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| 8-K - 8-K - Northwest Bancshares, Inc. | a2017-06x30nwbi8kcover.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., Senior Executive Vice President and Chief Financial Officer (814) 726-2140 | |
Northwest Bancshares, Inc. Announces Second Quarter 2017 Earnings and Quarterly Dividend
Warren, Pennsylvania — July 24, 2017
Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2017 of $31.0 million, or $0.30 per diluted share. This represents an increase of $38.0 million compared to the same quarter last year when the Company reported a net loss of $7.0 million or $0.07 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended June 30, 2017 were 10.48% and 1.30% compared to (2.44)% and (0.32)% for the same quarter last year.
The current quarter's earnings were significantly augmented by the sale of the Company's three Maryland offices at a profit of $17.2 million, or $10.3 million after tax, while earnings for the same quarter in the previous year were negatively impacted by a penalty of $37.0 million, or $22.2 million after tax, relating to the prepayment of $700.0 million of long-term, fixed-rate Federal Home Loan Bank ("FHLB") borrowings. For more information, see "Reconciliation of Non-GAAP to GAAP Net Income" within this press release.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per share payable on August 17, 2017 to shareholders of record as of August 3, 2017. This is the 91st consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's stock as of June 30, 2017, this dividend represents an annualized yield of approximately 4.1%.
In making this announcement, William J. Wagner, President and CEO, noted, "Excluding the aforementioned profit on the sale of the Maryland offices and costs associated with the closure of our consumer finance business, adjusted non-GAAP earnings for the quarter were $22.3 million, or $0.22 per share, a significant improvement over the first quarter of 2017. With the sale of the Maryland offices and closure of the consumer finance business now completed, our efforts will be focused on the lines of business and markets that are scalable, efficient, and offer meaningful opportunities for growth and earnings enhancement."
Net interest income increased by $7.2 million, or 9.5%, to $82.7 million for the quarter ended June 30, 2017, from $75.5 million for the quarter ended June 30, 2016. This increase is due primarily to a $3.2 million, or 3.9%, increase in interest income on loans receivable as a result of a $396.9 million, or 5.5%, increase in average loans receivable from the prior year period. Also contributing to the increase in net interest income is a $2.9 million, or 70.1%, decrease in interest expense on borrowed funds as a result of the prepayment of $700.0 million of long-term FHLB borrowings in the second quarter of 2016.
The provision for loan losses increased by $1.4 million, or 32.5%, to $5.6 million for the quarter ended June 30, 2017, from $4.2 million for the quarter ended June 30, 2016. This increase relates to the growth in the indirect automobile and commercial business loan portfolios as well as for the closure of the Company's consumer finance subsidiary. Overall credit quality improved slightly with nonaccrual loans decreasing to $72.8 million, or 0.95% of total loans, at June 30, 2017 from $75.9 million, or 1.04% of total loans, at June 30, 2016 and total loan delinquency decreasing to $82.5 million, or 1.07% of total loans outstanding, at June 30, 2017 from $83.8 million, or 1.15% of total loans outstanding, at June 30, 2016.
Excluding the $17.2 million profit received on the sale of the Maryland offices, noninterest income increased by $4.0 million, or 19.8%, to $24.3 million for the quarter ended June 30, 2017, from $20.3 million for the quarter ended June 30, 2016. Contributing to this increase was an increase in service charges and fees of $2.1 million, or 19.9%, which is attributable to the growth in checking accounts. Additionally, trust and other financial services income increased by $1.3 million, or 40.4%, due primarily to growth in assets under management.
Excluding the $37.0 million penalty incurred in the prior year period due to the prepayment of long-term FHLB borrowings, noninterest expense increased by $8.1 million, or 12.5%, for the quarter ended June 30, 2017. This increase, comprised primarily of increases in compensation and employee benefits of $4.5 million, or 13.4%, premises and occupancy costs of $828,000, or 13.2%, office operations of $827,000, or 24.7%, and amortization of intangible assets of $1.0 million, or 146.3%, relates primarily to the acquisition of 18 bank offices and related personnel in September 2016.
Net income for the six-month period ended June 30, 2017 was $48.7 million, or $0.48 per diluted share. This represents an increase of $37.7 million, or 344.0%, compared to the six-month period ended June 30, 2016, when net income was $11.0 million, or $0.11 per diluted share. The annualized returns on average shareholders’ equity and average assets for the six-month period ended June 30, 2017 were 8.34% and 1.03% compared to 1.90% and 0.25% for the same period last year. In addition to the aforementioned items impacting the quarter, net interest income for the six-month period ended June 30, 2017 increased by $16.2 million, or 11.0%, due primarily to the loans received with the office acquisition previously discussed.
As announced in April, the Company closed the remaining 43 offices of its consumer finance subsidiary, Northwest Consumer Discount Company ("NCDC"), on July 14, 2017. All loans were transferred to Northwest Bank which will continue to operate NCDC's indirect sales finance program.
Also, in a continued effort to exit less efficient lines of business, Northwest Bank recently entered into a definitive agreement to sell its retirement services subsidiary, Boetger and Associates, Inc. ("Boetger"), to Boetger's current managing director. Both the annual revenue and annual expense generated by this line of business are approximately $2.5 million. It is anticipated that this transaction will close in the fourth quarter of 2017 and that Boetger will continue to administer Northwest Bank's retirement plans.
Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest 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 164 full-service community banking offices and nine free standing drive-through facilities in Pennsylvania, New York, and Ohio. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.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 or the ability to complete sales transactions; and (7) increased risk associated with 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 (Unaudited)
(Dollars in thousands, except per share amounts)
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||
Assets | |||||||||
Cash and cash equivalents | $ | 111,772 | 119,403 | 87,711 | |||||
Interest-earning deposits in other financial institutions | 44,355 | 266,902 | 223,084 | ||||||
Federal funds sold and other short-term investments | 640 | 3,562 | 636 | ||||||
Marketable securities available-for-sale (amortized cost of $949,161, $825,552 and $692,403, respectively) | 952,802 | 826,200 | 705,297 | ||||||
Marketable securities held-to-maturity (fair value of $36,560, $20,426 and $25,978, respectively) | 36,206 | 19,978 | 25,144 | ||||||
Total cash, interest-earning deposits and marketable securities | 1,145,775 | 1,236,045 | 1,041,872 | ||||||
Residential mortgage loans held for sale | 10,297 | 9,625 | 39,942 | ||||||
Residential mortgage loans | 2,740,174 | 2,705,139 | 2,717,656 | ||||||
Home equity loans | 1,301,032 | 1,328,772 | 1,162,174 | ||||||
Consumer loans | 658,125 | 642,961 | 546,550 | ||||||
Commercial real estate loans | 2,396,663 | 2,342,089 | 2,363,376 | ||||||
Commercial loans | 580,446 | 528,761 | 465,223 | ||||||
Total loans receivable | 7,686,737 | 7,557,347 | 7,294,921 | ||||||
Allowance for loan losses | (62,885 | ) | (60,939 | ) | (60,781 | ) | |||
Loans receivable, net | 7,623,852 | 7,496,408 | 7,234,140 | ||||||
Assets held-for-sale | — | 152,528 | — | ||||||
Federal Home Loan Bank stock, at cost | 8,142 | 7,390 | 40,321 | ||||||
Accrued interest receivable | 21,667 | 21,699 | 20,713 | ||||||
Real estate owned, net | 6,030 | 4,889 | 4,950 | ||||||
Premises and Equipment, net | 154,785 | 161,185 | 151,643 | ||||||
Bank owned life insurance | 172,023 | 171,449 | 169,616 | ||||||
Goodwill | 307,420 | 307,420 | 262,140 | ||||||
Other intangible assets | 28,935 | 32,433 | 8,095 | ||||||
Other assets | 30,381 | 32,194 | 30,485 | ||||||
Total assets | $ | 9,499,010 | 9,623,640 | 8,963,975 | |||||
Liabilities and Shareholders’ equity | |||||||||
Liabilities | |||||||||
Noninterest-bearing demand deposits | $ | 1,577,562 | 1,448,972 | 1,189,032 | |||||
Interest-bearing demand deposits | 1,440,196 | 1,428,317 | 1,110,607 | ||||||
Money market deposit accounts | 1,800,261 | 1,841,567 | 1,295,127 | ||||||
Savings deposits | 1,685,282 | 1,622,879 | 1,444,947 | ||||||
Time deposits | 1,467,946 | 1,540,586 | 1,596,288 | ||||||
Total deposits | 7,971,247 | 7,882,321 | 6,636,001 | ||||||
Liabilities held-for-sale | — | 215,657 | — | ||||||
Borrowed funds | 110,441 | 142,899 | 959,969 | ||||||
Advances by borrowers for taxes and insurance | 48,446 | 36,879 | 45,288 | ||||||
Accrued interest payable | 530 | 635 | 737 | ||||||
Other liabilities | 60,203 | 63,373 | 55,312 | ||||||
Junior subordinated debentures | 111,213 | 111,213 | 111,213 | ||||||
Total liabilities | 8,302,080 | 8,452,977 | 7,808,520 | ||||||
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, 102,478,146 shares, 101,699,406 shares and 102,472,947 issued and outstanding, respectively | 1,025 | 1,017 | 1,025 | ||||||
Paid-in-capital | 726,036 | 718,834 | 722,980 | ||||||
Retained earnings | 495,017 | 478,803 | 470,337 | ||||||
Unallocated common stock of Employee Stock Ownership Plan | — | — | (19,370 | ) | |||||
Accumulated other comprehensive loss | (25,148 | ) | (27,991 | ) | (19,517 | ) | |||
Total shareholders’ equity | 1,196,930 | 1,170,663 | 1,155,455 | ||||||
Total liabilities and shareholders’ equity | $ | 9,499,010 | 9,623,640 | 8,963,975 | |||||
Equity to assets | 12.60 | % | 12.16 | % | 12.89 | % | |||
Tangible common equity to assets | 9.39 | % | 8.95 | % | 10.18 | % | |||
Book value per share | $ | 11.68 | 11.51 | 11.28 | |||||
Tangible book value per share | $ | 8.40 | 8.17 | 8.64 | |||||
Closing market price per share | $ | 15.61 | 18.03 | 14.83 | |||||
Full time equivalent employees | 2,273 | 2,306 | 2,091 | ||||||
Number of banking offices | 173 | 176 | 157 | ||||||
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended | |||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||||
Interest income: | |||||||||||||||||
Loans receivable | $ | 84,714 | 82,751 | 85,669 | 81,083 | 81,506 | |||||||||||
Mortgage-backed securities | 2,987 | 2,222 | 2,166 | 2,030 | 2,115 | ||||||||||||
Taxable investment securities | 981 | 1,006 | 988 | 627 | 756 | ||||||||||||
Tax-free investment securities | 529 | 569 | 625 | 676 | 707 | ||||||||||||
FHLB dividends | 50 | 59 | 285 | 218 | 401 | ||||||||||||
Interest-earning deposits | 536 | 660 | 300 | 114 | 70 | ||||||||||||
Total interest income | 89,797 | 87,267 | 90,033 | 84,748 | 85,555 | ||||||||||||
Interest expense: | |||||||||||||||||
Deposits | 5,826 | 5,465 | 5,859 | 5,653 | 5,865 | ||||||||||||
Borrowed funds | 1,240 | 1,225 | 1,232 | 1,801 | 4,143 | ||||||||||||
Total interest expense | 7,066 | 6,690 | 7,091 | 7,454 | 10,008 | ||||||||||||
Net interest income | 82,731 | 80,577 | 82,942 | 77,294 | 75,547 | ||||||||||||
Provision for loan losses | 5,562 | 4,637 | 2,145 | 5,538 | 4,199 | ||||||||||||
Net interest income after provision for loan losses | 77,169 | 75,940 | 80,797 | 71,756 | 71,348 | ||||||||||||
Noninterest income: | |||||||||||||||||
Gain on sale of investments | 3 | 17 | 213 | 58 | 227 | ||||||||||||
Service charges and fees | 12,749 | 11,717 | 12,406 | 11,012 | 10,630 | ||||||||||||
Trust and other financial services income | 4,600 | 4,304 | 4,131 | 3,434 | 3,277 | ||||||||||||
Insurance commission income | 2,353 | 2,794 | 2,499 | 2,541 | 2,768 | ||||||||||||
Gain/ (loss) on real estate owned, net | (230 | ) | (67 | ) | 164 | (563 | ) | 111 | |||||||||
Income from bank owned life insurance | 1,652 | 1,068 | 1,281 | 1,380 | 1,105 | ||||||||||||
Mortgage banking income | 434 | 240 | 2,344 | 1,886 | 446 | ||||||||||||
Gain on sale of offices | 17,186 | — | — | — | — | ||||||||||||
Other operating income | 2,730 | 1,431 | 1,781 | 1,070 | 1,711 | ||||||||||||
Total noninterest income | 41,477 | 21,504 | 24,819 | 20,818 | 20,275 | ||||||||||||
Noninterest expense: | |||||||||||||||||
Compensation and employee benefits | 37,658 | 37,755 | 36,562 | 38,122 | 33,210 | ||||||||||||
Premises and occupancy costs | 7,103 | 7,516 | 7,228 | 6,094 | 6,275 | ||||||||||||
Office operations | 4,170 | 4,222 | 4,395 | 3,700 | 3,343 | ||||||||||||
Collections expense | 553 | 549 | 437 | 589 | 729 | ||||||||||||
Processing expenses | 9,639 | 9,909 | 9,429 | 8,844 | 8,172 | ||||||||||||
Marketing expenses | 2,846 | 2,148 | 2,181 | 2,239 | 2,541 | ||||||||||||
Federal deposit insurance premiums | 856 | 1,167 | 475 | 984 | 1,442 | ||||||||||||
Professional services | 2,452 | 2,575 | 2,088 | 1,815 | 2,129 | ||||||||||||
Amortization of intangible assets | 1,749 | 1,749 | 1,806 | 1,068 | 710 | ||||||||||||
Real estate owned expense | 217 | 282 | 192 | 206 | 295 | ||||||||||||
Restructuring/ acquisition expense | 2,634 | 223 | 1,009 | 7,183 | 3,386 | ||||||||||||
FHLB prepayment penalty | — | — | — | — | 36,978 | ||||||||||||
Other expense | 3,385 | 3,551 | 2,959 | 2,836 | 2,836 | 2,912 | |||||||||||
Total noninterest expense | 73,262 | 71,646 | 68,761 | 73,680 | 102,122 | ||||||||||||
Income/ (loss) before income taxes | 45,384 | 25,798 | 36,855 | 18,894 | (10,499 | ) | |||||||||||
Income tax expense/ (benefit) | 14,402 | 8,052 | 12,361 | 4,697 | (3,491 | ) | |||||||||||
Net income/ (loss) | $ | 30,982 | 17,746 | 24,494 | 14,197 | (7,008 | ) | ||||||||||
Basic earnings/ (loss) per share | $ | 0.31 | 0.18 | 0.24 | 0.14 | (0.07 | ) | ||||||||||
Diluted earnings/ (loss) per share | $ | 0.30 | 0.17 | 0.24 | 0.14 | (0.07 | ) | ||||||||||
Weighted average common shares outstanding - basic | 100,950,772 | 100,653,277 | 100,219,370 | 99,602,535 | 99,177,609 | ||||||||||||
Weighted average common shares outstanding - diluted | 102,449,693 | 102,480,549 | 100,089,892 | 101,068,245 | 100,243,442 | ||||||||||||
Annualized return on average equity | 10.48 | % | 6.15 | % | 8.37 | % | 4.89 | % | (2.44 | )% | |||||||
Annualized return on average assets | 1.30 | % | 0.75 | % | 1.01 | % | 0.63 | % | (0.32 | )% | |||||||
Annualized return on tangible common equity | 14.44 | % | 8.57 | % | 11.73 | % | 6.88 | % | (3.18 | )% | |||||||
Efficiency ratio * | 64.36 | % | 68.25 | % | 61.20 | % | 66.69 | % | 63.71 | % | |||||||
Annualized noninterest expense to average assets * | 2.89 | % | 2.94 | % | 2.73 | % | 2.88 | % | 2.76 | % | |||||||
* Excludes gain on sale of offices and restructuring/acquisition expenses, FHLB prepayment penalty, and amortization of intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share amounts)
Six Months Ended | ||||||
2017 | 2016 | |||||
Interest income: | ||||||
Loans receivable | $ | 167,465 | 162,287 | |||
Mortgage-backed securities | 5,209 | 4,344 | ||||
Taxable investment securities | 1,987 | 1,794 | ||||
Tax-free investment securities | 1,098 | 1,431 | ||||
FHLB dividends | 109 | 868 | ||||
Interest-earning deposits | 1,196 | 129 | ||||
Total interest income | 177,064 | 170,853 | ||||
Interest expense: | ||||||
Deposits | 11,291 | 11,953 | ||||
Borrowed funds | 2,465 | 11,801 | ||||
Total interest expense | 13,756 | 23,754 | ||||
Net interest income | 163,308 | 147,099 | ||||
Provision for loan losses | 10,199 | 5,859 | ||||
Net interest income after provision for loan losses | 153,109 | 141,240 | ||||
Noninterest income: | ||||||
Gain on sale of investments | 20 | 354 | ||||
Service charges and fees | 24,466 | 20,695 | ||||
Trust and other financial services income | 8,904 | 6,538 | ||||
Insurance commission income | 5,147 | 5,482 | ||||
Gain/(loss) on real estate owned, net | (297 | ) | 360 | |||
Income from bank owned life insurance | 2,720 | 2,700 | ||||
Mortgage banking income | 674 | 664 | ||||
Gain on sale of offices | 17,186 | — | ||||
Other operating income | 4,161 | 2,930 | ||||
Total noninterest income | 62,981 | 39,723 | ||||
Noninterest expense: | ||||||
Compensation and employee benefits | 75,413 | 66,243 | ||||
Premises and occupancy costs | 14,619 | 12,812 | ||||
Office operations | 8,392 | 6,803 | ||||
Collections expense | 1,102 | 1,405 | ||||
Processing expenses | 19,548 | 16,586 | ||||
Marketing expenses | 4,994 | 4,432 | ||||
Federal deposit insurance premiums | 2,023 | 2,945 | ||||
Professional services | 5,027 | 3,962 | ||||
Amortization of intangible assets | 3,498 | 1,385 | ||||
Real estate owned expense | 499 | 606 | ||||
Restructuring/ acquisition expense | 2,857 | 4,021 | ||||
FHLB prepayment penalty | — | 36,978 | ||||
Other expense | 6,936 | 7,219 | ||||
Total noninterest expense | 144,908 | 165,397 | ||||
Income before income taxes | 71,182 | 15,566 | ||||
Income tax expense | 22,454 | 4,590 | ||||
Net income | $ | 48,728 | 10,976 | |||
Basic earnings per share | $ | 0.48 | 0.11 | |||
Diluted earnings per share | $ | 0.48 | 0.11 | |||
Weighted average common shares outstanding - basic | 100,798,209 | 99,033,676 | ||||
Weighted average common shares outstanding - diluted | 102,525,058 | 99,811,725 | ||||
Annualized return on average equity | 8.34 | % | 1.90 | % | ||
Annualized return on average assets | 1.03 | % | 0.25 | % | ||
Annualized return on tangible common equity | 11.42 | % | 2.49 | % | ||
Efficiency ratio * | 66.26 | % | 65.85 | % | ||
Annualized noninterest expense to average assets * | 2.92 | % | 2.81 | % | ||
* Excludes gain on sale of offices and restructuring/acquisition expenses, FHLB prepayment penalty, and amortization of intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) *
(Dollars in thousands, except per share amounts)
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Operating results (non-GAAP): | ||||||||||||
Net interest income | $ | 82,731 | 75,547 | 163,308 | 147,099 | |||||||
Provision for loan losses | 5,562 | 4,199 | 10,199 | 5,859 | ||||||||
Noninterest income | 24,291 | 20,275 | 45,795 | 39,723 | ||||||||
Noninterest expense | 70,628 | 61,758 | 142,051 | 124,398 | ||||||||
Income taxes | 8,581 | 12,655 | 16,722 | 20,990 | ||||||||
Net operating income (non-GAAP) | $ | 22,251 | 17,210 | 40,131 | 35,575 | |||||||
Diluted earnings per share (non-GAAP) | $ | 0.22 | 0.17 | 0.39 | 0.36 | |||||||
Average equity | $ | 1,185,357 | 1,154,885 | 1,177,631 | 1,159,450 | |||||||
Average assets | 9,551,905 | 8,882,058 | 9,580,209 | 8,896,530 | ||||||||
Annualized ROE (non-GAAP) | 7.53 | % | 5.99 | % | 6.87 | % | 6.17 | % | ||||
Annualized ROA (non-GAAP) | 0.93 | % | 0.78 | % | 0.84 | % | 0.80 | % | ||||
Reconciliation of net operating income to net income: | ||||||||||||
Net operating income (non-GAAP) | $ | 22,251 | 17,210 | 40,131 | 35,575 | |||||||
Nonoperating income/ expenses, net of tax: | ||||||||||||
Gain on sale of offices | 10,311 | — | 10,311 | — | ||||||||
Restructuring/ acquisition expenses | (1,580 | ) | (2,032 | ) | (1,714 | ) | (2,413 | ) | ||||
FHLB prepayment penalty | — | (22,186 | ) | — | (22,186 | ) | ||||||
Net income/ (loss) (GAAP) | $ | 30,982 | (7,008 | ) | 48,728 | 10,976 | ||||||
Diluted earnings per share (GAAP) | $ | 0.30 | (0.07 | ) | 0.48 | 0.11 | ||||||
Annualized ROE (GAAP) | 10.48 | % | (2.44 | )% | 8.34 | % | 1.90 | % | ||||
Annualized ROA (GAAP) | 1.30 | % | (0.32 | )% | 1.03 | % | 0.25 | % | ||||
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude certain income and expenses net of tax benefit and cost. The net tax effect was calculated using statutory tax rates of approximately 40.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
Northwest Bancshares, Inc. and Subsidiaries
Asset Quality (Unaudited)
(Dollars in thousands)
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||
Nonaccrual loans current: | |||||||||||||||
Residential mortgage loans | $ | 841 | 1,864 | 2,109 | 3,063 | 2,017 | |||||||||
Home equity loans | 158 | 1,244 | 1,451 | 1,446 | 1,092 | ||||||||||
Consumer loans | 379 | 633 | 520 | 464 | 277 | ||||||||||
Commercial real estate loans | 16,189 | 13,347 | 13,955 | 19,246 | 17,456 | ||||||||||
Commercial loans | 5,262 | 5,335 | 5,361 | 7,299 | 4,462 | ||||||||||
Total nonaccrual loans current | $ | 22,829 | 22,423 | 23,396 | 31,518 | 25,304 | |||||||||
Nonaccrual loans delinquent 30 days to 59 days: | |||||||||||||||
Residential mortgage loans | $ | 181 | 1,001 | 1,464 | 344 | — | |||||||||
Home equity loans | 164 | 328 | 422 | 315 | 49 | ||||||||||
Consumer loans | 169 | 218 | 400 | 211 | 95 | ||||||||||
Commercial real estate loans | 474 | 1,970 | 3,478 | 514 | 151 | ||||||||||
Commercial loans | 32 | 328 | 145 | 185 | 16 | ||||||||||
Total nonaccrual loans delinquent 30 days to 59 days | $ | 1,020 | 3,845 | 5,909 | 1,569 | 311 | |||||||||
Nonaccrual loans delinquent 60 days to 89 days: | |||||||||||||||
Residential mortgage loans | $ | 896 | 704 | 1,522 | 1,270 | 1,524 | |||||||||
Home equity loans | 326 | 408 | 440 | 465 | 366 | ||||||||||
Consumer loans | 342 | 242 | 366 | 250 | 157 | ||||||||||
Commercial real estate loans | 2,233 | 540 | 2,027 | 151 | 6,513 | ||||||||||
Commercial loans | — | 23 | 695 | 319 | 1,748 | ||||||||||
Total nonaccrual loans delinquent 60 days to 89 days | $ | 3,797 | 1,917 | 5,050 | 2,455 | 10,308 | |||||||||
Nonaccrual loans delinquent 90 days or more: | |||||||||||||||
Residential mortgage loans | $ | 11,637 | 11,911 | 13,169 | 13,242 | 14,829 | |||||||||
Home equity loans | 5,744 | 6,194 | 5,552 | 5,874 | 5,226 | ||||||||||
Consumer loans | 2,809 | 3,359 | 3,823 | 3,354 | 2,374 | ||||||||||
Commercial real estate loans | 21,295 | 20,897 | 19,264 | 22,155 | 12,960 | ||||||||||
Commercial loans | 3,642 | 2,744 | 3,373 | 6,105 | 4,566 | ||||||||||
Total nonaccrual loans delinquent 90 days or more | $ | 45,127 | 45,105 | 45,181 | 50,730 | 39,955 | |||||||||
Total nonaccrual loans | $ | 72,773 | 73,290 | 79,536 | 86,272 | 75,878 | |||||||||
Total nonaccrual loans | $ | 72,773 | 73,290 | 79,536 | 86,272 | 75,878 | |||||||||
Loans 90 days past maturity and still accruing | 182 | 265 | 649 | 103 | 472 | ||||||||||
Nonperforming loans | 72,955 | 73,555 | 80,185 | 86,375 | 76,350 | ||||||||||
Real estate owned, net | 6,030 | 6,242 | 4,889 | 4,841 | 4,950 | ||||||||||
Nonperforming assets | $ | 78,985 | 79,797 | 85,074 | 91,216 | 81,300 | |||||||||
Nonaccrual troubled debt restructuring * | $ | 17,873 | 18,273 | 16,346 | 17,374 | 18,098 | |||||||||
Accruing troubled debt restructuring | 23,987 | 25,305 | 26,580 | 29,221 | 31,015 | ||||||||||
Total troubled debt restructuring | $ | 41,860 | 43,578 | 42,926 | 46,595 | 49,113 | |||||||||
Nonperforming loans to total loans | 0.95 | % | 0.97 | % | 1.06 | % | 1.11 | % | 1.05 | % | |||||
Nonperforming assets to total assets | 0.83 | % | 0.82 | % | 0.88 | % | 0.94 | % | 0.91 | % | |||||
Allowance for loan losses to total loans | 0.82 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.83 | % | |||||
Allowance for loan losses to nonperforming loans | 86.20 | % | 83.07 | % | 76.00 | % | 73.22 | % | 79.61 | % | |||||
* Amounts included in nonperforming loans above.
Northwest Bancshares, Inc. and Subsidiaries
Loans by Credit Quality Indicators (Unaudited)
(Dollars in thousands)
At June 30, 2017 | Pass | Special Mention * | Substandard ** | Doubtful | Loss | Loans Receivable | |||||||||||||
Personal Banking: | |||||||||||||||||||
Residential mortgage loans | $ | 2,733,555 | — | 16,916 | — | — | 2,750,471 | ||||||||||||
Home equity loans | 1,292,333 | — | 8,699 | — | — | 1,301,032 | |||||||||||||
Consumer loans | 655,149 | — | 2,976 | — | — | 658,125 | |||||||||||||
Total Personal Banking | 4,681,037 | — | 28,591 | — | — | 4,709,628 | |||||||||||||
Commercial Banking: | |||||||||||||||||||
Commercial real estate loans | 2,178,996 | 67,826 | 149,841 | — | — | 2,396,663 | |||||||||||||
Commercial loans | 521,520 | 10,269 | 48,657 | — | — | 580,446 | |||||||||||||
Total Commercial Banking | 2,700,516 | 78,095 | 198,498 | — | — | 2,977,109 | |||||||||||||
Total loans | $ | 7,381,553 | 78,095 | 227,089 | — | — | 7,686,737 | ||||||||||||
At March 31, 2017 | |||||||||||||||||||
Personal Banking: | |||||||||||||||||||
Residential mortgage loans | $ | 2,689,203 | — | 16,866 | — | — | 2,706,069 | ||||||||||||
Home equity loans | 1,296,182 | — | 9,212 | — | — | 1,305,394 | |||||||||||||
Consumer loans | 639,574 | — | 3,531 | — | — | 643,105 | |||||||||||||
Total Personal Banking | 4,624,959 | — | 29,609 | — | — | 4,654,568 | |||||||||||||
Commercial Banking: | |||||||||||||||||||
Commercial real estate loans | 2,187,545 | 48,189 | 142,740 | — | — | 2,378,474 | |||||||||||||
Commercial loans | 474,662 | 12,226 | 43,158 | — | — | 530,046 | |||||||||||||
Total Commercial Banking | 2,662,207 | 60,415 | 185,898 | — | — | 2,908,520 | |||||||||||||
Total loans | $ | 7,287,166 | 60,415 | 215,507 | — | — | 7,563,088 | ||||||||||||
At December 31, 2016 | |||||||||||||||||||
Personal Banking: | |||||||||||||||||||
Residential mortgage loans | $ | 2,696,705 | — | 18,059 | — | — | 2,714,764 | ||||||||||||
Home equity loans | 1,318,998 | — | 9,774 | — | — | 1,328,772 | |||||||||||||
Consumer loans | 639,044 | — | 3,917 | — | — | 642,961 | |||||||||||||
Total Personal Banking | 4,654,747 | — | 31,750 | — | — | 4,686,497 | |||||||||||||
Commercial Banking: | |||||||||||||||||||
Commercial real estate loans | 2,153,328 | 43,724 | 145,037 | — | — | 2,342,089 | |||||||||||||
Commercial loans | 469,993 | 17,192 | 41,576 | — | — | 528,761 | |||||||||||||
Total Commercial Banking | 2,623,321 | 60,916 | 186,613 | — | — | 2,870,850 | |||||||||||||
Total loans | $ | 7,278,068 | 60,916 | 218,363 | — | — | 7,557,347 | ||||||||||||
At September 30, 2016 | |||||||||||||||||||
Personal Banking: | |||||||||||||||||||
Residential mortgage loans | $ | 2,800,420 | — | 18,593 | — | — | 2,819,013 | ||||||||||||
Home equity loans | 1,338,643 | — | 10,462 | — | — | 1,349,105 | |||||||||||||
Consumer loans | 624,885 | — | 3,627 | — | — | 628,512 | |||||||||||||
Total Personal Banking | 4,763,948 | — | 32,682 | — | — | 4,796,630 | |||||||||||||
Commercial Banking: | |||||||||||||||||||
Commercial real estate loans | 2,265,816 | 61,763 | 137,088 | 14 | — | 2,464,681 | |||||||||||||
Commercial loans | 479,321 | 14,707 | 40,326 | 2,901 | — | 537,255 | |||||||||||||
Total Commercial Banking | 2,745,137 | 76,470 | 177,414 | 2,915 | — | 3,001,936 | |||||||||||||
Total loans | $ | 7,509,085 | 76,470 | 210,096 | 2,915 | — | 7,798,566 | ||||||||||||
At June 30, 2016 | |||||||||||||||||||
Personal Banking: | |||||||||||||||||||
Residential mortgage loans | $ | 2,741,101 | — | 16,497 | — | — | 2,757,598 | ||||||||||||
Home equity loans | 1,153,010 | — | 9,164 | — | — | 1,162,174 | |||||||||||||
Consumer loans | 544,174 | — | 2,376 | — | — | 546,550 | |||||||||||||
Total Personal Banking | 4,438,285 | — | 28,037 | — | — | 4,466,322 | |||||||||||||
Commercial Banking: | |||||||||||||||||||
Commercial real estate loans | 2,170,583 | 63,351 | 129,428 | 14 | — | 2,363,376 | |||||||||||||
Commercial loans | 408,178 | 15,435 | 38,546 | 3,064 | — | 465,223 | |||||||||||||
Total Commercial Banking | 2,578,761 | 78,786 | 167,974 | 3,078 | — | 2,828,599 | |||||||||||||
Total loans | $ | 7,017,046 | 78,786 | 196,011 | 3,078 | — | 7,294,921 | ||||||||||||
* Includes $9.7 million $12.4 million, $9.4 million, $19.3 million, and $7.6 million of acquired loans at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively.
** Includes $44.8 million, $45.3 million, $39.1 million, $29.8 million, and $25.5 million of acquired loans at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Loan Delinquency (Unaudited)
(Dollars in thousands)
June 30, 2017 | * | March 31, 2017 | * | December 31, 2016 | * | September 30, 2016 | * | June 30, 2016 | * | |||||||||||||||||||||||||||||||||||||||||
(Number of loans and dollar amount of loans) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans delinquent 30 days to 59 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | 64 | $ | 2,893 | 0.1 | % | 280 | $ | 22,254 | 0.8 | % | 360 | $ | 27,386 | 1.0 | % | 74 | $ | 3,380 | 0.1 | % | 72 | $ | 3,353 | 0.1 | % | |||||||||||||||||||||||||
Home equity loans | 111 | 4,058 | 0.3 | % | 125 | 4,586 | 0.4 | % | 179 | 6,805 | 0.5 | % | 164 | 4,984 | 0.4 | % | 128 | 4,988 | 0.4 | % | ||||||||||||||||||||||||||||||
Consumer loans | 1,399 | 8,578 | 1.3 | % | 1,022 | 7,157 | 1.1 | % | 1,497 | 9,868 | 1.5 | % | 1,269 | 7,583 | 1.2 | % | 1,144 | 6,725 | 1.2 | % | ||||||||||||||||||||||||||||||
Commercial real estate loans | 38 | 4,629 | 0.2 | % | 60 | 9,364 | 0.4 | % | 61 | 10,377 | 0.4 | % | 28 | 3,855 | 0.2 | % | 34 | 4,828 | 0.2 | % | ||||||||||||||||||||||||||||||
Commercial loans | 20 | 1,378 | 0.2 | % | 29 | 2,304 | 0.4 | % | 20 | 1,178 | 0.2 | % | 26 | 1,493 | 0.3 | % | 15 | 533 | 0.1 | % | ||||||||||||||||||||||||||||||
Total loans delinquent 30 days to 59 days | 1,632 | $ | 21,536 | 0.3 | % | 1,516 | $ | 45,665 | 0.6 | % | 2,117 | $ | 55,614 | 0.7 | % | 1,561 | $ | 21,295 | 0.3 | % | 1,393 | $ | 20,427 | 0.3 | % | |||||||||||||||||||||||||
Loans delinquent 60 days to 89 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | 72 | $ | 6,320 | 0.2 | % | 28 | $ | 1,594 | 0.1 | % | 80 | $ | 6,227 | 0.2 | % | 76 | $ | 6,174 | 0.2 | % | 74 | $ | 5,633 | 0.2 | % | |||||||||||||||||||||||||
Home equity loans | 44 | 1,522 | 0.1 | % | 36 | 1,145 | 0.1 | % | 62 | 1,563 | 0.1 | % | 41 | 1,145 | 0.1 | % | 42 | 1,435 | 0.1 | % | ||||||||||||||||||||||||||||||
Consumer loans | 623 | 3,234 | 0.5 | % | 430 | 2,241 | 0.3 | % | 636 | 3,609 | 0.6 | % | 532 | 2,673 | 0.4 | % | 514 | 2,247 | 0.4 | % | ||||||||||||||||||||||||||||||
Commercial real estate loans | 14 | 3,368 | 0.1 | % | 19 | 3,034 | 0.1 | % | 25 | 4,495 | 0.2 | % | 13 | 1,102 | — | % | 16 | 8,765 | 0.4 | % | ||||||||||||||||||||||||||||||
Commercial loans | 9 | 199 | — | % | 10 | 499 | 0.1 | % | 21 | 2,081 | 0.4 | % | 9 | 594 | 0.1 | % | 23 | 2,429 | 0.5 | % | ||||||||||||||||||||||||||||||
Total loans delinquent 60 days to 89 days | 762 | $ | 14,643 | 0.2 | % | 523 | $ | 8,513 | 0.1 | % | 824 | $ | 17,975 | 0.2 | % | 671 | $ | 11,688 | 0.1 | % | 669 | $ | 20,509 | 0.3 | % | |||||||||||||||||||||||||
Loans delinquent 90 days or more: ** | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | 145 | $ | 12,053 | 0.4 | % | 139 | $ | 12,326 | 0.5 | % | 169 | $ | 13,621 | 0.5 | % | 168 | $ | 13,478 | 0.5 | % | 176 | $ | 15,046 | 0.5 | % | |||||||||||||||||||||||||
Home equity loans | 126 | 5,800 | 0.4 | % | 143 | 6,258 | 0.5 | % | 155 | 5,756 | 0.4 | % | 137 | 6,022 | 0.4 | % | 124 | 5,422 | 0.5 | % | ||||||||||||||||||||||||||||||
Consumer loans | 487 | 2,821 | 0.4 | % | 532 | 3,372 | 0.5 | % | 646 | 3,838 | 0.6 | % | 757 | 3,372 | 0.5 | % | 440 | 2,399 | 0.4 | % | ||||||||||||||||||||||||||||||
Commercial real estate loans | 108 | 22,044 | 0.9 | % | 106 | 23,009 | 1.0 | % | 101 | 21,270 | 0.9 | % | 106 | 24,533 | 1.0 | % | 107 | 15,244 | 0.6 | % | ||||||||||||||||||||||||||||||
Commercial loans | 39 | 3,642 | 0.6 | % | 39 | 2,744 | 0.5 | % | 37 | 3,520 | 0.7 | % | 28 | 6,249 | 1.2 | % | 32 | 4,709 | 1.0 | % | ||||||||||||||||||||||||||||||
Total loans delinquent 90 days or more | 905 | $ | 46,360 | 0.6 | % | 959 | $ | 47,709 | 0.6 | % | 1,108 | $ | 48,005 | 0.6 | % | 1,196 | $ | 53,654 | 0.7 | % | 879 | $ | 42,820 | 0.6 | % | |||||||||||||||||||||||||
Total loans delinquent | 3,299 | $ | 82,539 | 1.1 | % | 2,998 | $ | 101,887 | 1.3 | % | 4,049 | $ | 121,594 | 1.5 | % | 3,428 | $ | 86,637 | 1.1 | % | 2,941 | $ | 83,756 | 1.2 | % | |||||||||||||||||||||||||
* Represents delinquency, in dollars, divided by the respective total amount of that class of loan outstanding.
** Includes purchased credit impaired loans of $1.2 million, $2.6 million, $2.8 million, $2.9 million, and $2.9 million at June 30, 2017, March 31,2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Allowance for Loan Losses (Unaudited)
(Dollars in thousands)
Quarter Ended | |||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||
Beginning balance | $ | 61,104 | 60,939 | 63,246 | 60,781 | 62,278 | |||||||||
Provision | 5,562 | 4,637 | 2,145 | 5,538 | 4,199 | ||||||||||
Charge-offs residential mortgage | (372 | ) | (290 | ) | (710 | ) | (354 | ) | (1,852 | ) | |||||
Charge-offs home equity | (689 | ) | (649 | ) | (321 | ) | (288 | ) | (946 | ) | |||||
Charge-offs consumer | (3,517 | ) | (3,660 | ) | (3,469 | ) | (2,701 | ) | (2,332 | ) | |||||
Charge-offs commercial real estate | (329 | ) | (474 | ) | (323 | ) | (789 | ) | (1,731 | ) | |||||
Charge-offs commercial | (929 | ) | (1,267 | ) | (2,489 | ) | (708 | ) | (903 | ) | |||||
Recoveries | 2,055 | 1,868 | 2,860 | 1,767 | 2,068 | ||||||||||
Ending balance | $ | 62,885 | 61,104 | 60,939 | 63,246 | 60,781 | |||||||||
Net charge-offs to average loans, annualized | 0.20 | % | 0.23 | % | 0.23 | % | 0.17 | % | 0.31 | % | |||||
Six Months Ended June 30, | ||||||
2017 | 2016 | |||||
Beginning balance | $ | 60,939 | 62,672 | |||
Provision | 10,199 | 5,859 | ||||
Charge-offs residential mortgage | (662 | ) | (2,416 | ) | ||
Charge-offs home equity | (1,338 | ) | (1,930 | ) | ||
Charge-offs consumer | (7,177 | ) | (4,735 | ) | ||
Charge-offs commercial real estate | (803 | ) | (2,628 | ) | ||
Charge-offs commercial | (2,196 | ) | (1,020 | ) | ||
Recoveries | 3,923 | 4,979 | ||||
Ending balance | $ | 62,885 | 60,781 | |||
Net charge-offs to average loans, annualized | 0.22 | % | 0.21 | % | ||
Northwest Bancshares, Inc. and Subsidiaries
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.
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | |||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | $ | 2,721,445 | 28,245 | 4.15 | % | $ | 2,718,904 | 27,309 | 4.02 | % | $ | 2,766,693 | 28,165 | 4.07 | % | $ | 2,739,099 | 27,952 | 4.08 | % | $ | 2,751,601 | 29,089 | 4.23 | % | ||||||||||||||||||||||||
Home equity loans | 1,311,274 | 14,344 | 4.39 | % | 1,332,647 | 14,201 | 4.32 | % | 1,346,856 | 14,442 | 4.27 | % | 1,192,929 | 12,884 | 4.30 | % | 1,163,900 | 12,701 | 4.39 | % | |||||||||||||||||||||||||||||
Consumer loans | 636,115 | 9,515 | 6.00 | % | 627,288 | 9,701 | 6.27 | % | 620,294 | 10,083 | 6.47 | % | 554,954 | 8,931 | 6.40 | % | 522,745 | 8,697 | 6.69 | % | |||||||||||||||||||||||||||||
Commercial real estate loans | 2,430,594 | 27,071 | 4.41 | % | 2,456,070 | 26,562 | 4.33 | % | 2,467,569 | 27,863 | 4.42 | % | 2,394,001 | 26,683 | 4.36 | % | 2,356,994 | 26,691 | 4.48 | % | |||||||||||||||||||||||||||||
Commercial loans | 554,506 | 6,087 | 4.34 | % | 522,847 | 5,515 | 4.22 | % | 527,330 | 5,682 | 4.27 | % | 476,715 | 5,193 | 4.26 | % | 461,808 | 4,902 | 4.20 | % | |||||||||||||||||||||||||||||
Total loans receivable (a) (b) (d) | 7,653,934 | 85,262 | 4.47 | % | 7,657,756 | 83,288 | 4.41 | % | 7,728,742 | 86,235 | 4.44 | % | 7,357,698 | 81,643 | 4.41 | % | 7,257,048 | 82,080 | 4.55 | % | |||||||||||||||||||||||||||||
Mortgage-backed securities (c) | 592,917 | 2,987 | 2.02 | % | 471,674 | 2,222 | 1.88 | % | 482,707 | 2,166 | 1.79 | % | 440,966 | 2,030 | 1.84 | % | 458,398 | 2,115 | 1.85 | % | |||||||||||||||||||||||||||||
Investment securities (c) (d) | 372,398 | 1,796 | 1.93 | % | 377,819 | 1,881 | 1.99 | % | 401,602 | 1,950 | 1.94 | % | 275,718 | 1,667 | 2.42 | % | 313,647 | 1,844 | 2.35 | % | |||||||||||||||||||||||||||||
FHLB stock | 7,602 | 50 | 2.64 | % | 7,305 | 59 | 3.28 | % | 7,575 | 285 | 4.54 | % | 27,761 | 218 | 3.12 | % | 33,302 | 401 | 4.84 | % | |||||||||||||||||||||||||||||
Other interest-earning deposits | 208,141 | 536 | 1.02 | % | 294,391 | 660 | 0.90 | % | 325,889 | 300 | 0.36 | % | 91,243 | 114 | 0.49 | % | 63,950 | 70 | 0.43 | % | |||||||||||||||||||||||||||||
Total interest-earning assets | 8,834,992 | 90,631 | 4.11 | % | 8,808,945 | 88,110 | 4.06 | % | 8,946,515 | 90,936 | 4.04 | % | 8,193,386 | 85,672 | 4.16 | % | 8,126,345 | 86,510 | 4.28 | % | |||||||||||||||||||||||||||||
Noninterest earning assets (e) | 716,913 | 799,569 | 677,888 | 835,500 | 755,713 | ||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 9,551,905 | $ | 9,608,514 | $ | 9,624,403 | $ | 9,028,886 | $ | 8,882,058 | |||||||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||
Savings deposits | $ | 1,714,290 | 768 | 0.18 | % | $ | 1,702,528 | 755 | 0.18 | % | $ | 1,668,492 | 771 | 0.18 | % | $ | 1,485,763 | 744 | 0.20 | % | $ | 1,440,886 | 837 | 0.23 | % | ||||||||||||||||||||||||
Interest-bearing demand deposits | 1,451,787 | 283 | 0.08 | % | 1,422,284 | 116 | 0.03 | % | 1,431,671 | 85 | 0.02 | % | 1,179,557 | 78 | 0.03 | % | 1,130,122 | 144 | 0.05 | % | |||||||||||||||||||||||||||||
Money market deposit accounts | 1,839,693 | 1,064 | 0.23 | % | 1,879,292 | 1,074 | 0.23 | % | 1,890,220 | 1,101 | 0.23 | % | 1,418,779 | 826 | 0.23 | % | 1,294,381 | 829 | 0.26 | % | |||||||||||||||||||||||||||||
Time deposits | 1,518,650 | 3,711 | 0.98 | % | 1,573,574 | 3,520 | 0.91 | % | 1,643,785 | 3,902 | 0.94 | % | 1,597,542 | 4,005 | 1.00 | % | 1,616,260 | 4,055 | 1.01 | % | |||||||||||||||||||||||||||||
Borrowed funds (f) | 126,685 | 55 | 0.17 | % | 136,872 | 58 | 0.17 | % | 143,540 | 61 | 0.17 | % | 560,407 | 657 | 0.47 | % | 772,225 | 3,017 | 1.57 | % | |||||||||||||||||||||||||||||
Junior subordinated debentures | 111,213 | 1,185 | 4.22 | % | 111,213 | 1,167 | 4.20 | % | 111,213 | 1,171 | 4.12 | % | 111,213 | 1,144 | 4.03 | % | 111,213 | 1,126 | 4.01 | % | |||||||||||||||||||||||||||||
Total interest-bearing liabilities | 6,762,318 | 7,066 | 0.42 | % | 6,825,763 | 6,690 | 0.40 | % | 6,888,921 | 7,091 | 0.41 | % | 6,353,261 | 7,454 | 0.47 | % | 6,365,087 | 10,008 | 0.63 | % | |||||||||||||||||||||||||||||
Noninterest-bearing demand deposits (g) | 1,544,953 | 1,506,268 | 1,493,528 | 1,243,474 | 1,184,786 | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest bearing liabilities | 59,277 | 106,578 | 77,827 | 276,014 | 177,300 | ||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 8,366,548 | 8,438,609 | 8,460,276 | 7,872,749 | 7,727,173 | ||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 1,185,357 | 1,169,905 | 1,164,127 | 1,156,137 | 1,154,885 | ||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 9,551,905 | $ | 9,608,514 | $ | 9,624,403 | $ | 9,028,886 | $ | 8,882,058 | |||||||||||||||||||||||||||||||||||||||
Net interest income/ Interest rate spread | 83,565 | 3.69 | % | 81,420 | 3.66 | % | 83,845 | 3.63 | % | 78,218 | 3.69 | % | 76,502 | 3.65 | % | ||||||||||||||||||||||||||||||||||
Net interest-earning assets/ Net interest margin | $ | 2,072,674 | 3.78 | % | $ | 1,983,182 | 3.75 | % | $ | 2,057,594 | 3.75 | % | $ | 1,840,125 | 3.82 | % | $ | 1,761,258 | 3.77 | % | |||||||||||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 1.31X | 1.29X | 1.30X | 1.29X | 1.28X | ||||||||||||||||||||||||||||||||||||||||||||
(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 collateralized borrowings.
(g) Average cost of deposits were 0.29%, 0.27%, 0.29%, 0.32% and 0.35%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.44%, 4.38%, 4.41%, 4.38% and 4.52%, respectively, Investment securities - 1.62%, 1.67%, 1.61%, 1.89% and 1.87%, respectively, Interest-earning assets - 4.08%, 4.02%, 4.00%, 4.11% and 4.23%, respectively. GAAP basis net interest rate spreads were 3.66%, 3.62%, 3.59%, 3.65% and 3.60%, respectively, and GAAP basis net interest margins were 3.75%, 3.71%, 3.71%, 3.77% and 3.72%, respectively.
Northwest Bancshares, Inc. and Subsidiaries
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.
Six Months Ended June 30, | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | ||||||||||||||
Assets: | |||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Residential mortgage loans | $ | 2,720,180 | 55,554 | 4.08 | % | $ | 2,745,695 | 58,874 | 4.29 | % | |||||||||
Home equity loans | 1,321,902 | 28,545 | 4.35 | % | 1,170,653 | 25,243 | 4.34 | % | |||||||||||
Consumer loans | 631,726 | 19,216 | 6.13 | % | 516,419 | 16,916 | 6.59 | % | |||||||||||
Commercial real estate loans | 2,443,262 | 53,633 | 4.37 | % | 2,353,371 | 52,684 | 4.43 | % | |||||||||||
Commercial loans | 538,760 | 11,602 | 4.28 | % | 451,893 | 9,625 | 4.21 | % | |||||||||||
Loans receivable (a) (b) (d) | 7,655,830 | 168,550 | 4.44 | % | 7,238,031 | 163,342 | 4.54 | % | |||||||||||
Mortgage-backed securities (c) | 532,631 | 5,209 | 1.96 | % | 473,346 | 4,344 | 1.84 | % | |||||||||||
Investment securities (c) (d) | 375,093 | 3,677 | 1.96 | % | 350,553 | 3,995 | 2.28 | % | |||||||||||
FHLB stock | 7,454 | 109 | 2.95 | % | 35,200 | 868 | 4.96 | % | |||||||||||
Other interest-earning deposits | 257,427 | 1,196 | 0.92 | % | 45,926 | 129 | 0.56 | % | |||||||||||
Total interest-earning assets | 8,828,435 | 178,741 | 4.08 | % | 8,143,056 | 172,678 | 4.26 | % | |||||||||||
Noninterest earning assets (e) | 751,774 | 753,474 | |||||||||||||||||
Total assets | $ | 9,580,209 | $ | 8,896,530 | |||||||||||||||
Liabilities and shareholders’ equity: | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Savings deposits | $ | 1,708,441 | 1,524 | 0.18 | % | $ | 1,423,343 | 1,702 | 0.24 | % | |||||||||
Interest-bearing demand deposits | 1,437,112 | 399 | 0.06 | % | 1,111,981 | 300 | 0.05 | % | |||||||||||
Money market deposit accounts | 1,859,383 | 2,138 | 0.23 | % | 1,291,457 | 1,694 | 0.26 | % | |||||||||||
Time deposits | 1,545,959 | 7,230 | 0.94 | % | 1,640,291 | 8,257 | 1.01 | % | |||||||||||
Borrowed funds (f) | 131,750 | 112 | 0.17 | % | 835,832 | 9,556 | 2.30 | % | |||||||||||
Junior subordinated debentures | 111,213 | 2,353 | 4.21 | % | 111,213 | 2,245 | 3.99 | % | |||||||||||
Total interest-bearing liabilities | 6,793,858 | 13,756 | 0.41 | % | 6,414,117 | 23,754 | 0.74 | % | |||||||||||
Noninterest-bearing demand deposits (g) | 1,525,723 | 1,109,662 | |||||||||||||||||
Noninterest bearing liabilities | 82,997 | 213,301 | |||||||||||||||||
Total liabilities | 8,402,578 | 7,737,080 | |||||||||||||||||
Shareholders’ equity | 1,177,631 | 1,159,450 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 9,580,209 | $ | 8,896,530 | |||||||||||||||
Net interest income/ Interest rate spread | 164,985 | 3.67 | % | 148,924 | 3.52 | % | |||||||||||||
Net interest-earning assets/ Net interest margin | $ | 2,034,577 | 3.74 | % | $ | 1,728,939 | 3.66 | % | |||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 1.30X | 1.27X | |||||||||||||||||
(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 collateralized borrowings.
(g) Average cost of deposits were 0.28%, and 0.37%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.41% and 4.51%, respectively, Investment securities - 1.64% and 1.84%, respectively, Interest-earning assets - 4.04% and 4.22%, respectively. GAAP basis net interest rate spreads were 3.64% and 3.47%, respectively, and GAAP basis net interest margins were 3.70% and 3.61%, respectively.