Northwest Bancshares, Inc. Announces Earnings and Dividend Declaration

Jan 25, 2010, 13:53 ET from Northwest Bancshares, Inc.

WARREN, Pa., Jan. 25 /PRNewswire-FirstCall/ --  Northwest Bancshares, Inc. (Nasdaq: NWBI, formerly NWSB) announced net income for the quarter ended December 31, 2009 of $1.0 million, or $0.01 per diluted share.  This represents a decrease of $10.3 million over the same quarter last year when net income was $11.3 million, or $0.10 per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 0.46% and 0.05% compared to 7.27% and 0.65% for the same quarter last year.  In making the announcement, the Company emphasized that current quarter earnings were significantly reduced by the establishment of a charitable foundation in the amount of $13.8 million, in conjunction with the Company's second-step stock offering.  

During the quarter ended December 31, 2009, the Company converted from a partially-public mutual holding company to a fully-public stock holding company by completing a second-step stock offering and selling 68.8 million shares of common stock at $10 per share.  As a part of the conversion, Northwest Bancshares, Inc. contributed $1.0 million of the offering proceeds and issued 1.3 million shares of common stock to a charitable foundation for the benefit of the communities in which it operates.  The Company recognized a pre-tax expense of $13.8 million during the quarter as a result of this contribution.    

In addition to the 68.8 million common shares sold in the offering, the Company exchanged 40.5 million common shares of Northwest Bancshares, Inc. for the 18.0 million common shares of Northwest Bancorp, Inc. that were owned by the public prior to the conversion.  This represents an exchange ratio of 2.25 to 1.  As a result, the Company had 110.6 million shares of common stock outstanding as of December 31, 2009.    

Also contributing to the decrease in quarterly earnings was a significant increase in the provision for loan losses, which was $14.5 million for the quarter ended December 31, 2009 compared to $10.2 million in the same quarter a year ago.  This increase in the provision was considered necessary given current economic conditions and the stress placed on the Company's borrowers.  The Company noted, however, that actual loan charge-offs for the quarter were only $11.9 million.  

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share payable on February 18, 2010, to shareholders of record as of February 4, 2010.  This represents the 61st consecutive quarter in which the Company has paid a cash dividend.  Shareholders who owned Northwest shares prior to the second-step conversion now own 2.25 new shares for each share they owned prior to the conversion, and the total dividends they will receive from those shares this quarter will be slightly higher than they were last quarter.  

In looking at the various components of quarterly income, the Company noted that net interest income decreased by $1.5 million, or 2.5%, for the quarter ended December 31, 2009 compared to the same quarter last year as a result of a decrease in net interest margin to 3.45% from 3.83%.  The decrease in net interest margin resulted primarily from the Company carrying, on average, $458.4 million more in overnight funds than in the previous year's quarter earning an average rate of 0.19% compared to an average rate of 0.87% in the previous year.  The increase in overnight funds was primarily attributable to the substantial increase in deposits experienced over the past several quarters as well as the additional capital received from the second-step common stock offering.  These funds are temporarily being invested in overnight funds until they can be deployed to purchase investment securities and to fund loans.  

Noninterest expense increased by $20.8 million, or 47.8%, to $64.2 million for the quarter ended December 31, 2009 from $43.5 million for the quarter ended December 31, 2008 primarily due to increases in compensation and employee benefit costs, FDIC insurance assessments and marketing expenses as well as the funding of the charitable foundation.  Compensation and employee benefits increased by $2.2 million, or 9.5%, as the Company made an ESOP contribution of $3.1 million to benefit all Northwest employees in connection with the completion of the second-step conversion offering.  Federal deposit insurance premiums increased by $1.1 million, or 110.6%, due to increases in both the Company's deposits and the rate charged by the FDIC.  Marketing expenses increased by $2.2 million, or 114.4%, to $4.1 million for the quarter ended December 31, 2009 from $1.9 million for the quarter ended December 31, 2008 as a result of the initiation of a major campaign focused on the acquisition of checking account relationships.            

Net income for the year ended December 31, 2009 of $32.7 million, or $0.30 per diluted share, represents a decrease of $15.5 million, or 32.2% compared to net income of $48.2 million, or $0.44 per diluted share, for the year ended December 31, 2008.  This decrease resulted primarily from the Company recording a provision for loan losses which was $19.0 million, or 83.1%, higher than the previous year.  The increase in the provision was considered necessary given the current economic environment.  Also contributing to the decrease in income was the previously mentioned $13.8 million charitable contribution and a $3.3 million special assessment by the FDIC.  Partially offsetting these reductions in net income was a $9.3 million, or 4.2%, increase in net interest income and a $14.6 million, or 37.6%, increase in noninterest income.  Included in the increase in noninterest income was a $3.5 million gain recognized as part of the acquisition of Keystone State Savings Bank, which occurred October 23, 2009.  The annualized returns on average shareholders' equity and average assets were 4.71% and 0.46%, respectively, for the current year compared to 7.75% and 0.70%, respectively, for the prior year.    

Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc., through its subsidiary Northwest Savings Bank, currently operates 171 community banking locations in Pennsylvania, New York, Ohio, Maryland and Florida.  Northwest Savings Bank is a full-service financial institution offering a complete line of retail and business banking products as well as investment management and trust services.  The Company also operates 51 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company.  Northwest Bancshares, Inc.'s stock is listed on the NASDAQ Global Select Market.  Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.  

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

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except per share amounts)

December 31,

December 31,

Assets

2009

2008

Cash and cash equivalents

$       69,265   

55,815   

Interest-earning deposits in other financial institutions

1,037,893   

16,795   

Federal funds sold and other short-term investments

632   

7,312   

Marketable securities available-for-sale (amortized cost of $1,059,177 and $1,144,435)

1,067,089   

1,139,170   

Total cash, interest-earning deposits and marketable securities

2,174,879   

1,219,092   

Loans held for sale

1,164   

18,738   

Mortgage loans - one- to four- family

2,334,538   

2,447,506   

Home equity loans

1,067,584   

1,013,876   

Consumer loans

286,292   

289,602   

Commercial real estate loans

1,238,217   

1,071,182   

Commercial business loans

371,670   

355,917   

Total loans receivable

5,299,465   

5,196,821   

Allowance for loan losses

(70,403)  

(54,929)  

Loans receivable, net

5,229,062   

5,141,892   

Federal Home Loan Bank stock, at cost

63,242   

63,143   

Accrued interest receivable

25,780   

27,252   

Real estate owned, net

20,257   

16,844   

Premises and Equipment, net

124,316   

115,842   

Bank owned life insurance

128,270   

123,479   

Goodwill

171,363   

171,363   

Other intangible assets

4,678   

7,395   

Other assets

83,451   

43,939   

Total assets

$   8,025,298  

6,930,241   

Liabilities and Shareholders' equity

Liabilities:

Noninterest-bearing demand deposits

$     487,036   

394,011   

Interest-bearing demand deposits

768,110   

706,120   

Savings deposits

1,744,537   

1,480,620   

Time deposits

2,624,741   

2,457,460   

Total deposits

5,624,424   

5,038,211   

Borrowed funds

897,326   

1,067,945   

Advances by borrowers for taxes and insurance

22,034   

26,190   

Accrued interest payable

4,493   

5,194   

Other liabilities

57,412   

70,663   

Junior subordinated debentures

103,094   

108,254   

Total liabilities

6,708,783   

6,316,457   

Shareholders' equity:

Preferred stock, $0.01 par value and $0.10 par value, respectively: 50,000,000 shares authorized, no shares issued

                    -

                    -

Common stock, $0.01 par value: 500,000,000 shares authorized, 110,641,858 shares issued

1,106   

-   

Common stock, $0.10 par value: 500,000,000 shares authorized, 51,244,974 shares issued

-   

5,124   

Paid-in-capital

828,195   

218,332   

Retained earnings

508,842   

490,326   

Unallocated common stock of Employee Stock Ownership Plan

(11,651)  

-   

Accumulated other comprehensive loss

(9,977)  

(30,575)  

Treasury stock of -0- and 2,742,800 shares, at cost

-   

(69,423)  

Total shareholders' equity

1,316,515   

613,784   

Total liabilities and shareholders' equity

$   8,025,298  

6,930,241   

Equity to assets

16.40%

8.86%

Tangible common equity to assets

14.53%

6.36%

Book value per share*

$11.90   

$5.62 *

Tangible book value per share*

$10.31   

$3.93 *

Closing market price per share*

$11.27   

$9.50 *

Full time equivalent employees

1,867   

1,860   

Number of banking offices

171   

167   

* - Adjusted for 2.25 to 1 exchange rate.

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

Three months ended

Year ended

December 31,

December 31,

2009

2008

2009

2008

Interest income:

Loans receivable

$          80,322

            83,161

          320,121

          327,128

Mortgage-backed securities

              6,405

              8,830

            27,263

            34,694

Taxable investment securities

              1,246

              2,102

              5,384

            11,828

Tax-free investment securities

              2,678

              3,032

            11,054

            12,253

Interest-earning deposits

                 226

                   42

                 641

              2,756

Total interest income

            90,877

            97,167

          364,463

          388,659

Interest expense:

Deposits

            22,839

            27,259

            95,394

          137,061

Borrowed funds

              9,994

            10,405

            40,412

            32,232

Total interest expense

            32,833

            37,664

          135,806

          169,293

Net interest income

            58,044

            59,503

          228,657

          219,366

Provision for loan losses

            14,500

            10,212

            41,847

            22,851

Net interest income after provision

for loan losses

            43,544

            49,291

          186,810

          196,515

Noninterest income:

Impairment losses on securities

             (5,920)

             (3,653)

           (12,408)

           (16,004)

Noncredit related losses on securities not expected

to be sold (recognized in other comprehensive income)

              5,004

                      -

              6,311

                      -

Net impairment losses

                (916)

             (3,653)

             (6,097)

           (16,004)

Gain on sale of investments, net

                   26

              2,199

                 403

              6,037

Service charges and fees

              9,343

              8,337

            34,811

            32,432

Trust and other financial services income

              1,958

              1,491

              6,307

              6,718

Insurance commission income

                 619

                 619

              2,658

              2,376

Gain/ (loss) on sale of real estate owned, net

                (120)

                   11

             (4,054)

                (428)

Income from bank owned life insurance

              1,195

              1,213

              4,791

              4,797

Mortgage banking income

                 702

                   12

              5,594

                 665

Non-cash recovery/ (impairment) of MSRs

                 290

             (2,330)

              1,840

             (2,165)

Gain on bargain purchase

              3,503

                      -

              3,503

                      -

Other operating income

                 695

              1,366

              3,581

              4,324

Total noninterest income

            17,295

              9,265

            53,337

            38,752

Noninterest expense:

Compensation and employee benefits

            25,637

            23,408

            95,594

            91,129

Premises and occupancy costs

              5,442

              5,400

            21,963

            21,924

Office operations

              3,372

              3,185

            12,947

            13,237

Processing expenses

              5,829

              4,861

            21,312

            18,652

Marketing expenses

              4,106

              1,915

              9,152

              5,500

Federal deposit insurance premiums

              2,148

              1,020

              8,309

              3,884

FDIC Special Assessment

                      -

                      -

              3,288

                      -

Professional services

                 691

                 668

              2,590

              2,582

Amortization of intangible assets

                 649

                 848

              3,020

              4,387

Loss on early extinguishment of debt

                      -

                      -

                      -

                 705

Contribution to charitable foundation

            13,822

                      -

            13,822

                      -

Other expense

              2,541

              2,169

              8,497

              8,128

Total noninterest expense

            64,237

            43,474

          200,494

          170,128

(Loss)/ income before income taxes

             (3,398)

            15,082

            39,653

            65,139

Income tax (benefit)/ expense

             (4,404)

              3,798

              7,000

            16,968

Net income

$            1,006

            11,284

            32,653

            48,171

Basic earnings per share

0.01

$              0.10

*

$              0.30

$              0.44

*

Diluted earnings per share

0.01

$              0.10

*

$              0.30

$              0.44

*

Annualized return on average equity

0.46%

7.27%

4.71%

7.75%

Annualized return on average assets

0.05%

0.65%

0.46%

0.70%

Basic common shares outstanding

   109,286,606

   108,873,585

*

   109,078,129

   108,815,648

*

Diluted common shares outstanding

   109,820,238

   109,346,564

*

   109,459,875

   109,346,454

*

* - Adjusted for 2.25 to 1 exchange ratio.

Northwest Bancshares, Inc. and Subsidiaries

Supplementary data

(Dollars in thousands)

Three months ended

Year ended

December 31,

December 31,

2009

2008

2009

2008

Allowance for loan losses

Beginning balance

$    67,775   

47,924   

54,929   

41,784   

Provision

14,500   

10,212   

41,847   

22,851   

Charge-offs mortgage

(137)  

(332)  

(1,437)  

(1,513)  

Charge-offs consumer

(2,530)  

(1,739)  

(7,045)  

(6,607)  

Charge-offs commercial

(9,633)  

(1,425)  

(19,334)  

(3,490)  

Recoveries

428   

289   

1,443   

1,904   

Ending balance

$    70,403   

54,929   

70,403   

54,929   

Net charge-offs to average loans, annualized

0.91%

0.25%

0.51%

0.19%

December 31,

2009   

2008   

2007   

2006   

Nonperforming loans

$  124,626   

99,203   

49,610   

40,525   

Real estate owned, net

20,257   

16,844   

8,667   

6,653   

Nonperforming assets

$  144,883   

116,047   

58,277   

47,178   

Nonperforming loans to total loans

2.35%

1.91%

1.03%

0.91%

Nonperforming assets to total assets

1.81%

1.67%

0.87%

0.72%

Allowance for loan losses to total loans

1.33%

1.06%

0.86%

0.85%

Allowance for loan losses to nonperforming loans

56.49%

55.37%

84.22%

92.92%

Northwest Bancshares, Inc. and Subsidiaries

Supplementary data

(Dollars in thousands)

Loans past due schedule

(Number of loans and dollar amount of loans)

December 31,

2009

*

2008

*

2007

*

Loans past due 30 days to 59 days:

One- to four- family residential loans

350   

$   27,998   

1.2%

392   

$ 32,988   

1.3%

361   

$ 27,270   

1.1%

Consumer loans

1,100   

11,226   

0.8%

1,157   

11,295   

0.9%

1,331   

10,550   

0.8%

Multifamily and commercial RE loans

85   

16,152   

1.3%

99   

18,901   

1.8%

88   

11,331   

1.3%

Commercial business loans

48   

3,293   

0.9%

86   

7,700   

2.2%

70   

9,947   

3.0%

Total loans past due 30 days to 59 days

1,583   

$   58,669   

1.1%

1,734   

$ 70,884   

1.4%

1,850   

$ 59,098   

1.2%

Loans past due 60 days to 89 days:

One- to four- family residential loans

85   

$     6,772   

0.3%

101   

$   7,599   

0.3%

99   

$   6,077   

0.3%

Consumer loans

392   

3,029   

0.2%

379   

2,836   

0.2%

437   

2,676   

0.2%

Multifamily and commercial RE loans

35   

5,811   

0.5%

54   

8,432   

0.8%

41   

4,984   

0.6%

Commercial business loans

26   

2,474   

0.7%

45   

3,801   

1.1%

34   

2,550   

0.8%

Total loans past due 60 days to 89 days

538   

$   18,086   

0.3%

579   

$ 22,668   

0.4%

611   

$ 16,287   

0.3%

Loans past due 90 days or more:

One- to four- family residential loans

279   

$   29,373   

1.3%

223   

$ 20,435   

0.8%

193   

$ 12,542   

0.5%

Consumer loans

727   

12,544   

0.9%

687   

9,756   

0.7%

744   

7,582   

0.6%

Multifamily and commercial RE loans

199   

49,594   

4.0%

155   

43,828   

4.1%

105   

24,323   

2.9%

Commercial business loans

124   

18,269   

4.9%

114   

25,184   

7.1%

84   

5,163   

1.6%

Total loans past due 90 days or more

1,329   

$ 109,780   

2.1%

1,179   

$ 99,203   

1.9%

1,126   

$ 49,610   

1.0%

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

Northwest Bancshares, Inc. and Subsidiaries

Analysis of loan portfolio by geographic location as of December 31, 2009:

(Dollars in thousands)

Loans outstanding:

Mortgage

(1)

Consumer

(2)

Commercial

(3)

Total

(4)

Pennsylvania

$ 1,913,127   

81.9%

1,189,667   

87.9%

1,057,995   

65.7%

4,160,789   

78.4%

New York

136,729   

5.9%

98,870   

7.3%

302,145   

18.8%

537,744   

10.1%

Ohio

24,973   

1.1%

17,048   

1.3%

43,338   

2.7%

85,359   

1.6%

Maryland

232,146   

9.9%

39,227   

2.9%

157,262   

9.8%

428,635   

8.1%

Florida

28,727   

1.2%

9,064   

0.7%

49,147   

3.1%

86,938   

1.6%

    Total

$ 2,335,702   

100.0%

1,353,876  

100.0%

1,609,887   

100.0%

5,299,465   

100.0%

(1) - Percentage of total mortgage loans

(2) - Percentage of total consumer loans

(3) - Percentage of total commercial loans

(4) - Percentage of total loans

Loans 90 or more past due:

Mortgage

(5)

Consumer

(6)

Commercial

(7)

Total

(8)

Pennsylvania

$      21,683

1.1%

        9,571

0.8%

      46,649

4.4%

      77,903

1.9%

New York

             386

0.3%

           230

0.2%

        1,040

0.3%

        1,656

0.3%

Ohio

             196

0.8%

             78

0.5%

           496

1.1%

           770

0.9%

Maryland

             702

0.3%

        1,000

2.5%

      11,942

7.6%

      13,644

3.2%

Florida

          6,406

22.3%

        1,665

18.4%

        7,736

15.7%

      15,807

18.2%

    Total

$      29,373

1.3%

      12,544

0.9%

      67,863

4.2%

    109,780

2.1%

 (5) - Percentage of mortgage loans in that geographic area  

 (6) - Percentage of consumer loans in that geographic area  

 (7) - Percentage of commercial loans in that geographic area  

 (8) - Percentage of total loans in that geographic area  

Northwest Bancshares, Inc. and Subsidiaries

Supplementary data

(Dollars in thousands)

Marketable securities available-for-sale as of December 31, 2009:

Gross

Gross

unrealized

unrealized

Amortized

holding

holding

Market

cost

gains

losses

value

Debt issued by the U.S. government and agencies:

Due in one year or less

$             76 

(1)

75 

Debt issued by government sponsored enterprises:

Due in one year - five years

1,977 

153 

2,130 

Due in five years - ten years

21,912 

524 

22,436 

Due after ten years

52,667 

1,128 

(498)

53,297 

Equity securities

1,054 

191 

(118)

1,127 

Municipal securities:

Due in one year - five years

3,146 

68 

3,214 

Due in five years - ten years

41,170 

1,163 

42,333 

Due after ten years

190,812 

2,774 

(1,677)

191,909 

Corporate trust preferred securities:

Due in one year - five years

500 

500 

Due after ten years

26,882 

168 

(10,549)

16,501 

Mortgage-backed securities:

Fixed rate pass-through

145,363 

6,440 

(47)

151,756 

Variable rate pass-through

231,232 

7,894 

(85)

239,041 

Fixed rate non-agency CMO

18,698 

48 

(1,567)

17,179 

Fixed rate agency CMO

19,994 

982 

20,976 

Variable rate non-agency CMO

9,296 

(1,391)

7,905 

Variable rate agency CMO

294,398 

2,642 

(330)

296,710 

Total mortgage-backed securities

718,981 

18,006 

(3,420)

733,567 

Total marketable securities available-for-sale

$ 1,059,177 

24,175 

(16,263)

1,067,089 

Issuers of mortgage-backed securities as of December 31, 2009:

Fannie Mae

$    250,145 

7,202 

(366)

256,981 

Ginnie Mae

124,455 

1,726 

(17)

126,164 

Freddie Mac

315,606 

9,029 

(73)

324,562 

Non-agency

28,775 

49 

(2,964)

25,860 

  Total

$    718,981 

18,006 

(3,420)

733,567 

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.

Three months ended December 31,

2009

2008

Average

Interest

Avg.

Average

Interest

Avg.

Balance

Yield/

Balance

Yield/

Cost

Cost

ASSETS:

Interest-earning assets:

  Loans receivable (a) (b) (d)

$ 5,242,823   

80,160   

6.13%

5,161,835   

83,554   

6.42%

  Mortgage-backed securities (c)

744,755   

6,405   

3.44%

761,155   

8,830   

4.64%

  Investment securities (c) (d) (e)

349,309   

5,365   

6.14%

421,417   

6,452   

6.12%

  FHLB stock

63,216   

-   

0.00%

60,969   

314   

2.06%

  Other interest-earning deposits

477,269   

226   

0.19%

18,846   

42   

0.87%

Total interest-earning assets

6,877,372   

92,156   

5.37%

6,424,222   

99,192   

6.13%

Noninterest earning assets (f)

669,511   

496,051   

TOTAL ASSETS

$ 7,546,883   

6,920,273   

LIABILITIES AND SHAREHOLDERS' EQUITY:

Interest-bearing liabilities:

  Savings accounts

$    934,213   

1,852   

0.79%

779,238   

2,272   

1.16%

  Interest-bearing demand accounts

755,158   

434   

0.23%

722,807   

1,305   

0.72%

  Money market accounts

805,347   

1,768   

0.87%

708,655   

2,976   

1.67%

  Certificate accounts

2,604,329   

18,785   

2.86%

2,452,075   

20,706   

3.35%

  Borrowed funds (g)

899,711   

8,558   

3.77%

1,009,931   

9,013   

3.54%

  Junior subordinated debentures

103,094   

1,436   

5.45%

108,260   

1,392   

5.03%

Total interest-bearing liabilities

6,101,852   

32,833   

2.13%

5,780,966   

37,664   

2.58%

Noninterest bearing liabilities

569,269   

518,031   

Total liabilities

6,671,121   

6,298,997   

Shareholders' equity

875,762   

621,276   

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 7,546,883   

6,920,273   

Net interest income/ Interest rate spread

59,323   

3.24%

61,528   

3.55%

Net interest-earning assets/ Net interest margin

$    775,520   

3.45%

643,256   

3.83%

Ratio of interest-earning assets to

interest-bearing liabilities

1.13X

1.11X

(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 Fannie Mae and Freddie Mac stock.

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

(g) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

Average Balance Sheet

(Dollars in Thousands)

The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.

Year ended December 31,

2009

2008  

Average

Interest

Avg.

Average

Interest

Avg.

Balance

Yield/

Balance

Yield/

Cost

Cost

ASSETS:

Interest-earning assets:

  Loans receivable (a) (b) (d)

$ 5,199,829   

321,764   

6.17%

5,016,694   

328,687   

6.50%

  Mortgage-backed securities (c)

720,683   

27,263   

3.78%

732,281   

34,694   

4.74%

  Investment securities (c) (d) (e)

360,620   

22,390   

6.21%

478,933   

29,250   

6.11%

  FHLB stock

63,162   

-   

0.00%

48,167   

1,428   

2.96%

  Other interest-earning deposits

297,228   

641   

0.21%

104,895   

2,756   

2.59%

Total interest-earning assets

6,641,522   

372,058   

5.59%

6,380,970   

396,815   

6.18%

Noninterest earning assets (f)

523,038   

488,579   

TOTAL ASSETS

$ 7,164,560   

6,869,549   

LIABILITIES AND SHAREHOLDERS' EQUITY:

Interest-bearing liabilities:

  Savings accounts

$    850,707   

6,501   

0.76%

778,341   

9,159   

1.18%

  Interest-bearing demand accounts

739,102   

2,536   

0.34%

732,097   

6,434   

0.88%

  Money market accounts

752,166   

8,471   

1.13%

720,713   

14,726   

2.04%

  Certificate accounts

2,546,867   

77,886   

3.06%

2,716,815   

106,742   

3.93%

  Borrowed funds (g)

936,571   

34,578   

3.69%

718,657   

26,893   

3.74%

  Junior subordinated debentures

105,672   

5,834   

5.45%

108,287   

5,339   

4.86%

Total interest-bearing liabilities

5,931,085   

135,806   

2.29%

5,774,910   

169,293   

2.93%

Noninterest bearing liabilities

540,536   

473,410   

Total liabilities

6,471,621   

6,248,320   

Shareholders' equity

692,939   

621,229   

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 7,164,560   

6,869,549   

Net interest income/ Interest rate spread

236,252   

3.30%

227,522   

3.25%

Net interest-earning assets/ Net interest margin

$    710,437   

3.56%

606,060   

3.57%

Ratio of interest-earning assets to

interest-bearing liabilities

1.12X

1.10X

(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 Fannie Mae and Freddie Mac stock.

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

(g) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

SOURCE Northwest Bancshares, Inc.



RELATED LINKS

http://www.northwestsavingsbank.com