Northwest Bancshares, Inc. Announces Record Annual Earnings and Increased Dividend Declaration

News provided by

Jan 23, 2012, 01:24 ET

WARREN, Pa., Jan. 23, 2012 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2011 of $15.2 million, or $0.16 per diluted share. This represents an increase of $2.5 million, or 19.1%, over the same quarter last year when net income was $12.7 million, or $0.12 per diluted share, and a decrease of $1.5 million compared to the quarter ended September 30, 2011 when net income was $16.7 million, or $0.17 per diluted share. The annualized returns on average shareholders' equity and average assets for the current quarter were 5.23% and 0.76% compared to 3.90% and 0.63% for the same quarter last year and 5.62% and 0.83% for the quarter ended September 30, 2011.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share, an increase of $0.01 per share, or 9.1%, payable on February 16, 2012, to shareholders of record as of February 2, 2012. This represents the 69th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, "We were pleased with most areas of our operations for the most recent quarter and the 2011 calendar year. Compared to prior year periods, net interest income remained at historically strong levels and all other sources of income remained relatively consistent as a reduction in service charges on deposits was offset by an increase in fee income from trust and insurance services. Increases in operating expense resulted primarily from additional compensation expense and professional fees that were incurred in conjunction with initiatives to strengthen our compliance management system. Although delinquency continues to improve, loan loss provisions and loan charge-offs remain at elevated levels as we continue to work through the credit challenges that have accumulated over the past three years. Stock repurchases were curtailed in the most recent quarter with only 170,000 shares purchased, as the market value of our stock increased substantially. Given our strong capital position, the Board of Directors elected to increase the dividend by $0.01 per quarter for the third consecutive year, resulting in a dividend yield of approximately 3.8%."

Net interest income decreased by $692,000, or 1.0%, to $66.5 million for the quarter ended December 31, 2011, from $67.2 million for the quarter ended December 31, 2010, which was primarily attributable to a decrease in interest income from loans of $3.2 million, or 3.8%, to $79.9 million. Partially offsetting this decrease was a decrease in interest on deposits of $2.8 million, or 16.4%, to $14.2 million. Both of these decreases were primarily due to decreases in market interest rates.

The provision for loan losses decreased by $3.4 million, or 24.5%, to $10.5 million for the quarter ended December 31, 2011, from $13.9 million a year ago. As of December 31, 2011, the allowance for loan losses was $71.1 million, or 1.28% of total loans, compared to $76.4 million, or 1.38% of total loans, as of December 31, 2010. Nonperforming loans decreased $17.3 million, or 11.6%, to $131.1 million at December 31, 2011, from $148.4 million at December 31, 2010. The ratio of nonperforming assets to total assets decreased to 1.99% at December 31, 2011 from 2.08% at December 31, 2010.

Noninterest income decreased by $1.2 million, or 7.4%, to $14.0 million for the quarter ended December 31, 2011, from $15.2 million for the quarter ended December 31, 2010 primarily due to a decrease in mortgage banking income of $1.5 million, or 102.0%. This reduction resulted from the Company retaining most of the mortgage loans originated rather than selling those loans into the secondary market.

Noninterest expense decreased by $2.3 million, or 4.5%, to $48.4 million for the quarter ended December 31, 2011, from $50.7 million in the prior year due primarily to a decrease in federal deposit insurance premiums of $1.4 million, or 60.0%, to $933,000 as the assessment formula was changed to calculate premiums based on assets rather than deposits.

Net income for the year ended December 31, 2011 of $64.1 million, or $0.64 per diluted share represents an increase of $6.6 million, or 11.5% compared to net income of $57.5 million, or $0.53 per diluted share, for the year ended December 31, 2010. The annual returns on average shareholders' equity and average assets were 5.24% and 0.80%, respectively, for the current year compared to 4.40% and 0.71%, respectively, in the prior year. Year over year net interest income increased by $9.6 million, or 3.7%, and the provision for loan losses decreased by $6.3 million, or 15.6%. Partially offsetting these improvements was a decrease in noninterest income of $2.3 million, or 3.7%, and an increase in noninterest expense of $3.7 million, or 1.9%.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products as well as benefits and wealth management services. Northwest operates 168 community banking offices in Pennsylvania, New York, Ohio and Maryland and 52 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.

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

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)

			December 31,
Assets			2011	2010
Cash and cash equivalents			$ 94,276	40,708
Interest-earning deposits in other financial institutions			593,388	677,771
Federal funds sold and other short-term investments			633	632
Marketable securities available-for-sale (amortized cost of $885,408 and $945,571)			908,349	950,463
Marketable securities held-to-maturity (fair value of $239,412 and $354,126)			231,389	357,922
	Total cash, interest-earning deposits and marketable securities		1,828,035	2,027,496

Loans held for sale			967	11,376
Residential mortgage loans			2,396,399	2,386,928
Home equity loans			1,084,786	1,095,953
Other consumer loans			245,689	255,776
Commercial real estate loans			1,435,767	1,350,319
Commercial loans			387,911	433,653
	Total loans receivable		5,551,519	5,534,005
Allowance for loan losses			(71,138)	(76,412)
	Loans receivable, net		5,480,381	5,457,593

Federal Home Loan Bank stock, at cost			48,935	60,080
Accrued interest receivable			25,502	26,216
Real estate owned, net			26,887	20,780
Premises and Equipment, net			132,152	128,101
Bank owned life insurance			133,524	132,237
Goodwill			171,882	171,882
Other intangible assets			2,123	3,942
Other assets			107,203	119,828
	Total assets		$ 7,956,624	8,148,155

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits			$ 658,560	575,281
Interest-bearing demand deposits			800,676	782,257
Savings deposits			2,036,272	1,948,882
Time deposits			2,284,817	2,457,916
	Total deposits		5,780,325	5,764,336
Borrowed funds			827,925	891,293
Advances by borrowers for taxes and insurance			23,571	22,868
Accrued interest payable			1,104	1,716
Other liabilities			66,782	57,398
Junior subordinated debentures			103,094	103,094
	Total liabilities		6,802,801	6,840,705

Shareholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued			-	-
Common stock, $0.01 par value: 500,000,000 shares authorized, 97,493,046 shares
	and 110,295,117 shares issued, respectively		975	1,103
Paid-in-capital			659,523	824,164
Retained earnings			543,598	523,089
Unallocated common stock of Employee Stock Ownership Plan			(27,047)	(27,409)
Accumulated other comprehensive loss			(23,226)	(13,497)
	Total shareholders' equity		1,153,823	1,307,450
	Total liabilities and shareholders' equity		$ 7,956,624	8,148,155

		Equity to assets	14.50%	16.05%
		Tangible common equity to assets	12.59%	14.19%
		Book value per share	$11.83	$11.85
		Tangible book value per share	$10.05	$10.26
		Closing market price per share	$12.44	$11.78
		Full time equivalent employees	1,950	1,897
		Number of banking offices	168	171

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

				Three months ended
				December 31,		September 30,
				2011	2010	2011
Interest income:
	Loans receivable			$ 79,930	83,096	80,562
	Mortgage-backed securities			5,077	5,886	5,544
	Taxable investment securities			776	428	684
	Tax-free investment securities			2,600	3,111	2,848
	Interest-earning deposits			423	496	393
		Total interest income		88,806	93,017	90,031

Interest expense:
	Deposits			14,227	17,025	14,958
	Borrowed funds			8,041	8,762	8,061
		Total interest expense		22,268	25,787	23,019

		Net interest income		66,538	67,230	67,012
Provision for loan losses				10,502	13,918	8,057
		Net interest income after provision
		for loan losses		56,036	53,312	58,955

Noninterest income:
	Impairment losses on securities			(1,205)	(1,841)	-
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)		775	1,006	-
	Net impairment losses			(430)	(835)	-
	Gain on sale of investments, net			157	8	152
	Service charges and fees			8,630	9,296	8,499
	Trust and other financial services income			1,967	1,907	2,063
	Insurance commission income			1,582	1,362	1,796
	Loss on real estate owned, net			(466)	(279)	(1,340)
	Income from bank owned life insurance			1,199	1,228	1,938
	Mortgage banking income/(loss)			(29)	1,423	400
	Other operating income			1,428	1,058	1,002
		Total noninterest income		14,038	15,168	14,510

Noninterest expense:
	Compensation and employee benefits			25,434	25,328	26,004
	Premises and occupancy costs			5,556	5,675	5,658
	Office operations			3,286	3,233	3,209
	Processing expenses			5,982	6,041	5,896
	Marketing expenses			3,098	2,930	2,788
	Federal deposit insurance premiums			933	2,334	1,386
	Professional services			1,441	291	1,238
	Amortization of intangible assets			374	518	475
	Real estate owned expense			462	636	483
	Acquisition expense			-	591	-
	Other expense			1,870	3,122	2,786
		Total noninterest expense		48,436	50,699	49,923

		Income before income taxes		21,638	17,781	23,542
	Income tax expense			6,463	5,043	6,822

			Net income	$ 15,175	12,738	16,720

Basic earnings per share				$ 0.16	0.12	0.17

Diluted earnings per share				$ 0.16	0.12	0.17

Annualized return on average shareholders' equity				5.23%	3.90%	5.62%
Annualized return on average assets				0.76%	0.63%	0.83%

Basic common shares outstanding				93,675,589	108,337,001	96,918,016
Diluted common shares outstanding				93,972,187	108,848,189	97,124,328

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

				Year ended
				December 31,
				2011	2010
Interest income:
	Loans receivable			$ 320,942	328,948
	Mortgage-backed securities			23,450	25,271
	Taxable investment securities			2,452	2,514
	Tax-free investment securities			11,514	11,738
	Interest-earning deposits			1,712	2,097
		Total interest income		360,070	370,568

Interest expense:
	Deposits			60,721	75,174
	Borrowed funds			32,080	37,753
		Total interest expense		92,801	112,927

		Net interest income		267,269	257,641
Provision for loan losses				34,170	40,486
		Net interest income after provision
		for loan losses		233,099	217,155

Noninterest income:
	Impairment losses on securities			(1,782)	(2,741)
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)		845	1,193
	Net impairment losses			(937)	(1,548)
	Gain on sale of investments, net			358	2,208
	Service charges and fees			35,378	37,921
	Trust and other financial services income			8,125	7,252
	Insurance commission income			6,548	5,190
	Loss on real estate owned, net			(2,426)	(2,572)
	Income from bank owned life insurance			6,019	5,080
	Mortgage banking income			858	2,196
	Other operating income			4,213	4,671
		Total noninterest income		58,136	60,398

Noninterest expense:
	Compensation and employee benefits			106,595	100,709
	Premises and occupancy costs			23,055	22,665
	Office operations			12,850	13,864
	Processing expenses			23,332	23,152
	Marketing expenses			9,953	9,875
	Federal deposit insurance premiums			7,101	9,054
	Professional services			5,224	2,728
	Amortization of intangible assets			1,819	2,784
	Real estate owned expense			1,625	2,901
	Acquisition expense			-	1,229
	Other expense			8,673	7,547
		Total noninterest expense		200,227	196,508

		Income before income taxes		91,008	81,045
	Income tax expense			26,857	23,522

			Net income	$ 64,151	57,523

Basic earnings per share				$ 0.64	0.53

Diluted earnings per share				$ 0.64	0.53

Annualized return on average shareholders' equity				5.24%	4.40%
Annualized return on average assets				0.80%	0.71%

Basic common shares outstanding				99,801,783	108,308,834
Diluted common shares outstanding				100,177,564	108,931,377

Northwest Bancshares, Inc. and Subsidiaries
Asset Quality
(Dollars in thousands)

		Three months ended		Year ended
		December 31,		December 31,
		2011	2010	2011	2010
Allowance for loan losses
	Beginning balance	$ 73,208	77,245	76,412	70,403
	Provision	10,502	13,918	34,170	40,486
	Charge-offs residential mortgage	(1,530)	(2,550)	(4,198)	(4,497)
	Charge-offs home equity	(998)	(1,146)	(4,734)	(4,104)
	Charge-offs other consumer	(1,467)	(1,643)	(5,283)	(6,390)
	Charge-offs commercial real estate	(4,288)	(5,953)	(12,508)	(12,576)
	Charge-offs commercial	(4,935)	(4,365)	(15,641)	(9,305)
	Recoveries	646	906	2,920	2,395
	Ending balance	$ 71,138	76,412	71,138	76,412


Net charge-offs to average loans, annualized		0.91%	1.06%	0.72%	0.63%

		December 31,
		2011	2010	2009	2008
Nonperforming loans		$ 131,105	148,391	124,626	99,203
Real estate owned, net		26,887	20,780	20,257	16,844
Nonperforming assets		$ 157,992	169,171	144,883	116,047

Non-accrual troubled debt restructuring *		$ 26,908	41,740	2,908	-
Accruing troubled debt restructuring		39,854	10,865	18,177	-
Total troubled debt restructuring		$ 66,762	52,605	21,085	-

Nonperforming loans to total loans		2.36%	2.68%	2.35%	1.91%

Nonperforming assets to total assets		1.99%	2.08%	1.81%	1.67%

Allowance for loan losses to total loans		1.28%	1.38%	1.33%	1.06%

Allowance for loan losses to nonperforming loans		54.26%	51.49%	56.49%	55.37%

* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries
Non-accrual loans delinquency
(Dollars in thousands)

			December 31, 2011	December 31, 2010	December 31, 2009

Non-accrual loans current:
	Residential mortgage loans	$	-	-	-
	Home equity loans		-	-	-
	Other consumer loans		-	-	-
	Commercial real estate loans		13,057	7,378	-
	Commercial loans		13,480	23,317	13,141
Total non-accrual loans current		$	26,537	30,695	13,141

Non-accrual loans delinquent 30 days to 59 days:
	Residential mortgage loans	$	-	-	-
	Home equity loans		-	-	-
	Other consumer loans		-	-	-
	Commercial real estate loans		3,274	4,039	-
	Commercial loans		90	1,465	-
Total non-accrual loans delinquent 30 days to 59 days		$	3,364	5,504	-

Non-accrual loans delinquent 60 days to 89 days:
	Residential mortgage loans	$	-	-	-
	Home equity loans		-	-	-
	Other consumer loans		-	-	-
	Commercial real estate loans		1,560	10,923	1,705
	Commercial loans		3,808	848	-
Total non-accrual loans delinquent 60 days to 89 days		$	5,368	11,771	1,705

Non-accrual loans delinquent 90 days or more:
	Residential mortgage loans	$	28,221	29,751	29,134
	Home equity loans		9,560	10,263	10,008
	Other consumer loans		2,667	2,565	2,775
	Commercial real estate loans		44,603	44,965	49,594
	Commercial loans		10,785	12,877	18,269
Total non- accrual loans delinquent 90 days or more		$	95,836	100,421	109,780

Total non-accrual loans		$	131,105	148,391	124,626

Northwest Bancshares, Inc. and Subsidiaries
Delinquency
(Dollars in thousands)



Loan delinquency schedule
	(Number of loans and dollar amount of loans)
		December 31,
		2011		*	2010		*	2009		*
Loans delinquent 30 days to 59 days:
	Residential mortgage loans	427	$ 33,671	1.4%	427	$ 35,329	1.5%	343	$ 27,913	1.2%
	Home equity loans	222	7,426	0.7%	230	7,317	0.7%	184	7,014	0.6%
	Other consumer loans	903	4,854	2.0%	1,008	5,318	2.1%	923	4,297	1.6%
	Commercial real estate loans	104	10,680	0.7%	82	16,287	1.2%	85	16,152	1.3%
	Commercial loans	32	2,027	0.5%	48	6,590	1.5%	48	3,293	0.9%
Total loans delinquent 30 days to 59 days		1,688	$ 58,658	1.1%	1,795	$ 70,841	1.3%	1,583	$ 58,669	1.1%

Loans delinquent 60 days to 89 days:
	Residential mortgage loans	99	$ 8,629	0.4%	106	$ 9,848	0.4%	77	$ 6,657	0.3%
	Home equity loans	47	1,953	0.2%	81	3,249	0.3%	52	1,719	0.2%
	Other consumer loans	412	1,787	0.7%	356	1,331	0.5%	348	1,425	0.5%
	Commercial real estate loans	38	3,122	0.2%	39	14,365	1.1%	35	5,811	0.5%
	Commercial loans	25	4,958	1.3%	9	1,678	0.4%	26	2,474	0.7%
Total loans delinquent 60 days to 89 days		621	$ 20,449	0.4%	591	$ 30,471	0.6%	538	$ 18,086	0.3%

Loans delinquent 90 days or more:
	Residential mortgage loans	273	$ 28,221	1.2%	275	$ 29,751	1.2%	265	$ 29,134	1.2%
	Home equity loans	177	9,560	0.9%	190	10,263	0.9%	195	10,008	0.9%
	Other consumer loans	456	2,667	1.1%	374	2,565	1.0%	546	2,775	1.0%
	Commercial real estate loans	131	44,603	3.1%	181	44,965	3.3%	199	49,594	4.0%
	Commercial loans	66	10,785	2.8%	111	12,877	3.0%	124	18,269	4.9%
Total loans delinquent 90 days or more		1,103	$ 95,836	1.7%	1,131	$ 100,421	1.8%	1,329	$ 109,780	2.1%

Total loans delinquent		3,412	$ 174,943	3.2%	3,517	$ 201,733	3.7%	3,450	$ 186,535	3.5%

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

Northwest Bancshares, Inc. and Subsidiaries
Analysis of loan portfolio by geographic location as of December 31, 2011:
(Dollars in thousands)

Loans outstanding:

		Residential Mortgage	(1)	Home equity	(2)	Other consumer	(3)	Commercial real estate loans	(4)	Commercial loans	(5)	Total	(6)

	Pennsylvania	$ 1,978,512	82.5%	925,368	85.3%	225,827	91.9%	849,702	59.2%	258,775	66.7%	4,238,184	76.3%
	New York	159,389	6.6%	104,194	9.6%	11,191	4.6%	356,868	24.9%	56,128	14.5%	687,770	12.4%
	Ohio	19,895	0.8%	11,677	1.1%	3,022	1.2%	35,882	2.5%	10,072	2.6%	80,548	1.5%
	Maryland	168,247	7.0%	33,816	3.1%	1,417	0.6%	114,839	8.0%	25,942	6.7%	344,261	6.2%
	Florida	27,551	1.1%	8,057	0.7%	1,473	0.6%	40,904	2.8%	17,340	4.5%	95,325	1.7%
	All other	43,772	1.8%	1,674	0.2%	2,759	1.1%	37,572	2.6%	19,654	5.1%	105,431	1.9%
	Total	$ 2,397,366	100.0%	1,084,786	100.0%	245,689	100.0%	1,435,767	100.0%	387,911	100.0%	5,551,519	100.0%

	(1) - Percentage of total mortgage loans
	(2) - Percentage of total home equity loans
	(3) - Percentage of total other consumer loans
	(4) - Percentage of total commercial real estate loans
	(5) - Percentage of total commercial loans
	(6) - Percentage of total loans

Loans 90 or more past due:

		Residential Mortgage	(7)	Home equity	(8)	Other consumer	(9)	Commercial real estate loans	(10)	Commercial loans	(11)	Total	(12)

	Pennsylvania	$ 16,971	0.9%	6,559	0.7%	2,537	1.1%	17,753	2.1%	5,075	2.0%	48,895	1.2%
	New York	1,358	0.9%	1,031	1.0%	54	0.5%	8,625	2.4%	281	0.5%	11,349	1.7%
	Ohio	305	1.5%	23	0.2%	23	0.8%	88	0.2%	-	0.0%	439	0.5%
	Maryland	4,436	2.6%	1,496	4.4%	-	0.0%	6,573	5.7%	2,514	9.7%	15,019	4.4%
	Florida	4,312	15.7%	422	5.2%	53	3.6%	4,407	10.8%	2,915	16.8%	12,109	12.7%
	All other	839	1.9%	29	1.7%	-	0.0%	7,157	19.0%	-	0.0%	8,025	7.6%
	Total	$ 28,221	1.2%	9,560	0.9%	2,667	1.1%	44,603	3.1%	10,785	2.8%	95,836	1.7%

	(7) - Percentage of total mortgage loans in that geographic area
	(8) - Percentage of total home equity loans in that geographic area
	(9) - Percentage of total other consumer loans in that geographic area
	(10) - Percentage of total commercial real estate loans in that geographic area
	(11) - Percentage of total commercial loans in that geographic area
	(12) - Percentage of total loans in that geographic area

Northwest Bancshares, Inc. and Subsidiaries
Investment Portfolio
(Dollars in thousands)

Marketable securities available-for-sale as of December 31, 2011:
			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	$ 59	-	-	59

Debt issued by government sponsored enterprises:
	Due in one year - five years	36,295	134	-	36,429
	Due in five years - ten years	29,557	638	(61)	30,134
	Due after ten years	9,665	-	(49)	9,616

Equity securities		12,080	644	(259)	12,465

Municipal securities:
	Due in one year - five years	10,633	291	-	10,924
	Due in five years - ten years	27,817	1,336	-	29,153
	Due after ten years	124,041	5,350	(180)	129,211

Corporate trust preferred securities:
	Due in one year or less	500	-	-	500
	Due after ten years	25,036	233	(4,635)	20,634

Mortgage-backed securities:
	Fixed rate pass-through	110,364	8,201	(1)	118,564
	Variable rate pass-through	135,103	6,679	(4)	141,778
	Fixed rate non-agency CMO	9,521	188	(735)	8,974
	Fixed rate agency CMO	112,670	3,466	-	116,136
	Variable rate non-agency CMO	1,104	-	(154)	950
	Variable rate agency CMO	240,963	1,991	(132)	242,822

	Total mortgage-backed securities	609,725	20,525	(1,026)	629,224

	Total marketable securities available-for-sale	$ 885,408	29,151	(6,210)	908,349

Marketable securities held-to-maturity as of December 31, 2011:
			Gross	Gross
			unrealized	unrealized
		Amortized	holding	holding	Market
		cost	gains	losses	value

Municipal securities:
	Due in five years - ten years	3,677	174	-	3,851
	Due after ten years	71,015	3,615	-	74,630

Mortgage-backed securities:
	Fixed rate pass-through	24,160	1,099	-	25,259
	Variable rate pass-through	9,066	94	-	9,160
	Fixed rate agency CMO	108,881	2,761	-	111,642
	Variable rate agency CMO	14,590	280	-	14,870

	Total mortgage-backed securities	156,697	4,234	-	160,931

	Total marketable securities held-to-maturity	$ 231,389	8,023	-	239,412

Issuers of mortgage-backed securities as of December 31, 2011:
	Fannie Mae	$ 324,439	11,487	(73)	335,853
	Ginnie Mae	139,901	4,050	-	143,951
	Freddie Mac	272,095	9,034	(51)	281,078
	SBA	18,637	-	(13)	18,624
	Non-agency	11,350	188	(889)	10,649
	Total	$ 766,422	24,759	(1,026)	790,155

Northwest Bancshares, Inc. and Subsidiaries
Investment Portfolio - Continued
(Dollars in thousands)


		Book	As a %
		Value	of Book
		12/31/2011	Value
Municipal securities by state:
	Pennsylvania
	School district	$ 114,699	48.4%
	General obligation	41,766	17.6%
	Revenue bonds	4,709	2.0%
	Total Pennsylvania	161,174	68.0%
	New York	33,679	14.2%
	Ohio	6,426	2.7%
	All other states	35,904	15.1%
		$ 237,183

Average Balance Sheet - unaudited
(Dollars in thousands)

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

	Three months ended December 31,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,544,194	80,395	5.79%	5,565,989	83,491	5.99%
Mortgage-backed securities (c)	797,071	5,077	2.55%	879,958	5,886	2.68%
Investment securities (c) (d)	376,545	4,776	5.07%	365,003	5,213	5.71%
FHLB stock	49,775	-	-	61,042	-	-
Other interest-earning deposits	615,906	423	0.27%	721,174	496	0.27%

Total interest-earning assets	7,383,491	90,671	4.90%	7,593,166	95,086	5.00%

Noninterest earning assets (e)	571,873			588,945

Total assets	$ 7,955,364			8,182,111

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,064,533	1,139	0.42%	1,058,373	1,695	0.64%
Interest-bearing demand accounts	787,674	238	0.12%	786,488	249	0.13%
Money market accounts	959,378	1,013	0.42%	906,414	1,209	0.53%
Certificate accounts	2,308,440	11,837	2.03%	2,456,893	13,872	2.24%
Borrowed funds (f)	836,948	6,604	3.13%	892,461	7,326	3.26%
Junior subordinated debentures	103,094	1,437	5.45%	103,094	1,436	5.45%

Total interest-bearing liabilities	6,060,067	22,268	1.46%	6,203,723	25,787	1.65%

Noninterest bearing liabilities (g)	734,898			671,412

Total liabilities	6,794,965			6,875,135

Shareholders' equity	1,160,399			1,306,976

Total liabilities and shareholders' equity	$ 7,955,364			8,182,111

Net interest income/ Interest rate spread		68,403	3.44%		69,299	3.35%

Net interest-earning assets/ Net interest margin	$ 1,323,424		3.71%	1,389,443		3.65%

Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.96%, respectively, Investment securities - 3.59% and 3.88%, respectively,
Interest-earning assets - 4.80% and 4.89%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.24%, respectively,
and GAAP basis net interest margins were 3.60% and 3.54%, respectively.

Average Balance Sheet - unaudited
(Dollars in thousands)

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

	Year ended December 31,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,508,790	322,656	5.85%	5,487,645	330,431	6.03%
Mortgage-backed securities (c)	874,366	23,450	2.68%	816,182	25,271	3.10%
Investment securities (c) (d)	384,389	20,166	5.25%	369,858	20,572	5.56%
FHLB stock	53,985	-	-	62,688	-	-
Other interest-earning deposits	665,074	1,712	0.25%	805,161	2,097	0.26%

Total interest-earning assets	7,486,604	367,984	4.91%	7,541,534	378,371	5.02%

Noninterest earning assets (e)	570,888			578,317

Total assets	$ 8,057,492			8,119,851

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,075,890	5,000	0.46%	1,031,362	8,166	0.79%
Interest-bearing demand accounts	793,287	960	0.12%	776,091	1,211	0.16%
Money market accounts	939,317	4,243	0.45%	888,081	5,977	0.67%
Certificate accounts	2,362,313	50,518	2.14%	2,483,481	59,820	2.41%
Borrowed funds (f)	841,748	26,381	3.13%	896,843	32,054	3.57%
Junior subordinated debentures	103,094	5,699	5.45%	103,094	5,699	5.45%

Total interest-bearing liabilities	6,115,649	92,801	1.52%	6,178,952	112,927	1.83%

Noninterest bearing liabilities (g)	718,434			634,119

Total liabilities	6,834,083			6,813,071

Shareholders' equity	1,223,409			1,306,780

Total liabilities and shareholders' equity	$ 8,057,492			8,119,851

Net interest income/ Interest rate spread		275,183	3.39%		265,444	3.19%

Net interest-earning assets/ Net interest margin	$ 1,370,955		3.68%	1,362,582		3.52%

Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.82% and 6.00%, respectively, Investment securities - 3.63% and 3.85%, respectively,
Interest-earning assets - 4.80% and 4.92%, respectively. GAAP basis net interest rate spreads were 3.29% and 3.09%, respectively,
and GAAP basis net interest margins were 3.57% and 3.42%, respectively.

Average Balance Sheet - unaudited
(Dollars in thousands)

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

	Three months ended			Three months ended
	December 31, 2011			September 30, 2011
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,544,194	80,395	5.79%	5,490,795	81,025	5.86%
Mortgage-backed securities (c)	797,071	5,077	2.55%	857,898	5,544	2.58%
Investment securities (c) (d)	376,545	4,776	5.07%	412,927	5,066	4.91%
FHLB stock	49,775	-	-	52,336	-	-
Other interest-earning deposits	615,906	423	0.27%	652,958	393	0.24%

Total interest-earning assets	7,383,491	90,671	4.90%	7,466,914	92,028	4.90%

Noninterest earning assets (e)	571,873			560,951

Total assets	$ 7,955,364			8,027,865

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,064,533	1,139	0.42%	1,081,721	1,157	0.42%
Interest-bearing demand accounts	787,674	238	0.12%	798,424	244	0.12%
Money market accounts	959,378	1,013	0.42%	950,113	1,016	0.42%
Certificate accounts	2,308,440	11,837	2.03%	2,338,436	12,541	2.13%
Borrowed funds (f)	836,948	6,604	3.13%	840,560	6,625	3.13%
Junior subordinated debentures	103,094	1,437	5.45%	103,094	1,436	5.45%

Total interest-bearing liabilities	6,060,067	22,268	1.46%	6,112,348	23,019	1.49%

Noninterest bearing liabilities (g)	734,898			726,173

Total liabilities	6,794,965			6,838,521

Shareholders' equity	1,160,399			1,189,344

Total liabilities and shareholders' equity	$ 7,955,364			8,027,865

Net interest income/ Interest rate spread		68,403	3.44%		69,009	3.41%

Net interest-earning assets/ Net interest margin	$ 1,323,424		3.71%	1,354,566		3.70%

Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.82%, respectively, Investment securities - 3.59% and 3.42%, respectively,
Interest-earning assets - 4.80% and 4.79%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.29%, respectively,
and GAAP basis net interest margins were 3.60% and 3.59%, respectively.