WARREN, Pa., Oct. 26, 2015 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2015 of $12.9 million, or $0.13 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2015 were 4.54% and 0.59%. Earnings for the current quarter include acquisition expenses of $7.6 million relating to the merger of LNB Bancorp, Inc. ("LNB") on August 14, 2015. Excluding the after-tax impact of these expenses, non-GAAP net operating income for the quarter was $17.9 million, or $0.19 per diluted share, compared to $17.3 million, or $0.19 per diluted share in the same quarter last year. The non-GAAP annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2015 were 6.30% and 0.82% compared to 6.43% and 0.87% in the previous year.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.14 per share payable on November 19, 2015, to shareholders of record as of November 5, 2015. This represents the 84th consecutive quarter in which the Company has paid a cash dividend.
In making this announcement, William J. Wagner, President and CEO, noted, "We are pleased to have completed the acquisition of LNB Bancorp, Inc. and Lorain National Bank during the current quarter, our first acquisition of a bank since 2008. This merger brings additional talent, twenty-one community banking offices and over 55,000 new customers to Northwest. It also greatly increases our presence in a market that we feel presents great opportunities for our institution. Because the transaction was closed mid-quarter, and because certain transitional expenses were incurred, the accretive impact on earnings from this merger will not be fully realized until the fourth quarter of 2015. Finally, we believe the potential to leverage the benefits of this transaction will provide additional opportunities to enhance shareholder value. We are also pleased to report solid earnings for the quarter as our net interest margin remained stable and noninterest income continues to improve. Noninterest expense, exclusive of the impact of the LNB merger, continues to be controlled, and we remain focused on improving our efficiency."
Net interest income increased by $4.6 million, or 7.4%, to $66.9 million for the quarter ended September 30, 2015, from $62.3 million for the quarter ended September 30, 2014. This increase is primarily due to a $5.3 million increase in interest income on loans, which was fueled by a $1.16 billion increase in the company's loan portfolio over the past twelve months. The substantial increase in loans resulted from internal growth of $218.5 million, or 3.6%, for the first nine months of 2015, while the acquisition of LNB provided net loans of $943.2 million. Also contributing to the increase in net interest income was a $142,000 decrease in interest on deposits, as the company's cost of funds decreased sufficiently over the past year to offset the cost of the $1.010 billion of deposits acquired during the quarter from the LNB merger.
The provision for loan losses decreased by $299,000, or 8.6%, to $3.2 million for the quarter ended September 30, 2015, from $3.5 million for the quarter ended September 30, 2014 as overall asset quality improved compared to last year. Loans 90 days or more delinquent decreased by $9.1 million, or 19.8%, to $36.8 million at September 30, 2015 from $45.9 million at September 30, 2014, while total nonaccrual loans decreased by $21.9 million, or 24.4%, to $67.9 million at September 30, 2015 from $89.8 million last year.
Noninterest income increased by $403,000, or 2.3%, to $18.1 million for the quarter ended September 30, 2015, from $17.7 million for the quarter ended September 30, 2014. This increase is due primarily to an increase in insurance commission income of $620,000, or 34.9%, related to the company's acquisition of its third insurance agency over the past four years on January 1, 2015. Also contributing to the increase in noninterest income was an increase in service charges and fees of $280,000, or 2.9%. This increase was attributable to additional fees earned from the continued growth in checking accounts as well as from the additional checking accounts provided by the merger with LNB. Partially offsetting these increases was a decrease in gain on sale of investments of $592,000, as the company sold $1.4 million of bank stocks in 2014 at a considerable profit.
Noninterest expense increased by $10.4 million, or 19.6%, to $63.8 million for the quarter ended September 30, 2015, from $53.4 million for the quarter ended September 30, 2014. This increase resulted primarily to acquisition expenses of $7.6 million incurred during the current quarter relating to the merger of LNB. The cost of the employees acquired in the LNB merger also contributed greatly to an increase in compensation and employee benefits of $3.0 million, or 10.5%, in the current quarter as compared to the previous year. Also contributing to the increase in noninterest expense was an increase in processing expenses of $1.4 million, or 20.9%, due primarily to recent technology upgrades, including the implementation of enhanced customer security for online financial transactions. Partially offsetting these increases to noninterest expense was a decrease in other expense of $1.4 million, or 43.6%, due primarily to the timing of charitable contributions.
Net income for the nine month period ended September 30, 2015 was $44.3 million, or $0.48 per diluted share. This represents a decrease of $270,000, or 0.6%, compared to the nine month period ended September 30, 2014, when net income was $44.6 million, or $0.48 per diluted share. The annualized returns on average shareholders' equity and average assets for the nine month period ended September 30, 2015 were 5.47% and 0.73% compared to 5.44% and 0.75% for the same period last year. This decrease is due primarily to the acquisition of LNB which generated acquisition expenses of $8.4 million as well as an increase in compensation and employee benefits of $3.2 million. Also contributing to the decrease in net income was a decrease in the gain on sale of investments of $3.6 million as the company sold $3.4 million of bank stocks at a considerable gain. Offsetting these items which negatively impacted income was a reduction in the provision for loan losses of $14.1 million, or 73.4%, as asset quality continued to improve. Non-GAAP net operating income for the nine month period ended September 30, 2015, which excludes the after-tax impact of the aforementioned acquisition expenses of $8.4 million, was $49.9 million, or $0.54 per diluted share. This represents an increase of $5.3 million, or 11.8%, compared to the nine month period ended September 30, 2014 when net income was $44.6 million, or $0.48 per diluted share. The non-GAAP annualized returns on average shareholders' equity and average assets for the nine month period ended September 30, 2015 were 6.15% and 0.82% compared to 5.44% and 0.75% for the same period last year.
Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 181 community banking offices in Pennsylvania, New York, Ohio and Maryland and 51 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 ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank 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 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) | |||||||||||
September 30, | December 31, | ||||||||||
Assets | 2015 | 2014 | |||||||||
Cash and cash equivalents | $ 91,406 | 87,401 | |||||||||
Interest-earning deposits in other financial institutions | 3,206 | 152,671 | |||||||||
Federal funds sold and other short-term investments | 1,013 | 634 | |||||||||
Marketable securities available-for-sale (amortized cost of $965,965 and $906,702) | 976,677 | 912,371 | |||||||||
Marketable securities held-to-maturity (fair value of $48,511 and $106,292) | 47,299 | 103,695 | |||||||||
Total cash, interest-earning deposits and marketable securities | 1,119,601 | 1,256,772 | |||||||||
Residential mortgage loans | 2,712,537 | 2,521,456 | |||||||||
Home equity loans | 1,203,190 | 1,066,131 | |||||||||
Other consumer loans | 494,714 | 242,744 | |||||||||
Commercial real estate loans | 2,330,864 | 1,801,184 | |||||||||
Commercial loans | 410,308 | 358,376 | |||||||||
Total loans receivable | 7,151,613 | 5,989,891 | |||||||||
Allowance for loan losses | (60,547) | (67,518) | |||||||||
Loans receivable, net | 7,091,066 | 5,922,373 | |||||||||
Federal Home Loan Bank stock, at cost | 40,115 | 33,293 | |||||||||
Accrued interest receivable | 22,098 | 18,623 | |||||||||
Real estate owned, net | 10,391 | 16,759 | |||||||||
Premises and Equipment, net | 153,841 | 143,909 | |||||||||
Bank owned life insurance | 167,258 | 144,362 | |||||||||
Goodwill | 258,367 | 175,323 | |||||||||
Other intangible assets | 9,712 | 3,033 | |||||||||
Other assets | 62,459 | 60,586 | |||||||||
Total assets | $ 8,934,908 | 7,775,033 | |||||||||
Liabilities and Shareholders' equity | |||||||||||
Liabilities | |||||||||||
Noninterest-bearing demand deposits | $ 1,127,864 | 891,248 | |||||||||
Interest-bearing demand deposits | 1,097,969 | 874,623 | |||||||||
Money market deposit accounts | 1,277,878 | 1,179,070 | |||||||||
Savings deposits | 1,378,958 | 1,209,287 | |||||||||
Time deposits | 1,762,073 | 1,478,314 | |||||||||
Total deposits | 6,644,742 | 5,632,542 | |||||||||
Borrowed funds | 927,219 | 888,109 | |||||||||
Advances by borrowers for taxes and insurance | 18,216 | 30,507 | |||||||||
Accrued interest payable | 1,816 | 936 | |||||||||
Other liabilities | 62,246 | 57,198 | |||||||||
Junior subordinated debentures | 119,332 | 103,094 | |||||||||
Total liabilities | 7,773,571 | 6,712,386 | |||||||||
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, 101,725,112 shares | |||||||||||
and 94,721,453 shares issued and outstanding, respectively | 1,017 | 947 | |||||||||
Paid-in-capital | 714,730 | 626,134 | |||||||||
Retained earnings | 487,048 | 481,577 | |||||||||
Unallocated common stock of Employee Stock Ownership Plan | (21,398) | (21,641) | |||||||||
Accumulated other comprehensive loss | (20,060) | (24,370) | |||||||||
Total shareholders' equity | 1,161,337 | 1,062,647 | |||||||||
Total liabilities and shareholders' equity | $ 8,934,908 | 7,775,033 | |||||||||
Equity to assets | 13.00% | 13.67% | |||||||||
Tangible common equity to assets | 10.31% | 11.64% | |||||||||
Book value per share | $ 11.42 | 11.22 | |||||||||
Tangible book value per share | $ 8.78 | 9.34 | |||||||||
Closing market price per share | $ 13.00 | 12.53 | |||||||||
Full time equivalent employees | 2,209 | 2,042 | |||||||||
Number of banking offices | 182 | 162 | |||||||||
Northwest Bancshares, Inc. and Subsidiaries | ||||||||||
Consolidated Statements of Income | ||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||
Quarter ended | ||||||||||
September 30, | June 30, | |||||||||
2015 | 2014 | 2015 | ||||||||
Interest income: | ||||||||||
Loans receivable | $ 76,087 | 70,820 | 70,985 | |||||||
Mortgage-backed securities | 2,230 | 2,504 | 2,058 | |||||||
Taxable investment securities | 1,689 | 1,456 | 1,604 | |||||||
Tax-free investment securities | 986 | 1,561 | 1,143 | |||||||
Interest-earning deposits | 99 | 187 | 180 | |||||||
Total interest income | 81,091 | 76,528 | 75,970 | |||||||
Interest expense: | ||||||||||
Deposits | 6,163 | 6,305 | 5,691 | |||||||
Borrowed funds | 7,987 | 7,882 | 8,101 | |||||||
Total interest expense | 14,150 | 14,187 | 13,792 | |||||||
Net interest income | 66,941 | 62,341 | 62,178 | |||||||
Provision for loan losses | 3,167 | 3,466 | 1,050 | |||||||
Net interest income after provision for loan losses | 63,774 | 58,875 | 61,128 | |||||||
Noninterest income: | ||||||||||
Gain on sale of investments | 260 | 852 | 566 | |||||||
Service charges and fees | 9,945 | 9,665 | 9,228 | |||||||
Trust and other financial services income | 3,062 | 2,976 | 3,094 | |||||||
Insurance commission income | 2,398 | 1,778 | 2,210 | |||||||
Loss on real estate owned, net | (246) | (240) | (541) | |||||||
Income from bank owned life insurance | 1,166 | 1,083 | 1,008 | |||||||
Mortgage banking income | 267 | 239 | 218 | |||||||
Other operating income | 1,288 | 1,384 | 742 | |||||||
Total noninterest income | 18,140 | 17,737 | 16,525 | |||||||
Noninterest expense: | ||||||||||
Compensation and employee benefits | 31,000 | 28,047 | 28,920 | |||||||
Premises and occupancy costs | 6,072 | 5,642 | 5,899 | |||||||
Office operations | 3,892 | 3,419 | 3,508 | |||||||
Processing expenses | 8,126 | 6,723 | 7,392 | |||||||
Marketing expenses | 1,691 | 2,211 | 3,190 | |||||||
Federal deposit insurance premiums | 1,177 | 1,242 | 1,286 | |||||||
Professional services | 1,529 | 1,854 | 1,652 | |||||||
Amortization of intangible assets | 422 | 330 | 269 | |||||||
Real estate owned expense | 471 | 636 | 514 | |||||||
Acquisition expense | 7,590 | - | 467 | |||||||
Other expense | 1,834 | 3,250 | 2,038 | |||||||
Total noninterest expense | 63,804 | 53,354 | 55,135 | |||||||
Income before income taxes | 18,110 | 23,258 | 22,518 | |||||||
Income tax expense | 5,238 | 5,926 | 7,213 | |||||||
Net income | $ 12,872 | 17,332 | 15,305 | |||||||
Basic earnings per share | $ 0.14 | 0.19 | 0.17 | |||||||
Diluted earnings per share | $ 0.13 | 0.19 | 0.17 | |||||||
Annualized return on average equity | 4.54% | 6.43% | 5.77% | |||||||
Annualized return on average assets | 0.59% | 0.87% | 0.78% | |||||||
Basic common shares outstanding | 95,256,807 | 91,745,512 | 91,538,172 | |||||||
Diluted common shares outstanding | 95,825,798 | 92,118,154 | 91,998,005 | |||||||
Northwest Bancshares, Inc. and Subsidiaries | ||||||||
Consolidated Statements of Income | ||||||||
(Dollars in thousands, except per share amounts) | ||||||||
Nine months ended | ||||||||
September 30, | ||||||||
2015 | 2014 | |||||||
Interest income: | ||||||||
Loans receivable | $ 217,783 | 210,868 | ||||||
Mortgage-backed securities | 6,522 | 7,963 | ||||||
Taxable investment securities | 5,741 | 4,523 | ||||||
Tax-free investment securities | 3,477 | 4,814 | ||||||
Interest-earning deposits | 418 | 673 | ||||||
Total interest income | 233,941 | 228,841 | ||||||
Interest expense: | ||||||||
Deposits | 17,620 | 19,216 | ||||||
Borrowed funds | 24,221 | 23,389 | ||||||
Total interest expense | 41,841 | 42,605 | ||||||
Net interest income | 192,100 | 186,236 | ||||||
Provision for loan losses | 5,117 | 19,236 | ||||||
Net interest income after provision for loan losses | 186,983 | 167,000 | ||||||
Noninterest income: | ||||||||
Gain on sale of investments | 921 | 4,549 | ||||||
Service charges and fees | 27,832 | 27,115 | ||||||
Trust and other financial services income | 8,932 | 9,078 | ||||||
Insurance commission income | 7,036 | 6,579 | ||||||
Loss on real estate owned, net | (1,833) | (937) | ||||||
Income from bank owned life insurance | 3,087 | 3,134 | ||||||
Mortgage banking income | 725 | 753 | ||||||
Other operating income | 2,590 | 3,274 | ||||||
Total noninterest income | 49,290 | 53,545 | ||||||
Noninterest expense: | ||||||||
Compensation and employee benefits | 87,815 | 84,562 | ||||||
Premises and occupancy costs | 18,238 | 17,939 | ||||||
Office operations | 11,080 | 11,044 | ||||||
Processing expenses | 22,723 | 19,951 | ||||||
Marketing expenses | 6,857 | 6,779 | ||||||
Federal deposit insurance premiums | 3,810 | 3,877 | ||||||
Professional services | 4,973 | 5,691 | ||||||
Amortization of intangible assets | 959 | 992 | ||||||
Real estate owned expense | 1,677 | 1,734 | ||||||
Acquisition expense | 8,404 | - | ||||||
Other expense | 6,114 | 7,754 | ||||||
Total noninterest expense | 172,650 | 160,323 | ||||||
Income before income taxes | 63,623 | 60,222 | ||||||
Income tax expense | 19,276 | 15,605 | ||||||
Net income | $ 44,347 | 44,617 | ||||||
Basic earnings per share | $ 0.48 | 0.49 | ||||||
Diluted earnings per share | $ 0.48 | 0.48 | ||||||
Annualized return on average equity | 5.47% | 5.44% | ||||||
Annualized return on average assets | 0.73% | 0.75% | ||||||
Basic common shares outstanding | 92,822,720 | 91,465,986 | ||||||
Diluted common shares outstanding | 93,256,099 | 92,333,110 | ||||||
Northwest Bancshares, Inc. and Subsidiaries | ||||||||||||||||
Reconciliation of Non-GAAP to GAAP Net Income * | ||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Quarter ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating results (non-GAAP): | ||||||||||||||||
Net interest income | $ | 66,941 | 62,341 | 192,100 | 186,236 | |||||||||||
Provision for loan losses | 3,167 | 3,466 | 5,117 | 19,236 | ||||||||||||
Noninterest income | 18,140 | 17,737 | 49,290 | 53,545 | ||||||||||||
Noninterest expense | 56,214 | 53,354 | 164,246 | 160,323 | ||||||||||||
Income taxes | 7,844 | 5,926 | 22,128 | 15,605 | ||||||||||||
Net operating income (non-GAAP) | $ | 17,856 | 17,332 | 49,899 | 44,617 | |||||||||||
Diluted earnings per share (non-GAAP) | $ | 0.19 | 0.19 | 0.54 | 0.49 | |||||||||||
Reconciliation of net operating income to net income: | ||||||||||||||||
Net operating income (non-GAAP) | $ | 17,856 | 17,332 | 49,899 | 44,617 | |||||||||||
Nonoperating expenses, net of tax: | ||||||||||||||||
Acquisition expenses | (4,984) | - | (5,552) | - | ||||||||||||
Net income (GAAP) | $ | 12,872 | 17,332 | 44,347 | 44,617 | |||||||||||
Diluted earnings per share (GAAP) | $ | 0.13 | 0.19 | 0.48 | 0.48 | |||||||||||
*- | 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 acquisition expenses net of tax benefit. The Company believe 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 | ||||||||||
(Dollars in thousands) | ||||||||||
September 30, | June 30, | September 30, | December 31, | |||||||
Nonaccrual loans current: | ||||||||||
Residential mortgage loans | $ 1,900 | $ 1,655 | 1,645 | 1,169 | ||||||
Home equity loans | 1,471 | 1,345 | 1,542 | 1,527 | ||||||
Other consumer loans | 251 | 171 | 108 | 88 | ||||||
Commercial real estate loans | 19,602 | 8,596 | 24,193 | 25,657 | ||||||
Commercial loans | 4,877 | 5,096 | 9,775 | 3,963 | ||||||
Total nonaccrual loans current | $ 28,101 | $ 16,863 | 37,263 | 32,404 | ||||||
Nonaccrual loans delinquent 30 days to 59 days: | ||||||||||
Residential mortgage loans | $ - | $ - | 27 | 1,545 | ||||||
Home equity loans | 392 | 49 | 355 | 712 | ||||||
Other consumer loans | 155 | 77 | 149 | 48 | ||||||
Commercial real estate loans | 359 | 867 | 2,059 | 1,128 | ||||||
Commercial loans | 131 | 186 | 485 | 9 | ||||||
Total nonaccrual loans delinquent 30 days to 59 days | $ 1,037 | $ 1,179 | 3,075 | 3,442 | ||||||
Nonaccrual loans delinquent 60 days to 89 days: | ||||||||||
Residential mortgage loans | $ 1,097 | $ 1,197 | 782 | 784 | ||||||
Home equity loans | 260 | 472 | 585 | 724 | ||||||
Other consumer loans | 156 | 191 | 52 | 234 | ||||||
Commercial real estate loans | 416 | 504 | 1,476 | 763 | ||||||
Commercial loans | 11 | 119 | 660 | 131 | ||||||
Total nonaccrual loans delinquent 60 days to 89 days | $ 1,940 | $ 2,483 | 3,555 | 2,636 | ||||||
Nonaccrual loans delinquent 90 days or more: | ||||||||||
Residential mortgage loans | $ 16,510 | $ 16,125 | 20,319 | 17,696 | ||||||
Home equity loans | 4,546 | 4,616 | 6,802 | 6,606 | ||||||
Other consumer loans | 3,132 | 2,199 | 2,098 | 2,450 | ||||||
Commercial real estate loans | 10,565 | 12,673 | 13,552 | 11,099 | ||||||
Commercial loans | 2,074 | 1,858 | 3,162 | 3,475 | ||||||
Total nonaccrual loans delinquent 90 days or more | $ 36,827 | $ 37,471 | 45,933 | 41,326 | ||||||
Total nonaccrual loans | $ 67,905 | $ 57,996 | 89,826 | 79,808 | ||||||
September 30, | June 30, | September 30, | December 31, | |||||||
2015 | 2015 | 2014 | 2014 | |||||||
Nonaccrual loans | $ 67,905 | $ 57,996 | 89,826 | 79,808 | ||||||
Loans 90 days past maturity and still accruing | 680 | 385 | 390 | 235 | ||||||
Nonperforming loans | 68,585 | 58,381 | 90,216 | 80,043 | ||||||
Real estate owned, net | 10,391 | 13,864 | 15,007 | 16,759 | ||||||
Nonperforming assets | $ 78,976 | $ 72,245 | 105,223 | 96,802 | ||||||
Nonaccrual troubled debt restructuring * | $ 23,184 | $ 15,443 | 21,871 | 24,459 | ||||||
Accruing troubled debt restructuring | 26,154 | 40,741 | 39,995 | 37,329 | ||||||
Total troubled debt restructuring | $ 49,338 | $ 56,184 | 61,866 | 61,788 | ||||||
Nonperforming loans to total loans | 0.96% | 0.95% | 1.51% | 1.34% | ||||||
Nonperforming assets to total assets | 0.88% | 0.92% | 1.34% | 1.25% | ||||||
Allowance for loan losses to total loans | 0.85% | 0.96% | 1.20% | 1.13% | ||||||
Allowance for loan losses to nonperforming loans | 94.54% | 101.16% | 79.42% | 84.35% | ||||||
* Amounts included in nonperforming loans above. | ||||||||||
Northwest Bancshares, Inc. and Subsidiaries | |||||||||||||||
Loans by credit quality indicators as of September 30, 2015 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Recorded | |||||||||||||||
investment | |||||||||||||||
Special | in loans | ||||||||||||||
Pass | mention * | Substandard ** | Doubtful | Loss | receivable | ||||||||||
Personal Banking: | |||||||||||||||
Residential mortgage loans | $ 2,699,670 | - | 11,512 | - | 1,355 | 2,712,537 | |||||||||
Home equity loans | 1,198,779 | - | 4,411 | - | - | 1,203,190 | |||||||||
Other consumer loans | 492,023 | - | 2,691 | - | - | 494,714 | |||||||||
Total Personal Banking | 4,390,472 | - | 18,614 | - | 1,355 | 4,410,441 | |||||||||
Business Banking: | |||||||||||||||
Commercial real estate loans | 2,154,439 | 33,339 | 143,086 | - | - | 2,330,864 | |||||||||
Commercial loans | 353,366 | 19,364 | 37,413 | 165 | - | 410,308 | |||||||||
Total Business Banking | 2,507,805 | 52,703 | 180,499 | 165 | - | 2,741,172 | |||||||||
$ 6,898,277 | 52,703 | 199,113 | 165 | 1,355 | 7,151,613 | ||||||||||
* - Includes $533,000 of acquired loans. | |||||||||||||||
** - Includes $18.5 million of acquired loans. | |||||||||||||||
Northwest Bancshares, Inc. and Subsidiaries | |||||||||||||||
Loans by credit quality indicators as of December 31, 2014 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Recorded | |||||||||||||||
investment | |||||||||||||||
Special | in loans | ||||||||||||||
Pass | mention | Substandard | Doubtful | Loss | receivable | ||||||||||
Personal Banking: | |||||||||||||||
Residential mortgage loans | $ 2,507,269 | - | 12,763 | - | 1,424 | 2,521,456 | |||||||||
Home equity loans | 1,059,525 | - | 6,606 | - | - | 1,066,131 | |||||||||
Other consumer loans | 240,947 | - | 1,797 | - | - | 242,744 | |||||||||
Total Personal Banking | 3,807,741 | - | 21,166 | - | 1,424 | 3,830,331 | |||||||||
Business Banking: | |||||||||||||||
Commercial real estate loans | 1,618,269 | 36,908 | 145,502 | 505 | - | 1,801,184 | |||||||||
Commercial loans | 286,234 | 23,690 | 46,280 | 2,172 | - | 358,376 | |||||||||
Total Business Banking | 1,904,503 | 60,598 | 191,782 | 2,677 | - | 2,159,560 | |||||||||
$ 5,712,244 | 60,598 | 212,948 | 2,677 | 1,424 | 5,989,891 | ||||||||||
Northwest Bancshares, Inc. and Subsidiaries | |||||||||||||||||
Delinquency | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Loan delinquency schedule | |||||||||||||||||
(Number of loans and dollar amount of loans) | |||||||||||||||||
September 30, | June 30, | September 30, | December 31, | ||||||||||||||
2015 | * | 2015 | * | 2014 | * | 2014 | * | ||||||||||
Loans delinquent 30 days to 59 days: | |||||||||||||||||
Residential mortgage loans | 75 | $ 3,644 | 0.1% | 64 | $ 3,250 | 0.1% | 79 | $ 4,241 | 0.2% | 377 | $ 27,443 | 1.1% | |||||
Home equity loans | 149 | 5,770 | 0.5% | 112 | 3,768 | 0.4% | 151 | 5,856 | 0.5% | 161 | 5,752 | 0.5% | |||||
Consumer loans | 1,214 | 6,324 | 1.3% | 1,103 | 5,116 | 2.0% | 1,105 | 5,076 | 2.1% | 1,193 | 5,572 | 2.3% | |||||
Commercial real estate loans | 55 | 7,463 | 0.3% | 39 | 3,788 | 0.2% | 69 | 5,888 | 0.3% | 56 | 4,956 | 0.3% | |||||
Commercial loans | 21 | 1,379 | 0.3% | 21 | 1,363 | 0.4% | 22 | 1,413 | 0.4% | 26 | 2,262 | 0.6% | |||||
Total loans delinquent 30 days to 59 days | 1,514 | $ 24,580 | 0.3% | 1,339 | $ 17,285 | 0.3% | 1,426 | $ 22,474 | 0.4% | 1,813 | $ 45,985 | 0.8% | |||||
Loans delinquent 60 days to 89 days: | |||||||||||||||||
Residential mortgage loans | 83 | $ 5,193 | 0.2% | 70 | $ 5,815 | 0.2% | 87 | $ 6,558 | 0.3% | 100 | $ 6,970 | 0.3% | |||||
Home equity loans | 52 | 1,716 | 0.1% | 39 | 2,090 | 0.2% | 54 | 1,727 | 0.2% | 49 | 1,672 | 0.2% | |||||
Consumer loans | 512 | 2,593 | 0.5% | 442 | 1,767 | 0.7% | 467 | 1,958 | 0.8% | 525 | 2,435 | 1.0% | |||||
Commercial real estate loans | 28 | 8,368 | 0.4% | 30 | 4,919 | 0.3% | 31 | 2,762 | 0.2% | 21 | 2,038 | 0.1% | |||||
Commercial loans | 8 | 401 | 0.1% | 7 | 159 | 0.0% | 13 | 970 | 0.2% | 4 | 209 | 0.1% | |||||
Total loans delinquent 60 days to 89 days | 683 | $ 18,271 | 0.3% | 588 | $ 14,750 | 0.2% | 652 | $ 13,975 | 0.2% | 699 | $ 13,324 | 0.2% | |||||
Loans delinquent 90 days or more: ** | |||||||||||||||||
Residential mortgage loans | 204 | $ 17,209 | 0.6% | 203 | $ 16,125 | 0.6% | 251 | $ 20,319 | 0.8% | 225 | $ 17,696 | 0.7% | |||||
Home equity loans | 136 | 5,554 | 0.5% | 104 | 4,616 | 0.4% | 159 | 6,802 | 0.6% | 139 | 6,606 | 0.6% | |||||
Consumer loans | 570 | 3,156 | 0.6% | 440 | 2,199 | 0.9% | 465 | 2,098 | 0.9% | 539 | 2,450 | 1.0% | |||||
Commercial real estate loans | 95 | 14,898 | 0.6% | 76 | 12,673 | 0.7% | 110 | 13,552 | 0.8% | 102 | 11,099 | 0.6% | |||||
Commercial loans | 23 | 2,319 | 0.6% | 13 | 1,858 | 0.5% | 25 | 3,162 | 0.8% | 25 | 3,475 | 1.0% | |||||
Total loans delinquent 90 days or more | 1,028 | $ 43,136 | 0.6% | 836 | $ 37,471 | 0.6% | 1,010 | $ 45,933 | 0.8% | 1,030 | $ 41,326 | 0.7% | |||||
Total loans delinquent | 3,225 | $ 85,987 | 1.2% | 2,763 | $ 69,506 | 1.1% | 3,088 | $ 82,382 | 1.4% | 3,542 | $ 100,635 | 1.7% | |||||
* - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding. | |||||||||||||||||
** - Includes $6.3 million of acquired loans considered to be accruing. At September 30, 2015, we expect to fully collect the carrying value of our acquired loans and have | |||||||||||||||||
determined that we can reasonably estimate their future cash flows including those loans that are 90 days or more delinquent. As a result, we do not consider our | |||||||||||||||||
acquired loans that are 90 days or more delinquent to be nonaccrual or impaired and continue to recognize interest income on these loans including the loans' | |||||||||||||||||
accretable discount. | |||||||||||||||||
Northwest Bancshares, Inc. and Subsidiaries | ||||||||||
Allowance for loan losses | ||||||||||
(Dollars in thousands) | ||||||||||
Quarter ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2015 | 2014 | 2015 | 2014 | |||||||
Allowance for loan losses | ||||||||||
Beginning balance | $ 59,057 | 71,442 | 67,518 | 71,348 | ||||||
Provision | 3,167 | 3,466 | 5,117 | 19,236 | ||||||
Charge-offs residential mortgage | (342) | (352) | (955) | (1,694) | ||||||
Charge-offs home equity | (443) | (325) | (1,327) | (1,290) | ||||||
Charge-offs other consumer | (2,014) | (1,446) | (5,713) | (4,612) | ||||||
Charge-offs commercial real estate | (558) | (2,199) | (5,110) | (5,709) | ||||||
Charge-offs commercial | (595) | (360) | (7,675) | (10,646) | ||||||
Recoveries | 2,275 | 1,424 | 8,692 | 5,017 | ||||||
Ending balance | $ 60,547 | 71,650 | 60,547 | 71,650 | ||||||
Net charge-offs to average loans, annualized | 0.10% | 0.22% | 0.26% | 0.43% | ||||||
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 September 30, | ||||||
2015 | 2014 | |||||
Avg. | Avg. | |||||
Average | Yield/ | Average | Yield/ | |||
Balance | Interest | Cost (g) | Balance | Interest | Cost (g) | |
Assets: | ||||||
Interest-earning assets: | ||||||
Loans receivable (a) (b) (d) | $ 6,584,664 | 76,583 | 4.66% | $ 5,912,890 | 71,306 | 4.78% |
Mortgage-backed securities (c) | 498,757 | 2,230 | 1.79% | 569,482 | 2,504 | 1.76% |
Investment securities (c) (d) | 482,666 | 2,754 | 2.28% | 488,893 | 3,405 | 2.79% |
FHLB stock | 39,552 | 451 | 4.52% | 43,986 | 452 | 4.11% |
Other interest-earning deposits | 162,041 | 99 | 0.24% | 323,447 | 187 | 0.23% |
Total interest-earning assets | 7,767,680 | 82,117 | 4.24% | 7,338,698 | 77,854 | 4.24% |
Noninterest earning assets (e) | 846,439 | 537,065 | ||||
Total assets | $ 8,614,119 | $ 7,875,763 | ||||
Liabilities and shareholders' equity: | ||||||
Interest-bearing liabilities: | ||||||
Savings deposits | $ 1,324,620 | 865 | 0.26% | $ 1,228,105 | 834 | 0.27% |
Interest-bearing demand deposits | 1,022,585 | 149 | 0.06% | 899,231 | 152 | 0.07% |
Money market deposit accounts | 1,217,122 | 825 | 0.27% | 1,187,024 | 802 | 0.27% |
Time deposits | 1,577,159 | 4,324 | 1.09% | 1,553,867 | 4,517 | 1.15% |
Borrowed funds (f) | 906,410 | 6,713 | 2.94% | 876,034 | 6,700 | 3.03% |
Junior subordinated debentures | 111,213 | 1,274 | 4.48% | 103,094 | 1,182 | 4.49% |
Total interest-bearing liabilities | 6,159,109 | 14,150 | 0.91% | 5,847,355 | 14,187 | 0.96% |
Noninterest-bearing demand deposits | 1,054,270 | 891,842 | ||||
Noninterest bearing liabilities | 275,435 | 66,432 | ||||
Total liabilities | 7,488,814 | 6,805,629 | ||||
Shareholders' equity | 1,125,305 | 1,070,134 | ||||
Total liabilities and shareholders' equity | $ 8,614,119 | $ 7,875,763 | ||||
Net interest income/ Interest rate spread | 67,967 | 3.33% | 63,667 | 3.28% | ||
Net interest-earning assets/ Net interest margin | $ 1,608,571 | 3.50% | $ 1,491,343 | 3.47% | ||
Ratio of interest-earning assets to | ||||||
interest-bearing liabilities | 1.26X | 1.26X | ||||
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status, and adjustments for acquired loans. | ||||||
(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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.63% and 4.75%, respectively, Investment securities - 1.84% | ||||||
and 2.10%, respectively, Interest-earning assets - 4.19% and 4.17%, respectively. GAAP basis net interest rate spreads were 3.28% and | ||||||
3.21%, respectively, and GAAP basis net interest margins were 3.45% and 3.40%, 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. | ||||||
Nine months ended September 30, | ||||||
2015 | 2014 | |||||
Avg. | Avg. | |||||
Average | Yield/ | Average | Yield/ | |||
Balance | Interest | Cost (g) | Balance | Interest | Cost (g) | |
Assets: | ||||||
Interest-earning assets: | ||||||
Loans receivable (a) (b) (d) | $ 6,228,049 | 219,210 | 4.71% | $ 5,856,940 | 212,437 | 4.85% |
Mortgage-backed securities (c) | 494,416 | 6,522 | 1.76% | 597,042 | 7,963 | 1.78% |
Investment securities (c) (d) | 483,792 | 8,761 | 2.41% | 501,120 | 10,504 | 2.79% |
FHLB stock (h) | 37,112 | 1,289 | 4.64% | 43,882 | 1,425 | 4.33% |
Other interest-earning deposits | 217,232 | 418 | 0.25% | 352,370 | 673 | 0.25% |
Total interest-earning assets | 7,460,601 | 236,200 | 4.23% | 7,351,354 | 233,002 | 4.23% |
Noninterest earning assets (e) | 664,830 | 563,902 | ||||
Total assets | $ 8,125,431 | $ 7,915,256 | ||||
Liabilities and shareholders' equity: | ||||||
Interest-bearing liabilities: | ||||||
Savings deposits | $ 1,273,724 | 2,516 | 0.26% | $ 1,225,411 | 2,459 | 0.27% |
Interest-bearing demand deposits | 1,025,896 | 411 | 0.06% | 882,465 | 440 | 0.07% |
Money market deposit accounts | 1,176,446 | 2,349 | 0.27% | 1,181,056 | 2,376 | 0.27% |
Time deposits | 1,395,165 | 12,344 | 1.11% | 1,598,870 | 13,941 | 1.17% |
Borrowed funds (f) | 932,123 | 20,617 | 2.96% | 876,606 | 19,880 | 3.03% |
Junior subordinated debentures | 105,800 | 3,604 | 4.49% | 103,094 | 3,509 | 4.49% |
Total interest-bearing liabilities | 5,909,154 | 41,841 | 0.95% | 5,867,502 | 42,605 | 0.97% |
Noninterest-bearing demand deposits | 975,904 | 853,294 | ||||
Noninterest bearing liabilities | 156,247 | 98,877 | ||||
Total liabilities | 7,041,305 | 6,819,673 | ||||
Shareholders' equity | 1,084,126 | 1,095,583 | ||||
Total liabilities and shareholders' equity | $ 8,125,431 | $ 7,915,256 | ||||
Net interest income/ Interest rate spread | 194,359 | 3.28% | 190,397 | 3.26% | ||
Net interest-earning assets/ Net interest margin | $ 1,551,447 | 3.47% | $ 1,483,852 | 3.45% | ||
Ratio of interest-earning assets to | ||||||
interest-bearing liabilities | 1.26X | 1.25X | ||||
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status, and adjustments for acquired loans. | ||||||
(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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.68% and 4.81%, respectively, Investment securities - 1.90% | ||||||
and 2.11%, respectively, Interest-earning assets - 4.17% and 4.15%, respectively. GAAP basis net interest rate spreads were 3.22% and | ||||||
3.18%, respectively, and GAAP basis net interest margins were 3.41% and 3.38%, respectively. | ||||||
(h) Excludes a $1.0 million special dividend paid in February 2015 from the average yield calculation. | ||||||
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 | Quarter ended | |||||
September 30, 2015 | June 30, 2015 | |||||
Avg. | Avg. | |||||
Average | Yield/ | Average | Yield/ | |||
Balance | Interest | Cost (g) | Balance | Interest | Cost (g) | |
Assets: | ||||||
Interest-earning assets: | ||||||
Loans receivable (a) (b) (d) | $ 6,584,664 | 76,583 | 4.66% | $ 6,073,911 | 71,445 | 4.72% |
Mortgage-backed securities (c) | 498,757 | 2,230 | 1.79% | 477,800 | 2,058 | 1.72% |
Investment securities (c) (d) | 482,666 | 2,754 | 2.28% | 482,670 | 2,887 | 2.39% |
FHLB stock | 39,552 | 451 | 4.52% | 35,608 | 475 | 5.35% |
Other interest-earning deposits | 162,041 | 99 | 0.24% | 272,691 | 180 | 0.26% |
Total interest-earning assets | 7,767,680 | 82,117 | 4.24% | 7,342,680 | 77,045 | 4.21% |
Noninterest earning assets (e) | 846,439 | 529,528 | ||||
Total assets | $ 8,614,119 | $ 7,872,208 | ||||
Liabilities and shareholders' equity: | ||||||
Interest-bearing liabilities: | ||||||
Savings deposits | $ 1,324,620 | 865 | 0.26% | $ 1,263,785 | 838 | 0.27% |
Interest-bearing demand deposits | 1,022,585 | 149 | 0.06% | 920,071 | 131 | 0.06% |
Money market deposit accounts | 1,217,122 | 825 | 0.27% | 1,147,017 | 759 | 0.27% |
Time deposits | 1,577,159 | 4,324 | 1.09% | 1,409,740 | 3,963 | 1.13% |
Borrowed funds (f) | 906,410 | 6,713 | 2.94% | 929,744 | 6,929 | 2.99% |
Junior subordinated debentures | 111,213 | 1,274 | 4.48% | 103,094 | 1,172 | 4.50% |
Total interest-bearing liabilities | 6,159,109 | 14,150 | 0.91% | 5,773,451 | 13,792 | 0.96% |
Noninterest-bearing demand deposits | 1,054,270 | 957,912 | ||||
Noninterest bearing liabilities | 275,435 | 77,075 | ||||
Total liabilities | 7,488,814 | 6,808,438 | ||||
Shareholders' equity | 1,125,305 | 1,063,770 | ||||
Total liabilities and shareholders' equity | $ 8,614,119 | $ 7,872,208 | ||||
Net interest income/ Interest rate spread | 67,967 | 3.33% | 63,253 | 3.25% | ||
Net interest-earning assets/ Net interest margin | $ 1,608,571 | 3.50% | $ 1,569,229 | 3.45% | ||
Ratio of interest-earning assets to | ||||||
interest-bearing liabilities | 1.26X | 1.27X | ||||
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status, and adjustments for acquired loans. | ||||||
(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) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.63% and 4.69%, respectively, Investment securities -1.84% | ||||||
and 1.88%, respectively, Interest-earning assets - 4.19% and 4.15%, respectively. GAAP basis net interest rate spreads were 3.28% and | ||||||
3.19%, respectively, and GAAP basis net interest margins were 3.45% and 3.39%, respectively. | ||||||
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SOURCE Northwest Bancshares, Inc.
