Northwest Bancshares, Inc. Announces First Quarter 2021 Earnings and Quarterly Dividend Increase

Rhea-AI Summary

Northwest Bancshares, Inc. (NWBI) reported a net income of $40.2 million or $0.32 per diluted share for Q1 2021, significantly up from $7.9 million or $0.07 in Q1 2020. The annualized returns on average assets and equity were 1.17% and 10.61%. The quarterly cash dividend was increased by 5.3% to $0.20 per share. Improvements were noted in fee income and a decrease in credit loss provisions. However, total classified loans rose to $467.7 million, impacted by COVID-19. Net interest income increased by 15.2% to $100.5 million, despite a drop in net interest margin.

Positive

• Net income increased by $32.3 million YoY to $40.2 million.
• Quarterly cash dividend raised by 5.3% to $0.20 per share.
• Net interest income rose 15.2% to $100.5 million due to increased loan balances.
• Credit loss provision decreased significantly, indicating improved economic forecasts.
• Noninterest income increased by 14.2% driven by mortgage banking activities.

Negative

• Total classified loans increased by $253.6 million to $467.7 million, or 4.51% of total loans.
• Net interest margin decreased to 3.18% from 3.66% year-on-year.
• Service charges and fees decreased by 18.0% due to the Durbin amendment.

WARREN, Pa., April 26, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2021 of $40.2 million, or $0.32 per diluted share.  This represents an increase of $32.3 million compared to the same quarter last year when net income was $7.9 million, or $0.07 per diluted share.  The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2021 were 10.61% and 1.17% compared to 2.37% and 0.30% for the same quarter last year. 

The Company also announced that its Board of Directors increased the quarterly cash dividend by 5.3% to $0.20 per share payable on May 17, 2021 to shareholders of record as of May 6, 2021.  This is the 106th consecutive quarter in which the Company has paid a cash dividend.  Based on the market value of the Company's common stock as of March 31, 2021, this represents an annualized dividend yield of approximately 5.5%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We are extremely pleased with the current quarter results beginning once again with strong fee income led by our mortgage banking operations.  We are also delighted to report that our credit loss provision decreased significantly from prior year and prior quarter as we continue to see economic forecasts improve.  From a credit quality perspective, delinquencies continue to be well maintained while payment deferrals on loans declined to just $53.8 million, or 0.5% of the loan portfolio, at March 31, 2021 as compared to $129.9 million at December 31, 2020.  Despite the increase in nonperforming loans, or loans for which the accrual of interest has ceased, by $120.7 million during the quarter, classified loans declined from the December quarter by $21.6 million, or 4.4%, indicating that these potential problem loans had already previously been identified and an adequate reserve has already been allocated."

Mr. Seiffert continued, "During the first quarter, we also announced the divestiture of our insurance business to a very qualified and compassionate buyer in USI Insurance Services. As we assessed this business line for the past several years, it became clear that we were not going to be able to scale this business line in a meaningful way and that our resources and capital are better spent on our core banking businesses.  The sale is expected to close during the second quarter."

Net interest income increased by $13.2 million, or 15.2%, to $100.5 million for the quarter ended March 31, 2021, from $87.2 million for the quarter ended March 31, 2020, largely due to a $7.3 million, or 7.7%, increase in interest income on loans receivable.  This increase in interest income on loans was mainly due to an increase of $1.633 billion, or 18.6%, in the average balance of loans, primarily as a result of the acquisition of MutualBank during the second quarter of 2020.  Also contributing to this increase in net interest income was a decrease of $5.9 million, or 51.6%, in interest expense on deposits due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.33% for the quarter ended March 31, 2021 from 0.72% for the quarter ended March 31, 2020. Despite the overall increase in net interest income, net interest margin decreased to 3.18% for the quarter ended March 31, 2021 from 3.66% for the same quarter last year as interest earning asset yields decreased to 3.42% for the quarter ended March 31, 2021 from 4.21% for the quarter ended March 31, 2020. Contributing to the overall decline in average asset yield was the increase in average cash balances of $766.4 million, earning just 0.09%, due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks, as well as the overall decrease in market interest rates beginning with the decrease in the targeted federal funds rate of 1.25% by the Federal Reserve in March of 2020.

The provision for credit losses decreased by $33.3 million due to a current period credit of $5.6 million for the quarter ended March 31, 2021, compared to a provision expense of $27.6 million for the quarter ended March 31, 2020 because of a release in the allowance for credit losses due to continued improvements in economic forecasts.  Total classified loans increased by $253.6 million to $467.7 million, or 4.51% of total loans, at March 31, 2021 from $214.1 million, or 2.42% of total loans, as of March 31, 2020.  This increase was primarily due to the downgrade of commercial loans in certain industries impacted by COVID-19. 

Noninterest income increased by $4.0 million, or 14.2%, to $32.0 million for the quarter ended March 31, 2021, from $28.0 million for the quarter ended March 31, 2020.  This increase was primarily due to the increase in mortgage banking income of $4.8 million to $6.0 million for the quarter ended March 31, 2021 from $1.2 million for the quarter ended March 31, 2020. This increase was due to continued efforts to expand our secondary market sales capabilities over the last year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. In addition, trust and other financial services income increased $1.5 million, or 29.7%, as a result of additional fee income from the MutualBank acquisition. Slightly offsetting these increases was a decrease in service charges and fees of $2.7 million, or 18.0%, due to the impact of the Durbin amendment on our interchange fees which came into effect in the second half of 2020.

Noninterest expense increased by $7.6 million, or 9.6%, to $86.2 million for the quarter ended March 31, 2021, from $78.6 million for the quarter ended March 31, 2020.  This increase resulted primarily from an increase of $4.5 million, or 10.5%, in compensation and employee benefits due primarily to the addition of MutualBank employees during the second quarter of 2020.  Also contributing to this increase was an increase of $2.3 million, or 20.8%, in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for online and mobile banking has increased.  Professional services expense increased $1.8 million, or 62.9%, due to the utilization of third-party experts to recruit talent and assist with our digital strategy rollout. Premises and occupancy costs increased $1.3 million, or 18.0%, over the prior year due primarily to additional snow removal costs. Lastly, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased $1.3 million due to assessment credits received in the previous year.

The provision for income taxes increased by $10.6 million to $11.6 million for the quarter ended March 31, 2021, from $1.0 million for the quarter ended March 31, 2020 due to higher income before income taxes.

Northwest Bancshares, Inc. is the holding company of Northwest Bank, which is headquartered in Warren, Pennsylvania. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of March 31, 2021, Northwest operated 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. 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; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism.  Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
	March 31, 2021				December 31, 2020			March 31, 2020
Assets
Cash and cash equivalents	$	979,290			736,277			276,454
Marketable securities available-for-sale (amortized cost of $1,430,352, $1,375,685 and $749,703, respectively)	1,430,131				1,398,941			765,579
Marketable securities held-to-maturity (fair value of $593,232, $179,666 and $17,968, respectively)	604,284				178,887			17,208
Total cash and cash equivalents and marketable securities	3,013,705				2,314,105			1,059,241
Residential mortgage loans held-for-sale	46,270				58,786			6,426
Residential mortgage loans	2,925,408				3,009,335			2,831,860
Home equity loans	1,407,524				1,467,736			1,353,263
Consumer loans	1,554,355				1,507,993			1,178,055
Commercial real estate loans	3,289,436				3,345,889			2,755,468
Commercial loans	1,145,047				1,191,110			711,802
Total loans receivable	10,368,040				10,580,849			8,836,874
Allowance for credit losses	(123,997)				(134,427)			(92,897)
Loans receivable, net	10,244,043				10,446,422			8,743,977
FHLB stock, at cost	21,861				21,748			13,131
Accrued interest receivable	28,732				35,554			25,531
Real estate owned, net	1,738				2,232			1,075
Premises and equipment, net	158,784				161,538			147,427
Bank-owned life insurance	252,599				253,951			190,127
Goodwill	382,356				382,279			346,103
Other intangible assets, net	18,342				19,936			21,425
Other assets	148,196				168,503			133,159
Total assets	$	14,270,356			13,806,268			10,681,196
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	3,000,019			2,716,224			1,736,622
Interest-bearing demand deposits	2,826,461				2,755,950			1,975,830
Money market deposit accounts	2,521,881				2,437,539			1,946,113
Savings deposits	2,229,214				2,047,424			1,640,414
Time deposits	1,535,519				1,642,096			1,493,756
Total deposits	12,113,094				11,599,233			8,792,735
Borrowed funds	253,617				283,044			191,599
Junior subordinated debentures	128,859				128,794			121,813
Advances by borrowers for taxes and insurance	44,024				45,230			47,154
Accrued interest payable	659				2,054			834
Other liabilities	189,109				209,210			185,269
Total liabilities	12,729,362				12,267,565			9,339,404
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, 127,222,648, 127,019,452, and 106,933,483 shares issued and outstanding, respectively	1,272				1,270			1,069
Additional paid-in capital	1,018,822				1,015,502			808,250
Retained earnings	571,612				555,480			561,380
Accumulated other comprehensive loss	(50,712)				(33,549)			(28,907)
Total shareholders' equity	1,540,994				1,538,703			1,341,792
Total liabilities and shareholders' equity	$	14,270,356			13,806,268			10,681,196
Equity to assets	10.80		%		11.14	%		12.56	%
Tangible common equity to assets*	8.22		%		8.48	%		9.45	%
Book value per share	$	12.11			12.11			12.55
Tangible book value per share*	$	8.96			8.95			9.11
Closing market price per share	$	14.45			12.74			11.57
Full time equivalent employees	2,443				2,421			2,223
Number of banking offices	170				170			178

*   Excludes goodwill and other intangible assets (non-GAAP).

 

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income/(Loss) (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	March 31, 2021				December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
Interest income:
Loans receivable	$	102,318			105,681			107,241			103,012			94,973
Mortgage-backed securities	4,200				4,551			4,652			4,038			4,175
Taxable investment securities	634				471			427			439			648
Tax-free investment securities	575				656			655			564			185
FHLB stock dividends	116				192			218			309			262
Interest-earning deposits	183				178			221			185			135
Total interest income	108,026				111,729			113,414			108,547			100,378
Interest expense:
Deposits	5,514				6,714			8,443			9,336			11,403
Borrowed funds	2,054				2,127			1,437			1,133			1,747
Total interest expense	7,568				8,841			9,880			10,469			13,150
Net interest income	100,458				102,888			103,534			98,078			87,228
Provision for credit losses	(5,620)				(2,230)			6,818			51,750			27,637
Net interest income after provision for credit losses	106,078				105,118			96,716			46,328			59,591
Noninterest income:
Gain/(loss) on sale of investments	(21)				75			(12)			(8)			181
Gain on sale of loans	—				—			—			—			1,302
Service charges and fees	12,394				13,074			14,354			13,069			15,116
Trust and other financial services income	6,484				5,722			5,376			4,823			5,001
Insurance commission income	2,546				2,034			2,331			2,395			2,372
Gain/(loss) on real estate owned, net	(42)				114			(32)			(97)			(91)
Income from bank-owned life insurance	1,736				1,330			1,576			1,248			1,036
Mortgage banking income	6,020				7,120			11,055			12,022			1,194
Other operating income	2,836				2,654			2,022			2,044			1,865
Total noninterest income	31,953				32,123			36,670			35,496			27,976
Noninterest expense:
Compensation and employee benefits	47,239				48,209			47,371			40,049			42,746
Premises and occupancy costs	8,814				7,614			8,342			7,195			7,471
Office operations	3,165				4,009			4,626			3,711			3,382
Collections expense	616				893			1,264			644			474
Processing expenses	13,456				12,186			15,042			11,680			11,142
Marketing expenses	1,980				1,994			2,147			2,047			1,507
Federal deposit insurance premiums	1,307				1,651			1,498			1,618			—
Professional services	4,582				3,599			3,246			2,825			2,812
Amortization of intangible assets	1,594				1,664			1,781			1,760			1,651
Real estate owned expense	75				64			111			89			95
Merger/asset disposition expense	9				7,238			1,414			9,679			2,458
Other expenses	3,354				3,728			27			7,866			4,873
Total noninterest expense	86,191				92,849			86,869			89,163			78,611
Income/(loss) before income taxes	51,840				44,392			46,517			(7,339)			8,956
Income tax expense/(benefit)	11,603				9,327			8,467			(1,139)			1,017
Net income/(loss)	$	40,237			35,065			38,050			(6,200)			7,939
Basic earnings/(loss) per share	$	0.32			0.28			0.30			(0.05)			0.08
Diluted earnings/(loss) per share	$	0.32			0.28			0.30			(0.05)			0.07
Weighted average common shares outstanding - basic	126,182,409				126,713,429			126,855,810			121,480,563			105,882,553
Weighted average common shares outstanding - diluted	126,700,024				126,728,602			126,855,810			121,480,563			106,148,247
Annualized return on average equity	10.61		%		9.00	%		9.82	%		(1.63)	%		2.37	%
Annualized return on average assets	1.17		%		1.01	%		1.09	%		(0.18)	%		0.30	%
Annualized return on tangible common equity **	14.31		%		12.27	%		13.28	%		(2.22)	%		3.28	%
Efficiency ratio *	63.88		%		62.18	%		59.68	%		58.19	%		64.67	%
Annualized noninterest expense to average assets *	2.45		%		2.42	%		2.39	%		2.30	%		2.83	%

*    Excludes merger/asset disposition expenses and amortization of intangible assets (non-GAAP).

**   Excludes goodwill and other intangible assets (non-GAAP).

 

 

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
	March 31, 2021				December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
Nonaccrual loans current:
Residential mortgage loans	$	164			21			1,128			413			285
Home equity loans	268				154			366			481			592
Consumer loans	225				207			234			214			77
Commercial real estate loans	146,304				20,317			22,610			30,677			14,337
Commercial loans	6,361				16,027			6,488			6,551			3,514
Total nonaccrual loans current	$	153,322			36,726			30,826			38,336			18,805
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	1,261			647			60			61			691
Home equity loans	340				338			445			247			159
Consumer loans	254				301			230			335			143
Commercial real estate loans	965				1,416			692			2,372			496
Commercial loans	1,538				87			57			—			—
Total nonaccrual loans delinquent 30 days to 59 days	$	4,358			2,789			1,484			3,015			1,489
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	813			767			576			1,013			218
Home equity loans	417				190			618			960			539
Consumer loans	649				583			781			666			488
Commercial real estate loans	1,877				714			2,745			163			2,096
Commercial loans	7,919				48			15			768			37
Total nonaccrual loans delinquent 60 days to 89 days	$	11,675			2,302			4,735			3,570			3,378
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	9,333			14,489			14,750			15,369			10,457
Home equity loans	7,044				8,441			7,845			7,060			5,816
Consumer loans	3,625				5,473			5,352			6,896			3,459
Commercial real estate loans	29,737				25,287			35,496			29,729			25,342
Commercial loans	4,860				7,325			6,310			11,535			16,685
Total nonaccrual loans delinquent 90 days or more	$	54,599			61,015			69,753			70,589			61,759
Total nonaccrual loans	$	223,954			102,832			106,798			115,510			85,431
Total nonaccrual loans	$	223,954			102,832			106,798			115,510			85,431
Loans 90 days past due and still accruing	197				585			495			77			31
Nonperforming loans	224,151				103,417			107,293			115,587			85,462
Real estate owned, net	1,738				2,232			2,575			1,897			1,075
Nonperforming assets	$	225,889			105,649			109,868			117,484			86,537
Nonaccrual troubled debt restructuring *	$	7,390			10,704			17,120			17,562			17,375
Accruing troubled debt restructuring	20,120				21,431			17,684			17,888			15,977
Total troubled debt restructuring	$	27,510			32,135			34,804			35,450			33,352
Nonperforming loans to total loans	2.16		%		0.98	%		1.00	%		1.06	%		0.97	%
Nonperforming assets to total assets	1.58		%		0.77	%		0.80	%		0.85	%		0.81	%
Allowance for credit losses to total loans	1.20		%		1.27	%		1.30	%		1.29	%		1.05	%
Allowance for total loans excluding PPP loan balances	1.24		%		1.32	%		1.36	%		1.36	%		N/A
Allowance for credit losses to nonperforming loans	55.32		%		129.99	%		130.68	%		121.63	%		108.70	%

*    Amounts included in nonperforming loans above.

 

 

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At March 31, 2021		Pass				Special mention *			Substandard **			Doubtful ***			Loss			Loans receivable
Personal Banking:
Residential mortgage loans		$	2,950,103			—			21,575			—			—			2,971,678
Home equity loans		1,396,757				—			10,767			—			—			1,407,524
Consumer loans		1,547,502				—			6,853			—			—			1,554,355
Total Personal Banking		5,894,362				—			39,195			—			—			5,933,557
Commercial Banking:
Commercial real estate loans		2,801,082				120,345			368,009			—			—			3,289,436
Commercial loans		1,061,884				22,623			60,540			—			—			1,145,047
Total Commercial Banking		3,862,966				142,968			428,549			—			—			4,434,483
Total loans		$	9,757,328			142,968			467,744			—			—			10,368,040
At December 31, 2020
Personal Banking:
Residential mortgage loans		$	3,042,544			—			25,577			—			—			3,068,121
Home equity loans		1,455,474				—			12,262			—			—			1,467,736
Consumer loans		1,499,004				—			8,989			—			—			1,507,993
Total Personal Banking		5,997,022				—			46,828			—			—			6,043,850
Commercial Banking:
Commercial real estate loans		2,852,705				108,021			385,163			—			—			3,345,889
Commercial loans		1,092,498				41,278			57,334			—			—			1,191,110
Total Commercial Banking		3,945,203				149,299			442,497			—			—			4,536,999
Total loans		$	9,942,225			149,299			489,325			—			—			10,580,849
At September 30, 2020
Personal Banking:
Residential mortgage loans		$	3,117,442			—			25,927			—			—			3,143,369
Home equity loans		1,471,919				—			12,446			—			—			1,484,365
Consumer loans		1,478,109				—			8,974			—			—			1,487,083
Total Personal Banking		6,067,470				—			47,347			—			—			6,114,817
Commercial Banking:
Commercial real estate loans		2,850,611				110,073			359,059			—			—			3,319,743
Commercial loans		1,255,255				40,631			51,406			—			—			1,347,292
Total Commercial Banking		4,105,866				150,704			410,465			—			—			4,667,035
Total loans		$	10,173,336			150,704			457,812			—			—			10,781,852
At June 30, 2020
Personal Banking:
Residential mortgage loans		$	3,196,304			—			26,451			—			—			3,222,755
Home equity loans		1,438,339				—			12,031			—			—			1,450,370
Consumer loans		1,508,129				—			9,990			—			—			1,518,119
Total Personal Banking		6,142,772				—			48,472			—			—			6,191,244
Commercial Banking:
Commercial real estate loans		3,034,984				72,755			199,993			1,092			—			3,308,824
Commercial loans		1,270,279				41,458			42,692			4,290			—			1,358,719
Total Commercial Banking		4,305,263				114,213			242,685			5,382			—			4,667,543
Total loans		$	10,448,035			114,213			291,157			5,382			—			10,858,787
At March 31, 2020
Personal Banking:
Residential mortgage loans		$	2,830,596			—			7,690			—			—			2,838,286
Home equity loans		1,345,052				—			8,211			—			—			1,353,263
Consumer loans		1,174,067				—			3,988			—			—			1,178,055
Total Personal Banking		5,349,715				—			19,889			—			—			5,369,604
Commercial Banking:
Commercial real estate loans		2,537,736				73,967			143,765			—			—			2,755,468
Commercial loans		618,267				43,071			50,464			—			—			711,802
Total Commercial Banking		3,156,003				117,038			194,229			—			—			3,467,270
Total loans		$	8,505,718			117,038			214,118			—			—			8,836,874

*	Includes $26.4 million, $31.3 million, $34.7 million, $37.4 million, and $13.1 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
**	Includes $143.2 million, $153.2 million, $129.2 million, $108.2 million, and $56.8 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

 

 

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
	March 31, 2021							*			December 31, 2020							*			September 30, 2020							*			June 30, 2020							*			March 31, 2020							*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	248			$	22,236			0.7	%		315			$	28,797			0.9	%		17			$	736			—	%		15			$	629			—	%		358			$	32,755			1.2	%
Home equity loans	84			3,334				0.2	%		138			4,763				0.3	%		129			4,984				0.3	%		118			4,569				0.3	%		190			7,061				0.5	%
Consumer loans	535			5,732				0.4	%		1,279			10,574				0.7	%		1,078			8,586				0.6	%		629			7,199				0.5	%		953			8,774				0.7	%
Commercial real estate loans	33			12,240				0.4	%		43			10,923				0.3	%		28			5,090				0.2	%		46			14,177				0.4	%		58			12,895				0.5	%
Commercial loans	16			3,032				0.3	%		37			6,405				0.5	%		19			1,797				0.1	%		12			1,242				0.1	%		35			7,545				1.1	%
Total loans delinquent 30 days to 59 days	916			$	46,574			0.4	%		1,812			$	61,462			0.6	%		1,271			$	21,193			0.2	%		820			$	27,816			0.3	%		1,594			$	69,030			0.8	%
Loans delinquent 60 days to 89 days:
Residential mortgage loans	26			$	2,062			0.1	%		84			$	5,083			0.2	%		65			$	4,788			0.2	%		64			$	5,364			0.2	%		11			$	511			—	%
Home equity loans	31			953				0.1	%		47			1,656				0.1	%		56			1,860				0.1	%		59			2,326				0.2	%		65			2,652				0.2	%
Consumer loans	169			1,868				0.1	%		322			2,742				0.2	%		323			3,049				0.2	%		258			2,916				0.2	%		265			2,610				0.2	%
Commercial real estate loans	14			7,609				0.2	%		11			1,615				—	%		14			4,212				0.1	%		18			3,913				0.1	%		12			2,981				0.1	%
Commercial loans	12			8,979				0.8	%		10			864				0.1	%		7			357				—	%		15			1,151				0.1	%		10			309				—	%
Total loans delinquent 60 days to 89 days	252			$	21,471			0.2	%		474			$	11,960			0.1	%		465			$	14,266			0.1	%		414			$	15,670			0.1	%		363			$	9,063			0.1	%
Loans delinquent 90 days or more: **
Residential mortgage loans	121			$	9,333			0.3	%		168			$	14,489			0.5	%		168			$	14,750			0.5	%		185			$	15,369			0.5	%		129			$	10,457			0.4	%
Home equity loans	176			7,044				0.5	%		207			8,441				0.6	%		193			7,845				0.5	%		182			7,060				0.5	%		152			5,816				0.4	%
Consumer loans	454			3,822				0.2	%		720			6,058				0.4	%		696			5,847				0.4	%		709			6,896				0.5	%		445			3,459				0.3	%
Commercial real estate loans	113			29,737				0.9	%		119			25,287				0.8	%		136			35,496				1.1	%		149			29,729				0.9	%		139			25,342				0.9	%
Commercial loans	31			4,860				0.4	%		37			7,325				0.6	%		34			6,310				0.5	%		47			11,535				0.8	%		51			16,685				0.2	%
Total loans delinquent 90 days or more	895			$	54,796			0.5	%		1,251			$	61,600			0.6	%		1,227			$	70,248			0.7	%		1,272			$	70,589			0.7	%		916			$	61,759			0.7	%
Total loans delinquent	2,063			$	122,841			1.2	%		3,537			$	135,022			1.3	%		2,963			$	105,707			1.0	%		2,506			$	114,075			1.1	%		2,873			$	139,852			1.6	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $12.7 million, $6.6 million, $20.3 million, $18.0 million, and $298,000 at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.

 

 

Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited) (dollars in thousands)
Loans outstanding      The following table provides delinquency information for various loan sectors in our portfolio that are potentially vulnerable to the COVID-19 pandemic impacts at March 31, 2021:
At March 31, 2021		30-59 days delinquent				*			60-89 days delinquent				*			90 days or greater delinquent				*			Total delinquent				*			Current				*			Total loans  receivable				*
Restaurants/bars		$	310			—	%		$	355			—	%		$	759			—	%		$	1,424			—	%		$	103,097			1.0	%		$	104,521			1.0	%
Hotels/hospitality		4,285				—	%		367				—	%		7,963				0.1	%		12,615				0.1	%		166,694				1.6	%		179,309				1.7	%
Gyms and fitness		—				—	%		—				—	%		—				—	%		—				—	%		4,590				—	%		4,590				—	%
Transportation		275				—	%		14				—	%		296				—	%		585				—	%		70,994				0.7	%		71,579				0.7	%
Oil and gas		—				—	%		—				—	%		—				—	%		—				—	%		9,200				0.1	%		9,200				0.1	%
Residential care facilities		1,250				—	%		—				—	%		—				—	%		1,250				—	%		246,561				2.4	%		247,811				2.4	%
Retail buildings		1,692				—	%		—				—	%		938				—	%		2,630				—	%		445,102				4.3	%		447,732				4.3	%
Education/student housing		—				—	%		1,389				—	%		441				—	%		1,830				—	%		138,536				1.3	%		140,366				1.4	%
Construction/development:
Education/student housing		—				—	%		—				—	%		—				—	%		—				—	%		53,903				0.5	%		53,903				0.5	%
Hotels/hospitality		—				—	%		—				—	%		—				—	%		—				—	%		25,639				0.2	%		25,639				0.2	%
Residential care facilities		3,450				—	%		—				—	%		—				—	%		3,450				—	%		30,144				0.3	%		33,594				0.3	%
All other construction/development		319				—	%		804				—	%		4,193				—	%		5,316				0.1	%		178,109				1.7	%		183,425				1.8	%
All other sectors		34,993				0.3	%		18,542				0.2	%		40,206				0.4	%		93,741				0.9	%		8,772,630				84.6	%		8,866,371				85.5	%
Total loans		$	46,574			0.4	%		$	21,471			0.2	%		$	54,796			0.5	%		$	122,841			1.2	%		$	10,245,199			98.8	%		$	10,368,040			100.0	%
*     Percent of total loans outstanding.
Loan deferrals      The following table represents loans that entered into and are currently in a deferment offered by the Company to aid customers in the COVID-19 pandemic as of March 31, 2021.
										Balance as of December 31, 2020									Loans returned to full payment status, net of payments							New loans entered into a deferral								Balance as of March 31, 2021
										Number of loans		Outstanding principal balance				*			Number of loans			Outstanding principal balance				Number of loans			Outstanding principal balance					Number of loans			Outstanding principal balance				*
Residential mortgage loans										43		$	6,442			0.2	%		42			$	6,119			29			$	4,484				30			$	4,807			0.2	%
Home equity loans										41		2,615				0.2	%		40			2,560				21			1,096					22			1,151				0.1	%
Consumer loans										83		1,299				0.1	%		83			1,299				21			546					21			546				—	%
Commercial real estate loans										34		118,212				3.5	%		29			80,666				20			6,068					25			43,614				1.3	%
Commercial loans										22		1,332				0.1	%		21			1,301				59			3,633					60			3,664				0.3	%
Total loans										223		$	129,900			1.2	%		215			$	91,945			150			$	15,827				158			$	53,782	**		0.5	%
*     Percent of total loans outstanding by the respective total amount of that type of loan.
**   As of March 31, 2021, $53.6 million of loan deferrals expire in Q2 2021 and $150,000 of loan deferrals expire in Q3 2021.  Of the $53.8 total loan deferrals, $37.1 million are in the hospitality industry.

 

 

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
	Quarter ended
	March 31, 2021				December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
Beginning balance	$	134,427			140,209			140,586			92,897			57,941
CECL adoption	—				—			—			—			10,792
Initial allowance on loans purchased with credit deterioration	—				—			—			8,845			—
Provision	(5,620)				(2,230)			6,818			51,750			27,637
Charge-offs residential mortgage	(855)				(407)			(129)			(38)			(343)
Charge-offs home equity	(228)				(58)			(88)			(173)			(289)
Charge-offs consumer	(2,603)				(2,623)			(3,356)			(3,191)			(3,488)
Charge-offs commercial real estate	(4,626)				(2,770)			(532)			(690)			(331)
Charge-offs commercial	(54)				(156)			(4,892)			(10,349)			(815)
Recoveries	3,556				2,462			1,802			1,535			1,793
Ending balance	$	123,997			134,427			140,209			140,586			92,897
Net charge-offs to average loans, annualized	0.19		%		0.13	%		0.27	%		0.51	%		0.16	%

 

 

	March 31, 2021
	Originated loans							Acquired loans						Total loans
	Balance				Reserve			Balance			Reserve			Balance			Reserve
Residential mortgage loans	$	2,693,075			5,117			278,603			744			2,971,678			5,861
Home equity loans	1,138,718				3,984			268,806			1,257			1,407,524			5,241
Consumer loans	1,351,401				15,026			202,954			2,425			1,554,355			17,451
Personal Banking Loans	5,183,194				24,127			750,363			4,426			5,933,557			28,553
Commercial real estate loans	2,568,567				60,874			720,869			16,085			3,289,436			76,959
Commercial loans	1,011,722				10,571			133,325			7,914			1,145,047			18,485
Commercial Banking Loans	3,580,289				71,445			854,194			23,999			4,434,483			95,444
Total Loans	$	8,763,483			95,572			1,604,557			28,425			10,368,040			123,997

 

 

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
	March 31, 2021										December 31, 2020										September 30, 2020										June 30, 2020										March 31, 2020
	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	$	3,007,439			26,366			3.51	%		$	3,089,916			27,503			3.56	%		$	3,176,436			28,769			3.62	%		$	3,092,392			29,019			3.75	%		$	2,845,483			28,062			3.94	%
Home equity loans	1,432,009				12,815			3.63	%		1,472,527				13,535			3.66	%		1,479,429				13,732			3.69	%		1,415,091				13,806			3.92	%		1,345,059				14,801			4.43	%
Consumer loans	1,463,284				14,566			4.04	%		1,444,860				15,874			4.37	%		1,437,828				15,851			4.39	%		1,375,130				14,993			4.39	%		1,123,336				12,160			4.35	%
Commercial real estate loans	3,313,892				38,471			4.64	%		3,317,418				37,965			4.48	%		3,306,386				36,887			4.37	%		3,156,749				34,595			4.34	%		2,747,419				31,437			4.53	%
Commercial loans	1,189,812				10,566			3.55	%		1,325,047				11,414			3.37	%		1,377,223				12,603			3.58	%		1,161,228				11,269			3.84	%		712,621				8,856			4.92	%
Total loans receivable (a) (b) (d)	10,406,436				102,784			4.01	%		10,649,768				106,291			3.97	%		10,777,302				107,842			3.98	%		10,200,590				103,682			4.09	%		8,773,918				95,316			4.37	%
Mortgage-backed securities (c)	1,324,558				4,200			1.27	%		1,166,739				4,551			1.56	%		1,004,803				4,651			1.85	%		714,657				4,038			2.26	%		668,470				4,175			2.50	%
Investment securities (c) (d)	331,358				1,381			1.67	%		252,898				1,380			2.18	%		216,081				1,336			2.47	%		170,309				1,244			2.92	%		144,152				881			2.44	%
FHLB stock, at cost	21,811				116			2.17	%		23,346				192			3.27	%		25,595				218			3.39	%		22,192				309			5.60	%		15,931				262			6.61	%
Other interest-earning deposits	801,119				183			0.09	%		632,494				178			0.11	%		791,601				221			0.11	%		623,870				185			0.12	%		34,697				135			1.54	%
Total interest-earning assets	12,885,282				108,664			3.42	%		12,725,245				112,592			3.52	%		12,815,382				114,268			3.55	%		11,731,618				109,458			3.75	%		9,637,168				100,769			4.21	%
Noninterest-earning assets (e)	1,102,477										1,066,609										1,088,273										1,858,513										960,303
Total assets	$	13,987,759									$	13,791,854									$	13,903,655									$	13,590,131									$	10,597,471
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,118,030			625			0.12	%		$	2,028,155			617			0.12	%		$	2,015,604			648			0.13	%		$	1,884,202			648			0.14	%		$	1,611,111			727			0.18	%
Interest-bearing demand deposits	2,783,429				429			0.06	%		2,699,515				476			0.07	%		2,680,591				763			0.11	%		2,428,060				812			0.13	%		1,915,871				1,307			0.27	%
Money market deposit accounts	2,497,495				657			0.11	%		2,426,513				960			0.16	%		2,347,097				1,347			0.23	%		2,204,810				1,600			0.29	%		1,921,243				3,088			0.65	%
Time deposits	1,583,525				3,803			0.97	%		1,676,094				4,660			1.11	%		1,782,350				5,685			1.27	%		1,761,260				6,276			1.43	%		1,528,891				6,281			1.65	%
Borrowed funds (f)	267,163				1,412			2.14	%		352,392				1,469			1.66	%		420,715				717			0.68	%		371,700				296			0.32	%		240,118				709			1.19	%
Junior subordinated debentures	128,817				642			1.99	%		128,752				659			2.00	%		128,658				720			2.19	%		127,472				837			2.60	%		121,809				1,038			3.37	%
Total interest-bearing liabilities	9,378,459				7,568			0.33	%		9,311,421				8,841			0.38	%		9,375,015				9,880			0.42	%		8,777,504				10,469			0.48	%		7,339,043				13,150			0.72	%
Noninterest-bearing demand deposits (g)	2,805,206										2,675,986										2,703,266										2,401,368										1,640,180
Noninterest-bearing liabilities	265,667										253,966										284,440										882,391										268,139
Total liabilities	12,449,332										12,241,373										12,362,721										12,061,263										9,247,362
Shareholders' equity	1,538,427										1,550,481										1,540,934										1,528,868										1,350,109
Total liabilities and shareholders' equity	$	13,987,759									$	13,791,854									$	13,903,655									$	13,590,131									$	10,597,471
Net interest income/Interest rate spread					101,096			3.09	%						103,751			3.14	%						104,388			3.13	%						98,989			3.27	%						87,619			3.48	%
Net interest-earning assets/Net interest margin	$	3,506,823						3.18	%		$	3,413,824						3.26	%		$	3,440,367						3.26	%		$	2,954,114						3.38	%		$	2,298,125						3.66	%
Ratio of interest-earning assets to interest-bearing liabilities	1.37X										1.37X										1.37X										1.34X										1.31X

(a)	Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)	Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)	Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)	Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") 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, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.19%, 0.23%, 0.29%, 0.35%, and 0.53%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.99%, 3.94%, 3.96%, 4.06%, and 4.35%, respectively, Investment securities - 1.46%, 1.78%, 2.00%, 2.36%, and 2.31%, respectively, Interest-earning assets - 3.40%, 3.48%, 3.52%, 3.72%, and 4.19%, respectively. GAAP basis net interest rate spreads were 3.07%, 3.11%, 3.10%, 3.24%, and 3.47%, respectively, and GAAP basis net interest margins were 3.16%, 3.23%, 3.23%, 3.34%, and 3.64%, respectively.

 

 

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SOURCE Northwest Bancshares, Inc.

FAQ

What was Northwest Bancshares' net income for Q1 2021?

Northwest Bancshares reported a net income of $40.2 million for the quarter ended March 31, 2021.

What is the dividend increase announced by Northwest Bancshares?

The quarterly cash dividend was increased by 5.3% to $0.20 per share.

How did net interest income perform in Q1 2021?

Net interest income increased by 15.2% to $100.5 million compared to Q1 2020.

What were the annualized returns on average assets for NWBI in Q1 2021?

The annualized return on average assets was 1.17% for the quarter ended March 31, 2021.

What impact did COVID-19 have on classified loans for NWBI?

Total classified loans increased to $467.7 million, partly due to the impact of COVID-19.