Northwest Bancshares, Inc. Announces Fourth Quarter 2012 Earnings
WARREN, Pa., Jan. 22, 2013 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2012 of $16.3 million, or $0.18 per diluted share. This represents an increase of $1.1 million, or 7.6%, over the same quarter last year when net income was $15.2 million, or $0.16 per diluted share, and an increase of $632,000, or 4.0%, over the quarter ended September 30, 2012 when net income was $15.7 million, or $0.17 per diluted share. The annualized returns on average shareholders' equity and average assets for the current quarter were 5.68% and 0.82% compared to 5.23% and 0.76% for the same quarter last year and 5.37% and 0.78% for the quarter ended September 30, 2012.
As previously announced the Board of Directors declared a quarterly cash dividend of $0.12 per share for the first quarter of 2013 and accelerated its payment into the fourth quarter of 2012. Paid on December 24, 2012, this represents the 73rd consecutive quarter in which the Company has declared a cash dividend.
Net interest income increased by $77,000, or 0.1%, to $66.6 million for the quarter ended December 31, 2012, from $66.5 million for the quarter ended December 31, 2011, as a $5.2 million decrease in interest paid on deposit accounts was partially offset by a $3.2 million decrease in interest income on loans receivable and a $1.9 million decrease in interest income from investment securities. These changes from the previous year were primarily due to decreases in market interest rates and continued competitive pricing pressure.
The provision for loan losses decreased by $2.3 million, or 22.2%, to $8.2 million for the quarter ended December 31, 2012, from $10.5 million for the quarter ended December 31, 2011. As of December 31, 2012, the allowance for loan losses was $73.2 million, or 1.28% of total loans, compared to $71.1 million, or 1.28% of total loans, as of December 31, 2011. The decrease in the provision for loan losses is partially attributable to a decrease in loans that are 90 days or more delinquent to $68.3 million as of December 31, 2012, from $95.8 million as of December 31, 2011 and $80.4 million as of September 30, 2012. Additionally, net charge-offs for the quarter ended December 31, 2012, decreased by $6.5 million, or 51.2%, to $6.1 million compared to $12.6 million in the same quarter last year.
Noninterest income increased by $1.1 million, or 7.8%, to $15.1 million for the quarter ended December 31, 2012, from $14.0 million for the quarter ended December 30, 2011, due primarily to an increase in mortgage banking income of $1.9 million, as an increased number of residential mortgage loans were sold at favorable pricing levels.
Noninterest expense increased by $2.8 million, or 5.7%, to $51.2 million for the quarter ended December 31, 2012, from $48.4 million for the quarter ended December 30, 2011, due primarily to an increase in compensation and employee benefits of $2.9 million, or 11.3%. This increase is the result of the addition of 92 full-time equivalent employees, primarily in our compliance and lending areas and increased benefit costs. Additionally, real estate owned expense increased by $799,000. Partially offsetting these increases was a decrease in marketing expense of $3.0 million, which was due to the timing of marketing campaigns.
Net income for the year ended December 31, 2012 of $63.6 million represents a decrease of $591,000, or 0.9%, compared to net income of $64.2 million for the year ended December 31, 2011. Even though net income decreased slightly from the previous year, diluted earnings per share increased to $0.68 from $0.64, as there were 5,974,113 fewer diluted average shares outstanding in 2012. The annualized returns on average shareholders' equity and average assets were 5.48% and 0.79%, respectively, for the year ended December 31, 2012 compared to 5.24% and 0.80%, respectively, in the prior year.
In making this announcement, William J. Wagner, President and CEO, noted, "2012 was a challenging but productive year. During the year, we further enhanced our compliance management system, restructured our Credit Department to strengthen our commercial lending process and exited some of our larger problem loans. In addition, we were able to deploy $230 million of interest-earning cash by increasing investments securities by approximately $100 million and growing our loan portfolio by $150 million. This use of cash, along with continued growth in checking balances enabled us to maintain our net interest margin at 3.65% throughout the year. Credit quality continued to improve and we were able to decrease our provision for loan losses by nearly $8 million from the prior year. Non-performing loans are now at their lowest level in four years and net charge-offs were down approximately 40% from the previous year. Finally, we continued to manage our excess capital position during the quarter by repurchasing more than 4.2 million of our common shares at an average price of $11.81 per share."
Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products as well as benefits and wealth management services. Northwest operates 165 community banking offices in Pennsylvania, New York, Ohio and Maryland and 52 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.