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Northwest Bancshares, Inc. Announces First Quarter 2014 Earnings and Dividend Declaration

WARREN, Pa., April 21, 2014 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2014 of $14.6 million, or $0.16 per diluted share. This represents a decrease of $658,000, or 4.3%, over the same quarter last year when net income was $15.3 million, or $0.17 per diluted share, and a decrease of $5.8 million, or 28.1%, compared to the quarter ended December 31, 2013 when net income was $20.4 million, or $0.22 per diluted share. The annualized returns on average shareholders' equity and average assets for the current quarter were 5.16% and 0.75% compared to 5.45% and 0.78% for the same quarter last year and 7.06% and 1.02% for the quarter ended December 31, 2013.

The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.13 per share in addition to the $1.00 special dividend announced on April 14, 2014. Both dividends are payable on May 15, 2014, to shareholders of record as of May 1, 2014 with an ex-dividend date, as established by Nasdaq, of April 29, 2014. This represents the 78th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, "Our operating results for the first quarter did not meet our expectations due primarily to the deterioration of two commercial loans. However, core earnings remained relatively consistent with little change in our net interest margin during the quarter, a 6.3% increase in fee-based income from a year ago and a 3.3% year-over-year increase in operating expense. Market reaction to the $1.00 per share special dividend has been positive. We are hopeful that the significant increase in the market value of our shares that followed the announcement will enable Northwest to achieve greater success in pursuing mergers and acquisitions that are beneficial to our shareholders. Finally, we were pleased to learn that Forbes named our company to its list of America's 50 Most Trustworthy Financial Companies."

Net interest income decreased by $3.1 million, or 4.8%, to $60.9 million for the quarter ended March 31, 2014, from $64.0 million for the quarter ended March 31, 2013, as decreases in interest income on loans receivable and investment securities of $3.6 million and $881,000, respectively, were partially offset by a $1.3 million decrease in interest paid on deposit accounts. These changes from the previous year were due primarily to the continued low level of market interest rates.

The provision for loan losses increased by $327,000, or 4.6%, to $7.5 million for the quarter ended March 31, 2014, from $7.2 million for the quarter ended March 31, 2013 and increased by $6.5 million compared to the quarter ended December 31, 2013. This increase is due primarily to two commercial loans requiring reserves of $4.9 million and $1.2 million, respectively. Had it not been for these two extraordinary items, the quarterly provision would have been significantly less as asset quality has improved greatly with loans 90 days or more delinquent decreasing $21.2 million, or 29.2%, from a year ago. At March 31, 2014, the allowance for loan losses was $76.2 million, or 1.30% of total loans, compared to $72.0 million, or 1.28% of total loans, at March 31, 2013. Net charge-offs were $2.6 million, or 0.18% of average loans for the quarter ended March 31, 2014 compared to $8.4 million, or 0.59% for the same quarter last year.

Noninterest income increased by $3.3 million, or 20.0%, to $19.7 million for the quarter ended March 31, 2014, from $16.4 million for the quarter ended March 31, 2013. This increase is due primarily to a $3.2 million increase in the gain on sale of investments. Additionally, trust and other financial services income increased by $843,000, due primarily to our acquisition of Evans Capital Management, Inc. as of January 1, 2014. Partially offsetting these increases was a decrease in mortgage banking income of $707,000, due primarily to the retention of the residential mortgage loans that we originated during the current quarter.

Noninterest expense increased by $1.7 million, or 3.3%, to $53.2 million for the quarter ended March 31, 2014, from $51.5 million for the quarter ended March 31, 2013. This increase was due primarily to a $736,000 increase in processing expense as the result of software upgrades. Additionally, office operations increased by $489,000, due primarily to increased collections costs. Partially offsetting these increases was a decrease in marketing expense of $263,000, which was due to the timing of various campaigns in the current and prior year.

Our effective tax rate of 26.5% during the quarter ended March 31, 2014 is reflective of the expected lower annual tax rate due primarily to the deductibility of dividends paid on the Company's stock held in our Employee Stock Ownership Plan and 401(k) plan.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 165 community banking offices in Pennsylvania, New York, Ohio and Maryland and 50 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.

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

 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except per share amounts)









(Unaudited)











March 31,


December 31,

Assets


2014


2013

Cash and cash equivalents




$         81,927


98,122

Interest-earning deposits in other financial institutions


379,765


293,149

Federal funds sold and other short-term investments


634


634

Marketable securities available-for-sale (amortized cost of $1,008,975 and $1,022,078)

1,009,717


1,016,767

Marketable securities held-to-maturity (fair value of $120,933 and $124,061)

117,724


121,366


Total cash, interest-earning deposits and marketable securities

1,589,767


1,530,038












Residential mortgage loans held for sale



-


221

Residential mortgage loans




2,485,688


2,482,783

Home equity loans 






1,065,988


1,083,939

Other consumer loans





223,045


228,348

Commercial real estate loans



1,664,255


1,608,399

Commercial loans






412,098


402,601


Total loans receivable




5,851,074


5,806,291

Allowance for loan losses




(76,234)


(71,348)


Loans receivable, net




5,774,840


5,734,943












Federal Home Loan Bank stock, at cost



43,714


43,715

Accrued interest receivable




22,188


21,821

Real estate owned, net





16,692


18,203

Premises and Equipment, net



146,880


146,139

Bank owned life insurance




141,173


140,172

Goodwill






175,988


174,463

Other intangible assets





4,025


2,319

Other assets






59,693


69,663


Total assets






$   7,974,960


7,881,476












Liabilities and Shareholders' equity





Liabilities





Noninterest-bearing demand deposits



$      844,743


789,135

Interest-bearing demand deposits



890,788


852,809

Money market deposit accounts



1,176,462


1,167,954

Savings deposits






1,236,130


1,191,584

Time deposits






1,626,740


1,667,397


Total deposits






5,774,863


5,668,879

Borrowed funds






865,621


881,645

Advances by borrowers for taxes and insurance


31,074


26,669

Accrued interest payable




860


888

Other liabilities






41,892


43,499

Junior subordinated debentures



103,094


103,094


Total liabilities






6,817,404


6,724,674












Shareholders' equity





Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued

-


-

Common stock, $0.01 par value: 500,000,000 shares authorized, 94,464,430 shares and 94,243,713 shares issued and outstanding, respectively




945


943

Paid-in-capital






622,758


619,678

Retained earnings






564,580


571,164

Unallocated common stock of Employee Stock Ownership Plan


(22,632)


(23,083)

Accumulated other comprehensive loss



(8,095)


(11,900)


Total shareholders' equity



1,157,556


1,156,802


Total liabilities and shareholders' equity



$   7,974,960


7,881,476













Equity to assets


14.51%


14.68%



Tangible common equity to assets

12.54%


12.72%



Book value per share

$          12.25


12.27



Tangible book value per share

$          10.35


10.40



Closing market price per share

$          14.60


14.78



Full time equivalent employees

2,050


2,043



Number of banking offices

165


165












 

 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)
















Quarter ended






March 31,


December 31,






2014


2013


2013

Interest income:








Loans receivable


$      69,373


72,973


70,849


Mortgage-backed securities


2,793


3,441


2,956


Taxable investment securities


1,080


905


1,052


Tax-free investment securities


1,655


2,063


1,748


Interest-earning deposits


200


251


249



Total interest income


75,101


79,633


76,854











Interest expense:








Deposits


6,490


7,814


6,911


Borrowed funds


7,714


7,831


7,894



Total interest expense


14,204


15,645


14,805













Net interest income


60,897


63,988


62,049

Provision for loan losses


7,485


7,158


964



Net interest income after provision









for loan losses


53,412


56,830


61,085











Noninterest income:








Impairment losses on securities


-


-


(713)


Noncredit related losses on securities not expected









to be sold (recognized in other comprehensive income)

-


-


-


Net impairment losses


-


-


(713)


Gain on sale of investments, net


3,348


101


5,889


Service charges and fees


8,408


8,691


8,874


Trust and other financial services income


3,047


2,204


2,483


Insurance commission income


2,564


2,295


2,131


Loss on real estate owned, net


(135)


(130)


(660)


Income from bank owned life insurance


1,001


1,085


1,846


Mortgage banking income


249


956


228


Other operating income


1,175


1,176


869



Total noninterest income


19,657


16,378


20,947











Noninterest expense:








Compensation and employee benefits


27,972


27,930


28,475


Premises and occupancy costs


6,557


6,153


5,652


Office operations


3,757


3,268


3,823


Processing expenses


6,589


5,853


6,269


Marketing expenses


1,637


1,900


1,259


Federal deposit insurance premiums


1,297


1,438


1,361


Professional services


2,062


1,693


2,044


Amortization of intangible assets


331


348


222


Real estate owned expense


639


599


557


Other expense


2,322


2,289


2,918



Total noninterest expense


53,163


51,471


52,580













Income before income taxes


19,906


21,737


29,452


Income tax expense


5,266


6,439


9,089














Net income


$      14,640


15,298


20,363











Basic earnings per share


$          0.16


0.17


0.22











Diluted earnings per share


$          0.16


0.17


0.22











Annualized return on average equity


5.16%


5.45%


7.06%

Annualized return on average assets


0.75%


0.78%


1.02%











Basic common shares outstanding


91,154,998


90,403,909


90,864,076

Diluted common shares outstanding


92,353,312


90,878,903


92,245,167











 

 

Northwest Bancshares, Inc. and Subsidiaries


Asset quality


(Dollars in thousands)














March 31,
2014


December 31, 
2013


March 31,
2013


December 31, 
2012












Non-accrual loans current:










Residential mortgage loans

$          1,064


1,361


1,728


797



Home equity loans

1,771


835


1,050


635



Other consumer loans

136


98


87


44



Commercial real estate loans

26,564


17,866


25,203


24,960



Commercial loans

19,603


13,357


9,069


5,424


Total non-accrual loans current

$        49,138


33,517


37,137


31,860












Non-accrual loans delinquent 30 days to 59 days:










Residential mortgage loans

$             741


427


1,789


-



Home equity loans

155


404


222


-



Other consumer loans

36


15


26


-



Commercial real estate loans

4,118


3,468


5,105


5,549



Commercial loans

5


7,650


2,631


2,002


Total non-accrual loans delinquent 30 days to 59 days

$         5,055


11,964


9,773


7,551












Non-accrual loans delinquent 60 days to 89 days:










Residential mortgage loans

$         1,914


864


1,969


-



Home equity loans

485


280


330


-



Other consumer loans

99


87


74


-



Commercial real estate loans

902


2,036


2,506


2,802



Commercial loans

95


716


1,318


9,652


Total non-accrual loans delinquent 60 days to 89 days

$         3,495


3,983


6,197


12,454












Non-accrual loans delinquent 90 days or more:










Residential mortgage loans

$       20,564


24,625


24,416


24,286



Home equity loans

8,420


8,344


7,967


8,479



Other consumer loans

1,818


2,057


1,802


1,936



Commercial real estate loans

16,098


18,433


22,204


24,550



Commercial loans

4,494


4,298


16,246


9,096


Total non- accrual loans delinquent 90 days or more

$       51,394


57,757


72,635


68,347












Total non-accrual loans

$     109,082


107,221


125,742


120,212
























March 31,


December 31,


March 31,


December 31,




2014


2013


2013


2012












Non-accrual loans

$     109,082


107,221


125,742


120,212


Loans 90 days past maturity and still accruing

709


690


781


1,698


   Nonperforming loans

109,791


107,911


126,523


121,910


Real estate owned, net

16,692


18,203


24,035


26,165


   Nonperforming assets

$     126,483


126,114


150,558


148,075












Non-accrual troubled debt restructuring *

$       34,268


28,889


46,109


41,166


Accruing troubled debt restructuring

40,243


50,277


45,256


48,278


Total troubled debt restructuring

$       74,511


79,166


91,365


89,444












Nonperforming loans to total loans

1.88%


1.86%


2.26%


2.14%












Nonperforming assets to total assets

1.59%


1.60%


1.88%


1.86%












Allowance for loan losses to total loans

1.30%


1.23%


1.28%


1.28%












Allowance for loan losses to nonperforming loans

69.44%


66.12%


56.91%


60.06%












* Amounts included in nonperforming loans above.
















 

 

Northwest Bancshares, Inc. and Subsidiaries

Delinquency

(Dollars in thousands)




















































Loan delinquency schedule
















(Number of loans and dollar amount of loans)














March 31,


December 31,


March 31,


December 31,



2014

*


2013

*


2013

*


2012

*

Loans delinquent 30 days to 59 days:

















Residential mortgage loans

352

$ 26,874

1.1%


374

$ 27,486

1.1%


410

$ 33,054

1.4%


430

$ 32,921

1.4%


Home equity loans

172

5,449

0.5%


213

6,946

0.6%


204

6,254

0.6%


224

6,534

0.6%


Consumer loans

749

3,412

1.5%


1,010

4,515

2.0%


789

3,684

1.7%


1,122

5,456

2.4%


Commercial real estate loans

84

26,518

1.6%


73

8,449

0.5%


93

12,833

0.8%


87

13,001

0.8%


Commercial loans

41

1,375

0.3%


34

9,243

2.3%


49

4,620

1.2%


41

3,233

0.8%

Total loans delinquent 30 days to 59 days

1,398

$ 63,628

1.1%


1,704

$ 56,639

1.0%


1,545

60,445

1.1%


1,904

$ 61,145

1.1%


















Loans delinquent 60 days to 89 days:

















Residential mortgage loans

46

$   3,674

0.1%


103

$  7,568

0.3%


54

$  4,577

0.2%


100

$   9,387

0.4%


Home equity loans

42

1,437

0.1%


67

2,243

0.2%


67

2,321

0.2%


65

1,977

0.2%


Consumer loans

330

1,289

0.6%


507

1,866

0.8%


302

1,145

0.5%


448

1,830

0.8%


Commercial real estate loans

33

2,570

0.2%


35

3,968

0.2%


32

4,448

0.3%


33

4,596

0.3%


Commercial loans

9

473

0.1%


16

1,555

0.4%


19

1,654

0.4%


17

10,158

2.6%

Total loans delinquent 60 days to 89 days

460

$  9,443

0.2%


728

$ 17,200

0.3%


474

14,145

0.3%


663

$ 27,948

0.5%


















Loans delinquent 90 days or more:

















Residential mortgage loans

236

$ 20,564

0.8%


273

$ 24,625

1.0%


233

$ 24,416

1.0%


266

$  24,286

1.0%


Home equity loans

176

8,420

0.8%


171

8,344

0.8%


179

7,967

0.8%


175

8,479

0.8%


Consumer loans

391

1,818

0.8%


470

2,057

0.9%


374

1,802

0.8%


427

1,936

0.8%


Commercial real estate loans

116

16,098

1.0%


124

18,433

1.1%


127

22,204

1.4%


146

24,550

1.5%


Commercial loans

33

4,494

1.1%


31

4,298

1.1%


51

16,246

4.1%


61

9,096

2.3%

Total loans delinquent 90 days or more

952

$ 51,394

0.9%


1,069

$ 57,757

1.0%


964

72,635

1.3%


1,075

$  68,347

1.2%


















Total loans delinquent

2,810

$124,465

2.1%


3,501

$131,596

2.3%


2,983

$147,225

2.6%


3,642

$157,440

2.8%



















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





















 

 

Northwest Bancshares, Inc. and Subsidiaries


Loans by credit quality indicators as of March 31, 2014


(Dollars in thousands)
































Recorded
















investment








Special








in loans






Pass


mention


Substandard


 Doubtful 


 Loss 


receivable


Personal Banking:
















Residential mortgage loans

$ 2,469,561


-


14,649


-


1,478


2,485,688




Home equity loans


1,057,568


-


8,420


-


-


1,065,988




Other consumer loans


221,776


-


1,269


-


-


223,045



Total Personal Banking


3,748,905


-


24,338


-


1,478


3,774,721


















Business Banking:
















Commercial real estate loans

1,456,037


54,004


151,248


2,966


-


1,664,255




Commercial loans


357,778


11,987


33,515


8,818


-


412,098



Total Business Banking


1,813,815


65,991


184,763


11,784


-


2,076,353






















$ 5,562,720


65,991


209,101


11,784


1,478


5,851,074


































Northwest Bancshares, Inc. and Subsidiaries


Loans by credit quality indicators as of December 31, 2013


(Dollars in thousands)
































Recorded
















investment








Special








in loans






Pass


mention


Substandard


 Doubtful 


 Loss 


receivable


Personal Banking:
















Residential mortgage loans

$ 2,464,057


-


17,626


-


1,321


2,483,004




Home equity loans


1,075,595


-


8,344


-


-


1,083,939




Other consumer loans


226,922


-


1,426


-


-


228,348



Total Personal Banking


3,766,574


-


27,396


-


1,321


3,795,291


















Business Banking:
















Commercial real estate loans

1,398,652


46,557


161,906


1,284


-


1,608,399




Commercial loans


345,612


12,045


43,040


1,904


-


402,601



Total Business Banking


1,744,264


58,602


204,946


3,188


-


2,011,000






















$ 5,510,838


58,602


232,342


3,188


1,321


5,806,291


































 

 

Northwest Bancshares, Inc. and Subsidiaries

Allowance for loan losses

(Dollars in thousands)












Quarter ended


Year ended



March 31, 


December 31, 



2014


2013


2013


2012

Allowance for loan losses 









Beginning balance

$   71,348


73,219


73,219


71,138


Provision

7,485


7,158


18,519


26,338


Charge-offs residential mortgage

(459)


(679)


(2,501)


(4,295)


Charge-offs home equity

(372)


(370)


(2,239)


(4,066)


Charge-offs other consumer

(1,716)


(1,404)


(6,055)


(5,919)


Charge-offs commercial real estate

(932)


(3,990)


(10,042)


(9,919)


Charge-offs commercial

(770)


(2,680)


(5,007)


(6,254)


Recoveries

1,650


755


5,454


6,196


Ending balance

$   76,234


72,009


71,348


73,219



















Net charge-offs to average loans, annualized

0.18%


0.59%


0.36%


0.43%










 

 

Northwest Bancshares, Inc. and Subsidiaries

Municipal securities portfolio

(Dollars in thousands)














March 31, 2014


As a % of




Market


Amortized


Unrealized


amortized




 value 


cost


gain/ (loss)


cost

Municipal securities by state:









Pennsylvania










School districts

$     74,904


73,474


1,430


46.7%



General obligations

28,986


28,267


719


18.0%



Revenue bonds

1,080


1,080


-


0.7%


Total Pennsylvania

104,970


102,821


2,149


65.4%


New York

15,924


15,668


256


10.0%


Ohio

6,183


5,976


207


3.7%


All other states

34,252


32,837


1,415


20.9%




$   161,329


157,302


4,027


























December 31, 2013


As a % of




Market


Amortized


Unrealized


amortized




 value 


cost


gain


cost

Municipal securities by state:









Pennsylvania










School districts

$     76,736


75,767


969


47.1%



General obligations

28,745


28,264


481


17.6%



Revenue bonds

1,071


1,080


(9)


0.7%


Total Pennsylvania

106,552


105,111


1,441


65.4%


New York

15,857


15,665


192


9.7%


Ohio

5,980


5,975


5


3.7%


All other states

34,828


34,014


814


21.2%




$   163,217


160,765


2,452













 

 

Northwest Bancshares, Inc. and Subsidiaries


Average balance sheet 


(Dollars in thousands)










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













 Quarter ended March 31, 



2014

2013



 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 



 Balance 


 Yield/ 

 Balance 


 Yield/ 





 Cost (g) 



 Cost (g) 


Assets:








Interest-earning assets:








   Loans receivable (a) (b) (d)

$ 5,823,527

69,916

4.87%

$ 5,638,332

73,527

5.22%


   Mortgage-backed securities (c) 

621,146

2,793

1.80%

725,524

3,441

1.90%


   Investment securities (c) (d) 

507,354

3,627

2.86%

470,386

4,079

3.47%


   FHLB stock

43,715

275

2.52%

46,868

38

0.32%


   Other interest-earning deposits

351,615

200

0.23%

452,385

251

0.22%










Total interest-earning assets 

7,347,357

76,811

4.23%

7,333,495

81,336

4.44%










Noninterest-earning assets (e)

584,754



585,516












Total assets

$ 7,932,111



$ 7,919,011












Liabilities and shareholders' equity:








Interest-bearing liabilities:








   Savings accounts

$ 1,208,349

804

0.27%

$ 1,180,487

894

0.31%


   Interest-bearing demand accounts

851,723

139

0.07%

840,264

139

0.07%


   Money market deposit accounts

1,173,957

782

0.27%

1,107,522

742

0.27%


   Time deposits

1,642,224

4,765

1.18%

1,849,782

6,039

1.32%


   Borrowed funds (f)

881,187

6,557

3.02%

853,487

6,426

3.05%


   Junior subordinated debentures

103,094

1,157

4.49%

103,094

1,405

5.45%










Total interest-bearing liabilities

5,860,534

14,204

0.98%

5,934,636

15,645

1.07%










Noninterest-bearing demand accounts

815,117



768,071




Noninterest-bearing liabilities

105,027



77,106












Total liabilities

6,780,678



6,779,813












Shareholders' equity

1,151,433



1,139,198












Total liabilities and shareholders' equity

$ 7,932,111



$ 7,919,011












Net interest income/ Interest rate spread


62,607

3.25%


65,691

3.37%










Net interest-earning assets/ Net interest margin

$ 1,486,823


3.45%

$ 1,398,859


3.58%










Ratio of interest-earning assets to








 interest-bearing liabilities

 1.25X 



 1.24X 












(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.


(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

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

(f) Average balances include FHLB borrowings and securities sold under agreements to repurchase.

(g) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.83% and 5.18%,

      respectively,  Investment securities - 2.16% and 2.52%, respectively, Interest-earning assets - 4.16% and

      4.35%, respectively. GAAP basis net interest rate spreads were 3.18% and  3.28%, respectively, and

      GAAP basis net interest margins were 3.38% and 3.49%, respectively.

 

 

Northwest Bancshares, Inc. and Subsidiaries


Average balance sheet 


(Dollars in thousands)










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













 Quarter ended 



March 31, 2014

December 31, 2013



 Average 

 Interest 

 Avg. 

 Average 

 Interest 

 Avg. 



 Balance 


 Yield/ 

 Balance 


 Yield/ 





 Cost (g) 



 Cost (g) 


Assets:








Interest-earning assets:








   Loans receivable (a) (b) (d)

$ 5,823,527

69,916

4.87%

$ 5,762,308

71,421

4.96%


   Mortgage-backed securities (c) 

621,146

2,793

1.80%

653,526

2,956

1.81%


   Investment securities (c) (d) 

507,354

3,627

2.86%

528,612

3,740

2.83%


   FHLB stock

43,715

275

2.52%

43,715

180

1.65%


   Other interest-earning deposits

351,615

200

0.23%

373,694

249

0.26%










Total interest-earning assets 

7,347,357

76,811

4.23%

7,361,855

78,546

4.27%










Noninterest-earning assets (e)

584,754



541,511












Total assets

$ 7,932,111



$ 7,903,366












Liabilities and shareholders' equity:








Interest-bearing liabilities:








   Savings accounts

$ 1,208,349

804

0.27%

$ 1,191,476

919

0.31%


   Interest-bearing demand accounts

851,723

139

0.07%

851,356

144

0.07%


   Money market deposit accounts

1,173,957

782

0.27%

1,160,520

783

0.27%


   Time deposits

1,642,224

4,765

1.18%

1,690,251

5,065

1.19%


   Borrowed funds (f)

881,187

6,557

3.02%

889,920

6,711

2.99%


   Junior subordinated debentures

103,094

1,157

4.49%

103,094

1,183

4.49%










Total interest-bearing liabilities

5,860,534

14,204

0.98%

5,886,617

14,805

1.00%










Noninterest-bearing demand accounts

815,117



808,732




Noninterest-bearing liabilities

105,027



64,338












Total liabilities

6,780,678



6,759,687












Shareholders' equity

1,151,433



1,143,679












Total liabilities and shareholders' equity

$ 7,932,111



$ 7,903,366












Net interest income/ Interest rate spread


62,607

3.25%


63,741

3.27%










Net interest-earning assets/ Net interest margin

$ 1,486,823


3.45%

$ 1,475,238


3.46%










Ratio of interest-earning assets to








 interest-bearing liabilities

 1.25X 



 1.25X 












(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

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

(f) Average balances include FHLB borrowings and securities sold under agreements to repurchase.

(g) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.83% and 4.92%,  

      respectively, Investment securities - 2.16%  and 2.12%, respectively, Interest-earning assets - 4.16% and

      4.19%, respectively. GAAP basis net interest rate spreads were 3.18% and 3.19%, respectively, and

      GAAP basis net interest margins were 3.38% and 3.38%, respectively.

 

SOURCE Northwest Bancshares, Inc.

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