Northwest Bancshares, Inc. Announces Second Quarter 2012 Earnings and Dividend Declaration

WARREN, Pa., July 23, 2012 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2012 of $16.4 million, or $0.17 per diluted share.  This represents an increase of $1.4 million, or 9.1%, over the same quarter last year when net income was $15.0 million, or $0.15 per diluted share, and an increase of $1.2 million, or 7.8%, over the quarter ended March 31, 2012 when net income was $15.2 million, or $0.16 per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 5.63% and 0.82% compared to 4.81% and 0.74% for the same quarter last year and 5.29% and 0.76% for the quarter ended March 31, 2012. 

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share payable on August 16, 2012, to shareholders of record as of August 2, 2012.  This represents the 71st consecutive quarter in which the Company has paid a cash dividend. 

In making this announcement, William J. Wagner, President and CEO, noted, "In the most recent quarter we continued to see many positive trends in our operations. We were pleased with the stability of our margin despite the continued challenges of the interest rate environment and competitive pricing pressures.  During the quarter we experienced net loan growth of approximately $65 million, while asset quality continued to improve.  Delinquent and non-accrual loans at the end of the quarter were at the lowest levels since the second quarter of 2008.  Finally, through the hard work and dedication of our Board of Directors and employees in strengthening our compliance management system, we were pleased to announce the termination of the FDIC Consent Order on July 6, 2012." 

Net interest income decreased by $718,000, or 1.1%, to $66.0 million for the quarter ended June 30, 2012, from $66.7 million for the quarter ended June 30, 2011, which was primarily attributable to a decrease in interest income from loans of $2.6 million, or 3.2%, and from investment securities of $2.5 million, or 25.9%.  Partially offsetting this decrease was a $4.3 million, or 27.7% decrease in interest expense on deposit accounts. These changes from the previous year were primarily due to decreases in market interest rates.

The provision for loan losses decreased by $3.4 million, or 40.7%, to $5.0 million for the quarter ended June 30, 2012, from $8.4 million for the quarter ended June 30, 2011.  As of June 30, 2012, the allowance for loan losses was $70.1 million, or 1.24% of total loans, compared to $75.5 million, or 1.37% of total loans, as of June 30, 2011.  Loans 90 days or more delinquent decreased to $84.7 million as of June 30, 2012, compared to $90.2 million as of March 31, 2012 and $115.8 million as of June 30, 2011.  Net charge-offs for the quarter ended June 30, 2012 were $7.8 million, or 0.55% of average loans on an annualized basis, compared to $9.4 million, or 0.68% of average loans on an annualized basis, in the same quarter last year.

Noninterest income decreased by $425,000, or 2.8%, to $14.8 million for the quarter ended June 30, 2012, from $15.3 million for the quarter ended June 30, 2011, due primarily to a decrease in service charges and fees of $619,000.  This decrease is primarily attributable to changes in overdraft fees assessed on transactional deposit accounts.

Noninterest expense decreased by $524,000, or 1.0%, to $52.0 million for the quarter ended June 30, 2012, from $52.5 million for the quarter ended June 30, 2011, due primarily to a decrease in compensation and employee benefits of $2.3 million.  This decrease is primarily the result of a relatively high level of stock benefits being granted in the previous year. Partially offsetting this decrease was an increase in marketing expense of $1.7 million, which was due to the timing of several campaigns designed to increase lending activity and promote brand awareness.

Net income for the six-month period ended June 30, 2012 of $31.5 million, or $0.33 per diluted share, represents a decrease of $714,000, or 2.2% compared to net income of $32.3 million, or $0.31 per diluted share, for the six-month period ended June 30, 2011.  The annualized returns on average shareholders' equity and average assets were 5.44% and 0.79%, respectively, for the current six-month period compared to 5.07% and 0.79%, respectively, in the prior year.    

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 167 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 press 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)

 






(Unaudited)








June 30,


December 31,


Assets


2012


2011


Cash and cash equivalents


$         82,295


94,276


Interest-earning deposits in other financial institutions


638,940


593,388


Federal funds sold and other short-term investments


633


633


Marketable securities available-for-sale (amortized cost of $874,048 and $885,408)


900,643


908,349


Marketable securities held-to-maturity (fair value of $187,043 and $239,412)


180,134


231,389



Total cash, interest-earning deposits and marketable securities


1,802,645


1,828,035










Loans held for sale


12,800


967


Residental mortgage loans


2,418,756


2,396,399


Home equity loans 


1,102,936


1,084,786


Other consumer loans


240,992


245,689


Commercial real estate loans


1,494,781


1,435,767


Commercial loans


399,470


387,911



Total loans receivable


5,669,735


5,551,519


Allowance for loan losses


(70,110)


(71,138)



Loans receivable, net


5,599,625


5,480,381










Federal Home Loan Bank stock, at cost


46,834


48,935


Accrued interest receivable


23,871


24,599


Real estate owned, net


30,470


26,887


Premises and Equipment, net


135,004


132,152


Bank owned life insurance


135,722


133,524


Goodwill


171,882


171,882


Other intangible assets


1,549


2,123


Other assets


90,394


109,187



Total assets


$    8,037,996


7,957,705










Liabilities and Shareholders' equity






Liabilities





Noninterest-bearing demand deposits


$        732,200


658,560


Interest-bearing demand deposits


845,209


800,676


Savings deposits


2,195,095


2,036,272


Time deposits


2,033,366


2,284,817



Total deposits


5,805,870


5,780,325


Borrowed funds


853,114


827,925


Advances by borrowers for taxes and insurance


32,324


23,571


Accrued interest payable


1,242


1,104


Other liabilities


73,210


66,782


Junior subordinated debentures


103,094


103,094



Total liabilities


6,868,854


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, 97,880,874 shares







and 97,493,046 shares issued, respectively


979


975


Paid-in-capital


662,183


659,523


Retained earnings


552,278


543,598


Unallocated common stock of Employee Stock Ownership Plan


(25,192)


(25,966)


Accumulated other comprehensive loss


(21,106)


(23,226)



Total shareholders' equity


1,169,142


1,154,904



Total liabilities and shareholders' equity


$     8,037,996


7,957,705












Equity to assets


14.54%


14.51%




Tangible common equity to assets


12.66%


12.60%




Book value per share


$            11.94


$       11.85




Tangible book value per share


$            10.17


$       10.06




Closing market price per share


$            11.71


$       12.44




Full time equivalent employees


2,018


1,950




Number of banking offices


167


168










 

Northwest Bancshares, Inc. and Subsidiaries


Consolidated Statements of Income - Unaudited


(Dollars in thousands, except per share amounts)


















Quarter months ended







June 30,


March 31,







2012


2011


2012


Interest income:









Loans receivable


$         77,422


79,993


78,159



Mortgage-backed securities


4,409


6,073


4,691



Taxable investment securities


435


594


573



Tax-free investment securities


2,318


2,992


2,446



Interest-earning deposits


473


489


380




Total interest income


85,057


90,141


86,249













Interest expense:









Deposits


11,184


15,473


12,944



Borrowed funds


7,912


7,989


7,899




Total interest expense


19,096


23,462


20,843















Net interest income


65,961


66,679


65,406


Provision for loan losses


4,963


8,367


6,287




Net interest income after provision










for loan losses


60,998


58,312


59,119













Noninterest income:









Impairment losses on securities


-


(577)


(545)



Noncredit related losses on securities not expected










to be sold (recognized in other comprehensive income)


-


70


307



Net impairment losses


-


(507)


(238)



Gain/ (loss) on sale of investments, net


(44)


45


44



Service charges and fees


8,702


9,321


8,425



Trust and other financial services income


2,018


2,185


2,116



Insurance commission income


1,603


1,790


1,718



Loss on real estate owned, net


(582)


(593)


(1,070)



Income from bank owned life insurance


1,107


1,716


1,117



Mortgage banking income


789


290


531



Other operating income


1,244


1,015


997




Total noninterest income


14,837


15,262


13,640













Noninterest expense:









Compensation and employee benefits


27,416


29,658


27,838



Premises and occupancy costs


5,483


5,650


5,748



Office operations


3,340


3,255


3,324



Processing expenses


6,059


5,687


6,142



Marketing expenses


3,829


2,108


2,036



Federal deposit insurance premiums


1,418


2,355


1,620



Professional services


1,500


1,289


1,697



Amortization of intangible assets


279


479


295



Real estate owned expense


571


249


740



Other expense


2,071


1,760


1,836




Total noninterest expense


51,966


52,490


51,276















Income before income taxes


23,869


21,084


21,483



Income tax expense


7,508


6,081


6,302
















Net income


$         16,361


15,003


15,181













Basic earnings per share


$             0.17


0.15


0.16













Diluted earnings per share


$             0.17


0.15


0.16













Annualized return on average equity


5.63%


4.81%


5.29%


Annualized return on average assets


0.82%


0.74%


0.76%













Basic common shares outstanding


94,294,956


102,216,892


94,115,522


Diluted common shares outstanding


94,500,877


102,536,202


94,665,333













 

Northwest Bancshares, Inc. and Subsidiaries


Consolidated Statements of Income - Unaudited


(Dollars in thousands, except per share amounts)
















Six months ended







June 30,







2012


2011


Interest income:







Loans receivable


$         155,581


160,450



Mortgage-backed securities


9,100


12,829



Taxable investment securities


1,008


992



Tax-free investment securities


4,764


6,066



Interest-earning deposits


853


896




Total interest income


171,306


181,233











Interest expense:







Deposits


24,128


31,536



Borrowed funds


15,811


15,978




Total interest expense


39,939


47,514













Net interest income


131,367


133,719


Provision for loan losses


11,250


15,611




Net interest income after provision








for loan losses


120,117


118,108











Noninterest income:







Impairment losses on securities


(545)


(577)



Noncredit related losses on securities not expected








to be sold (recognized in other comprehensive income)


307


70



Net impairment losses


(238)


(507)



Gain on sale of investments, net


-


49



Service charges and fees


17,127


18,249



Trust and other financial services income


4,134


4,095



Insurance commission income


3,321


3,170



Loss on real estate owned, net


(1,652)


(620)



Income from bank owned life insurance


2,224


2,882



Mortgage banking income


1,320


487



Other operating income


2,241


1,783




Total noninterest income


28,477


29,588











Noninterest expense:







Compensation and employee benefits


55,254


55,157



Premises and occupancy costs


11,231


11,841



Office operations


6,664


6,355



Processing expenses


12,201


11,454



Marketing expenses


5,865


4,067



Federal deposit insurance premiums


3,038


4,782



Professional services


3,197


2,545



Amortization of intangible assets


574


970



Real estate owned expense


1,311


680



Other expense


3,907


4,017




Total noninterest expense


103,242


101,868













Income before income taxes


45,352


45,828



Income tax expense


13,810


13,572














Net income


$          31,542


32,256











Basic earnings per share


$              0.33


$                 0.31











Diluted earnings per share


$              0.33


$                 0.31











Annualized return on average equity


5.44%


5.07%


Annualized return on average assets


0.79%


0.79%











Basic common shares outstanding


94,205,239


104,381,955


Diluted common shares outstanding


94,583,105


104,884,123











 












Northwest Bancshares, Inc. and Subsidiaries



Asset quality



(Dollars in thousands)
















June 30,

2012


March 31,

2012


June 30,

2011


December 31,

2011













Non-accrual loans current:










Residential mortgage loans

$                 -


-


-


-



Home equity loans

-


-


-


-



Other consumer loans

-


-


-


-



Commercial real estate loans

16,773


18,462


13,572


13,057



Commercial loans

10,168


4,232


26,542


13,480


Total non-accrual loans current

$        26,941


22,694


40,114


26,537












Non-accrual loans delinquent 30 days to 59 days:










Residential mortgage loans

$                  -


-


-


-



Home equity loans

-


-


-


-



Other consumer loans

-


-


-


-



Commercial real estate loans

3,230


3,068


2,809


3,274



Commercial loans

489


6,258


312


90


Total non-accrual loans delinquent 30 days to 59 days

$           3,719


9,326


3,121


3,364












Non-accrual loans delinquent 60 days to 89 days:










Residential mortgage loans

$                   -


-


-


-



Home equity loans

-


-


-


-



Other consumer loans

-


-


-


-



Commercial real estate loans

1,600


2,269


1,385


1,560



Commercial loans

344


534


693


3,808


Total non-accrual loans delinquent 60 days to 89 days

$           1,944


2,803


2,078


5,368












Non-accrual loans delinquent 90 days or more:










Residential mortgage loans

$         25,336


28,696


30,594


28,221



Home equity loans

9,770


9,100


9,069


9,560



Other consumer loans

1,580


1,983


1,825


2,667



Commercial real estate loans

33,956


34,601


55,512


44,603



Commercial loans

14,008


15,810


18,802


10,785


Total non- accrual loans delinquent 90 days or more

$         84,650


90,190


115,802


95,836












Total non-accrual loans

$       117,254


125,013


161,115


131,105





































June 30,


March 31, 


June 30,


December 31,





2012


2012


2011


2011












Nonperforming loans

$      117,254


125,013


161,115


131,105


Real estate owned, net

30,470


28,895


21,389


26,887


Nonperforming assets

$      147,724


153,908


182,504


157,992












Non-accrual troubled debt restructuring *

$        28,342


29,606


39,962


29,575


Accruing troubled debt restructuring

50,129


37,697


19,984


39,854


Total troubled debt restructuring

$        78,471


67,303


59,946


69,429












Nonperforming loans to total loans

2.07%


2.23%


2.94%


2.36%












Nonperforming assets to total assets

1.84%


1.91%


2.26%


1.99%












Allowance for loan losses to total loans

1.24%


1.30%


1.37%


1.28%












Allowance for loan losses to nonperforming loans

59.79%


58.35%


46.83%


54.26%












* 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) 

















June 30,


March 31,



June 30,


December 31,




2012

*


2012

*


2011

*


2011

*


Loans delinquent 30 days to 59 days:


















Residential mortgage loans

70

$    4,470

0.2%


366

$  29,414

1.2%


84

4,627

0.2%


427

$33,671

1.4%



Home equity loans

153

5,842

0.5%


201

7,086

0.7%


174

5,763

0.5%


222

7,426

0.7%



Consumer loans

847

3,513

1.5%


647

2,854

1.2%


825

3,816

1.5%


903

4,854

2.0%



Commercial real estate loans

58

8,149

0.5%


77

9,275

0.6%


58

7,902

0.6%


104

10,680

0.7%



Commercial loans

33

1,839

0.5%


29

7,069

1.7%


40

2,264

0.5%


32

2,027

0.5%


Total loans delinquent 30 days to 59 days

1,161

$  23,813

0.4%


1,320

55,698

1.0%


1,181

24,372

0.4%


1,688

58,658

1.1%




















Loans delinquent 60 days to 89 days:


















Residential mortgage loans

83

$    6,932

0.3%


22

$   1,466

0.1%


84

8,044

0.3%


99

$  8,629

0.4%



Home equity loans

72

2,824

0.3%


50

2,313

0.2%


60

2,602

0.2%


47

1,953

0.2%



Consumer loans

319

1,273

0.5%


262

1,083

0.5%


349

1,195

0.5%


412

1,787

0.7%



Commercial real estate loans

23

3,081

0.2%


27

3,203

0.2%


23

3,348

0.2%


38

3,122

0.2%



Commercial loans

16

980

0.2%


16

1,376

0.3%


22

3,887

0.9%


25

4,958

1.3%


Total loans delinquent 60 days to 89 days

513

$  15,090

0.3%


377

9,441

0.2%


538

19,076

0.3%


621

20,449

0.4%




















Loans delinquent 90 days or more:


















Residential mortgage loans

265

$  25,336

1.0%


275

$  28,696

1.2%


268

30,594

1.3%


273

$28,221

1.2%



Home equity loans

180

9,770

0.9%


167

9,100

0.9%


173

9,069

0.8%


177

9,560

0.9%



Consumer loans

308

1,580

0.7%


348

1,983

0.8%


314

1,825

0.7%


456

2,667

1.1%



Commercial real estate loans

128

33,956

2.3%


120

34,601

2.3%


151

55,512

4.0%


131

44,603

3.1%



Commercial loans

57

14,008

3.5%


56

15,810

3.9%


55

18,802

4.3%


66

10,785

2.8%


Total loans delinquent 90 days or more

938

$84,650

1.5%


966

90,190

1.6%


961

115,802

2.1%


1,103

95,836

1.7%




















Total loans delinquent

2,612

$123,553

2.2%


2,663

$155,329

2.8%


2,680

$159,250

2.8%


3,412

$174,943

3.2%





















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

























 

Northwest Bancshares, Inc. and Subsidiaries

Criticized loans as of June 30, 2012 - unaudited:

(Dollars in thousands)






























Recorded















investment







Special








in loans





Pass


mention


Substandard


 Doubtful 


 Loss 


receivable

Personal Banking:















Residential mortgage loans


$         2,412,020


-


18,477


22


1,037


2,431,556



Home equity loans


1,093,023


-


9,913


-


-


1,102,936



Other consumer loans


240,180


-


812


-


-


240,992


Total Personal Banking


3,745,223


-


29,202


22


1,037


3,775,484
















Business Banking:















Commercial real estate loans


1,278,665


64,985


149,363


1,768


-


1,494,781



Commercial loans


313,741


14,685


70,540


504


-


399,470


Total Business Banking


1,592,406


79,670


219,903


2,272


-


1,894,251




















$         5,337,629


79,670


249,105


2,294


1,037


5,669,735

 

Northwest Bancshares, Inc. and Subsidiaries

Allowance for loan losses

(Dollars in thousands)














Quarter months ended


Six months ended




June 30, 


June 30,




2012


2011


2012


2011

Allowance for loan losses 










Beginning balance


$             72,941


76,450


71,138


76,412


Provision


4,963


8,367


11,250


15,611


Charge-offs residential mortgage                                            


(1,219)


(829)


(2,262)


(2,034)


Charge-offs home equity


(589)


(893)


(1,481)


(3,148)


Charge-offs other consumer


(1,504)


(1,277)


(2,791)


(2,509)


Charge-offs commercial real estate


(2,959)


(2,269)


(4,432)


(4,545)


Charge-offs commercial


(2,719)


(4,874)


(3,368)


(5,915)


Recoveries


1,196


780


2,056


1,583


Ending balance


$             70,110


75,455


70,110


75,455





















Net charge-offs to average loans, annualized


0.55%


0.68%


0.44%


0.60%





















Northwest Bancshares, Inc. and Subsidiaries

Municipal Securities Portfolio

(Dollars in thousands)










Market


 Book 


Unrealized


As a %


 value 


 value 


gain/ (loss)


of book


6/30/2012


6/30/2012


6/30/2012


value

Municipal securities by state: 








     Pennsylvania








          School districts

$              105,282


100,796


4,486


47.6%

          General obligations

38,776


37,332


1,444


17.6%

          Revenue bonds

4,755


4,710


45


2.2%

     Total Pennsylvania

148,813


142,838


5,975


67.5%

     New York

28,907


27,786


1,121


13.1%

     Ohio

6,784


6,427


357


3.0%

     All other states

37,524


34,644


2,880


16.4%


$              222,028


211,695


10,333



 

Average Balance Sheet - unaudited

(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 an 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.












 Quarters ended June 30, 


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)

$  5,627,459

77,981

5.54%

5,484,194

80,389

5.86%

   Mortgage-backed securities (c) 

761,616

4,409

2.32%

917,748

6,073

2.65%

   Investment securities (c) (d)     

311,087

4,001

5.14%

392,963

5,196

5.29%

   FHLB stock

46,916

25

0.21%

55,100

-

-

   Other interest-earning deposits                    

679,217

473

0.28%

705,568

489

0.27%








Total interest-earning assets 

7,426,295

86,889

4.68%

7,555,573

92,147

4.87%








Noninterest earning assets (e)

592,004



556,085










Total assets

$  8,018,299



8,111,658










Liabilities and shareholders' equity:







Interest-bearing liabilities:







   Savings accounts

$  1,146,989

1,034

0.36%

1,093,539

1,275

0.47%

   Interest-bearing demand accounts

831,414

240

0.12%

813,179

246

0.12%

   Money market accounts

1,021,485

878

0.35%

933,288

1,059

0.46%

   Certificate accounts

2,088,538

9,032

1.74%

2,372,039

12,893

2.18%

   Borrowed funds (f)

846,244

6,490

3.08%

841,835

6,569

3.13%

   Junior subordinated debentures

103,094

1,422

5.46%

103,094

1,420

5.45%








Total interest-bearing liabilities

6,037,764

19,096

1.27%

6,156,974

23,462

1.53%








Noninterest bearing liabilities (g)

817,118



708,310










Total liabilities

6,854,882



6,865,284










Shareholders' equity

1,163,417



1,246,374










Total liabilities and shareholders' equity

$  8,018,299



8,111,658










Net interest income/ Interest rate spread


67,793

3.41%


68,685

3.34%








Net interest-earning assets/ Net interest margin

$  1,388,531


3.65%

1,398,599


3.64%








Ratio of interest-earning assets to







 interest-bearing liabilities

 1.23X 



 1.23X 










(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, securities sold under agreements to repurchase and other borrowings.

(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 - 5.50% and 5.83%, respectively, Investment securities - 3.54%  and 3.65%, respectively, Interest-earning assets - 4.58% and 4.80%, respectively. GAAP basis net interest rate spreads were 3.31% and  3.27%, respectively, and GAAP basis net interest margins were 3.55% and 3.53%, respectively.


Average Balance Sheet - unaudited

(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.












 Six months ended June 30, 


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)

$  5,603,311

156,673

5.61%

5,500,134

161,237

5.88%

   Mortgage-backed securities (c) 

754,285

9,100

2.41%

922,024

12,829

2.78%

   Investment securities (c) (d) 

327,074

8,337

5.10%

373,870

10,324

5.52%

   FHLB stock

47,581

25

0.11%

56,962

-

-

   Other interest-earning deposits

668,982

853

0.25%

695,717

896

0.26%








Total interest-earning asse 

7,401,233

174,988

4.74%

7,548,707

185,286

4.92%








Noninterest earning assets (e)

603,822



574,662










Total assets

$  8,005,055



8,123,369










Liabilities and shareholders' equity







Interest-bearing liabilities:







   Savings accounts

$  1,123,651

2,140

0.38%

1,078,700

2,704

0.51%

   Interest-bearing demand accounts  

808,675

467

0.12%

793,526

478

0.12%

   Money market accounts

998,840

1,843

0.37%

924,383

2,214

0.48%

   Certificate accounts

2,162,679

19,678

1.83%

2,401,829

26,140

2.19%

   Borrowed funds (f)

840,043

12,967

3.10%

844,793

13,153

3.14%

   Junior subordinated debentures

103,094

2,844

5.46%

103,094

2,825

5.45%








Total interest-bearing liabilities

6,036,982

39,939

1.33%

6,146,325

47,514

1.56%








Noninterest bearing liabilities (g)

809,138



705,098










Total liabilities

6,846,120



6,851,423










Shareholders' equity

1,158,935



1,271,946










Total liabilities and shareholders' equity

$  8,005,055



8,123,369










Net interest income/ Interest rate spread 


135,049

3.41%


137,772

3.36%








Net interest-earning assets/ Net interest margin

$  1,364,251


3.65%

1,402,382


3.65%








Ratio of interest-earning assets to







 interest-bearing liabilities

 1.23X 



 1.23X 










(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, securities sold under agreements to repurchase and other borrowings.

(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 - 5.57% and 5.85%, respectively, Investment securities - 3.53% and 3.78%, respectively, Interest-earning assets - 4.64% and 4.81%, respectively. GAAP basis net interest rate spreads were 3.31% and 3.25%, respectively, and GAAP basis net interest margins were 3.55% and 3.54%, respectively.


Average Balance Sheet - unaudited

(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 

 Quarter ended 


June 30, 2012

March 31, 2012


 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 


 Balance 


 Yield/ 

 Balance 


 Yield/ 




 Cost (h) 



 Cost (h) 

Assets:







Interest-earning assets:







   Loans receivable (a) (b) (d)

$  5,627,459

77,981

5.54%

5,579,071

78,691

5.67%

   Mortgage-backed securities (c) 

761,616

4,409

2.32%

746,954

4,691

2.51%

   Investment securities (c) (d) 

311,087

4,001

5.14%

343,059

4,336

5.06%

   FHLB stock

46,916

25

0.21%

48,246

-

-

   Other interest-earning deposits

679,217

473

0.28%

658,747

380

0.23%








Total interest-earning assets 

7,426,295

86,889

4.68%

7,376,077

88,098

4.80%








Noninterest earning assets (e)

592,004



615,734










Total assets

$  8,018,299



7,991,811










Liabilities and shareholders' equity:







Interest-bearing liabilities:







   Savings accounts

$  1,146,989

1,034

0.36%

1,100,312

1,106

0.40%

   Interest-bearing demand accounts

831,414

240

0.12%

785,935

227

0.12%

   Money market accounts

1,021,485

878

0.35%

976,194

965

0.40%

   Certificate accounts

2,088,538

9,032

1.74%

2,236,823

10,646

1.91%

   Borrowed funds (f)

846,244

6,490

3.08%

833,843

6,477

3.12%

   Junior subordinated debentures

103,094

1,422

5.46%

103,094

1,422

5.46%








Total interest-bearing liabilities

6,037,764

19,096

1.27%

6,036,201

20,843

1.38%








Noninterest bearing liabilities (g)

817,118



801,157










Total liabilities

6,854,882



6,837,358










Shareholders' equity 

1,163,417



1,154,453










Total liabilities and shareholders' equity 

$  8,018,299



7,991,811










Net interest income/ Interest rate spread


67,793

3.41%


67,255

3.42%








Net interest-earning assets/ Net interest margin

$  1,388,531


3.65%

1,339,876


3.65%








Ratio of interest-earning assets to