fiduciary and subject to traditional fiduciary standards and obligations.  When a number of advisors, family members and corporate trustees are involved, rather than a single trustee or advisor, the risk is reduced that the trust will be administered in a manner that departs from the trust creator’s original wishes.

Thomas A. Campbell, EVP and chief trust officer

Christiana Bank & Trust

Christiana Bank & Trust Company provides banking, fiduciary, agency and investment services that allow clients to take advantage of Delaware’s robust, clear and predictable business and trust law.

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Lifetime Income Products

It has become increasingly apparent that a large number of baby boomers simply have not saved enough. Many of these individuals believed that their retirement could be financed by home equity or that their 401(k) account alone was a sufficient savings vehicle.

Whatever the cause of under saving, there is an urgent need for many individuals nearing or in retirement to find a second source of lifetime income. The first source, of course, is Social Security, which in many cases may prove inadequate to cover all retirement expenses.

Households that have accumulated a retirement nest egg via their 401(k) or other means may be planning on withdrawing a planned amount each year during retirement. However, there is no assurance that these savings or investments will continue to provide sufficient purchasing power over a 10, 20 or 30-year period. Occasional market downturns can seriously reduce a retiree’s principal, and periods of low interest rates and inflation can decrease the absolute or relative value of investment income.

For a growing number of retirees, one solution may be the new generation of lifetime income products, such as a fixed annuity. Backed by insurers, these products assure* investors of receiving income throughout their entire retirement, thereby removing the threat of running out of money**. The income thrown off by a lifetime income product also may be a potentially effective diversifier within a larger retirement portfolio.

The guaranteed death benefit offered by many lifetime income products may ensure that the beneficiary (or beneficiaries) will have a postmortem income stream. Beneficiaries also may have access to multiple fund managers to help to potentially maximize returns, and are allowed to dollar-cost-average*** into their investment.

Provided by, Edward Cwalina, senior vice president, investment executive

National Penn Investment Services

National Penn Investment Services offers a range of financial services inclusive of financial planning, brokerage, securities, and investment services.

Editorial assistance provided by Ben-Abraham Associates

PrimeVest Financial Services, Inc. (PrimeVest) is an independent registered broker-dealer. Member FINRA/SIPC. National Penn Investment Services is a marketing name for PrimeVest which is offering securities at National Penn Bank (NPB) and its affiliates. PrimeVest is not affiliated with NPB or National Penn Investors Trust Company (NPITC), a limited purpose trust company of NPB. Neither NPB or NPITC is a broker-dealer or insurance agency. Ben Abraham Associates is not affiliated with PrimeVest.

Securities and insurance products offered are:

● Not a Deposit ● Not FDIC Insured ● Not Insured by Any Federal Government Agency

● Not Guaranteed by National Penn Bank ● May Lose Value

*Guarantees are backed by the claims paying ability of the issuer.

**Lifetime income enhancements may involve higher fees and expenses.

***Dollar cost averaging will not guarantee a profit, or protect you from loss, but may reduce your average cost per share in a fluctuating market.

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For more information, please contact: Catharine S. Bower, director of corporate communications at 610.369.6618 or catharine.bower@nationalpenn.com

Catharine S. Bower

Senior Vice President

Corporate Communications

National Penn Bancshares, Inc.

P.O.Box 547

24 North Reading Avenue

Boyertown, PA 19512

p. 610.369.6618

f.  610.369.6153