Northwest Bancshares, Inc. Announces Third Quarter 2011 Earnings and Dividend Declaration

News provided by

Oct 24, 2011, 10:16 ET

WARREN, Pa., Oct. 24, 2011 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2011 of $16.7 million, or $0.17 per diluted share. This represents an increase of $1.2 million, or $0.03 per diluted share over the same quarter last year when net income was $15.5 million, or $0.14 per diluted share, and an increase of $1.7 million, or $0.02 per diluted share compared to the quarter ended June 30, 2011 when net income was $15.0 million, or $0.15 per diluted share. The annualized returns on average shareholders’ equity and average assets for the current quarter were 5.62% and 0.83% compared to 4.72% and 0.76% for the same quarter last year and 4.81% and 0.74% for the quarter ended June 30, 2011.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.11 per share payable on November 17, 2011, to shareholders of record as of November 3, 2011. This represents the 68th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, “We are pleased to report another solid quarter with fairly significant growth in earnings, earnings per share, loans, and core deposits. Despite the challenges of historically low interest rates and a flat yield curve, our net interest margin remains strong at 3.70% versus 3.63% last year. Finally, we continued our stock repurchase program during the quarter with 5,835,164 shares being purchased at an average price of $11.67. To date, we have repurchased 14,822,153 shares at an average price of $11.95. This has been accomplished with little dilution to tangible book value per share as the value was $10.28 at the start of the program on December 20, 2010 and had decreased to $10.17 as of September 30, 2011. During that time we paid cash dividends of $0.32 per share.”

Net interest income increased by $362,000, or 0.5%, to $67.0 million for the quarter ended September 30, 2011, from $66.7 million for the quarter ended September 30, 2010. This increase was primarily attributable to a decrease in the cost of deposits which was nearly offset by a decrease in the yield earned on loans receivable. Interest expense on deposits decreased by $2.8 million, or 15.8%, to $15.0 million as a result of a decrease in market interest rates and the continued change in the mix of deposits. Lower-cost transaction and savings accounts grew by $106.2 million, or 3.9%, while higher-cost time deposit accounts decreased by $126.4 million, or 5.1% during the current year. Interest income on loans receivable decreased by $2.8 million, or 3.4%, to $80.6 million as a result of the re-pricing of adjustable rate loans and increased competition for quality lending opportunities.

The provision for loan losses decreased by $1.8 million, or 18.4%, to $8.1 million for the quarter ended September 30, 2011, from $9.9 million a year ago. As of September 30, 2011, the allowance for loan losses was $73.2 million, or 1.33% of total loans, compared to $77.2 million, or 1.38% of total loans, as of September 30, 2010. Net loan charge-offs were $10.3 million for the current quarter compared to $8.0 million in the previous year and $9.4 million in the previous quarter. Loans 90 days or more delinquent were $112.2 million as of September 30, 2011, compared to $103.5 million as of September 30, 2010 and $115.8 million as of June 30, 2011.

Noninterest income increased by $682,000, or 4.9%, to $14.5 million for the quarter ended September 30, 2011, from $13.8 million for the quarter ended September 30, 2010. Income from bank owned life insurance increased by $726,000, or 59.9%, to $1.9 million for the quarter ended September 30, 2011, from $1.2 million for the same quarter last year. This increase is the result of the death benefits received on two policies. Losses on real estate owned decreased by $674,000, or 33.5%, to $1.3 million for the quarter ended September 30, 2011, from $2.0 million for the quarter ended September 30, 2010. The loss in the current quarter is the result of further write-downs on properties in Florida and Central Pennsylvania. Trust and other financial services income and insurance commission income increased by $463,000, or 28.9%, and $403,000, or 28.9%, respectively, for the quarter ended September 30, 2011. Partially offsetting these increases was a decrease in service charges and fees of $1.3 million, or 13.5%, to $8.5 million for the quarter ended September 30, 2011. This decrease was primarily the result of lower deposit overdraft revenue.

Noninterest expense increased by $875,000, or 1.8%, to $49.9 million for the quarter ended September 30, 2011, from $49.0 million for the quarter ended September 30, 2010. This increase is primarily a result of increases in compensation and employee benefits of $1.4 million, or 5.9%, to $26.0 million for the quarter ended September 30, 2011. This increase is attributable to an increase in health insurance and other employee benefits expense and an increase of 47 full-time equivalent employees when compared to September 30, 2010. The increase in personnel occurred primarily in the areas of commercial lending, loan servicing and regulatory compliance. Partially offsetting these increases were decreases in office operations expense and federal deposit insurance premiums. Office operations expense decreased by $1.3 million, to $3.2 million for the quarter ended September 30, 2011 which was attributable to a check kiting fraud suffered during the quarter ended September 30, 2010. Federal deposit insurance premiums decreased $1.0 million, or 42.8%, to $1.4 million for the quarter ended September 30, 2011 from the previous year due to a change in the assessment formula, which now calculates premiums based on assets rather than deposits.

Net income for the nine-month period ended September 30, 2011 of $49.0 million, or $0.48 per diluted share, represents an increase in income of $4.2 million, or 9.4% and $0.07 per diluted share when compared to the previous year. The annualized returns on average shareholders’ equity and average assets were 5.25% and 0.81%, respectively, for the current nine-month period compared to 4.57% and 0.74%, respectively, in the prior year.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products as well as benefits and wealth management services. Northwest operates 169 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)
			(Unaudited)
			September 30,	December 31,
Assets			2011	2010
Cash and cash equivalents			$ 90,493	40,708
Interest-earning deposits in other financial institutions			579,915	677,771
Federal funds sold and other short-term investments			633	632
Marketable securities available-for-sale (amortized cost of $949,789 and $945,571)			971,543	950,463
Marketable securities held-to-maturity (fair value of $274,803 and $354,126)			268,517	357,922
	Total cash, interest-earning deposits and marketable securities		1,911,101	2,027,496

Loans held for sale			926	11,376
Residential mortgage loans			2,349,196	2,386,928
Home equity loans			1,094,609	1,092,606
Other consumer loans			246,188	259,123
Commercial real estate loans			1,420,504	1,350,319
Commercial loans			406,885	433,653
	Total loans receivable		5,518,308	5,534,005
Allowance for loan losses			(73,208)	(76,412)
	Loans receivable, net		5,445,100	5,457,593

Federal Home Loan Bank stock, at cost			51,511	60,080
Accrued interest receivable			25,745	26,216
Real estate owned, net			20,648	20,780
Premises and Equipment, net			126,047	128,101
Bank owned life insurance			133,081	132,237
Goodwill			171,882	171,882
Other intangible assets			2,497	3,942
Other assets			101,731	119,828
	Total assets		$ 7,989,343	8,148,155

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits			$ 643,920	575,281
Interest-bearing demand deposits			819,796	782,257
Savings deposits			2,017,563	1,948,882
Time deposits			2,331,471	2,457,916
	Total deposits		5,812,750	5,764,336
Borrowed funds			828,674	891,293
Advances by borrowers for taxes and insurance			12,080	22,868
Accrued interest payable			1,072	1,716
Other liabilities			64,896	57,398
Junior subordinated debentures			103,094	103,094
	Total liabilities		6,822,566	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, 97,576,368 shares
	and 110,295,117 shares issued, respectively		976	1,103
Paid-in-capital			659,432	824,164
Retained earnings			538,882	523,089
Unallocated common stock of Employee Stock Ownership Plan			(26,258)	(27,409)
Accumulated other comprehensive loss			(6,255)	(13,497)
	Total shareholders' equity		1,166,777	1,307,450
	Total liabilities and shareholders' equity		$ 7,989,343	8,148,155

		Equity to assets	14.60%	16.05%
		Tangible common equity to assets	12.70%	14.19%
		Book value per share	$11.96	$11.85
		Tangible book value per share	$10.17	$10.26
		Closing market price per share	$11.91	$11.78
		Full time equivalent employees	1,926	1,881
		Number of banking offices	169	171

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

				Three months ended
				September 30,		June 30,
				2011	2010	2011
Interest income:
	Loans receivable			$ 80,562	83,372	79,993
	Mortgage-backed securities			5,544	6,534	6,073
	Taxable investment securities			684	489	594
	Tax-free investment securities			2,848	3,090	2,992
	Interest-earning deposits			393	524	489
		Total interest income		90,031	94,009	90,141

Interest expense:
	Deposits			14,958	17,772	15,473
	Borrowed funds			8,061	9,587	7,989
		Total interest expense		23,019	27,359	23,462

		Net interest income		67,012	66,650	66,679
Provision for loan losses				8,057	9,871	8,367
		Net interest income after provision
		for loan losses		58,955	56,779	58,312

Noninterest income:
	Impairment losses on securities			-	(1,830)	(577)
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)		-	1,438	70
	Net impairment losses			-	(392)	(507)
	Gain on sale of investments, net			152	17	45
	Service charges and fees			8,499	9,821	9,321
	Trust and other financial services income			2,063	1,600	2,185
	Insurance commission income			1,796	1,393	1,790
	Loss on real estate owned, net			(1,340)	(2,014)	(593)
	Income from bank owned life insurance			1,938	1,212	1,716
	Mortgage banking income			400	752	290
	Other operating income			1,002	1,439	1,015
		Total noninterest income		14,510	13,828	15,262

Noninterest expense:
	Compensation and employee benefits			26,004	24,565	29,658
	Premises and occupancy costs			5,658	5,648	5,650
	Office operations			3,209	4,460	3,255
	Processing expenses			5,896	5,863	5,687
	Marketing expenses			2,788	2,208	2,108
	Federal deposit insurance premiums			1,386	2,424	2,355
	Professional services			1,238	1,126	1,289
	Amortization of intangible assets			475	725	479
	Real estate owned expense			483	654	249
	Other expense			2,786	1,375	1,760
		Total noninterest expense		49,923	49,048	52,490

		Income before income taxes		23,542	21,559	21,084
	Income tax expense			6,822	6,068	6,081

			Net income	$ 16,720	15,491	15,003

Basic earnings per share				$ 0.17	$ 0.14	$ 0.15

Diluted earnings per share				$ 0.17	$ 0.14	$ 0.15

Annualized return on average equity				5.62%	4.72%	4.81%
Annualized return on average assets				0.83%	0.76%	0.74%

Basic common shares outstanding				96,918,016	108,340,566	102,216,892
Diluted common shares outstanding				97,124,328	108,914,069	102,536,202

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

				Nine months ended
				September 30,
				2011	2010
Interest income:
	Loans receivable			$ 241,012	245,852
	Mortgage-backed securities			18,373	19,385
	Taxable investment securities			1,676	2,086
	Tax-free investment securities			8,914	8,627
	Interest-earning deposits			1,289	1,601
		Total interest income		271,264	277,551

Interest expense:
	Deposits			46,494	58,149
	Borrowed funds			24,039	28,991
		Total interest expense		70,533	87,140

		Net interest income		200,731	190,411
Provision for loan losses				23,668	26,568
		Net interest income after provision
		for loan losses		177,063	163,843

Noninterest income:
	Impairment losses on securities			(577)	(1,994)
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)		70	1,287
	Net impairment losses			(507)	(707)
	Gain on sale of investments, net			201	2,194
	Service charges and fees			26,748	28,625
	Trust and other financial services income			6,158	5,345
	Insurance commission income			4,966	3,828
	Loss on real estate owned, net			(1,960)	(2,293)
	Income from bank owned life insurance			4,820	3,852
	Mortgage banking income			887	773
	Other operating income			2,785	3,613
		Total noninterest income		44,098	45,230

Noninterest expense:
	Compensation and employee benefits			81,161	75,381
	Premises and occupancy costs			17,499	16,990
	Office operations			9,564	10,631
	Processing expenses			17,350	17,111
	Marketing expenses			6,855	6,945
	Federal deposit insurance premiums			6,168	6,720
	Professional services			3,783	2,437
	Amortization of intangible assets			1,445	2,266
	Real estate owned expense			1,163	2,265
	Other expense			6,803	5,063
		Total noninterest expense		151,791	145,809

		Income before income taxes		69,370	63,264
	Income tax expense			20,394	18,479

			Net income	$ 48,976	44,785

Basic earnings per share				$ 0.48	$ 0.41

Diluted earnings per share				$ 0.48	$ 0.41

Annualized return on average equity				5.25%	4.57%
Annualized return on average assets				0.81%	0.74%

Basic common shares outstanding				101,866,461	108,299,515
Diluted common shares outstanding				102,268,927	108,959,585

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

		Three months ended		Nine months ended
		September 30,		September 30,
		2011	2010	2011	2010
Allowance for loan losses
	Beginning balance	$ 75,455	$ 75,417	76,412	70,403
	Provision	8,057	9,871	23,668	26,568
	Charge-offs residential mortgage	(634)	(672)	(2,668)	(1,947)
	Charge-offs home equity	(588)	(1,237)	(3,736)	(2,958)
	Charge-offs other consumer	(1,307)	(1,813)	(3,816)	(4,747)
	Charge-offs commercial real estate	(3,675)	(3,488)	(8,220)	(6,623)
	Charge-offs commercial	(4,791)	(1,323)	(10,706)	(4,940)
	Recoveries	691	490	2,274	1,489
	Ending balance	$ 73,208	$ 77,245	73,208	77,245


Net charge-offs to average loans, annualized		0.75%	0.58%	0.65%	0.48%

		September 30,	June 30,	September 30,	December 31,
		2011	2011	2010	2010
Nonperforming loans		$ 161,375	$ 161,115	$ 151,217	148,391
Real estate owned, net		20,648	21,389	22,998	20,780
Nonperforming assets		$ 182,023	$ 182,504	$ 174,215	169,171


Nonperforming loans to total loans		2.92%	2.94%	2.70%	2.68%

Nonperforming assets to total assets		2.28%	2.26%	2.14%	2.08%

Allowance for loan losses to total loans		1.33%	1.37%	1.38%	1.38%

Allowance for loan losses to nonperforming loans		45.37%	46.83%	51.08%	51.49%

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


			September 30, 2011	June 30, 2011	September 30, 2010	December 31, 2010

Non-accrual loans current:
	Residential mortgage loans	$	-	-	-	-
	Home equity loans		-	-	-	-
	Other consumer loans		-	-	-	-
	Commercial real estate loans		17,296	13,572	14,313	7,378
	Commercial loans		20,534	26,542	22,335	23,317
Total non-accrual loans current		$	37,830	40,114	36,648	30,695

Non-accrual loans delinquent 30 days to 59 days:
	Residential mortgage loans	$	-	-	-	-
	Home equity loans		-	-	-	-
	Other consumer loans		-	-	-	-
	Commercial real estate loans		5,557	2,809	1,470	4,039
	Commercial loans		1,238	312	1,052	1,465
Total non-accrual loans delinquent 30 days to 59 days		$	6,795	3,121	2,522	5,504

Non-accrual loans delinquent 60 days to 89 days:
	Residential mortgage loans	$	-	-	-	-
	Home equity loans		-	-	-	-
	Other consumer loans		-	-	-	-
	Commercial real estate loans		2,052	1,385	8,120	10,923
	Commercial loans		2,471	693	403	848
Total non-accrual loans delinquent 60 days to 89 days		$	4,523	2,078	8,523	11,771

Non-accrual loans delinquent 90 days or more:
	Residential mortgage loans	$	31,705	30,594	27,370	29,751
	Home equity loans		9,340	9,069	9,231	10,263
	Other consumer loans		2,117	1,825	2,887	2,565
	Commercial real estate loans		50,395	55,512	41,605	44,965
	Commercial loans		18,670	18,802	22,431	12,877
Total non- accrual loans delinquent 90 days or more		$	112,227	115,802	103,524	100,421

Total non-accrual loans		$	161,375	161,115	151,217	148,391

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



Loans delinquency schedule
	(Number of loans and dollar amount of loans)
		September 30,			June 30,			September 30,			December 31,
		2011		*	2011		*	2010		*	2010		*
Loans delinquent 30 days to 59 days:
	Residential mortgage loans	73	$ 3,724	0.2%	84	$ 4,627	0.2%	86	$ 6,605	0.3%	427	$ 35,329	1.5%
	Home equity loans	178	7,125	0.7%	174	5,763	0.5%	173	6,205	0.6%	230	7,317	0.7%
	Other consumer loans	857	4,189	1.7%	825	3,816	1.5%	831	3,760	1.4%	1,008	5,318	2.1%
	Commercial real estate loans	57	10,489	0.7%	58	7,902	0.6%	76	12,445	0.9%	82	16,287	1.2%
	Commercial loans	40	2,690	0.7%	40	2,264	0.5%	55	5,130	1.3%	48	6,590	1.5%
Total loans delinquent 30 days to 59 days		1,205	$ 28,217	0.5%	1,181	$ 24,372	0.4%	1,221	$ 34,145	0.6%	1,795	$ 70,841	1.3%

Loans delinquent 60 days to 89 days:
	Residential mortgage loans	85	$ 7,430	0.3%	84	$ 8,044	0.3%	74	$ 6,476	0.3%	106	$ 9,848	0.4%
	Home equity loans	45	1,547	0.1%	60	2,602	0.2%	44	2,148	0.2%	81	3,249	0.3%
	Other consumer loans	331	1,337	0.5%	349	1,195	0.5%	371	1,560	0.6%	356	1,331	0.5%
	Commercial real estate loans	19	2,471	0.2%	23	3,348	0.2%	36	12,358	0.9%	39	14,365	1.1%
	Commercial loans	29	4,466	1.1%	22	3,887	0.9%	36	2,304	0.6%	9	1,678	0.4%
Total loans delinquent 60 days to 89 days		509	$ 17,251	0.3%	538	$ 19,076	0.3%	561	$ 24,846	0.4%	591	$ 30,471	0.6%

Loans delinquent 90 days or more:
	Residential mortgage loans	274	$ 31,705	1.3%	268	$ 30,594	1.3%	243	$ 27,370	1.1%	275	$ 29,751	1.2%
	Home equity loans	171	9,340	0.9%	173	9,069	0.8%	177	9,231	0.8%	190	10,263	0.9%
	Other consumer loans	407	2,117	0.9%	314	1,825	0.7%	431	2,887	1.1%	374	2,565	1.0%
	Commercial real estate loans	142	50,395	3.5%	151	55,512	4.0%	186	41,605	3.1%	181	44,965	3.3%
	Commercial loans	46	18,670	4.6%	55	18,802	4.3%	104	22,431	5.6%	111	12,877	3.0%
Total loans delinquent 90 days or more		1,040	$ 112,227	2.0%	961	$ 115,802	2.1%	1,141	$ 103,524	1.9%	1,131	$ 100,421	1.8%

Total loans delinquent		2,754	$ 157,695	2.8%	2,680	$ 159,250	2.8%	2,923	$ 162,515	2.9%	3,517	$ 201,733	3.7%

	* - 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 September 30, 2011
(Dollars in thousands)

Loans outstanding:

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

	Pennsylvania	$ 1,923,966	81.9%	935,015	85.4%	224,753	91.2%	854,125	60.1%	258,406	63.6%	4,196,265	76.1%
	New York	157,589	6.7%	103,656	9.5%	11,002	4.5%	331,802	23.4%	59,079	14.5%	663,128	12.0%
	Ohio	20,256	0.9%	11,799	1.1%	2,768	1.1%	34,203	2.4%	9,050	2.2%	78,076	1.4%
	Maryland	174,977	7.4%	34,013	3.1%	1,409	0.6%	117,844	8.3%	23,177	5.7%	351,420	6.4%
	Florida	29,037	1.2%	8,277	0.7%	1,673	0.7%	45,193	3.2%	17,585	4.3%	101,765	1.8%
	All Other	44,297	1.9%	1,849	0.2%	4,583	1.9%	37,337	2.6%	39,588	9.7%	127,654	2.3%
	Total	$ 2,350,122	100.0%	1,094,609	100.0%	246,188	100.0%	1,420,504	100.0%	406,885	100.0%	5,518,308	100.0%

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

Loans 90 days or more past due:

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

	Pennsylvania	$ 19,475	1.0%	6,384	0.7%	2,025	0.9%	22,032	2.6%	6,035	2.3%	55,951	1.3%
	New York	1,026	0.7%	744	0.7%	70	0.6%	7,472	2.3%	8,949	15.1%	18,261	2.8%
	Ohio	237	1.2%	69	0.6%	3	0.1%	-	0.0%	-	0.0%	309	0.4%
	Maryland	4,615	2.6%	1,673	4.9%	-	0.0%	7,718	6.5%	596	2.6%	14,602	4.2%
	Florida	5,422	18.7%	433	5.2%	19	1.1%	5,964	13.2%	2,865	16.3%	14,703	14.4%
	All Other	930	2.1%	37	2.0%	-	0.0%	7,209	19.3%	225	0.6%	8,401	6.6%
	Total	$ 31,705	1.3%	9,340	0.9%	2,117	0.9%	50,395	3.5%	18,670	4.6%	112,227	2.0%

	(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 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 September 30, 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	$ 61	-	(1)	60

Debt issued by government sponsored enterprises:
	Due in one year or less	1,997	19	-	2,016
	Due in one year - five years	54,298	271	-	54,569
	Due in five years - ten years	29,898	654	(44)	30,508
	Due after ten years	9,953	-	(34)	9,919

Equity securities		9,200	667	(325)	9,542

Municipal securities:
	Due in one year or less	460	1	-	461
	Due in one year - five years	8,049	281	-	8,330
	Due in five years - ten years	30,712	1,303	-	32,015
	Due after ten years	143,519	4,015	(321)	147,213

Corporate trust preferred securities:
	Due in one year or less	500	-	-	500
	Due after ten years	25,362	349	(4,845)	20,866

Mortgage-backed securities:
	Fixed rate pass-through	108,335	8,514	-	116,849
	Variable rate pass-through	141,591	6,995	(4)	148,582
	Fixed rate non-agency CMO	10,544	191	(907)	9,828
	Fixed rate agency CMO	125,821	3,292	-	129,113
	Variable rate non-agency CMO	1,389	-	(109)	1,280
	Variable rate agency CMO	248,100	1,964	(172)	249,892

	Total mortgage-backed securities	635,780	20,956	(1,192)	655,544

	Total marketable securities available-for-sale	$ 949,789	28,516	(6,762)	971,543

Marketable securities held-to-maturity as of September 30, 2011:
			Gross	Gross
			unrealized	unrealized
		Amortized	holding	holding	Market
		cost	gains	losses	value

Municipal securities:
	Due in five years - ten years	$ 2,084	66	-	2,150
	Due after ten years	74,604	1,855	-	76,459

Mortgage-backed securities:
	Fixed rate pass-through	26,421	1,153	-	27,574
	Variable rate pass-through	9,356	66	-	9,422
	Fixed rate agency CMO	139,390	2,860	-	142,250
	Variable rate agency CMO	16,662	286	-	16,948

	Total mortgage-backed securities	191,829	4,365	-	196,194

	Total marketable securities held-to-maturity	$ 268,517	6,286	-	274,803

Issuers of mortgage-backed securities as of September 30, 2011:
	Fannie Mae	$ 318,491	11,918	(84)	330,325
	Ginnie Mae	172,840	3,916	(8)	176,748
	Freddie Mac	304,033	9,296	(70)	313,259
	SBA	19,581	-	(14)	19,567
	Non-agency	12,664	191	(1,016)	11,839
	Total	$ 827,609	25,321	(1,192)	851,738

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

			Book	As a %
			Value	of Book
			9/30/2011	Value
Municipal securities by state:
	Pennsylvania
		School districts	$ 121,521	46.8%
		General obligations	48,242	18.6%
		Revenue bonds	12,959	5.0%
	Total Pennsylvania		182,722	70.4%
	New York		33,672	13.0%
	Ohio		6,427	2.5%
	All other states		36,607	14.1%
			$ 259,428

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 September 30,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance		Yield/	Balance		Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,490,795	81,025	5.86%	5,569,014	83,753	6.00%
Mortgage-backed securities (c)	857,898	5,544	2.58%	853,714	6,534	3.06%
Investment securities (c) (d)	412,927	5,066	4.91%	378,145	5,243	5.55%
FHLB stock	52,336	-	-	63,242	-	-
Other interest-earning deposits	652,958	393	0.24%	706,829	524	0.29%

Total interest-earning assets	7,466,914	92,028	4.90%	7,570,944	96,054	5.06%

Noninterest earning assets (e)	560,951			591,977

Total assets	$ 8,027,865			8,162,921

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,081,721	1,157	0.42%	$ 1,071,708	2,203	0.82%
Interest-bearing demand accounts	798,424	244	0.12%	778,597	244	0.12%
Money market accounts	950,113	1,016	0.42%	903,278	1,301	0.57%
Certificate accounts	2,338,436	12,541	2.13%	2,446,317	14,024	2.27%
Borrowed funds (f)	840,560	6,625	3.13%	898,618	8,150	3.60%
Junior subordinated debentures	103,094	1,436	5.45%	103,094	1,437	5.45%

Total interest-bearing liabilities	6,112,348	23,019	1.49%	6,201,612	27,359	1.75%

Noninterest bearing liabilities	726,173			648,905

Total liabilities	6,838,521			6,850,517

Shareholders' equity	1,189,344			1,312,404

Total liabilities and shareholders' equity	$ 8,027,865			8,162,921

Net interest income/ Interest rate spread		69,009	3.41%		68,695	3.31%

Net interest-earning assets/ Net interest margin	$ 1,354,566		3.70%	1,369,332		3.63%

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.

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.

	Nine months ended September 30,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance		Yield/	Balance		Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,496,988	242,262	5.87%	5,461,244	246,941	6.05%
Mortgage-backed securities (c)	900,414	18,373	2.72%	794,691	19,385	3.25%
Investment securities (c) (d)	387,034	15,390	5.30%	371,587	15,358	5.51%
FHLB stock	55,403	-	-	63,242	-	-
Other interest-earning deposits	681,464	1,289	0.25%	833,157	1,601	0.25%

Total interest-earning assets	7,521,303	277,314	4.91%	7,523,921	283,285	5.04%

Noninterest earning assets (e)	570,231			577,252

Total assets	$ 8,091,534			$ 8,101,173

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,079,718	3,861	0.48%	1,022,259	6,472	0.85%
Interest-bearing demand accounts	795,183	722	0.12%	772,584	962	0.17%
Money market accounts	932,617	3,231	0.46%	881,983	4,768	0.72%
Certificate accounts	2,380,466	38,680	2.17%	2,492,344	45,947	2.46%
Borrowed funds (f)	843,366	19,778	3.14%	898,320	24,728	3.68%
Junior subordinated debentures	103,094	4,261	5.45%	103,094	4,263	5.45%

Total interest-bearing liabilities	6,134,444	70,533	1.54%	6,170,584	87,140	1.89%

Noninterest bearing liabilities	712,678			623,875

Total liabilities	6,847,122			6,794,459

Shareholders' equity	1,244,412			1,306,714

Total liabilities and shareholders' equity	$ 8,091,534			8,101,173

Net interest income/ Interest rate spread		206,781	3.37%		196,145	3.15%

Net interest-earning assets/ Net interest margin	$ 1,386,859		3.67%	1,353,337		3.48%

Ratio of interest-earning assets to
interest-bearing liabilities	1.23X			1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

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
	September 30, 2011			June 30, 2011
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance		Yield/	Balance		Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$ 5,490,795	81,025	5.86%	5,484,194	80,389	5.86%
Mortgage-backed securities (c)	857,898	5,544	2.58%	917,748	6,073	2.65%
Investment securities (c) (d)	412,927	5,066	4.91%	392,963	5,196	5.29%
FHLB stock	52,336	-	-	55,100	-	-
Other interest-earning deposits	652,958	393	0.24%	705,568	489	0.27%

Total interest-earning assets	7,466,914	92,028	4.90%	7,555,573	92,147	4.87%

Noninterest earning assets (e)	560,951			556,085

Total assets	$ 8,027,865			8,111,658

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$ 1,081,721	1,157	0.42%	1,093,539	1,275	0.47%
Interest-bearing demand accounts	798,424	244	0.12%	813,179	246	0.12%
Money market accounts	950,113	1,016	0.42%	933,288	1,059	0.46%
Certificate accounts	2,338,436	12,541	2.13%	2,372,039	12,893	2.18%
Borrowed funds (f)	840,560	6,625	3.13%	841,835	6,569	3.13%
Junior subordinated debentures	103,094	1,436	5.45%	103,094	1,420	5.45%

Total interest-bearing liabilities	6,112,348	23,019	1.49%	6,156,974	23,462	1.53%

Noninterest bearing liabilities	726,173			708,310

Total liabilities	6,838,521			6,865,284

Shareholders' equity	1,189,344			1,246,374

Total liabilities and shareholders' equity	$ 8,027,865			8,111,658

Net interest income/ Interest rate spread		69,009	3.41%		68,685	3.34%

Net interest-earning assets/ Net interest margin	$ 1,354,566		3.70%	1,398,599		3.64%

Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			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, securities sold under agreements to repurchase and other borrowings.

SOURCE Northwest Savings Bank

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED

Browse News Releases

News Releases Overview

Multimedia Gallery

Multimedia Gallery Overview

Trending Topics

Northwest Bancshares, Inc. Announces Third Quarter 2011 Earnings and Dividend Declaration

News provided by

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

Contact PR Newswire

Products

About

My Services