Northwest Bancshares, Inc. Announces Third Quarter 2013 Earnings and Dividend Declaration

Oct 21, 2013, 11:27 ET from Northwest Bancshares, Inc.

WARREN, Pa., Oct. 21, 2013 /PRNewswire/ -- Northwest Bancshares, Inc. (Nasdaq: NWBI) announced net income for the quarter ended September 30, 2013 of $17.6 million, or $0.19 per diluted share. This represents an increase of $1.9 million, or 12.2%, over the same quarter last year when net income was $15.7 million, or $0.17 per diluted share, and an increase of $4.1 million, or 30.6%, compared to the quarter ended June 30, 2013 when net income was $13.5 million, or $0.15 per diluted share. The annualized returns on average shareholders' equity and average assets for the current quarter were 6.18% and 0.88% compared to 5.37% and 0.78% for the same quarter last year and 4.79% and 0.68% for the quarter ended June 30, 2013. 

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.13 per share payable on November 14, 2013, to shareholders of record as of October 31, 2013.  This represents the 75th consecutive quarter in which the Company has paid a cash dividend. 

In making this announcement, William J. Wagner, President and CEO, noted, "In this prolonged environment of low interest rates and relatively weak loan demand, we are especially pleased that our interest rate spread remained flat from the previous quarter, while our net interest margin decreased by just two basis points.  This was accomplished by realizing continued growth in both loans and low-cost checking deposits.  Also contributing to improved earnings was an increase in noninterest income, led by continued improvement in trust, financial services and insurance income.  Finally, our heightened emphasis on controlling operating expense is noticeable in almost every expense category on our income statement."

Net interest income decreased by $3.2 million, or 4.8%, to $62.5 million for the quarter ended September 30, 2013, from $65.7 million for the quarter ended September 30, 2012, as decreases in interest income on loans receivable and investment securities of $5.3 million and $686,000, respectively, were partially offset by a $3.1 million decrease in interest paid on deposit accounts.  These changes from the previous year were due primarily to the continued low level of market interest rates.

The provision for loan losses decreased by $1.9 million, or 27.8%, to $5.0 million for the quarter ended September 30, 2013, from $6.9 million for the quarter ended September 30, 2012.  As of September 30, 2013, the allowance for loan losses was $75.9 million, or 1.32% of total loans, compared to $71.2 million, or 1.24% of total loans, as of September 30, 2012 and $73.2 million, or 1.28% of total loans, as of December 31, 2012.  Net charge-offs were $1.7 million, or 0.12% for the quarter ended September 30, 2013 compared to $5.8 million, or 0.41% for the same quarter last year.  Loans 90 days or more delinquent decreased by $21.9 million, or 27.3%, to $58.5 million as of September 30, 2013 from $80.4 million as of September 30, 2012.

Noninterest income increased by $836,000, or 5.5%, to $16.1 million for the quarter ended September 30, 2013, from $15.3 million for the quarter ended September 30, 2012.  This increase is due primarily to a $1.1 million decrease in loss on real estate owned. Additionally, insurance commission income increased by $539,000 as a result of the acquisition of the Bert Company, effective January 1, 2013.  Partially offsetting these increases was a decrease in mortgage banking income of $1.3 million, due primarily to slower origination activity.  

Noninterest expense decreased by $1.5 million, or 2.9%, to $50.3 million for the quarter ended September 30, 2013, from $51.8 million for the quarter ended September 30, 2012, due primarily to a decrease in marketing expense of $798,000, or 43.6%, which was due to the timing of various campaigns.  Additionally, professional services decreased by $608,000, or 31.4%, and compensation and employee benefits decreased by $542,000, or 1.9%, as a result of our continued focus on controlling expenses. 

Net income for the nine month period ended September 30, 2013 of $46.4 million represents a decrease of $859,000, or 1.8%, compared to net income of $47.2 million for the nine month period ended September 30, 2012.  Diluted earnings per share for the nine month period ended September 30, 2013 increased to $0.51 from $0.50 in the same period last year.  The annualized returns on average shareholders' equity and average assets were 5.47% and 0.78%, respectively, for the current nine month period compared to 5.42% 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, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 165 community banking offices in Pennsylvania, New York, Ohio and Maryland and 50 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; (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.  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

2013

2012

Cash and cash equivalents

$                      93,335

88,277

Interest-earning deposits in other financial institutions

321,344

362,794

Federal funds sold and other short-term investments

634

633

Marketable securities available-for-sale (amortized cost of $1,084,596 and 1,053,122)

1,092,799

1,079,074

Marketable securities held-to-maturity (fair value of $129,580 and $161,969)

125,937

155,081

Total cash, interest-earning deposits and marketable securities

1,634,049

1,685,859

Residential mortgage loans held for sale

-

15,441

Residential mortgage loans

2,453,109

2,400,208

Home equity loans

1,072,388

1,076,637

Other consumer loans

225,978

235,367

Commercial real estate loans

1,586,991

1,585,833

Commercial loans

392,636

388,994

Total loans receivable

5,731,102

5,702,480

Allowance for loan losses

(75,865)

(73,219)

Loans receivable, net

5,655,237

5,629,261

Federal Home Loan Bank stock, at cost

43,716

46,834

Accrued interest receivable

22,560

23,313

Real estate owned, net

20,173

26,165

Premises and Equipment, net

142,487

138,824

Bank owned life insurance

140,389

137,044

Goodwill

174,463

174,461

Other intangible assets

2,541

3,529

Other assets

72,764

77,310

Total assets

$              7,908,379

7,942,600

Liabilities and Shareholders' equity

Liabilities

Noninterest-bearing demand deposits

$                 803,498

755,429

Interest-bearing demand deposits

854,288

851,771

Savings deposits

2,348,805

2,271,311

Time deposits

1,718,774

1,886,089

Total deposits

5,725,365

5,764,600

Borrowed funds

865,096

860,047

Advances by borrowers for taxes and insurance

14,152

23,325

Accrued interest payable

861

888

Other liabilities

61,277

62,177

Junior subordinated debentures

103,094

103,094

Total liabilities

6,769,845

6,814,131

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, 94,152,042 shares

and 93,652,960 shares issued and outstanding, respectively

942

937

Paid-in-capital

617,180

613,249

Retained earnings

562,758

550,296

Unallocated common stock of Employee Stock Ownership Plan

(23,305)

(24,525)

Accumulated other comprehensive loss

(19,041)

(11,488)

Total shareholders' equity

1,138,534

1,128,469

Total liabilities and shareholders' equity

$              7,908,379

7,942,600

Equity to assets

14.40%

14.21%

Tangible common equity to assets

12.44%

12.23%

Book value per share

$                      12.09

$                         12.05

Tangible book value per share

$                      10.21

$                         10.14

Closing market price per share

$                      13.21

$                         12.14

Full time equivalent employees

2,023

2,042

Number of banking offices

165

165

 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Quarter ended

September 30,

June 30,

2013

2012

2013

Interest income:

Loans receivable

$            71,480

76,771

71,987

Mortgage-backed securities

3,113

3,941

3,308

Taxable investment securities

1,030

577

1,034

Tax-free investment securities

1,912

2,223

2,094

Interest-earning deposits

253

364

340

Total interest income

77,788

83,876

78,763

Interest expense:

Deposits

7,150

10,207

7,404

Borrowed funds

8,126

8,013

8,032

Total interest expense

15,276

18,220

15,436

Net interest income

62,512

65,656

63,327

Provision for loan losses

4,992

6,915

5,405

Net interest income after provision

for loan losses

57,520

58,741

57,922

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

109

260

19

Service charges and fees

9,282

9,110

9,037

Trust and other financial services income

2,380

2,122

2,263

Insurance commission income

2,019

1,480

2,190

Loss on real estate owned, net

(111)

(1,187)

(2,285)

Income from bank owned life insurance

1,178

1,148

1,088

Mortgage banking income

203

1,484

236

Other operating income

1,049

949

865

Total noninterest income

16,109

15,273

13,413

Noninterest expense:

Compensation and employee benefits

27,629

28,171

28,156

Premises and occupancy costs

5,633

5,498

5,744

Office operations

3,497

3,141

3,866

Processing expenses

6,036

6,340

7,390

Marketing expenses

1,032

1,830

2,093

Federal deposit insurance premiums

1,377

1,305

1,424

Professional services

1,331

1,939

1,199

Amortization of intangible assets

291

219

349

Real estate owned expense

681

832

600

Other expense

2,770

2,528

1,985

Total noninterest expense

50,277

51,803

52,806

Income before income taxes

23,352

22,211

18,529

Income tax expense

5,752

6,518

5,051

Net income

$            17,600

15,693

13,478

Basic earnings per share

$                0.19

0.17

0.15

Diluted earnings per share

$                0.19

0.17

0.15

Annualized return on average equity

6.18%

5.37%

4.79%

Annualized return on average assets

0.88%

0.78%

0.68%

Basic common shares outstanding

90,760,402

94,422,878

90,423,717

Diluted common shares outstanding

91,824,384

94,610,656

90,917,136

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Nine months ended

September 30,

2013

2012

Interest income:

Loans receivable

$                 216,440

231,888

Mortgage-backed securities

9,862

13,041

Taxable investment securities

2,969

1,585

Tax-free investment securities

6,069

6,987

Interest-earning deposits

844

1,217

Total interest income

236,184

254,718

Interest expense:

Deposits

22,368

34,335

Borrowed funds

23,989

23,824

Total interest expense

46,357

58,159

Net interest income

189,827

196,559

Provision for loan losses

17,555

18,165

Net interest income after provision

for loan losses

172,272

178,394

Noninterest income:

Impairment losses on securities

-

(885)

Noncredit related losses on securities not expected

to be sold (recognized in other comprehensive income)

-

554

Net impairment losses

-

(331)

Gain/ (loss) on sale of investments, net

229

260

Service charges and fees

27,010

26,701

Trust and other financial services income

6,847

6,256

Insurance commission income

6,504

4,801

Loss on real estate owned, net

(2,526)

(2,839)

Income from bank owned life insurance

3,351

3,372

Mortgage banking income

1,395

2,804

Other operating income

3,090

3,190

Total noninterest income

45,900

44,214

Noninterest expense:

Compensation and employee benefits

83,715

83,425

Premises and occupancy costs

17,530

16,729

Office operations

10,631

9,805

Processing expenses

19,279

18,541

Marketing expenses

5,025

7,695

Federal deposit insurance premiums

4,239

4,343

Professional services

4,223

5,136

Amortization of intangible assets

988

793

Real estate owned expense

1,880

2,143

Other expense

7,044

6,435

Total noninterest expense

154,554

155,045

Income before income taxes

63,618

67,563

Income tax expense

17,242

20,328

Net income

$                    46,376

47,235

Basic earnings per share

$                        0.51

0.50

Diluted earnings per share

$                        0.51

0.50

Annualized return on average equity

5.47%

5.42%

Annualized return on average assets

0.78%

0.79%

Basic common shares outstanding

90,530,417

94,277,362

Diluted common shares outstanding

91,210,040

94,591,402

Northwest Bancshares, Inc. and Subsidiaries

Asset quality

(Dollars in thousands)

September 30, 2013

June 30, 2013

September 30, 2012

December 31, 2012

Non-accrual loans current:

Residential mortgage loans

$                1,500

1,564

-

797

Home equity loans

808

859

-

635

Other consumer loans

81

69

-

44

Commercial real estate loans

30,505

27,882

18,138

24,960

Commercial loans

22,779

15,687

12,290

5,424

Total non-accrual loans current

$             55,673

46,061

30,428

31,860

Non-accrual loans delinquent 30 days to 59 days:

Residential mortgage loans

$                     339

18

-

-

Home equity loans

183

81

-

-

Other consumer loans

33

14

-

-

Commercial real estate loans

3,198

4,536

6,404

5,549

Commercial loans

366

172

311

2,002

Total non-accrual loans delinquent 30 days to 59 days

$                4,119

4,821

6,715

7,551

Non-accrual loans delinquent 60 days to 89 days:

Residential mortgage loans

$                1,131

1,964

-

-

Home equity loans

255

198

-

-

Other consumer loans

111

60

-

-

Commercial real estate loans

2,534

1,848

1,860

2,802

Commercial loans

572

2,104

1,340

9,652

Total non-accrual loans delinquent 60 days to 89 days

$                4,603

6,174

3,200

12,454

Non-accrual loans delinquent 90 days or more:

Residential mortgage loans

$             25,002

23,730

24,476

24,286

Home equity loans

8,959

8,607

9,365

8,479

Other consumer loans

1,848

1,706

1,494

1,936

Commercial real estate loans

16,282

20,872

35,230

24,550

Commercial loans

6,413

8,595

9,864

9,096

Total non- accrual loans delinquent 90 days or more

$             58,504

63,510

80,429

68,347

Total non-accrual loans

$          122,899

120,566

120,772

120,212

September 30,

June 30,

September 30,

December 31,

2013

2013

2012

2012

Non-accrual loans

$          122,899

120,566

120,772

120,212

Loans 90 days past maturity and still accruing

809

893

807

1,698

   Nonperforming loans

123,708

121,459

121,579

121,910

Real estate owned, net

20,173

21,269

29,291

26,165

   Nonperforming assets

$          143,881

142,728

150,870

148,075

Non-accrual troubled debt restructuring *

$             37,519

42,043

29,261

41,166

Accruing troubled debt restructuring

41,871

44,474

57,004

48,278

Total troubled debt restructuring

$             79,390

86,517

86,265

89,444

Nonperforming loans to total loans

2.16%

2.13%

2.12%

2.14%

Nonperforming assets to total assets

1.82%

1.79%

1.87%

1.86%

Allowance for loan losses to total loans

1.32%

1.28%

1.24%

1.28%

Allowance for loan losses to nonperforming loans

61.33%

59.77%

58.54%

60.06%

* Amounts included in non-accrual 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,

2013

*

2013

*

2012

*

2012

*

Loans delinquent 30 days to 59 days:

Residential mortgage loans

87

$         4,391

0.2%

77

3,741

0.2%

99

$         5,971

0.2%

430

32,921

1.4%

Home equity loans

140

4,161

0.4%

174

4,993

0.5%

154

5,027

0.5%

224

6,534

0.6%

Consumer loans

992

4,193

1.9%

1,026

4,334

1.9%

1,019

4,470

1.9%

1,122

5,456

2.3%

Commercial real estate loans

73

6,536

0.4%

74

7,982

0.5%

101

18,512

1.2%

87

13,001

0.8%

Commercial loans

28

1,059

0.3%

31

952

0.2%

22

791

0.2%

41

3,233

0.8%

Total loans delinquent 30 days to 59 days

1,320

$      20,340

0.4%

1,382

22,002

0.4%

1,395

34,771

0.6%

1,904

61,145

1.1%

Loans delinquent 60 days to 89 days:

Residential mortgage loans

87

$         6,360

0.3%

101

8,516

0.4%

83

$         7,621

0.3%

100

9,387

0.4%

Home equity loans

56

2,193

0.2%

50

1,361

0.1%

53

2,116

0.2%

65

1,977

0.2%

Consumer loans

412

1,646

0.7%

368

1,470

0.7%

383

1,424

0.6%

448

1,830

0.8%

Commercial real estate loans

29

3,692

0.2%

41

3,170

0.2%

19

2,544

0.2%

33

4,596

0.3%

Commercial loans

15

1,242

0.3%

18

2,389

0.6%

21

1,855

0.5%

17

10,158

2.5%

Total loans delinquent 60 days to 89 days

599

$      15,133

0.3%

578

16,906

0.3%

559

15,560

0.3%

663

27,948

0.5%

Loans delinquent 90 days or more:

Residential mortgage loans

265

$      25,002

1.0%

250

23,730

1.0%

255

$      24,476

1.0%

266

24,286

1.0%

Home equity loans

203

8,959

0.8%

194

8,607

0.8%

181

9,365

0.9%

175

8,479

0.8%

Consumer loans

401

1,848

0.8%

379

1,706

0.8%

351

1,494

0.6%

427

1,936

0.8%

Commercial real estate loans

134

16,282

1.0%

128

20,872

1.3%

133

35,230

2.3%

146

24,550

1.6%

Commercial loans

50

6,413

1.6%

53

8,595

2.2%

53

9,864

2.4%

61

9,096

2.2%

Total loans delinquent 90 days or more

1,053

$      58,504

1.0%

1,004

63,510

1.1%

973

80,429

1.4%

1,075

68,347

1.2%

Total loans delinquent

2,972

$      93,977

1.6%

2,964

102,418

1.8%

2,927

130,760

2.3%

3,642

157,440

2.8%

* - 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, 2013

(Dollars in thousands)

Recorded

investment

Special

in loans

Pass

mention

Substandard

 Doubtful

 Loss

receivable

Personal Banking:

Residential mortgage loans

$         2,433,665

-

18,123

-

1,321

2,453,109

Home equity loans

1,063,429

-

8,959

-

-

1,072,388

Other consumer loans

224,644

-

1,334

-

-

225,978

Total Personal Banking

3,721,738

-

28,416

-

1,321

3,751,475

Business Banking:

Commercial real estate loans

1,380,452

44,173

161,069

1,297

-

1,586,991

Commercial loans

327,137

12,156

52,225

1,118

-

392,636

Total Business Banking

1,707,589

56,329

213,294

2,415

-

1,979,627

$         5,429,327

56,329

241,710

2,415

1,321

5,731,102

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

Allowance for loan losses

(Dollars in thousands)

Quarter ended

Nine months ended

September 30,

September 30,

2013

2012

2013

2012

Allowance for loan losses

Beginning balance

$             72,590

70,110

73,219

71,138

Provision

4,992

6,915

17,555

18,165

Charge-offs residential mortgage

(546)

(1,197)

(2,002)

(3,459)

Charge-offs home equity

(213)

(1,268)

(1,388)

(2,749)

Charge-offs other consumer

(1,675)

(1,536)

(4,359)

(4,327)

Charge-offs commercial real estate

(1,048)

(1,385)

(7,734)

(5,817)

Charge-offs commercial

(463)

(1,641)

(3,685)

(5,009)

Recoveries

2,228

1,179

4,259

3,235

Ending balance

$             75,865

71,177

75,865

71,177

Net charge-offs to average loans, annualized

0.12%

0.41%

0.35%

0.43%

Northwest Bancshares, Inc. and Subsidiaries

Municipal securities portfolio

(Dollars in thousands)

September 30, 2013

As a %

Market

Amortized

Unrealized

of book

 value

cost

gain/ (loss)

value

Municipal securities by state:

Pennsylvania

School districts

$                 85,563

84,022

1,541

47.6%

General obligations

30,603

29,931

672

16.9%

Revenue bonds

2,364

2,354

10

1.3%

Total Pennsylvania

118,530

116,307

2,223

65.8%

New York

19,935

19,648

287

11.1%

Ohio

6,069

5,974

95

3.4%

All other states

35,842

34,738

1,104

19.7%

$              180,376

176,667

3,709

December 31, 2012

As a %

Market

Amortized

Unrealized

of book

 value

cost

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

 

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 September 30,

2013

2012

 Average

 Interest

 Avg.

 Average

 Interest

 Avg.

 Balance

 Yield/

 Balance

 Yield/

 Cost (g)

 Cost (g)

Assets:

Interest-earning assets:

   Loans receivable (a) (b) (d)

$  5,703,527

72,051

5.05%

5,703,380

77,360

5.43%

   Mortgage-backed securities (c)

701,510

3,113

1.78%

722,368

3,941

2.18%

   Investment securities (c) (d)

545,005

3,972

2.92%

350,081

3,997

4.57%

   FHLB stock

47,650

120

1.01%

46,834

11

0.10%

   Other interest-earning deposits

376,699

253

0.26%

598,114

364

0.24%

Total interest-earning assets

7,374,391

79,509

4.31%

7,420,777

85,673

4.62%

Noninterest earning assets (e)

553,189

625,460

Total assets

$  7,927,580

8,046,237

Liabilities and shareholders' equity:

Interest-bearing liabilities:

   Savings accounts

$  1,209,726

882

0.29%

1,154,104

1,060

0.37%

   Interest-bearing demand accounts

854,600

144

0.07%

834,890

180

0.09%

   Money market accounts

1,144,522

768

0.27%

1,076,799

920

0.34%

   Certificate accounts

1,735,898

5,356

1.22%

1,991,987

8,047

1.61%

   Borrowed funds (f)

864,315

6,690

3.07%

856,292

6,576

3.06%

   Junior subordinated debentures

103,094

1,436

5.45%

103,094

1,437

5.45%

Total interest-bearing liabilities

5,912,155

15,276

1.03%

6,017,166

18,220

1.20%

Noninterest bearing checking

794,411

740,188

Noninterest bearing liabilities

91,385

119,365

Total liabilities

6,797,951

6,876,719

Shareholders' equity

1,129,629

1,169,518

Total liabilities and shareholders' equity

$  7,927,580

8,046,237

Net interest income/ Interest rate spread

64,233

3.28%

67,453

3.42%

Net interest-earning assets/ Net interest margin

$  1,462,236

3.48%

1,403,611

3.64%

Ratio of interest-earning assets to

 interest-bearing liabilities

 1.25X

  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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.01% and 5.38%, respectively, Investment securities - 2.16%

       and 3.20%, respectively, Interest-earning assets - 4.23% and 4.52%, respectively. GAAP basis net interest rate spreads were 3.20% and

      3.32%, respectively, and GAAP basis net interest margins were 3.40% and 3.54%, 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 September 30,

2013

2012

 Average

 Interest

 Avg.

 Average

 Interest

 Avg.

 Balance

 Yield/

 Balance

 Yield/

 Cost (g)

 Cost (g)

Assets:

Interest-earning assets:

   Loans receivable (a) (b) (d)

$  5,655,512

218,126

5.14%

5,636,905

233,569

5.52%

   Mortgage-backed securities (c)

717,785

9,862

1.83%

743,568

13,041

2.34%

   Investment securities (c) (d)

515,751

12,306

3.18%

334,799

12,334

4.91%

   FHLB stock

47,545

191

0.54%

47,330

36

0.10%

   Other interest-earning deposits

428,395

844

0.26%

644,602

1,217

0.25%

Total interest-earning assets

7,364,988

241,329

4.37%

7,407,204

260,197

4.68%

Noninterest earning assets (e)

575,832

611,578

Total assets

$  7,940,820

8,018,782

Liabilities and shareholders' equity:

Interest-bearing liabilities:

   Savings accounts

$  1,200,106

2,676

0.30%

1,133,876

3,200

0.38%

   Interest-bearing demand accounts

856,269

433

0.07%

817,474

648

0.11%

   Money market accounts

1,124,572

2,258

0.27%

1,024,971

2,762

0.36%

   Certificate accounts

1,791,819

17,001

1.27%

2,105,367

27,725

1.76%

   Borrowed funds (f)

861,465

19,728

3.06%

845,499

19,543

3.09%

   Junior subordinated debentures

103,094

4,261

5.45%

103,094

4,281

5.46%

Total interest-bearing liabilities

5,937,325

46,357

1.04%

6,030,281

58,159

1.29%

Noninterest bearing checking

776,087

714,454

Noninterest bearing liabilities

94,651

111,584

Total liabilities

6,808,063

6,856,319

Shareholders' equity

1,132,757

1,162,463

Total liabilities and shareholders' equity

$  7,940,820

8,018,782

Net interest income/ Interest rate spread

194,972

3.33%

202,038

3.39%

Net interest-earning assets/ Net interest margin

$  1,427,663

3.53%

1,376,923

3.64%

Ratio of interest-earning assets to

 interest-bearing liabilities

 1.24X

  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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.10% and 5.48%, respectively, Investment securities - 2.34%

       and 3.41%, respectively, Interest-earning assets - 4.28% and 4.59%, respectively. GAAP basis net interest rate spreads were 3.24% and

      3.30%, respectively, and GAAP basis net interest margins were 3.44% and 3.54%, 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, 2013

June 30, 2013

 Average

 Interest

 Avg.

 Average

 Interest

 Avg.

 Balance

 Yield/

 Balance

 Yield/

 Cost (g)

 Cost (g)

Assets:

Interest-earning assets:

   Loans receivable (a) (b) (d)

$  5,703,527

72,051

5.05%

5,623,784

72,548

5.16%

   Mortgage-backed securities (c)

701,510

3,113

1.78%

726,583

3,308

1.82%

   Investment securities (c) (d)

545,005

3,972

2.92%

531,802

4,255

3.20%

   FHLB stock

47,650

120

1.01%

48,110

34

0.28%

   Other interest-earning deposits

376,699

253

0.26%

513,930

340

0.26%

Total interest-earning assets

7,374,391

79,509

4.31%

7,444,209

80,485

4.32%

Noninterest earning assets (e)

553,189

531,771

Total assets

$  7,927,580

7,975,980

Liabilities and shareholders' equity:

Interest-bearing liabilities:

   Savings accounts

$  1,209,726

882

0.29%

1,209,783

900

0.30%

   Interest-bearing demand accounts

854,600

144

0.07%

873,804

149

0.07%

   Money market accounts

1,144,522

768

0.27%

1,121,579

748

0.27%

   Certificate accounts

1,735,898

5,356

1.22%

1,791,030

5,607

1.26%

   Borrowed funds (f)

864,315

6,690

3.07%

866,476

6,612

3.06%

   Junior subordinated debentures

103,094

1,436

5.45%

103,094

1,420

5.45%

Total interest-bearing liabilities

5,912,155

15,276

1.03%

5,965,766

15,436

1.04%

Noninterest bearing checking

794,411

778,468

Noninterest bearing liabilities

91,385

102,191

Total liabilities

6,797,951

6,846,425

Shareholders' equity

1,129,629

1,129,555

Total liabilities and shareholders' equity

$  7,927,580

7,975,980

Net interest income/ Interest rate spread

64,233

3.28%

65,049

3.28%

Net interest-earning assets/ Net interest margin

$  1,462,236

3.48%

1,478,443

3.50%

Ratio of interest-earning assets to

 interest-bearing liabilities

 1.25X

 1.25X

(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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.01% and 5.12%, respectively, Investment securities - 2.16%

       and 2.35%, respectively, Interest-earning assets - 4.23% and 4.23%, respectively. GAAP basis net interest rate spreads were 3.20% and

      3.19%, respectively, and GAAP basis net interest margins were 3.40% and 3.40%, respectively.

SOURCE Northwest Bancshares, Inc.



RELATED LINKS

http://www.northwestsavingsbank.com