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

WARREN, Pa., Oct. 22, 2012 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2012 of $15.7 million, or $0.17 per diluted share.  This represents a decrease of $1.0 million, or 6.1%, over the same quarter last year when net income was $16.7 million, or $0.17 per diluted share, and a decrease of $668,000, or 4.1%, over the quarter ended June 30, 2012 when net income was $16.4 million, or $0.17 per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 5.37% and 0.78% compared to 5.62% and 0.83% for the same quarter last year and 5.63% and 0.82% for the quarter ended June 30, 2012. 

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share payable on November 15, 2012, to shareholders of record as of November 1, 2012.  This represents the 72nd consecutive quarter in which the Company has paid a cash dividend. 

In making this announcement, William J. Wagner, President and CEO, noted, "We are pleased to have maintained a stable net interest margin of approximately 3.65% over the past year despite ongoing economic uncertainty and the challenges of the prolonged low interest rate environment. Largely contributing to this success was a $177 million, or 3.2%, increase in our loan portfolio over the past nine months.  Asset quality continues to improve from the beginning of the year with loans 90 or more days delinquent at the lowest level since the second quarter of 2008 and net charge-offs for the quarter down more than 40% from the same quarter last year.  Finally, we continued to manage our excess capital position during the quarter by repurchasing 183,780 of our common shares at an average price of $12.00 per share.

Net interest income decreased by $1.0 million, or 1.5%, to $66.0 million for the quarter ended September 30, 2012, from $67.0 million for the quarter ended September 30, 2011, which was primarily attributable to a decrease in interest income from loans of $3.5 million, or 4.3%, and from investment securities of $2.3 million, or 25.7%.  Partially offsetting this decrease was a $4.8 million, or 31.8%, decrease in interest expense on deposit accounts. 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 $1.2 million, or 14.2%, to $6.9 million for the quarter ended September 30, 2012, from $8.1 million for the quarter ended September 30, 2011.  As of September 30, 2012, the allowance for loan losses was $71.2 million, or 1.24% of total loans, compared to $73.2 million, or 1.33% of total loans, as of September 30, 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 $80.4 million as of September 30, 2012, from $112.2 million as of September 30, 2011 and $84.7 million as of June 30, 2012.  Additionally, net charge-offs for the quarter ended September 30, 2012, decreased by $4.5 million, or 43.2%, to $5.8 million compared to $10.3 million in the same quarter last year.

Noninterest income increased by $425,000, or 2.9%, to $14.9 million for the quarter ended September 30, 2012, from $14.5 million for the quarter ended September 30, 2011, due primarily to an increase in mortgage banking income of $1.1 million, as an increased number of residential mortgage loans were sold at favorable pricing levels.

Noninterest expense increased by $1.9 million, or 3.8%, to $51.8 million for the quarter ended September 30, 2012, from $49.9 million for the quarter ended September 30, 2011, due primarily to an increase in compensation and employee benefits of $2.2 million.  This increase is the result of increased health insurance costs and an increase in lending and compliance personnel.  Partially offsetting this increase in compensation expense was a decrease in marketing expense of $958,000, which was due to the timing of several marketing campaigns.

Net income for the nine-month period ended September 30, 2012 of $47.2 million represents a decrease of $1.8 million, or 3.6%, compared to net income of $49.0 million for the nine-month period ended September 30, 2011.  However, diluted earnings per share increased to $0.50 from $0.48 in the previous year, as there were 7,677,525 fewer diluted average shares outstanding in 2012.  The annualized returns on average shareholders' equity and average assets were 5.42% and 0.79%, respectively, for the current nine-month period compared to 5.25% and 0.81%, 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 166 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)




(Unaudited)











September 30,


December 31,

Assets


2012


2011

Cash and cash equivalents



$              91,286


94,276

Interest-earning deposits in other financial institutions



546,149


593,388

Federal funds sold and other short-term investments



633


633

Marketable securities available-for-sale (amortized cost of $922,684 and $885,408)



951,879


908,349

Marketable securities held-to-maturity (fair value of $174,821 and $239,412)



167,739


231,389


Total cash, interest-earning deposits and marketable securities



1,757,686


1,828,035












Residential mortgage loans held for sale



14,152


967

Residential mortgage loans



2,410,124


2,396,399

Home equity loans 



1,100,879


1,084,786

Other consumer loans



235,693


245,689

Commercial real estate loans



1,560,966


1,435,767

Commercial loans



406,819


387,911


Total loans receivable



5,728,633


5,551,519

Allowance for loan losses



(71,177)


(71,138)


Loans receivable, net



5,657,456


5,480,381












Federal Home Loan Bank stock, at cost



46,834


48,935

Accrued interest receivable



25,324


24,599

Real estate owned, net



29,291


26,887

Premises and Equipment, net



135,455


132,152

Bank owned life insurance



136,871


133,524

Goodwill



171,882


171,882

Other intangible assets



1,330


2,123

Other assets



85,542


109,187


Total assets



$      8,047,671


7,957,705












Liabilities and Shareholders' equity





Liabilities




Noninterest-bearing demand deposits



$           763,839


658,560

Interest-bearing demand deposits



842,389


800,676

Savings deposits



2,256,544


2,036,272

Time deposits



1,961,984


2,284,817


Total deposits



5,824,756


5,780,325

Borrowed funds



855,552


827,925

Advances by borrowers for taxes and insurance



11,570


23,571

Accrued interest payable



1,111


1,104

Other liabilities



76,962


66,782

Junior subordinated debentures



103,094


103,094


Total liabilities



6,873,045


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, 97,844,382 shares







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



978


975

Paid-in-capital



661,589


659,523

Retained earnings



556,502


543,598

Unallocated common stock of Employee Stock Ownership Plan



(24,817)


(25,966)

Accumulated other comprehensive loss



(19,626)


(23,226)


Total shareholders' equity



1,174,626


1,154,904


Total liabilities and shareholders' equity



$      8,047,671


7,957,705

















Equity to assets



14.60%


14.51%






Tangible common equity to assets



12.72%


12.60%






Book value per share



$                 12.00


$               11.85






Tangible book value per share



$                 10.23


$               10.06






Closing market price per share



$                 12.23


$               12.44






Full time equivalent employees



2,027


1,950






Number of banking offices



166


168

  

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)
















Quarter ended






September 30,


June 30,






2012


2011


2012

Interest income:








Loans receivable


$         77,109


80,562


77,422


Mortgage-backed securities


3,941


5,544


4,409


Taxable investment securities


577


684


435


Tax-free investment securities


2,223


2,848


2,318


Interest-earning deposits


364


393


473



Total interest income


84,214


90,031


85,057











Interest expense:








Deposits


10,207


14,958


11,184


Borrowed funds


8,013


8,061


7,912



Total interest expense


18,220


23,019


19,096













Net interest income


65,994


67,012


65,961

Provision for loan losses


6,915


8,057


4,963



Net interest income after provision









for loan losses


59,079


58,955


60,998











Noninterest income:








Impairment losses on securities


(340)


-


-


Noncredit related losses on securities not expected









to be sold (recognized in other comprehensive income)


247


-


-


Net impairment losses


(93)


-


-


Gain/ (loss) on sale of investments, net


260


152


(44)


Service charges and fees


8,772


8,499


8,702


Trust and other financial services income


2,122


2,063


2,018


Insurance commission income


1,480


1,796


1,603


Loss on real estate owned, net


(1,187)


(1,340)


(582)


Income from bank owned life insurance


1,148


1,938


1,107


Mortgage banking income


1,484


400


789


Other operating income


949


1,002


1,244



Total noninterest income


14,935


14,510


14,837











Noninterest expense:








Compensation and employee benefits


28,171


26,004


27,416


Premises and occupancy costs


5,498


5,658


5,483


Office operations


3,141


3,209


3,340


Processing expenses


6,340


5,896


6,059


Marketing expenses


1,830


2,788


3,829


Federal deposit insurance premiums


1,305


1,386


1,418


Professional services


1,939


1,238


1,500


Amortization of intangible assets


219


475


279


Real estate owned expense


832


483


571


Other expense


2,528


2,786


2,071



Total noninterest expense


51,803


49,923


51,966













Income before income taxes


22,211


23,542


23,869


Income tax expense


6,518


6,822


7,508














Net income


$           15,693


16,720


16,361











Basic earnings per share


$               0.17


0.17


0.17











Diluted earnings per share


$               0.17


0.17


0.17











Annualized return on average equity


5.37%


5.62%


5.63%

Annualized return on average assets


0.78%


0.83%


0.82%











Basic common shares outstanding


94,422,878


96,918,016


94,294,956

Diluted common shares outstanding


94,610,656


97,124,328


94,500,877

  

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)














Nine months ended September 30,






2012


2011

Interest income:






Loans receivable


$      232,690


241,012


Mortgage-backed securities


13,041


18,373


Taxable investment securities


1,585


1,676


Tax-free investment securities


6,987


8,914


Interest-earning deposits


1,217


1,289



Total interest income


255,520


271,264









Interest expense:






Deposits


34,335


46,494


Borrowed funds


23,824


24,039



Total interest expense


58,159


70,533











Net interest income


197,361


200,731

Provision for loan losses


18,165


23,668



Net interest income after provision







for loan losses


179,196


177,063









Noninterest income:






Impairment losses on securities


(885)


(577)


Noncredit related losses on securities not expected







to be sold (recognized in other comprehensive income)


554


70


Net impairment losses


(331)


(507)


Gain on sale of investments, net


260


201


Service charges and fees


25,899


26,748


Trust and other financial services income


6,256


6,158


Insurance commission income


4,801


4,966


Loss on real estate owned, net


(2,839)


(1,960)


Income from bank owned life insurance


3,372


4,820


Mortgage banking income


2,804


887


Other operating income


3,190


2,785



Total noninterest income


43,412


44,098









Noninterest expense:






Compensation and employee benefits


83,425


81,161


Premises and occupancy costs


16,729


17,499


Office operations


9,805


9,564


Processing expenses


18,541


17,350


Marketing expenses


7,695


6,855


Federal deposit insurance premiums


4,343


6,168


Professional services


5,136


3,783


Amortization of intangible assets


793


1,445


Real estate owned expense


2,143


1,163


Other expense


6,435


6,803



Total noninterest expense


155,045


151,791











Income before income taxes


67,563


69,370


Income tax expense


20,328


20,394












Net income


$         47,235


48,976









Basic earnings per share


$               0.50


0.48









Diluted earnings per share


$               0.50


0.48









Annualized return on average equity


5.42%


5.25%

Annualized return on average assets


0.79%


0.81%









Basic common shares outstanding


94,277,362


101,866,461

Diluted common shares outstanding


94,591,402


102,268,927


  












Northwest Bancshares, Inc. and Subsidiaries


Asset quality


(Dollars in thousands)
















September 30,

2012


June 30,

2012


September 30,

 2011


December 31,

2011












Non-accrual loans current:










Residential mortgage loans


$                             -


-


-


-


Home equity loans


-


-


-


-


Other consumer loans


-


-


-


-


Commercial real estate loans


18,138


16,773


17,296


13,057


Commercial loans


12,290


10,168


20,534


13,480

Total non-accrual loans current


$                   30,428


26,941


37,830


26,537











Non-accrual loans delinquent 30 days to 59 days:










Residential mortgage loans


$                             -


-


-


-


Home equity loans


-


-


-


-


Other consumer loans


-


-


-


-


Commercial real estate loans


6,404


3,230


5,557


3,274


Commercial loans


311


489


1,238


90

Total non-accrual loans delinquent 30 days to 59 days


$                     6,715


3,719


6,795


3,364











Non-accrual loans delinquent 60 days to 89 days:










Residential mortgage loans


$                             -


-


-


-


Home equity loans


-


-


-


-


Other consumer loans


-


-


-


-


Commercial real estate loans


1,860


1,600


2,052


1,560


Commercial loans


1,340


344


2,471


3,808

Total non-accrual loans delinquent 60 days to 89 days


$                     3,200


1,944


4,523


5,368











Non-accrual loans delinquent 90 days or more:










Residential mortgage loans


$                   24,476


25,336


31,705


28,221


Home equity loans


9,365


9,770


9,340


9,560


Other consumer loans


1,494


1,580


2,117


2,667


Commercial real estate loans


35,230


33,956


50,395


44,603


Commercial loans


9,864


14,008


18,670


10,785

Total non- accrual loans delinquent 90 days or more


$                   80,429


84,650


112,227


95,836











Total non-accrual loans


$                 120,772


117,254


161,375


131,105


























September 30,


June 30,


September 30,


December 31,





2012


2012


2011


2011











Nonperforming loans


$                 120,772


117,254


161,375


131,105

Real estate owned, net


29,291


30,470


20,648


26,887

Nonperforming assets


$                 150,063


147,724


182,023


157,992











Non-accrual troubled debt restructuring *


$                   29,261


28,342


27,421


29,575

Accruing troubled debt restructuring


57,004


50,129


39,417


39,854

Total troubled debt restructuring


$                   86,265


78,471


66,838


69,429











Nonperforming loans to total loans


2.11%


2.07%


2.92%


2.36%











Nonperforming assets to total assets


1.86%


1.84%


2.28%


1.99%











Allowance for loan losses to total loans


1.24%


1.24%


1.33%


1.28%











Allowance for loan losses to nonperforming loans


58.94%


59.79%


45.37%


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)
















September 30,


June 30,


September 30,


December 31,



2012

*


2012

*


2011

*


2011

*

Loans delinquent 30 days to 59 days:

















Residential mortgage loans

99

$        5,971

0.2%


70

$        4,470

0.2%


73

3,724

0.2%


427

$     33,671

1.4%


Home equity loans

154

5,027

0.5%


153

5,842

0.5%


178

7,125

0.7%


222

7,426

0.7%


Consumer loans

1,019

4,470

1.9%


847

3,513

1.5%


857

4,189

1.7%


903

4,854

2.0%


Commercial real estate loans

101

18,512

1.2%


58

8,149

0.5%


57

10,489

0.7%


104

10,680

0.7%


Commercial loans

22

791

0.2%


33

1,839

0.5%


40

2,690

0.7%


32

2,027

0.5%

Total loans delinquent 30 days to 59 days

1,395

$     34,771

0.6%


1,161

$     23,813

0.4%


1,205

28,217

0.5%


1,688

58,658

1.1%


















Loans delinquent 60 days to 89 days:

















Residential mortgage loans

83

$        7,621

0.3%


83

$        6,932

0.3%


85

7,430

0.3%


99

$        8,629

0.4%


Home equity loans

53

2,116

0.2%


72

2,824

0.3%


45

1,547

0.1%


47

1,953

0.2%


Consumer loans

383

1,424

0.6%


319

1,273

0.5%


331

1,337

0.5%


412

1,787

0.7%


Commercial real estate loans

19

2,544

0.2%


23

3,081

0.2%


19

2,471

0.2%


38

3,122

0.2%


Commercial loans

21

1,855

0.5%


16

980

0.2%


29

4,466

1.1%


25

4,958

1.3%

Total loans delinquent 60 days to 89 days

559

$     15,560

0.3%


513

$     15,090

0.3%


509

17,251

0.3%


621

20,449

0.4%


















Loans delinquent 90 days or more:

















Residential mortgage loans

255

$     24,476

1.0%


265

$     25,336

1.0%


274

31,705

1.3%


273

$     28,221

1.2%


Home equity loans

181

9,365

0.9%


180

9,770

0.9%


171

9,340

0.9%


177

9,560

0.9%


Consumer loans

351

1,494

0.6%


308

1,580

0.7%


407

2,117

0.9%


456

2,667

1.1%


Commercial real estate loans

133

35,230

2.3%


128

33,956

2.3%


142

50,395

3.5%


131

44,603

3.1%


Commercial loans

53

9,864

2.4%


57

14,008

3.5%


46

18,670

4.6%


66

10,785

2.8%

Total loans delinquent 90 days or more

973

$     80,429

1.4%


938

$     84,650

1.5%


1,040

112,227

2.0%


1,103

95,836

1.7%


















Total loans delinquent

2,927

$  130,760

2.3%


2,612

$  123,553

2.2%


2,754

$  157,695

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


Loans by credit quality indicators as of September 30, 2012 

(Dollars in thousands)






























Recorded















investment







Special








in loans





Pass


mention


Substandard


 Doubtful 


 Loss 


receivable

Personal Banking:















Residential mortgage loans


$  2,403,993


-


18,910


16


1,357


2,424,276



Home equity loans


1,091,530


-


9,349


-


-


1,100,879



Other consumer loans


234,765


-


928


-


-


235,693


Total Personal Banking


3,730,288


-


29,187


16


1,357


3,760,848
















Business Banking:















Commercial real estate loans


1,327,799


81,854


147,063


4,250


-


1,560,966



Commercial loans


326,229


15,415


61,747


3,428


-


406,819


Total Business Banking


1,654,028


97,269


208,810


7,678


-


1,967,785




















$  5,384,316


97,269


237,997


7,694


1,357


5,728,633
































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


Nine months ended




September 30, 


September 30, 




2012


2011


2012


2011

Allowance for loan losses 










Beginning balance


$  70,110


75,455


71,138


76,412


Provision


6,915


8,057


18,165


23,668


Charge-offs residential mortgage


(1,197)


(634)


(3,459)


(2,668)


Charge-offs home equity


(1,268)


(588)


(2,749)


(3,736)


Charge-offs other consumer


(1,536)


(1,307)


(4,327)


(3,816)


Charge-offs commercial real estate


(1,385)


(3,675)


(5,817)


(8,220)


Charge-offs commercial


(1,641)


(4,791)


(5,009)


(10,706)


Recoveries


1,179


691


3,235


2,274


Ending balance


$  71,177


73,208


71,177


73,208





















Net charge-offs to average loans, annualized


0.41%


0.75%


0.43%


0.65%


  

Northwest Bancshares, Inc. and Subsidiaries

Municipal securities portfolio

(Dollars in thousands)














September 30, 2012


As a %




Market


 Book 


Unrealized


of book




 value 


 value 


gain


value

Municipal securities by state:









Pennsylvania










School districts

$  100,813


95,928


4,885


47.1%



General obligations                     

37,275


35,431


1,844


17.4%



Revenue bonds

4,386


4,313


73


2.1%


Total Pennsylvania

142,474


135,672


6,802


66.6%


New York

28,125


27,051


1,074


13.3%


Ohio

6,887


6,428


459


3.2%


All other states

37,898


34,653


3,245


17.0%




$  215,384


203,804


11,580


























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.









 Quarters ended September 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)

$  5,703,380

77,698

5.43%

5,490,795

81,025

5.86%

   Mortgage-backed securities (c) 

722,368

3,941

2.18%

857,898

5,544

2.58%

   Investment securities (c) (d) 

350,081

3,997

4.57%

412,927

5,066

4.91%

   FHLB stock

46,834

12

0.10%

52,336

-

-

   Other interest-earning deposits

598,114

364

0.24%

652,958

393

0.24%








Total interest-earning assets 

7,420,777

86,012

4.62%

7,466,914

92,028

4.90%








Noninterest earning assets (e)

625,460



560,951










Total assets

$  8,046,237



8,027,865










Liabilities and shareholders' equity:







Interest-bearing liabilities:







   Savings accounts

$  1,154,104

1,060

0.37%

1,081,721

1,157

0.42%

   Interest-bearing demand accounts

834,890

180

0.09%

798,424

244

0.12%

   Money market accounts

1,076,799

920

0.34%

950,113

1,016

0.42%

   Certificate accounts

1,991,987

8,047

1.61%

2,338,436

12,541

2.13%

   Borrowed funds (f)

856,292

6,576

3.06%

840,560

6,625

3.13%

   Junior subordinated debentures

103,094

1,437

5.45%

103,094

1,436

5.45%








Total interest-bearing liabilities

6,017,166

18,220

1.20%

6,112,348

23,019

1.49%








Noninterest bearing liabilities (g)

859,553



726,173










Total liabilities

6,876,719



6,838,521










Shareholders' equity

1,169,518



1,189,344










Total liabilities and shareholders' equity

$  8,046,237



8,027,865










Net interest income/ Interest rate spread


67,792

3.42%


69,009

3.41%








Net interest-earning assets/ Net interest margin

$  1,403,611


3.65%

1,354,566


3.70%








Ratio of interest-earning assets to







 interest-bearing liabilities

 1.23X 



 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 - 5.39% and 5.82%, respectively, Investment securities - 3.20% 

      and 3.42%, respectively, Interest-earning assets - 4.52% and 4.79%, respectively. GAAP basis net interest rate spreads were 3.32% and 

      3.29%, respectively, and GAAP basis net interest margins were 3.56% and 3.59%, 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.









 Nine 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)

$  5,636,905

234,371

5.55%

5,496,988

242,262

5.87%

   Mortgage-backed securities (c) 

743,568

13,041

2.34%

900,414

18,373

2.72%

   Investment securities (c) (d) 

334,799

12,335

4.91%

387,034

15,390

5.30%

   FHLB stock

47,330

36

0.10%

55,403

-

-

   Other interest-earning deposits

644,602

1,217

0.25%

681,464

1,289

0.25%








Total interest-earning assets 

7,407,204

261,000

4.70%

7,521,303

277,314

4.91%








Noninterest earning assets (e)

611,578



570,231










Total assets

$  8,018,782



8,091,534










Liabilities and shareholders' equity:







Interest-bearing liabilities:







   Savings accounts

$  1,133,876

3,200

0.38%

1,079,718

3,861

0.48%

   Interest-bearing demand accounts

817,474

648

0.11%

795,183

722

0.12%

   Money market accounts

1,024,971

2,762

0.36%

932,617

3,231

0.46%

   Certificate accounts

2,105,367

27,725

1.76%

2,380,466

38,680

2.17%

   Borrowed funds (f)

845,499

19,543

3.09%

843,366

19,778

3.14%

   Junior subordinated debentures

103,094

4,281

5.46%

103,094

4,261

5.45%








Total interest-bearing liabilities

6,030,281

58,159

1.29%

6,134,444

70,533

1.54%








Noninterest bearing liabilities (g)

826,038



712,678










Total liabilities

6,856,319



6,847,122










Shareholders' equity

1,162,463



1,244,412










Total liabilities and shareholders' equity

$  8,018,782



8,091,534










Net interest income/ Interest rate spread


202,841

3.41%


206,781

3.37%








Net interest-earning assets/ Net interest margin

$  1,376,923


3.65%

1,386,859


3.67%








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 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 - 5.51% and 5.84%, respectively, Investment securities - 3.41% 

      and 3.65%, respectively, Interest-earning assets - 4.60% 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 3.56%, 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.









 Quarter ended 

 Quarter ended 


September 30, 2012

June 30, 2012


 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 


 Balance 


 Yield/ 

 Balance 


 Yield/ 




 Cost (h) 



 Cost (h) 

Assets: