Northwest Bancshares (NWBI) 8-K Northwest Bancshares, Inc. Announces First Quarter 2016 Earnings and Quarterly Dividend

EXHIBIT 99.1

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

EARNINGS RELEASE

FOR IMMEDIATE RELEASE

Contact:	William J. Wagner, President and Chief Executive Officer (814) 726-2140
	William W. Harvey, Jr., Senior Executive Vice President and Chief Financial Officer (814) 726-2140

Northwest Bancshares, Inc. Announces First Quarter 2016 Earnings and Quarterly Dividend

Warren, Pennsylvania — April 22, 2016

Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2016 of $18.0 million, or $0.18 per diluted share. This represents an increase of $1.8 million, or 11.2%, compared to the same quarter last year when net income was $16.2 million, or $0.18 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended March 31, 2016 were 6.21% and 0.81% compared to 6.17% and 0.83% for the same quarter last year. 

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share payable on May 16, 2016, to shareholders of record as of May 2, 2016. This represents the 86th consecutive quarter in which the Company has paid a cash dividend. Based on the current market value of the Company's stock, this represents an annualized dividend yield of 4.4%.

In making this announcement, William J. Wagner, President and CEO, noted, “We are pleased that our first quarter operating results reflect the positive impact of the LNB acquisition, which significantly increased both net interest income and noninterest income. Although we believe we have realized the cost savings originally projected for this transaction, expenses grew at an elevated rate as we continue to add the personnel, processes, and technology necessary to meet the requirements of a $9.0 billion bank. Operating efficiency remains a central focus and we look forward to the completion of our previously announced branch consolidation plan, which will positively impact expense ratios beginning in the second quarter of this year. We are also pleased that loans increased for the quarter by $70.0 million, or 3.9% on an annual basis, as our recently established corporate finance group gained momentum and greatly assisted with that effort.”

Net interest income increased by $8.6 million, or 13.6%, to $71.6 million for the quarter ended March 31, 2016, from $63.0 million for the quarter ended March 31, 2015. This increase is due primarily to a $10.1 million, or 14.2%, increase in interest income on loans as a result of a $1.229 billion increase in the company’s loan portfolio. Contributing significantly to this increase was the acquisition of Lorain National Bank ("LNB") on August 14, 2015, which included loans of $928.0 million. Also contributing to the increase in net interest income was a $475,000 decrease in interest expense on borrowed funds due primarily to the maturity of FHLB term advances. Partially offsetting these improvements was a $936,000 decrease in FHLB dividends as the company received a $1.0 million special dividend in the first quarter of 2015. The interest paid on deposits increased by $322,000 as deposit balances were $988.0 million, or 17.4%, higher than they were in the previous year, primarily due to the LNB acquisition. As a result of these changes, net interest margin increased to 3.57% for the quarter ended March 31, 2016 from 3.51% for the same quarter last year and 3.53% for the quarter ended December 31, 2015.

The provision for loan losses increased by $760,000, or 84.4%, to $1.7 million for the quarter ended March 31, 2016, from $900,000 for the quarter ended March 31, 2015. Loss provisions remain at low levels as asset quality continues to improve. The percentage of nonperforming loans to total loans decreased to 1.03% at March 31, 2016 from 1.21% at March 31, 2015 and classified loans decreased by $4.6 million, or 2.3%, to $196.7 million at March 31, 2016 from $201.3 million at March 31, 2015.

Noninterest income increased by $4.8 million, or 33.0%, to $19.4 million for the quarter ended March 31, 2016, from $14.6 million for the quarter ended March 31, 2015. Contributing to this increase was an increase in service charges and fees of $1.4 million, or 16.2%, which is attributable to the growth in checking accounts from both the LNB acquisition and the successful execution of internal growth initiatives. Also contributing to the increase in noninterest income was an increase in gain on sale of real estate owned of $1.3 million, as the Company recognized a net gain of $249,000 for the quarter ended March 31, 2016 compared to a net loss of $1.0 million for the same quarter last year. Additionally, trust and other financial services income and insurance commission income increased by $485,000 and $286,000, respectively, for the quarter ended March 31, 2016 compared to the same quarter last year.

     Noninterest expense increased by $9.6 million, or 17.8%, to $63.3 million for the quarter ended March 31, 2016, from $53.7 million for the quarter ended March 31, 2015. This increase resulted primarily from an increase in compensation and employee benefits of $5.1 million, or 18.4%, due primarily to the addition of lending and credit talent and the employees retained from the LNB acquisition. Other expenses increased by $2.1 million, or 92.1% due primarily to an increase in charitable contributions made to utilize Pennsylvania Education Improvement Tax Credits (EITC).  The offsetting tax credit for these contributions will be recognized as part of the annual effective tax rate. Also contributing to the increase in noninterest expense was an increase in processing expenses of $1.2 million, or 16.8%, due primarily to the acquisition of LNB, upgrades to technology and the replacement of debit cards in an effort to enhance customer security.  

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 176 full-service community banking offices and five free standing drive-up facilities 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.northwest.com.

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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)

	March 31, 2016			December 31, 2015		March 31, 2015
Assets
Cash and cash equivalents	$	86,151		92,263		83,970
Interest-earning deposits in other financial institutions	74,850			74,510		212,496
Federal funds sold and other short-term investments	2,320			635		635
Marketable securities available-for-sale (amortized cost of $772,768, $868,956 and $906,028, respectively)	783,940			874,405		916,423
Marketable securities held-to-maturity (fair value of $28,611, $32,552 and $92,989, respectively)	27,764			31,689		90,825
Total cash, interest-earning deposits and marketable securities	975,025			1,073,502		1,304,349
Residential mortgage loans held for sale	8,952			—		—
Residential mortgage loans	2,761,411			2,750,564		2,543,870
Home equity loans	1,169,821			1,187,106		1,055,739
Consumer loans	525,537			510,617		239,956
Commercial real estate loans	2,360,863			2,351,434		1,856,574
Commercial loans	467,418			422,400		368,725
Total loans receivable	7,294,002			7,222,121		6,064,864
Allowance for loan losses	(62,278		)	(62,672	)	(67,298	)
Loans receivable, net	7,231,724			7,159,449		5,997,566
Federal Home Loan Bank stock, at cost	35,539			40,903		36,292
Accrued interest receivable	21,712			21,072		19,753
Real estate owned, net	6,834			8,725		15,346
Premises and Equipment, net	153,000			154,351		142,481
Bank owned life insurance	168,511			168,509		145,275
Goodwill	261,736			261,736		175,498
Other intangible assets	8,398			8,982		3,027
Other assets	53,809			54,670		50,772
Total assets	$	8,916,288		8,951,899		7,890,359
Liabilities and Shareholders’ equity
Liabilities
Noninterest-bearing demand deposits	$	1,179,950		1,177,256		944,937
Interest-bearing demand deposits	1,121,779			1,080,086		898,945
Money market deposit accounts	1,295,138			1,274,504		1,151,971
Savings deposits	1,433,788			1,386,017		1,257,446
Time deposits	1,639,406			1,694,718		1,428,768
Total deposits	6,670,061			6,612,581		5,682,067
Borrowed funds	857,754			975,007		943,842
Advances by borrowers for taxes and insurance	38,719			33,735		34,998
Accrued interest payable	1,894			1,993		1,336
Other liabilities	66,059			54,207		57,506
Junior subordinated debentures	111,213			111,213		103,094
Total liabilities	7,745,700			7,788,736		6,822,843
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, 101,848,509 shares, 101,871,737 shares and 94,553,350 issued and outstanding, respectively	1,018			1,019		946
Paid-in-capital	718,027			717,603		624,584
Retained earnings	492,316			489,292		484,774
Unallocated common stock of Employee Stock Ownership Plan	(19,815		)	(20,216	)	(21,565	)
Accumulated other comprehensive loss	(20,958		)	(24,535	)	(21,223	)
Total shareholders’ equity	1,170,588			1,163,163		1,067,516
Total liabilities and shareholders’ equity	$	8,916,288		8,951,899		7,890,359
Equity to assets	13.13		%	12.99	%	13.53	%
Tangible common equity to assets	10.41		%	10.28	%	11.53	%
Book value per share	$	11.49		11.42		11.29
Tangible book value per share	$	8.84		8.76		9.40
Closing market price per share	$	13.51		13.39		11.85
Full time equivalent employees	2,152			2,186		2,041
Number of banking offices	181			181		161

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

	Quarter ended
	March 31,			December 31,		September 30,		June 30,		March 31,
	2016			2015		2015		2015		2015
Interest income:
Loans receivable	$	80,781		80,882		76,087		70,985		70,711
Mortgage-backed securities	2,229			2,301		2,230		2,058		2,234
Taxable investment securities	1,038			1,108		1,689		1,129		1,045
Tax-free investment securities	724			836		986		1,143		1,348
FHLB dividends	467			499		451		475		1,403
Interest-earning deposits	59			13		99		180		139
Total interest income	85,298			85,639		81,542		75,970		76,880
Interest expense:
Deposits	6,088			6,435		6,163		5,691		5,766
Borrowed funds	7,658			8,051		7,987		8,101		8,133
Total interest expense	13,746			14,486		14,150		13,792		13,899
Net interest income	71,552			71,153		67,392		62,178		62,981
Provision for loan losses	1,660			4,595		3,167		1,050		900
Net interest income after provision for loan losses	69,892			66,558		64,225		61,128		62,081
Noninterest income:
Gain on sale of investments	127			116		260		566		95
Service charges and fees	10,065			10,530		9,945		9,228		8,659
Trust and other financial services income	3,261			3,410		3,062		3,094		2,776
Insurance commission income	2,714			2,490		2,398		2,210		2,428
Gain/ loss on real estate owned, net	249			(156	)	(246	)	(541	)	(1,046	)
Income from bank owned life insurance	1,595			1,251		1,166		1,008		913
Mortgage banking income	218			208		267		218		240
Other operating income	1,219			1,697		837		742		560
Total noninterest income	19,448			19,546		17,689		16,525		14,625
Noninterest expense:
Compensation and employee benefits	33,033			32,003		31,000		28,920		27,895
Premises and occupancy costs	6,537			6,403		6,072		5,899		6,267
Office operations	3,460			3,252		3,268		2,905		2,912
Collections expense	676			1,252		624		603		768
Processing expenses	8,414			8,057		8,126		7,392		7,205
Marketing expenses	1,891			1,642		1,691		3,190		1,976
Federal deposit insurance premiums	1,503			1,299		1,177		1,286		1,347
Professional services	1,833			1,933		1,529		1,652		1,792
Amortization of intangible assets	675			729		422		269		268
Real estate owned expense	311			393		471		514		692
Restructuring/ acquisition expense	635			1,347		7,590		467		347
Other expense	4,307			2,917		1,834		2,038		2,242
Total noninterest expense	63,275			61,227		63,804		55,135		53,711
Income before income taxes	26,065			24,877		18,110		22,518		22,995
Income tax expense	8,081			8,684		5,238		7,213		6,825
Net income	$	17,984		16,193		12,872		15,305		16,170
Basic earnings per share	$	0.18		0.16		0.14		0.17		0.18
Diluted earnings per share	$	0.18		0.16		0.13		0.17		0.18
Weighted average common shares outstanding - basic	98,889,744			98,741,393		95,256,807		91,538,172		91,634,064
Weighted average common shares outstanding - diluted	99,380,009			99,500,056		95,825,798		91,998,005		91,902,071
Annualized return on average equity	6.21		%	5.83	%	4.54	%	5.77	%	6.17	%
Annualized return on average assets	0.81		%	0.77	%	0.59	%	0.78	%	0.83	%
Annualized return on tangible common equity	8.03		%	7.20	%	5.72	%	6.90	%	7.38	%
Efficiency ratio *	68.09		%	65.22	%	65.58	%	69.12	%	68.42	%
Annualized noninterest expense to average assets *	2.80		%	2.63	%	2.57	%	2.77	%	2.73	%

* - Excludes restructuring/acquisition expenses and amortization of intangible assets.

Northwest Bancshares, Inc. and Subsidiaries

Asset quality

(Dollars in thousands)

	March 31,  2016			December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015
Nonaccrual loans current:
Residential mortgage loans	$	1,678		1,393		1,900		1,655		1,322
Home equity loans	1,118			1,108		1,471		1,345		1,910
Consumer loans	190			140		251		171		114
Commercial real estate loans	19,350			14,018		19,602		8,596		18,465
Commercial loans	5,923			4,604		4,877		5,096		9,429
Total nonaccrual loans current	$	28,259		21,263		28,101		16,863		31,240
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	1,600		430		—		—		951
Home equity loans	119			375		392		49		380
Consumer loans	164			97		155		77		92
Commercial real estate loans	3,371			2,192		359		867		3,907
Commercial loans	4			322		131		186		144
Total nonaccrual loans delinquent 30 days to 59 days	$	5,258		3,416		1,037		1,179		5,474
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	721		2,139		1,097		1,197		1,892
Home equity loans	504			389		260		472		507
Consumer loans	182			315		156		191		129
Commercial real estate loans	109			762		416		504		1,045
Commercial loans	57			110		11		119		107
Total nonaccrual loans delinquent 60 days to 89 days	$	1,573		3,715		1,940		2,483		3,680
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	14,301		15,810		16,510		16,125		15,068
Home equity loans	5,922			5,650		4,546		4,616		5,646
Consumer loans	2,360			2,900		3,132		2,199		2,045
Commercial real estate loans	13,165			16,449		10,565		12,673		8,233
Commercial loans	3,314			2,459		2,074		1,858		1,921
Total nonaccrual loans delinquent 90 days or more	$	39,062		43,268		36,827		37,471		32,913
Total nonaccrual loans	$	74,152		71,662		67,905		57,996		73,307
Total nonaccrual loans	$	74,152		71,662		67,905		57,996		73,307
Loans 90 days past maturity and still accruing	894			1,334		680		385		310
Nonperforming loans	75,046			72,996		68,585		58,381		73,617
Real estate owned, net	6,834			8,725		10,391		13,864		15,346
Nonperforming assets	$	81,880		81,721		78,976		72,245		88,963
Nonaccrual troubled debt restructuring *	$	17,699		21,118		23,184		15,443		19,843
Accruing troubled debt restructuring	30,549			29,997		26,154		40,741		40,802
Total troubled debt restructuring	$	48,248		51,115		49,338		56,184		60,645
Nonperforming loans to total loans	1.03		%	1.01	%	0.96	%	0.95	%	1.21	%
Nonperforming assets to total assets	0.92		%	0.91	%	0.88	%	0.92	%	1.13	%
Allowance for loan losses to total loans	0.85		%	0.87	%	0.85	%	0.96	%	1.11	%
Allowance for loan losses to nonperforming loans	82.99		%	85.86	%	94.54	%	101.16	%	91.42	%

* - Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries

Exposure to the oil and gas industry

(Dollars in thousands)

	March 31, 2016		December 31, 2015	September 30, 2015	June 30, 2015	March 31, 2015
Direct exposure to oil and gas extraction:
Outstanding balance	$	13,764	16,619	17,209	17,990	18,417
Commitments	18,450		19,576	20,127	20,511	21,181
Impaired	1,127		1,127	1,127	—	—
Reserve	1,157		1,190	1,313	274	208
Indirect exposure: *
Outstanding balance	54,465		56,659	57,805	72,416	66,386
Commitments	58,522		68,659	79,226	99,661	102,252
Impaired	—		—	—	217	219
Reserve	195		34	150	103	69
Total exposure:
Outstanding balance	68,229		73,278	75,014	90,406	84,803
Commitments	76,972		88,235	99,353	120,172	123,433
Impaired	1,127		1,127	1,127	217	219
Reserve	1,352		1,224	1,463	377	277

* - Includes loans to haulers, wholesalers, and refineries.

Northwest Bancshares, Inc. and Subsidiaries

Loans by credit quality indicators

(Dollars in thousands)

At March 13, 2016	Pass		Special mention  *	Substandard  **	Doubtful	Loss	Recorded investment in loans receivable
Personal Banking:
Residential mortgage loans	$	2,755,325	—	13,721	—	1,317	2,770,363
Home equity loans	1,161,382		—	8,439	—	—	1,169,821
Consumer loans	523,333		—	2,204	—	—	525,537
Total Personal Banking	4,440,040		—	24,364	—	1,317	4,465,721
Business Banking:
Commercial real estate loans	2,167,110		63,695	130,043	15	—	2,360,863
Commercial loans	409,994		16,425	39,887	1,112	—	467,418
Total Business Banking	2,577,104		80,120	169,930	1,127	—	2,828,281
Total loans	$	7,017,144	80,120	194,294	1,127	1,317	7,294,002
At December 31, 2015
Personal Banking:
Residential mortgage loans	$	2,725,492	—	14,060	—	1,340	2,740,892
Home equity loans	1,178,735		—	8,371	—	—	1,187,106
Consumer loans	517,746		—	2,543	—	—	520,289
Total Personal Banking	4,421,973		—	24,974	—	1,340	4,448,287
Business Banking:
Commercial real estate loans	2,170,951		53,390	126,978	115	—	2,351,434
Commercial loans	359,403		23,730	38,157	1,110	—	422,400
Total Business Banking	2,530,354		77,120	165,135	1,225	—	2,773,834
Total loans	$	6,952,327	77,120	190,109	1,225	1,340	7,222,121
At September 30, 2015
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
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
Total loans	$	6,898,277	52,703	199,113	165	1,355	7,151,613
At June 30, 2015
Personal Banking:
Residential mortgage loans	$	2,584,438	—	11,362	—	1,370	2,597,170
Home equity loans	1,051,213		—	4,616	—	—	1,055,829
Consumer loans	250,648		—	1,743	—	—	252,391
Total Personal Banking	3,886,299		—	17,721	—	1,370	3,905,390
Business Banking:
Commercial real estate loans	1,688,449		37,497	133,797	—	—	1,859,743
Commercial loans	301,467		19,793	38,262	2	—	359,524
Total Business Banking	1,989,916		57,290	172,059	2	—	2,219,267
Total loans	$	5,876,215	57,290	189,780	2	1,370	6,124,657
At March 31, 2015
Personal Banking:
Residential mortgage loans	$	2,531,595	—	10,851	—	1,424	2,543,870
Home equity loans	1,050,092		—	5,647	—	—	1,055,739
Consumer loans	238,381		—	1,575	—	—	239,956
Total Personal Banking	3,820,068		—	18,073	—	1,424	3,839,565
Business Banking:
Commercial real estate loans	1,671,331		43,874	141,369	—	—	1,856,574
Commercial loans	305,632		22,651	31,243	9,199	—	368,725
Total Business Banking	1,976,963		66,525	172,612	9,199	—	2,225,299
Total loans	$	5,797,031	66,525	190,685	9,199	1,424	6,064,864

* - Includes $7.7 million, $7.6 million and $533,000 of acquired loans at March 31, 2016, December 31, 2015 and September 30, 2015, respectively.

** - Includes $17.9 million, $18.6 million and $18.5 million of acquired loans at March 31, 2016, December 31, 2015 and September 30, 2015, respectively.

Northwest Bancshares, Inc. and Subsidiaries

Loan delinquency

(Dollars in thousands)

	March 31, 2016			*		December 31, 2015			*		September 30, 2015			*		June 30, 2015			*		March 31, 2015		*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	323	$	24,494	0.9	%	349	$	25,943	0.9	%	75	$	3,644	0.1	%	64	$	3,250	0.1	%	336	25,586	1.0	%
Home equity loans	132	5,351		0.5	%	173	5,806		0.5	%	149	5,770		0.5	%	112	3,768		0.4	%	128	3,737	0.4	%
Consumer loans	895	5,511		1.0	%	1,234	7,101		1.4	%	1,214	6,324		1.3	%	1,103	5,116		2.0	%	912	4,374	1.8	%
Commercial real estate loans	51	27,474		1.2	%	48	24,877		1.1	%	55	7,463		0.3	%	39	3,788		0.2	%	50	5,497	0.3	%
Commercial loans	26	3,133		0.7	%	31	2,868		0.7	%	21	1,379		0.3	%	21	1,363		0.4	%	36	1,480	0.4	%
Total loans delinquent 30 days to 59 days	1,427	$	65,963	0.9	%	1,835	$	66,595	0.9	%	1,514	$	24,580	0.3	%	1,339	$	17,285	0.3	%	1,462	40,674	0.7	%
Loans delinquent 60 days to 89 days:
Residential mortgage loans	21	$	1,358	—	%	100	$	7,790	0.3	%	83	$	5,193	0.2	%	70	$	5,815	0.2	%	40	3,397	0.1	%
Home equity loans	36	1,256		0.1	%	50	2,478		0.2	%	52	1,716		0.1	%	39	2,090		0.2	%	34	1,404	0.1	%
Consumer loans	379	1,803		0.3	%	521	2,521		0.5	%	512	2,593		0.5	%	442	1,767		0.7	%	352	1,515	0.6	%
Commercial real estate loans	11	1,081		—	%	21	8,228		0.3	%	28	8,368		0.4	%	30	4,919		0.3	%	21	2,351	0.1	%
Commercial loans	7	375		0.1	%	7	598		0.1	%	8	401		0.1	%	7	159		—	%	5	136	—	%
Total loans delinquent 60 days to 89 days	454	$	5,873	0.1	%	699	$	21,615	0.3	%	683	$	18,271	0.3	%	588	$	14,750	0.2	%	452	8,803	0.1	%
Loans delinquent 90 days or more: **
Residential mortgage loans	183	$	14,673	0.5	%	215	$	16,350	0.6	%	204	$	17,209	0.6	%	203	$	16,125	0.6	%	193	15,068	0.6	%
Home equity loans	120	6,200		0.5	%	143	6,112		0.5	%	136	5,554		0.5	%	104	4,616		0.4	%	123	5,646	0.5	%
Consumer loans	557	2,386		0.5	%	523	2,926		0.6	%	570	3,156		0.6	%	440	2,199		0.9	%	440	2,045	0.9	%
Commercial real estate loans	106	15,442		0.7	%	113	19,031		0.8	%	95	14,898		0.6	%	76	12,673		0.7	%	84	8,233	0.4	%
Commercial loans	34	3,456		0.7	%	25	2,599		0.6	%	23	2,319		0.6	%	13	1,858		0.5	%	16	1,921	0.5	%
Total loans delinquent 90 days or more	1,000	$	42,157	0.6	%	1,019	$	47,018	0.7	%	1,028	$	43,136	0.6	%	836	$	37,471	0.6	%	856	32,913	0.5	%
Total loans delinquent	2,881	$	113,993	1.6	%	3,553	$	135,228	1.9	%	3,225	$	85,987	1.2	%	2,763	$	69,506	1.1	%	2,770	82,390	1.4	%

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

** - Includes purchased credit impaired loans of $3.1 million, $3.7 million and $6.3 million at March 31, 2016, December 31, 2015 and September 30, 2015, respectively.

Northwest Bancshares, Inc. and Subsidiaries

Allowance for loan losses

(Dollars in thousands)

	Quarter ended
	March 31, 2016			December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015
Beginning balance	$	62,672		60,547		59,057		67,298		67,518
Provision	1,660			4,595		3,167		1,050		900
Charge-offs residential mortgage	(564		)	(171	)	(342	)	(278	)	(335	)
Charge-offs home equity	(984		)	(1,097	)	(443	)	(542	)	(342	)
Charge-offs consumer	(2,403		)	(2,561	)	(2,014	)	(1,759	)	(1,940	)
Charge-offs commercial real estate	(897		)	(1,216	)	(558	)	(3,439	)	(1,113	)
Charge-offs commercial	(117		)	(508	)	(595	)	(6,356	)	(724	)
Recoveries	2,911			3,083		2,275		3,083		3,334
Ending balance	$	62,278		62,672		60,547		59,057		67,298
Net charge-offs to average loans, annualized	0.11		%	0.14	%	0.10	%	0.61	%	0.07	%

Northwest Bancshares, Inc. and Subsidiaries

Average balance sheet

(Dollars in thousands) 

The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages. 

	Quarter ended
	March 31, 2016					December 31, 2015					September 30, 2015					June 30, 2015					March 31, 2015
	Average Balance		Interest	Avg. Yield/ Cost (i)		Average Balance		Interest	Avg. Yield/ Cost (i)		Average Balance		Interest	Avg. Yield/ Cost (i)		Average Balance		Interest	Avg. Yield/ Cost (i)		Average Balance		Interest	Avg. Yield/ Cost (i)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,739,787	29,786	4.35	%	$	2,710,811	29,227	4.31	%	$	2,632,199	29,060	4.42	%	$	2,546,712	28,395	4.46	%	$	2,512,202	28,255	4.50	%
Home equity loans	1,177,406		12,642	4.32	%	1,193,433		12,753	4.24	%	1,114,931		12,208	4.34	%	1,054,508		11,402	4.34	%	1,059,128		11,473	4.39	%
Consumer loans	510,091		8,219	6.48	%	500,175		8,805	6.98	%	364,378		7,146	7.78	%	245,832		6,529	10.65	%	239,927		6,290	10.63	%
Commercial real estate loans	2,349,748		25,993	4.38	%	2,331,769		25,972	4.36	%	2,100,463		24,061	4.48	%	1,859,790		21,257	4.52	%	1,799,324		20,927	4.65	%
Commercial loans	441,977		4,723	4.23	%	412,415		4,671	4.43	%	372,693		4,108	4.31	%	367,069		3,862	4.16	%	408,669		4,237	4.15	%
Total loans receivable (a) (b) (d)	7,219,009		81,363	4.53	%	7,148,603		81,428	4.52	%	6,584,664		76,583	4.66	%	6,073,911		71,445	4.72	%	6,019,250		71,182	4.80	%
Mortgage-backed securities (c)	488,294		2,229	1.83	%	519,736		2,301	1.77	%	498,757		2,230	1.79	%	477,800		2,058	1.72	%	506,778		2,234	1.76	%
Investment securities (c) (d)	387,460		2,151	2.22	%	427,363		2,394	2.24	%	482,666		2,754	2.28	%	482,670		2,887	2.39	%	486,078		3,119	2.57	%
FHLB stock (g)	37,098		467	5.06	%	38,651		499	5.12	%	39,552		451	4.52	%	35,608		475	5.35	%	36,139		363	4.07	%
Other interest-earning deposits	43,578		59	0.54	%	40,410		13	0.13	%	162,041		99	0.24	%	272,691		180	0.26	%	246,296		139	0.23	%
Total interest-earning assets	8,175,439		86,269	4.24	%	8,174,763		86,635	4.20	%	7,767,680		82,117	4.24	%	7,342,680		77,045	4.21	%	7,294,541		77,037	4.28	%
Noninterest earning assets (e)	735,562					747,317					846,439					529,528					595,425
Total assets	$	8,911,001				$	8,922,080				$	8,614,119				$	7,872,208				$	7,889,966
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings deposits	$	1,405,800	865	0.25	%	$	1,378,377	871	0.25	%	$	1,324,620	865	0.26	%	$	1,263,785	838	0.27	%	$	1,231,745	813	0.27	%
Interest-bearing demand deposits	1,093,839		156	0.06	%	1,083,524		157	0.06	%	1,022,585		149	0.06	%	920,071		131	0.06	%	878,230		131	0.06	%
Money market deposit accounts	1,288,535		865	0.27	%	1,279,181		873	0.27	%	1,217,122		825	0.27	%	1,147,017		759	0.27	%	1,165,159		765	0.27	%
Time deposits	1,664,322		4,202	1.02	%	1,720,895		4,534	1.05	%	1,577,159		4,324	1.09	%	1,409,740		3,963	1.13	%	1,452,476		4,057	1.13	%
Borrowed funds (f)	899,439		6,539	2.92	%	906,574		6,730	2.95	%	906,410		6,713	2.94	%	929,744		6,929	2.99	%	960,812		6,975	2.94	%
Junior subordinated debentures	111,213		1,119	3.98	%	116,626		1,321	4.43	%	111,213		1,274	4.48	%	103,094		1,172	4.50	%	103,094		1,158	4.49	%
Total interest-bearing liabilities	6,463,148		13,746	0.86	%	6,485,177		14,486	0.89	%	6,159,109		14,150	0.91	%	5,773,451		13,792	0.96	%	5,791,516		13,899	0.97	%
Noninterest-bearing demand deposits (h)	1,161,151					1,145,276					1,054,270					957,912					914,025
Noninterest bearing liabilities	122,667					133,323					275,435					77,075					121,121
Total liabilities	7,746,966					7,763,776					7,488,814					6,808,438					6,826,662
Shareholders’ equity	1,164,035					1,158,304					1,125,305					1,063,770					1,063,304
Total liabilities and shareholders’ equity	$	8,911,001				$	8,922,080				$	8,614,119				$	7,872,208				$	7,889,966
Net interest income/ Interest rate spread			72,523	3.38	%			72,149	3.31	%			67,967	3.33	%			63,253	3.25	%			63,138	3.31	%
Net interest-earning assets/ Net interest margin	$	1,712,291		3.57	%	$	1,689,586		3.53	%	$	1,608,571		3.50	%	$	1,569,229		3.45	%	$	1,503,025		3.51	%
Ratio of interest-earning assets to interest-bearing liabilities	1.26X					1.26X					1.26X					1.27X					1.26X

(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) Excludes a $1.0 million special dividend paid in February 2015 from the average yield calculation.

(h) Average cost of deposits were 0.37%, 0.39%, 0.39%, 0.40% and 0.41%, respectively.

(i) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.50%, 4.49%, 4.63%, 4.69% and 4.76%, respectively, Investment securities - 1.82%, 1.82%, 1.84%, 1.88% and 1.97%, respectively, Interest-earning assets - 4.20%, 4.16%, 4.19%, 4.15% and 4.21%, respectively. GAAP basis net interest rate spreads were 3.34%, 3.27%, 3.28%, 3.19% and 3.24%, respectively, and GAAP basis net interest margins were 3.55%, 3.48%, 3.45%, 3.39% and 3.44%, respectively.