EXHIBIT 99.1
PRESS RELEASE OF NORTHWEST BANCSHARES, INC.
EARNINGS RELEASE
FOR IMMEDIATE RELEASE
| Contact: | William J. Wagner, Chairman and Chief Executive Officer (814) 726-2140 |
| Ronald J. Seiffert, President and Chief Operating Officer (814) 726-2140 | |
| William W. Harvey, Jr., Senior Executive Vice President and Chief Financial Officer (814) 726-2140 | |
Northwest Bancshares, Inc. Announces Fourth Quarter 2017 Earnings and Quarterly Dividend Increase
Warren, Pennsylvania — January 22, 2018
Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2017 of $22.1 million, or $0.22 per diluted share. This represents a decrease of $2.4 million, or 9.6%, compared to the same quarter last year when net income was $24.5 million or $0.24 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended December 31, 2017 were 7.31% and 0.94% compared to 8.37% and 1.01% for the same quarter last year.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per share payable on February 15, 2018, to shareholders of record as of February 1, 2018. This represents a 6.25% increase over the prior quarter and is the 93rd consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of December 31, 2017, this dividend represents an annualized yield of approximately 4.1%.
In making this announcement, William J. Wagner, Chairman and CEO, noted, "2017 was a year of significant restructuring for our company. With a goal of reducing operating expenses, improving efficiency and narrowing our business focus, we divested our Maryland offices, closed our consumer finance subsidiary, sold our retirement services business, consolidated our wealth management platforms and achieved full integration of our recent acquisitions in Ohio and New York. While these initiatives negatively impacted earnings in 2017, we expect that they will provide a meaningful reduction in our expense ratios in the years ahead. We were pleased to realize continued improvement in net interest margin during 2017 resulting primarily from commercial loan growth of 5% accompanied by 11% growth in noninterest bearing checking accounts. With that, our current margin of 3.93% represents an historic high for our institution. Looking ahead, our company will be primarily focused on improving loan growth and operating efficiency in an effort to continue to improve our company’s return on assets."
Net interest income increased by $1.3 million, or 1.6%, to $84.2 million for the quarter ended December 31, 2017, from $82.9 million for the quarter ended December 31, 2016. This increase is due primarily to a $1.5 million, or 1.7%, increase in interest income on loans receivable and an $850,000, or 39.2% increase in interest income on mortgage-backed securities. These increases were primarily due to increases of $16.8 million and $98.3 million in the average balances of loans and mortgage-backed securities, respectively. Additionally, the average yield on loans and mortgage-backed securities increased by 5 and 29 basis points, respectively, over the prior year.
The provision for loan losses increased by $4.4 million, to $6.5 million for the quarter ended December 31, 2017, from $2.1 million for the quarter ended December 31, 2016. This increase is due primarily to higher provisions for consumer loans, which were related to the July 2017 closure of the Company's consumer finance subsidiary, as credit quality in other components of the loan portfolio improved. The percentage of total delinquent loans to total loans decreased to 1.51% at December 31, 2017 from 1.61% at December 31, 2016 and total nonaccrual loans decreased by $15.0 million, or 19.0%, to $64.5 million at December 31, 2017 from $79.5 million at December 31, 2016.
Noninterest income decreased by $1.9 million, or 7.7%, to $22.9 million for the quarter ended December 31, 2017, from $24.8 million for the quarter ended December 31, 2016. Contributing to this decrease was a $2.1 million decrease in mortgage banking income relating to a substantial decrease in the amount of loans sold into the secondary market this year versus the prior year. Additionally, the Company realized a net loss of $369,000 on the sale of investments during the quarter while realizing a net profit of $213,000 a year ago. The loss incurred in the current year related to the sale of two pooled trust preferred securities to take advantage of the recent changes in the federal tax rates. Partially offsetting these decreases was an increase in income from bank owned life insurance of $1.0 million as a result of death benefits received during the quarter.
Noninterest expense increased by $3.1 million, or 4.6%, to $71.9 million for the quarter ended December 31, 2017, from $68.8 million for the quarter ended December 31, 2016. This increase resulted primarily from a $2.2 million, or 6.1%, increase in compensation and employee benefits due primarily to increases in the cost of health insurance and other employee benefits. Also contributing to the increase was an increase of $857,000 in professional services due primarily to ongoing efforts to comply with the CECL standard effective January 1, 2020.
Income tax expense decreased by $5.8 million, or 46.8%, to $6.6 million for the quarter ended December 31, 2017, from $12.4 million for the quarter ended December 31, 2016. This decrease is due primarily to a decrease in income before taxes of $8.1 million and the impact of the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017. When enacted, the tax law change will decrease the corporate tax rate from 35.0% to 21.0%. As a result, the value of the Company's net deferred tax liability decreased by $3.1 million, which had the effect of decreasing current period tax expense.
Net income for the year ended December 31, 2017 was $94.5 million, or $0.92 per diluted share, which represents an increase of $44.8 million, or 90.2%, compared to the year ended December 31, 2016, when net income was $49.7 million, or $0.49 per diluted share. The returns on average shareholders’ equity and average assets for the year ended December 31, 2017 were 7.95% and 0.99%, respectively, compared to 4.28% and 0.55% for the same period last year. This increase is due primarily to the sale of the Company's Maryland offices at a profit of $17.2 million during 2017 and also to a $37.0 million penalty incurred from the prepayment of FHLB borrowings during 2016.
Non-GAAP net income for the year ended December 31, 2017, which excludes the after-tax impact of the gain on sale of the Maryland offices of $10.3 million and after-tax restructuring expenses of $2.7 million as well as the aforementioned $3.1 million tax benefit was $83.7 million, or $0.83 per diluted share. Non-GAAP net income for the year ended December 31, 2016, which excludes the after-tax impact of the FHLB prepayment penalty, restructuring and acquisition expenses, and ESOP termination expenses totaling $32.6 million, was $82.3 million, or $0.82 per diluted share. For more information, see "Reconciliation of Non-GAAP to GAAP Net Income" within this press release.
Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 162 full-service community banking offices and ten free standing drive-through facilities in Pennsylvania, New York, and Ohio. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
# # #
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; and (7) increased risk associated with commercial real-estate and business loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands, except per share amounts)
| December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 77,710 | 165,676 | 389,867 | |||||||
| Marketable securities available-for-sale (amortized cost of $800,094, $867,311 and $825,552 respectively) | 792,535 | 869,481 | 826,200 | ||||||||
| Marketable securities held-to-maturity (fair value of $29,667, $32,282 and $20,426 respectively) | 29,678 | 31,961 | 19,978 | ||||||||
| Total cash and cash equivalents and marketable securities | 899,923 | 1,067,118 | 1,236,045 | ||||||||
| Residential mortgage loans held-for-sale | 3,128 | 1,382 | 9,625 | ||||||||
| Residential mortgage loans | 2,773,075 | 2,741,844 | 2,688,541 | ||||||||
| Home equity loans | 1,310,355 | 1,313,435 | 1,345,370 | ||||||||
| Consumer loans | 671,389 | 673,920 | 642,961 | ||||||||
| Commercial real estate loans | 2,454,726 | 2,398,886 | 2,342,089 | ||||||||
| Commercial loans | 580,736 | 596,671 | 528,761 | ||||||||
| Total loans receivable | 7,793,409 | 7,726,138 | 7,557,347 | ||||||||
| Allowance for loan losses | (56,795 | ) | (56,927 | ) | (60,939 | ) | |||||
| Loans receivable, net | 7,736,614 | 7,669,211 | 7,496,408 | ||||||||
| Assets held-for-sale | — | — | 152,528 | ||||||||
| Federal Home Loan Bank stock, at cost | 11,733 | 7,984 | 7,390 | ||||||||
| Accrued interest receivable | 23,352 | 22,802 | 21,699 | ||||||||
| Real estate owned, net | 5,666 | 5,462 | 4,889 | ||||||||
| Premises and equipment, net | 151,944 | 152,761 | 161,185 | ||||||||
| Bank owned life insurance | 171,547 | 173,096 | 171,449 | ||||||||
| Goodwill | 307,420 | 307,420 | 307,420 | ||||||||
| Other intangible assets | 25,669 | 27,244 | 32,433 | ||||||||
| Other assets | 30,066 | 26,716 | 32,194 | ||||||||
| Total assets | $ | 9,363,934 | 9,459,814 | 9,623,640 | |||||||
| Liabilities and Shareholders’ equity | |||||||||||
| Liabilities | |||||||||||
| Noninterest-bearing demand deposits | $ | 1,610,409 | 1,625,189 | 1,448,972 | |||||||
| Interest-bearing demand deposits | 1,442,928 | 1,451,818 | 1,428,317 | ||||||||
| Money market deposit accounts | 1,707,450 | 1,759,395 | 1,841,567 | ||||||||
| Savings deposits | 1,653,579 | 1,669,782 | 1,622,879 | ||||||||
| Time deposits | 1,412,623 | 1,435,861 | 1,540,586 | ||||||||
| Total deposits | 7,826,989 | 7,942,045 | 7,882,321 | ||||||||
| Liabilities held-for-sale | — | — | 215,657 | ||||||||
| Borrowed funds | 108,238 | 115,388 | 142,899 | ||||||||
| Advances by borrowers for taxes and insurance | 40,825 | 21,864 | 36,879 | ||||||||
| Accrued interest payable | 460 | 518 | 635 | ||||||||
| Other liabilities | 68,485 | 62,939 | 63,373 | ||||||||
| Junior subordinated debentures | 111,213 | 111,213 | 111,213 | ||||||||
| Total liabilities | 8,156,210 | 8,253,967 | 8,452,977 | ||||||||
| 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, shares, 102,687,811 shares, 102,565,667,and 101,699,406 issued and outstanding, respectively | 1,027 | 1,026 | 1,017 | ||||||||
| Paid-in-capital | 730,719 | 728,163 | 718,834 | ||||||||
| Retained earnings | 508,058 | 502,265 | 478,803 | ||||||||
| Accumulated other comprehensive loss | (32,080 | ) | (25,607 | ) | (27,991 | ) | |||||
| Total shareholders’ equity | 1,207,724 | 1,205,847 | 1,170,663 | ||||||||
| Total liabilities and shareholders’ equity | $ | 9,363,934 | $ | 9,459,814 | $ | 9,623,640 | |||||
| Equity to assets | 12.90 | % | 12.75 | % | 12.16 | % | |||||
| Tangible common equity to assets | 9.68 | % | 9.55 | % | 8.95 | % | |||||
| Book value per share | $ | 11.76 | 11.76 | 11.51 | |||||||
| Tangible book value per share | $ | 8.52 | 8.49 | 8.17 | |||||||
| Closing market price per share | $ | 16.73 | 17.27 | 18.03 | |||||||
| Full time equivalent employees | 2,106 | 2,137 | 2,306 | ||||||||
| Number of banking offices | 172 | 173 | 176 | ||||||||
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, | |||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||
| Interest income: | |||||||||||||||
| Loans receivable | $ | 87,154 | 85,373 | 84,714 | 82,751 | 85,669 | |||||||||
| Mortgage-backed securities | 3,016 | 3,118 | 2,987 | 2,222 | 2,166 | ||||||||||
| Taxable investment securities | 805 | 957 | 981 | 1,006 | 988 | ||||||||||
| Tax-free investment securities | 449 | 476 | 529 | 569 | 625 | ||||||||||
| FHLB dividends | 78 | 63 | 50 | 59 | 285 | ||||||||||
| Interest-earning deposits | 59 | 244 | 536 | 660 | 300 | ||||||||||
| Total interest income | 91,561 | 90,231 | 89,797 | 87,267 | 90,033 | ||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 5,971 | 5,795 | 5,826 | 5,465 | 5,859 | ||||||||||
| Borrowed funds | 1,350 | 1,199 | 1,240 | 1,225 | 1,232 | ||||||||||
| Total interest expense | 7,321 | 6,994 | 7,066 | 6,690 | 7,091 | ||||||||||
| Net interest income | 84,240 | 83,237 | 82,731 | 80,577 | 82,942 | ||||||||||
| Provision for loan losses | 6,525 | 3,027 | 5,562 | 4,637 | 2,145 | ||||||||||
| Net interest income after provision for loan losses | 77,715 | 80,210 | 77,169 | 75,940 | 80,797 | ||||||||||
| Noninterest income: | |||||||||||||||
| Gain/(loss) on sale of investments | (369 | ) | 1,497 | 3 | 17 | 213 | |||||||||
| Service charges and fees | 12,527 | 12,724 | 12,749 | 11,717 | 12,406 | ||||||||||
| Trust and other financial services income | 4,290 | 4,793 | 4,600 | 4,304 | 4,131 | ||||||||||
| Insurance commission income | 1,874 | 1,992 | 2,353 | 2,794 | 2,499 | ||||||||||
| Gain/ (loss) on real estate owned, net | (307 | ) | (193 | ) | (230 | ) | (67 | ) | 164 | ||||||
| Income from bank owned life insurance | 2,295 | 1,078 | 1,652 | 1,068 | 1,281 | ||||||||||
| Mortgage banking income | 225 | 519 | 434 | 240 | 2,344 | ||||||||||
| Gain on sale of offices | — | — | 17,186 | — | — | ||||||||||
| Other operating income | 2,370 | 2,184 | 2,730 | 1,431 | 1,781 | ||||||||||
| Total noninterest income | 22,905 | 24,594 | 41,477 | 21,504 | 24,819 | ||||||||||
| Noninterest expense: | |||||||||||||||
| Compensation and employee benefits | 38,776 | 36,039 | 37,658 | 37,755 | 36,562 | ||||||||||
| Premises and occupancy costs | 7,293 | 6,951 | 7,103 | 7,516 | 7,228 | ||||||||||
| Office operations | 4,011 | 3,939 | 4,170 | 4,222 | 4,395 | ||||||||||
| Collections expense | 1,179 | 568 | 553 | 549 | 437 | ||||||||||
| Processing expenses | 9,888 | 9,650 | 9,639 | 9,909 | 9,429 | ||||||||||
| Marketing expenses | 2,125 | 2,488 | 2,846 | 2,148 | 2,181 | ||||||||||
| Federal deposit insurance premiums | 724 | 771 | 856 | 1,167 | 475 | ||||||||||
| Professional services | 2,945 | 2,321 | 2,452 | 2,575 | 2,088 | ||||||||||
| Amortization of intangible assets | 1,575 | 1,691 | 1,749 | 1,749 | 1,806 | ||||||||||
| Real estate owned expense | 195 | 310 | 217 | 282 | 192 | ||||||||||
| Restructuring/ acquisition expense | 164 | 1,398 | 2,634 | 223 | 1,009 | ||||||||||
| Other expense | 3,021 | 2,673 | 3,385 | 3,551 | 2,959 | ||||||||||
| Total noninterest expense | 71,896 | 68,799 | 73,262 | 71,646 | 68,761 | ||||||||||
| Income before income taxes | 28,724 | 36,005 | 45,384 | 25,798 | 36,855 | ||||||||||
| Income tax expense | 6,576 | 12,414 | 14,402 | 8,052 | 12,361 | ||||||||||
| Net income | $ | 22,148 | 23,591 | 30,982 | 17,746 | 24,494 | |||||||||
| Basic earnings per share | $ | 0.22 | 0.23 | 0.31 | 0.18 | 0.24 | |||||||||
| Diluted earnings per share | $ | 0.22 | 0.23 | 0.30 | 0.17 | 0.24 | |||||||||
| Weighted average common shares outstanding - basic | 101,293,307 | 101,163,534 | 100,950,772 | 100,653,277 | 100,219,370 | ||||||||||
| Weighted average common shares outstanding - diluted | 102,643,726 | 102,564,476 | 102,449,693 | 102,480,549 | 102,089,892 | ||||||||||
| Annualized return on average equity | 7.31 | % | 7.81 | % | 10.48 | % | 6.15 | % | 8.37 | % | |||||
| Annualized return on average assets | 0.94 | % | 0.99 | % | 1.30 | % | 0.75 | % | 1.01 | % | |||||
| Annualized return on tangible common equity | 10.05 | % | 10.74 | % | 14.44 | % | 8.57 | % | 11.73 | % | |||||
| Efficiency ratio * | 65.48 | % | 60.94 | % | 64.36 | % | 68.25 | % | 61.20 | % | |||||
| Annualized noninterest expense to average assets * | 2.97 | % | 2.76 | % | 2.89 | % | 2.94 | % | 2.73 | % | |||||
* Excludes gain on sale of offices, restructuring/acquisition expenses, and amortization of intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share amounts)
| Year ended December 31, | |||||||
| 2017 | 2016 | ||||||
| Interest income: | |||||||
| Loans receivable | $ | 339,992 | 329,039 | ||||
| Mortgage-backed securities | 11,343 | 8,540 | |||||
| Taxable investment securities | 3,749 | 3,409 | |||||
| Tax-free investment securities | 2,023 | 2,732 | |||||
| FHLB dividends | 250 | 1,371 | |||||
| Interest-earning deposits | 1,499 | 543 | |||||
| Total interest income | 358,856 | 345,634 | |||||
| Interest expense: | |||||||
| Deposits | 23,057 | 23,465 | |||||
| Borrowed funds | 5,014 | 14,834 | |||||
| Total interest expense | 28,071 | 38,299 | |||||
| Net interest income | 330,785 | 307,335 | |||||
| Provision for loan losses | 19,751 | 13,542 | |||||
| Net interest income after provision for loan losses | 311,034 | 293,793 | |||||
| Noninterest income: | |||||||
| Gain on sale of investments | 1,148 | 625 | |||||
| Service charges and fees | 49,717 | 44,113 | |||||
| Trust and other financial services income | 17,987 | 14,103 | |||||
| Insurance commission income | 9,013 | 10,522 | |||||
| Loss on real estate owned, net | (797 | ) | (39 | ) | |||
| Income from bank owned life insurance | 6,093 | 5,361 | |||||
| Mortgage banking income | 1,418 | 4,894 | |||||
| Gain on sale of offices | 17,186 | — | |||||
| Other operating income | 8,715 | 5,781 | |||||
| Total noninterest income | 110,480 | 85,360 | |||||
| Noninterest expense: | |||||||
| Compensation and employee benefits | 150,228 | 140,927 | |||||
| Premises and occupancy costs | 28,863 | 26,134 | |||||
| Office operations | 16,342 | 14,898 | |||||
| Collections expense | 2,849 | 2,431 | |||||
| Processing expenses | 39,086 | 34,859 | |||||
| Marketing expenses | 9,607 | 8,852 | |||||
| Federal deposit insurance premiums | 3,518 | 4,404 | |||||
| Professional services | 10,293 | 7,865 | |||||
| Amortization of intangible assets | 6,764 | 4,259 | |||||
| Real estate owned expense | 1,004 | 1,004 | |||||
| Restructuring/ acquisition expense | 4,419 | 12,213 | |||||
| FHLB prepayment penalty | — | 36,978 | |||||
| Other expense | 12,630 | 13,014 | |||||
| Total noninterest expense | 285,603 | 307,838 | |||||
| Income before income taxes | 135,911 | 71,315 | |||||
| Income tax expense | 41,444 | 21,648 | |||||
| Net income | $ | 94,467 | $ | 49,667 | |||
| Basic earnings per share | $ | 0.94 | 0.50 | ||||
| Diluted earnings per share | $ | 0.92 | 0.49 | ||||
| Weighted average common shares outstanding - basic | 101,015,083 | 99,439,174 | |||||
| Weighted average common shares outstanding - diluted | 102,564,905 | 100,664,688 | |||||
| Annualized return on average equity | 7.95 | % | 4.28 | % | |||
| Annualized return on average assets | 0.99 | % | 0.55 | % | |||
| Annualized return on tangible common equity | 10.80 | % | 5.98 | % | |||
| Efficiency ratio * | 64.71 | % | 64.78 | % | |||
| Annualized noninterest expense to average assets * | 2.89 | % | 2.79 | % | |||
* Excludes gain on sale of offices, 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)
Year ended December 31, | |||||||
| 2017 | 2016 | ||||||
| Operating results (non-GAAP): | |||||||
| Net interest income | $ | 330,785 | 307,335 | ||||
| Provision for loan losses | 19,751 | 13,542 | |||||
| Noninterest income | 93,294 | 85,360 | |||||
| Noninterest expense | 281,184 | 253,510 | |||||
| Income taxes | 39,409 | 43,379 | |||||
| Net operating income (non-GAAP) | $ | 83,735 | 82,264 | ||||
| Diluted earnings per share (non-GAAP) | $ | 0.83 | 0.82 | ||||
| Average equity | $ | 1,188,787 | 1,159,791 | ||||
| Average assets | 9,502,518 | 9,111,587 | |||||
| Annualized ROE (non-GAAP) | 7.04 | % | 7.09 | % | |||
| Annualized ROA (non-GAAP) | 0.88 | % | 0.90 | % | |||
| Reconciliation of net operating income to net income: | |||||||
| Net operating income (non-GAAP) | $ | 83,735 | 82,264 | ||||
| Nonoperating income and expenses | |||||||
| Gain on sale of offices, net of tax | 10,311 | — | |||||
| Restructuring/ acquisition expenses, net of tax | (2,651 | ) | (7,330 | ) | |||
| Stock-based compensation expense - ESOP termination, net of tax | — | (3,081 | ) | ||||
| FHLB prepayment penalty, net of tax | — | (22,186 | ) | ||||
| Tax benefit from the Tax Cuts and Jobs Act of 2017 | 3,072 | — | |||||
| Net income (GAAP) | $ | 94,467 | 49,667 | ||||
| Diluted earnings per share (GAAP) | $ | 0.92 | 0.49 | ||||
| Annualized ROE (GAAP) | 7.95 | % | 4.28 | % | |||
| Annualized ROA (GAAP) | 0.99 | % | 0.55 | % | |||
* 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 certain income and expenses, net of tax benefit and cost. The net tax effect was calculated using statutory tax rates of approximately 40%. 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.
Northwest Bancshares, Inc. and Subsidiaries
Asset quality (Unaudited)
(Dollars in thousands)
| December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
| Nonaccrual loans current: | |||||||||||||||
| Residential mortgage loans | $ | 70 | 318 | 841 | 1,864 | 2,109 | |||||||||
| Home equity loans | 615 | 439 | 158 | 1,244 | 1,451 | ||||||||||
| Consumer finance loans | — | 1 | — | — | — | ||||||||||
| Consumer loans | 317 | 259 | 379 | 633 | 520 | ||||||||||
| Commercial real estate loans | 10,080 | 10,646 | 16,189 | 13,347 | 13,955 | ||||||||||
| Commercial loans | 4,178 | 4,098 | 5,262 | 5,335 | 5,361 | ||||||||||
| Total nonaccrual loans current | $ | 15,260 | 15,761 | 22,829 | 22,423 | 23,396 | |||||||||
| Nonaccrual loans delinquent 30 days to 59 days: | |||||||||||||||
| Residential mortgage loans | $ | 509 | 200 | 181 | 1,001 | 1,464 | |||||||||
| Home equity loans | 167 | 466 | 164 | 328 | 422 | ||||||||||
| Consumer finance loans | — | — | — | — | — | ||||||||||
| Consumer loans | 239 | 200 | 169 | 218 | 400 | ||||||||||
| Commercial real estate loans | 1,928 | 597 | 474 | 1,970 | 3,478 | ||||||||||
| Commercial loans | 25 | — | 32 | 328 | 145 | ||||||||||
| Total nonaccrual loans delinquent 30 days to 59 days | $ | 2,868 | 1,463 | 1,020 | 3,845 | 5,909 | |||||||||
| Nonaccrual loans delinquent 60 days to 89 days: | |||||||||||||||
| Residential mortgage loans | $ | 703 | 892 | 896 | 704 | 1,522 | |||||||||
| Home equity loans | 874 | 499 | 326 | 408 | 440 | ||||||||||
| Consumer finance loans | — | — | — | — | — | ||||||||||
| Consumer loans | 500 | 405 | 342 | 242 | 366 | ||||||||||
| Commercial real estate loans | 1,104 | 5,895 | 2,233 | 540 | 2,027 | ||||||||||
| Commercial loans | 69 | 3 | — | 23 | 695 | ||||||||||
| Total nonaccrual loans delinquent 60 days to 89 days | $ | 3,250 | 7,694 | 3,797 | 1,917 | 5,050 | |||||||||
| Nonaccrual loans delinquent 90 days or more: | |||||||||||||||
| Residential mortgage loans | $ | 13,509 | 11,785 | 11,637 | 11,911 | 13,169 | |||||||||
| Home equity loans | 7,251 | 6,295 | 5,744 | 6,194 | 5,552 | ||||||||||
| Consumer finance loans | 199 | 332 | 536 | 471 | 743 | ||||||||||
| Consumer loans | 3,617 | 3,244 | 2,273 | 2,888 | 3,080 | ||||||||||
| Commercial real estate loans | 15,361 | 22,583 | 21,295 | 20,897 | 19,264 | ||||||||||
| Commercial loans | 3,140 | 4,177 | 3,642 | 2,744 | 3,373 | ||||||||||
| Total nonaccrual loans delinquent 90 days or more | $ | 43,077 | 48,416 | 45,127 | 45,105 | 45,181 | |||||||||
| Total nonaccrual loans | $ | 64,455 | 73,334 | 72,773 | 73,290 | 79,536 | |||||||||
| Total nonaccrual loans | $ | 64,455 | 73,334 | 72,773 | 73,290 | 79,536 | |||||||||
| Loans 90 days past maturity and still accruing | 502 | 398 | 182 | 265 | 649 | ||||||||||
| Nonperforming loans | 64,957 | 73,732 | 72,955 | 73,555 | 80,185 | ||||||||||
| Real estate owned, net | 5,666 | 5,462 | 6,030 | 6,242 | 4,889 | ||||||||||
| Nonperforming assets | $ | 70,623 | 79,194 | 78,985 | 79,797 | 85,074 | |||||||||
| Nonaccrual troubled debt restructuring * | $ | 12,285 | 17,809 | 17,873 | 18,273 | 16,346 | |||||||||
| Accruing troubled debt restructuring | 19,819 | 20,660 | 23,987 | 25,305 | 26,580 | ||||||||||
| Total troubled debt restructuring | $ | 32,104 | 38,469 | 41,860 | 43,578 | 42,926 | |||||||||
| Nonperforming loans to total loans | 0.83 | % | 0.95 | % | 0.95 | % | 0.97 | % | 1.06 | % | |||||
| Nonperforming assets to total assets | 0.75 | % | 0.84 | % | 0.83 | % | 0.82 | % | 0.88 | % | |||||
| Allowance for loan losses to total loans | 0.73 | % | 0.74 | % | 0.82 | % | 0.81 | % | 0.81 | % | |||||
| Allowance for loan losses to nonperforming loans | 87.43 | % | 77.16 | % | 86.20 | % | 83.07 | % | 76.00 | % | |||||
* Amounts included in nonperforming loans above.
Northwest Bancshares, Inc. and Subsidiaries
Loans by credit quality indicators (Unaudited)
(Dollars in thousands)
| At December 31, 2017 | Pass | Special mention * | Substandard ** | Doubtful | Loss | Loans receivable | |||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,758,465 | — | 17,738 | — | — | 2,776,203 | ||||||||||||
| Home equity loans | 1,300,277 | — | 10,078 | — | — | 1,310,355 | |||||||||||||
| Consumer loans | 666,629 | — | 4,760 | — | — | 671,389 | |||||||||||||
| Total Personal Banking | 4,725,371 | — | 32,576 | — | — | 4,757,947 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,216,326 | 83,537 | 154,863 | — | 2,454,726 | ||||||||||||||
| Commercial loans | 511,035 | 19,297 | 50,404 | — | 580,736 | ||||||||||||||
| Total Commercial Banking | 2,727,361 | 102,834 | 205,267 | — | — | 3,035,462 | |||||||||||||
| Total loans | $ | 7,452,732 | 102,834 | 237,843 | — | — | 7,793,409 | ||||||||||||
| At September 30, 2017 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,725,060 | — | 18,166 | — | — | 2,743,226 | ||||||||||||
| Home equity loans | 1,302,036 | — | 11,399 | — | — | 1,313,435 | |||||||||||||
| Consumer loans | 669,532 | — | 4,388 | — | — | 673,920 | |||||||||||||
| Total Personal Banking | 4,696,628 | — | 33,953 | — | — | 4,730,581 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,196,510 | 56,118 | 146,258 | — | — | 2,398,886 | |||||||||||||
| Commercial loans | 526,824 | 18,924 | 50,923 | — | — | 596,671 | |||||||||||||
| Total Commercial Banking | 2,723,334 | 75,042 | 197,181 | — | — | 2,995,557 | |||||||||||||
| Total loans | $ | 7,419,962 | 75,042 | 231,134 | — | — | 7,726,138 | ||||||||||||
| At June 30, 2017 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,718,866 | — | 16,916 | — | — | 2,735,782 | ||||||||||||
| Home equity loans | 1,307,022 | — | 8,699 | — | — | 1,315,721 | |||||||||||||
| Consumer loans | 655,149 | — | 2,976 | — | — | 658,125 | |||||||||||||
| Total Personal Banking | 4,681,037 | — | 28,591 | — | — | 4,709,628 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,178,996 | 67,826 | 149,841 | — | — | 2,396,663 | |||||||||||||
| Commercial loans | 521,520 | 10,269 | 48,657 | — | — | 580,446 | |||||||||||||
| Total Commercial Banking | 2,700,516 | 78,095 | 198,498 | — | — | 2,977,109 | |||||||||||||
| Total loans | $ | 7,381,553 | 78,095 | 227,089 | — | — | 7,686,737 | ||||||||||||
| At March 31, 2017 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,673,678 | — | 16,866 | — | — | 2,690,544 | ||||||||||||
| Home equity loans | 1,311,707 | — | 9,212 | — | — | 1,320,919 | |||||||||||||
| Consumer loans | 639,574 | — | 3,531 | — | — | 643,105 | |||||||||||||
| Total Personal Banking | 4,624,959 | — | 29,609 | — | — | 4,654,568 | |||||||||||||
| Commercial Banking: | |||||||||||||||||||
| Commercial real estate loans | 2,187,545 | 48,189 | 142,740 | — | — | 2,378,474 | |||||||||||||
| Commercial loans | 474,662 | 12,226 | 43,158 | — | — | 530,046 | |||||||||||||
| Total Commercial Banking | 2,662,207 | 60,415 | 185,898 | — | — | 2,908,520 | |||||||||||||
| Total loans | $ | 7,287,166 | 60,415 | 215,507 | — | — | 7,563,088 | ||||||||||||
| At December 31, 2016 | |||||||||||||||||||
| Personal Banking: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,680,107 | — | 18,059 | — | — | 2,698,166 | ||||||||||||
| Home equity loans | 1,335,596 | — | 9,774 | — | — | 1,345,370 | |||||||||||||
| 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 | ||||||||||||
* Includes $8.6 million $8.9 million, $9.7 million, $12.4 million, and $9.4 million of acquired loans at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively.
** Includes $.46.7.million, $48.2 million, $44.8 million, $45.3 million, and $39.1 million of acquired loans at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Loan delinquency (Unaudited)
(Dollars in thousands)
| December 31 2017 | * | September 30 2017 | * | June 30 2017 | * | March 31 2017 | * | December 31 2016 | * | |||||||||||||||||||||||||||||||||||||||||
| (Number of loans and dollar amount of loans) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans delinquent 30 days to 59 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 317 | $ | 25,784 | 0.9 | % | 44 | $ | 2,771 | 0.1 | % | 64 | $ | 2,893 | 0.1 | % | 280 | $ | 22,254 | 0.8 | % | 360 | $ | 27,386 | 1.0 | % | |||||||||||||||||||||||||
| Home equity loans | 218 | 7,461 | 0.6 | % | 191 | 7,330 | 0.6 | % | 111 | 4,058 | 0.3 | % | 125 | 4,586 | 0.4 | % | 179 | 6,805 | 0.5 | % | ||||||||||||||||||||||||||||||
| Consumer finance loans | 849 | 2,128 | 11.4 | % | 1,045 | 3,065 | 11.4 | % | 581 | 1,785 | 4.1 | % | 308 | 947 | 1.8 | % | 410 | 1,255 | 2.1 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 1,295 | 10,912 | 1.7 | % | 1,119 | 9,510 | 1.5 | % | 818 | 6,793 | 1.1 | % | 714 | 6,210 | 1.1 | % | 1,087 | 8,613 | 1.5 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 53 | 8,315 | 0.3 | % | 27 | 5,753 | 0.2 | % | 38 | 4,629 | 0.2 | % | 60 | 9,364 | 0.4 | % | 61 | 10,377 | 0.4 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 26 | 1,865 | 0.3 | % | 16 | 746 | 0.1 | % | 20 | 1,378 | 0.2 | % | 29 | 2,304 | 0.4 | % | 20 | 1,178 | 0.2 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 30 days to 59 days | 2,758 | $ | 56,465 | 0.7 | % | 2,442 | $ | 29,175 | 0.4 | % | 1,632 | $ | 21,536 | 0.3 | % | 1,516 | $ | 45,665 | 0.6 | % | 2,117 | $ | 55,614 | 0.7 | % | |||||||||||||||||||||||||
| Loans delinquent 60 days to 89 days: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 75 | $ | 6,235 | 0.2 | % | 84 | $ | 7,196 | 0.3 | % | 72 | $ | 6,320 | 0.2 | % | 28 | $ | 1,594 | 0.1 | % | 80 | $ | 6,227 | 0.2 | % | |||||||||||||||||||||||||
| Home equity loans | 72 | 2,871 | 0.2 | % | 73 | 2,390 | 0.2 | % | 44 | 1,522 | 0.1 | % | 36 | 1,145 | 0.1 | % | 62 | 1,563 | 0.1 | % | ||||||||||||||||||||||||||||||
| Consumer finance loans | 412 | 1,113 | 6.0 | % | 831 | 2,190 | 8.1 | % | 276 | 759 | 1.7 | % | 164 | 475 | 0.9 | % | 235 | 766 | 1.3 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 463 | 3,351 | 0.5 | % | 473 | 3,283 | 0.5 | % | 347 | 2,475 | 0.4 | % | 266 | 1,766 | 0.3 | % | 401 | 2,843 | 0.5 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 25 | 2,539 | 0.1 | % | 22 | 7,666 | 0.3 | % | 14 | 3,368 | 0.1 | % | 19 | 3,034 | 0.1 | % | 25 | 4,495 | 0.2 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 10 | 441 | 0.1 | % | 9 | 196 | — | % | 9 | 199 | — | % | 10 | 499 | 0.1 | % | 21 | 2,081 | 0.4 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 60 days to 89 days | 1,057 | $ | 16,550 | 0.2 | % | 1,492 | $ | 22,921 | 0.3 | % | 762 | $ | 14,643 | 0.2 | % | 523 | $ | 8,513 | 0.1 | % | 824 | $ | 17,975 | 0.2 | % | |||||||||||||||||||||||||
| Loans delinquent 90 days or more: ** | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | 158 | $ | 13,890 | 0.5 | % | 143 | $ | 12,190 | 0.4 | % | 145 | $ | 12,053 | 0.4 | % | 139 | $ | 12,326 | 0.5 | % | 169 | $ | 13,621 | 0.5 | % | |||||||||||||||||||||||||
| Home equity loans | 177 | 7,349 | 0.6 | % | 150 | 6,397 | 0.5 | % | 126 | 5,800 | 0.4 | % | 143 | 6,258 | 0.5 | % | 155 | 5,756 | 0.4 | % | ||||||||||||||||||||||||||||||
| Consumer finance loans | 74 | 199 | 1.1 | % | 124 | 332 | 1.2 | % | 188 | 536 | 1.2 | % | 169 | 471 | 0.9 | % | 228 | 743 | 1.2 | % | ||||||||||||||||||||||||||||||
| Consumer loans | 719 | 3,627 | 0.6 | % | 428 | 3,254 | 0.5 | % | 299 | 2,285 | 0.4 | % | 363 | 2,901 | 0.5 | % | 418 | 3,095 | 0.5 | % | ||||||||||||||||||||||||||||||
| Commercial real estate loans | 109 | 16,284 | 0.7 | % | 113 | 23,310 | 1.0 | % | 108 | 22,044 | 0.9 | % | 106 | 23,009 | 1.0 | % | 101 | 21,270 | 0.9 | % | ||||||||||||||||||||||||||||||
| Commercial loans | 37 | 3,140 | 0.5 | % | 45 | 4,177 | 0.7 | % | 39 | 3,642 | 0.6 | % | 39 | 2,744 | 0.5 | % | 37 | 3,520 | 0.7 | % | ||||||||||||||||||||||||||||||
| Total loans delinquent 90 days or more | 1,274 | $ | 44,489 | 0.6 | % | 1,003 | $ | 49,660 | 0.6 | % | 905 | $ | 46,360 | 0.6 | % | 959 | $ | 47,709 | 0.6 | % | 1,108 | $ | 48,005 | 0.6 | % | |||||||||||||||||||||||||
| Total loans delinquent | 5,089 | $ | 117,504 | 1.5 | % | 4,937 | $ | 101,756 | 1.3 | % | 3,299 | $ | 82,539 | 1.1 | % | 2,998 | $ | 101,887 | 1.3 | % | 4,049 | $ | 121,594 | 1.5 | % | |||||||||||||||||||||||||
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit impaired loans of $1.4 million, $1.2 million, $1.2 million, $2.6 million, and $2.8 million at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016 respectively.
Northwest Bancshares, Inc. and Subsidiaries
Allowance for loan losses (Unaudited)
(Dollars in thousands)
| Quarter ended | |||||||||||||||
| December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||
| Beginning balance | $ | 56,927 | 62,885 | 61,104 | 60,939 | 63,246 | |||||||||
| Provision | 6,525 | 3,027 | 5,562 | 4,637 | 2,145 | ||||||||||
| Charge-offs residential mortgage | (162 | ) | (215 | ) | (372 | ) | (290 | ) | (710 | ) | |||||
| Charge-offs home equity | (393 | ) | (528 | ) | (689 | ) | (649 | ) | (321 | ) | |||||
| Charge-offs consumer finance | (2,900 | ) | (3,891 | ) | (782 | ) | (796 | ) | (1,003 | ) | |||||
| Charge-offs consumer | (3,322 | ) | (3,002 | ) | (2,735 | ) | (2,864 | ) | (2,466 | ) | |||||
| Charge-offs commercial real estate | (1,470 | ) | (1,901 | ) | (329 | ) | (474 | ) | (323 | ) | |||||
| Charge-offs commercial | (785 | ) | (509 | ) | (929 | ) | (1,267 | ) | (2,489 | ) | |||||
| Recoveries | 2,375 | 1,061 | 2,055 | 1,868 | 2,860 | ||||||||||
| Ending balance | $ | 56,795 | 56,927 | 62,885 | 61,104 | 60,939 | |||||||||
| Net charge-offs to average loans, annualized | 0.34 | % | 0.47 | % | 0.20 | % | 0.23 | % | 0.23 | % | |||||
| Year ended December 31, | ||||||
| 2017 | 2016 | |||||
| Beginning balance | $ | 60,939 | 62,672 | |||
| Provision | 19,751 | 13,542 | ||||
| Charge-offs residential mortgage | (1,039 | ) | (3,480 | ) | ||
| Charge-offs home equity | (2,259 | ) | (2,539 | ) | ||
| Charge-offs consumer finance | (8,369 | ) | (3,323 | ) | ||
| Charge-offs consumer | (11,923 | ) | (7,582 | ) | ||
| Charge-offs commercial real estate | (4,174 | ) | (3,740 | ) | ||
| Charge-offs commercial | (3,490 | ) | (4,217 | ) | ||
| Recoveries | 7,359 | 9,606 | ||||
| Ending balance | $ | 56,795 | 60,939 | |||
| Net charge-offs to average loans, annualized | 0.31 | % | 0.21 | % | ||
| December 31, 2017 | ||||||||||||||||||
| Originated loans | Acquired loans | Total loans | ||||||||||||||||
| Balance | Reserve | Balance | Reserve | Balance | Reserve | |||||||||||||
| Residential mortgage loans | $ | 2,662,380 | 3,824 | 113,823 | 131 | 2,776,203 | 3,955 | |||||||||||
| Home equity loans | 1,051,558 | 4,072 | 258,797 | 762 | 1,310,355 | 4,834 | ||||||||||||
| Consumer finance loans | 18,619 | 3,968 | — | — | 18,619 | 3,968 | ||||||||||||
| Consumer loans | 553,366 | 8,475 | 99,404 | 890 | 652,770 | 9,365 | ||||||||||||
| Personal Banking loans | 4,285,923 | 20,339 | 472,024 | 1,783 | 4,757,947 | 22,122 | ||||||||||||
| Commercial real estate loans | 2,161,212 | 19,911 | 293,514 | 3,549 | 2,454,726 | 23,460 | ||||||||||||
| Commercial loans | 521,198 | 10,322 | 59,538 | 891 | 580,736 | 11,213 | ||||||||||||
| Commercial Banking loans | 2,682,410 | 30,233 | 353,052 | 4,440 | 3,035,462 | 34,673 | ||||||||||||
| Total loans | $ | 6,968,333 | 50,572 | 825,076 | 6,223 | 7,793,409 | 56,795 | |||||||||||
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, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 2,746,992 | 28,373 | 4.13 | % | $ | 2,732,546 | 28,279 | 4.14 | % | $ | 2,721,445 | 28,245 | 4.15 | % | $ | 2,718,904 | 27,309 | 4.02 | % | $ | 2,766,693 | 28,165 | 4.07 | % | ||||||||||||||||||||||||
| Home equity loans | 1,312,146 | 15,187 | 4.59 | % | 1,299,473 | 14,694 | 4.49 | % | 1,311,274 | 14,344 | 4.39 | % | 1,332,647 | 14,201 | 4.32 | % | 1,346,856 | 14,442 | 4.27 | % | |||||||||||||||||||||||||||||
| Consumer loans | 633,023 | 8,004 | 5.02 | % | 617,754 | 7,627 | 4.90 | % | 595,170 | 7,405 | 4.99 | % | 580,836 | 7,219 | 5.04 | % | 571,108 | 7,580 | 5.28 | % | |||||||||||||||||||||||||||||
| Consumer finance loans | 22,469 | 1,151 | 20.32 | % | 33,469 | 1,433 | 17.13 | % | 40,945 | 2,110 | 20.61 | % | 46,452 | 2,482 | 21.37 | % | 49,186 | 2,503 | 20.36 | % | |||||||||||||||||||||||||||||
| Commercial real estate loans | 2,442,528 | 28,251 | 4.53 | % | 2,389,969 | 27,234 | 4.46 | % | 2,430,594 | 27,071 | 4.41 | % | 2,456,070 | 26,562 | 4.33 | % | 2,467,569 | 27,863 | 4.42 | % | |||||||||||||||||||||||||||||
| Commercial loans | 588,420 | 6,739 | 4.48 | % | 593,143 | 6,659 | 4.39 | % | 554,506 | 6,087 | 4.34 | % | 522,847 | 5,515 | 4.22 | % | 527,330 | 5,682 | 4.27 | % | |||||||||||||||||||||||||||||
| Total loans receivable (a) (b) (d) | 7,745,578 | 87,705 | 4.49 | % | 7,666,354 | 85,926 | 4.45 | % | 7,653,934 | 85,262 | 4.47 | % | 7,657,756 | 83,288 | 4.41 | % | 7,728,742 | 86,235 | 4.44 | % | |||||||||||||||||||||||||||||
| Mortgage-backed securities (c) | 581,055 | 3,016 | 2.08 | % | 607,454 | 3,118 | 2.05 | % | 592,917 | 2,987 | 2.02 | % | 471,674 | 2,222 | 1.88 | % | 482,707 | 2,166 | 1.79 | % | |||||||||||||||||||||||||||||
| Investment securities (c) (d) | 301,268 | 1,495 | 1.98 | % | 352,813 | 1,690 | 1.92 | % | 372,398 | 1,796 | 1.93 | % | 377,819 | 1,881 | 1.99 | % | 401,602 | 1,950 | 1.94 | % | |||||||||||||||||||||||||||||
| FHLB stock | 10,066 | 78 | 3.07 | % | 7,748 | 63 | 3.23 | % | 7,602 | 50 | 2.64 | % | 7,305 | 59 | 3.28 | % | 7,575 | 285 | 4.54 | % | |||||||||||||||||||||||||||||
| Other interest-earning deposits | 13,515 | 59 | 1.71 | % | 71,482 | 243 | 1.33 | % | 208,141 | 536 | 1.02 | % | 294,391 | 660 | 0.90 | % | 325,889 | 300 | 0.36 | % | |||||||||||||||||||||||||||||
| Total interest-earning assets | 8,651,482 | 92,353 | 4.24 | % | 8,705,851 | 91,040 | 4.15 | % | 8,834,992 | 90,631 | 4.11 | % | 8,808,945 | 88,110 | 4.06 | % | 8,946,515 | 90,936 | 4.04 | % | |||||||||||||||||||||||||||||
| Noninterest earning assets (e) | 709,753 | 755,026 | 716,913 | 799,569 | 677,888 | ||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 9,361,235 | $ | 9,460,877 | $ | 9,551,905 | $ | 9,608,514 | $ | 9,624,403 | |||||||||||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Savings deposits | $ | 1,655,798 | 763 | 0.18 | % | $ | 1,681,777 | 776 | 0.18 | % | $ | 1,714,290 | 768 | 0.18 | % | $ | 1,702,528 | 755 | 0.18 | % | $ | 1,668,492 | 771 | 0.18 | % | ||||||||||||||||||||||||
| Interest-bearing demand deposits | 1,419,352 | 331 | 0.09 | % | 1,435,143 | 297 | 0.08 | % | 1,451,787 | 283 | 0.08 | % | 1,422,284 | 116 | 0.03 | % | 1,431,671 | 85 | 0.02 | % | |||||||||||||||||||||||||||||
| Money market deposit accounts | 1,734,444 | 1,017 | 0.23 | % | 1,789,082 | 1,048 | 0.23 | % | 1,839,693 | 1,064 | 0.23 | % | 1,879,292 | 1,074 | 0.23 | % | 1,890,220 | 1,101 | 0.23 | % | |||||||||||||||||||||||||||||
| Time deposits | 1,421,569 | 3,860 | 1.08 | % | 1,449,830 | 3,674 | 1.01 | % | 1,518,650 | 3,711 | 0.98 | % | 1,573,574 | 3,520 | 0.91 | % | 1,643,785 | 3,902 | 0.94 | % | |||||||||||||||||||||||||||||
| Borrowed funds (f) | 159,599 | 187 | 0.46 | % | 106,282 | 49 | 0.18 | % | 126,685 | 55 | 0.17 | % | 136,872 | 58 | 0.17 | % | 143,540 | 61 | 0.17 | % | |||||||||||||||||||||||||||||
| Junior subordinated debentures | 111,213 | 1,163 | 4.09 | % | 111,213 | 1,150 | 4.05 | % | 111,213 | 1,185 | 4.22 | % | 111,213 | 1,167 | 4.20 | % | 111,213 | 1,171 | 4.12 | % | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 6,501,975 | 7,321 | 0.45 | % | 6,573,327 | 6,994 | 0.42 | % | 6,762,318 | 7,066 | 0.42 | % | 6,825,763 | 6,690 | 0.40 | % | 6,888,921 | 7,091 | 0.41 | % | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits (g) | 1,599,834 | 1,573,112 | 1,544,953 | 1,506,268 | 1,493,528 | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing liabilities | 57,956 | 116,021 | 59,277 | 106,578 | 77,827 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 8,159,765 | 8,262,460 | 8,366,548 | 8,438,609 | 8,460,276 | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,201,470 | 1,198,417 | 1,185,357 | 1,169,905 | 1,164,127 | ||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 9,361,235 | $ | 9,460,877 | $ | 9,551,905 | $ | 9,608,514 | $ | 9,624,403 | |||||||||||||||||||||||||||||||||||||||
| Net interest income/ Interest rate spread | 85,032 | 3.79 | % | 84,046 | 3.73 | % | 83,565 | 3.69 | % | 81,420 | 3.66 | % | 83,845 | 3.63 | % | ||||||||||||||||||||||||||||||||||
| Net interest-earning assets/ Net interest margin | $ | 2,149,507 | 3.93 | % | $ | 2,132,524 | 3.86 | % | $ | 2,072,674 | 3.78 | % | $ | 1,983,182 | 3.75 | % | $ | 2,057,594 | 3.75 | % | |||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.33X | 1.32X | 1.31X | 1.29X | 1.30X | ||||||||||||||||||||||||||||||||||||||||||||
(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 0.30%, 0.29%, 0.29%, 0.27% and 0.29%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.46%, 4.42%, 4.44%, 4.38% and 4.41%, respectively, Investment securities - 1.66%, 1.62%, 1.62%, 1.67% and 1.61%, respectively, Interest-earning assets - 4.20%, 4.11%, 4.08%, 4.02% and 4.00%, respectively. GAAP basis net interest rate spreads were 3.75%, 3.69%, 3.66%, 3.62% and 3.59%, respectively, and GAAP basis net interest margins were 3.89%, 3.82%, 3.75%, 3.71% and 3.71%, 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, | |||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||
Average Balance | Interest | Avg. Yield/ Cost (h) | Average Balance | Interest | Avg. Yield/ Cost (h) | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Residential mortgage loans | $ | 2,730,055 | 112,206 | 4.11 | % | $ | 2,749,314 | 114,991 | 4.18 | % | |||||||||
| Home equity loans | 1,313,789 | 58,426 | 4.45 | % | 1,220,220 | 52,671 | 4.32 | % | |||||||||||
| Consumer loans | 590,439 | 30,253 | 5.12 | % | 501,587 | 25,348 | 5.05 | % | |||||||||||
| Consumer finance loans | 35,761 | 7,177 | 20.07 | % | 50,950 | 10,582 | 20.77 | % | |||||||||||
| Commercial real estate loans | 2,429,644 | 109,118 | 4.43 | % | 2,392,290 | 107,231 | 4.41 | % | |||||||||||
| Commercial loans | 564,600 | 25,000 | 4.37 | % | 477,095 | 20,499 | 4.23 | % | |||||||||||
| Loans receivable (a) (b) (d) | 7,664,288 | 342,180 | 4.46 | % | 7,391,456 | 331,322 | 4.48 | % | |||||||||||
| Mortgage-backed securities (c) | 563,696 | 11,343 | 2.01 | % | 467,560 | 8,540 | 1.83 | % | |||||||||||
| Investment securities (c) (d) | 350,870 | 6,862 | 1.96 | % | 344,575 | 7,612 | 2.21 | % | |||||||||||
| FHLB stock | 8,186 | 250 | 3.05 | % | 26,386 | 1,371 | 5.20 | % | |||||||||||
| Other interest-earning deposits | 158,229 | 1,499 | 0.93 | % | 100,336 | 543 | 0.53 | % | |||||||||||
| Total interest-earning assets | 8,745,269 | 362,134 | 4.14 | % | 8,330,313 | 349,388 | 4.19 | % | |||||||||||
| Noninterest earning assets (e) | 757,249 | 781,274 | |||||||||||||||||
| Total assets | $ | 9,502,518 | $ | 9,111,587 | |||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Savings deposits | $ | 1,688,451 | 3,062 | 0.18 | % | $ | 1,500,655 | 3,218 | 0.21 | % | |||||||||
| Interest-bearing demand deposits | 1,432,134 | 1,027 | 0.07 | % | 1,209,325 | 462 | 0.04 | % | |||||||||||
| Money market deposit accounts | 1,810,083 | 4,203 | 0.23 | % | 1,473,897 | 3,621 | 0.25 | % | |||||||||||
| Time deposits | 1,490,378 | 14,765 | 0.99 | % | 1,630,424 | 16,164 | 0.99 | % | |||||||||||
| Borrowed funds (f) | 132,350 | 348 | 0.26 | % | 592,581 | 10,274 | 1.73 | % | |||||||||||
| Junior subordinated debentures | 111,213 | 4,666 | 4.14 | % | 111,213 | 4,560 | 4.03 | % | |||||||||||
| Total interest-bearing liabilities | 6,664,609 | 28,071 | 0.42 | % | 6,518,095 | 38,299 | 0.59 | % | |||||||||||
| Noninterest-bearing demand deposits (g) | 1,556,511 | 1,245,320 | |||||||||||||||||
| Noninterest bearing liabilities | 92,611 | 188,381 | |||||||||||||||||
| Total liabilities | 8,313,731 | 7,951,796 | |||||||||||||||||
| Shareholders’ equity | 1,188,787 | 1,159,791 | |||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 9,502,518 | $ | 9,111,587 | |||||||||||||||
| Net interest income/ Interest rate spread | 334,063 | 3.72 | % | 311,089 | 3.60 | % | |||||||||||||
| Net interest-earning assets/ Net interest margin | $ | 2,080,660 | 3.82 | % | $ | 1,812,218 | 3.73 | % | |||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.31X | 1.28X | |||||||||||||||||
(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%, and 0.33%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.44% and 4.45%, respectively, Investment securities - 1.65% and 1.78%, respectively, Interest-earning assets - 4.10% and 4.15%, respectively. GAAP basis net interest rate spreads were 3.68% and 3.56%, respectively, and GAAP basis net interest margins were 3.78% and 3.69%, respectively.