Northwest Bancshares 8K Results of Operations and Financial Condition | NWBI 23 Jan 12

Northwest Bancshares (NWBI) 8-KResults of Operations and Financial Condition

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)

	December 31,
Assets	2011			2010
Cash and cash equivalents	$	94,276			40,708
Interest-earning deposits in other financial institutions		593,388			677,771
Federal funds sold and other short-term investments		633			632
Marketable securities available-for-sale (amortized cost of $885,408 and $945,571)		908,349			950,463
Marketable securities held-to-maturity (fair value of $239,412 and $354,126)		231,389			357,922
Total cash, interest-earning deposits and marketable securities		1,828,035			2,027,496

Loans held for sale		967			11,376
Residential mortgage loans		2,396,399			2,386,928
Home equity loans		1,084,786			1,095,953
Other consumer loans		245,689			255,776
Commercial real estate loans		1,435,767			1,350,319
Commercial loans		387,911			433,653
Total loans receivable		5,551,519			5,534,005
Allowance for loan losses		(71,138	)		(76,412	)
Loans receivable, net		5,480,381			5,457,593

Federal Home Loan Bank stock, at cost		48,935			60,080
Accrued interest receivable		25,502			26,216
Real estate owned, net		26,887			20,780
Premises and Equipment, net		132,152			128,101
Bank owned life insurance		133,524			132,237
Goodwill		171,882			171,882
Other intangible assets		2,123			3,942
Other assets		107,203			119,828
Total assets	$	7,956,624			8,148,155

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	658,560			575,281
Interest-bearing demand deposits		800,676			782,257
Savings deposits		2,036,272			1,948,882
Time deposits		2,284,817			2,457,916
Total deposits		5,780,325			5,764,336
Borrowed funds		827,925			891,293
Advances by borrowers for taxes and insurance		23,571			22,868
Accrued interest payable		1,104			1,716
Other liabilities		66,782			57,398
Junior subordinated debentures		103,094			103,094
Total liabilities		6,802,801			6,840,705

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, 97,493,046 shares and 110,295,117 shares issued, respectively		975			1,103
Paid-in-capital		659,523			824,164
Retained earnings		543,598			523,089
Unallocated common stock of Employee Stock Ownership Plan		(27,047	)		(27,409	)
Accumulated other comprehensive loss		(23,226	)		(13,497	)
Total shareholders' equity		1,153,823			1,307,450
Total liabilities and shareholders' equity	$	7,956,624			8,148,155


Equity to assets		14.50	%		16.05	%
Tangible common equity to assets		12.59	%		14.19	%
Book value per share	$	11.83		$	11.85
Tangible book value per share	$	10.05		$	10.26
Closing market price per share	$	12.44		$	11.78
Full time equivalent employees		1,950			1,897
Number of banking offices		168			171

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

	Three months ended
	December 31,						September 30,
	2011			2010			2011
Interest income:
Loans receivable	$	79,930			83,096			80,562
Mortgage-backed securities		5,077			5,886			5,544
Taxable investment securities		776			428			684
Tax-free investment securities		2,600			3,111			2,848
Interest-earning deposits		423			496			393
Total interest income		88,806			93,017			90,031

Interest expense:
Deposits		14,227			17,025			14,958
Borrowed funds		8,041			8,762			8,061
Total interest expense		22,268			25,787			23,019

Net interest income		66,538			67,230			67,012
Provision for loan losses		10,502			13,918			8,057
Net interest income after provision
for loan losses		56,036			53,312			58,955

Noninterest income:
Impairment losses on securities		(1,205	)		(1,841	)		—
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)		775			1,006			—
Net impairment losses		(430	)		(835	)		—
Gain on sale of investments, net		157			8			152
Service charges and fees		8,630			9,296			8,499
Trust and other financial services income		1,967			1,907			2,063
Insurance commission income		1,582			1,362			1,796
Loss on real estate owned, net		(466	)		(279	)		(1,340	)
Income from bank owned life insurance		1,199			1,228			1,938
Mortgage banking (loss)/ income		(29	)		1,423			400
Other operating income		1,428			1,058			1,002
Total noninterest income		14,038			15,168			14,510

Noninterest expense:
Compensation and employee benefits		25,434			25,328			26,004
Premises and occupancy costs		5,556			5,675			5,658
Office operations		3,286			3,233			3,209
Processing expenses		5,982			6,041			5,896
Marketing expenses		3,098			2,930			2,788
Federal deposit insurance premiums		933			2,334			1,386
Professional services		1,441			291			1,238
Amortization of intangible assets		374			518			475
Real estate owned expense		462			636			483
Acquisition expense		—			591			—
Other expense		1,870			3,122			2,786
Total noninterest expense		48,436			50,699			49,923

Income before income taxes		21,638			17,781			23,542
Income tax expense		6,463			5,043			6,822

Net income	$	15,175			12,738			16,720

Basic earnings per share	$	0.16			0.12			0.17

Diluted earnings per share	$	0.16			0.12			0.17

Annualized return on average shareholders' equity		5.23	%		3.90	%		5.62	%
Annualized return on average assets		0.76	%		0.63	%		0.83	%

Basic common shares outstanding		93,675,589			108,337,001			96,918,016
Diluted common shares outstanding		93,972,187			108,848,189			97,124,328

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

	Year ended
	December 31,
	2011			2010
Interest income:
Loans receivable	$	320,942			328,948
Mortgage-backed securities		23,450			25,271
Taxable investment securities		2,452			2,514
Tax-free investment securities		11,514			11,738
Interest-earning deposits		1,712			2,097
Total interest income		360,070			370,568

Interest expense:
Deposits		60,721			75,174
Borrowed funds		32,080			37,753
Total interest expense		92,801			112,927

Net interest income		267,269			257,641
Provision for loan losses		34,170			40,486
Net interest income after provision
for loan losses		233,099			217,155

Noninterest income:
Impairment losses on securities		(1,782	)		(2,741	)
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)		845			1,193
Net impairment losses		(937	)		(1,548	)
Gain on sale of investments, net		358			2,208
Service charges and fees		35,378			37,921
Trust and other financial services income		8,125			7,252
Insurance commission income		6,548			5,190
Loss on real estate owned, net		(2,426	)		(2,572	)
Income from bank owned life insurance		6,019			5,080
Mortgage banking income		858			2,196
Other operating income		4,213			4,671
Total noninterest income		58,136			60,398

Noninterest expense:
Compensation and employee benefits		106,595			100,709
Premises and occupancy costs		23,055			22,665
Office operations		12,850			13,864
Processing expenses		23,332			23,152
Marketing expenses		9,953			9,875
Federal deposit insurance premiums		7,101			9,054
Professional services		5,224			2,728
Amortization of intangible assets		1,819			2,784
Real estate owned expense		1,625			2,901
Acquisition expense		—			1,229
Other expense		8,673			7,547
Total noninterest expense		200,227			196,508

Income before income taxes		91,008			81,045
Income tax expense		26,857			23,522

Net income	$	64,151			57,523

Basic earnings per share	$	0.64			0.53

Diluted earnings per share	$	0.64			0.53

Annualized return on average shareholders' equity		5.24	%		4.40	%
Annualized return on average assets		0.80	%		0.71	%

Basic common shares outstanding		99,801,783			108,308,834
Diluted common shares outstanding		100,177,564			108,931,377

Northwest Bancshares, Inc. and Subsidiaries
Asset Quality
(Dollars in thousands)

	Three months ended						Year ended
	December 31,						December 31,
	2011			2010			2011			2010
Allowance for loan losses
Beginning balance	$	73,208			77,245			76,412			70,403
Provision		10,502			13,918			34,170			40,486
Charge-offs residential mortgage		(1,530	)		(2,550	)		(4,198	)		(4,497	)
Charge-offs home equity		(998	)		(1,146	)		(4,734	)		(4,104	)
Charge-offs other consumer		(1,467	)		(1,643	)		(5,283	)		(6,390	)
Charge-offs commercial real estate		(4,288	)		(5,953	)		(12,508	)		(12,576	)
Charge-offs commercial		(4,935	)		(4,365	)		(15,641	)		(9,305	)
Recoveries		646			906			2,920			2,395
Ending balance	$	71,138			76,412			71,138			76,412


Net charge-offs to average loans, annualized		0.91	%		1.06	%		0.72	%		0.63	%

	December 31,
	2011			2010			2009			2008
Nonperforming loans	$	131,105			148,391			124,626			99,203
Real estate owned, net		26,887			20,780			20,257			16,844
Nonperforming assets	$	157,992			169,171			144,883			116,047

Non-accrual troubled debt restructuring *	$	26,908			41,740			2,908			—
Accruing troubled debt restructuring		39,854			10,865			18,177			—
Total troubled debt restructuring	$	66,762			52,605			21,085			—

Nonperforming loans to total loans		2.36	%		2.68	%		2.35	%		1.91	%

Nonperforming assets to total assets		1.99	%		2.08	%		1.81	%		1.67	%

Allowance for loan losses to total loans		1.28	%		1.38	%		1.33	%		1.06	%

Allowance for loan losses to nonperforming loans		54.26	%		51.49	%		56.49	%		55.37	%

* Amounts included in nonperforming loans above

Northwest Bancshares, Inc. and Subsidiaries
Non-accrual loans delinquency
(Dollars in thousands)

	December 31, 2011		December 31, 2010		December 31, 2009

Non-accrual loans current:
Residential mortgage loans	$	—		—		—
Home equity loans		—		—		—
Other consumer loans		—		—		—
Commercial real estate loans		13,057		7,378		—
Commercial loans		13,480		23,317		13,141
Total non-accrual loans current	$	26,537		30,695		13,141

Non-accrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	—		—		—
Home equity loans		—		—		—
Other consumer loans		—		—		—
Commercial real estate loans		3,274		4,039		—
Commercial loans		90		1,465		—
Total non-accrual loans delinquent 30 days to 59 days	$	3,364		5,504		—

Non-accrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	—		—		—
Home equity loans		—		—		—
Other consumer loans		—		—		—
Commercial real estate loans		1,560		10,923		1,705
Commercial loans		3,808		848		—
Total non-accrual loans delinquent 60 days to 89 days	$	5,368		11,771		1,705

Non-accrual loans delinquent 90 days or more:
Residential mortgage loans	$	28,221		29,751		29,134
Home equity loans		9,560		10,263		10,008
Other consumer loans		2,667		2,565		2,775
Commercial real estate loans		44,603		44,965		49,594
Commercial loans		10,785		12,877		18,269
Total non- accrual loans delinquent 90 days or more	$	95,836		100,421		109,780

Total non-accrual loans	$	131,105		148,391		124,626

Northwest Bancshares, Inc. and Subsidiaries

Delinquency

(Dollars in thousands)

Loan delinquency schedule

(Number of loans and dollar amount of loans)

	December 31,
	2011				*			2010				*			2009				*
Loans delinquent 30 days to 59 days:
Residential mortgage loans		427	$	33,671		1.4	%		427	$	35,329		1.5	%		343	$	27,913		1.2	%
Home equity loans		222		7,426		0.7	%		230		7,317		0.7	%		184		7,014		0.6	%
Other consumer loans		903		4,854		2.0	%		1,008		5,318		2.1	%		923		4,297		1.6	%
Commercial real estate loans		104		10,680		0.7	%		82		16,287		1.2	%		85		16,152		1.3	%
Commercial loans		32		2,027		0.5	%		48		6,590		1.5	%		48		3,293		0.9	%
Total loans delinquent 30 days to 59 days		1,688	$	58,658		1.1	%		1,795	$	70,841		1.3	%		1,583	$	58,669		1.1	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans		99	$	8,629		0.4	%		106	$	9,848		0.4	%		77	$	6,657		0.3	%
Home equity loans		47		1,953		0.2	%		81		3,249		0.3	%		52		1,719		0.2	%
Other consumer loans		412		1,787		0.7	%		356		1,331		0.5	%		348		1,425		0.5	%
Commercial real estate loans		38		3,122		0.2	%		39		14,365		1.1	%		35		5,811		0.5	%
Commercial loans		25		4,958		1.3	%		9		1,678		0.4	%		26		2,474		0.7	%
Total loans delinquent 60 days to 89 days		621	$	20,449		0.4	%		591	$	30,471		0.6	%		538	$	18,086		0.3	%

Loans delinquent 90 days or more:
Residential mortgage loans		273	$	28,221		1.2	%		275	$	29,751		1.2	%		265	$	29,134		1.2	%
Home equity loans		177		9,560		0.9	%		190		10,263		0.9	%		195		10,008		0.9	%
Other consumer loans		456		2,667		1.1	%		374		2,565		1.0	%		546		2,775		1.0	%
Commercial real estate loans		131		44,603		3.1	%		181		44,965		3.3	%		199		49,594		4.0	%
Commercial loans		66		10,785		2.8	%		111		12,877		3.0	%		124		18,269		4.9	%
Total loans delinquent 90 days or more		1,103	$	95,836		1.7	%		1,131	$	100,421		1.8	%		1,329	$	109,780		2.1	%

Total loans delinquent		3,412	$	174,943		3.2	%		3,517	$	201,733		3.7	%		3,450	$	186,535		3.5	%

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

Northwest Bancshares, Inc. and Subsidiaries

Analysis of loan portfolio by geographic location as of December 31, 2011:

(Dollars in thousands)

Loans outstanding:

	Residential Mortgage		(1)			Home equity		(2)			Other consumer		(3)			Commercial real estate loans		(4)			Commercial loans		(5)			Total		(6)

Pennsylvania	$	1,978,512		82.5	%		925,368		85.3	%		225,827		91.9	%		849,702		59.2	%		258,775		66.7	%		4,238,184		76.3	%
New York		159,389		6.6	%		104,194		9.6	%		11,191		4.6	%		356,868		24.9	%		56,128		14.5	%		687,770		12.4	%
Ohio		19,895		0.8	%		11,677		1.1	%		3,022		1.2	%		35,882		2.5	%		10,072		2.6	%		80,548		1.5	%
Maryland		168,247		7.0	%		33,816		3.1	%		1,417		0.6	%		114,839		8.0	%		25,942		6.7	%		344,261		6.2	%
Florida		27,551		1.1	%		8,057		0.7	%		1,473		0.6	%		40,904		2.8	%		17,340		4.5	%		95,325		1.7	%
All other		43,772		1.8	%		1,674		0.2	%		2,759		1.1	%		37,572		2.6	%		19,654		5.1	%		105,431		1.9	%
Total	$	2,397,366		100.0	%		1,084,786		100.0	%		245,689		100.0	%		1,435,767		100.0	%		387,911		100.0	%		5,551,519		100.0	%

(1) - Percentage of total mortgage loans

(2) - Percentage of total home equity loans

(3) - Percentage of total other consumer loans

(4) - Percentage of total commercial real estate loans

(5) - Percentage of total commercial loans

(6) - Percentage of total loans

Loans 90 or more past due:

	Residential Mortgage		(7)			Home equity		(8)			Other consumer		(9)			Commercial real estate loans		(10)			Commercial loans		(11)			Total		(12)

Pennsylvania	$	16,971		0.9	%		6,559		0.7	%		2,537		1.1	%		17,753		2.1	%		5,075		2.0	%		48,895		1.2	%
New York		1,358		0.9	%		1,031		1.0	%		54		0.5	%		8,625		2.4	%		281		0.5	%		11,349		1.7	%
Ohio		305		1.5	%		23		0.2	%		23		0.8	%		88		0.2	%		—		0.0	%		439		0.5	%
Maryland		4,436		2.6	%		1,496		4.4	%		—		0.0	%		6,573		5.7	%		2,514		9.7	%		15,019		4.4	%
Florida		4,312		15.7	%		422		5.2	%		53		3.6	%		4,407		10.8	%		2,915		16.8	%		12,109		12.7	%
All other		839		1.9	%		29		1.7	%		—		0.0	%		7,157		19.0	%		—		0.0	%		8,025		7.6	%
Total	$	28,221		1.2	%		9,560		0.9	%		2,667		1.1	%		44,603		3.1	%		10,785		2.8	%		95,836		1.7	%

(7) - Percentage of total mortgage loans in that geographic area

(8) - Percentage of total home equity loans in that geographic area

(9) - Percentage of total other consumer loans in that geographic area

(10) - Percentage of total commercial real estate loans in that geographic area

(11) - Percentage of total commercial loans in that geographic area

(12) - Percentage of total loans in that geographic area

Northwest Bancshares, Inc. and Subsidiaries
Investment Portfolio
(Dollars in thousands)

Marketable securities available-for-sale as of December 31, 2011:

			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	59		—		—			59

Debt issued by government sponsored enterprises:
Due in one year - five years		36,295		134		—			36,429
Due in five years - ten years		29,557		638		(61	)		30,134
Due after ten years		9,665		—		(49	)		9,616

Equity securities		12,080		644		(259	)		12,465

Municipal securities:
Due in one year - five years		10,633		291		—			10,924
Due in five years - ten years		27,817		1,336		—			29,153
Due after ten years		124,041		5,350		(180	)		129,211

Corporate trust preferred securities:
Due in one year or less		500		—		—			500
Due after ten years		25,036		233		(4,635	)		20,634

Mortgage-backed securities:
Fixed rate pass-through		110,364		8,201		(1	)		118,564
Variable rate pass-through		135,103		6,679		(4	)		141,778
Fixed rate non-agency CMO		9,521		188		(735	)		8,974
Fixed rate agency CMO		112,670		3,466		—			116,136
Variable rate non-agency CMO		1,104		—		(154	)		950
Variable rate agency CMO		240,963		1,991		(132	)		242,822

Total mortgage-backed securities		609,725		20,525		(1,026	)		629,224

Total marketable securities available-for-sale	$	885,408		29,151		(6,210	)		908,349

Marketable securities held-to-maturity as of December 31, 2011:

			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value

Municipal securities:
Due in five years - ten years		3,677		174		—			3,851
Due after ten years		71,015		3,615		—			74,630

Mortgage-backed securities:
Fixed rate pass-through		24,160		1,099		—			25,259
Variable rate pass-through		9,066		94		—			9,160
Fixed rate agency CMO		108,881		2,761		—			111,642
Variable rate agency CMO		14,590		280		—			14,870

Total mortgage-backed securities		156,697		4,234		—			160,931

Total marketable securities held-to-maturity	$	231,389		8,023		—			239,412

Issuers of mortgage-backed securities as of December 31, 2011:
Fannie Mae	$	324,439		11,487		(73	)		335,853
Ginnie Mae		139,901		4,050		—			143,951
Freddie Mac		272,095		9,034		(51	)		281,078
SBA		18,637		—		(13	)		18,624
Non-agency		11,350		188		(889	)		10,649
Total	$	766,422		24,759		(1,026	)		790,155

Northwest Bancshares, Inc. and Subsidiaries

Investment Portfolio - Continued

(Dollars in thousands)

	Book		As a %
	Value		of Book
	12/31/2011		Value
Municipal securities by state:
Pennsylvania
School district	$	114,699		48.4	%
General obligation		41,766		17.6	%
Revenue bonds		4,709		2.0	%
Total Pennsylvania		161,174		68.0	%
New York		33,679		14.2	%
Ohio		6,426		2.7	%
All other states		35,904		15.1	%
	$	237,183

	Three months ended December 31,
	2011								2010
	Average			Interest		Avg.			Average			Interest		Avg.
	Balance			(h)		Yield/			Balance			(h)		Yield/
						Cost								Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,544,194			80,395		5.79	%		5,565,989			83,491		5.99	%
Mortgage-backed securities (c)		797,071			5,077		2.55	%		879,958			5,886		2.68	%
Investment securities (c) (d)		376,545			4,776		5.07	%		365,003			5,213		5.71	%
FHLB stock		49,775			—		—			61,042			—		—
Other interest-earning deposits		615,906			423		0.27	%		721,174			496		0.27	%

Total interest-earning assets		7,383,491			90,671		4.90	%		7,593,166			95,086		5.00	%

Noninterest earning assets (e)		571,873								588,945

Total assets	$	7,955,364								8,182,111

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,064,533			1,139		0.42	%		1,058,373			1,695		0.64	%
Interest-bearing demand accounts		787,674			238		0.12	%		786,488			249		0.13	%
Money market accounts		959,378			1,013		0.42	%		906,414			1,209		0.53	%
Certificate accounts		2,308,440			11,837		2.03	%		2,456,893			13,872		2.24	%
Borrowed funds (f)		836,948			6,604		3.13	%		892,461			7,326		3.26	%
Junior subordinated debentures		103,094			1,437		5.45	%		103,094			1,436		5.45	%

Total interest-bearing liabilities		6,060,067			22,268		1.46	%		6,203,723			25,787		1.65	%

Noninterest bearing liabilities (g)		734,898								671,412

Total liabilities		6,794,965								6,875,135

Shareholders' equity		1,160,399								1,306,976

Total liabilities and shareholders' equity	$	7,955,364								8,182,111

Net interest income/ Interest rate spread					68,403		3.44	%					69,299		3.35	%

Net interest-earning assets/ Net interest margin	$	1,323,424					3.71	%		1,389,443					3.65	%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22	X							1.22	X

(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

(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, securities sold under agreements to repurchase and other borrowings

(g) Average balances include non-interest bearing demand deposits (checking accounts)

(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.96%, respectively, Investment securities - 3.59% and 3.88%, respectively,

Interest-earning assets - 4.80% and 4.89%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.24%, respectively,

and GAAP basis net interest margins were 3.60% and 3.54%, respectively

	Year ended December 31,
	2011								2010
	Average			Interest		Avg.			Average			Interest		Avg.
	Balance			(h)		Yield/			Balance			(h)		Yield/
						Cost								Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,508,790			322,656		5.85	%		5,487,645			330,431		6.03	%
Mortgage-backed securities (c)		874,366			23,450		2.68	%		816,182			25,271		3.10	%
Investment securities (c) (d)		384,389			20,166		5.25	%		369,858			20,572		5.56	%
FHLB stock		53,985			—		—			62,688			—		—
Other interest-earning deposits		665,074			1,712		0.25	%		805,161			2,097		0.26	%

Total interest-earning assets		7,486,604			367,984		4.91	%		7,541,534			378,371		5.02	%

Noninterest earning assets (e)		570,888								578,317

Total assets	$	8,057,492								8,119,851

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,075,890			5,000		0.46	%		1,031,362			8,166		0.79	%
Interest-bearing demand accounts		793,287			960		0.12	%		776,091			1,211		0.16	%
Money market accounts		939,317			4,243		0.45	%		888,081			5,977		0.67	%
Certificate accounts		2,362,313			50,518		2.14	%		2,483,481			59,820		2.41	%
Borrowed funds (f)		841,748			26,381		3.13	%		896,843			32,054		3.57	%
Junior subordinated debentures		103,094			5,699		5.45	%		103,094			5,699		5.45	%

Total interest-bearing liabilities		6,115,649			92,801		1.52	%		6,178,952			112,927		1.83	%

Noninterest bearing liabilities (g)		718,434								634,119

Total liabilities		6,834,083								6,813,071

Shareholders' equity		1,223,409								1,306,780

Total liabilities and shareholders' equity	$	8,057,492								8,119,851

Net interest income/ Interest rate spread					275,183		3.39	%					265,444		3.19	%

Net interest-earning assets/ Net interest margin	$	1,370,955					3.68	%		1,362,582					3.52	%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22	X							1.22	X

(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

(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, securities sold under agreements to repurchase and other borrowings

(g) Average balances include non-interest bearing demand deposits (checking accounts)

(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.82% and 6.00%, respectively, Investment securities - 3.63% and 3.85%, respectively,

Interest-earning assets - 4.80% and 4.92%, respectively. GAAP basis net interest rate spreads were 3.29% and 3.09%, respectively,

and GAAP basis net interest margins were 3.57% and 3.42%, respectively

	Three months ended								Three months ended
	December 31, 2011								September 30, 2011
	Average			Interest		Avg.			Average			Interest		Avg.
	Balance			(h)		Yield/			Balance			(h)		Yield/
						Cost								Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,544,194			80,395		5.79	%		5,490,795			81,025		5.86	%
Mortgage-backed securities (c)		797,071			5,077		2.55	%		857,898			5,544		2.58	%
Investment securities (c) (d)		376,545			4,776		5.07	%		412,927			5,066		4.91	%
FHLB stock		49,775			—		—			52,336			—		—
Other interest-earning deposits		615,906			423		0.27	%		652,958			393		0.24	%

Total interest-earning assets		7,383,491			90,671		4.90	%		7,466,914			92,028		4.90	%

Noninterest earning assets (e)		571,873								560,951

Total assets	$	7,955,364								8,027,865

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,064,533			1,139		0.42	%		1,081,721			1,157		0.42	%
Interest-bearing demand accounts		787,674			238		0.12	%		798,424			244		0.12	%
Money market accounts		959,378			1,013		0.42	%		950,113			1,016		0.42	%
Certificate accounts		2,308,440			11,837		2.03	%		2,338,436			12,541		2.13	%
Borrowed funds (f)		836,948			6,604		3.13	%		840,560			6,625		3.13	%
Junior subordinated debentures		103,094			1,437		5.45	%		103,094			1,436		5.45	%

Total interest-bearing liabilities		6,060,067			22,268		1.46	%		6,112,348			23,019		1.49	%

Noninterest bearing liabilities (g)		734,898								726,173

Total liabilities		6,794,965								6,838,521

Shareholders' equity		1,160,399								1,189,344

Total liabilities and shareholders' equity	$	7,955,364								8,027,865

Net interest income/ Interest rate spread					68,403		3.44	%					69,009		3.41	%

Net interest-earning assets/ Net interest margin	$	1,323,424					3.71	%		1,354,566					3.70	%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22	X							1.22	X

(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

(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, securities sold under agreements to repurchase and other borrowings

(g) Average balances include non-interest bearing demand deposits (checking accounts)

(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.82%, respectively, Investment securities - 3.59% and 3.42%, respectively,

Interest-earning assets - 4.80% and 4.79%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.29%, respectively,

and GAAP basis net interest margins were 3.60% and 3.59%, respectively

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