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 Record Fourth Quarter 2016 Earnings and Quarterly Dividend Increase
Warren, Pennsylvania — January 23, 2017
Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2016 of $24.5 million, or $0.24 per diluted share. This represents an increase of $8.3 million, or 51.3%, compared to the same quarter last year when net income was $16.2 million or $0.16 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended December 31, 2016 were 8.37% and 1.01% compared to 5.55% and 0.73% for the same quarter last year.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per share payable on February 16, 2017, to shareholders of record as of February 2, 2017. This represents a 6.67% increase over the prior year and is the 89th consecutive quarter in which the Company has paid a cash dividend.
In making this announcement, William J. Wagner, President and CEO, noted, "The results of the fourth quarter when compared to the previous year reflect the earnings accretion we expected from both the LNB merger and the First Niagara branch acquisition. As a result of these acquisitions our checking accounts have increased by 37% over the last two years and time deposits have decreased to less than 20% of total deposits. This change in deposit mix has increased our net interest margin from 3.53% to 3.75%. These acquisitions along with the recently announced plan to divest our three offices in Maryland better defines our footprint for the future and establishes a framework for increased revenue growth and greater efficiency."
Net interest income increased by $11.7 million, or 16.6%, to $82.9 million for the quarter ended December 31, 2016, from $71.2 million for the quarter ended December 31, 2015. This increase is due primarily to a $4.8 million, or 5.9%, increase in interest income on loans and a $6.8 million, or 84.7% decrease in interest expense on borrowed funds. The increase in loan interest income is a result of a $580.1 million increase in the average balance of the Company’s loan portfolio from the same quarter last year, while the decrease in interest expense on borrowed funds is due primarily to the payoff of Federal Home Loan Bank ("FHLB") advances with the funds received from the purchase of deposits in western New York.
The provision for loan losses decreased by $2.5 million, or 53.3%, to $2.1 million for the quarter ended December 31, 2016, from $4.6 million for the quarter ended December 31, 2015. This decrease is due primarily to a decrease in the percentage of total loan delinquency to total loans to 1.61% at December 31, 2016 from 1.87% at December 31, 2015.
Noninterest income increased by $5.3 million, or 27.0%, to $24.8 million for the quarter ended December 31, 2016, from $19.5 million for the quarter ended December 31, 2015. Contributing to this increase was an increase in mortgage banking income of $2.1 million, which is the result of resuming the sale of mortgage loans originated by the Wholesale Lending Division. Also contributing to this increase was an increase in service charges and fees of $1.9 million, or 17.8%, which is primarily attributable to the growth in checking accounts from both acquisitions, and internal growth initiatives. Additionally, trust and other financial services income increased by $721,000, or 21.1%, due primarily to the approximately $450.0 million of wealth management assets acquired with the western New York branch purchase.
Noninterest expense increased by $7.6 million, or 12.3%, to $68.8 million for the quarter ended December 31, 2016, from $61.2 million for the quarter ended December 31, 2015. This increase resulted primarily from a $4.6 million, or 14.3%, increase in compensation and employee benefits due primarily to the costs associated with the employees added from the 18 western New York branches. The other increases for the current quarter compared to the prior year are also primarily attributable to incremental expenses from the additional branches. Partially offsetting these increases were decreases in federal deposit insurance premiums and collection expense of $824,000 and $815,000, respectively.
Net income for the year ended December 31, 2016 was $49.7 million, or $0.49 per diluted share, which represents a decrease of $10.8 million, or 18.0%, compared to the year ended December 31, 2015, when net income was $60.5 million, or $0.64 per diluted share. The annualized returns on average shareholders’ equity and average assets for the year ended December 31, 2016 were 4.28% and 0.55%, respectively, compared to 5.49% and 0.73% for the same period last year. This decrease is due primarily to a $37.0 million penalty incurred from the prepayment of FHLB borrowings, acquisition and restructuring expenses of $12.2 million, and ESOP termination expense of $5.1 million.
Non-GAAP net operating income for the year ended December 31, 2016, which excludes the after-tax impact of the aforementioned FHLB prepayment penalty, restructuring and acquisition expenses, and ESOP termination expenses totaling $34.7 million, was $84.3 million, or $0.84 per diluted share. This represents an increase of $17.3 million, or 25.8%, compared to the year ended December 31, 2015 with non-GAAP net operating income of $67.0 million, or $0.71 per diluted share. The non-GAAP annualized returns on average shareholders’ equity and average assets for the year ended December 31, 2016 were 7.27% and 0.93%, respectively, compared to 6.08% and 0.80% for the same period last year.
The Company previously announced that it has entered into a purchase and assumption agreement to sell three bank branches located in the greater Baltimore, Maryland area to Shore Bancshares, Inc.'s banking subsidiary, Shore United Bank. This divestiture includes approximately $216.0 million of deposits, $147.0 million of performing loans and $40.0 million of cash. The transaction includes a deposit premium of 8.0% and based on the amounts at the time the agreement was signed Northwest anticipates recording a gain of approximately $17.0 million. The sale is expected to close during the second quarter of 2017.
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 167 full-service community banking offices and nine free standing drive-through facilities in Pennsylvania, New York, Ohio and Maryland and 49 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.
# # #
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)
| December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 119,403 | 107,604 | 92,263 | |||||
| Interest-earning deposits in other financial institutions | 266,902 | 210,723 | 74,510 | ||||||
| Federal funds sold and other short-term investments | 3,562 | 2,239 | 635 | ||||||
| Marketable securities available-for-sale (amortized cost of $825,552, $879,141 and $868,956, respectively) | 826,200 | 890,688 | 874,405 | ||||||
| Marketable securities held-to-maturity (fair value of $20,426, $23,249 and $32,552 , respectively) | 19,978 | 22,584 | 31,689 | ||||||
| Total cash, interest-earning deposits and marketable securities | 1,236,045 | 1,233,838 | 1,073,502 | ||||||
| Residential mortgage loans held-for-sale | 9,625 | 30,355 | — | ||||||
| Residential mortgage loans | 2,705,139 | 2,788,658 | 2,740,892 | ||||||
| Home equity loans | 1,328,772 | 1,349,105 | 1,187,106 | ||||||
| Consumer loans | 642,961 | 628,512 | 520,289 | ||||||
| Commercial real estate loans | 2,342,089 | 2,464,681 | 2,351,434 | ||||||
| Commercial loans | 528,761 | 537,255 | 422,400 | ||||||
| Total loans receivable | 7,557,347 | 7,798,566 | 7,222,121 | ||||||
| Allowance for loan losses | (60,939 | ) | (63,246 | ) | (62,672 | ) | |||
| Loans receivable, net | 7,496,408 | 7,735,320 | 7,159,449 | ||||||
| Assets held-for-sale | 152,528 | — | — | ||||||
| Federal Home Loan Bank stock, at cost | 7,390 | 7,660 | 40,903 | ||||||
| Accrued interest receivable | 21,699 | 21,591 | 21,072 | ||||||
| Real estate owned, net | 4,889 | 4,841 | 8,725 | ||||||
| Premises and equipment, net | 161,185 | 167,596 | 154,351 | ||||||
| Bank owned life insurance | 171,449 | 170,172 | 168,509 | ||||||
| Goodwill | 307,420 | 307,711 | 261,736 | ||||||
| Other intangible assets | 32,433 | 33,901 | 8,982 | ||||||
| Other assets | 32,194 | 31,977 | 54,670 | ||||||
| Total assets | $ | 9,623,640 | 9,714,607 | 8,951,899 | |||||
| Liabilities and Shareholders’ equity | |||||||||
| Liabilities | |||||||||
| Noninterest-bearing demand deposits | $ | 1,448,972 | 1,496,574 | 1,177,256 | |||||
| Interest-bearing demand deposits | 1,428,317 | 1,446,971 | 1,080,086 | ||||||
| Money market deposit accounts | 1,841,567 | 1,896,272 | 1,274,504 | ||||||
| Savings deposits | 1,622,879 | 1,671,539 | 1,386,017 | ||||||
| Time deposits | 1,540,586 | 1,691,447 | 1,694,718 | ||||||
| Total deposits | 7,882,321 | 8,202,803 | 6,612,581 | ||||||
| Liabilities held-for-sale | 215,657 | — | — | ||||||
| Borrowed funds | 142,899 | 135,891 | 975,007 | ||||||
| Advances by borrowers for taxes and insurance | 36,879 | 21,616 | 33,735 | ||||||
| Accrued interest payable | 635 | 682 | 1,993 | ||||||
| Other liabilities | 63,373 | 79,599 | 54,207 | ||||||
| Junior subordinated debentures | 111,213 | 111,213 | 111,213 | ||||||
| Total liabilities | 8,452,977 | 8,551,804 | 7,788,736 | ||||||
| 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, 101,699,406 shares, 101,268,648 shares and 101,871,737 issued and outstanding, respectively | 1,017 | 1,013 | 1,019 | ||||||
| Paid-in-capital | 718,834 | 711,974 | 717,603 | ||||||
| Retained earnings | 478,803 | 469,459 | 489,292 | ||||||
| Unallocated common stock of Employee Stock Ownership Plan | — | — | (20,216 | ) | |||||
| Accumulated other comprehensive loss | (27,991 | ) | (19,643 | ) | (24,535 | ) | |||
| Total shareholders’ equity | 1,170,663 | 1,162,803 | 1,163,163 | ||||||
| Total liabilities and shareholders’ equity | $ | 9,623,640 | 9,714,607 | 8,951,899 | |||||
| Equity to assets | 12.16 | % | 11.97 | % | 12.99 | % | |||
| Tangible common equity to assets | 8.95 | % | 8.76 | % | 10.28 | % | |||
| Book value per share | $ | 11.51 | 11.48 | 11.42 | |||||
| Tangible book value per share | $ | 8.17 | 8.11 | 8.76 | |||||
| Closing market price per share | $ | 18.03 | 15.71 | 13.39 | |||||
| Full time equivalent employees | 2,306 | 2,268 | 2,186 | ||||||
| Number of banking offices | 176 | 176 | 181 | ||||||
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, | ||||||||||||
| 2016 | 2016 | 2016 | 2016 | 2015 | ||||||||||||
| Interest income: | ||||||||||||||||
| Loans receivable | $ | 85,669 | 81,083 | 81,506 | 80,781 | 80,882 | ||||||||||
| Mortgage-backed securities | 2,166 | 2,030 | 2,115 | 2,229 | 2,301 | |||||||||||
| Taxable investment securities | 988 | 627 | 756 | 1,038 | 1,108 | |||||||||||
| Tax-free investment securities | 625 | 676 | 707 | 724 | 836 | |||||||||||
| FHLB dividends | 285 | 218 | 401 | 467 | 499 | |||||||||||
| Interest-earning deposits | 300 | 114 | 70 | 59 | 13 | |||||||||||
| Total interest income | 90,033 | 84,748 | 85,555 | 85,298 | 85,639 | |||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 5,859 | 5,653 | 5,865 | 6,088 | 6,435 | |||||||||||
| Borrowed funds | 1,232 | 1,801 | 4,143 | 7,658 | 8,051 | |||||||||||
| Total interest expense | 7,091 | 7,454 | 10,008 | 13,746 | 14,486 | |||||||||||
| Net interest income | 82,942 | 77,294 | 75,547 | 71,552 | 71,153 | |||||||||||
| Provision for loan losses | 2,145 | 5,538 | 4,199 | 1,660 | 4,595 | |||||||||||
| Net interest income after provision for loan losses | 80,797 | 71,756 | 71,348 | 69,892 | 66,558 | |||||||||||
| Noninterest income: | ||||||||||||||||
| Gain on sale of investments | 213 | 58 | 227 | 127 | 116 | |||||||||||
| Service charges and fees | 12,406 | 11,012 | 10,630 | 10,065 | 10,530 | |||||||||||
| Trust and other financial services income | 4,131 | 3,434 | 3,277 | 3,261 | 3,410 | |||||||||||
| Insurance commission income | 2,499 | 2,541 | 2,768 | 2,714 | 2,490 | |||||||||||
| Gain/ (loss) on real estate owned, net | 164 | (563 | ) | 111 | 249 | (156 | ) | |||||||||
| Income from bank owned life insurance | 1,281 | 1,380 | 1,105 | 1,595 | 1,251 | |||||||||||
| Mortgage banking income | 2,344 | 1,886 | 446 | 218 | 208 | |||||||||||
| Other operating income | 1,781 | 1,070 | 1,711 | 1,219 | 1,697 | |||||||||||
| Total noninterest income | 24,819 | 20,818 | 20,275 | 19,448 | 19,546 | |||||||||||
| Noninterest expense: | ||||||||||||||||
| Compensation and employee benefits | 36,562 | 38,122 | 33,210 | 33,033 | 32,003 | |||||||||||
| Premises and occupancy costs | 7,228 | 6,094 | 6,275 | 6,537 | 6,403 | |||||||||||
| Office operations | 4,395 | 3,700 | 3,343 | 3,460 | 3,252 | |||||||||||
| Collections expense | 437 | 589 | 729 | 676 | 1,252 | |||||||||||
| Processing expenses | 9,429 | 8,844 | 8,172 | 8,414 | 8,057 | |||||||||||
| Marketing expenses | 2,181 | 2,239 | 2,541 | 1,891 | 1,642 | |||||||||||
| Federal deposit insurance premiums | 475 | 984 | 1,442 | 1,503 | 1,299 | |||||||||||
| Professional services | 2,088 | 1,815 | 2,129 | 1,833 | 1,933 | |||||||||||
| Amortization of intangible assets | 1,806 | 1,068 | 710 | 675 | 729 | |||||||||||
| Real estate owned expense | 192 | 206 | 295 | 311 | 393 | |||||||||||
| Restructuring/ acquisition expense | 1,009 | 7,183 | 3,386 | 635 | 1,347 | |||||||||||
| FHLB prepayment penalty | — | — | 36,978 | — | — | |||||||||||
| Other expense | 2,959 | 2,836 | 2,912 | 4,307 | 2,917 | |||||||||||
| Total noninterest expense | 68,761 | 73,680 | 102,122 | 63,275 | 61,227 | |||||||||||
| Income/(loss) before income taxes | 36,855 | 18,894 | (10,499 | ) | 26,065 | 24,877 | ||||||||||
| Income tax expense/ (benefit) | 12,361 | 4,697 | (3,491 | ) | 8,081 | 8,684 | ||||||||||
| Net income/ (loss) | $ | 24,494 | 14,197 | (7,008 | ) | 17,984 | $ | 16,193 | ||||||||
| Basic earnings/ (loss) per share | $ | 0.24 | 0.14 | (0.07 | ) | 0.18 | 0.16 | |||||||||
| Diluted earnings/ (loss) per share | $ | 0.24 | 0.14 | (0.07 | ) | 0.18 | 0.16 | |||||||||
| Weighted average common shares outstanding - basic | 100,219,370 | 99,602,535 | 99,177,609 | 98,889,744 | 98,741,393 | |||||||||||
| Weighted average common shares outstanding - diluted | 102,089,892 | 101,068,245 | 100,243,442 | 99,380,009 | 99,500,056 | |||||||||||
| Annualized return on average equity | 8.37 | % | 4.89 | % | (2.44 | )% | 6.21 | % | 5.55 | % | ||||||
| Annualized return on average assets | 1.01 | % | 0.63 | % | (0.32 | )% | 0.81 | % | 0.73 | % | ||||||
| Annualized return on tangible common equity | 11.73 | % | 6.88 | % | (3.18 | )% | 8.03 | % | 7.20 | % | ||||||
| Efficiency ratio * | 61.20 | % | 66.69 | % | 63.71 | % | 68.09 | % | 65.22 | % | ||||||
| Annualized noninterest expense to average assets * | 2.73 | % | 2.88 | % | 2.76 | % | 2.80 | % | 2.63 | % | ||||||
* Excludes restructuring/acquisition expenses, FHLB prepayment penalty, and amortization of intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share amounts)
| Year Ended December 31, | |||||||
| 2016 | 2015 | ||||||
| Interest income: | |||||||
| Loans receivable | $ | 329,039 | 299 | 298,665 | |||
| Mortgage-backed securities | 8,540 | 8,823 | |||||
| Taxable investment securities | 3,409 | 4,520 | |||||
| Tax-free investment securities | 2,732 | 4,313 | |||||
| FHLB dividends | 1,371 | 2,828 | |||||
| Interest-earning deposits | 543 | 431 | |||||
| Total interest income | 345,634 | 319,580 | |||||
| Interest expense: | |||||||
| Deposits | 23,465 | 24,055 | |||||
| Borrowed funds | 14,834 | 32,272 | |||||
| Total interest expense | 38,299 | 56,327 | |||||
| Net interest income | 307,335 | 263,253 | |||||
| Provision for loan losses | 13,542 | 9,712 | |||||
| Net interest income after provision for loan losses | 293,793 | 253,541 | |||||
| Noninterest income: | |||||||
| Gain on sale of investments | 625 | 1,037 | |||||
| Service charges and fees | 44,113 | 38,362 | |||||
| Trust and other financial services income | 14,103 | 12,342 | |||||
| Insurance commission income | 10,522 | 9,526 | |||||
| Loss on real estate owned, net | (39 | ) | (1,989 | ) | |||
| Income from bank owned life insurance | 5,361 | 4,338 | |||||
| Mortgage banking income | 4,894 | 933 | |||||
| Other operating income | 5,781 | 4,287 | |||||
| Total noninterest income | 85,360 | 68,836 | |||||
| Noninterest expense: | |||||||
| Compensation and employee benefits | 140,927 | 119,818 | |||||
| Premises and occupancy costs | 26,134 | 24,641 | |||||
| Office operations | 14,898 | 12,337 | |||||
| Collections expense | 2,431 | 3,247 | |||||
| Processing expenses | 34,859 | 30,780 | |||||
| Marketing expenses | 8,852 | 8,499 | |||||
| Federal deposit insurance premiums | 4,404 | 5,109 | |||||
| Professional services | 7,865 | 6,906 | |||||
| Amortization of intangible assets | 4,259 | 1,688 | |||||
| Real estate owned expense | 1,004 | 2,070 | |||||
| Restructuring/ acquisition expense | 12,213 | 9,751 | |||||
| FHLB prepayment penalty | 36,978 | — | |||||
| Other expense | 13,014 | 9,031 | |||||
| Total noninterest expense | 307,838 | 233,877 | |||||
| Income before income taxes | 71,315 | 88,500 | |||||
| Income tax expense | 21,648 | 27,960 | |||||
| Net income | $ | 49,667 | 60,540 | ||||
| Basic earnings per share | $ | 0.50 | 0.64 | ||||
| Diluted earnings per share | $ | 0.49 | 0.64 | ||||
| Weighted average common shares outstanding - basic | 99,439,174 | 94,314,420 | |||||
| Weighted average common shares outstanding - diluted | 100,664,688 | 94,829,789 | |||||
| Annualized return on average equity | 4.28 | % | 5.49 | % | |||
| Annualized return on average assets | 0.55 | % | 0.73 | % | |||
| Annualized return on tangible common equity | 5.98 | % | 6.78 | % | |||
| Efficiency ratio * | 64.78 | % | 66.98 | % | |||
| Annualized noninterest expense to average assets * | 2.79 | % | 2.67 | % | |||
* Excludes restructuring/acquisition expenses, FHLB prepayment penalty, and amortization of intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) *
(Dollars in thousands, except per share amounts)
Quarter ended December 31, | Year ended December 31, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Operating results (non-GAAP): | ||||||||||||
| Net interest income | $ | 82,942 | 71,153 | 307,335 | 263,253 | |||||||
| Provision for loan losses | 2,145 | 4,595 | 13,542 | 9,712 | ||||||||
| Noninterest income | 24,819 | 19,546 | 85,360 | 68,836 | ||||||||
| Noninterest expense | 67,752 | 59,880 | 253,510 | 224,126 | ||||||||
| Income taxes | 12,724 | 9,111 | 41,322 | 31,239 | ||||||||
| Net operating income (non-GAAP) | $ | 25,140 | 17,113 | 84,321 | 67,012 | |||||||
| Diluted earnings per share (non-GAAP) | $ | 0.25 | 0.17 | 0.84 | 0.71 | |||||||
| Average equity | $ | 1,164,127 | 1,158,304 | 1,159,791 | 1,102,671 | |||||||
| Average assets | 9,624,403 | 8,922,080 | 9,111,587 | 8,324,593 | ||||||||
| Annualized ROE (non-GAAP) | 8.59 | % | 5.86 | % | 7.27 | % | 6.08 | % | ||||
| Annualized ROA (non-GAAP) | 1.04 | % | 0.76 | % | 0.93 | % | 0.80 | % | ||||
| Reconciliation of net operating income to net income: | ||||||||||||
| Net operating income (non-GAAP) | $ | 25,140 | 17,113 | 84,321 | 67,012 | |||||||
| Nonoperating expenses, net of tax: | ||||||||||||
| Restructuring/ acquisition expenses | (646 | ) | (920 | ) | (6,744 | ) | (6,472 | ) | ||||
| Stock-based compensation expense - ESOP | — | — | (3,669 | ) | — | |||||||
| FHLB prepayment penalty | — | — | (24,241 | ) | — | |||||||
| Net income/ (loss) (GAAP) | $ | 24,494 | 16,193 | 49,667 | 60,540 | |||||||
| Diluted earnings per share (GAAP) | $ | 0.24 | 0.16 | 0.49 | 0.64 | |||||||
| Annualized ROE (GAAP) | 8.37 | % | 5.55 | % | 4.28 | % | 5.49 | % | ||||
| Annualized ROA (GAAP) | 1.01 | % | 0.73 | % | 0.55 | % | 0.73 | % | ||||
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude acquisition expenses, prepayment penalties, and compensation expense related to the Northwest Bank ESOP termination, net of tax benefit. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
Reconciliation of Assets and Liabilities Held-For-Sale (Unaudited)
(Dollars in thousands)
| Balance at December 31, 2016 | |||
| Assets held-for-sale: | |||
| Residential mortgage loans | $ | 26,406 | |
| Home equity loans | 15,725 | ||
| Consumer loans | 522 | ||
| Commercial real estate loans | 101,123 | ||
| Commercial loans | 2,884 | ||
| Total loans | 146,660 | ||
| Accrued interest receivable | 416 | ||
| Premises and equipment, net | 5,452 | ||
| Total assets held-for-sale | $ | 152,528 | |
| Liabilities held-for-sale: | |||
| Noninterest-bearing demand deposits | $ | 34,657 | |
| Interest-bearing demand deposits | 17,181 | ||
| Money market deposit accounts | 45,806 | ||
| Savings deposits | 55,205 | ||
| Time deposits | 62,800 | ||
| Total deposits | 215,649 | ||
| Accrued interest payable | 8 | ||
| Total liabilities held-for-sale | $ | 215,657 | |
Northwest Bancshares, Inc. and Subsidiaries
Asset quality (Unaudited)
(Dollars in thousands)
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||
| Nonaccrual loans current: | |||||||||||||||
| Residential mortgage loans | $ | 2,109 | 3,063 | 2,017 | 1,678 | 1,393 | |||||||||
| Home equity loans | 1,451 | 1,446 | 1,092 | 1,118 | 1,108 | ||||||||||
| Consumer loans | 520 | 464 | 277 | 190 | 140 | ||||||||||
| Commercial real estate loans | 13,955 | 19,246 | 17,456 | 19,350 | 14,018 | ||||||||||
| Commercial loans | 5,361 | 7,299 | 4,462 | 5,923 | 4,604 | ||||||||||
| Total nonaccrual loans current | $ | 23,396 | 31,518 | 25,304 | 28,259 | 21,263 | |||||||||
| Nonaccrual loans delinquent 30 days to 59 days: | |||||||||||||||
| Residential mortgage loans | $ | 1,464 | 344 | — | 1,600 | 430 | |||||||||
| Home equity loans | 422 | 315 | 49 | 119 | 375 | ||||||||||
| Consumer loans | 400 | 211 | 95 | 164 | 97 | ||||||||||
| Commercial real estate loans | 3,478 | 514 | 151 | 3,371 | 2,192 | ||||||||||
| Commercial loans | 145 | 185 | 16 | 4 | 322 | ||||||||||
| Total nonaccrual loans delinquent 30 days to 59 days | $ | 5,909 | 1,569 | 311 | 5,258 | 3,416 | |||||||||
| Nonaccrual loans delinquent 60 days to 89 days: | |||||||||||||||
| Residential mortgage loans | $ | 1,522 | 1,270 | 1,524 | 721 | 2,139 | |||||||||
| Home equity loans | 440 | 465 | 366 | 504 | 389 | ||||||||||
| Consumer loans | 366 | 250 | 157 | 182 | 315 | ||||||||||
| Commercial real estate loans | 2,027 | 151 | 6,513 | 109 | 762 | ||||||||||
| Commercial loans | 695 | 319 | 1,748 | 57 | 110 | ||||||||||
| Total nonaccrual loans delinquent 60 days to 89 days | $ | 5,050 | 2,455 | 10,308 | 1,573 | 3,715 | |||||||||
| Nonaccrual loans delinquent 90 days or more: | |||||||||||||||
| Residential mortgage loans | $ | 13,169 | 13,242 | 14,829 | 14,301 | 15,810 | |||||||||
| Home equity loans | 5,552 | 5,874 | 5,226 | 5,922 | 5,650 | ||||||||||
| Consumer loans | 3,823 | 3,354 | 2,374 | 2,360 | 2,900 | ||||||||||
| Commercial real estate loans | 19,264 | 22,155 | 12,960 | 13,165 | 16,449 | ||||||||||
| Commercial loans | 3,373 | 6,105 | 4,566 | 3,314 | 2,459 | ||||||||||
| Total nonaccrual loans delinquent 90 days or more | $ | 45,181 | 50,730 | 39,955 | 39,062 | 43,268 | |||||||||
| Total nonaccrual loans | $ | 79,536 | 86,272 | 75,878 | 74,152 | 71,662 | |||||||||
| Total nonaccrual loans | $ | 79,536 | 86,272 | 75,878 | 74,152 | 71,662 | |||||||||
| Loans 90 days past maturity and still accruing | 649 | 103 | 472 | 894 | 1,334 | ||||||||||
| Nonperforming loans | 80,185 | 86,375 | 76,350 | 75,046 | 72,996 | ||||||||||
| Real estate owned, net | 4,889 | 4,841 | 4,950 | 6,834 | 8,725 | ||||||||||
| Nonperforming assets | $ | 85,074 | 91,216 | 81,300 | 81,880 | 81,721 | |||||||||
| Nonaccrual troubled debt restructuring * | $ | 16,346 | 17,374 | 18,098 | 17,699 | 21,118 | |||||||||
| Accruing troubled debt restructuring | 26,580 | 29,221 | 31,015 | 30,549 | 29,997 | ||||||||||
| Total troubled debt restructuring | $ | 42,926 | 46,595 | 49,113 | 48,248 | 51,115 | |||||||||
| Nonperforming loans to total loans | 1.06 | % | 1.11 | % | 1.05 | % | 1.03 | % | 1.01 | % | |||||
| Nonperforming assets to total assets | 0.88 | % | 0.94 | % | 0.91 | % | 0.92 | % | 0.91 | % | |||||
| Allowance for loan losses to total loans | 0.81 | % | 0.81 | % | 0.83 | % | 0.85 | % | 0.87 | % | |||||
| Allowance for loan losses to nonperforming loans | 76.00 | % | 73.22 | % | 79.61 | % | 82.99 | % | 85.86 | % | |||||
* Amounts included in nonperforming loans above.
Northwest Bancshares, Inc. and Subsidiaries
Exposure to the oil and gas industry (Unaudited)
(Dollars in thousands)
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||
| Direct exposure to oil and gas extraction: | |||||||||||||||
| Outstanding balance | $ | 12,080 | 13,109 | 12,844 | 13,764 | 16,619 | |||||||||
| Commitments | 15,318 | 16,511 | 16,542 | 18,450 | 19,576 | ||||||||||
| Impaired | — | 558 | 561 | 564 | 564 | ||||||||||
| Reserve | 500 | 511 | 548 | 594 | 626 | ||||||||||
| Indirect exposure: * | |||||||||||||||
| Outstanding balance | 44,602 | 44,781 | 58,399 | 54,465 | 56,659 | ||||||||||
| Commitments | 48,025 | 48,927 | 62,581 | 58,522 | 68,659 | ||||||||||
| Impaired | — | 761 | 611 | — | — | ||||||||||
| Reserve | 231 | 237 | 220 | 195 | 34 | ||||||||||
| Total exposure: | |||||||||||||||
| Outstanding balance | 56,682 | 57,890 | 71,243 | 68,229 | 73,278 | ||||||||||
| Commitments | 63,343 | 65,438 | 79,123 | 76,972 | 88,235 | ||||||||||
| Impaired | — | 1,319 | 1,172 | 564 | 564 | ||||||||||
| Reserve | 731 | 748 | 768 | 789 | 660 | ||||||||||
* Includes loans to haulers, wholesalers, and refineries.
Northwest Bancshares, Inc. and Subsidiaries
Loans by credit quality indicators (Unaudited)
(Dollars in thousands)
| At December 31, 2016 | Pass | Special mention * | Substandard ** | Doubtful | Loss | Loans receivable | |||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,696,705 | — | 18,059 | — | — | 2,714,764 | ||||||||||||
| Home equity loans | 1,318,998 | — | 9,774 | — | — | 1,328,772 | |||||||||||||
| Consumer loans | 639,044 | — | 3,917 | — | — | 642,961 | |||||||||||||
| Total Personal Banking | 4,654,747 | — | 31,750 | — | — | 4,686,497 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,153,328 | 43,724 | 145,037 | — | — | 2,342,089 | |||||||||||||
| Commercial loans | 469,993 | 17,192 | 41,576 | — | — | 528,761 | |||||||||||||
| Total Commercial Banking | 2,623,321 | 60,916 | 186,613 | — | — | 2,870,850 | |||||||||||||
| Total loans | $ | 7,278,068 | 60,916 | 218,363 | — | — | 7,557,347 | ||||||||||||
| At September 30, 2016 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,800,420 | — | 18,593 | — | — | 2,819,013 | ||||||||||||
| Home equity loans | 1,338,643 | — | 10,462 | — | — | 1,349,105 | |||||||||||||
| Consumer loans | 624,885 | — | 3,627 | — | — | 628,512 | |||||||||||||
| Total Personal Banking | 4,763,948 | — | 32,682 | — | — | 4,796,630 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,265,816 | 61,763 | 137,088 | 14 | — | 2,464,681 | |||||||||||||
| Commercial loans | 479,321 | 14,707 | 40,326 | 2,901 | — | 537,255 | |||||||||||||
| Total Commercial Banking | 2,745,137 | 76,470 | 177,414 | 2,915 | — | 3,001,936 | |||||||||||||
| Total loans | $ | 7,509,085 | 76,470 | 210,096 | 2,915 | — | 7,798,566 | ||||||||||||
| At June 30, 2016 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,741,101 | — | 16,497 | — | — | 2,757,598 | ||||||||||||
| Home equity loans | 1,153,010 | — | 9,164 | — | — | 1,162,174 | |||||||||||||
| Consumer loans | 544,174 | — | 2,376 | — | — | 546,550 | |||||||||||||
| Total Personal Banking | 4,438,285 | — | 28,037 | — | — | 4,466,322 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,170,583 | 63,351 | 129,428 | 14 | — | 2,363,376 | |||||||||||||
| Commercial loans | 408,178 | 15,435 | 38,546 | 3,064 | — | 465,223 | |||||||||||||
| Total Commercial Banking | 2,578,761 | 78,786 | 167,974 | 3,078 | — | 2,828,599 | |||||||||||||
| Total loans | $ | 7,017,046 | 78,786 | 196,011 | 3,078 | — | 7,294,921 | ||||||||||||
| At March 31, 2016 | |||||||||||||||||||
| 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 | |||||||||||||
| Commercial 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 Commercial 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 | |||||||||||||
| Commercial 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 Commercial 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 | ||||||||||||
* Includes $9.4 million $19.3 million, $7.6 million, $7.7 million, and $7.6 million of acquired loans at December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015, respectively.
** Includes $39.1 million, $29.8 million, $25.5 million, $17.9million, and $18.6 million of acquired loans at December 31, 2016, September 30, 2016 June 31, 2016, March 31, 2016, and December 31, 2015, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Loan delinquency (Unaudited)
(Dollars in thousands)
December 31, 2016 | * | September 30, 2016 | * | June 30, 2016 | * | March 31, 2016 | * | December 31, 2015 | * | |||||||||||||||||||||||||||||||||||||||||
| (Number of loans and dollar amount of loans) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans delinquent 30 days to 59 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 360 | $ | 27,386 | 1.0 | % | 74 | $ | 3,380 | 0.1 | % | 72 | $ | 3,353 | 0.1 | % | 323 | $ | 24,494 | 0.9 | % | 349 | $ | 25,943 | 0.9 | % | |||||||||||||||||||||||||
| Home equity loans | 179 | 6,805 | 0.5 | % | 164 | 4,984 | 0.4 | % | 128 | 4,988 | 0.4 | % | 132 | 5,351 | 0.5 | % | 173 | 5,806 | 0.5 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 1,497 | 9,868 | 1.5 | % | 1,269 | 7,583 | 1.2 | % | 1,144 | 6,725 | 1.2 | % | 895 | 5,511 | 1.0 | % | 1,234 | 7,101 | 1.4 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 61 | 10,377 | 0.4 | % | 28 | 3,855 | 0.2 | % | 34 | 4,828 | 0.2 | % | 51 | 27,474 | 1.2 | % | 48 | 24,877 | 1.1 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 20 | 1,178 | 0.2 | % | 26 | 1,493 | 0.3 | % | 15 | 533 | 0.1 | % | 26 | 3,133 | 0.7 | % | 31 | 2,868 | 0.7 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 30 days to 59 days | 2,117 | $ | 55,614 | 0.7 | % | 1,561 | $ | 21,295 | 0.3 | % | 1,393 | $ | 20,427 | 0.3 | % | 1,427 | $ | 65,963 | 0.9 | % | 1,835 | $ | 66,595 | 0.9 | % | |||||||||||||||||||||||||
| Loans delinquent 60 days to 89 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 80 | $ | 6,227 | 0.2 | % | 76 | $ | 6,174 | 0.2 | % | 74 | $ | 5,633 | 0.2 | % | 21 | $ | 1,358 | — | % | 100 | $ | 7,790 | 0.3 | % | |||||||||||||||||||||||||
| Home equity loans | 62 | 1,563 | 0.1 | % | 41 | 1,145 | 0.1 | % | 42 | 1,435 | 0.1 | % | 36 | 1,256 | 0.1 | % | 50 | 2,478 | 0.2 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 636 | 3,609 | 0.6 | % | 532 | 2,673 | 0.4 | % | 514 | 2,247 | 0.4 | % | 379 | 1,803 | 0.3 | % | 521 | 2,521 | 0.5 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 25 | 4,495 | 0.2 | % | 13 | 1,102 | — | % | 16 | 8,765 | 0.4 | % | 11 | 1,081 | — | % | 21 | 8,228 | 0.3 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 21 | 2,081 | 0.4 | % | 9 | 594 | 0.1 | % | 23 | 2,429 | 0.5 | % | 7 | 375 | 0.1 | % | 7 | 598 | 0.1 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 60 days to 89 days | 824 | $ | 17,975 | 671 | $ | 11,688 | 0.1 | % | 669 | $ | 20,509 | 0.3 | % | 454 | $ | 5,873 | 0.3 | % | 699 | $ | 21,615 | 0.3 | % | |||||||||||||||||||||||||||
| Loans delinquent 90 days or more: ** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 169 | $ | 13,621 | 0.5 | % | 168 | $ | 13,478 | 0.5 | % | 176 | $ | 15,046 | 0.5 | % | 183 | $ | 14,673 | 0.5 | % | 215 | $ | 16,350 | 0.6 | % | |||||||||||||||||||||||||
| Home equity loans | 155 | 5,756 | 0.4 | % | 137 | 6,022 | 0.4 | % | 124 | 5,422 | 0.5 | % | 120 | 6,200 | 0.5 | % | 143 | 6,112 | 0.5 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 646 | 3,838 | 0.6 | % | 757 | 3,372 | 0.5 | % | 440 | 2,399 | 0.4 | % | 557 | 2,386 | 0.5 | % | 523 | 2,926 | 0.6 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 101 | 21,270 | 0.9 | % | 106 | 24,533 | 1.0 | % | 107 | 15,244 | 0.6 | % | 106 | 15,442 | 0.7 | % | 113 | 19,031 | 0.8 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 37 | 3,520 | 0.7 | % | 28 | 6,249 | 1.2 | % | 32 | 4,709 | 1.0 | % | 34 | 3,456 | 0.7 | % | 25 | 2,599 | 0.6 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 90 days or more | 1,108 | $ | 48,005 | 0.6 | % | 1,196 | $ | 53,654 | 0.7 | % | 879 | $ | 42,820 | 0.6 | % | 1,000 | $ | 42,157 | 0.6 | % | 1,019 | $ | 47,018 | 0.7 | % | |||||||||||||||||||||||||
| Total loans delinquent | 4,049 | $ | 121,594 | 1.6 | % | 3,428 | $ | 86,637 | 1.1 | % | 2,941 | $ | 83,756 | 1.1 | % | 2,881 | $ | 113,993 | 1.6 | % | 3,553 | $ | 135,228 | 1.9 | % | |||||||||||||||||||||||||
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit impaired loans of $2.8 million, $2.9 million, $2.9 million, $3.1 million, and $3.7 million at December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015 respectively.
Northwest Bancshares, Inc. and Subsidiaries
Allowance for loan losses (Unaudited)
(Dollars in thousands)
| Quarter ended | |||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||
| Beginning balance | $ | 63,246 | 60,781 | 62,278 | 62,672 | 60,547 | |||||||||
| Provision | 2,145 | 5,538 | 4,199 | 1,660 | 4,595 | ||||||||||
| Charge-offs residential mortgage | (710 | ) | (354 | ) | (1,852 | ) | (564 | ) | (171 | ) | |||||
| Charge-offs home equity | (321 | ) | (288 | ) | (946 | ) | (984 | ) | (1,097 | ) | |||||
| Charge-offs consumer | (3,469 | ) | (2,701 | ) | (2,332 | ) | (2,403 | ) | (2,561 | ) | |||||
| Charge-offs commercial real estate | (323 | ) | (789 | ) | (1,731 | ) | (897 | ) | (1,216 | ) | |||||
| Charge-offs commercial | (2,489 | ) | (708 | ) | (903 | ) | (117 | ) | (508 | ) | |||||
| Recoveries | 2,860 | 1,767 | 2,068 | 2,911 | 3,083 | ||||||||||
| Ending balance | $ | 60,939 | 63,246 | 60,781 | 62,278 | 62,672 | |||||||||
| Net charge-offs to average loans, annualized | 0.23 | % | 0.17 | % | 0.31 | % | 0.11 | % | 0.14 | % | |||||
| Year Ended December 31, | ||||||
| 2016 | 2015 | |||||
| Beginning balance | $ | 62,672 | 67,518 | |||
| Provision | 13,542 | 9,712 | ||||
| Charge-offs residential mortgage | (3,480 | ) | (1,126 | ) | ||
| Charge-offs home equity | (2,539 | ) | (2,424 | ) | ||
| Charge-offs consumer | (10,905 | ) | (8,274 | ) | ||
| Charge-offs commercial real estate | (3,740 | ) | (6,326 | ) | ||
| Charge-offs commercial | (4,217 | ) | (8,183 | ) | ||
| Recoveries | 9,606 | 11,775 | ||||
| Ending balance | $ | 60,939 | 62,672 | |||
| Net charge-offs to average loans, annualized | 0.21 | % | 0.23 | % | ||
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, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 2,766,693 | 28,165 | 4.07 | % | $ | 2,739,099 | 27,952 | 4.08 | % | $ | 2,751,601 | 29,089 | 4.23 | % | $ | 2,739,787 | 29,786 | 4.35 | % | $ | 2,710,811 | 29,227 | 4.31 | % | ||||||||||||||||||||||||
| Home equity loans | 1,346,856 | 14,442 | 4.27 | % | 1,192,929 | 12,884 | 4.30 | % | 1,163,900 | 12,701 | 4.39 | % | 1,177,406 | 12,642 | 4.32 | % | 1,193,433 | 12,753 | 4.24 | % | |||||||||||||||||||||||||||||
| Consumer loans | 620,294 | 10,083 | 6.47 | % | 554,954 | 8,931 | 6.40 | % | 522,745 | 8,697 | 6.69 | % | 510,091 | 8,219 | 6.48 | % | 500,175 | 8,805 | 6.98 | % | |||||||||||||||||||||||||||||
| Commercial real estate loans | 2,467,569 | 27,863 | 4.42 | % | 2,394,001 | 26,683 | 4.36 | % | 2,356,994 | 26,691 | 4.48 | % | 2,349,748 | 25,993 | 4.38 | % | 2,331,769 | 25,972 | 4.36 | % | |||||||||||||||||||||||||||||
| Commercial loans | 527,330 | 5,682 | 4.27 | % | 476,715 | 5,193 | 4.26 | % | 461,808 | 4,902 | 4.20 | % | 441,977 | 4,723 | 4.23 | % | 412,415 | 4,671 | 4.43 | % | |||||||||||||||||||||||||||||
| Total loans receivable (a) (b) (d) | 7,728,742 | 86,235 | 4.44 | % | 7,357,698 | 81,643 | 4.41 | % | 7,257,048 | 82,080 | 4.55 | % | 7,219,009 | 81,363 | 4.53 | % | 7,148,603 | 81,428 | 4.52 | % | |||||||||||||||||||||||||||||
| Mortgage-backed securities (c) | 482,707 | 2,166 | 1.79 | % | 440,966 | 2,030 | 1.84 | % | 458,398 | 2,115 | 1.85 | % | 488,294 | 2,229 | 1.83 | % | 519,736 | 2,301 | 1.77 | % | |||||||||||||||||||||||||||||
| Investment securities (c) (d) | 401,602 | 1,950 | 1.94 | % | 275,718 | 1,667 | 2.42 | % | 313,647 | 1,844 | 2.35 | % | 387,460 | 2,151 | 2.22 | % | 427,363 | 2,394 | 2.24 | % | |||||||||||||||||||||||||||||
| FHLB stock | 7,575 | 285 | 4.54 | % | 27,761 | 218 | 3.12 | % | 33,302 | 401 | 4.84 | % | 37,098 | 467 | 5.06 | % | 38,651 | 499 | 5.12 | % | |||||||||||||||||||||||||||||
| Other interest-earning deposits | 325,889 | 300 | 0.36 | % | 91,243 | 114 | 0.49 | % | 63,950 | 70 | 0.43 | % | 43,578 | 59 | 0.54 | % | 40,410 | 13 | 0.13 | % | |||||||||||||||||||||||||||||
| Total interest-earning assets | 8,946,515 | 90,936 | 4.04 | % | 8,193,386 | 85,672 | 4.16 | % | 8,126,345 | 86,510 | 4.28 | % | 8,175,439 | 86,269 | 4.24 | % | 8,174,763 | 86,635 | 4.20 | % | |||||||||||||||||||||||||||||
| Noninterest earning assets (e) | 677,888 | 835,500 | 755,713 | 735,562 | 747,317 | ||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 9,624,403 | $ | 9,028,886 | $ | 8,882,058 | $ | 8,911,001 | $ | 8,922,080 | |||||||||||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Savings deposits | $ | 1,668,492 | 771 | 0.18 | % | $ | 1,485,763 | 744 | 0.20 | % | $ | 1,440,886 | 837 | 0.23 | % | $ | 1,405,800 | 865 | 0.25 | % | $ | 1,378,377 | 871 | 0.25 | % | ||||||||||||||||||||||||
| Interest-bearing demand deposits | 1,431,671 | 85 | 0.02 | % | 1,179,557 | 78 | 0.03 | % | 1,130,122 | 144 | 0.05 | % | 1,093,839 | 156 | 0.06 | % | 1,083,524 | 157 | 0.06 | % | |||||||||||||||||||||||||||||
| Money market deposit accounts | 1,890,220 | 1,101 | 0.23 | % | 1,418,779 | 826 | 0.23 | % | 1,294,381 | 829 | 0.26 | % | 1,288,535 | 865 | 0.27 | % | 1,279,181 | 873 | 0.27 | % | |||||||||||||||||||||||||||||
| Time deposits | 1,643,785 | 3,902 | 0.94 | % | 1,597,542 | 4,005 | 1.00 | % | 1,616,260 | 4,055 | 1.01 | % | 1,664,322 | 4,202 | 1.02 | % | 1,720,895 | 4,534 | 1.05 | % | |||||||||||||||||||||||||||||
| Borrowed funds (f) | 143,540 | 61 | 0.17 | % | 560,407 | 657 | 0.47 | % | 772,225 | 3,017 | 1.57 | % | 899,439 | 6,539 | 2.92 | % | 906,574 | 6,730 | 2.95 | % | |||||||||||||||||||||||||||||
| Junior subordinated debentures | 111,213 | 1,171 | 4.12 | % | 111,213 | 1,144 | 4.03 | % | 111,213 | 1,126 | 4.01 | % | 111,213 | 1,119 | 3.98 | % | 116,626 | 1,321 | 4.43 | % | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 6,888,921 | 7,091 | 0.41 | % | 6,353,261 | 7,454 | 0.47 | % | 6,365,087 | 10,008 | 0.63 | % | 6,463,148 | 13,746 | 0.86 | % | 6,485,177 | 14,486 | 0.89 | % | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits (g) | 1,493,528 | 1,243,474 | 1,184,786 | 1,161,151 | 1,145,276 | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing liabilities | 77,827 | 276,014 | 177,300 | 122,667 | 133,323 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 8,460,276 | 7,872,749 | 7,727,173 | 7,746,966 | 7,763,776 | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,164,127 | 1,156,137 | 1,154,885 | 1,164,035 | 1,158,304 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 9,624,403 | $ | 9,028,886 | $ | 8,882,058 | $ | 8,911,001 | $ | 8,922,080 | |||||||||||||||||||||||||||||||||||||||
| Net interest income/ Interest rate spread | 83,845 | 3.63 | % | 78,218 | 3.69 | % | 76,502 | 3.65 | % | 72,523 | 3.38 | % | 72,149 | 3.31 | % | ||||||||||||||||||||||||||||||||||
| Net interest-earning assets/ Net interest margin | $ | 2,057,594 | 3.75 | % | $ | 1,840,125 | 3.82 | % | $ | 1,761,258 | 3.77 | % | $ | 1,712,291 | 3.57 | % | $ | 1,689,586 | 3.53 | % | |||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.30X | 1.29X | 1.28X | 1.26X | 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) Average cost of deposits were 0.29%, 0.32%, 0.35%, 0.37% and 0.39%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.41%,4.38%, 4.52%, 4.50% and 4.49%, respectively, Investment securities - 1.61%, 1.89%, 1.87%, 1.82% and 1.82%, respectively, Interest-earning assets - 4.00%, 4.11%, 4.23%,, 4.20% and 4.16%, respectively. GAAP basis net interest rate spreads were 3.59%, 3.65%, 3.60%, 3.34% and 3.27%, respectively, and GAAP basis net interest margins were 3.71%, 3.77%, 3.72%, 3.55% and 3.48%, 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, | |||||||||||||||||||
| 2016 | 2015 | ||||||||||||||||||
Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,749,314 | 114,991 | 4.18 | % | $ | 2,601,111 | 114,937 | 4.42 | % | |||||||||
| Home equity loans | 1,220,220 | 52,671 | 4.32 | % | 1,105,887 | 47,836 | 4.33 | % | |||||||||||
| Consumer loans | 552,537 | 35,930 | 6.50 | % | 338,364 | 28,770 | 8.50 | % | |||||||||||
| Commercial real estate loans | 2,392,290 | 107,231 | 4.41 | % | 2,024,542 | 92,217 | 4.49 | % | |||||||||||
| Commercial loans | 477,095 | 20,499 | 4.23 | % | 390,174 | 16,878 | 4.27 | % | |||||||||||
| Loans receivable (a) (b) (d) | 7,391,456 | 331,322 | 4.48 | % | 6,460,078 | 300,638 | 4.65 | % | |||||||||||
| Mortgage-backed securities (c) | 467,560 | 8,540 | 1.83 | % | 500,797 | 8,823 | 1.77 | % | |||||||||||
| Investment securities (c) (d) | 344,575 | 7,612 | 2.21 | % | 469,568 | 11,155 | 2.38 | % | |||||||||||
| FHLB stock (i) | 26,386 | 1,371 | 5.20 | % | 37,500 | 2,828 | 4.77 | % | |||||||||||
| Other interest-earning deposits | 100,336 | 543 | 0.53 | % | 179,201 | 431 | 0.24 | % | |||||||||||
| Total interest-earning assets | 8,330,313 | 349,388 | 4.19 | % | 7,647,144 | 323,875 | 4.22 | % | |||||||||||
| Noninterest earning assets (e) | 781,274 | 677,449 | |||||||||||||||||
| Total assets | $ | 9,111,587 | $ | 8,324,593 | |||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Savings deposits | $ | 1,500,655 | 3,218 | 0.21 | % | $ | 1,300,102 | 3,387 | 0.26 | % | |||||||||
| Interest-bearing demand deposits | 1,209,325 | 462 | 0.04 | % | 976,789 | 568 | 0.06 | % | |||||||||||
| Money market deposit accounts | 1,473,897 | 3,621 | 0.25 | % | 1,202,143 | 3,222 | 0.27 | % | |||||||||||
| Time deposits | 1,630,424 | 16,164 | 0.99 | % | 1,540,905 | 16,878 | 1.10 | % | |||||||||||
| Borrowed funds (f) | 592,581 | 10,274 | 1.73 | % | 925,683 | 27,347 | 2.95 | % | |||||||||||
| Junior subordinated debentures | 111,213 | 4,560 | 4.03 | % | 108,507 | 4,925 | 4.48 | % | |||||||||||
| Total interest-bearing liabilities | 6,518,095 | 38,299 | 0.59 | % | 6,054,129 | 56,327 | 0.93 | % | |||||||||||
| Noninterest-bearing demand deposits (g) | 1,245,320 | 1,001,263 | |||||||||||||||||
| Noninterest bearing liabilities | 188,381 | 166,530 | |||||||||||||||||
| Total liabilities | 7,951,796 | 7,221,922 | |||||||||||||||||
| Shareholders’ equity | 1,159,791 | 1,102,671 | |||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 9,111,587 | $ | 8,324,593 | |||||||||||||||
| Net interest income/ Interest rate spread | 311,089 | 3.60 | % | 267,548 | 3.29 | % | |||||||||||||
| Net interest-earning assets/ Net interest margin | $ | 1,812,218 | 3.73 | % | $ | 1,593,015 | 3.49 | % | |||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.28X | 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) Average cost of deposits were 0.33%, and 0.40%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.45% and 4.62%, respectively, Investment securities - 1.78% and 1.88%, respectively, Interest-earning assets - 4.15% and 4.17%, respectively. GAAP basis net interest rate spreads were 3.56% and 3.24%, respectively, and GAAP basis net interest margins were 3.69% and 3.43%, respectively.
(i) The average yield calculation excludes the $1.0 million special dividend paid in February 2015, the average yield was 7.54% with the special dividend included.