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

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

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