Northwest Bancshares, Inc. Announces Fourth Quarter 2020 Earnings and Quarterly Dividend

Rhea-AI Summary

Northwest Bancshares, Inc. (NASDAQ: NWBI) reported a net income of $35.1 million for Q4 2020, a 37% increase from $25.6 million in Q4 2019. This equates to $0.28 per diluted share. Annual returns on average shareholders' equity and assets improved to 9.00% and 1.01%, respectively. A quarterly dividend of $0.19 per share was declared, marking 105 consecutive quarters of dividends. Despite a 32.2% annual decline in net income to $74.9 million, driven by higher credit loss provisions due to COVID-19, net interest income grew by 15.7% to $102.9 million. Noninterest expenses rose by 21.3% to $92.8 million.

Positive

• Q4 net income increased by 37% year-over-year, totaling $35.1 million.
• Quarterly dividend declared at $0.19 per share, maintaining a strong yield of approximately 5.50%.
• Net interest income rose by 15.7% to $102.9 million for Q4 2020.
• Successful acquisition of MutualBank and branch optimization initiatives completed.

Negative

• Annual net income decreased by 32.2% to $74.9 million primarily due to COVID-19 impacts.
• Provision for credit losses increased significantly due to economic uncertainty.
• Noninterest expenses surged by 21.3%, outpacing revenue growth.

WARREN, Pa., Jan. 25, 2021 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2020 of $35.1 million, or $0.28 per diluted share.  This represents an increase of $9.5 million, or 37.0%, compared to the same quarter last year when net income was $25.6 million, or $0.24 per diluted share.  The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2020 were 9.00% and 1.01% compared to 7.52% and 0.97% for the same quarter last year.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share payable on February 15, 2021 to shareholders of record as of February 4, 2021. This is the 105th consecutive quarter in which the Company has paid a cash dividend.  Ronald J. Seiffert, Chairman, President and CEO, added, "We are extremely proud that we were able to maintain our dividend throughout 2020 despite the challenges of COVID-19 on bank earnings. Based on the current market value of the Company's stock, this represents an annualized dividend yield of approximately 5.50%, which continues to be among the highest in our peer group."

Mr. Seiffert continued, "When looking back over a very challenging 2020, I am amazed at what our team accomplished during the midst of COVID-19.  We successfully adopted CECL in the first quarter followed closely by the close and conversion of MutualBank on April 24th, the largest acquisition in the company's history.  We also completed a very successful $125 million sub-debt offering in September.  This additional liquidity and capital at the holding company allowed us to resume our existing five million share common stock buyback program, of which we successfully repurchased approximately 760,000 shares in the fourth quarter at an average price of $12.20.  Finally, we completed our branch optimization program which resulted in the consolidation of 43 offices in December 2020.  In addition to all of these initiatives, we will be launching our digital strategy this year which will significantly enhance our online banking capabilities and streamline our account opening processes.  We want to give our customers the same award winning experience online as they are accustomed to receiving in our branch offices. In addition, we are expanding our capabilities in mortgage banking to all of our markets and expanding our geographic footprint for dealer services' indirect auto and power sports lending.  We have acquired talent to enhance our treasury management services, added resources to our corporate finance capabilities, created a healthcare vertical with a dedicated subject matter expert and will be opening a Loan Production Office in the greater Philadelphia market with the addition of a team of capable middle market bankers.  As rewarding as 2020 was, we are even more optimistic about 2021."

Net interest income increased by $13.9 million, or 15.7%, to $102.9 million for the quarter ended December 31, 2020, from $88.9 million for the quarter ended December 31, 2019, primarily due to a $7.8 million, or 8.0%, increase in interest income on loans receivable and a $6.2 million, or 47.9%, decrease in interest expense on deposits.  The increase in interest income was primarily due to an increase of $1.935 billion, or 22.2%, in the average balance of loans which more than offset the decline experienced from a reduction in the yield on loans to 3.97% for the quarter ended December 31, 2020 from 4.47% for the same quarter last year.  The decrease in interest expense was primarily due to a decrease in our interest-bearing cost of deposits to 0.30% for the quarter ended December 31, 2020 from 0.75% for the quarter ended December 31, 2019 which was partially offset by the growth in the average balance of interest-bearing deposits by $1.991 billion, or 29.1%.  The net impact of these changes caused the Company's net interest margin to decrease to 3.26% for the quarter ended December 31, 2020 from 3.73% for the same quarter last year.

The provision for credit losses decreased by $10.5 million, or 127.1%, due to a release of the allowance for credit losses of $2.2 million for the quarter ended December 31, 2020, compared to an expense of $8.2 million for the quarter ended December 31, 2019.  This decrease in the provision was primarily the result of improvements in the economic forecasts.

Noninterest income increased by $3.9 million, or 13.9%, to $32.1 million for the quarter ended December 31, 2020, from $28.2 million for the quarter ended December 31, 2019.  This increase was primarily due to the increase in mortgage banking income of $5.6 million to $7.1 million for the quarter ended December 31, 2020 from $1.5 million for the quarter ended December 31, 2019.  Our successful mortgage banking income was the result of continued efforts to expand our secondary market sales capabilities over the past year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. Also contributing to this increase was a $1.2 million, or 26.7%, increase in trust and other financial services income due to additional fee income received as a result of the acquisition of MutualBank. Partially offsetting these increases was a decrease in other operating income of $1.4 million, or 34.9%, due to a decline in swap fee income as well as a decrease of service charges and fees of $1.1 million, or 7.4%, primarily as a result of the fee income cap of the Durbin amendment on debit card interchange revenue which took effect for Northwest on July 1, 2020.

Noninterest expense increased by $16.3 million, or 21.3%, to $92.8 million for the quarter ended December 31, 2020, from $76.6 million for the quarter ended December 31, 2019.  This increase primarily resulted from a $6.1 million increase in acquisition and branch optimization expense due to expenses incurred as part of the branch optimization initiative that occurred during December.  In addition, compensation and employee benefits increased $6.1 million, or 14.6%, due to internal growth of compensation and staff as well as the addition of MutualBank employees. Also contributing to this increase was an increase in processing expenses of $1.9 million, or 18.7%, as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking and loan origination platforms has increased.  Lastly, federal deposit insurance premiums increased $1.7 million due to assessment credits received in the previous year. 

Net income for the year ended December 31, 2020 was $74.9 million, or $0.62 per diluted share.  This represents a decrease of $35.6 million, or 32.2%, compared to the year ended December 31, 2019, when net income was $110.4 million, or $1.04 per diluted share.  The annualized returns on average shareholders' equity and average assets for the year ended December 31, 2020 were 4.72% and 0.58% compared to 8.36% and 1.07% for the prior year.  This decrease in net income was the result of an increase in provision for credit losses of $61.3 million primarily as a result of COVID-19 and the expected impact on the allowance for credit losses as well as the acquisition of MutualBank and the required provision associated with the adoption of ASU 2016-13, Current Expected Credit Losses ("CECL").  In addition, noninterest expense increased by $51.4 million, or 17.4%, primarily as a result of the additional operating expenses of MutualBank as well as the one-time costs associated with acquisitions and branch optimization costs which increased $16.6 million for the year.  Partially offsetting these factors was an increase in net interest income over the prior year of $31.3 million, or 8.7% due to balance sheet growth during the year as well as a $32.9 million, or 33.1%, increase in fee income highlighted by a $27.6 million increase in mortgage banking income.

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.  As of December 31, 2020, Northwest operates 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; 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, 2020				September 30, 2020			December 31, 2019
Assets
Cash and cash equivalents	$	736,277			656,749			60,846
Marketable securities available-for-sale (amortized cost of $1,375,685, $1,385,835 and $815,495, respectively)	1,398,941				1,409,150			819,901
Marketable securities held-to-maturity (fair value of $179,666, $16,168 and $18,223, respectively)	178,887				15,333			18,036
Total cash and cash equivalents and marketable securities	2,314,105				2,081,232			898,783
Residential mortgage loans held-for-sale	58,786				25,140			7,709
Residential mortgage loans	3,009,335				3,118,229			2,860,418
Home equity loans	1,467,736				1,484,365			1,342,918
Consumer loans	1,507,993				1,487,083			1,125,132
Commercial real estate loans	3,345,889				3,319,743			2,754,390
Commercial loans	1,191,110				1,347,292			718,107
Total loans receivable	10,580,849				10,781,852			8,808,674
Allowance for credit losses	(134,427)				(140,209)			(57,941)
Loans receivable, net	10,446,422				10,641,643			8,750,733
Federal Home Loan Bank stock, at cost	21,748				23,171			14,740
Accrued interest receivable	35,554				36,916			25,755
Real estate owned, net	2,232				2,575			950
Premises and equipment, net	161,538				166,919			147,409
Bank-owned life insurance	253,951				252,621			189,091
Goodwill	382,279				386,044			346,103
Other intangible assets, net	19,936				21,601			23,076
Other assets	168,503				176,083			97,268
Total assets	$	13,806,268			13,788,805			10,493,908
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	2,716,224			2,641,234			1,609,653
Interest-bearing demand deposits	2,755,950				2,663,878			1,944,108
Money market deposit accounts	2,437,539				2,396,567			1,863,998
Savings deposits	2,047,424				2,022,918			1,604,838
Time deposits	1,642,096				1,732,022			1,569,410
Total deposits	11,599,233				11,456,619			8,592,007
Borrowed funds	283,044				398,216			246,336
Junior subordinated debentures	128,794				128,729			121,800
Advances by borrowers for taxes and insurance	45,230				29,755			44,556
Accrued interest payable	2,054				1,002			1,142
Other liabilities	209,210				227,253			134,782
Total liabilities	12,267,565				12,241,574			9,140,623
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, 127,019,452, 127,801,297, and 106,859,088 shares issued and outstanding, respectively	1,270				1,278			1,069
Paid-in capital	1,015,502				1,023,827			805,750
Retained earnings	555,480				544,695			583,407
Accumulated other comprehensive loss	(33,549)				(22,569)			(36,941)
Total shareholders' equity	1,538,703				1,547,231			1,353,285
Total liabilities and shareholders' equity	$	13,806,268			13,788,805			10,493,908
Equity to assets	11.14		%		11.22	%		12.90	%
Tangible common equity to assets	8.48		%		8.52	%		9.72	%
Book value per share	$	12.11			12.11			12.66
Tangible book value per share	$	8.95			8.92			9.21
Closing market price per share	$	12.74			9.20			16.63
Full time equivalent employees	2,421				2,523			2,209
Number of banking offices	170				213			181

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income/(Loss) (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	December 31, 2020				September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Interest income:
Loans receivable	$	105,681			107,241			103,012			94,973			97,866
Mortgage-backed securities	4,551				4,652			4,038			4,175			4,237
Taxable investment securities	471				427			439			648			683
Tax-free investment securities	656				655			564			185			201
FHLB dividends	192				218			309			262			262
Interest-earning deposits	178				221			185			135			169
Total interest income	111,729				113,414			108,547			100,378			103,418
Interest expense:
Deposits	6,714				8,443			9,336			11,403			12,893
Borrowed funds	2,127				1,437			1,133			1,747			1,580
Total interest expense	8,841				9,880			10,469			13,150			14,473
Net interest income	102,888				103,534			98,078			87,228			88,945
Provision for credit losses	(2,230)				6,818			51,750			27,637			8,223
Net interest income after provision for credit losses	105,118				96,716			46,328			59,591			80,722
Noninterest income:
Gain/(loss) on sale of investments	75				(12)			(8)			181			27
Gain on sale of loans	—				—			—			1,302			908
Service charges and fees	13,074				14,354			13,069			15,116			14,125
Trust and other financial services income	5,722				5,376			4,823			5,001			4,517
Insurance commission income	2,034				2,331			2,395			2,372			1,858
Gain/(loss) on real estate owned, net	114				(32)			(97)			(91)			86
Income from bank-owned life insurance	1,330				1,576			1,248			1,036			1,121
Mortgage banking income	7,120				11,055			12,022			1,194			1,494
Other operating income	2,654				2,022			2,044			1,865			4,077
Total noninterest income	32,123				36,670			35,496			27,976			28,213
Noninterest expense:
Compensation and employee benefits	48,209				47,371			40,049			42,746			42,074
Premises and occupancy costs	7,614				8,342			7,195			7,471			7,051
Office operations	4,009				4,626			3,711			3,382			4,097
Collections expense	893				1,264			644			474			566
Processing expenses	12,186				15,042			11,680			11,142			10,263
Marketing expenses	1,994				2,147			2,047			1,507			1,010
Federal deposit insurance premiums	1,651				1,498			1,618			—			—
Professional services	3,599				3,246			2,825			2,812			3,533
Amortization of intangible assets	1,664				1,781			1,760			1,651			1,634
Real estate owned expense	64				111			89			95			72
Acquisition/branch optimization expense	7,238				1,414			9,679			2,458			1,114
Other expenses	3,728				27			7,866			4,873			5,157
Total noninterest expense	92,849				86,869			89,163			78,611			76,571
Income/(loss) before income taxes	44,392				46,517			(7,339)			8,956			32,364
Income tax expense/(benefit)	9,327				8,467			(1,139)			1,017			6,773
Net income/(loss)	$	35,065			38,050			(6,200)			7,939			25,591
Basic earnings/(loss) per share	$	0.28			0.30			(0.05)			0.08			0.24
Diluted earnings/(loss) per share	$	0.28			0.30			(0.05)			0.07			0.24
Weighted average common shares outstanding - basic	126,713,429				126,855,810			121,480,563			105,882,553			105,627,194
Weighted average common shares outstanding - diluted	126,728,602				126,855,810			121,480,563			106,148,247			106,306,615
Annualized return on average equity	9.00		%		9.82	%		(1.63)	%		2.37	%		7.52	%
Annualized return on average assets	1.01		%		1.09	%		(0.18)	%		0.30	%		0.97	%
Annualized return on tangible common equity **	12.27		%		13.28	%		(2.22)	%		3.28	%		10.32	%
Efficiency ratio *	62.18		%		59.68	%		58.19	%		64.67	%		63.01	%
Annualized noninterest expense to average assets *	2.42		%		2.39	%		2.30	%		2.83	%		2.80	%

*	Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
**	Excludes goodwill and other 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,
	2020				2019
Interest income:
Loans receivable	$	410,907			394,809
Mortgage-backed securities	17,416				16,670
Taxable investment securities	1,985				3,401
Tax-free investment securities	2,060				844
FHLB dividends	981				1,056
Interest-earning deposits	719				600
Total interest income	434,068				417,380
Interest expense:
Deposits	35,896				49,216
Borrowed funds	6,444				7,698
Total interest expense	42,340				56,914
Net interest income	391,728				360,466
Provision for credit losses	83,975				22,659
Net interest income after provision for credit losses	307,753				337,807
Noninterest income:
Gain on sale of investments	236				50
Gain on sale of loans	1,302				1,734
Service charges and fees	55,613				53,065
Trust and other financial services income	20,922				17,765
Insurance commission income	9,132				8,068
Loss on real estate owned, net	(106)				(53)
Income from bank-owned life insurance	5,190				4,418
Mortgage banking income	31,391				3,819
Other operating income	8,585				10,541
Total noninterest income	132,265				99,407
Noninterest expense:
Compensation and employee benefits	178,375				163,086
Premises and occupancy costs	30,622				28,717
Office operations	15,728				14,133
Collections expense	3,275				2,560
Processing expenses	50,050				42,453
Marketing expenses	7,695				6,998
Federal deposit insurance premiums	4,767				685
Professional services	12,482				12,287
Amortization of intangible assets	6,856				6,543
Real estate owned expense	359				478
Acquisition/branch optimization expense	20,789				4,168
Other expenses	16,494				13,995
Total noninterest expense	347,492				296,103
Income before income taxes	92,526				141,111
Income tax expense	17,672				30,679
Net income	$	74,854			110,432
Basic earnings per share	$	0.62			1.05
Diluted earnings per share	$	0.62			1.04
Weighted average common shares outstanding - basic	120,244,474				104,878,774
Weighted average common shares outstanding - diluted	120,244,474				105,839,149
Return on average equity	4.72		%		8.36	%
Return on average assets	0.58		%		1.07	%
Return on tangible common equity **	6.59		%		11.22	%
Efficiency ratio *	61.04		%		62.06	%
Noninterest expense to average assets *	2.48		%		2.76	%

*	Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
**	Excludes goodwill and other intangible assets (non-GAAP).

 

Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) * (dollars in thousands, except per share amounts)
	Quarter ended December 31,							Year ended December 31,
	2020				2019			2020			2019
Operating results (non-GAAP):
Net interest income	$	102,888			88,945			391,728			360,466
Provision for credit losses	2,647				8,223			24,198			22,659
Noninterest income	32,123				28,213			132,265			99,407
Noninterest expense	85,611				75,457			328,703			291,935
Income taxes	9,988				7,085			39,670			31,846
Net operating income (non-GAAP)	$	36,765			26,393			131,422			113,433
Diluted earnings per share (non-GAAP)	$	0.29			0.25			1.09			1.07
Average equity	$	1,550,481			1,349,803			1,584,747			1,321,452
Average assets	13,791,854				10,447,710			12,892,120			10,329,017
Annualized return on average equity (non-GAAP)	9.43		%		7.76	%		8.29	%		8.58	%
Annualized return on average assets (non-GAAP)	1.06		%		1.00	%		1.02	%		1.10	%
Reconciliation of net operating income to net income:
Net operating income (non-GAAP)	$	36,765			26,393			131,422			113,433
Non-GAAP adjustments, net of tax:
COVID-related provision **	3,511				—			(29,951)			—
CECL provision impact due to acquisition of MutualBank	—				—			(13,089)			—
PPP deferred origination costs	—				—			3,034			—
COVID-related off balance sheet provision **	—				—			(1,594)			—
Acquisition/branch optimization expense	(5,211)				(802)			(14,968)			(3,001)
Net income (GAAP)	$	35,065			25,591			74,854			110,432
Diluted earnings per share (GAAP)	$	0.28			0.24			0.62			1.04
Annualized return on average equity (GAAP)	9.00		%		7.52	%		4.72	%		8.36	%
Annualized return on average assets (GAAP)	1.01		%		0.97	%		0.58	%		1.07	%

*	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 estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs, estimated COVID-related off balance sheet provision and acquisition/branch optimization expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. 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.
**	To arrive at the non-COVID related provision estimates, the Company applied Moody's forecast scenarios prior to the onset of COVID-19 to the Company's loan portfolio at December 31, 2020.

 

Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands)
	At December 31, 2020
	Actual							Minimum capital requirements (1)							Well capitalized requirements
	Amount				Ratio			Amount				Ratio			Amount				Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,654,208			16.641	%		$	1,043,790			10.500	%		$	994,086			10.000	%
Northwest Bank	1,478,320				14.886	%		1,042,751				10.500	%		993,096				10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,406,320				14.147	%		844,973				8.500	%		795,268				8.000	%
Northwest Bank	1,354,027				13.634	%		844,132				8.500	%		794,477				8.000	%
Common equity tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,281,515				12.891	%		695,860				7.000	%		646,156				6.500	%
Northwest Bank	1,354,027				13.634	%		695,167				7.000	%		645,513				6.500	%
Tier 1 capital (leverage)  (to average assets)
Northwest Bancshares, Inc.	1,406,320				10.145	%		554,501				4.000	%		693,126				5.000	%
Northwest Bank	1,354,027				9.903	%		546,905				4.000	%		683,631				5.000	%

(1)	Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2019 Annual Report on Form 10-K.

 

Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands)
		At December 31, 2020
Marketable securities available-for-sale		Amortized cost				Gross unrealized holding gains			Gross unrealized holding losses			Fair value
Debt issued by the U.S. government and agencies:
Due after ten years		$	40,761			211			(55)			40,917
Debt issued by government sponsored enterprises:
Due in less than one year		24,976				159			—			25,135
Due in one year through five years		238				3			—			241
Due in five years through ten years		68,973				238			(80)			69,131
Municipal securities:
Due in less than one year		4,008				14			—			4,022
Due in one year through five years		2,803				63			(2)			2,864
Due in five years through ten years		16,045				429			(5)			16,469
Due after ten years		89,778				3,752			(72)			93,458
Residential mortgage-backed securities:
Fixed rate pass-through		339,406				7,125			(86)			346,445
Variable rate pass-through		14,778				431			(20)			15,189
Fixed rate agency CMOs		723,586				11,758			(1,093)			734,251
Variable rate agency CMOs		50,333				519			(33)			50,819
Total residential mortgage-backed securities		1,128,103				19,833			(1,232)			1,146,704
Total marketable securities available-for-sale		$	1,375,685			24,702			(1,446)			1,398,941
Marketable securities held-to-maturity
Debt issued by the U.S. government and agencies:
Due in five years through ten years		$	67,990			12			(123)			67,879
Residential mortgage-backed securities:
Fixed rate pass-through		22,039				135			—			22,174
Variable rate pass-through		919				30			—			949
Fixed rate agency CMOs		87,335				712			(2)			88,045
Variable rate agency CMOs		604				15			—			619
Total residential mortgage-backed securities		110,897				892			(2)			111,787
Total marketable securities held-to-maturity		$	178,887			904			(125)			179,666

 

Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands)
	At December 31, 2020
	Amount				Average rate
Term notes payable to the Federal Home Loan Bank (FHLB):
Payable to the FHLB of Indianapolis acquired from MutualBank	$	22,054			1.92	%
Total term notes payable to the FHLB	22,054
Collateralized borrowings, due within one year	137,661				0.19	%
Subordinated debentures, net of issuance costs	123,329				4.00	%
Total borrowed funds *	$	283,044

*	As of December 31, 2020, the Company had $3.9 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including a $250.0 million overnight line of credit, which had no balance, as well as $95.4 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million of borrowing capacity with three correspondent banks.

 

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
	December 31, 2020				September 30, 2020			June 30, 2020			March 31, 2020				December 31, 2019
Nonaccrual loans current:
Residential mortgage loans	$	21			1,128			413			285				72
Home equity loans	154				366			481			592				197
Consumer loans	207				234			214			77				78
Commercial real estate loans	20,317				22,610			30,677			14,337				9,241
Commercial loans	16,027				6,488			6,551			3,514				3,424
Total nonaccrual loans current	$	36,726			30,826			38,336			18,805				13,012
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	647			60			61			691				674
Home equity loans	338				445			247			159				224
Consumer loans	301				230			335			143				121
Commercial real estate loans	1,416				692			2,372			496				196
Commercial loans	87				57			—			—				55
Total nonaccrual loans delinquent 30 days to 59 days	$	2,789			1,484			3,015			1,489				1,270
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	767			576			1,013			218				1,048
Home equity loans	190				618			960			539				689
Consumer loans	583				781			666			488				417
Commercial real estate loans	714				2,745			163			2,096				413
Commercial loans	48				15			768			37				341
Total nonaccrual loans delinquent 60 days to 89 days	$	2,302			4,735			3,570			3,378				2,908
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	14,489			14,750			15,369			10,457				12,682
Home equity loans	8,441				7,845			7,060			5,816				5,635
Consumer loans	5,473				5,352			6,896			3,459				3,610
Commercial real estate loans	25,287				35,496			29,729			25,342				25,014
Commercial loans	7,325				6,310			11,535			16,685				4,739
Total nonaccrual loans delinquent 90 days or more	$	61,015			69,753			70,589			61,759				51,680
Total nonaccrual loans	$	102,832			106,798			115,510			85,431				68,870
Total nonaccrual loans	$	102,832			106,798			115,510			85,431				68,870
Loans 90 days past maturity and still accruing	585				495			77			31				32
Nonperforming loans	103,417				107,293			115,587			85,462				68,902
Real estate owned, net	2,232				2,575			1,897			1,075				950
Nonperforming assets	$	105,649			109,868			117,484			86,537				69,852
Nonaccrual troubled debt restructuring *	$	10,704			17,120			17,562			17,375				9,043
Accruing troubled debt restructuring	21,431				17,684			17,888			15,977				22,956
Total troubled debt restructuring	$	32,135			34,804			35,450			33,352				31,999
Nonperforming loans to total loans	0.98		%		1.00	%		1.06	%		0.97		%		0.78	%
Nonperforming assets to total assets	0.77		%		0.80	%		0.85	%		0.81		%		0.67	%
Allowance for credit losses to total loans	1.27		%		1.30	%		1.29	%		1.05		%		0.66	%
Allowance for total loans excluding PPP loan balance	1.32		%		1.36	%		1.36	%		N/A				N/A
Allowance for credit losses to nonperforming loans	129.99		%		130.68	%		121.63	%		108.70		%		84.09	%

*	Amounts included in nonperforming loans above.

 

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At December 31, 2020		Pass				Special    mention*			Substandard**			Doubtful***			Loss			Loans receivable
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
At December 31, 2019
Personal Banking:
Residential mortgage loans		$	2,858,582			—			9,545			—			—			2,868,127
Home equity loans		1,336,111				—			6,807			—			—			1,342,918
Consumer loans		1,120,732				—			4,400			—			—			1,125,132
Total Personal Banking		5,315,425				—			20,752			—			—			5,336,177
Commercial Banking:
Commercial real estate loans		2,538,816				80,570			135,004			—			—			2,754,390
Commercial loans		616,983				42,380			58,744			—			—			718,107
Total Commercial Banking		3,155,799				122,950			193,748			—			—			3,472,497
Total loans		$	8,471,224			122,950			214,500			—			—			8,808,674

*	Includes $31.3 million, $34.7 million, $37.4 million, $13.1 million, and $10.3 million of acquired loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
**	Includes $153.2 million, $129.2 million, $108.2 million, $56.8 million, and $53.1 million of acquired loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

 

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
		December 31, 2020							*			September 30, 2020							*			June 30, 2020							*			March 31, 2020							*			December 31, 2019							*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans		315			$	28,797			0.9	%		17			$	736			—	%		15			$	629			—	%		358			$	32,755			1.2	%		292			$	23,296			0.8	%
Home equity loans		138			4,763				0.3	%		129			4,984				0.3	%		118			4,569				0.3	%		190			7,061				0.5	%		173			6,469				0.5	%
Consumer loans		1,279			10,574				0.7	%		1,078			8,586				0.6	%		629			7,199				0.5	%		953			8,774				0.7	%		960			9,208				0.8	%
Commercial real estate loans		43			10,923				0.3	%		28			5,090				0.2	%		46			14,177				0.4	%		58			12,895				0.5	%		43			7,921				0.3	%
Commercial loans		37			6,405				0.5	%		19			1,797				0.1	%		12			1,242				0.1	%		35			7,545				1.1	%		32			1,187				0.2	%
Total loans delinquent 30 days to 59 days		1,812			$	61,462			0.6	%		1,271			$	21,193			0.2	%		820			$	27,816			0.3	%		1,594			$	69,030			0.8	%		1,500			$	48,081			0.5	%
Loans delinquent 60 days to 89 days:
Residential mortgage loans		84			$	5,083			0.2	%		65			$	4,788			0.2	%		64			$	5,364			0.2	%		11			$	511			—	%		67			$	5,693			0.2	%
Home equity loans		47			1,656				0.1	%		56			1,860				0.1	%		59			2,326				0.2	%		65			2,652				0.2	%		66			2,405				0.2	%
Consumer loans		322			2,742				0.2	%		323			3,049				0.2	%		258			2,916				0.2	%		265			2,610				0.2	%		395			3,302				0.3	%
Commercial real estate loans		11			1,615				—	%		14			4,212				0.1	%		18			3,913				0.1	%		12			2,981				0.1	%		19			1,690				0.1	%
Commercial loans		10			864				0.1	%		7			357				—	%		15			1,151				0.1	%		10			309				—	%		17			6,403				0.9	%
Total loans delinquent 60 days to 89 days		474			$	11,960			0.1	%		465			$	14,266			0.1	%		414			$	15,670			0.1	%		363			$	9,063			0.1	%		564			$	19,493			0.2	%
Loans delinquent 90 days or more: **
Residential mortgage loans		168			$	14,489			0.5	%		168			$	14,750			0.5	%		185			$	15,369			0.5	%		129			$	10,457			0.4	%		141			$	12,775			0.4	%
Home equity loans		207			8,441				0.6	%		193			7,845				0.5	%		182			7,060				0.5	%		152			5,816				0.4	%		159			5,688				0.4	%
Consumer loans		720			6,058				0.4	%		696			5,847				0.4	%		709			6,896				0.5	%		445			3,459				0.3	%		590			3,611				0.3	%
Commercial real estate loans		119			25,287				0.8	%		136			35,496				1.1	%		149			29,729				0.9	%		139			25,342				0.9	%		129			25,014				0.9	%
Commercial loans		37			7,325				0.6	%		34			6,310				0.5	%		47			11,535				0.8	%		51			16,685				0.2	%		37			4,739				0.7	%
Total loans delinquent 90 days or more		1,251			$	61,600			0.6	%		1,227			$	70,248			0.7	%		1,272			$	70,589			0.7	%		916			$	61,759			0.7	%		1,056			$	51,827			0.6	%
Total loans delinquent		3,537			$	135,022			1.3	%		2,963			$	105,707			1.0	%		2,506			$	114,075			1.1	%		2,873			$	139,852			1.6	%		3,120			$	119,401			1.4	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $6.6 million, $20.3 million, $18.0 million, and $298,000 at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, respectively, and purchased credit impaired loans of $147,000 at December 31, 2019.

 

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 December 31, 2020:
At December 31, 2020	30-59 days delinquent				*			60-89 days delinquent				*			90 days or greater delinquent				*			Total delinquent				*			Current				*			Total loans  receivable				*
Restaurants/bars	$	417			—	%		$	276			—	%		$	754			—	%		$	1,447			—	%		$	91,703			0.9	%		$	93,150			0.9	%
Hotels/hospitality	—				—	%		—				—	%		1,074				—	%		1,074				—	%		177,016				1.7	%		178,090				1.7	%
Gyms and fitness	—				—	%		—				—	%		—				—	%		—				—	%		4,113				—	%		4,113				—	%
Transportation	33				—	%		43				—	%		431				—	%		507				—	%		72,786				0.7	%		73,293				0.7	%
Oil and gas	—				—	%		—				—	%		7				—	%		7				—	%		10,083				0.1	%		10,090				0.1	%
Residential care facilities	—				—	%		—				—	%		500				—	%		500				—	%		246,221				2.3	%		246,721				2.3	%
Retail buildings	1,072				—	%		—				—	%		520				—	%		1,592				—	%		443,275				4.2	%		444,867				4.2	%
Education/student housing	—				—	%		—				—	%		1,872				—	%		1,872				—	%		139,790				1.3	%		141,662				1.3	%
Construction/development:
Education/student housing	—				—	%		—				—	%		—				—	%		—				—	%		51,675				0.5	%		51,675				0.5	%
Hotels/hospitality	—				—	%		—				—	%		—				—	%		—				—	%		25,633				0.2	%		25,633				0.2	%
Residential care facilities	—				—	%		—				—	%		—				—	%		—				—	%		37,604				0.4	%		37,604				0.4	%
All other construction/development	268				—	%		—				—	%		5,465				0.1	%		5,733				0.1	%		183,947				1.7	%		189,680				1.8	%
All other sectors	59,672				0.6	%		11,641				0.1	%		50,977				0.5	%		122,290				1.2	%		8,961,981				84.7	%		9,084,271				85.9	%
Total loans	$	61,462			0.6	%		$	11,960			0.1	%		$	61,600			0.6	%		$	135,022			1.3	%		$	10,445,827			98.7	%		$	10,580,849			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 December 31, 2020. Of these loan deferrals, 257 borrowers applied for and received PPP loans totaling approximately $39.9 million:
		Balance as of September 30, 2020									Loans returned to full payment status, net of payments							New loans entered into first deferral							Balance as of December 31, 2020
		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		111		$	15,967			0.5	%		90			$	12,914			22			$	3,389			43			$	6,442			0.2	%
Home equity loans		48		3,639				0.2	%		37			2,536				30			1,512				41			2,615				0.2	%
Consumer loans		123		2,348				0.2	%		102			1,950				62			901				83			1,299				0.1	%
Commercial real estate loans		94		183,661				5.5	%		71			68,855				11			3,406				34			118,212				3.5	%
Commercial loans		28		7,085				0.5	%		14			6,071				8			318				22			1,332				0.1	%
Total loans		404		$	212,700			2.0	%		314			$	92,326			133			$	9,526			223			$	129,900	**		1.2	%

*	Percent of total loans outstanding by the respective total amount of that type of loan.
**	As of December 31, 2020, first loan deferrals totaled $9.5 million, second loan deferrals totaled $67.5 million, and third loan deferrals totaled $52.9 million. $91.9 million of loan deferrals expire in Q1 2021 and $38.0 million of loan deferrals expire in Q2 2021.  In addition, of the $129.9 million total loan deferrals, $108.7 million are in the hospitality industry.

 

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
	Quarter ended
	December 31, 2020				September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Beginning balance	$	140,209			140,586			92,897			57,941			52,859
CECL adoption	—				—			—			10,792			—
Initial allowance on loans purchased with credit deterioration	—				—			8,845			—			—
Provision	(2,230)				6,818			51,750			27,637			8,223
Charge-offs residential mortgage	(407)				(129)			(38)			(343)			(222)
Charge-offs home equity	(58)				(88)			(173)			(289)			(113)
Charge-offs consumer	(2,623)				(3,356)			(3,191)			(3,488)			(3,142)
Charge-offs commercial real estate	(2,770)				(532)			(690)			(331)			(107)
Charge-offs commercial	(156)				(4,892)			(10,349)			(815)			(1,143)
Recoveries	2,462				1,802			1,535			1,793			1,586
Ending balance	$	134,427			140,209			140,586			92,897			57,941
Net charge-offs to average loans, annualized	0.13		%		0.27	%		0.51	%		0.16	%		0.14	%

 

	Year ended December 31,
	2020				2019
Beginning balance	$	57,941			55,214
CECL adoption	10,792				—
Initial allowance on loans purchased with credit deterioration	8,845				—
Provision	83,975				22,659
Charge-offs residential mortgage	(917)				(1,166)
Charge-offs home equity	(608)				(1,121)
Charge-offs consumer	(12,658)				(11,807)
Charge-offs commercial real estate	(4,323)				(5,467)
Charge-offs commercial	(16,212)				(6,651)
Recoveries	7,592				6,280
Ending balance	$	134,427			57,941
Net charge-offs to average loans	0.27		%		0.23	%

 

	December 31, 2020
	Originated loans							Acquired loans						Total loans
	Balance				Reserve			Balance			Reserve			Balance			Reserve
Residential mortgage loans	$	2,753,593			6,049			314,528			1,217			3,068,121			7,266
Home equity loans	1,175,703				4,579			292,033			1,413			1,467,736			5,992
Consumer loans	1,283,106				14,949			224,887			2,747			1,507,993			17,696
Personal Banking Loans	5,212,402				25,577			831,448			5,377			6,043,850			30,954
Commercial real estate loans	2,567,124				70,707			778,765			19,192			3,345,889			89,899
Commercial loans	1,019,482				6,590			171,628			6,984			1,191,110			13,574
Commercial Banking Loans	3,586,606				77,297			950,393			26,176			4,536,999			103,473
Total Loans	$	8,799,008			102,874			1,781,841			31,553			10,580,849			134,427

 

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, 2020										September 30, 2020										June 30, 2020										March 31, 2020										December 31, 2019
	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	$	3,089,916			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	%		$	2,847,932			28,011			3.93	%
Home equity loans	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	%		1,333,748				15,354			4.57	%
Consumer loans	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	%		1,073,565				12,016			4.44	%
Commercial real estate loans	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	%		2,741,687				32,985			4.71	%
Commercial loans	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	%		717,438				9,841			5.37	%
Total loans receivable (a) (b) (d)	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	%		8,714,370				98,207			4.47	%
Mortgage-backed securities (c)	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	%		667,910				4,237			2.54	%
Investment securities (c) (d)	252,898				1,380			2.18	%		216,081				1,336			2.47	%		170,309				1,244			2.92	%		144,152				881			2.44	%		151,289				938			2.48	%
FHLB stock, at cost	23,346				192			3.27	%		25,595				218			3.39	%		22,192				309			5.60	%		15,931				262			6.61	%		13,400				262			7.76	%
Other interest-earning deposits	632,494				178			0.11	%		791,601				221			0.11	%		623,870				185			0.12	%		34,697				135			1.54	%		31,624				169			2.09	%
Total interest-earning assets	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	%		9,578,593				103,813			4.30	%
Noninterest-earning assets (e)	1,066,609										1,088,273										1,858,513										960,303										869,117
Total assets	$	13,791,854									$	13,903,655									$	13,590,131									$	10,597,471									$	10,447,710
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,028,155			617			0.12	%		$	2,015,604			648			0.13	%		$	1,884,202			648			0.14	%		$	1,611,111			727			0.18	%		$	1,615,996			792			0.19	%
Interest-bearing demand deposits	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	%		1,769,623				1,570			0.35	%
Money market deposit accounts	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	%		1,845,535				3,226			0.69	%
Time deposits	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	%		1,607,992				7,305			1.80	%
Borrowed funds (f)	352,392				1,469			1.66	%		420,715				717			0.68	%		371,700				296			0.32	%		240,118				709			1.19	%		177,670				444			0.99	%
Junior subordinated debentures	128,752				659			2.00	%		128,658				720			2.19	%		127,472				837			2.60	%		121,809				1,038			3.37	%		121,796				1,136			3.65	%
Total interest-bearing liabilities	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	%		7,138,612				14,473			0.80	%
Noninterest-bearing demand deposits (g)	2,675,986										2,703,266										2,401,368										1,640,180										1,800,861
Noninterest-bearing liabilities	253,966										284,440										882,391										268,139										158,434
Total liabilities	12,241,373										12,362,721										12,061,263										9,247,362										9,097,907
Shareholders' equity	1,550,481										1,540,934										1,528,868										1,350,109										1,349,803
Total liabilities and shareholders' equity	$	13,791,854									$	13,903,655									$	13,590,131									$	10,597,471									$	10,447,710
Net interest income/Interest rate spread					103,751			3.14	%						104,388			3.13	%						98,989			3.27	%						87,619			3.48	%						89,340			3.50	%
Net interest-earning assets/Net interest margin	$	3,413,824						3.26	%		$	3,440,367						3.26	%		$	2,954,114						3.38	%		$	2,298,125						3.66	%		$	2,439,981						3.73	%
Ratio of interest-earning assets to interest-bearing liabilities	1.37X										1.37X										1.34X										1.31X										1.34X

(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 0.23%, 0.29%, 0.35%, 0.53%, and 0.59%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were — Loans: 3.94%, 3.96%, 4.06%, 4.35%, and 4.46%, respectively, Investment securities: 1.78%, 2.00%, 2.36%, 2.31%, and 2.34%, respectively, Interest-earning assets: 3.48%, 3.52%, 3.72%, 4.19%, and 4.28%, respectively. GAAP basis net interest rate spreads were 3.11%, 3.10%, 3.24%, 3.47%, and 3.48%, respectively, and GAAP basis net interest margins were 3.23%, 3.23%, 3.34%, 3.64%, 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,
	2020										2019
	Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	3,051,582			113,353			3.71	%		$	2,860,765			115,583			4.04	%
Home equity loans	1,436,632				55,875			3.89	%		1,308,908				64,222			4.91	%
Consumer loans	1,338,120				58,878			4.40	%		980,623				44,859			4.57	%
Commercial real estate loans	3,132,976				140,883			4.42	%		2,725,792				132,915			4.81	%
Commercial loans	1,145,143				44,142			3.79	%		678,866				38,565			5.60	%
Loans receivable (a) (b) (d)	10,104,453				413,131			4.09	%		8,554,954				396,144			4.63	%
Mortgage-backed securities (c)	889,744				17,416			1.96	%		639,764				16,670			2.61	%
Investment securities (c) (d)	196,071				4,841			2.47	%		205,757				4,470			2.17	%
FHLB stock, at cost	21,781				981			4.50	%		14,477				1,056			7.29	%
Other interest-earning deposits	520,666				719			0.14	%		23,305				600			2.54	%
Total interest-earning assets	11,732,715				437,088			3.73	%		9,438,257				418,940			4.44	%
Noninterest-earning assets (e)	1,159,405										890,760
Total assets	$	12,892,120									$	10,329,017
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	1,885,517			2,640			0.14	%		$	1,655,495			3,115			0.19	%
Interest-bearing demand deposits	2,432,427				3,358			0.14	%		1,651,393				6,012			0.36	%
Money market deposit accounts	2,224,904				6,995			0.31	%		1,778,661				13,010			0.73	%
Time deposits	1,687,381				22,903			1.36	%		1,555,726				27,079			1.74	%
Borrowed funds (f)	346,442				3,190			0.92	%		206,458				2,865			1.39	%
Junior subordinated debentures	126,683				3,254			2.53	%		120,012				4,833			3.97	%
Total interest-bearing liabilities	8,703,354				42,340			0.49	%		6,967,745				56,914			0.82	%
Noninterest-bearing demand deposits (g)	2,357,725										1,835,622
Noninterest-bearing liabilities	246,294										204,198
Total liabilities	11,307,373										9,007,565
Shareholders' equity	1,584,747										1,321,452
Total liabilities and shareholders' equity	$	12,892,120									$	10,329,017
Net interest income/Interest rate spread					394,748			3.24	%						362,026			3.62	%
Net interest-earning assets/Net interest margin	$	3,029,361						3.36	%		$	2,470,512						3.84	%
Ratio of interest-earning assets to interest-bearing liabilities	1.35X										1.35X

(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, collateralized borrowings, and subordinated debt.
(g)	Average cost of deposits were 0.34% and 0.58%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were — Loans: 4.07% and 4.61%, respectively, Investment securities: 2.06% and 2.06%, respectively, Interest-earning assets: 3.70% and 4.42%, respectively. GAAP basis net interest rate spreads were 3.21% and 3.61%, respectively, and GAAP basis net interest margins were 3.34% and 3.82%, respectively.

 

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SOURCE Northwest Bancshares, Inc.