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8-K - 8-K - Northwest Bancshares, Inc.a14-10861_18k.htm

Exhibit 99.1

 

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

 



 

EARNINGS RELEASE

 

FOR IMMEDIATE RELEASE

 

Contact:   William J. Wagner, President and Chief Executive Officer (814) 726-2140

William W. Harvey, Jr., Executive Vice President and Chief Financial Officer (814) 726-2140

 

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

 

Warren, Pennsylvania – April 21, 2014

 

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,

 

 

 

2014

 

2013

 

Assets

 

 

 

 

 

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

 

 

 

 

 

 

 

Avg.

 

 

 

 

 

Avg.

 

 

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost (g)

 

Balance

 

Interest

 

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 deposits

 

$

1,208,349

 

804

 

0.27

%

$

1,180,487

 

894

 

0.31

%

Interest-bearing demand deposits

 

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 deposits

 

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

 

 

 

 

 

 

 

Avg.

 

 

 

 

 

Avg.

 

 

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

 

 

Balance

 

Interest

 

Cost (g)

 

Balance

 

Interest

 

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 deposits

 

$

1,208,349

 

804

 

0.27

%

$

1,191,476

 

919

 

0.31

%

Interest-bearing demand deposits

 

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 deposits

 

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.