National Penn Bancshares Inc. (NASDAQ:NPBC) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 10:00 am ET

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National Penn Bancshares Inc. (NASDAQ:NPBC) Q4 2014 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Casey Haire, Jefferies. Check your mute function please?

Executive
Unidentified Speaker

Casey, are you on? Okay, maybe we can come back to Casey.

Operator
operator

Frank Schiraldi, Sandler O'Neill.

Analyst
Rob Haderer

Actually Rob Haderer filling in for Frank this morning. Just a couple of quick ones for me. Could you guys maybe quantify the size of the incentive compensation adjustment in the quarter? I can't download that you guys touched on the release. Could you maybe quantify the size of the true-up there?

Executive
Unidentified Speaker

Yes, we look at total benefits in the quarter. They were down $2 million. It was really a function of -- we have over dozen incentive comp plans that have various factors. And we do look at them on a quarterly basis as well as other year-end employee benefits.

Analyst
Rob Haderer

And just on the positive, it looks like just excluding, to exclude the TF Financial, deposits brought on the deal looks like organic deposit actually contracted. Just wondering if this is sort of seasonal muni outflows or was there something else driving that?

Executive
Unidentified Speaker

Your points well taken, it's definitely seasonal muni outflows. We said that our deposit growth would be driven by a great extent to our loan growth. We funded that throughout the

Executive
Unidentified Speaker

year but when you look at the quarterly reduction in deposits, it's almost totally attributable to munis and that is a normal seasonal thing that we see annually.

Analyst
Rob Haderer

And then just one last one for me, look at the credit marked in the TF's deal, I thought when it was -- when the deal was announced the credit mark was estimated close to 2%. It looks like it came in close to 3%. You talked about maybe what change or what factors might have driven that?

Executive
Mike Hughes

Yes. In the executory period, as you would expect to look at some moving parts as it relates to the mark. When we did the transaction or model the transaction at announcement, we thought it will be in the $50 million range and it is. We had some benefits in other areas of some write-ups.

We are conservative by nature. We looked at those marks and the 0.7% is probably $4 million incremental. So as I said in my remarks, what we thought at the modeling stage into diligent stage at TF really materialize that there is no one big factor there.

Executive
Unidentified Speaker

And I think to Mike's point, overall great outcome and once again, right within our range.

Operator
operator

Michael Perito, KBW.

Analyst
Michael Perito

Scott, first quickly on the buyback on the 125 million of purchase authorization. Can you maybe just give us little more thoughts on how you guys are thinking about executing that in terms of how active on a quarterly basis versus more opportunistic it will be?

Executive
Unidentified Speaker

Yes. I think we're going to look at -- this is Mike. I think we're going to look at a variety of potential alternatives there, open market purchases. We're going to evaluate and accelerate the share repurchase, obviously, in the prior year or at 2014. We had