Northwest Bancshares, Inc. Announces Fourth Quarter 2023 Earnings and Quarterly Dividend

Rhea-AI Summary

Northwest Bancshares, Inc. (NWBI) announced a decrease in net income for the quarter ended December 31, 2023, compared to the same quarter last year. The company declared a quarterly cash dividend of $0.20 per share, representing the 117th consecutive quarter of dividend payments. Despite liquidity and interest rate challenges, the company executed a commercial banking strategy, growing loans and deposit base. However, net interest income, noninterest income, and noninterest expense saw fluctuations. The provision for credit losses decreased, and the company's annual net income increased slightly. Northwest Bancshares, Inc. is the bank holding company of Northwest Bank, operating 134 full-service community banking offices in Pennsylvania, New York, Ohio, and Indiana.

Insights

Financial Analyst

Northwest Bancshares, Inc.'s reported decrease in quarterly net income and diluted earnings per share reflects a contraction in profitability, which is a critical concern for current and potential investors. The decline in annualized returns on average shareholders' equity and average assets indicates a less efficient use of capital, potentially affecting investor confidence. However, the consistent payment of dividends, with the current yield being notably high, may still appeal to income-focused shareholders. The strategic shift towards commercial banking and loan growth, despite the decrease in net interest margin, suggests a targeted approach to enhance profitability in a challenging interest rate environment.

It's important to note the increase in noninterest expense, particularly in compensation and employee benefits, which may raise questions about operational efficiency. The bank's proactive measures in cost control, such as branch consolidations and staff rightsizing, should be monitored to assess their effectiveness in offsetting these expenses. The financial health of the bank is further evidenced by the decreased provision for credit losses and the reduction in substandard loans, indicating a potentially lower risk profile going forward.

Market Research Analyst

From a market perspective, Northwest Bancshares' strategic reallocation of assets towards more profitable commercial portfolios and the overall loan growth of 4.5% are positive signals of adaptive management in response to market conditions. The growth in the deposit base and reduction of more expensive borrowed funds align with a competitive banking environment where liquidity management is key. The ability to grow tangible common equity to 8.30% provides the bank with flexibility for future growth and may be viewed favorably by the market.

However, the reported net interest income decrease and a lower net interest margin due to increased interest expenses reflect the broader impact of rising market interest rates. These financial dynamics are crucial for investors to understand as they can significantly influence the bank's interest rate risk management and future earnings potential.

Economist

The reported financial results of Northwest Bancshares, Inc. are indicative of the broader economic trends impacting the banking sector, such as rising interest rates and liquidity pressures. The increase in the cost of interest-bearing liabilities and the competitive pressure for liquidity are consistent with a tightening monetary policy environment. The bank's response to these macroeconomic conditions, including the shift in asset allocation and cost-saving measures, will be important factors in maintaining profitability amidst economic uncertainty.

Furthermore, the decrease in the provision for credit losses corresponds with improved economic forecasts, suggesting a cautiously optimistic economic outlook. The bank's financial strategies and performance metrics should be evaluated within the context of these economic trends to anticipate potential future performance in a changing economic landscape.

COLUMBUS, Ohio, Jan. 22, 2024 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2023 of $29.0 million, or $0.23 per diluted share. This represents a decrease of $5.6 million, or 16.3%, compared to the same quarter last year, when net income was $34.6 million, or $0.27 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2023 were 7.64% and 0.80% compared to 9.38% and 0.98% for the same quarter last year.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on February 14, 2024 to shareholders of record as of February 2, 2024. This is the 117th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of December 31, 2023, this represents an annualized dividend yield of approximately 6.4%.

Louis J. Torchio, President and CEO, added, "We were very pleased with 2023 results as we continue to execute upon our commercial banking strategy despite the current year liquidity and interest rate challenges for the industry. We grew loans at a measured pace of 4.5%, but more importantly we reallocated over $440.0 million from lower yielding investment securities, retail loans and consumer loans into the more profitable commercial portfolio, which grew $677.2 million, or 17.1%. We were also pleased with the stability of our deposit base throughout the year which grew $515.4 million, enabling us to reduce more expensive borrowed funds by $282.3 million, and our tangible common equity grew to 8.30%, which provides flexibility for growth going forward."

Mr. Torchio continued, "We have also taken additional measures to control our noninterest expense growth by consolidating three more branches, rightsizing our retail and consumer staff, and renegotiating third-party contracts across the board. These measures required severance and professional service costs in the fourth quarter of approximately $3.5 million. The expense savings going forward will be allocated to the continued build-out of our credit administration, risk management, and internal audit functions that support our focus on commercial loan growth."

Net interest income decreased by $10.7 million, or 9.2%, to $106.3 million for the quarter ended December 31, 2023, from $117.0 million for the quarter ended December 31, 2022. This decrease in net interest income resulted primarily from a $40.3 million increase in interest expense due to increases in both the average balance and average cost of interest-bearing liabilities. The average balance of interest-bearing liabilities increased $663.1 million, or 7.2%, to $9.912 billion for the quarter ended December 31, 2023 from $9.249 billion for the quarter ended December 31, 2022, driven by an increase in time deposits and borrowed funds. In addition, the cost of interest-bearing liabilities increased to 2.04% for the quarter ended December 31, 2023 from 0.46% for the quarter ended December 31, 2022 due to higher market interest rates and competitive pressure for liquidity. Partially offsetting this increase in interest expense was a $29.5 million increase in interest income. Cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest-earning assets to increase to 4.67% for the quarter ended December 31, 2023 from 3.89% for the quarter ended December 31, 2022. Interest income on loans receivable increased $29.4 million, or 25.1%, due to an increase of $525.2 million, or 4.9%, in the average balance of loans in addition to an increase in the yield on loans to 5.19% for the quarter ended December 31, 2023 from 4.35% for the quarter ended December 31, 2022. The net effect of these changes in interest rates and average balances was a decrease in the Company's net interest margin to 3.16% for the quarter ended December 31, 2023 from 3.57% for the same quarter last year.

The provision for credit losses decreased by $3.0 million, or 27.1%, to $7.9 million for the current quarter ended December 31, 2023 from $10.9 million for the quarter ended December 31, 2022. Economic forecasts continued to improve, and the Company continued to experience a decrease in substandard loans by $17.8 million, or 7.5%, to $218.5 million, or 1.91% of total loans, at December 31, 2023 from $236.2 million, or 2.16% of total loans, at December 31, 2022. This decrease was assisted by the note sale of approximately $8.0 million of nonperforming loans for a net gain of approximately $726,000. In addition, delinquencies remain well controlled.

Noninterest income increased by $1.3 million, or 4.7%, to $29.2 million for the quarter ended December 31, 2023, from $27.9 million for the quarter ended December 31, 2022. This increase was driven by increases in core businesses such as service charges and fees on deposits and loans, trust and other financial services income and the net gain on the sale of SBA loans and other real estate owned. Service charges and fees increased $1.8 million, or 12.7%, to $15.9 million for the quarter ended December 31, 2023 from $14.1 million for the quarter ended December 31, 2022 driven by deposit-related fees based on customer activity as well as commercial loan fees, and the net gain on real estate owned increased $1.0 million to $1.1 million for the quarter ended December 31, 2023 from $51,000 for the quarter ended December 31, 2022 as a result of gains on property sales in the current period. These increases were partially offset by a $2.4 million, or 49.7%, decrease in other operating income to $2.5 million for the quarter ended December 31, 2023 from $4.9 million for the quarter ended December 31, 2022 as a result of gains from the sales of branch buildings associated with the previously announced branch consolidations during the quarter ended December 31, 2022.

Noninterest expense increased by $1.9 million, or 2.1%, to $90.7 million for the quarter ended December 31, 2023 from $88.8 million for the quarter ended December 31, 2022. This increase primarily resulted from a $3.5 million, or 7.6%, increase in compensation and employee benefits to $50.2 million for the quarter ended December 31, 2023, from $46.7 million for the quarter ended December 31, 2022 driven primarily by the buildout of the commercial business and related credit, risk management and internal audit support functions over the past twelve months. Processing expenses increased $1.4 million, or 10.5%, to $15.0 million for the quarter ended December 31, 2023, from $13.6 million for the quarter ended December 31, 2022 due to the implementation of additional third-party software platforms. FDIC insurance premiums increased $1.3 million, or 100.4%, to $2.6 million for the quarter ended December 31, 2023 from $1.3 million for the quarter ended December 31, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.

The provision for income taxes decreased by $2.7 million, or 25.9%, to $7.8 million for the quarter ended December 31, 2023 from $10.6 million for the quarter ended December 31, 2022 due primarily to lower income before income taxes.

Net income for the year ended December 31, 2023 was $135.0 million, or $1.06 per diluted share. This represents an increase of $1.3 million, or 1.0%, compared to the year ended December 31, 2022, when net income was $133.7 million, or $1.05 per diluted share. The annualized returns on average shareholders' equity and average assets for the year ended December 31, 2023 were 8.94% and 0.95% compared to 8.80% and 0.94% for the prior year. This increase in net income was the result of an increase in net interest income of $15.0 million, or 3.6%, to $435.7 million for the year ended December 31, 2023 from $420.7 million for the year ended December 31, 2022. This increase in net interest income was primarily due to an increase in the average yield on interest-earning assets, partially offset by increases in the average balance and average cost of interest-bearing liabilities. The average yield on interest-earning assets increased to 4.42% for the year ended December 31, 2023 compared to 3.41% for the prior year due to the rising interest rate environment as well as the change in asset mix to higher yielding commercial loans. The average balance of interest-bearing liabilities increased by $355.6 million, or 3.8% and the average cost increased to 1.56% for the year ended December 31, 2023 from 0.30% for the year ended December 31, 2022 due to rising interest rates throughout the year as well as competitive pressure for funding and liquidity. In addition, the total provision for credit losses decreased $5.4 million, or 19.2% compared to the prior year, specifically within the provision for unfunded commitments as a result of the timing of the origination of loans with off balance sheet exposures. Noninterest income increased $3.0 million, or 2.7% to $113.8 million for the year ended December 31, 2023 from $110.8 million for the year ended December 31, 2022, driven by a $4.0 million increase in service charges and fees, $1.8 million in gains on sales of SBA loans during the current year, and a $1.5 million increase in income from bank owned life insurance as a result of death benefits received in the current year. These changes were partially offset by a $22.0 million, or 6.7%, increase in noninterest expense to $351.6 million for the year ended December 31, 2023 from $329.5 million for the year ended December 31, 2022, driven by a $7.3 million increase in compensation and employee benefits expense, a $6.2 million increase in processing expenses due to the implementation of additional third-party software platforms, and a $4.5 million increase in federal deposit insurance premiums due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.

Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, 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 December 31, 2023, Northwest operated 134 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 inflation and 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; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) 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)
	December 31, 2023		September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$       122,260		161,995		139,365
Marketable securities available-for-sale (amortized cost of $1,240,003, $1,262,080 and $1,431,728, respectively)	1,043,359		1,010,076		1,218,108
Marketable securities held-to-maturity (fair value of $699,506, $682,681 and $751,384, respectively)	814,839		830,106		881,249
Total cash and cash equivalents and marketable securities	1,980,458		2,002,177		2,238,722
Loans held-for-sale	8,768		10,592		9,913
Residential mortgage loans	3,419,417		3,462,606		3,488,686
Home equity loans	1,227,858		1,258,765		1,297,674
Consumer loans	2,126,027		2,155,119		2,168,655
Commercial real estate loans	2,974,010		2,922,582		2,823,555
Commercial loans	1,658,729		1,500,609		1,131,969
Total loans receivable	11,414,809		11,310,273		10,920,452
Allowance for credit losses	(125,243)		(124,841)		(118,036)
Loans receivable, net	11,289,566		11,185,432		10,802,416
FHLB stock, at cost	30,146		40,404		40,143
Accrued interest receivable	47,353		42,624		35,528
Real estate owned, net	104		363		413
Premises and equipment, net	138,838		138,041		145,909
Bank-owned life insurance	251,895		250,502		255,062
Goodwill	380,997		380,997		380,997
Other intangible assets, net	5,290		6,013		8,560
Other assets	294,458		315,648		205,574
Total assets	$   14,419,105		14,362,201		14,113,324
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$     2,669,023		2,774,291		2,993,243
Interest-bearing demand deposits	2,634,546		2,598,080		2,686,431
Money market deposit accounts	1,968,218		2,042,813		2,457,569
Savings deposits	2,105,234		2,116,360		2,275,020
Time deposits	2,602,881		2,258,338		1,052,285
Total deposits	11,979,902		11,789,882		11,464,548
Borrowed funds	398,895		604,587		681,166
Subordinated debt	114,189		114,102		113,840
Junior subordinated debentures	129,574		129,509		129,314
Advances by borrowers for taxes and insurance	45,253		27,653		47,613
Accrued interest payable	13,669		7,915		3,231
Other liabilities	186,306		190,122		182,126
Total liabilities	12,867,788		12,863,770		12,621,838
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, 127,110,453, 127,101,349 and 127,028,848 shares issued and outstanding, respectively	1,271		1,271		1,270
Additional paid-in capital	1,024,852		1,023,591		1,019,647
Retained earnings	674,686		671,092		641,727
Accumulated other comprehensive loss	(149,492)		(197,523)		(171,158)
Total shareholders' equity	1,551,317		1,498,431		1,491,486
Total liabilities and shareholders' equity	$   14,419,105		14,362,201		14,113,324
Equity to assets	10.76 %		10.43 %		10.57 %
Tangible common equity to assets*	8.30 %		7.95 %		8.03 %
Book value per share	$           12.20		11.79		11.74
Tangible book value per share*	$             9.17		8.74		8.67
Closing market price per share	$           12.48		10.23		13.98
Full time equivalent employees	2,098		2,084		2,160
Number of banking offices	142		142		150

*          Excludes goodwill and other intangible assets (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items.

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	December 31,  2023		September 30,  2023		June 30, 2023		March 31,  2023		December 31,  2022
Interest income:
Loans receivable	$   146,523		140,667		132,724		123,745		117,137
Mortgage-backed securities	7,951		8,072		8,326		8,537		8,603
Taxable investment securities	786		786		841		845		840
Tax-free investment securities	492		491		667		700		701
FHLB stock dividends	666		668		844		690		419
Interest-earning deposits	970		914		594		423		153
Total interest income	157,388		151,598		143,996		134,940		127,853
Interest expense:
Deposits	40,600		31,688		21,817		11,238		3,871
Borrowed funds	10,486		11,542		13,630		11,238		6,938
Total interest expense	51,086		43,230		35,447		22,476		10,809
Net interest income	106,302		108,368		108,549		112,464		117,044
Provision for credit losses - loans	3,801		3,983		6,010		4,870		9,023
Provision for credit losses - unfunded commitments (1)	4,145		(2,981)		2,920		126		1,876
Net interest income after provision for credit losses	98,356		107,366		99,619		107,468		106,145
Noninterest income:
Loss on sale of investments	(1)		—		(8,306)		—		(1)
Gain on sale of mortgage servicing rights	—		—		8,305		—		—
Gain on sale of SBA loans	388		301		832		279		—
Gain on sale of loans	726		—		—		—		—
Service charges and fees	15,922		15,270		14,833		13,189		14,125
Trust and other financial services income	6,884		7,085		6,866		6,449		6,642
Gain on real estate owned, net	1,084		29		785		108		51
Income from bank-owned life insurance	1,454		4,561		1,304		1,269		1,663
Mortgage banking income	247		632		1,028		524		477
Other operating income	2,465		3,010		4,150		2,151		4,901
Total noninterest income	29,169		30,888		29,797		23,969		27,858
Noninterest expense:
Compensation and employee benefits	50,194		51,243		47,650		46,604		46,658
Premises and occupancy costs	7,049		7,052		7,579		7,471		7,370
Office operations	3,747		3,398		2,800		3,010		3,544
Collections expense	328		551		429		387		563
Processing expenses	15,017		14,672		14,648		14,350		13,585
Marketing expenses	1,317		2,379		2,856		2,892		2,773
Federal deposit insurance premiums	2,643		2,341		2,064		2,223		1,319
Professional services	6,255		3,002		3,804		4,758		5,434
Amortization of intangible assets	724		795		842		909		932
Real estate owned expense	51		141		83		181		53
Merger, asset disposition and restructuring expense	2,354		—		1,593		2,802		4,243
Other expenses	997		1,996		1,510		1,863		2,304
Total noninterest expense	90,676		87,570		85,858		87,450		88,778
Income before income taxes	36,849		50,684		43,558		43,987		45,225
Income tax expense	7,835		11,464		10,514		10,308		10,576
Net income	$     29,014		39,220		33,044		33,679		34,649
Basic earnings per share	$         0.23		0.31		0.26		0.27		0.27
Diluted earnings per share	$         0.23		0.31		0.26		0.26		0.27
Annualized return on average equity	7.64 %		10.27 %		8.72 %		9.11 %		9.38 %
Annualized return on average assets	0.80 %		1.08 %		0.93 %		0.97 %		0.98 %
Annualized return on tangible common equity *	9.88 %		14.00 %		11.79 %		12.15 %		12.48 %
Efficiency ratio	66.93 %		62.88 %		62.06 %		64.10 %		61.27 %
Efficiency ratio, excluding certain items (1) **	64.66 %		62.31 %		60.30 %		61.38 %		57.70 %
Annualized noninterest expense to average assets	2.51 %		2.42 %		2.42 %		2.51 %		2.52 %
Annualized noninterest expense to average assets, excluding certain items (1) **	2.43 %		2.39 %		2.35 %		2.40 %		2.37 %

(1)	Reclassified from other expenses for periods prior to March 31, 2023. Respective ratios updated for reclassification.
*	Excludes goodwill and other intangible assets (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items.
**	Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).See reconciliation of non-GAAP financial measures for additional information relating to these items.

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Year ended December 31,
	2023		2022
Interest income:
Loans receivable	$                         543,659		407,828
Mortgage-backed securities	32,886		30,804
Taxable investment securities	3,258		3,070
Tax-free investment securities	2,350		2,767
FHLB stock dividends	2,868		730
Interest-earning deposits	2,901		3,599
Total interest income	587,922		448,798
Interest expense:
Deposits	105,343		14,120
Borrowed funds	46,896		13,997
Total interest expense	152,239		28,117
Net interest income	435,683		420,681
Provision for credit losses - loans	18,664		17,860
Provision for credit losses - unfunded commitments (1)	4,210		10,453
Net interest income after provision for credit losses	412,809		392,368
Noninterest income:
Loss on sale of investments	(8,307)		(8)
Gain on sale of mortgage servicing rights	8,305		—
Gain on sale of SBA loans	1,800		—
Gain on sale of loans	726		—
Service charges and fees	59,214		55,188
Trust and other financial services income	27,284		27,765
Gain on real estate owned, net	2,006		603
Income from bank-owned life insurance	8,588		7,129
Mortgage banking income	2,431		4,865
Other operating income	11,776		15,307
Total noninterest income	113,823		110,849
Noninterest expense:
Compensation and employee benefits	195,691		188,359
Premises and occupancy costs	29,151		29,618
Office operations	12,955		13,318
Collections expense	1,695		1,808
Processing expenses	58,687		52,496
Marketing expenses	9,444		9,095
Federal deposit insurance premiums	9,271		4,778
Professional services	17,819		14,703
Amortization of intangible assets	3,270		4,277
Real estate owned expense	456		223
Merger, asset disposition and restructuring expense	6,749		5,617
Other expenses	6,366		5,233
Total noninterest expense	351,554		329,525
Income before income taxes	175,078		173,692
Income tax expense	40,121		40,026
Net income	$                         134,957		133,666
Basic earnings per share	$                               1.06		1.05
Diluted earnings per share	$                               1.06		1.05
Annualized return on average equity	8.94 %		8.80 %
Annualized return on average assets	0.95 %		0.94 %
Annualized return on tangible common equity *	11.58 %		12.13 %
Efficiency ratio	63.98 %		62.00 %
Efficiency ratio, excluding certain items (1) **	62.15 %		60.13 %
Annualized noninterest expense to average assets	2.46 %		2.32 %
Annualized noninterest expense to average assets, excluding certain items (1) **	2.39 %		2.25 %

(1)	Reclassified from other expenses for periods prior to March 31, 2023.  Respective ratios updated for reclassification.
*	Excludes goodwill and other intangible assets (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items.
**	Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items.

 

Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts)
	Quarter ended December 31,				Year ended December 31,
	2023		2022		2023		2022
Reconciliation of net income to adjusted net operating income:
Net income (GAAP)	$            29,014		34,649		134,957		133,666
Non-GAAP adjustments
Add: merger, asset disposition and restructuring expense	2,354		4,243		6,749		5,617
Less: tax benefit of merger, asset disposition and restructuring expense	(659)		(1,188)		(1,890)		(1,573)
Adjusted net operating income (non-GAAP)	$            30,709		37,704		139,816		137,710
Diluted earnings per share (GAAP)	$                0.23		0.27		1.06		1.05
Diluted adjusted operating earnings per share (non-GAAP)	$                0.24		0.30		1.10		1.08
Average equity	$       1,506,895		1,465,285		1,510,285		1,518,704
Average assets	14,329,020		13,983,100		14,269,809		14,177,698
Annualized return on average equity (GAAP)	7.64 %		9.38 %		8.94 %		8.80 %
Annualized return on average assets (GAAP)	0.80 %		0.98 %		0.95 %		0.94 %
Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP)	8.09 %		10.21 %		9.26 %		9.07 %
Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP)	0.85 %		1.07 %		0.98 %		0.97 %

The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Financial Condition.

	December 31, 2023		September 30, 2023		December 31, 2022
Tangible common equity to assets
Total shareholders' equity	$       1,551,317		1,498,431		1,491,486
Less: goodwill and intangible assets	(386,287)		(387,010)		(389,557)
Tangible common equity	$       1,165,030		1,111,421		1,101,929
Total assets	$     14,419,105		14,362,201		14,113,324
Less: goodwill and intangible assets	(386,287)		(387,010)		(389,557)
Tangible assets	$     14,032,818		13,975,191		13,723,767
Tangible common equity to tangible assets	8.30 %		7.95 %		8.03 %
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments
Tangible common equity	$       1,165,030		1,111,421		1,101,929
Less: unrealized losses on held to maturity investments	(115,334)		(147,425)		(129,865)
Add: deferred taxes on unrealized losses on held to maturity investments	32,294		41,279		36,362
Tangible common equity, including unrealized losses on held-to-maturity investments	$       1,081,990		1,005,275		1,008,426
Tangible assets	14,032,818		13,975,191		13,723,767
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments	7.71 %		7.19 %		7.35 %
Tangible book value per share
Tangible common equity	$       1,165,030		1,111,421		1,101,929
Common shares outstanding	127,110,453		127,101,349		127,028,848
Tangible book value per share	9.17		8.74		8.67

 

Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts)
The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Income.
	Quarter ended										Year ended December 30,
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		2023		2022
Annualized return on tangible common equity
Net income	$        29,014		39,220		33,044		33,679		34,649		134,957		133,666
Total shareholders' equity	1,551,317		1,498,431		1,511,501		1,513,275		1,491,486		1,551,317		1,491,486
Less: goodwill and intangible assets	(386,287)		(387,010)		(387,806)		(388,648)		(389,557)		(386,287)		(389,557)
Tangible common equity	$   1,165,030		1,111,421		1,123,695		1,124,627		1,101,929		1,165,030		1,101,929
Annualized return on tangible common equity	9.88 %		14.00 %		11.79 %		12.15 %		12.48 %		11.58 %		12.13 %
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses
Non-interest expense	$        90,676		87,570		85,858		87,450		88,778		351,554		329,525
Less: amortization expense	(724)		(795)		(842)		(909)		(932)		(3,270)		(4,277)
Less: merger, asset disposition and restructuring expenses	(2,354)		—		(1,593)		(2,802)		(4,243)		(6,749)		(5,617)
Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses	$        87,598		86,775		83,423		83,739		83,603		341,535		319,631
Net interest income	$      106,302		108,368		108,549		112,464		117,044		435,683		420,681
Non-interest income	29,169		30,888		29,797		23,969		27,858		113,823		110,849
Net interest income plus non-interest income	$      135,471		139,256		138,346		136,433		144,902		549,506		531,530
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses	64.66 %		62.31 %		60.30 %		61.38 %		57.70 %		62.15 %		60.13 %
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense
Non-interest expense excluding amortization and merger, asset disposition and restructuring expenses	87,598		86,775		83,423		83,739		83,603		341,535		319,631
Average assets	14,329,020		14,379,323		14,245,917		14,121,496		13,983,100		14,269,809		14,177,698
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense	2.43 %		2.39 %		2.35 %		2.40 %		2.37 %		2.39 %		2.25 %

*

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 merger, asset disposition and restructuring 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.

 

Northwest Bancshares, Inc. and Subsidiaries Deposits (Unaudited) (dollars in thousands)
Generally, deposits in excess of $250,000 are not federally insured. The following table provides details regarding the Company's uninsured deposits portfolio:
	As of December 31, 2023
	Balance		Percent of total deposits		Number of  relationships
Uninsured deposits per the Call Report (1)	$              2,810,966		23.46 %		4,924
Less intercompany deposit accounts	976,113		8.15 %		12
Less collateralized deposit accounts	432,443		3.61 %		239
Uninsured deposits excluding intercompany and collateralized accounts	$              1,402,410		11.71 %		4,673

(1)   Uninsured deposits presented may be different from actual amounts due to titling of accounts.

 

Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19.0 million, or 0.16% of total deposits, as of December 31, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $105.8 million, or 0.88% of total deposits, as of December 31, 2023. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $300,000 as of December 31, 2023.
The following table provides additional details over the Company's deposit portfolio:
	As of December 31, 2023
	Balance		Percent of total deposits		Number of accounts
Personal noninterest bearing demand deposits	$              1,357,875		11.33 %		288,919
Business noninterest bearing demand deposits	1,311,148		10.94		44,306
Personal interest-bearing demand deposits	1,464,058		12.22		58,543
Business interest-bearing demand deposits	1,170,488		9.77		7,953
Personal money market deposits	1,435,939		11.99		25,556
Business money market deposits	532,279		4.44		2,841
Savings deposits	2,105,234		17.57		206,127
Time deposits	2,602,881		21.74		74,330
Total deposits	$            11,979,902		100.00 %		708,575

 

Our average deposit account balance as of December 31, 2023 was $17,000. The Company's insured cash sweep deposit balance was $357.0 million as of December 31, 2023.
The following table provides additional details regarding the Company's deposit portfolio over time:
	6/30/2022		9/30/2022		12/31/2022		3/31/2023		6/30/2023		9/30/2023		12/31/2023
Personal noninterest bearing demand deposits	1,388,690		1,413,781		1,412,227		1,428,232		1,397,167		1,375,144		1,357,875
Business noninterest bearing demand deposits	1,669,559		1,680,339		1,581,016		1,467,860		1,423,396		1,399,147		1,311,148
Personal interest-bearing demand deposits	1,785,761		1,742,173		1,718,806		1,627,546		1,535,254		1,477,617		1,464,058
Business interest-bearing demand deposits	529,357		498,937		499,059		466,105		624,252		689,914		812,433
Municipal demand deposits	543,573		571,620		468,566		447,852		418,147		430,549		358,055
Personal money market deposits	1,994,907		1,949,379		1,832,583		1,626,614		1,511,652		1,463,689		1,435,939
Business money market deposits	636,805		627,634		624,986		701,436		642,601		579,124		532,279
Savings deposits	2,362,725		2,327,419		2,275,020		2,194,743		2,120,215		2,116,360		2,105,234
Time deposits	1,155,878		1,067,110		1,052,285		1,576,791		1,989,711		2,258,338		2,602,881
Total deposits	12,067,255		11,878,392		11,464,548		11,537,179		11,662,395		11,789,882		11,979,902

 

Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands)
	At December 31, 2023
	Actual				Minimum capital requirements (1)				Well capitalized requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$     1,799,883		16.040 %		$     1,178,234		10.500 %		$     1,122,128		10.000 %
Northwest Bank	1,520,736		13.564 %		1,177,257		10.500 %		1,121,197		10.000 %
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,553,766		13.847 %		953,809		8.500 %		897,702		8.000 %
Northwest Bank	1,388,808		12.387 %		953,018		8.500 %		896,958		8.000 %
Common equity tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,428,181		12.727 %		785,489		7.000 %		729,383		6.500 %
Northwest Bank	1,388,808		12.387 %		784,838		7.000 %		728,778		6.500 %
Tier 1 capital (leverage)  (to average assets)
Northwest Bancshares, Inc.	1,553,766		10.841 %		573,290		4.000 %		716,612		5.000 %
Northwest Bank	1,388,808		9.697 %		572,903		4.000 %		716,128		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 2020 Annual Report on Form 10-K.

 

Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands)
		December 31, 2023
Marketable securities available-for-sale		Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Fair value		Weighted average  duration
Debt issued by the U.S. government and agencies:
Due after one year through five years		$              20,000		—		(1,135)		18,865		2.90
Due after ten years		49,383		—		(9,934)		39,449		6.15
Debt issued by government sponsored enterprises:
Due after one year through five years		45,986		—		(5,763)		40,223		4.34
Due after five years through ten years		386		—		(12)		374		1.84
Municipal securities:
Due after one year through five years		4,279		22		(427)		3,874		3.99
Due after five years through ten years		20,725		—		(1,437)		19,288		7.10
Due after ten years		60,762		125		(8,580)		52,307		10.30
Corporate debt issues:
Due after five years through ten years		8,466		—		(778)		7,688		5.35
Residential mortgage-backed agency securities:
Fixed rate pass-through		209,069		27		(25,222)		183,874		6.49
Variable rate pass-through		7,140		11		(71)		7,080		4.50
Fixed rate agency CMOs		789,842		—		(143,055)		646,787		5.20
Variable rate agency CMOs		23,965		38		(453)		23,550		3.57
Total residential mortgage-backed agency securities		1,030,016		76		(168,801)		861,291		5.42
Total marketable securities available-for-sale		$         1,240,003		223		(196,867)		1,043,359		5.63
Marketable securities held-to-maturity
Government sponsored
Due after one year through five years		$              69,471		—		(8,100)		61,371		3.90
Due after five years through ten years		54,987		—		(8,700)		46,287		5.33
Residential mortgage-backed agency securities:
Fixed rate pass-through		147,874		—		(20,834)		127,040		5.26
Variable rate pass-through		449		1		—		450		4.47
Fixed rate agency CMOs		541,529		—		(77,694)		463,835		6.28
Variable rate agency CMOs		529		—		(6)		523		5.33
Total residential mortgage-backed agency securities		690,381		1		(98,534)		591,848		6.06
Total marketable securities held-to-maturity		$            814,839		1		(115,334)		699,506		5.83

 

Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands)
	December 31, 2023
	Amount		Average rate
Term notes payable to the FHLB of Pittsburgh, due within one year	$                        175,000		5.71 %
Notes payable to the FHLB of Pittsburgh, due within one year	163,500		5.70 %
Total term notes payable to the FHLB	338,500		5.70 %
Collateralized borrowings, due within one year	35,495		1.72 %
Collateral received, due within one year	24,900		5.26 %
Subordinated debentures, net of issuance costs	114,189		4.28 %
Junior subordinated debentures	129,574		7.88 %
Total borrowed funds *	$                        642,658		5.65 %

*	As of December 31, 2023, the Company had $3.3 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $163.5 million drawn balance, as well as $297.5 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks.

 

Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited)
Commercial real estate loans outstanding                The following table provides the various loan sectors in our commercial real estate portfolio at December 31, 2023:
		December 31, 2023
Property type		Percent of portfolio
5 or More Unit Dwelling		14.5 %
Nursing Home		12.8
Retail Building		12.0
Commercial Office Building - non-owner occupied		9.3
Residential acquisition & development - 1-4 family, townhouses and apartments		4.8
Manufacturing & Industrial Building		4.8
Multi-use building - commercial, retail and residential		4.4
Warehouse/Storage Building		3.9
Commercial office building - owner occupied		3.3
Multi-use building - office and warehouse		3.3
Single Family Dwelling		2.7
Other Medical Facility		2.5
Student Housing		2.2
Hotel/Motel		2.1
2-4 Family		2.1
Agricultural Real Estate		2.1
All Other Types		13.2
Total		100.0 %

 

The following table describes our commercial real estate portfolio by state at December 31, 2023:

		December 31, 2023
State		Percent of portfolio
New York		32.4 %
Pennsylvania		30.9
Ohio		20.0
Indiana		7.9
All other		8.8
Total		100.0 %

 

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Nonaccrual loans current:
Residential mortgage loans	$             959		1,951		1,559		1,423		1,496
Home equity loans	871		947		1,089		1,084		1,418
Consumer loans	1,051		1,049		1,009		911		836
Commercial real estate loans	64,603		44,639		48,468		50,045		53,303
Commercial loans	1,182		1,369		995		1,468		895
Total nonaccrual loans current	$         68,666		49,955		53,120		54,931		57,948
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$              933		48		49		688		473
Home equity loans	174		92		37		18		180
Consumer loans	225		274		309		223		178
Commercial real estate loans	51		1,913		1,697		1,900		1,220
Commercial loans	139		90		855		341		145
Total nonaccrual loans delinquent 30 days to 59 days	$           1,522		2,417		2,947		3,170		2,196
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$              511		66		185		919		31
Home equity loans	347		319		363		338		290
Consumer loans	557		312		360		340		341
Commercial real estate loans	831		212		210		1,355		473
Commercial loans	56		291		245		126		96
Total nonaccrual loans delinquent 60 days to 89 days	$           2,302		1,200		1,363		3,078		1,231
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$           6,324		7,695		6,290		3,300		5,574
Home equity loans	3,100		2,073		1,965		2,190		2,257
Consumer loans	3,212		2,463		2,033		2,791		2,672
Commercial real estate loans	6,488		8,416		8,575		8,010		7,867
Commercial loans	2,770		2,435		2,296		1,139		1,491
Total nonaccrual loans delinquent 90 days or more	$         21,894		23,082		21,159		17,430		19,861
Total nonaccrual loans	$         94,384		76,654		78,589		78,609		81,236
Total nonaccrual loans	$         94,384		76,654		78,589		78,609		81,236
Loans 90 days past due and still accruing	2,698		728		532		652		744
Nonperforming loans	97,082		77,382		79,121		79,261		81,980
Real estate owned, net	104		363		371		524		413
Nonperforming assets	$         97,186		77,745		79,492		79,785		82,393
Nonperforming loans to total loans	0.85 %		0.68 %		0.70 %		0.71 %		0.75 %
Nonperforming assets to total assets	0.67 %		0.54 %		0.56 %		0.56 %		0.58 %
Allowance for credit losses to total loans	1.10 %		1.10 %		1.10 %		1.09 %		1.08 %
Allowance for credit losses to nonperforming loans	129.01 %		161.33 %		157.26 %		152.98 %		143.98 %

 

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At December 31, 2023		Pass		Special    mention *		Substandard **		Doubtful		Loss		Loans receivable
Personal Banking:
Residential mortgage loans		$       3,413,846		—		14,339		—		—		3,428,185
Home equity loans		1,223,097		—		4,761		—		—		1,227,858
Consumer loans		2,120,216		—		5,811		—		—		2,126,027
Total Personal Banking		6,757,159		—		24,911		—		—		6,782,070
Commercial Banking:
Commercial real estate loans		2,670,510		124,116		179,384		—		—		2,974,010
Commercial loans		1,637,879		6,678		14,172		—		—		1,658,729
Total Commercial Banking		4,308,389		130,794		193,556		—		—		4,632,739
Total loans		$     11,065,548		130,794		218,467		—		—		11,414,809
At September 30, 2023
Personal Banking:
Residential mortgage loans		$       3,459,251		—		13,512		—		—		3,472,763
Home equity loans		1,254,985		—		3,780		—		—		1,258,765
Consumer loans		2,150,464		—		4,655		—		—		2,155,119
Total Personal Banking		6,864,700		—		21,947		—		—		6,886,647
Commercial Banking:
Commercial real estate loans		2,632,472		123,935		166,610		—		—		2,923,017
Commercial loans		1,476,833		3,690		20,086		—		—		1,500,609
Total Commercial Banking		4,109,305		127,625		186,696		—		—		4,423,626
Total loans		$     10,974,005		127,625		208,643		—		—		11,310,273
At June 30, 2023
Personal Banking:
Residential mortgage loans		$       3,483,098		—		12,059		—		—		3,495,157
Home equity loans		1,272,363		—		3,699		—		—		1,276,062
Consumer loans		2,196,938		—		4,124		—		—		2,201,062
Total Personal Banking		6,952,399		—		19,882		—		—		6,972,281
Commercial Banking:
Commercial real estate loans		2,649,535		74,170		171,519		—		—		2,895,224
Commercial loans		1,377,981		3,040		22,705		—		—		1,403,726
Total Commercial Banking		4,027,516		77,210		194,224		—		—		4,298,950
Total loans		$     10,979,915		77,210		214,106		—		—		11,271,231
At March 31, 2023
Personal Banking:
Residential mortgage loans		$       3,499,135		—		6,330		—		—		3,505,465
Home equity loans		1,277,915		—		3,631		—		—		1,281,546
Consumer loans		2,227,379		—		4,754		—		—		2,232,133
Total Personal Banking		7,004,429		—		14,715		—		—		7,019,144
Commercial Banking:
Commercial real estate loans		2,585,676		69,837		171,591		—		—		2,827,104
Commercial loans		1,217,344		6,381		22,298		—		—		1,246,023
Total Commercial Banking		3,803,020		76,218		193,889		—		—		4,073,127
Total loans		$     10,807,449		76,218		208,604		—		—		11,092,271
At December 31, 2022
Personal Banking:
Residential mortgage loans		$       3,484,870		—		13,729		—		—		3,498,599
Home equity loans		1,292,146		—		5,528		—		—		1,297,674
Consumer loans		2,164,220		—		4,435		—		—		2,168,655
Total Personal Banking		6,941,236		—		23,692		—		—		6,964,928
Commercial Banking:
Commercial real estate loans		2,579,809		55,076		188,670		—		—		2,823,555
Commercial loans		1,100,707		7,384		23,878		—		—		1,131,969
Total Commercial Banking		3,680,516		62,460		212,548		—		—		3,955,524
Total loans		$     10,621,752		62,460		236,240		—		—		10,920,452

*	Includes $7.8 million, $6.9 million, $4.9 million, $7.4 million, and $7.4 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
**	Includes $20.3 million, $28.9 million, $31.2 million, $31.9 million, and $39.1 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

 

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
	December 31, 2023				*		September 30, 2023				*		June 30, 2023				*		March 31, 2023				*		December 31, 2022				*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	307		$  30,041		0.9 %		6		$      573		— %		14		$      627		— %		259		$  26,992		0.8 %		304		$  29,487		0.8 %
Home equity loans	121		5,761		0.5 %		112		4,707		0.4 %		92		3,395		0.3 %		111		4,235		0.3 %		145		6,657		0.5 %
Consumer loans	896		11,211		0.5 %		733		9,874		0.5 %		602		7,955		0.4 %		587		6,930		0.3 %		737		9,435		0.4 %
Commercial real estate loans	23		3,204		0.1 %		22		3,411		0.1 %		13		2,710		0.1 %		23		4,834		0.2 %		29		4,008		0.1 %
Commercial loans	59		4,196		0.3 %		52		2,847		0.2 %		38		15,658		1.1 %		46		4,253		0.3 %		51		2,648		0.2 %
Total loans delinquent 30 days to 59 days	1,406		$  54,413		0.5 %		925		$  21,412		0.2 %		759		$  30,345		0.3 %		1,026		$  47,244		0.4 %		1,266		$  52,235		0.5 %
Loans delinquent 60 days to 89 days:
Residential mortgage loans	69		$   7,796		0.2 %		56		$   5,395		0.2 %		52		$   3,521		0.1 %		23		$   1,922		0.1 %		65		$   5,563		0.2 %
Home equity loans	37		982		0.1 %		40		1,341		0.1 %		31		1,614		0.1 %		31		1,061		0.1 %		29		975		0.1 %
Consumer loans	322		3,754		0.2 %		236		2,707		0.1 %		250		2,584		0.1 %		185		2,083		0.1 %		255		3,070		0.1 %
Commercial real estate loans	9		1,031		— %		13		1,588		0.1 %		12		1,288		— %		17		1,949		0.1 %		16		2,377		0.1 %
Commercial loans	16		703		— %		15		981		0.1 %		23		11,092		0.8 %		19		1,088		0.1 %		24		1,115		0.1 %
Total loans delinquent 60 days to 89 days	453		$  14,266		0.1 %		360		$  12,012		0.1 %		368		$  20,099		0.2 %		275		$   8,103		0.1 %		389		$  13,100		0.1 %
Loans delinquent 90 days or more: **
Residential mortgage loans	70		$   7,995		0.2 %		79		$   7,695		0.2 %		63		$   6,290		0.2 %		39		$   3,300		0.1 %		65		$   5,574		0.2 %
Home equity loans	81		3,126		0.3 %		73		2,206		0.2 %		68		1,965		0.2 %		65		2,190		0.2 %		68		2,257		0.2 %
Consumer loans	440		3,978		0.2 %		357		3,020		0.1 %		314		2,447		0.1 %		313		3,279		0.1 %		334		3,079		0.1 %
Commercial real estate loans	27		6,712		0.2 %		27		8,416		0.3 %		20		8,575		0.3 %		18		8,010		0.3 %		19		7,867		0.3 %
Commercial loans	53		2,780		0.2 %		39		2,472		0.2 %		38		2,414		0.2 %		24		1,302		0.1 %		15		1,829		0.2 %
Total loans delinquent 90 days or more	671		$  24,591		0.2 %		575		$  23,809		0.2 %		503		$  21,691		0.2 %		459		$  18,081		0.2 %		501		$  20,606		0.2 %
Total loans delinquent	2,530		$  93,270		0.8 %		1,860		$  57,233		0.5 %		1,630		$  72,135		0.6 %		1,760		$  73,428		0.7 %		2,156		$  85,941		0.8 %

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $646,000, $1.4 million, $605,000, $331,000, and $1.7 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

 

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
	Quarter ended
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Beginning balance	$      124,841		124,423		121,257		118,036		109,819
ASU 2022-02 Adoption	—		—		—		426		—
Provision	3,801		3,983		6,010		4,870		9,023
Charge-offs residential mortgage	(266)		(171)		(545)		(207)		(546)
Charge-offs home equity	(133)		(320)		(235)		(164)		(232)
Charge-offs consumer	(3,860)		(3,085)		(2,772)		(2,734)		(2,430)
Charge-offs commercial real estate	(742)		(484)		(483)		(657)		(621)
Charge-offs commercial	(806)		(1,286)		(1,209)		(865)		(404)
Recoveries	2,408		1,781		2,400		2,552		3,427
Ending balance	$      125,243		124,841		124,423		121,257		118,036
Net charge-offs to average loans, annualized	0.12 %		0.13 %		0.10 %		0.08 %		0.03 %
			Year ended December 31,
			2023				2022
Beginning balance			$                    118,036				102,241
ASU 2022-02 Adoption			426				—
Provision			18,664				17,860
Charge-offs residential mortgage			(1,189)				(2,033)
Charge-offs home equity			(852)				(1,469)
Charge-offs consumer			(12,451)				(8,406)
Charge-offs commercial real estate			(2,366)				(7,366)
Charge-offs commercial			(4,166)				(1,657)
Recoveries			9,141				18,866
Ending balance			$                    125,243				118,036
Net charge-offs to average loans, annualized			0.11 %				0.02 %

 

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, 2023						September 30, 2023						June 30, 2023						March 31, 2023						December 31, 2022
		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		$  3,442,308		32,739		3.80 %		$  3,476,446		32,596		3.75 %		$  3,485,517		32,485		3.73 %		$  3,493,617		32,009		3.66 %		$  3,439,401		30,974		3.60 %
Home equity loans		1,238,420		17,590		5.64 %		1,264,134		17,435		5.47 %		1,273,298		16,898		5.32 %		1,284,425		16,134		5.09 %		1,282,733		15,264		4.72 %
Consumer loans		2,055,783		24,667		4.76 %		2,092,023		23,521		4.46 %		2,143,804		22,662		4.24 %		2,123,672		20,794		3.97 %		2,069,207		19,709		3.78 %
Commercial real estate loans		2,950,589		43,337		5.83 %		2,911,145		41,611		5.67 %		2,836,443		38,426		5.43 %		2,824,120		37,031		5.24 %		2,822,008		35,428		4.91 %
Commercial loans		1,564,617		28,801		7.30 %		1,447,211		26,239		7.19 %		1,326,598		22,872		6.92 %		1,161,298		18,353		6.32 %		1,113,178		16,315		5.74 %
Total loans receivable (a) (b) (d)		11,251,717		147,134		5.19 %		11,190,959		141,402		5.01 %		11,065,660		133,343		4.83 %		10,887,132		124,321		4.63 %		10,726,527		117,690		4.35 %
Mortgage-backed securities (c)		1,741,687		7,951		1.83 %		1,781,010		8,072		1.81 %		1,859,427		8,326		1.79 %		1,909,676		8,537		1.79 %		1,956,167		8,603		1.76 %
Investment securities (c) (d)		335,121		1,425		1.70 %		336,125		1,431		1.70 %		374,560		1,715		1.83 %		384,717		1,761		1.83 %		386,468		1,753		1.81 %
FHLB stock, at cost		35,082		665		7.52 %		37,722		668		7.03 %		45,505		844		7.44 %		39,631		690		7.06 %		26,827		419		6.19 %
Other interest-earning deposits		62,027		970		6.20 %		59,433		915		6.11 %		38,912		594		6.12 %		30,774		423		5.50 %		9,990		153		5.99 %
Total interest-earning assets		13,425,634		158,145		4.67 %		13,405,249		152,488		4.51 %		13,384,064		144,822		4.34 %		13,251,930		135,732		4.15 %		13,105,979		128,618		3.89 %
Noninterest-earning assets (e)		903,386						974,074						861,853						869,566						877,121
Total assets		$   14,329,020						$   14,379,323						$   14,245,917						$   14,121,496						$   13,983,100
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits (g)		$  2,102,320		4,045		0.76 %		$  2,116,759		2,695		0.51 %		$  2,142,941		1,393		0.26 %		$  2,198,988		690		0.13 %		$  2,298,451		585		0.10 %
Interest-bearing demand deposits (g)		2,573,634		4,921		0.76 %		2,569,229		4,086		0.63 %		2,469,666		1,648		0.27 %		2,612,883		951		0.15 %		2,718,360		509		0.07 %
Money market deposit accounts (g)		1,997,116		7,446		1.48 %		2,112,228		6,772		1.27 %		2,221,713		6,113		1.10 %		2,408,582		4,403		0.74 %		2,512,892		1,310		0.21 %
Time deposits (g)		2,447,335		24,187		3.92 %		2,164,559		18,136		3.32 %		1,765,454		12,663		2.88 %		1,293,609		5,194		1.63 %		1,024,895		1,467		0.57 %
Borrowed funds (f)		548,089		6,826		4.94 %		643,518		7,937		4.89 %		837,358		10,202		4.89 %		740,218		7,938		4.35 %		451,369		3,967		3.49 %
Subordinated debt		114,134		1,148		4.02 %		114,045		1,148		4.03 %		113,958		1,148		4.03 %		113,870		1,148		4.03 %		113,783		1,148		4.04 %
Junior subordinated debentures		129,532		2,512		7.59 %		129,466		2,456		7.42 %		129,401		2,280		6.97 %		129,335		2,152		6.66 %		129,271		1,823		5.52 %
Total interest-bearing liabilities		9,912,160		51,085		2.04 %		9,849,804		43,230		1.74 %		9,680,491		35,447		1.47 %		9,497,485		22,476		0.96 %		9,249,021		10,809		0.46 %
Noninterest-bearing demand deposits (g)		2,675,788						2,757,091						2,820,928						2,889,973						3,039,000
Noninterest-bearing liabilities		234,177						257,141						224,508						235,213						229,794
Total liabilities		12,822,125						12,864,036						12,725,927						12,622,671						12,517,815
Shareholders' equity		1,506,895						1,515,287						1,519,990						1,498,825						1,465,285
Total liabilities and shareholders' equity		$   14,329,020						$   14,379,323						$   14,245,917						$   14,121,496						$   13,983,100
Net interest income/Interest rate spread				107,060		2.63 %				109,258		2.77 %				109,375		2.87 %				113,256		3.19 %				117,809		3.43 %
Net interest-earning assets/Net interest margin		$  3,513,474				3.16 %		$  3,555,445				3.23 %		$  3,703,573				3.28 %		$  3,754,445				3.47 %		$  3,856,958				3.57 %
Ratio of interest-earning assets to interest-bearing liabilities		1.35X						1.36X						1.38X						1.40X						1.42X

(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 and collateralized borrowings.
(g)	Average cost of deposits were 1.37%, 1.07%, 0.77%, 0.40%, and 0.13%, respectively and average cost of Interest-bearing deposits were 1.77%, 1.40%, 1.02%, 0.54%, and 0.18%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 5.17%, 4.99%, 4.81%, 4.61%, and 4.33%, respectively, Investment securities — 1.52%, 1.52%, 1.61%, 1.61%, and 1.59%, respectively, Interest-earning assets — 4.65%, 4.49%, 4.32%, 4.13%, and 3.87%, respectively. GAAP basis net interest rate spreads were 2.61%, 2.75%, 2.85%, 3.17%, and 3.41%, respectively, and GAAP basis net interest margins were 3.14%, 3.21%, 3.25%, 3.44%, and 3.54%, respectively.

 

Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing 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,
	2023						2022
	Average balance		Interest		Avg. yield/ cost (h)		Average balance		Interest		Avg. yield/ cost (h)
Assets
Interest-earning assets:
Residential mortgage loans	$     3,474,336		129,828		3.74 %		$     3,232,487		113,256		3.50 %
Home equity loans	1,264,941		68,058		5.38 %		1,282,218		52,707		4.11 %
Consumer loans	2,103,602		91,645		4.36 %		1,933,557		67,296		3.48 %
Commercial real estate loans	2,881,005		160,352		5.57 %		2,894,508		131,230		4.47 %
Commercial loans	1,376,234		96,253		6.99 %		976,128		45,293		4.58 %
Loans receivable (a) (b) (d)	11,100,118		546,136		4.92 %		10,318,898		409,782		3.97 %
Mortgage-backed securities (c)	1,822,375		32,886		1.80 %		1,968,528		30,804		1.56 %
Investment securities (c) (d)	357,436		6,312		1.77 %		381,518		6,671		1.75 %
FHLB stock, at cost	39,467		2,868		7.27 %		17,065		730		4.27 %
Other interest-earning deposits	47,787		2,901		6.07 %		567,609		3,599		0.63 %
Total interest-earning assets	13,367,183		591,103		4.42 %		13,253,618		451,586		3.41 %
Noninterest-earning assets (e)	902,626						924,080
Total assets	$   14,269,809						$   14,177,698
Liabilities and shareholders' equity
Interest-bearing liabilities:
Savings deposits (g)	$     2,148,127		8,822		0.41 %		$     2,336,217		2,343		0.10 %
Interest-bearing demand deposits (g)	2,556,281		11,606		0.45 %		2,810,889		1,517		0.05 %
Money market deposit accounts (g)	2,183,583		24,734		1.13 %		2,613,422		3,377		0.13 %
Time deposits (g)	1,913,372		60,181		3.15 %		1,161,432		6,883		0.59 %
Borrowed funds (f)	691,636		32,903		4.76 %		212,026		4,531		2.14 %
Subordinated debt	114,002		4,592		4.03 %		117,625		4,750		4.04 %
Junior subordinated debentures	129,434		9,401		7.26 %		129,175		4,716		3.60 %
Total interest-bearing liabilities	9,736,435		152,239		1.56 %		9,380,786		28,117		0.30 %
Noninterest-bearing demand deposits (g)	2,785,279						3,070,892
Noninterest-bearing liabilities	237,810						207,316
Total liabilities	12,759,524						12,658,994
Shareholders' equity	1,510,285						1,518,704
Total liabilities and shareholders' equity	$   14,269,809						$   14,177,698
Net interest income/Interest rate spread			438,864		2.86 %				423,469		3.11 %
Net interest-earning assets/Net interest margin	$     3,630,748				3.28 %		$     3,872,832				3.20 %
Ratio of interest-earning assets to interest-bearing liabilities	1.37X						1.41X

(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 were 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 and collateralized borrowings.
(g)	Average cost of deposits were 0.91% and 0.12%, respectively and average cost of Interest-bearing deposits were 1.20% and 0.16%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields were: Loans — 4.90% and 3.95%, respectively; Investment securities — 1.57% and 1.53%, respectively; Interest-earning assets — 4.40% and 3.39%, respectively. GAAP basis net interest rate spreads were 2.83% and 3.09%, respectively; and GAAP basis net interest margins were 3.26% and 3.17%, respectively.

 

 

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SOURCE Northwest Bank; Northwest Bancshares, Inc.

FAQ

What is the net income for Northwest Bancshares, Inc. for the quarter ended December 31, 2023?

The net income for the quarter ended December 31, 2023, was $29.0 million, or $0.23 per diluted share, representing a decrease of 16.3% compared to the same quarter last year.

What is the quarterly cash dividend declared by Northwest Bancshares, Inc.?

The company declared a quarterly cash dividend of $0.20 per share payable on February 14, 2024, to shareholders of record as of February 2, 2024.

How did the average shareholders' equity and average assets change for Northwest Bancshares, Inc. in the quarter ended December 31, 2023?

The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2023, were 7.64% and 0.80%, compared to 9.38% and 0.98% for the same quarter last year.

What is the annualized dividend yield based on the market value of Northwest Bancshares, Inc.'s common stock as of December 31, 2023?

Based on the market value of the Company's common stock as of December 31, 2023, the annualized dividend yield is approximately 6.4%.

How many full-service community banking offices does Northwest Bancshares, Inc. operate?

Northwest Bancshares, Inc. operates 134 full-service community banking offices and eight free-standing drive-through facilities in Pennsylvania, New York, Ohio, and Indiana.