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

Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans.  Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release. 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except per share amounts)




















December 31,

Assets


2012


2011

Cash and cash equivalents




$                      88,277


94,276

Interest-earning deposits in other financial institutions


362,794


593,388

Federal funds sold and other short-term investments


633


633

Marketable securities available-for-sale (amortized cost of $1,053,122 and $885,408)

1,079,074


908,349

Marketable securities held-to-maturity (fair value of $161,969 and $239,412)


155,081


231,389


Total cash, interest-earning deposits and marketable securities


1,685,859


1,828,035












Residential mortgage loans held for sale



15,441


967

Residential mortgage loans




2,400,208


2,396,399

Home equity loans 






1,076,637


1,084,786

Other consumer loans





235,367


245,689

Commercial real estate loans



1,585,833


1,435,767

Commercial loans






388,994


387,911


Total loans receivable




5,702,480


5,551,519

Allowance for loan losses




(73,219)


(71,138)


Loans receivable, net




5,629,261


5,480,381












Federal Home Loan Bank stock, at cost



46,834


48,935

Accrued interest receivable




23,313


24,599

Real estate owned, net





26,165


26,887

Premises and Equipment, net



138,824


132,152

Bank owned life insurance




137,044


133,524

Goodwill and other intangible assets



178,530


174,005

Other assets






76,770


109,187


Total assets






$              7,942,600


7,957,705












Liabilities and Shareholders' equity





Liabilities




Noninterest-bearing demand deposits



$                  755,429


658,560

Interest-bearing demand deposits



851,771


800,676

Savings deposits






2,271,311


2,036,272

Time deposits






1,886,089


2,284,817


Total deposits






5,764,600


5,780,325

Borrowed funds






860,047


827,925

Advances by borrowers for taxes and insurance


23,325


23,571

Accrued interest payable




888


1,104

Other liabilities






62,177


66,782

Junior subordinated debentures



103,094


103,094


Total liabilities






6,814,131


6,802,801












Shareholders' equity




Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued

-


-

Common stock, $0.01 par value: 500,000,000 shares authorized, 93,652,960 shares





and 97,493,046 shares issued and outstanding, respectively


937


975

Paid-in-capital






613,249


659,523

Retained earnings






550,296


543,598

Unallocated common stock of Employee Stock Ownership Plan


(24,525)


(25,966)

Accumulated other comprehensive loss



(11,488)


(23,226)


Total shareholders' equity



1,128,469


1,154,904


Total liabilities and shareholders' equity


$              7,942,600


7,957,705

















Equity to assets


14.21%


14.51%






Tangible common equity to assets


12.23%


12.60%






Book value per share


$                      12.05


$                         11.85






Tangible book value per share


$                      10.14


$                         10.06






Closing market price per share


$                      12.14


$                         12.44






Full time equivalent employees


2,042


1,950






Number of banking offices


165


168












Northwest Bancshares, Inc. and Subsidiaries


Consolidated Statements of Income


(Dollars in thousands, except per share amounts)


















Quarter ended







December 31,


September 30,







2012


2011


2012


Interest income:









Loans receivable


$                    76,701


79,930


77,109



Mortgage-backed securities


3,697


5,077


3,941



Taxable investment securities


743


776


577



Tax-free investment securities


2,132


2,600


2,223



Interest-earning deposits


382


423


364




Total interest income


83,655


88,806


84,214













Interest expense:









Deposits


9,042


14,227


10,207



Borrowed funds


7,998


8,041


8,013




Total interest expense


17,040


22,268


18,220















Net interest income


66,615


66,538


65,994


Provision for loan losses


8,173


10,502


6,915




Net interest income after provision










for loan losses


58,442


56,036


59,079













Noninterest income:









Impairment losses on securities


-


(1,504)


(340)



Noncredit related losses on securities not expected










to be sold (recognized in other comprehensive income)


-


1,074


247



Net impairment losses


-


(430)


(93)



Gain/ (loss) on sale of investments, net


394


157


260



Service charges and fees


8,587


8,630


8,772



Trust and other financial services income


2,288


1,967


2,122



Insurance commission income


1,463


1,582


1,480



Loss on real estate owned, net


(2,020)


(466)


(1,187)



Income from bank owned life insurance


1,589


1,199


1,148



Mortgage banking income


1,874


(29)


1,484



Other operating income


964


1,428


949




Total noninterest income


15,139


14,038


14,935













Noninterest expense:









Compensation and employee benefits


28,302


25,434


28,171



Premises and occupancy costs


5,680


5,556


5,498



Office operations


3,419


3,286


3,141



Processing expenses


6,459


5,982


6,340



Marketing expenses


134


3,098


1,830



Federal deposit insurance premiums


1,211


933


1,305



Professional services


1,869


1,441


1,939



Amortization of intangible assets


219


374


219



Real estate owned expense


1,261


462


832



Other expense


2,662


1,870


2,528




Total noninterest expense


51,216


48,436


51,803















Income before income taxes


22,365


21,638


22,211



Income tax expense


6,040


6,463


6,518
















Net income


$                    16,325


15,175


15,693













Basic earnings per share


$                        0.18


0.16


0.17













Diluted earnings per share


$                        0.18


0.16


0.17













Annualized return on average equity


5.68%


5.23%


5.37%


Annualized return on average assets


0.82%


0.76%


0.78%













Basic common shares outstanding


92,716,973


93,675,589


94,422,878


Diluted common shares outstanding


92,937,877


93,972,187


94,610,656


Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)














Year ended 






December 31,






2012


2011

Interest income:






Loans receivable


$                            309,391


320,942


Mortgage-backed securities


16,738


23,450


Taxable investment securities


2,328


2,452


Tax-free investment securities


9,119


11,514


Interest-earning deposits


1,599


1,712



Total interest income


339,175


360,070









Interest expense:






Deposits


43,377


60,721


Borrowed funds


31,822


32,080



Total interest expense


75,199


92,801











Net interest income


263,976


267,269

Provision for loan losses


26,338


34,170



Net interest income after provision







for loan losses


237,638


233,099









Noninterest income:






Impairment losses on securities


(996)


(2,081)


Noncredit related losses on securities not expected







to be sold (recognized in other comprehensive income)


665


1,144


Net impairment losses


(331)


(937)


Gain on sale of investments, net


654


358


Service charges and fees


34,486


35,378


Trust and other financial services income


8,544


8,125


Insurance commission income


6,264


6,548


Loss on real estate owned, net


(4,859)


(2,426)


Income from bank owned life insurance


4,961


6,019


Mortgage banking income


4,678


858


Other operating income


4,154


4,213



Total noninterest income


58,551


58,136









Noninterest expense:






Compensation and employee benefits


111,727


106,595


Premises and occupancy costs


22,409


23,055


Office operations


13,224


12,850


Processing expenses


25,000


23,332


Marketing expenses


7,829


9,953


Federal deposit insurance premiums


5,554


7,101


Professional services


7,005


5,224


Amortization of intangible assets


1,012


1,819


Real estate owned expense


3,404


1,625


Other expense


9,097


8,673



Total noninterest expense


206,261


200,227











Income before income taxes


89,928


91,008


Income tax expense


26,368


26,857












Net income


$                               63,560


64,151









Basic earnings per share


$                                   0.68


0.64









Diluted earnings per share


$                                   0.68


0.64









Annualized return on average equity


5.48%


5.24%

Annualized return on average assets


0.79%


0.80%









Basic common shares outstanding


93,912,821


99,801,783

Diluted common shares outstanding


94,203,451


100,177,564









Northwest Bancshares, Inc. and Subsidiaries



Asset quality



(Dollars in thousands)


















December 31,  2012


December 31, 2011


December 31, 2010


December 31, 2009















Non-accrual loans current:












Residential mortgage loans


$                  797


-


-


-




Home equity loans


635


-


-


-




Other consumer loans


44


-


-


-




Commercial real estate loans


24,960


13,057


7,378


-




Commercial loans


5,424


13,480


23,317


13,141



Total non-accrual loans current


$             31,860


26,537


30,695


13,141















Non-accrual loans delinquent 30 days to 59 days:












Residential mortgage loans


$                       -


-


-


-




Home equity loans


-


-


-


-




Other consumer loans


-


-


-


-




Commercial real estate loans


5,549


3,274


4,039


-




Commercial loans


2,002


90


1,465


-



Total non-accrual loans delinquent 30 days to 59 days


$                7,551


3,364


5,504


-















Non-accrual loans delinquent 60 days to 89 days:












Residential mortgage loans


$                        -


-


-


-




Home equity loans


-


-


-


-




Other consumer loans


-


-


-


-




Commercial real estate loans


2,802


1,560


10,923


1,705




Commercial loans


9,652


3,808


848


-



Total non-accrual loans delinquent 60 days to 89 days


$             12,454


5,368


11,771


1,705















Non-accrual loans delinquent 90 days or more:












Residential mortgage loans


$             24,286


28,221


29,751


29,134




Home equity loans


8,479


9,560


10,263


10,008




Other consumer loans


1,936


2,667


2,565


2,775




Commercial real estate loans


24,550


44,603


44,965


49,594




Commercial loans


9,096


10,785


12,877


18,269



Total non- accrual loans delinquent 90 days or more


$             68,347


95,836


100,421


109,780















Total non-accrual loans


$          120,212


131,105


148,391


124,626






























December 31,


December 31,


December 31,


December 31,






2012


2011


2010


2009















Nonperforming loans


$          120,212


131,105


148,391


124,626



Real estate owned, net


26,165


26,887


20,780


20,257



Nonperforming assets


$          146,377


157,992


169,171


144,883















Non-accrual troubled debt restructuring *


$             39,614


29,575


41,740


2,908



Accruing troubled debt restructuring


49,830


39,854


10,865


18,177



Total troubled debt restructuring


$             89,444


69,429


52,605


21,085















Nonperforming loans to total loans


2.11%


2.36%


2.68%


2.35%















Nonperforming assets to total assets


1.84%


1.99%


2.08%


1.81%















Allowance for loan losses to total loans


1.28%


1.28%


1.38%


1.33%















Allowance for loan losses to nonperforming loans


60.91%


54.26%


51.49%


56.49%















* Amounts included in nonperforming loans above.























Northwest Bancshares, Inc. and Subsidiaries

Delinquency

(Dollars in thousands)




















































Loan delinquency schedule

















(Number of loans and dollar amount of loans)
















December 31,


December 31,


December 31,


December 31,



2012

*


2011

*


2010

*


2009

*

Loans delinquent 30 days to 59 days:

















Residential mortgage loans

430

$      32,921

1.4%


427

$      33,671

1.4%


427

$      35,329

1.5%


343

$      27,913

1.2%


Home equity loans

224

6,534

0.6%


222

7,426

0.7%


230

7,317

0.7%


184

7,014

0.6%


Consumer loans

1,122

5,456

2.3%


903

4,854

2.0%


1,008

5,318

2.1%


923

4,297

1.6%


Commercial real estate loans

87

13,001

0.8%


104

10,680

0.7%


82

16,287

1.2%


85

16,152

1.3%


Commercial loans

41

3,233

0.8%


32

2,027

0.5%


48

6,590

1.5%


48

3,293

0.9%

Total loans delinquent 30 days to 59 days

1,904

$      61,145

1.1%


1,688

58,658

1.1%


1,795

$      70,841

1.3%


1,583

$      58,669

1.1%


















Loans delinquent 60 days to 89 days:

















Residential mortgage loans

100

$         9,387

0.4%


99

$         8,629

0.4%


106

$         9,848

0.4%


77

$         6,657

0.3%


Home equity loans

65

1,977

0.2%


47

1,953

0.2%


81

3,249

0.3%


52

1,719

0.2%


Consumer loans

448

1,830

0.8%


412

1,787

0.7%


356

1,331

0.5%


348

1,425

0.5%


Commercial real estate loans

33

4,596

0.3%


38

3,122

0.2%


39

14,365

1.1%


35

5,811

0.5%


Commercial loans

17

10,158

2.5%


25

4,958

1.3%


9

1,678

0.4%


26

2,474

0.7%

Total loans delinquent 60 days to 89 days

663

$      27,948

0.5%


621

20,449

0.4%


591

$      30,471

0.6%


538

$      18,086

0.3%


















Loans delinquent 90 days or more:

















Residential mortgage loans

266

$      24,286

1.0%


273

$      28,221

1.2%


275

$      29,751

1.2%


265

$      29,134

1.2%


Home equity loans

175

8,479

0.8%


177

9,560

0.9%


190

10,263

0.9%


195

10,008

0.9%


Consumer loans

427

1,936

0.8%


456

2,667

1.1%


374

2,565

1.0%


546

2,775

1.0%


Commercial real estate loans

146

24,550

1.6%


131

44,603

3.1%


181

44,965

3.3%


199

49,594

4.0%


Commercial loans

61

9,096

2.2%


66

10,785

2.8%


111

12,877

3.0%


124

18,269

4.9%

Total loans delinquent 90 days or more

1,075

$      68,347

1.2%


1,103

95,836

1.7%


1,131

$   100,421

1.8%


1,329

$   109,780

2.1%


















Total loans delinquent

3,642

$   157,440

2.8%


3,412

$   174,943

3.2%


3,517

$   201,733

3.7%


3,450

$   186,535

3.5%



















* - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.  
























 

Northwest Bancshares, Inc. and Subsidiaries



Loans by credit quality indicators as of December 31, 2012 



(Dollars in thousands)


































Recorded

















investment









Special








in loans







Pass


mention


Substandard


 Doubtful 


 Loss 


receivable



Personal Banking:

















Residential mortgage loans


$         2,395,809


-


18,743


48


1,049


2,415,649





Home equity loans


1,068,183


-


8,454


-


-


1,076,637





Other consumer loans


234,106


-


1,261


-


-


235,367




Total Personal Banking


3,698,098


-


28,458


48


1,049


3,727,653




















Business Banking:

















Commercial real estate loans


1,352,118


68,130


163,751


1,834


-


1,585,833





Commercial loans


320,228


13,077


52,742


2,947


-


388,994




Total Business Banking


1,672,346


81,207


216,493


4,781


-


1,974,827
























$         5,370,444


81,207


244,951


4,829


1,049


5,702,480





































Northwest Bancshares, Inc. and Subsidiaries



Loans by credit quality indicators as of December 31, 2011



(Dollars in thousands)


































Recorded

















investment









Special








in loans







Pass


mention


Substandard


 Doubtful 


 Loss 


receivable



Personal Banking:

















Residential mortgage loans


$         2,373,275


-


22,843


11


1,237


2,397,366





Home equity loans


1,074,512


-


10,274


-


-


1,084,786





Other consumer loans


244,491


-


1,198


-


-


245,689




Total Personal Banking


3,692,278


-


34,315


11


1,237


3,727,841




















Business Banking:

















Commercial real estate loans


1,211,583


75,981


144,947


3,256


-


1,435,767





Commercial loans


298,597


23,887


62,753


2,674


-


387,911




Total Business Banking


1,510,180


99,868


207,700


5,930


-


1,823,678
























$         5,202,458


99,868


242,015


5,941


1,237


5,551,519





































 

Northwest Bancshares, Inc. and Subsidiaries

Allowance for loan losses

(Dollars in thousands)














Quarter ended


Year ended




December 31, 


December 31, 




2012


2011


2012


2011

Allowance for loan losses 










Beginning balance


$             71,177


73,208


71,138


76,412


Provision


8,173


10,502


26,338


34,170


Charge-offs residential mortgage


(836)


(1,530)


(4,295)


(4,198)


Charge-offs home equity


(1,317)


(998)


(4,066)


(4,734)


Charge-offs other consumer


(1,592)


(1,467)


(5,919)


(5,283)


Charge-offs commercial real estate


(4,102)


(4,288)


(9,919)


(12,508)


Charge-offs commercial


(1,245)


(4,935)


(6,254)


(15,641)


Recoveries


2,961


646


6,196


2,920


Ending balance


$             73,219


71,138


73,219


71,138





















Net charge-offs to average loans, annualized


0.43%


0.91%


0.43%


0.72%

 

Northwest Bancshares, Inc. and Subsidiaries

Municipal securities portfolio

(Dollars in thousands)














December 31, 2012


As a %




Market


 Book 


Unrealized


of book




 value 


 value 


gain


value

Municipal securities by state:









Pennsylvania










School districts

$                 96,271


91,951


4,320


46.7%



General obligations

37,205


35,418


1,787


18.0%



Revenue bonds

3,006


2,948


58


1.5%


Total Pennsylvania

136,482


130,317


6,165


66.2%


New York

26,831


25,954


877


13.2%


Ohio

6,390


5,973


417


3.0%


All other states

37,683


34,659


3,024


17.6%




$              207,386


196,903


10,483


























December 31, 2011


As a %




Market


 Book 


Unrealized


of book




 value 


 value 


gain


value

Municipal securities by state:









Pennsylvania










School districts

$              119,920


114,699


5,221


48.4%



General obligations

43,129


41,766


1,363


17.6%



Revenue bonds

4,717


4,709


8


2.0%


Total Pennsylvania

167,766


161,174


6,592


68.0%


New York

35,269


33,679


1,590


14.2%


Ohio

6,661


6,426


235


2.7%


All other states

38,073


35,904


2,169


15.1%




$              247,769


237,183


10,586













 

Northwest Bancshares, Inc. and Subsidiaries

Average balance sheet 

(Dollars in thousands)








The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and

average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of

assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.










 Quarter ended December 31, 


2012

2011


 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 


 Balance 


 Yield/ 

 Balance 


 Yield/ 




 Cost (h) 



 Cost (h) 

Assets:







Interest-earning assets:







   Loans receivable (a) (b) (d)

$  5,709,603

77,279

5.41%

5,544,194

80,395

5.79%

   Mortgage-backed securities (c) 

717,028

3,697

2.06%

797,071

5,077

2.55%

   Investment securities (c) (d) 

408,925

4,022

3.93%

376,545

4,776

5.07%

   FHLB stock

46,833

51

0.44%

49,775

-

-

   Other interest-earning deposits

608,772

382

0.25%

615,906

423

0.27%








Total interest-earning assets 

7,491,161

85,431

4.56%

7,383,491

90,671

4.90%








Noninterest earning assets (e)

502,514



571,873










Total assets

$  7,993,675



7,955,364










Liabilities and shareholders' equity:







Interest-bearing liabilities:







   Savings accounts

$  1,145,405

1,019

0.35%

1,064,533

1,139

0.42%

   Interest-bearing demand accounts

837,955

145

0.07%

787,674

238

0.12%

   Money market accounts

1,115,655

842

0.30%

959,378

1,013

0.42%

   Certificate accounts

1,923,699

7,036

1.46%

2,308,440

11,837

2.03%

   Borrowed funds (f)

864,085

6,562

3.02%

836,948

6,604

3.13%

   Junior subordinated debentures

103,094

1,436

5.45%

103,094

1,437

5.45%








Total interest-bearing liabilities

5,989,893

17,040

1.13%

6,060,067

22,268

1.46%








Noninterest bearing liabilities (g)

854,786



734,898










Total liabilities

6,844,679



6,794,965










Shareholders' equity

1,148,996



1,160,399










Total liabilities and shareholders' equity

$  7,993,675



7,955,364










Net interest income/ Interest rate spread


68,391

3.43%


68,403

3.44%








Net interest-earning assets/ Net interest margin

$  1,501,268


3.65%

1,323,424


3.71%








Ratio of interest-earning assets to







 interest-bearing liabilities

 1.25X 



 1.22X 










(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.



(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.



(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.



(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.


(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.



(f) Average balances include FHLB borrowings and securities sold under agreements to repurchase.




(g) Average balances include non-interest bearing demand deposits (checking accounts).




(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.37% and 5.76%, respectively, Investment securities - 2.81% 

       and 3.59%, respectively, Interest-earning assets - 4.47% and 4.80%, respectively. GAAP basis net interest rate spreads were 3.34% and 

      3.34%, respectively, and GAAP basis net interest margins were 3.56% and 3.60%, respectively.




 

Northwest Bancshares, Inc. and Subsidiaries

Average balance sheet 

(Dollars in thousands)








The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and

average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of

assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.










 Year ended December 31, 


2012

2011


 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 


 Balance 


 Yield/ 

 Balance 


 Yield/ 




 Cost (h) 



 Cost (h) 

Assets:







Interest-earning assets:







   Loans receivable (a) (b) (d)

$  5,655,179

311,650

5.51%

5,508,790

322,656

5.85%

   Mortgage-backed securities (c) 

736,896

16,738

2.27%

874,366

23,450

2.68%

   Investment securities (c) (d) 

353,431

16,357

4.63%

384,389

20,166

5.25%

   FHLB stock

47,205

87

0.18%

53,985

-

-

   Other interest-earning deposits

638,366

1,599

0.25%

665,074

1,712

0.25%








Total interest-earning assets 

7,431,077

346,431

4.66%

7,486,604

367,984

4.91%








Noninterest earning assets (e)

581,429



570,888










Total assets

$  8,012,506



8,057,492










Liabilities and shareholders' equity:







Interest-bearing liabilities: