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

Rhea-AI Summary

Northwest Bancshares reported a net income of $49.0 million for the quarter ended June 30, 2021, reflecting a significant recovery from a net loss of $6.2 million in the same quarter last year. Earnings per diluted share were $0.38. The company attributed this improvement partly to a $25.3 million pre-tax gain from the sale of its insurance business. However, net interest income decreased by 2.4% to $95.7 million, impacted by a low interest rate environment. The company declared a cash dividend of $0.20 per share, marking the 107th consecutive quarterly dividend.

Positive

• Net income increased by $55.2 million year-over-year.
• Declared a quarterly cash dividend of $0.20 per share.
• No provision for credit losses was necessary, improving from $51.8 million in the previous year.

Negative

• Net interest income decreased by $2.3 million, or 2.4%.
• Net interest margin fell to 2.91%, down 27 basis points from Q1 2021.
• Loan growth is muted due to slower loan demand and PPP forgiveness.

WARREN, Pa., July 26, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2021 of $49.0 million, or $0.38 per diluted share.  This represents an increase of $55.2 million compared to the same quarter last year, when the Company experienced a net loss of $6.2 million, or ($0.05) per diluted share, due primarily to COVID-19 related credit loss provisioning.  The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2021 were 12.58% and 1.37% compared to (1.63%) and (0.18%) for the same quarter last year.  The Company's current period earnings were enhanced by a $25.3 million pre-tax gain from the previously disclosed sale of its insurance business to USI Insurance Services on April 30, 2021.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on August 16, 2021 to shareholders of record as of August 5, 2021.  This is the 107^th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of June 30, 2021, this represents an annualized dividend yield of approximately 5.9%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We continue to experience the negative effects of the current low interest rate environment on our net interest income along with excess liquidity, both at the bank level and from a customer perspective, causing low, and falling, net interest margins.  Our net interest margin decreased 27 basis points from the first quarter of 2021 to 2.91% due mostly to lower loan yields which accounted for approximately 15 basis points of this decline.  In addition, purchase accounting and PPP accretion was $3.5 million lower this quarter than the first quarter 2021, contributing another 11 basis points to this decline.  Furthermore, slower loan demand which, along with PPP forgiveness, is muting loan growth.  Fortunately, this excess liquidity, assisted through government stimulus, has kept loan delinquency and actual loan losses in check, enabling us to recoup the excess COVID-19 reserves of 2020 and right size our allowance for credit losses."

Mr. Seiffert continued, "We also continue to invest in our people, infrastructure and technology as we believe this short-term expense is essential to remain competitive as we ultimately look to scale in size in order to recognize long-term efficiencies.  Our customers demand ease, speed, convenience and security and we want to ensure that our existing and new customers experience the innovation and technology they expect and deserve."

Net interest income decreased by $2.3 million, or 2.4%, to $95.7 million for the quarter ended June 30, 2021, from $98.1 million for the quarter ended June 30, 2020, largely due to a $7.8 million, or 7.5%, decrease in interest income on loans receivable.  This decrease in interest income on loans was mainly due to a decrease in the average loan yield to 3.73% for the quarter ended June 30, 2021 from 4.09% for the quarter ended June 30, 2020.  Also contributing to the decrease in interest income on loans was a decrease of $96.8 million, or 0.9%, in the average balance of loans.  Partially offsetting this decrease was a decrease of $4.6 million, or 48.9%, in interest expense on deposits due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.29% for the quarter ended June 30, 2021 from 0.48% for the quarter ended June 30, 2020. The net effect of the changes in interest rates and average balances was a decrease in net interest margin to 2.91% for the quarter ended June 30, 2021 from 3.38% for the same quarter last year.

Our credit loss reserve process and modeling concluded that no provision for credit losses was necessary this quarter, which represents a decrease of $51.8 million compared to the quarter ended June 30, 2020.  This decrease was primarily due to continued improvements in economic forecasts compared to the uncertainty that existed last year in industries impacted by COVID-19.

Noninterest expense decreased by $2.8 million, or 3.2%, to $86.3 million for the quarter ended June 30, 2021, from $89.2 million for the quarter ended June 30, 2020.  This decrease was primarily due to a decline of $9.0 million, or 93.5%, in merger related expenses due to expenses incurred in the prior year as a result of the acquisition of MutualFirst Financial, Inc. Also contributing to this decrease was a reduction of $6.4 million, or 81.9%, in other expenses primarily due to an elevated reserve for unfunded commitments during the second quarter of 2020 resulting from the estimated economic impact of COVID-19.  Partially offsetting these decreases was an increase of $8.8 million, or 22.1%, in compensation and employee benefits due primarily to increases in health insurance and other benefit costs, regular merit expense and the addition of MutualBank employees and other strategic personnel. Also contributing to this increase was an increase of $3.5 million, or 29.7%, in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for ATM, check card, and online and mobile banking has increased. Lastly, there was an increase of $1.4 million, or 49.8%, in professional service expense for the quarter ended June 30, 2021 due primarily to the utilization of third-party experts to assist with our digital strategy rollout.

Noninterest expense decreased by $2.8 million, or 3.2%, to $86.3 million for the quarter ended June 30, 2021, from $89.2 million for the quarter ended June 30, 2020.  This decrease was primarily due to a decline of $9.0 million, or 93.5%, in merger related expenses due to expenses incurred in the prior year as a result of the acquisition of MutualFirst Financial, Inc. Also contributing to this decrease was a reduction of $6.4 million, or 81.9%, in other expenses primarily due to an elevated reserve for unfunded commitments during the second quarter of 2020 resulting from the estimated economic impact of COVID-19.  Partially offsetting these decreases was an increase of $8.8 million, or 22.1%, in compensation and employee benefits due primarily to increases in health insurance and other benefit costs, regular merit expense and the addition of MutualBank employees and other strategic personnel. Also contributing to this increase was an increase of $3.5 million, or 29.7%, in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for ATM, check card, and online and mobile banking has increased. Lastly, there was an increase of $1.4 million, or 49.8%, in professional service expense for the quarter ended June 30, 2021 due primarily to the utilization of third-party experts to assist with our digital strategy rollout.

The provision for income taxes increased by $16.3 million to an expense of $15.1 million for the quarter ended June 30, 2021, from a tax benefit of $1.1 million for the quarter ended June 30, 2020.  This increase in income taxes was due to higher income before income taxes.

Northwest Bancshares, Inc. is the holding company of Northwest Bank, which is headquartered in Warren, Pennsylvania. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of June 30, 2021, Northwest operated 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism.  Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
	June 30, 2021				December 31, 2020			June 30, 2020
Assets
Cash and cash equivalents	$	857,152			736,277			837,227
Marketable securities available-for-sale (amortized cost of $1,593,813, $1,375,685 and $1,176,258, respectively)	1,599,024				1,398,941			1,198,792
Marketable securities held-to-maturity (fair value of $632,620, $179,666 and $17,245, respectively)	639,424				178,887			16,415
Total cash and cash equivalents and marketable securities	3,095,600				2,314,105			2,052,434
Residential mortgage loans held-for-sale	29,055				58,786			34,118
Residential mortgage loans	2,925,496				3,009,335			3,188,637
Home equity loans	1,376,228				1,467,736			1,450,370
Consumer loans	1,745,231				1,507,993			1,518,119
Commercial real estate loans	3,215,189				3,345,889			3,308,824
Commercial loans	1,018,781				1,191,110			1,358,719
Total loans receivable	10,309,980				10,580,849			10,858,787
Allowance for credit losses	(117,330)				(134,427)			(140,586)
Loans receivable, net	10,192,650				10,446,422			10,718,201
FHLB stock, at cost	23,287				21,748			25,542
Accrued interest receivable	27,585				35,554			40,510
Real estate owned, net	1,353				2,232			1,897
Premises and equipment, net	156,076				161,538			166,966
Bank-owned life insurance	253,539				253,951			251,897
Goodwill	380,997				382,279			386,044
Other intangible assets, net	15,362				19,936			23,381
Other assets	151,607				168,503			178,212
Total assets	$	14,298,056			13,806,268			13,845,084
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	3,002,632			2,716,224			2,686,487
Interest-bearing demand deposits	2,824,219				2,755,950			2,632,310
Money market deposit accounts	2,538,607				2,437,539			2,327,286
Savings deposits	2,262,152				2,047,424			1,993,761
Time deposits	1,463,098				1,642,096			1,823,097
Total deposits	12,090,708				11,599,233			11,462,941
Borrowed funds	257,377				283,044			440,079
Junior subordinated debentures	128,924				128,794			128,630
Advances by borrowers for taxes and insurance	53,608				45,230			58,559
Accrued interest payable	1,820				2,054			1,389
Other liabilities	190,258				209,210			222,637
Total liabilities	12,722,695				12,267,565			12,314,235
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, 127,907,885, 127,019,452, and 127,838,400 shares issued and outstanding, respectively	1,279				1,270			1,278
Additional paid-in capital	1,025,174				1,015,502			1,023,083
Retained earnings	595,100				555,480			530,928
Accumulated other comprehensive loss	(46,192)				(33,549)			(24,440)
Total shareholders' equity	1,575,361				1,538,703			1,530,849
Total liabilities and shareholders' equity	$	14,298,056			13,806,268			13,845,084
Equity to assets	11.02		%		11.14	%		11.06	%
Tangible common equity to assets*	8.48		%		8.48	%		8.35	%
Book value per share	$	12.32			12.11			11.97
Tangible book value per share*	$	9.22			8.95			8.77
Closing market price per share	$	13.64			12.74			10.23
Full time equivalent employees	2,393				2,421			2,518
Number of banking offices	170				170			213
*    Excludes goodwill and other intangible assets (non-GAAP).

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income/(Loss) (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	June 30, 2021				March 31,  2021			December 31, 2020			September 30, 2020			June 30, 2020
Interest income:
Loans receivable	$	95,255			102,318			105,681			107,241			103,012
Mortgage-backed securities	5,680				4,200			4,551			4,652			4,038
Taxable investment securities	693				634			471			427			439
Tax-free investment securities	594				575			656			655			564
FHLB stock dividends	138				116			192			218			309
Interest-earning deposits	192				183			178			221			185
Total interest income	102,552				108,026			111,729			113,414			108,547
Interest expense:
Deposits	4,773				5,514			6,714			8,443			9,336
Borrowed funds	2,050				2,054			2,127			1,437			1,133
Total interest expense	6,823				7,568			8,841			9,880			10,469
Net interest income	95,729				100,458			102,888			103,534			98,078
Provision for credit losses	—				(5,620)			(2,230)			6,818			51,750
Net interest income after provision for credit losses	95,729				106,078			105,118			96,716			46,328
Noninterest income:
Gain/(loss) on sale of investments	(105)				(21)			75			(12)			(8)
Service charges and fees	12,744				12,394			13,074			14,354			13,069
Trust and other financial services income	7,435				6,484			5,722			5,376			4,823
Insurance commission income	1,043				2,546			2,034			2,331			2,395
Gain/(loss) on real estate owned, net	166				(42)			114			(32)			(97)
Income from bank-owned life insurance	1,639				1,736			1,330			1,576			1,248
Mortgage banking income	3,811				6,020			7,120			11,055			12,022
Gain on sale of insurance business	25,327				—			—			—			—
Other operating income	2,648				2,836			2,654			2,022			2,044
Total noninterest income	54,708				31,953			32,123			36,670			35,496
Noninterest expense:
Compensation and employee benefits	48,894				47,239			48,209			47,371			40,049
Premises and occupancy costs	7,410				8,814			7,614			8,342			7,195
Office operations	3,317				3,165			4,009			4,626			3,711
Collections expense	303				616			893			1,264			644
Processing expenses	15,151				13,456			12,186			15,042			11,680
Marketing expenses	2,101				1,980			1,994			2,147			2,047
Federal deposit insurance premiums	1,353				1,307			1,651			1,498			1,618
Professional services	4,231				4,582			3,599			3,246			2,825
Amortization of intangible assets	1,433				1,594			1,664			1,781			1,760
Real estate owned expense	85				75			64			111			89
Merger, asset disposition and restructuring expense	632				9			7,238			1,414			9,679
Other expenses	1,422				3,354			3,728			27			7,866
Total noninterest expense	86,332				86,191			92,849			86,869			89,163
Income/(loss) before income taxes	64,105				51,840			44,392			46,517			(7,339)
Income tax expense/(benefit)	15,138				11,603			9,327			8,467			(1,139)
Net income/(loss)	$	48,967			40,237			35,065			38,050			(6,200)
Basic earnings/(loss) per share	$	0.38			0.32			0.28			0.30			(0.05)
Diluted earnings/(loss) per share	$	0.38			0.32			0.28			0.30			(0.05)
Annualized return on average equity	12.58		%		10.61	%		9.00	%		9.82	%		(1.63)	%
Annualized return on average assets	1.37		%		1.17	%		1.01	%		1.09	%		(0.18)	%
Annualized return on tangible common equity *	16.66		%		14.31	%		12.27	%		13.28	%		(2.22)	%
Efficiency ratio **	67.35		%		63.88	%		62.18	%		59.68	%		58.19	%
Annualized noninterest expense to average assets ***	2.35		%		2.45	%		2.42	%		2.39	%		2.30	%

*	Excludes goodwill and other intangible assets (non-GAAP).
**	Excludes gain on sale of insurance business,  amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).
***	Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Six months ended June 30,
	2021				2020
Interest income:
Loans receivable	$	197,573			197,985
Mortgage-backed securities	9,880				8,213
Taxable investment securities	1,327				1,087
Tax-free investment securities	1,169				749
FHLB stock dividends	254				571
Interest-earning deposits	375				320
Total interest income	210,578				208,925
Interest expense:
Deposits	10,287				20,739
Borrowed funds	4,104				2,880
Total interest expense	14,391				23,619
Net interest income	196,187				185,306
Provision for credit losses	(5,620)				79,387
Net interest income after provision for credit losses	201,807				105,919
Noninterest income:
Gain/(loss) on sale of investments	(126)				173
Gain on sale of loans	—				1,302
Service charges and fees	25,138				28,185
Trust and other financial services income	13,919				9,824
Insurance commission income	3,589				4,767
Gain/(loss) on real estate owned, net	124				(188)
Income from bank-owned life insurance	3,375				2,284
Mortgage banking income	9,831				13,216
Gain on sale of insurance business	25,327				—
Other operating income	5,484				3,909
Total noninterest income	86,661				63,472
Noninterest expense:
Compensation and employee benefits	96,133				82,795
Premises and occupancy costs	16,224				14,666
Office operations	6,482				7,093
Collections expense	919				1,118
Processing expenses	28,607				22,822
Marketing expenses	4,081				3,554
Federal deposit insurance premiums	2,660				1,618
Professional services	8,813				5,637
Amortization of intangible assets	3,027				3,411
Real estate owned expense	160				184
Merger, asset disposition and restructuring expense	641				12,137
Other expenses	4,776				12,739
Total noninterest expense	172,523				167,774
Income before income taxes	115,945				1,617
Income tax expense/(benefit)	26,741				(122)
Net income	$	89,204			1,739
Basic earnings per share	$	0.70			0.02
Diluted earnings per share	$	0.70			0.02
Annualized return on average equity	11.61		%		0.24	%
Annualized return on average assets	1.27		%		0.03	%
Annualized return on tangible common equity *	15.26		%		0.31	%
Efficiency ratio **	65.57		%		61.19	%
Annualized noninterest expense to average assets ***	2.40		%		2.53	%

*	Excludes goodwill and other intangible assets (non-GAAP).
**	Excludes gain on sale of insurance business,  amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).
***	Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (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 June 30,							Six months ended June 30,
	2021				2020			2021			2020
Operating results (non-GAAP):
Net interest income	$	95,729			98,078			196,187			185,306
Provision for credit losses	—				12,279			(5,620)			16,203
Noninterest income	29,381				35,496			61,334			63,472
Noninterest expense	85,700				83,368			171,882			157,637
Income taxes	8,224				11,535			19,829			20,408
Net operating income (non-GAAP)	$	31,186			26,392			71,430			54,530
Diluted earnings per share (non-GAAP)	$	0.24			0.22			0.56			0.48
Average equity	$	1,560,959			1,528,868			1,549,755			1,439,489
Average assets	14,356,759				13,590,131			14,173,278			12,093,801
Annualized return on average equity (non-GAAP)	8.01		%		6.94	%		9.29	%		7.62	%
Annualized return on average assets (non-GAAP)	0.87		%		0.78	%		1.02	%		0.91	%
Reconciliation of net operating income to net income:
Net operating income (non-GAAP)	$	31,186			26,392			71,430			54,530
Non-GAAP adjustments, net of tax:
COVID-related provision **	—				(15,330)			—			(32,404)
CECL provision impact due to acquisition of MutualBank	—				(13,089)			—			(13,089)
Gain on sale of insurance business	18,236				—			18,236			—
PPP deferred origination costs	—				3,034			—			3,034
COVID-related off balance sheet provision **	—				(238)			—			(1,594)
Merger/asset disposition expense	(455)				(6,969)			(462)			(8,739)
Net income (GAAP)	$	48,967			(6,200)			89,204			1,738
Diluted earnings per share (GAAP)	$	0.38			(0.05)			0.70			0.02
Annualized return on average equity (GAAP)	12.58		%		(1.63)	%		11.61	%		0.24	%
Annualized return on average assets (GAAP)	1.37		%		(0.18)	%		1.27	%		0.03	%

*	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 the gain on the sale of our insurance business, merger/asset disposition expense and prior period estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs and estimated COVID-related off balance sheet provision. 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 for the periods presented.

 

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
	June 30, 2021				March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020
Nonaccrual loans current:
Residential mortgage loans	$	189			164			21			1,128			413
Home equity loans	170				268			154			366			481
Consumer loans	188				225			207			234			214
Commercial real estate loans	138,820				146,304			20,317			22,610			30,677
Commercial loans	17,545				6,361			16,027			6,488			6,551
Total nonaccrual loans current	$	156,912			153,322			36,726			30,826			38,336
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	68			1,261			647			60			61
Home equity loans	229				340			338			445			247
Consumer loans	230				254			301			230			335
Commercial real estate loans	1,589				965			1,416			692			2,372
Commercial loans	406				1,538			87			57			—
Total nonaccrual loans delinquent 30 days to 59 days	$	2,522			4,358			2,789			1,484			3,015
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	207			813			767			576			1,013
Home equity loans	310				417			190			618			960
Consumer loans	297				649			583			781			666
Commercial real estate loans	198				1,877			714			2,745			163
Commercial loans	21				7,919			48			15			768
Total nonaccrual loans delinquent 60 days to 89 days	$	1,033			11,675			2,302			4,735			3,570
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	10,007			9,333			14,489			14,750			15,369
Home equity loans	6,256				7,044			8,441			7,845			7,060
Consumer loans	2,341				3,625			5,473			5,352			6,896
Commercial real estate loans	23,564				29,737			25,287			35,496			29,729
Commercial loans	4,126				4,860			7,325			6,310			11,535
Total nonaccrual loans delinquent 90 days or more	$	46,294			54,599			61,015			69,753			70,589
Total nonaccrual loans	$	206,761			223,954			102,832			106,798			115,510
Total nonaccrual loans	$	206,761			223,954			102,832			106,798			115,510
Loans 90 days past due and still accruing	302				197			585			495			77
Nonperforming loans	207,063				224,151			103,417			107,293			115,587
Real estate owned, net	1,353				1,738			2,232			2,575			1,897
Nonperforming assets	$	208,416			225,889			105,649			109,868			117,484
Nonaccrual troubled debt restructuring *	$	8,951			7,390			10,704			17,120			17,562
Accruing troubled debt restructuring	18,480				20,120			21,431			17,684			17,888
Total troubled debt restructuring	$	27,431			27,510			32,135			34,804			35,450
Nonperforming loans to total loans	2.01		%		2.16	%		0.98	%		1.00	%		1.06	%
Nonperforming assets to total assets	1.46		%		1.58	%		0.77	%		0.80	%		0.85	%
Allowance for credit losses to total loans	1.14		%		1.20	%		1.27	%		1.30	%		1.29	%
Allowance for total loans excluding PPP loan balances	1.17		%		1.24	%		1.32	%		1.36	%		1.36	%
Allowance for credit losses to nonperforming loans	56.66		%		55.32	%		129.99	%		130.68	%		121.63	%
*  Amounts included in nonperforming loans above.

 

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At June 30, 2021		Pass				Special    mention *			Substandard **			Doubtful ***			Loss			Loans receivable
Personal Banking:
Residential mortgage loans		$	2,937,418			—			17,133			—			—			2,954,551
Home equity loans		1,367,765				—			8,463			—			—			1,376,228
Consumer loans		1,741,872				—			3,359			—			—			1,745,231
Total Personal Banking		6,047,055				—			28,955			—			—			6,076,010
Commercial Banking:
Commercial real estate loans		2,781,734				73,167			360,288			—			—			3,215,189
Commercial loans		943,665				11,266			63,850			—			—			1,018,781
Total Commercial Banking		3,725,399				84,433			424,138			—			—			4,233,970
Total loans		$	9,772,454			84,433			453,093			—			—			10,309,980
At March 31, 2021
Personal Banking:
Residential mortgage loans		$	2,950,103			—			21,575			—			—			2,971,678
Home equity loans		1,396,757				—			10,767			—			—			1,407,524
Consumer loans		1,547,502				—			6,853			—			—			1,554,355
Total Personal Banking		5,894,362				—			39,195			—			—			5,933,557
Commercial Banking:
Commercial real estate loans		2,801,082				120,345			368,009			—			—			3,289,436
Commercial loans		1,061,884				22,623			60,540			—			—			1,145,047
Total Commercial Banking		3,862,966				142,968			428,549			—			—			4,434,483
Total loans		$	9,757,328			142,968			467,744			—			—			10,368,040
At December 31, 2020
Personal Banking:
Residential mortgage loans		$	3,042,544			—			25,577			—			—			3,068,121
Home equity loans		1,455,474				—			12,262			—			—			1,467,736
Consumer loans		1,499,004				—			8,989			—			—			1,507,993
Total Personal Banking		5,997,022				—			46,828			—			—			6,043,850
Commercial Banking:
Commercial real estate loans		2,852,705				108,021			385,163			—			—			3,345,889
Commercial loans		1,092,498				41,278			57,334			—			—			1,191,110
Total Commercial Banking		3,945,203				149,299			442,497			—			—			4,536,999
Total loans		$	9,942,225			149,299			489,325			—			—			10,580,849
At September 30, 2020
Personal Banking:
Residential mortgage loans		$	3,117,442			—			25,927			—			—			3,143,369
Home equity loans		1,471,919				—			12,446			—			—			1,484,365
Consumer loans		1,478,109				—			8,974			—			—			1,487,083
Total Personal Banking		6,067,470				—			47,347			—			—			6,114,817
Commercial Banking:
Commercial real estate loans		2,850,611				110,073			359,059			—			—			3,319,743
Commercial loans		1,255,255				40,631			51,406			—			—			1,347,292
Total Commercial Banking		4,105,866				150,704			410,465			—			—			4,667,035
Total loans		$	10,173,336			150,704			457,812			—			—			10,781,852
At June 30, 2020
Personal Banking:
Residential mortgage loans		$	3,196,304			—			26,451			—			—			3,222,755
Home equity loans		1,438,339				—			12,031			—			—			1,450,370
Consumer loans		1,508,129				—			9,990			—			—			1,518,119
Total Personal Banking		6,142,772				—			48,472			—			—			6,191,244
Commercial Banking:
Commercial real estate loans		3,034,984				72,755			199,993			1,092			—			3,308,824
Commercial loans		1,270,279				41,458			42,692			4,290			—			1,358,719
Total Commercial Banking		4,305,263				114,213			242,685			5,382			—			4,667,543
Total loans		$	10,448,035			114,213			291,157			5,382			—			10,858,787

*	Includes $16.7 million, $26.4 million, $31.3 million, $34.7 million, and $37.4 million of acquired loans at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.
**	Includes $122.5 million, $143.2 million, $153.2 million, $129.2 million, and $108.2 million of acquired loans at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

 

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
	June 30, 2021							*			March 31, 2021							*			December 31, 2020							*			September 30, 2020							*			June 30, 2020							*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	13			$	606			—	%		248			$	22,236			0.7	%		315			$	28,797			0.9	%		17			$	736			—	%		15			$	629			—	%
Home equity loans	91			3,677				0.3	%		84			3,334				0.2	%		138			4,763				0.3	%		129			4,984				0.3	%		118			4,569				0.3	%
Consumer loans	532			5,571				0.3	%		535			5,732				0.4	%		1,279			10,574				0.7	%		1,078			8,586				0.6	%		629			7,199				0.5	%
Commercial real estate loans	13			2,857				0.1	%		33			12,240				0.4	%		43			10,923				0.3	%		28			5,090				0.2	%		46			14,177				0.4	%
Commercial loans	15			686				0.1	%		16			3,032				0.3	%		37			6,405				0.5	%		19			1,797				0.1	%		12			1,242				0.1	%
Total loans delinquent 30 days to 59 days	664			$	13,397			0.1	%		916			$	46,574			0.4	%		1,812			$	61,462			0.6	%		1,271			$	21,193			0.2	%		820			$	27,816			0.3	%
Loans delinquent 60 days to 89 days:
Residential mortgage loans	58			$	4,051			0.1	%		26			$	2,062			0.1	%		84			$	5,083			0.2	%		65			$	4,788			0.2	%		64			$	5,364			0.2	%
Home equity loans	36			1,502				0.1	%		31			953				0.1	%		47			1,656				0.1	%		56			1,860				0.1	%		59			2,326				0.2	%
Consumer loans	181			1,988				0.1	%		169			1,868				0.1	%		322			2,742				0.2	%		323			3,049				0.2	%		258			2,916				0.2	%
Commercial real estate loans	9			1,335				—	%		14			7,609				0.2	%		11			1,615				—	%		14			4,212				0.1	%		18			3,913				0.1	%
Commercial loans	2			27				—	%		12			8,979				0.8	%		10			864				0.1	%		7			357				—	%		15			1,151				0.1	%
Total loans delinquent 60 days to 89 days	286			$	8,903			0.1	%		252			$	21,471			0.2	%		474			$	11,960			0.1	%		465			$	14,266			0.1	%		414			$	15,670			0.1	%
Loans delinquent 90 days or more: **
Residential mortgage loans	115			$	10,007			0.3	%		121			$	9,333			0.3	%		168			$	14,489			0.5	%		168			$	14,750			0.5	%		185			$	15,369			0.5	%
Home equity loans	146			6,256				0.5	%		176			7,044				0.5	%		207			8,441				0.6	%		193			7,845				0.5	%		182			7,060				0.5	%
Consumer loans	356			2,643				0.2	%		454			3,822				0.2	%		720			6,058				0.4	%		696			5,847				0.4	%		709			6,896				0.5	%
Commercial real estate loans	83			23,564				0.7	%		113			29,737				0.9	%		119			25,287				0.8	%		136			35,496				1.1	%		149			29,729				0.9	%
Commercial loans	18			4,126				0.4	%		31			4,860				0.4	%		37			7,325				0.6	%		34			6,310				0.5	%		47			11,535				0.8	%
Total loans delinquent 90 days or more	718			$	46,596			0.5	%		895			$	54,796			0.5	%		1,251			$	61,600			0.6	%		1,227			$	70,248			0.7	%		1,272			$	70,589			0.7	%
Total loans delinquent	1,668			$	68,896			0.7	%		2,063			$	122,841			1.2	%		3,537			$	135,022			1.3	%		2,963			$	105,707			1.0	%		2,506			$	114,075			1.1	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $10.3 million, $12.7 million, $6.6 million, $20.3 million, and $18.0 million at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.

 

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
				Quarter ended
				June 30, 2021				March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020
Beginning balance				$	123,997			134,427			140,209			140,586			92,897
CECL adoption				—				—			—			—			—
Initial allowance on loans purchased with credit deterioration				—				—			—			—			8,845
Provision				—				(5,620)			(2,230)			6,818			51,750
Charge-offs residential mortgage				(770)				(855)			(407)			(129)			(38)
Charge-offs home equity				(379)				(228)			(58)			(88)			(173)
Charge-offs consumer				(2,401)				(2,603)			(2,623)			(3,356)			(3,191)
Charge-offs commercial real estate				(3,964)				(4,626)			(2,770)			(532)			(690)
Charge-offs commercial				(1,161)				(54)			(156)			(4,892)			(10,349)
Recoveries				2,008				3,556			2,462			1,802			1,535
Ending balance				$	117,330			123,997			134,427			140,209			140,586
Net charge-offs to average loans, annualized				0.26		%		0.19	%		0.13	%		0.27	%		0.51	%
													Six months ended June 30,
													2021				2020
Beginning balance													$	134,427			57,941
CECL adoption													—				10,792
Initial allowance on loans purchased with credit deterioration													—				8,845
Provision													(5,620)				79,387
Charge-offs residential mortgage													(1,625)				(381)
Charge-offs home equity													(607)				(462)
Charge-offs consumer													(5,004)				(6,679)
Charge-offs commercial real estate													(8,590)				(1,021)
Charge-offs commercial													(1,215)				(11,164)
Recoveries													5,564				3,328
Ending balance													$	117,330			140,586
Net charge-offs to average loans, annualized													0.22		%		0.35	%
	June 30, 2021
	Originated loans							Acquired loans						Total loans
	Balance				Reserve			Balance			Reserve			Balance			Reserve
Residential mortgage loans	$	2,701,046			6,316			253,505			931			2,954,551			7,247
Home equity loans	1,127,884				5,264			248,344			1,975			1,376,228			7,239
Consumer loans	1,565,344				13,667			179,887			2,022			1,745,231			15,689
Personal Banking Loans	5,394,274				25,247			681,736			4,928			6,076,010			30,175
Commercial real estate loans	2,585,259				54,473			629,930			14,837			3,215,189			69,310
Commercial loans	899,035				10,655			119,746			7,190			1,018,781			17,845
Commercial Banking Loans	3,484,294				65,128			749,676			22,027			4,233,970			87,155
Total Loans	$	8,878,568			90,375			1,431,412			26,955			10,309,980			117,330

 

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
	June 30, 2021										March 31, 2021										December 31, 2020										September 30, 2020										June 30, 2020
	Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,935,034			25,609			3.49	%		$	3,007,439			26,366			3.51	%		$	3,089,916			27,503			3.56	%		$	3,176,436			28,769			3.62	%		$	3,092,392			29,019			3.75	%
Home equity loans	1,380,794				12,232			3.55	%		1,432,009				12,815			3.63	%		1,472,527				13,535			3.66	%		1,479,429				13,732			3.69	%		1,415,091				13,806			3.92	%
Consumer loans	1,589,739				14,555			3.67	%		1,463,284				14,566			4.04	%		1,444,860				15,874			4.37	%		1,437,828				15,851			4.39	%		1,375,130				14,993			4.39	%
Commercial real estate loans	3,257,810				33,349			4.05	%		3,313,892				38,471			4.64	%		3,317,418				37,965			4.48	%		3,306,386				36,887			4.37	%		3,156,749				34,595			4.34	%
Commercial loans	1,133,969				9,978			3.48	%		1,189,812				10,566			3.55	%		1,325,047				11,414			3.37	%		1,377,223				12,603			3.58	%		1,161,228				11,269			3.84	%
Total loans receivable (a) (b) (d)	10,297,346				95,723			3.73	%		10,406,436				102,784			4.01	%		10,649,768				106,291			3.97	%		10,777,302				107,842			3.98	%		10,200,590				103,682			4.09	%
Mortgage-backed securities (c)	1,756,227				5,680			1.29	%		1,324,558				4,200			1.27	%		1,166,739				4,551			1.56	%		1,004,803				4,651			1.85	%		714,657				4,038			2.26	%
Investment securities (c) (d)	364,414				1,466			1.61	%		331,358				1,381			1.67	%		252,898				1,380			2.18	%		216,081				1,336			2.47	%		170,309				1,244			2.92	%
FHLB stock, at cost	23,107				138			2.40	%		21,811				116			2.17	%		23,346				192			3.27	%		25,595				218			3.39	%		22,192				309			5.60	%
Other interest-earning deposits	810,741				192			0.09	%		801,119				183			0.09	%		632,494				178			0.11	%		791,601				221			0.11	%		623,870				185			0.12	%
Total interest-earning assets	13,251,835				103,199			3.12	%		12,885,282				108,664			3.42	%		12,725,245				112,592			3.52	%		12,815,382				114,268			3.55	%		11,731,618				109,458			3.75	%
Noninterest-earning assets (e)	1,104,924										1,102,477										1,066,609										1,088,273										1,858,513
Total assets	$	14,356,759									$	13,987,759									$	13,791,854									$	13,903,655									$	13,590,131
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,255,578			590			0.10	%		$	2,118,030			625			0.12	%		$	2,028,155			617			0.12	%		$	2,015,604			648			0.13	%		$	1,884,202			648			0.14	%
Interest-bearing demand deposits	2,840,949				407			0.06	%		2,783,429				429			0.06	%		2,699,515				476			0.07	%		2,680,591				763			0.11	%		2,428,060				812			0.13	%
Money market deposit accounts	2,537,629				621			0.10	%		2,497,495				657			0.11	%		2,426,513				960			0.16	%		2,347,097				1,347			0.23	%		2,204,810				1,600			0.29	%
Time deposits	1,493,947				3,155			0.85	%		1,583,525				3,803			0.97	%		1,676,094				4,660			1.11	%		1,782,350				5,685			1.27	%		1,761,260				6,276			1.43	%
Borrowed funds (f)	254,683				1,414			2.23	%		267,163				1,412			2.14	%		352,392				1,469			1.66	%		420,715				717			0.68	%		371,700				296			0.32	%
Junior subordinated debentures	128,882				636			1.95	%		128,817				642			1.99	%		128,752				659			2.00	%		128,658				720			2.19	%		127,472				837			2.60	%
Total interest-bearing liabilities	9,511,668				6,823			0.29	%		9,378,459				7,568			0.33	%		9,311,421				8,841			0.38	%		9,375,015				9,880			0.42	%		8,777,504				10,469			0.48	%
Noninterest-bearing demand deposits (g)	3,036,202										2,805,206										2,675,986										2,703,266										2,401,368
Noninterest-bearing liabilities	247,930										265,667										253,966										284,440										882,391
Total liabilities	12,795,800										12,449,332										12,241,373										12,362,721										12,061,263
Shareholders' equity	1,560,959										1,538,427										1,550,481										1,540,934										1,528,868
Total liabilities and shareholders' equity	$	14,356,759									$	13,987,759									$	13,791,854									$	13,903,655									$	13,590,131
Net interest income/Interest rate spread					96,376			2.84	%						101,096			3.09	%						103,751			3.14	%						104,388			3.13	%						98,989			3.27	%
Net interest-earning assets/Net interest margin	$	3,740,167						2.91	%		$	3,506,823						3.18	%		$	3,413,824						3.26	%		$	3,440,367						3.26	%		$	2,954,114						3.38	%
Ratio of interest-earning assets to interest-bearing liabilities	1.39X										1.37X										1.37X										1.37X										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 0.16%, 0.19%, 0.23%, 0.29%, and 0.35%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.71%, 3.99%, 3.94%, 3.96%, and 4.06%, respectively, Investment securities - 1.41%, 1.46%, 1.78%, 2.00%, and 2.36%, respectively, Interest-earning assets - 3.10%,  3.40%, 3.48%, 3.52%, and 3.72%, respectively. GAAP basis net interest rate spreads were 2.82%, 3.07%, 3.11%, 3.10%, and 3.24%, respectively, and GAAP basis net interest margins were 2.89%, 3.16%, 3.23%, 3.23%, and 3.34%, 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.
	Six months ended June 30,
	2021										2020
	Average balance				Interest			Avg. yield/ cost (h)			Average balance				Interest			Avg. yield/ cost (h)
Assets
Interest-earning assets:
Residential mortgage loans	$	2,971,037			51,975			3.50	%		$	2,969,096			57,081			3.85	%
Home equity loans	1,406,260				25,046			3.57	%		1,380,076				28,607			4.17	%
Consumer loans	1,526,861				29,121			3.82	%		1,249,233				27,153			4.37	%
Commercial real estate loans	3,285,696				71,820			4.32	%		2,952,084				66,032			4.42	%
Commercial loans	1,161,736				20,543			3.50	%		936,924				20,124			4.25	%
Loans receivable (a) (b) (d)	10,351,590				198,505			3.85	%		9,487,413				198,997			4.22	%
Mortgage-backed securities (c)	1,541,585				9,880			1.28	%		691,564				8,213			2.38	%
Investment securities (c) (d)	347,977				2,847			1.64	%		157,231				2,125			2.70	%
FHLB stock, at cost	22,462				254			2.27	%		19,062				571			6.02	%
Other interest-earning deposits	805,930				375			0.09	%		329,284				320			0.19	%
Total interest-earning assets	13,069,544				211,861			3.25	%		10,684,554				210,226			3.96	%
Noninterest-earning assets (e)	1,103,734										1,409,247
Total assets	$	14,173,278									$	12,093,801
Liabilities and shareholders' equity
Interest-bearing liabilities:
Savings deposits	$	2,187,184			1,215			0.11	%		$	1,747,656			1,375			0.16	%
Interest-bearing demand deposits	2,812,348				836			0.06	%		2,171,970				2,119			0.20	%
Money market deposit accounts	2,517,673				1,278			0.10	%		2,061,226				4,688			0.46	%
Time deposits	1,538,489				6,959			0.91	%		1,645,077				12,557			1.54	%
Borrowed funds (f)	260,888				2,825			2.17	%		305,910				1,005			0.66	%
Junior subordinated debentures	128,850				1,278			1.96	%		124,638				1,875			2.98	%
Total interest-bearing liabilities	9,445,432				14,391			0.31	%		8,056,477				23,619			0.59	%
Noninterest-bearing demand deposits (g)	2,921,343										2,022,177
Noninterest-bearing liabilities	256,748										575,658
Total liabilities	12,623,523										10,654,312
Shareholders' equity	1,549,755										1,439,489
Total liabilities and shareholders' equity	$	14,173,278									$	12,093,801
Net interest income/Interest rate spread					197,470			2.94	%						186,607			3.37	%
Net interest-earning assets/Net interest margin	$	3,624,112						3.02	%		$	2,628,077						3.49	%
Ratio of interest-earning assets to interest-bearing liabilities	1.38X										1.33X

(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, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.17% and 0.43%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields were: Loans — 3.83% and 4.20%, respectively; Investment securities — 1.43% and 2.34%, respectively; Interest-earning assets — 3.23% and 3.93%, respectively. GAAP basis net interest rate spreads were 2.92% and 3.34%, respectively; and GAAP basis net interest margins were 3.00% and 3.47%, respectively.

 

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SOURCE Northwest Bancshares, Inc.

FAQ

What were the earnings for Northwest Bancshares for Q2 2021?

Northwest Bancshares reported a net income of $49.0 million for Q2 2021.

What is the EPS for Northwest Bancshares for the latest quarter?

The earnings per diluted share for Northwest Bancshares for the quarter ended June 30, 2021, were $0.38.

How much was the cash dividend declared by Northwest Bancshares?

Northwest Bancshares declared a quarterly cash dividend of $0.20 per share.

What factors contributed to the increase in net income for NWBI?

The increase in net income was primarily due to a $25.3 million pre-tax gain from the sale of its insurance business.

What impact did low interest rates have on NWBI's financial performance?

Low interest rates contributed to a decrease in net interest income and net interest margin.