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Northwest Bancshares, Inc. Announces Fourth Quarter 2018 Earnings and Quarterly Dividend Increase

Company Release - 1/22/2019 9:00 AM ET

WARREN, Pa., Jan. 22, 2019 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2018 of $26.5 million, or $0.26 per diluted share. This represents an increase of $4.3 million, or 19.5%, compared to the same quarter last year when net income was $22.1 million or $0.22 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2018 were 8.44% and 1.09% compared to 7.31% and 0.94% for the same quarter last year.

Northwest Bank (PRNewsfoto/Northwest Bank)

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.18 per share payable on February 14, 2019, to shareholders of record as of February 1, 2019. This is a 5.9% increase over the prior quarter and represents the 97th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of December 31, 2018, this dividend represents an annualized yield of approximately 4.25%.

In making this announcement, Ronald J. Seiffert, President and CEO, noted, "We are very pleased with both the fourth quarter and annual results for 2018 and are equally excited about our momentum going into 2019.  Despite the challenges that we and most of the industry have been facing regarding commercial loan growth and elevated payoff levels, we were pleased that many of these payoffs allowed us to reduce our substandard loans by over $54 million, or 22.7%.  We were still able to grow loans $258 million, or 3.3%, during the year because of our diversity and ability to augment our commercial loan growth with both direct and indirect retail lending.  Our net interest margin remained flat for the year at a healthy 3.94%, despite four market rate increases and a flattening yield curve.  Finally, having now received all regulatory approvals, we look forward to closing the acquisition and conversion of Union Community Bank on the weekend of March 8, 2019 and to welcoming their employees and customers to the Northwest family."

Net interest income increased by $2.6 million, or 3.1%, to $86.8 million for the quarter ended December 31, 2018, from $84.2 million for the quarter ended December 31, 2017. This increase is due primarily to a $5.4 million, or 6.1%, increase in interest income on loans receivable and a $926,000, or 30.7%, increase in interest income on mortgage-backed securities. These increases were primarily due to increases of $234.8 million, or 3.0%, and $38.0 million, or 6.5%, in the average balances of loans and mortgage-backed securities, respectively. Additionally, the average yield on loans and mortgage-backed securities increased by 12 and 47 basis points, respectively, over the prior year.

The provision for loan losses decreased by $2.7 million, or 41.9%, to $3.8 million for the quarter ended December 31, 2018, from $6.5 million for the quarter ended December 31, 2017. This decrease is due primarily to a reduction in loans risk rated as substandard of $53.7 million, or 22.7%, from $237.8 million at December 31, 2017 to $184.1 million at December 31, 2018.

Noninterest income increased by $343,000, or 1.5%, to $23.2 million for the quarter ended December 31, 2018, from $22.9 million for the quarter ended December 31, 2017. Contributing to this increase was a $658,000 increase in other operating income as a result of fees earned from debit/credit card volume-based incentives and a $300,000 increase in income from service charges and fees as a result of increased transaction volume. Additionally, the Company realized a gain of $4,000 on the sale of investments during the quarter ended December 31, 2018 as compared to a loss of $369,000 a year ago. Partially offsetting these increases was a decrease in income from bank owned life insurance of $1.3 million as a result of death benefits received during the prior year.

Noninterest expense increased by $377,000, or 0.5%, to $72.3 million for the quarter ended December 31, 2018, from $71.9 million for the quarter ended December 31, 2017. This increase resulted primarily from a $1.4 million, or 56.7%, increase in other expense due primarily to an increase in the reserve for unfunded loan commitments. Partially offsetting this increase was a decline in premises and occupancy costs of $726,000, or 10.0%, and a decline in office operations expense of $556,000, or 13.9%, primarily as a result of initiatives made during 2017 such as the sale of the Maryland branches, closure of the consumer finance company and divestiture of the retirement services subsidiary, the full benefits of which were recognized in 2018.

Income tax expense increased by $971,000, or 14.8%, to $7.5 million for the quarter ended December 31, 2018, from $6.6 million for the quarter ended December 31, 2017. This increase resulted primarily from an increase in income before taxes of $5.3 million, or 18.4%, to $34.0 million for the quarter ended December 31, 2018 from $28.7 million for the quarter ended December 31, 2017.

Net income for the year ended December 31, 2018 was $105.5 million, or $1.02 per diluted share, which represents an increase of $11.0 million, or 11.7%, compared to the year ended December 31, 2017, when net income was $94.5 million, or $0.92 per diluted share. The returns on average shareholders' equity and average assets for the year ended December 31, 2018 were 8.61% and 1.11%, respectively, compared to 7.95% and 0.99% for the same period last year.  This increase in net income was the result of an increase in net interest income after provision for loan losses of $7.3 million, or 2.3%, a decrease in noninterest expense of $9.5 million, or 3.3%, and a lower effective tax rate as prescribed by the Tax Cuts and Jobs Act.

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 162 full-service community banking offices and ten 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)



December 31,
 2018


September 30,
 2018


December 31,
 2017

Assets






Cash and cash equivalents

$

68,789



73,946



77,710


Marketable securities available-for-sale (amortized cost of $811,015, $829,345 and $800,094, respectively)

801,450



811,556



792,535


Marketable securities held-to-maturity (fair value of $22,446, $23,534 and $29,667, respectively)

22,765



24,222



29,678


Total cash and cash equivalents and marketable securities

893,004



909,724



899,923








Residential mortgage loans held-for-sale





3,128


Residential mortgage loans

2,864,470



2,846,834



2,773,075


Home equity loans

1,258,422



1,272,345



1,310,355


Consumer loans

859,713



776,049



671,389


Commercial real estate loans

2,471,821



2,518,066



2,454,726


Commercial loans

597,013



582,768



580,736


Total loans receivable

8,051,439



7,996,062



7,793,409


Allowance for loan losses

(55,214)



(55,975)



(56,795)


Loans receivable, net

7,996,225



7,940,087



7,736,614








Federal Home Loan Bank stock, at cost

15,635



15,452



11,733


Accrued interest receivable

24,490



25,798



23,352


Real estate owned, net

2,498



2,486



5,666


Premises and equipment, net

143,390



144,612



151,944


Bank owned life insurance

171,079



170,042



171,547


Goodwill

307,420



307,420



307,420


Other intangible assets

19,821



21,167



25,669


Other assets

34,211



38,543



30,066


Total assets

$

9,607,773



9,575,331



9,363,934








Liabilities and Shareholders' equity






Liabilities






Noninterest-bearing demand deposits

$

1,736,156



1,724,202



1,610,409


Interest-bearing demand deposits

1,455,460



1,499,344



1,442,928


Money market deposit accounts

1,661,623



1,676,845



1,707,450


Savings deposits

1,636,099



1,650,357



1,653,579


Time deposits

1,404,841



1,403,205



1,412,623


Total deposits

7,894,179



7,953,953



7,826,989








Borrowed funds

234,389



179,117



108,238


Advances by borrowers for taxes and insurance

43,298



23,297



40,825


Accrued interest payable

744



627



460


Other liabilities

66,312



66,448



68,485


Junior subordinated debentures

111,213



111,213



111,213


Total liabilities

8,350,135



8,334,655



8,156,210








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, 103,354,030 shares, 103,293,480 shares, and 102,394,828 issued and outstanding, respectively

1,034



1,033



1,027


Paid-in-capital

745,926



742,863



730,719


Retained earnings

550,374



541,469



508,058


Accumulated other comprehensive loss

(39,696)



(44,689)



(32,080)


Total shareholders' equity

1,257,638



1,240,676



1,207,724


Total liabilities and shareholders' equity

$

9,607,773



9,575,331



9,363,934








Equity to assets

13.09

%


12.96

%


12.90

%

Tangible common equity to assets

10.03

%


9.86

%


9.68

%

Book value per share

$

12.17



12.01



11.79


Tangible book value per share

$

9.00



8.83



8.54


Closing market price per share

$

16.94



17.32



16.73


Full time equivalent employees

2,128



2,133



2,106


Number of banking offices

172



172



172



 

 

 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share amounts)



Quarter ended


December 31,


September 30,


June 30,


March 31,


December 31,


2018


2018


2018


2018


2017

Interest income:










Loans receivable

$

92,512



90,733



88,106



85,220



87,154


Mortgage-backed securities

3,942



3,572



3,254



3,013



3,016


Taxable investment securities

924



814



648



678



805


Tax-free investment securities

170



205



313



390



449


FHLB dividends

151



119



85



97



78


Interest-earning deposits

69



162



469



135



59


Total interest income

97,768



95,605



92,875



89,533



91,561












Interest expense:










Deposits

8,985



8,233



7,309



6,458



5,971


Borrowed funds

1,952



1,555



1,340



1,308



1,350


Total interest expense

10,937



9,788



8,649



7,766



7,321












Net interest income

86,831



85,817



84,226



81,767



84,240


Provision for loan losses

3,792



6,982



5,349



4,209



6,525


Net interest income after provision for loan losses

83,039



78,835



78,877



77,558



77,715












Noninterest income:










Gain/ (loss) on sale of investments

4







153



(369)


Service charges and fees

12,827



13,158



12,908



11,899



12,527


Trust and other financial services income

4,246



4,254



4,050



4,031



4,290


Insurance commission income

1,906



2,046



2,090



2,749



1,874


Gain/ (loss) on real estate owned, net

(14)



(247)



176



(546)



(307)


Income from bank owned life insurance

1,038



1,460



2,333



990



2,295


Mortgage banking income

213



82



77



224



225


Other operating income

3,028



1,804



2,475



2,288



2,370


Total noninterest income

23,248



22,557



24,109



21,788



22,905












Noninterest expense:










Compensation and employee benefits

39,319



37,535



39,031



36,510



39,293


Premises and occupancy costs

6,567



6,821



6,824



7,307



7,293


Office operations

3,455



3,508



3,768



3,408



4,011


Collections expense

780



483



434



512



1,179


Processing expenses

10,160



9,620



9,560



9,706



9,888


Marketing expenses

2,331



1,949



2,014



2,140



2,125


Federal deposit insurance premiums

637



721



671



717



724


Professional services

3,134



2,368



2,819



2,277



2,945


Amortization of intangible assets

1,346



1,462



1,520



1,520



1,575


Real estate owned expense

187



205



133



292



195


Restructuring/ acquisition expense

435



186



393





164


Other expense

3,922



1,759



2,620



3,032



2,504


Total noninterest expense

72,273



66,617



69,787



67,421



71,896


Income before income taxes

34,014



34,775



33,199



31,925



28,724












Income tax expense

7,547



7,035



6,900



6,940



6,576


Net income

$

26,467



27,740



26,299



24,985



22,148












Basic earnings per share

$

0.26



0.27



0.26



0.25



0.22


Diluted earnings per share

$

0.26



0.27



0.25



0.24



0.22












Weighted average common shares outstanding - basic

102,479,086



102,334,954



101,870,043



101,598,928



101,293,307


Weighted average common shares outstanding - diluted

103,749,383



103,942,695



103,424,154



103,136,497



102,643,726












Annualized return on average equity

8.44

%


8.93

%


8.67

%


8.40

%


7.31

%

Annualized return on average assets

1.09

%


1.15

%


1.11

%


1.08

%


0.94

%

Annualized return on tangible common equity

11.29

%


12.07

%


11.74

%


11.47

%


10.05

%











Efficiency ratio *

64.04

%


59.95

%


62.65

%


63.64

%


65.48

%

Annualized noninterest expense to average assets *

2.91

%


2.70

%


2.87

%


2.84

%


2.97

%

* Excludes gain on sale of offices, restructuring/acquisition expenses, and amortization of intangible assets (non-GAAP).


 

 

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share amounts)



Year ended December 31,


2018


2017

Interest income:




Loans receivable

$

356,571



339,992


Mortgage-backed securities

13,781



11,343


Taxable investment securities

3,064



3,749


Tax-free investment securities

1,078



2,023


FHLB dividends

452



250


Interest-earning deposits

835



1,499


Total interest income

375,781



358,856






Interest expense:




Deposits

30,985



23,057


Borrowed funds

6,155



5,014


Total interest expense

37,140



28,071






Net interest income

338,641



330,785


Provision for loan losses

20,332



19,751


Net interest income after provision for loan losses

318,309



311,034






Noninterest income:




Gain on sale of investments

157



1,148


Service charges and fees

50,792



49,717


Trust and other financial services income

16,581



17,987


Insurance commission income

8,791



9,013


Loss on real estate owned, net

(631)



(797)


Income from bank owned life insurance

5,821



6,093


Mortgage banking income

596



1,418


Gain on sale of offices



17,186


Other operating income

9,595



8,715


Total noninterest income

91,702



110,480






Noninterest expense:




Compensation and employee benefits

152,395



150,228


Premises and occupancy costs

27,519



28,863


Office operations

14,139



16,342


Collections expense

2,209



2,849


Processing expenses

39,046



39,086


Marketing expenses

8,434



9,607


Federal deposit insurance premiums

2,746



3,518


Professional services

10,598



10,293


Amortization of intangible assets

5,848



6,764


Real estate owned expense

817



1,004


Restructuring/ acquisition expense

1,014



4,419


Other expense

11,333



12,630


Total noninterest expense

276,098



285,603


Income before income taxes

133,913



135,911






Income tax expense

28,422



41,444


Net income

$

105,491



94,467






Basic earnings per share

$

1.03



0.94


Diluted earnings per share

$

1.02



0.92






Weighted average common shares outstanding - basic

102,073,888


101,015,083

Weighted average common shares outstanding - diluted

103,565,901


102,564,905





Annualized return on average equity

8.61

%


7.95

%

Annualized return on average assets

1.11

%


0.99

%

Annualized return on tangible common equity

11.34

%


10.80

%





Efficiency ratio *

62.56

%


64.71

%

Annualized noninterest expense to average assets *

2.83

%


2.89

%

* Excludes gain on sale of offices, restructuring/acquisition expenses, and amortization of intangible assets (non-GAAP).


 

 

Northwest Bancshares, Inc. and Subsidiaries

Asset quality (Unaudited)

(Dollars in thousands)



December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018


December 31,
2017

Nonaccrual loans current:










Residential mortgage loans

$

264



869



669



123



70


Home equity loans

437



496



237



269



615


Consumer loans

196



126



218



178



317


Commercial real estate loans

9,947



10,905



14,814



11,355



10,080


Commercial loans

4,736



1,972



2,559



2,381



4,178


Total nonaccrual loans current

$

15,580



14,368



18,497



14,306



15,260












Nonaccrual loans delinquent 30 days to 59 days:










Residential mortgage loans

$

1,358



15



89



1,290



509


Home equity loans

266



333



221



232



167


Consumer loans

294



182



192



224



239


Commercial real estate loans

219



3,124



522



975



1,928


Commercial loans

23



150



51



140



25


Total nonaccrual loans delinquent 30 days to 59 days

$

2,160



3,804



1,075



2,861



2,868












Nonaccrual loans delinquent 60 days to 89 days:










Residential mortgage loans

$

1,262



547



668



755



703


Home equity loans

376



418



483



465



874


Consumer loans

582



464



194



224



500


Commercial real estate loans

1,260



1,872



1,682



399



1,104


Commercial loans

332



352



380



80



69


Total nonaccrual loans delinquent 60 days to 89 days

$

3,812



3,653



3,407



1,923



3,250












Nonaccrual loans delinquent 90 days or more:










Residential mortgage loans

$

12,965



13,154



11,822



10,660



13,509


Home equity loans

5,996



5,838



6,729



6,707



7,251


Consumer finance loans

22



39



15



3



199


Consumer loans

3,228



3,535



2,626



2,931



3,617


Commercial real estate loans

25,509



27,122



15,617



16,145



15,361


Commercial loans

3,010



2,714



2,925



3,144



3,140


Total nonaccrual loans delinquent 90 days or more

$

50,730



52,402



39,734



39,590



43,077












Total nonaccrual loans

$

72,282



74,227



62,713



58,680



64,455












Total nonaccrual loans

$

72,282



74,227



62,713



58,680



64,455


Loans 90 days past maturity and still accruing

166



195



94



210



502


Nonperforming loans

72,448



74,422



62,807



58,890



64,957


Real estate owned, net

2,498



2,486



2,722



4,041



5,666


Nonperforming assets

$

74,946



76,908



65,529



62,931



70,623












Nonaccrual troubled debt restructuring *

$

15,306



9,777



10,860



11,217



12,285


Accruing troubled debt restructuring

18,302



19,370



19,802



19,749



19,819


Total troubled debt restructuring

$

33,608



29,147



30,662



30,966



32,104












Nonperforming loans to total loans

0.90

%


0.93

%


0.79

%


0.75

%


0.83

%

Nonperforming assets to total assets

0.78

%


0.80

%


0.69

%


0.66

%


0.75

%

Allowance for loan losses to total loans

0.69

%


0.70

%


0.72

%


0.70

%


0.73

%

Allowance for loan losses to nonperforming loans

76.21

%


75.21

%


91.28

%


93.75

%


87.43

%

* Amounts included in nonperforming loans above.


 

 

Northwest Bancshares, Inc. and Subsidiaries

Loans by credit quality indicators (Unaudited)

(Dollars in thousands)


At December 31, 2018


Pass


Special

mention *


Substandard **


Doubtful


Loss


Loans

receivable

Personal Banking:













Residential mortgage loans


$

2,853,460





11,010







2,864,470


Home equity loans


1,251,518





6,904







1,258,422


Consumer loans


855,277





4,436







859,713


Total Personal Banking


4,960,255





22,350







4,982,605


Commercial Banking:













Commercial real estate loans


2,254,350



94,688



122,783







2,471,821


Commercial loans


538,762



19,281



38,970







597,013


Total Commercial Banking


2,793,112



113,969



161,753







3,068,834


Total loans


$

7,753,367



113,969



184,103







8,051,439















At September 30, 2018













Personal Banking:













Residential mortgage loans


$

2,835,806





11,028







2,846,834


Home equity loans


1,265,237





7,108







1,272,345


Consumer loans


771,555





4,494







776,049


Total Personal Banking


4,872,598





22,630







4,895,228


Commercial Banking:













Commercial real estate loans


2,283,152



53,529



181,385







2,518,066


Commercial loans


526,584



24,760



31,424







582,768


Total Commercial Banking


2,809,736



78,289



212,809







3,100,834


Total loans


$

7,682,334



78,289



235,439







7,996,062















At June 30, 2018













Personal Banking:













Residential mortgage loans


$

2,790,906





9,762







2,800,668


Home equity loans


1,268,884





7,297







1,276,181


Consumer loans


697,561





3,364







700,925


Total Personal Banking


4,757,351





20,423







4,777,774


Commercial Banking:













Commercial real estate loans


2,294,327



65,698



193,198







2,553,223


Commercial loans


554,495



18,140



38,738







611,373


Total Commercial Banking


2,848,822



83,838



231,936







3,164,596


Total loans


$

7,606,173



83,838



252,359







7,942,370















At March 31, 2018













Personal Banking:













Residential mortgage loans


$

2,755,078





17,070







2,772,148


Home equity loans


1,279,137





9,224







1,288,361


Consumer loans


682,433





3,605







686,038


Total Personal Banking


4,716,648





29,899







4,746,547


Commercial Banking:













Commercial real estate loans


2,256,054



57,690



198,513







2,512,257


Commercial loans


557,613



19,147



46,703







623,463


Total Commercial Banking


2,813,667



76,837



245,216







3,135,720


Total loans


$

7,530,315



76,837



275,115







7,882,267















At December 31, 2017













Personal Banking:













Residential mortgage loans


$

2,758,465





17,738







2,776,203


Home equity loans


1,300,277





10,078







1,310,355


Consumer loans


666,629





4,760







671,389


Total Personal Banking


4,725,371





32,576







4,757,947


Commercial Banking:













Commercial real estate loans


2,216,326



83,537



154,863







2,454,726


Commercial loans


511,035



19,297



50,404







580,736


Total Commercial Banking


2,727,361



102,834



205,267







3,035,462


Total loans


$

7,452,732



102,834



237,843







7,793,409


* Includes $7.1 million, $9.2 million, $9.5 million, $7.9 million, and $8.6 million of acquired loans at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.

** Includes $39.3 million, $45.3 million, $44.5 million, $45.2 million, and $46.7 million of acquired loans at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.


 

 

Northwest Bancshares, Inc. and Subsidiaries

Loan delinquency (Unaudited)

(Dollars in thousands)




December 31,
 2018


*


September 30,
 2018


*


June 30,
 2018


*


March 31,
 2018


*


December 31,
 2017


*

(Number of loans and dollar amount of loans)































Loans delinquent 30 days to 59 days:































Residential mortgage loans


333



$

27,777



1.0

%


27



$

1,500



0.1

%


30



$

1,561



0.1

%


319



$

27,403



1.0

%


317



$

25,784



0.9

%

Home equity loans


233



8,649



0.7

%


184



5,673



0.4

%


184



6,383



0.5

%


200



7,406



0.6

%


218



7,461



0.6

%

Consumer finance loans


327



661



17.3

%


280



632



10.7

%


306



711



8.1

%


477



1,288



10.3

%


849



2,128



11.4

%

Consumer loans


1,073



9,447



1.1

%


984



8,408



1.1

%


901



8,855



1.3

%


871



8,252



1.2

%


1,295



10,912



1.7

%

Commercial real estate loans


37



5,503



0.2

%


36



5,386



0.2

%


40



5,898



0.2

%


58



20,303



0.8

%


53



8,315



0.3

%

Commercial loans


21



973



0.2

%


17



622



0.1

%


24



1,000



0.2

%


35



2,912



0.5

%


26



1,865



0.3

%

Total loans delinquent 30 days to 59 days


2,024



$

53,010



0.7

%


1,528



$

22,221



0.3

%


1,485



$

24,408



0.3

%


1,960



$

67,564



0.9

%


2,758



$

56,465



0.7

%
































Loans delinquent 60 days to 89 days:































Residential mortgage loans


71



$

6,425



0.2

%


61



4,704



0.2

%


62



$

5,847



0.2

%


21



$

1,943



0.1

%


75



$

6,235



0.2

%

Home equity loans


63



2,065



0.2

%


69



2,536



0.2

%


73



2,495



0.2

%


52



2,040



0.2

%


72



2,871



0.2

%

Consumer finance loans


86



172



4.5

%


112



234



4.0

%


127



277



3.2

%


109



233



1.9

%


412



1,113



6.0

%

Consumer loans


389



3,042



0.4

%


352



3,251



0.4

%


350



2,654



0.4

%


296



2,259



0.3

%


463



3,351



0.5

%

Commercial real estate loans


24



5,387



0.2

%


30



6,678



0.3

%


28



3,689



0.1

%


23



1,809



0.1

%


25



2,539



0.1

%

Commercial loans


8



560



0.1

%


21



1,104



0.2

%


15



926



0.2

%


7



196



%


10



441



0.1

%

Total loans delinquent 60 days to 89 days


641



$

17,651



0.2

%


645



$

18,507



0.2

%


655



$

15,888



0.2

%


508



$

8,480



0.1

%


1,057



$

16,550



0.2

%
































Loans delinquent 90 days or more: **































Residential mortgage loans


145



$

12,985



0.5

%


143



$

13,483



0.5

%


140



$

12,293



0.4

%


127



$

10,791



0.4

%


158



$

13,890



0.5

%

Home equity loans


161



6,037



0.5

%


150



5,838



0.5

%


154



6,768



0.5

%


148



6,750



0.5

%


177



7,349



0.6

%

Consumer finance loans


6



21



0.6

%


16



39



0.7

%


8



15



0.2

%


7



3



%


74



199



1.1

%

Consumer loans


432



3,233



0.4

%


766



3,541



0.5

%


302



2,633



0.4

%


659



2,939



0.4

%


719



3,627



0.6

%

Commercial real estate loans


128



25,587



1.0

%


126



27,228



1.1

%


113



15,772



0.6

%


106



16,723



0.7

%


109



16,284



0.7

%

Commercial loans


29



3,010



0.5

%


29



2,714



0.5

%


31



2,925



0.5

%


35



3,144



0.5

%


37



3,140



0.5

%

Total loans delinquent 90 days or more


901



$

50,873



0.6

%


1,230



$

52,843



0.7

%


748



$

40,406



0.5

%


1,082



$

40,350



0.5

%


1,274



$

44,489



0.6

%
































Total loans delinquent


3,566



$

121,534



1.5

%


3,403



$

93,571



1.2

%


2,888



$

80,702



1.0

%


3,550



$

116,394



1.5

%


5,089



$

117,504



1.5

%

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

** Includes purchased credit impaired loans of $145,000, $440,000, $672,000, $760,000, and $1.4 million at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.

 

 

Northwest Bancshares, Inc. and Subsidiaries

Allowance for loan losses (Unaudited)

(Dollars in thousands)



Quarter ended


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018


December 31,
 2017

Beginning balance

$

55,975



57,332



55,211



56,795



56,927


Provision

3,792



6,982



5,349



4,209



6,525


Charge-offs residential mortgage

(375)



(214)



(389)



(201)



(162)


Charge-offs home equity

(341)



(426)



(406)



(611)



(393)


Charge-offs consumer finance

(329)



(445)



(486)



(1,553)



(2,900)


Charge-offs consumer

(3,751)



(3,470)



(2,682)



(3,249)



(3,322)


Charge-offs commercial real estate

(1,538)



(4,859)



(439)



(551)



(1,470)


Charge-offs commercial

(824)



(985)



(491)



(1,025)



(785)


Recoveries

2,605



2,060



1,665



1,397



2,375


Ending balance

$

55,214



55,975



57,332



55,211



56,795












Net charge-offs to average loans, annualized

0.23

%


0.42

%


0.16

%


0.30

%


0.34

%

 


Year ended December 31,


2018


2017

Beginning balance

$

56,795



60,939


Provision

20,332



19,751


Charge-offs residential mortgage

(1,179)



(1,039)


Charge-offs home equity

(1,785)



(2,259)


Charge-offs consumer finance

(2,813)



(8,369)


Charge-offs consumer

(13,152)



(11,923)


Charge-offs commercial real estate

(7,387)



(4,174)


Charge-offs commercial

(3,325)



(3,490)


Recoveries

7,728



7,359


Ending balance

$

55,214



56,795






Net charge-offs to average loans, annualized

0.28

%


0.31

%

 


December 31, 2018


Originated loans


Acquired loans


Total loans


Balance


Reserve


Balance


Reserve


Balance


Reserve

Residential mortgage loans

$

2,770,688



4,054



93,782



83



2,864,470



4,137


Home equity loans

1,043,878



3,184



214,544



348



1,258,422



3,532


Consumer finance loans

3,817



676







3,817



676


Consumer loans

796,427



10,404



59,469



419



855,896



10,823


Personal Banking loans

4,614,810



18,318



367,795



850



4,982,605



19,168














Commercial real estate loans

2,249,018



26,379



222,803



1,996



2,471,821



28,375


Commercial loans

549,357



7,054



47,656



617



597,013



7,671


Commercial Banking loans

2,798,375



33,433



270,459



2,613



3,068,834



36,046














Total loans

$

7,413,185



51,751



638,254



3,463



8,051,439



55,214


 


 

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


December 31, 2018


September 30, 2018


June 30, 2018


March 31, 2018


December 31, 2017


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

$

2,837,220



28,794



4.06

%


$

2,804,027



28,974



4.13

%


$

2,761,528



27,893



4.04

%


$

2,756,142



27,973



4.12

%


$

2,746,992



28,373



4.13

%

Home equity loans

1,264,169



15,788



4.95

%


1,272,847



15,248



4.75

%


1,281,001



15,384



4.82

%


1,298,780



14,786



4.62

%


1,312,146



15,187



4.59

%

Consumer loans

791,685



9,365



4.69

%


704,203



8,337



4.70

%


655,541



7,949



4.86

%


637,691



7,450



4.74

%


633,023



8,004



5.02

%

Consumer finance loans

4,751



220



18.52

%


7,176



343



19.12

%


10,428



516



19.79

%


15,254



768



20.14

%


22,469



1,151



20.32

%

Commercial real estate loans

2,492,331



29,991



4.71

%


2,540,270



29,974



4.62

%


2,518,170



29,034



4.56

%


2,471,422



27,384



4.43

%


2,442,528



28,251



4.53

%

Commercial loans

590,195



8,666



5.75

%


598,842



8,203



5.36

%


624,087



7,703



4.88

%


595,276



7,160



4.81

%


588,420



6,739



4.48

%

Total loans receivable (a) (b) (d)

7,980,351



92,824



4.61

%


7,927,365



91,079



4.56

%


7,850,755



88,479



4.52

%


7,774,565



85,521



4.46

%


7,745,578



87,705



4.49

%

Mortgage-backed securities (c)

619,105



3,942



2.55

%


598,596



3,572



2.39

%


569,893



3,255



2.28

%


558,055



3,013



2.16

%


581,055



3,016



2.08

%

Investment securities (c) (d)

227,813



1,140



2.00

%


244,346



1,074



1.76

%


235,784



1,044



1.77

%


256,287



1,172



1.83

%


301,268



1,495



1.98

%

FHLB stock

14,372



151



4.17

%


9,819



119



4.81

%


7,819



85



4.36

%


9,354



97



4.21

%


10,066



78



3.07

%

Other interest-earning deposits

10,454



68



2.55

%


26,057



162



2.43

%


103,739



469



1.79

%


34,200



135



1.58

%


13,515



59



1.71

%

Total interest-earning assets

8,852,095



98,125



4.40

%


8,806,183



96,006



4.33

%


8,767,990



93,332



4.27

%


8,632,461



89,938



4.23

%


8,651,482



92,353



4.24

%

Noninterest earning assets (e)

743,262







746,077







732,065







779,812







709,753






Total assets

$

9,595,357







$

9,552,260







$

9,500,055







$

9,412,273







$

9,361,235




































Liabilities and shareholders' equity:






























Interest-bearing liabilities:






























Savings deposits

$

1,637,400



758



0.18

%


$

1,672,990



785



0.19

%


$

1,699,168



773



0.18

%


$

1,670,491



749



0.18

%


$

1,655,798



763



0.18

%

Interest-bearing demand deposits

1,442,587



1,066



0.29

%


1,460,556



1,064



0.29

%


1,468,228



875



0.24

%


1,419,459



603



0.17

%


1,419,352



331



0.09

%

Money market deposit accounts

1,678,664



1,910



0.45

%


1,685,368



1,565



0.37

%


1,691,652



1,211



0.29

%


1,706,800



1,053



0.25

%


1,734,444



1,017



0.23

%

Time deposits

1,401,352



5,251



1.49

%


1,403,967



4,819



1.36

%


1,440,457



4,450



1.24

%


1,415,247



4,053



1.16

%


1,421,569



3,860



1.08

%

Borrowed funds (f)

216,975



782



1.43

%


129,523



239



0.73

%


104,415



50



0.19

%


133,231



124



0.38

%


159,599



187



0.46

%

Junior subordinated debentures

111,213



1,170



4.12

%


111,213



1,316



4.63

%


111,213



1,290



4.59

%


111,213



1,184



4.26

%


111,213



1,163



4.09

%

Total interest-bearing liabilities

6,488,191



10,937



0.67

%


6,463,617



9,788



0.60

%


6,515,133



8,649



0.53

%


6,456,441



7,766



0.49

%


6,501,975



7,321



0.45

%

Noninterest-bearing demand deposits (g)

1,750,253







1,724,427







1,676,344







1,606,247







1,599,834






Noninterest bearing liabilities

112,349







132,062







92,252







143,608







57,956






Total liabilities

8,350,793







8,320,106







8,283,729







8,206,296







8,159,765






Shareholders' equity

1,244,564







1,232,154







1,216,326







1,205,977







1,201,470






Total liabilities and shareholders' equity

$

9,595,357







$

9,552,260







$

9,500,055







$

9,412,273







$

9,361,235






Net interest income/ Interest rate spread



87,188



3.73

%




86,218



3.73

%




84,683



3.74

%




82,172



3.74

%




85,032



3.79

%

Net interest-earning assets/ Net interest margin

$

2,363,904





3.94

%


$

2,342,566





3.92

%


$

2,252,857





3.86

%


$

2,176,020





3.86

%


$

2,149,507





3.93

%

Ratio of interest-earning assets to interest-bearing liabilities



1.36X





1.36X







1.35X







1.34X







1.33X






(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 0.45%, 0.41%, 0.37%, 0.33% and 0.30%, respectively.

(h) 

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.60%, 4.54%, 4.50%, 4.45%  and 4.46%, respectively, Investment securities - 1.92%, 1.67%, 1.63%, 1.67% and 1.66%, respectively, Interest-earning assets - 4.38%,  4.31%,  4.25%, 4.21% and 4.20%, respectively. GAAP basis net interest rate spreads were 3.71%, 3.71%, 3.72%, 3.72% and 3.75%, respectively, and GAAP basis net interest margins were 3.92%, 3.90%, 3.84%, 3.84% and 3.89%, 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.



Year ended December 31,


2018


2017


Average

Balance


Interest


Avg.

Yield/

Cost (h)


Average

Balance


Interest


Avg.

Yield/

Cost (h)

Assets:












Interest-earning assets:












Residential mortgage loans

$

2,789,990



113,379



4.06

%


$

2,730,055



112,206



4.11

%

Home equity loans

1,279,087



61,405



4.80

%


1,313,789



58,426



4.45

%

Consumer loans

697,722



33,153



4.75

%


590,439



30,253



5.12

%

Consumer finance loans

9,367



1,847



19.72

%


35,761



7,177



20.07

%

Commercial real estate loans

2,505,701



116,180



4.57

%


2,429,644



109,118



4.43

%

Commercial loans

602,077



31,939



5.23

%


564,600



25,000



4.37

%

Loans receivable (a) (b) (d)

7,883,944



357,903



4.54

%


7,664,288



342,180



4.46

%

Mortgage-backed securities (c)

586,613



13,781



2.35

%


563,696



11,343



2.01

%

Investment securities (c) (d)

240,989



4,429



1.84

%


350,870



6,862



1.96

%

FHLB stock

10,354



452



4.37

%


8,186



250



3.05

%

Other interest-earning deposits

41,079



835



2.00

%


158,229



1,499



0.93

%

Total interest-earning assets

8,762,979



377,400



4.30

%


8,745,269



362,134



4.14

%

Noninterest earning assets (e)

752,007







757,249






Total assets

$

9,514,986







$

9,502,518


















Liabilities and shareholders' equity:












Interest-bearing liabilities:












Savings deposits

$

1,669,930



3,064



0.18

%


$

1,688,451



3,062



0.18

%

Interest-bearing demand deposits

1,447,809



3,607



0.25

%


1,432,134



1,027



0.07

%

Money market deposit accounts

1,690,481



5,740



0.34

%


1,810,083



4,203



0.23

%

Time deposits

1,415,187



18,574



1.31

%


1,490,378



14,765



0.99

%

Borrowed funds (f)

146,220



1,194



0.82

%


132,350



348



0.26

%

Junior subordinated debentures

111,213



4,961



4.40

%


111,213



4,666



4.14

%

Total interest-bearing liabilities

6,480,840



37,140



0.57

%


6,664,609



28,071



0.42

%

Noninterest-bearing demand deposits (g)

1,710,841







1,556,511






Noninterest bearing liabilities

98,550







92,611






Total liabilities

8,290,231







8,313,731






Shareholders' equity

1,224,755







1,188,787






Total liabilities and shareholders' equity

$

9,514,986







$

9,502,518






Net interest income/ Interest rate spread



340,260



3.73

%




334,063



3.72

%

Net interest-earning assets/ Net interest margin

$

2,282,139





3.88

%


$

2,080,660





3.82

%

Ratio of interest-earning assets to interest-bearing liabilities



1.35X





1.31X






(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 0.39%, and 0.29%, respectively.

(h) 

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.52% and  4.44%, respectively, Investment securities - 1.72% and 1.65%, respectively, Interest-earning assets - 4.29% and  4.10%, respectively. GAAP basis net interest rate spreads were 3.72% and 3.68%, respectively, and GAAP basis net interest margins were 3.86% and 3.78%, respectively.

 

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SOURCE Northwest Bancshares, Inc.