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

Rhea-AI Summary

Northwest Bancshares reported a net income of $35.1 million for Q3 2021, down 7.9% from Q3 2020. This translates to $0.27 per diluted share. The annualized returns on equity and assets decreased to 8.86% and 0.97%, respectively. The Board declared a quarterly dividend of $0.20 per share, marking the 108th consecutive quarter of dividends. Net interest income fell 4.9% to $98.4 million, largely due to the lower balance of loans. Noninterest income also decreased by 20.4% to $29.2 million.

Positive

• Quarterly cash dividend of $0.20 per share declared, reflecting consistent shareholder returns.
• Significant decrease in classified loans by 16.0%, indicating improved asset quality.
• Stable noninterest expense, highlighting effective cost control initiatives.

Negative

• 7.9% decline in net income year-over-year, impacting shareholder value.
• Net interest income decreased by 4.9% due to lower loan balances and yields.
• Noninterest income fell by 20.4%, primarily due to reduced mortgage banking income.

WARREN, Pa., Oct. 25, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2021 of $35.1 million, or $0.27 per diluted share.  This represents a decrease of $3.0 million, or 7.9%, compared to the same quarter last year, when net income was $38.1 million, or $0.30 per diluted share.  The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2021 were 8.86% and 0.97% compared to 9.82% and 1.09% 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 November 15, 2021 to shareholders of record as of November 5, 2021.  This is the 108^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 September 30, 2021, this represents an annualized dividend yield of approximately 6.0%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We were pleased to see that, absent the approximately $125.0 million of PPP loan forgiveness/payoffs this quarter, loans outstanding grew approximately $14.0 million, or 0.14%. In addition, $17.2 million of classified loans refinanced out of the bank which contributed to the $30.3 million decrease in nonperforming assets while our delinquencies continue to remain very low. As a result of these credit improvements, we continued to release credit loss reserves that were built up last year during COVID-19."

Mr. Seiffert continued "Although challenges continue with net interest income due to the low interest rate environment and falling yields, interest income during the current quarter was augmented by $4.0 million of PPP fee accretion.  In addition, noninterest income stabilized during the most recent quarter having absorbed approximately $1.0 million less per month in interchange revenue since August of last year as a result of the negative impact of the Durbin amendment for all institutions with over $10.0 billion in assets. Finally, core noninterest expense has remained flat over the last five quarters as the result of our continued efforts focused on expense control."

Net interest income decreased by $5.1 million, or 4.9%, to $98.4 million for the quarter ended September 30, 2021, from $103.5 million for the quarter ended September 30, 2020, largely due to a $9.8 million, or 9.1%, decrease in interest income on loans receivable.  This decrease in interest income on loans was due to a decrease of $551.4 million, or 5.1%, in the average balance of loans. Contributing to this decrease in average balances were $580.0 million of PPP loan forgiveness/payoffs since September 30 of last year.  Also contributing to lower interest income was a decrease in the average loan yield to 3.80% for the quarter ended September 30, 2021 from 3.98% for the quarter ended September 30, 2020.  Partially offsetting this decrease in interest income was a decrease of $3.9 million, or 46.2%, 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 0.27% for the quarter ended September 30, 2021 from 0.42% for the quarter ended September 30, 2020. The net effect of the changes in interest rates and average balances was a decrease in net interest margin to 2.97% for the quarter ended September 30, 2021 from 3.26% for the same quarter last year.

The provision for credit losses decreased by $11.2 million to a current period credit of $4.4 million for the quarter ended September 30, 2021 compared to a provision expense of $6.8 million for the quarter ended September 30, 2020 due to a release in the allowance for credit losses as economic forecasts continue to improve and classified assets declined. Total classified loans decreased by $73.4 million, or 16.0%, to $384.4 million, or 3.77% of total loans, at September 30, 2021 from $457.8 million, or 4.25% of total loans, at September 30, 2020.

Noninterest income decreased by $7.5 million, or 20.4%, to $29.2 million for the quarter ended September 30, 2021, from $36.7 million for the quarter ended September 30, 2020.  This decrease was primarily due to a decrease in mortgage banking income of $7.1 million, or 64.4%, to $3.9 million for the quarter ended September 30, 2021 from $11.1 million for the quarter ended September 30, 2020.  This decrease reflects the impact of less favorable pricing in the secondary market.  In addition, there was a decrease in insurance commission income of $2.3 million, or 98.1%, to $44,000 for the quarter ended September 30, 2021 from $2.3 million for the quarter ended September 30, 2020 due to the sale of the insurance business during the second quarter of 2021. Lastly, service charges and fees decreased $1.2 million, or 8.0%, to $13.2 million for the quarter ended September 30, 2021 from $14.4 million for the quarter ended September 30, 2020 due primarily to the impact of being subject to the Durbin amendment on interchange revenue.  Partially offsetting this decrease was an increase in trust and other financial services income of $1.8 million, or 33.6%, to $7.2 million for the quarter ended September 30, 2021 from $5.4 million for the quarter ended September 30, 2020, as a result of increases in both trust and brokerage advisory services. In addition, there was an increase in other operating income of $1.3 million, or 62.6%, to $3.3 million for the quarter ended September 30, 2021 from $2.0 million for the quarter ended September 30, 2020 primarily as a result of fees earned from debit/credit card volume-based incentives.

Noninterest expense decreased by $767,000, or 0.9%, to $86.1 million for the quarter ended September 30, 2021 from $86.9 million for the quarter ended September 30, 2020. This decrease was due to a decline in a majority of the noninterest expense categories. Processing expenses decreased $1.5 million, or 10.1%, to $13.5 million for the quarter ended September 30, 2021 from $15.0 million for the quarter ended September 30, 2020.  Merger related expenses decreased $1.4 million, or 100.0%, due to expenses incurred in the prior year as a result of the acquisition of MutualFirst Financial, Inc. Partially offsetting these decreases was an increase of $1.7 million, or 3.6%, in compensation and employee benefits due primarily to increases in health insurance and other benefit costs, regular merit expense increases and the addition of strategic personnel. In addition, there was an increase in other expenses of $2.2 million for the quarter ended September 30, 2021 due primarily due to an increase in the unfunded reserve as a result of an increase in undrawn commitments in the commercial real estate and construction portfolios.

The provision for income taxes increased by $2.3 million, or 27.5%, to $10.8 million for the quarter ended September 30, 2021 from $8.5 million for the quarter ended September 30, 2020.  This increase in income taxes was due to an increase in the annual effective tax rate for 2021 as the prior year had a greater percentage of net income generated by tax free or tax efficient earning assets.

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 September 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)
	September 30, 2021				December 31, 2020			September 30, 2020
Assets
Cash and cash equivalents	$	1,090,485			736,277			656,749
Marketable securities available-for-sale (amortized cost of $1,587,105, $1,375,685 and $1,385,835, respectively)	1,583,715				1,398,941			1,409,150
Marketable securities held-to-maturity (fair value of $609,777, $179,666 and $16,168, respectively)	618,395				178,887			15,333
Total cash and cash equivalents and marketable securities	3,292,595				2,314,105			2,081,232
Residential mortgage loans held-for-sale	27,411				58,786			25,140
Residential mortgage loans	2,962,110				3,009,335			3,118,229
Home equity loans	1,350,348				1,467,736			1,484,365
Consumer loans	1,816,836				1,507,993			1,487,083
Commercial real estate loans	3,162,551				3,345,889			3,319,743
Commercial loans	879,712				1,191,110			1,347,292
Total loans receivable	10,198,968				10,580,849			10,781,852
Allowance for credit losses	(109,767)				(134,427)			(140,209)
Loans receivable, net	10,089,201				10,446,422			10,641,643
FHLB stock, at cost	14,567				21,748			23,171
Accrued interest receivable	26,995				35,554			36,916
Real estate owned, net	809				2,232			2,575
Premises and equipment, net	155,740				161,538			166,919
Bank-owned life insurance	254,871				253,951			252,621
Goodwill	380,997				382,279			386,044
Other intangible assets, net	14,041				19,936			21,601
Other assets	159,419				168,503			176,083
Total assets	$	14,389,235			13,806,268			13,788,805
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	3,052,115			2,716,224			2,641,234
Interest-bearing demand deposits	2,926,351				2,755,950			2,663,878
Money market deposit accounts	2,584,424				2,437,539			2,396,567
Savings deposits	2,271,496				2,047,424			2,022,918
Time deposits	1,387,827				1,642,096			1,732,022
Total deposits	12,222,213				11,599,233			11,456,619
Borrowed funds	126,496				159,715			274,939
Subordinated debt	123,486				123,329			123,277
Junior subordinated debentures	128,989				128,794			128,729
Advances by borrowers for taxes and insurance	26,951				45,230			29,755
Accrued interest payable	589				2,054			1,002
Other liabilities	198,743				209,210			227,253
Total liabilities	12,827,467				12,267,565			12,241,574
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, 126,521,344, 127,019,452, and 127,801,297 shares issued and outstanding, respectively	1,265				1,270			1,278
Additional paid-in capital	1,008,099				1,015,502			1,023,827
Retained earnings	604,787				555,480			544,695
Accumulated other comprehensive loss	(52,383)				(33,549)			(22,569)
Total shareholders' equity	1,561,768				1,538,703			1,547,231
Total liabilities and shareholders' equity	$	14,389,235			13,806,268			13,788,805
Equity to assets	10.85		%		11.14	%		11.22	%
Tangible common equity to assets*	8.34		%		8.48	%		8.52	%
Book value per share	$	12.34			12.11			12.11
Tangible book value per share*	$	9.22			8.95			8.92
Closing market price per share	$	13.28			12.74			9.20
Full time equivalent employees	2,404				2,421			2,523
Number of banking offices	170				170			213

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

 

 

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	September 30, 2021				June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Interest income:
Loans receivable	$	97,475			95,255			102,318			105,681			107,241
Mortgage-backed securities	5,840				5,680			4,200			4,551			4,652
Taxable investment securities	649				693			634			471			427
Tax-free investment securities	628				594			575			656			655
FHLB stock dividends	71				138			116			192			218
Interest-earning deposits	352				192			183			178			221
Total interest income	105,015				102,552			108,026			111,729			113,414
Interest expense:
Deposits	4,540				4,773			5,514			6,714			8,443
Borrowed funds	2,056				2,050			2,054			2,127			1,437
Total interest expense	6,596				6,823			7,568			8,841			9,880
Net interest income	98,419				95,729			100,458			102,888			103,534
Provision for credit losses	(4,354)				—			(5,620)			(2,230)			6,818
Net interest income after provision for credit losses	102,773				95,729			106,078			105,118			96,716
Noninterest income:
Gain/(loss) on sale of investments	(46)				(105)			(21)			75			(12)
Service charges and fees	13,199				12,744			12,394			13,074			14,354
Trust and other financial services income	7,182				7,435			6,484			5,722			5,376
Insurance commission income	44				1,043			2,546			2,034			2,331
Gain/(loss) on real estate owned, net	247				166			(42)			114			(32)
Income from bank-owned life insurance	1,332				1,639			1,736			1,330			1,576
Mortgage banking income	3,941				3,811			6,020			7,120			11,055
Gain on sale of insurance business	—				25,327			—			—			—
Other operating income	3,287				2,648			2,836			2,654			2,022
Total noninterest income	29,186				54,708			31,953			32,123			36,670
Noninterest expense:
Compensation and employee benefits	49,063				48,894			47,239			48,209			47,371
Premises and occupancy costs	7,745				7,410			8,814			7,614			8,342
Office operations	4,143				3,317			3,165			4,009			4,626
Collections expense	411				303			616			893			1,264
Processing expenses	13,517				15,151			13,456			12,186			15,042
Marketing expenses	2,102				2,101			1,980			1,994			2,147
Federal deposit insurance premiums	1,184				1,353			1,307			1,651			1,498
Professional services	4,295				4,231			4,582			3,599			3,246
Amortization of intangible assets	1,321				1,433			1,594			1,664			1,781
Real estate owned expense	94				85			75			64			111
Merger, asset disposition and restructuring expense	—				632			9			7,238			1,414
Other expenses	2,227				1,422			3,354			3,728			27
Total noninterest expense	86,102				86,332			86,191			92,849			86,869
Income before income taxes	45,857				64,105			51,840			44,392			46,517
Income tax expense	10,794				15,138			11,603			9,327			8,467
Net income	$	35,063			48,967			40,237			35,065			38,050
Basic earnings per share	$	0.28			0.38			0.32			0.28			0.30
Diluted earnings per share	$	0.27			0.38			0.32			0.28			0.30
Annualized return on average equity	8.86		%		12.58	%		10.61	%		9.00	%		9.82	%
Annualized return on average assets	0.97		%		1.37	%		1.17	%		1.01	%		1.09	%
Annualized return on tangible common equity *	11.92		%		16.66	%		14.31	%		12.27	%		13.28	%
Efficiency ratio **	66.44		%		67.35	%		63.88	%		62.18	%		59.68	%
Annualized noninterest expense to average assets ***	2.33		%		2.35	%		2.45	%		2.42	%		2.39	%

*	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)
	Nine months ended September 30,
	2021				2020
Interest income:
Loans receivable	$	295,048			305,226
Mortgage-backed securities	15,720				12,865
Taxable investment securities	1,976				1,514
Tax-free investment securities	1,797				1,404
FHLB stock dividends	325				789
Interest-earning deposits	727				541
Total interest income	315,593				322,339
Interest expense:
Deposits	14,827				29,182
Borrowed funds	6,160				4,317
Total interest expense	20,987				33,499
Net interest income	294,606				288,840
Provision for credit losses	(9,974)				86,205
Net interest income after provision for credit losses	304,580				202,635
Noninterest income:
Gain/(loss) on sale of investments	(172)				161
Gain on sale of loans	—				1,302
Service charges and fees	38,337				42,539
Trust and other financial services income	21,101				15,200
Insurance commission income	3,633				7,098
Gain/(loss) on real estate owned, net	371				(220)
Income from bank-owned life insurance	4,707				3,860
Mortgage banking income	13,772				24,271
Gain on sale of insurance business	25,327				—
Other operating income	8,771				5,931
Total noninterest income	115,847				100,142
Noninterest expense:
Compensation and employee benefits	145,196				130,166
Premises and occupancy costs	23,969				23,008
Office operations	10,625				11,719
Collections expense	1,330				2,382
Processing expenses	42,124				37,864
Marketing expenses	6,183				5,701
Federal deposit insurance premiums	3,844				3,116
Professional services	13,108				8,883
Amortization of intangible assets	4,348				5,192
Real estate owned expense	254				295
Merger, asset disposition and restructuring expense	641				13,551
Other expenses	7,003				12,766
Total noninterest expense	258,625				254,643
Income before income taxes	161,802				48,134
Income tax expense	37,535				8,345
Net income	$	124,267			39,789
Basic earnings per share	$	0.98			0.34
Diluted earnings per share	$	0.97			0.34
Annualized return on average equity	10.67		%		3.33	%
Annualized return on average assets	1.17		%		0.42	%
Annualized return on tangible common equity *	14.24		%		4.66	%
Efficiency ratio **	65.86		%		60.65	%
Annualized noninterest expense to average assets ***	2.38		%		2.50	%

*	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 Asset Quality (Unaudited) (dollars in thousands)
	September 30, 2021				June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Nonaccrual loans current:
Residential mortgage loans	$	2,015			189			164			21			1,128
Home equity loans	1,267				170			268			154			366
Consumer loans	1,465				188			225			207			234
Commercial real estate loans	111,075				138,820			146,304			20,317			22,610
Commercial loans	17,021				17,545			6,361			16,027			6,488
Total nonaccrual loans current	$	132,843			156,912			153,322			36,726			30,826
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	99			68			1,261			647			60
Home equity loans	328				229			340			338			445
Consumer loans	152				230			254			301			230
Commercial real estate loans	205				1,589			965			1,416			692
Commercial loans	102				406			1,538			87			57
Total nonaccrual loans delinquent 30 days to 59 days	$	886			2,522			4,358			2,789			1,484
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	527			207			813			767			576
Home equity loans	142				310			417			190			618
Consumer loans	291				297			649			583			781
Commercial real estate loans	419				198			1,877			714			2,745
Commercial loans	170				21			7,919			48			15
Total nonaccrual loans delinquent 60 days to 89 days	$	1,549			1,033			11,675			2,302			4,735
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	8,069			10,007			9,333			14,489			14,750
Home equity loans	4,745				6,256			7,044			8,441			7,845
Consumer loans	2,184				2,341			3,625			5,473			5,352
Commercial real estate loans	25,562				23,564			29,737			25,287			35,496
Commercial loans	1,104				4,126			4,860			7,325			6,310
Total nonaccrual loans delinquent 90 days or more	$	41,664			46,294			54,599			61,015			69,753
Total nonaccrual loans	$	176,942			206,761			223,954			102,832			106,798
Total nonaccrual loans	$	176,942			206,761			223,954			102,832			106,798
Loans 90 days past due and still accruing	386				302			197			585			495
Nonperforming loans	177,328				207,063			224,151			103,417			107,293
Real estate owned, net	809				1,353			1,738			2,232			2,575
Nonperforming assets	$	178,137			208,416			225,889			105,649			109,868
Nonaccrual troubled debt restructuring *	$	12,858			8,951			7,390			10,704			17,120
Accruing troubled debt restructuring	13,664				18,480			20,120			21,431			17,684
Total troubled debt restructuring	$	26,522			27,431			27,510			32,135			34,804
Nonperforming loans to total loans	1.74		%		2.01	%		2.16	%		0.98	%		1.00	%
Nonperforming assets to total assets	1.24		%		1.46	%		1.58	%		0.77	%		0.80	%
Allowance for credit losses to total loans	1.08		%		1.14	%		1.20	%		1.27	%		1.30	%
Allowance for total loans excluding PPP loan balances	1.09		%		1.17	%		1.24	%		1.32	%		1.36	%
Allowance for credit losses to nonperforming loans	61.90		%		56.66	%		55.32	%		129.99	%		130.68	%

*  Amounts included in nonperforming loans above.

 

 

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At September 30, 2021		Pass				Special    mention *			Substandard **			Doubtful			Loss			Loans receivable
Personal Banking:
Residential mortgage loans		$	2,972,489			—			17,032			—			—			2,989,521
Home equity loans		1,342,479				—			7,869			—			—			1,350,348
Consumer loans		1,812,360				—			4,476			—			—			1,816,836
Total Personal Banking		6,127,328				—			29,377			—			—			6,156,705
Commercial Banking:
Commercial real estate loans		2,799,592				63,034			299,925			—			—			3,162,551
Commercial loans		813,665				10,976			55,071			—			—			879,712
Total Commercial Banking		3,613,257				74,010			354,996			—			—			4,042,263
Total loans		$	9,740,585			74,010			384,373			—			—			10,198,968
At June 30, 2021
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

*	Includes $16.7 million, $16.7 million, $26.4 million, $31.3 million, and $34.7 million of acquired loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.
**	Includes $110.4 million, $122.5 million, $143.2 million, $153.2 million, and $129.2 million of acquired loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

 

 

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
	September 30, 2021							*			June 30, 2021							*			March 31, 2021							*			December 31, 2020							*			September 30, 2020							*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	17			$	765			—	%		13			$	606			—	%		248			$	22,236			0.7	%		315			$	28,797			0.9	%		17			$	736			—	%
Home equity loans	101			3,351				0.2	%		91			3,677				0.3	%		84			3,334				0.2	%		138			4,763				0.3	%		129			4,984				0.3	%
Consumer loans	576			6,146				0.3	%		532			5,571				0.3	%		535			5,732				0.4	%		1,279			10,574				0.7	%		1,078			8,586				0.6	%
Commercial real estate loans	19			2,004				0.1	%		13			2,857				0.1	%		33			12,240				0.4	%		43			10,923				0.3	%		28			5,090				0.2	%
Commercial loans	10			692				0.1	%		15			686				0.1	%		16			3,032				0.3	%		37			6,405				0.5	%		19			1,797				0.1	%
Total loans delinquent 30 days to 59 days	723			$	12,958			0.1	%		664			$	13,397			0.1	%		916			$	46,574			0.4	%		1,812			$	61,462			0.6	%		1,271			$	21,193			0.2	%
Loans delinquent 60 days to 89 days:
Residential mortgage loans	55			$	4,907			0.2	%		58			$	4,051			0.1	%		26			$	2,062			0.1	%		84			$	5,083			0.2	%		65			$	4,788			0.2	%
Home equity loans	29			1,024				0.1	%		36			1,502				0.1	%		31			953				0.1	%		47			1,656				0.1	%		56			1,860				0.1	%
Consumer loans	180			1,757				0.1	%		181			1,988				0.1	%		169			1,868				0.1	%		322			2,742				0.2	%		323			3,049				0.2	%
Commercial real estate loans	8			1,170				—	%		9			1,335				—	%		14			7,609				0.2	%		11			1,615				—	%		14			4,212				0.1	%
Commercial loans	2			170				—	%		2			27				—	%		12			8,979				0.8	%		10			864				0.1	%		7			357				—	%
Total loans delinquent 60 days to 89 days	274			$	9,028			0.1	%		286			$	8,903			0.1	%		252			$	21,471			0.2	%		474			$	11,960			0.1	%		465			$	14,266			0.1	%
Loans delinquent 90 days or more: **
Residential mortgage loans	95			$	8,069			0.3	%		115			$	10,007			0.3	%		121			$	9,333			0.3	%		168			$	14,489			0.5	%		168			$	14,750			0.5	%
Home equity loans	119			4,745				0.4	%		146			6,256				0.5	%		176			7,044				0.5	%		207			8,441				0.6	%		193			7,845				0.5	%
Consumer loans	308			2,568				0.1	%		356			2,643				0.2	%		454			3,822				0.2	%		720			6,058				0.4	%		696			5,847				0.4	%
Commercial real estate loans	59			25,562				0.8	%		83			23,564				0.7	%		113			29,737				0.9	%		119			25,287				0.8	%		136			35,496				1.1	%
Commercial loans	10			1,104				0.1	%		18			4,126				0.4	%		31			4,860				0.4	%		37			7,325				0.6	%		34			6,310				0.5	%
Total loans delinquent 90 days or more	591			$	42,048			0.4	%		718			$	46,596			0.5	%		895			$	54,796			0.5	%		1,251			$	61,600			0.6	%		1,227			$	70,248			0.7	%
Total loans delinquent	1,588			$	64,034			0.6	%		1,668			$	68,896			0.7	%		2,063			$	122,841			1.2	%		3,537			$	135,022			1.3	%		2,963			$	105,707			1.0	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $8.4 million, $10.3 million, $12.7 million, $6.6 million, and $20.3 million at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

 

 

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
				Quarter ended
				September 30, 2021				June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Beginning balance				$	117,330			123,997			134,427			140,209			140,586
Provision				(4,354)				—			(5,620)			(2,230)			6,818
Charge-offs residential mortgage				(1,263)				(770)			(855)			(407)			(129)
Charge-offs home equity				(1,474)				(379)			(228)			(58)			(88)
Charge-offs consumer				(2,148)				(2,401)			(2,603)			(2,623)			(3,356)
Charge-offs commercial real estate				(1,581)				(3,964)			(4,626)			(2,770)			(532)
Charge-offs commercial				(412)				(1,161)			(54)			(156)			(4,892)
Recoveries				3,669				2,008			3,556			2,462			1,802
Ending balance				$	109,767			117,330			123,997			134,427			140,209
Net charge-offs to average loans, annualized				0.12		%		0.26	%		0.19	%		0.13	%		0.27	%
													Nine months ended September 30, 2021
													2021				2020
Beginning balance													$	134,427			57,941
CECL adoption													—				10,792
Initial allowance on loans purchased with credit deterioration													—				8,845
Provision													(9,974)				86,205
Charge-offs residential mortgage													(2,888)				(510)
Charge-offs home equity													(2,081)				(550)
Charge-offs consumer													(7,152)				(10,035)
Charge-offs commercial real estate													(10,171)				(1,553)
Charge-offs commercial													(1,627)				(16,056)
Recoveries													9,233				5,130
Ending balance													$	109,767			140,209
Net charge-offs to average loans, annualized													0.19		%		0.32	%
	September 30, 2021
	Originated loans							Acquired loans						Total loans
	Balance				Reserve			Balance			Reserve			Balance			Reserve
Residential mortgage loans	$	2,756,383			6,886			233,138			1,101			2,989,521			7,987
Home equity loans	1,122,611				4,748			227,737			1,545			1,350,348			6,293
Consumer loans	1,655,827				13,914			161,009			1,617			1,816,836			15,531
Personal Banking Loans	5,534,821				25,548			621,884			4,263			6,156,705			29,811
Commercial real estate loans	2,594,414				49,842			568,137			11,855			3,162,551			61,697
Commercial loans	786,111				11,832			93,601			6,427			879,712			18,259
Commercial Banking Loans	3,380,525				61,674			661,738			18,282			4,042,263			79,956
Total Loans	$	8,915,346			87,222			1,283,622			22,545			10,198,968			109,767

 

 

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
	September 30, 2021										June 30, 2021										March 31, 2021										December 31, 2020										September 30, 2020
	Average balance				Interest			Avg. yield/ cost (i)			Average balance				Interest			Avg. yield/ cost (i)			Average balance				Interest			Avg. yield/ cost (i)			Average balance				Interest			Avg. yield/ cost (i)			Average balance				Interest			Avg. yield/ cost (i)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,959,794			25,398			3.43	%		$	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	%
Home equity loans	1,356,131				11,993			3.51	%		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	%
Consumer loans	1,728,563				16,220			3.72	%		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	%
Commercial real estate loans	3,205,839				35,305			4.31	%		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	%
Commercial loans	975,603				9,096			3.65	%		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	%
Total loans receivable (a) (b) (d)	10,225,930				98,012			3.80	%		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	%
Mortgage-backed securities (c)	1,832,876				5,840			1.27	%		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	%
Investment securities (c) (d)	348,619				1,466			1.68	%		364,414				1,466			1.61	%		331,358				1,381			1.67	%		252,898				1,380			2.18	%		216,081				1,336			2.47	%
FHLB stock, at cost	21,607				71			1.31	%		23,107				138			2.40	%		21,811				116			2.17	%		23,346				192			3.27	%		25,595				218			3.39	%
Other interest-earning deposits	905,130				352			0.15	%		810,741				192			0.09	%		801,119				183			0.09	%		632,494				178			0.11	%		791,601				221			0.11	%
Total interest-earning assets	13,334,162				105,741			3.15	%		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	%
Noninterest-earning assets (e)	1,074,122										1,104,924										1,102,477										1,066,609										1,088,273
Total assets	$	14,408,284									$	14,356,759									$	13,987,759									$	13,791,854									$	13,903,655
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,271,365			603			0.11	%		$	2,255,578			590			0.10	%		$	2,118,030			625			0.12	%		$	2,028,155			617			0.12	%		$	2,015,604			648			0.13	%
Interest-bearing demand deposits	2,890,905				414			0.06	%		2,840,949				407			0.06	%		2,783,429				429			0.06	%		2,699,515				476			0.07	%		2,680,591				763			0.11	%
Money market deposit accounts	2,565,159				637			0.10	%		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	%
Time deposits	1,423,041				2,886			0.80	%		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	%
Borrowed funds (f)	131,199				154			0.47	%		131,240				150			0.46	%		143,806				154			0.43	%		229,109				213			0.37	%		419,375				411			0.55	%
Subordinated debt (g)	123,513				1,277			4.10	%		123,443				1,264			4.11	%		123,357				1,258			4.14	%		123,283				1,256			4.05	%		1,340				306			N/M
Junior subordinated debentures	128,946				625			1.90	%		128,882				636			1.95	%		128,817				642			1.99	%		128,752				659			2.00	%		128,658				720			2.19	%
Total interest-bearing liabilities	9,534,128				6,596			0.27	%		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	%
Noninterest-bearing demand deposits (h)	3,058,819										3,036,202										2,805,206										2,675,986										2,703,266
Noninterest-bearing liabilities	244,402										247,930										265,667										253,966										284,440
Total liabilities	12,837,349										12,795,800										12,449,332										12,241,373										12,362,721
Shareholders' equity	1,570,935										1,560,959										1,538,427										1,550,481										1,540,934
Total liabilities and shareholders' equity	$	14,408,284									$	14,356,759									$	13,987,759									$	13,791,854									$	13,903,655
Net interest income/Interest rate spread					99,145			2.87	%						96,376			2.84	%						101,096			3.09	%						103,751			3.14	%						104,388			3.13	%
Net interest-earning assets/Net interest margin	$	3,800,034						2.97	%		$	3,740,167						2.91	%		$	3,506,823						3.18	%		$	3,413,824						3.26	%		$	3,440,367						3.26	%
Ratio of interest-earning assets to interest-bearing liabilities	1.40X										1.39X										1.37X										1.37X										1.37X

(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)	On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.
(h)	Average cost of deposits were 0.15%, 0.16%, 0.19%, 0.23%, and 0.29%, respectively.
(i)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 3.79%, 3.71%, 3.99%, 3.94%, and 3.96%, respectively, Investment securities — 1.47%, 1.41%, 1.46%, 1.78%, and 2.00%, respectively, Interest-earning assets — 3.13%, 3.10%, 3.40%, 3.48%, and 3.52%, respectively. GAAP basis net interest rate spreads were 2.86%, 2.82%, 3.07%, 3.11%, and 3.10%, respectively, and GAAP basis net interest margins were 2.95%, 2.89%, 3.16%, 3.23%, and 3.23%, 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.
	Nine months ended September 30,
	2021										2020
	Average balance				Interest			Avg. yield/ cost (i)			Average balance				Interest			Avg. yield/ cost (i)
Assets
Interest-earning assets:
Residential mortgage loans	$	2,967,248			77,373			3.48	%		$	3,038,712			85,850			3.77	%
Home equity loans	1,389,367				37,039			3.55	%		1,424,580				42,340			3.97	%
Consumer loans	1,594,834				45,341			3.79	%		1,302,282				43,004			4.41	%
Commercial real estate loans	3,258,785				107,124			4.32	%		3,071,047				102,918			4.40	%
Commercial loans	1,099,010				29,640			3.54	%		1,084,739				32,727			3.96	%
Loans receivable (a) (b) (d)	10,309,244				296,517			3.83	%		9,921,360				306,839			4.13	%
Mortgage-backed securities (c)	1,639,749				15,720			1.28	%		796,739				12,865			2.15	%
Investment securities (c) (d)	348,193				4,313			1.65	%		176,991				3,461			2.61	%
FHLB stock, at cost	22,174				325			1.95	%		21,255				789			4.96	%
Other interest-earning deposits	838,997				727			0.11	%		483,390				541			0.15	%
Total interest-earning assets	13,158,357				317,602			3.22	%		11,399,735				324,495			3.80	%
Noninterest-earning assets (e)	1,094,117										1,190,283
Total assets	$	14,252,474									$	12,590,018
Liabilities and shareholders' equity
Interest-bearing liabilities:
Savings deposits	$	2,215,553			1,818			0.11	%		$	1,837,624			2,023			0.15	%
Interest-bearing demand deposits	2,838,822				1,250			0.06	%		2,342,748				2,882			0.16	%
Money market deposit accounts	2,533,676				1,914			0.10	%		2,157,212				6,035			0.37	%
Time deposits	1,499,583				9,845			0.87	%		1,691,168				18,243			1.44	%
Borrowed funds (f)	135,369				458			0.45	%		344,007				1,415			0.55	%
Subordinated debt (g)	123,438				3,799			4.10	%		450				306			N/M
Junior subordinated debentures	128,882				1,903			1.94	%		125,988				2,595			2.71	%
Total interest-bearing liabilities	9,475,323				20,987			0.30	%		8,499,197				33,499			0.53	%
Noninterest-bearing demand deposits (h)	2,967,672										2,250,864
Noninterest-bearing liabilities	252,587										243,705
Total liabilities	12,695,582										10,993,766
Shareholders' equity	1,556,892										1,596,252
Total liabilities and shareholders' equity	$	14,252,474									$	12,590,018
Net interest income/Interest rate spread					296,615			2.92	%						290,996			3.27	%
Net interest-earning assets/Net interest margin	$	3,683,034						3.01	%		$	2,900,538						3.40	%
Ratio of interest-earning assets to interest-bearing liabilities	1.39X										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 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)	On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.
(h)	Average cost of deposits were 0.16% and 0.38%, respectively.
(i)	Shown on a FTE basis. GAAP basis yields were: Loans — 3.82% and 4.11%, respectively; Investment securities — 1.44% and 2.20%, respectively; Interest-earning assets — 3.20% and 3.78%, respectively. GAAP basis net interest rate spreads were 2.91% and 3.25%, respectively; and GAAP basis net interest margins were 2.99% and 3.38%, respectively.

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/northwest-bancshares-inc-announces-third-quarter-2021-earnings-and-quarterly-dividend-301407101.html

SOURCE Northwest Bancshares, Inc.

FAQ

What were the earnings for NWBI in Q3 2021?

Northwest Bancshares, Inc. reported a net income of $35.1 million for Q3 2021, or $0.27 per diluted share.

How did NWBI's net interest income change in Q3 2021?

Net interest income decreased by 4.9% to $98.4 million due to lower loan balances and interest yields.

What is the dividend yield for NWBI?

The quarterly dividend of $0.20 per share reflects an annualized yield of approximately 6.0%.

What were the major changes in noninterest income for NWBI?

Noninterest income decreased by 20.4% to $29.2 million, largely due to a decline in mortgage banking income.

What improvements were reported in asset quality for NWBI?

Classified loans decreased by 16.0%, indicating a positive trend in asset quality for NWBI.