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

COLUMBUS, Ohio, Jan. 24, 2022 /PRNewswire/ — Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2021 of $30.1 million, or $0.24 per diluted share.  This represents a decrease of $5.0 million, or 14.3%, compared to the same quarter last year when net income was $35.1 million, or $0.28 per diluted share.  The annualized returns on average shareholders’ equity and average assets for the quarter ended December 31, 2021 were 7.65% and 0.82% compared to 9.00% and 1.01% 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, 2022 to shareholders of record as of February 3, 2022. This is the 109th 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, 2021, this represents an annualized dividend yield of approximately 5.6%.

Ronald J. Seiffert, Chairman, President and CEO, added, “Earnings were enhanced this year due to the release of credit loss reserves throughout 2021 including this quarter. These reserves had been previously built up as a result of the uncertainties created by COVID-19. We are also very pleased that non-performing and classified assets as well as our delinquencies continued to trend downward in 2021 and that our expenses remained well-contained heading into 2022. Although yields stabilized in 2021, our net interest spread and net interest margin both declined due to our current excess liquidity position.”

Mr. Seiffert continued, “Our overall in-branch transaction volumes once again declined in 2021 as our customers continued to migrate towards our digital banking experience. As a result, we have decided to further optimize our branch network by consolidating 12% of our branch offices in April of 2022. This effort, coupled with other efficiency measures, generated  $2.8 million in severance and restructuring costs in the fourth quarter with an additional $3.5 million expected to be recognized in the first quarter of 2022. This overall initiative is anticipated to generate approximately $8.0 million in annual operating expense savings beginning in the second quarter of 2022.”

Net interest income decreased by $6.2 million, or 6.1%, to $96.7 million for the quarter ended December 31, 2021, from $102.9 million for the quarter ended December 31, 2020, due to a $10.4 million, or 9.8%, decrease in interest income on loans receivable.  The decrease in interest income on loans was due to a decrease of $616.7 million, or 5.8%, in the average balance of loans in addition to a reduction in the yield on loans to 3.79% for the quarter ended December 31, 2021 from 3.97% for the same quarter last year.  Partially offsetting this decrease was a decrease in interest expense on deposits of $2.4 million, or 36.0%, primarily due to a decrease in our cost of interest-bearing liabilities to 0.26% for the quarter ended December 31, 2021 from 0.38% for the quarter ended December 31, 2020 as market interest rates continued to decline over the past year. Partially offsetting the decline in deposit interest rates was growth in the average balance of interest-bearing liabilities of $266.9 million, or 2.9%.  The net impact of these changes caused the Company’s net interest margin to decrease to 2.89% for the quarter ended December 31, 2021 from 3.26% for the same quarter last year.

The provision for credit losses experienced a net credit of $1.9 million for the quarter ended December 31, 2021, compared to a credit of $2.2 million for the quarter ended December 31, 2020.  This credit to provision expense was primarily the result of improvements in the economic forecasts and our overall improvement in credit quality.  Total classified loans decreased by $126.2 million, or 25.8%, to $363.2 million for the quarter ended December 31, 2021 from $489.3 million for the quarter ended December 31, 2020.

Noninterest income decreased by $5.1 million, or 15.8%, to $27.0 million for the quarter ended December 31, 2021 from $32.1 million for the quarter ended December 31, 2020.  This decrease was primarily due to the decrease in mortgage banking income of $5.0 million, or 70.2%, to $2.1 million for the quarter ended December 31, 2021 from $7.1 million for the quarter ended December 31, 2020.  This decrease in mortgage banking income reflects the continued impact of less favorable pricing in the secondary market.  In addition, there was a decrease in insurance commission income of $2.0 million, or 100.0%.  Partially offsetting these decreases was an increase in trust and brokerage income as growth in both customer accounts and market gains contributed to a $1.1 million, or 19.2%, increase over the prior year.

Noninterest expense decreased $6.6 million, or 7.1%, to $86.3 million for the quarter ended December 31, 2021, from $92.8 million for the quarter ended December 31, 2020.  This decrease primarily resulted from a $4.4 million, or 61.1%, decrease in merger, asset disposition and restructuring expense to $2.8 million for the quarter ended December 31, 2021 from $7.2 million for the quarter ended December 31, 2020 due to both periods incurring expenses as part of branch optimization initiatives. In addition, other expenses decreased $2.4 million, or 63.9%, to $1.3 million for the quarter ended December 31, 2021 from $3.7 million for the quarter ended December 31, 2020 primarily due to a reduction in the unfunded loan loss reserve associated with improving credit trends for construction loans and undrawn lines of credit in the current year. Slightly offsetting this decrease was an increase in processing expenses of $1.5 million, or 11.9%, to $13.6 million for the quarter ended December 31, 2021 from $12.2 million for the quarter ended December 31, 2020 as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking and loan origination platforms have increased. 

Net income for the year ended December 31, 2021 was $154.3 million, or $1.21 per diluted share.  This represents an increase of $79.5 million, or 106.2%, compared to the year ended December 31, 2020, when net income was $74.9 million, or $0.62 per diluted share. The annualized returns on average shareholders’ equity and average assets for the year ended December 31, 2021 were 9.91% and 1.08% compared to 4.72% and 0.58% for the prior year.  This increase in net income was the result of a decrease in provision for credit losses of $95.9 million primarily as a result of releasing reserves built up in the prior year due to the uncertainties around the impact of COVID-19. In addition, there was a $10.6 million, or 8.0%, increase in non-interest income largely due to the $25.3 million gain recognized on the sale of the insurance business in the second quarter of 2021, partially offset by a $15.5 million decrease in mortgage banking income which, as previously noted, is due to the impact of less favorable pricing in the secondary market. In addition, noninterest expense decreased $2.6 million, or 0.7%, primarily driven by acquisition and branch optimization costs in the prior year which were partially offset by MutualBank related increases in compensation as well as increased cost associated with our digital strategy rollout.

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, employee benefits and wealth management services.  As of December 31, 2021, Northwest operates 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana.  Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

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

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(dollars in thousands, except per share amounts)



December 31,
2021


September 30,
2021


December 31,
2020

Assets






Cash and cash equivalents

$   1,279,259


1,090,485


736,277

Marketable securities available-for-sale (amortized cost of $1,565,002, $1,587,105 and $1,375,685, respectively)

1,548,592


1,583,715


1,398,941

Marketable securities held-to-maturity (fair value of $751,513, $609,777 and $179,666, respectively)

768,154


618,395


178,887

Total cash and cash equivalents and marketable securities

3,596,005


3,292,595


2,314,105







Residential mortgage loans held-for-sale

25,056


27,411


58,786

Residential mortgage loans

2,969,564


2,962,110


3,009,335

Home equity loans

1,319,931


1,350,348


1,467,736

Consumer loans

1,838,748


1,816,836


1,507,993

Commercial real estate loans

3,015,484


3,162,551


3,345,889

Commercial loans

847,609


879,712


1,191,110

Total loans receivable

10,016,392


10,198,968


10,580,849

Allowance for credit losses

(102,241)


(109,767)


(134,427)

Loans receivable, net

9,914,151


10,089,201


10,446,422







FHLB stock, at cost

14,184


14,567


21,748

Accrued interest receivable

25,599


26,995


35,554

Real estate owned, net

873


809


2,232

Premises and equipment, net

156,524


155,740


161,538

Bank-owned life insurance

256,213


254,871


253,951

Goodwill

380,997


380,997


382,279

Other intangible assets, net

12,836


14,041


19,936

Other assets

144,126


159,419


168,503

Total assets

$  14,501,508


14,389,235


13,806,268

Liabilities and shareholders’ equity






Liabilities






Noninterest-bearing demand deposits

$   3,099,526


3,052,115


2,716,224

Interest-bearing demand deposits

2,940,442


2,926,351


2,755,950

Money market deposit accounts

2,629,882


2,584,424


2,437,539

Savings deposits

2,303,760


2,271,496


2,047,424

Time deposits

1,327,555


1,387,827


1,642,096

Total deposits

12,301,165


12,222,213


11,599,233







Borrowed funds

139,093


126,496


159,715

Subordinated debt

123,575


123,486


123,329

Junior subordinated debentures

129,054


128,989


128,794

Advances by borrowers for taxes and insurance

44,582


26,951


45,230

Accrued interest payable

1,804


589


2,054

Other liabilities

178,664


198,743


209,210

Total liabilities

12,917,937


12,827,467


12,267,565

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, 126,612,183, 126,521,344, and 127,019,452 shares issued and outstanding, respectively

1,266


1,265


1,270

Additional paid-in capital

1,010,405


1,008,099


1,015,502

Retained earnings

609,529


604,787


555,480

Accumulated other comprehensive loss

(37,629)


(52,383)


(33,549)

Total shareholders’ equity

1,583,571


1,561,768


1,538,703

Total liabilities and shareholders’ equity

$  14,501,508


14,389,235


13,806,268







Equity to assets

10.92  %


10.85  %


11.14  %

Tangible common equity to assets*

8.43  %


8.34  %


8.48  %

Book value per share

$          12.51


12.34


12.11

Tangible book value per share*

$           9.40


9.22


8.95

Closing market price per share

$          14.16


13.28


12.74

Full time equivalent employees

2,332


2,404


2,421

Number of banking offices

170


170


170



*

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


December 31,
2021


September 30,
2021


June 30,
2021


March 31,
2021


December 31,
2020






Interest income:










Loans receivable

$       95,295


97,475


95,255


102,318


105,681

Mortgage-backed securities

5,743


5,840


5,680


4,200


4,551

Taxable investment securities

640


649


693


634


471

Tax-free investment securities

688


628


594


575


656

FHLB stock dividends

82


71


138


116


192

Interest-earning deposits

467


352


192


183


178

Total interest income

102,915


105,015


102,552


108,026


111,729

Interest expense:










Deposits

4,295


4,540


4,773


5,514


6,714

Borrowed funds

1,964


2,056


2,050


2,054


2,127

Total interest expense

6,259


6,596


6,823


7,568


8,841

Net interest income

96,656


98,419


95,729


100,458


102,888

   Provision for credit losses

(1,909)


(4,354)



(5,620)


(2,230)

Net interest income after provision for credit losses

98,565


102,773


95,729


106,078


105,118

Noninterest income:










Gain/(loss) on sale of investments

(4)


(46)


(105)


(21)


75

Service charges and fees

13,500


13,199


12,744


12,394


13,074

Trust and other financial services income

6,820


7,182


7,435


6,484


5,722

Insurance commission income


44


1,043


2,546


2,034

Gain/(loss) on real estate owned, net

71


247


166


(42)


114

Income from bank-owned life insurance

1,343


1,332


1,639


1,736


1,330

Mortgage banking income

2,120


3,941


3,811


6,020


7,120

Gain on sale of insurance business



25,327



Other operating income

3,192


3,287


2,648


2,836


2,654

Total noninterest income

27,042


29,186


54,708


31,953


32,123

Noninterest expense:










Compensation and employee benefits

48,691


49,063


48,894


47,239


48,209

Premises and occupancy costs

7,104


7,745


7,410


8,814


7,614

Office operations

3,144


4,143


3,317


3,165


4,009

Collections expense

602


411


303


616


893

Processing expenses

13,639


13,517


15,151


13,456


12,186

Marketing expenses

2,054


2,102


2,101


1,980


1,994

Federal deposit insurance premiums

1,131


1,184


1,353


1,307


1,651

Professional services

4,513


4,295


4,231


4,582


3,599

Amortization of intangible assets

1,205


1,321


1,433


1,594


1,664

Real estate owned expense

44


94


85


75


64

Merger, asset disposition and restructuring expense

2,812



632


9


7,238

Other expenses

1,346


2,227


1,422


3,354


3,728

Total noninterest expense

86,285


86,102


86,332


86,191


92,849

Income before income taxes

39,322


45,857


64,105


51,840


44,392

Income tax expense

9,266


10,794


15,138


11,603


9,327

Net income

$       30,056


35,063


48,967


40,237


35,065











Basic earnings per share

$          0.24


0.28


0.38


0.32


0.28

Diluted earnings per share

$          0.24


0.27


0.38


0.32


0.28











Annualized return on average equity

7.65  %


8.86  %


12.58  %


10.61  %


9.00  %

Annualized return on average assets

0.82  %


0.97  %


1.37  %


1.17  %


1.01  %

Annualized return on tangible common equity *

10.02  %


11.92  %


16.66  %


14.31  %


12.27  %











Efficiency ratio **

66.51  %


66.44  %


67.35  %


63.88  %


62.18  %

Annualized noninterest expense to average assets ***

2.25  %


2.33  %


2.35  %


2.45  %


2.42  %



*

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)



Year ended December 31,


2021


2020

Interest income:




Loans receivable

$                    390,343


410,907

Mortgage-backed securities

21,463


17,416

Taxable investment securities

2,616


1,985

Tax-free investment securities

2,485


2,060

FHLB dividends

407


981

Interest-earning deposits

1,194


719

Total interest income

418,508


434,068

Interest expense:




Deposits

19,122


35,896

Borrowed funds

8,124


6,444

Total interest expense

27,246


42,340

Net interest income

391,262


391,728

   Provision for credit losses

(11,883)


83,975

Net interest income after provision for credit losses

403,145


307,753

Noninterest income:




Gain/(loss) on sale of investments

(176)


236

Gain on sale of loans


1,302

Service charges and fees

51,837


55,613

Trust and other financial services income

27,921


20,922

Insurance commission income

3,633


9,132

Gain/(loss) on real estate owned, net

442


(106)

Income from bank-owned life insurance

6,050


5,190

Mortgage banking income

15,892


31,391

Gain on sale of insurance business

25,327


Other operating income

11,963


8,585

Total noninterest income

142,889


132,265

Noninterest expense:




Compensation and employee benefits

193,887


178,375

Premises and occupancy costs

31,073


30,622

Office operations

13,769


15,728

Collections expense

1,932


3,275

Processing expenses

55,763


50,050

Marketing expenses

8,237


7,695

Federal deposit insurance premiums

4,975


4,767

Professional services

17,621


12,482

Amortization of intangible assets

5,553


6,856

Real estate owned expense

298


359

Merger, asset disposition and restructuring expense

3,453


20,789

Other expenses

8,349


16,494

Total noninterest expense

344,910


347,492

Income before income taxes

201,124


92,526

Income tax expense

46,801


17,672

Net income

$                    154,323


74,854





Basic earnings per share

$                          1.22


0.62

Diluted earnings per share

$                          1.21


0.62





Annualized return on average equity

9.91  %


4.72  %

Annualized return on average assets

1.08  %


0.58  %

Annualized return on tangible common equity *

12.97  %


6.59  %





Efficiency ratio **

66.02  %


61.04  %

Annualized noninterest expense to average assets ***

2.35  %


2.48  %



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)



December 31,
2021


September 30,
2021


June 30,
2021


March 31,
2021


December 31,
2020

Nonaccrual loans current:










Residential mortgage loans

$           1,354


2,015


189


164


21

Home equity loans

1,212


1,267


170


268


154

Consumer loans

1,336


1,465


188


225


207

Commercial real estate loans

106,233


111,075


138,820


146,304


20,317

Commercial loans

6,098


17,021


17,545


6,361


16,027

Total nonaccrual loans current

$       116,233


132,843


156,912


153,322


36,726

Nonaccrual loans delinquent 30 days to 59 days:










Residential mortgage loans

$              244


99


68


1,261


647

Home equity loans

223


328


229


340


338

Consumer loans

241


152


230


254


301

Commercial real estate loans

239


205


1,589


965


1,416

Commercial loans

53


102


406


1,538


87

Total nonaccrual loans delinquent 30 days to 59 days

$           1,000


886


2,522


4,358


2,789

Nonaccrual loans delinquent 60 days to 89 days:










Residential mortgage loans

$           1,163


527


207


813


767

Home equity loans

61


142


310


417


190

Consumer loans

292


291


297


649


583

Commercial real estate loans

364


419


198


1,877


714

Commercial loans

218


170


21


7,919


48

Total nonaccrual loans delinquent 60 days to 89 days

$           2,098


1,549


1,033


11,675


2,302

Nonaccrual loans delinquent 90 days or more:










Residential mortgage loans

$           7,641


8,069


10,007


9,333


14,489

Home equity loans

4,262


4,745


6,256


7,044


8,441

Consumer loans

2,069


2,184


2,341


3,625


5,473

Commercial real estate loans

24,063


25,562


23,564


29,737


25,287

Commercial loans

1,105


1,104


4,126


4,860


7,325

Total nonaccrual loans delinquent 90 days or more

$         39,140


41,664


46,294


54,599


61,015

Total nonaccrual loans

$       158,471


176,942


206,761


223,954


102,832

Total nonaccrual loans

$       158,471


176,942


206,761


223,954


102,832

Loans 90 days past due and still accruing

331


386


302


197


585

Nonperforming loans

158,802


177,328


207,063


224,151


103,417

Real estate owned, net

873


809


1,353


1,738


2,232

Nonperforming assets

$       159,675


178,137


208,416


225,889


105,649

Nonaccrual troubled debt restructuring *

$         17,216


12,858


8,951


7,390


10,704

Accruing troubled debt restructuring

13,072


13,664


18,480


20,120


21,431

Total troubled debt restructuring

$         30,288


26,522


27,431


27,510


32,135











Nonperforming loans to total loans

1.59  %


1.74  %


2.01  %


2.16  %


0.98  %

Nonperforming assets to total assets

1.10  %


1.24  %


1.46  %


1.58  %


0.77  %

Allowance for credit losses to total loans

1.02  %


1.08  %


1.14  %


1.20  %


1.27  %

Allowance for total loans excluding PPP loan balances

1.03  %


1.09  %


1.17  %


1.24  %


1.32  %

Allowance for credit losses to nonperforming loans

64.38  %


61.90  %


56.66  %


55.32  %


129.99  %



*

Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries

Loans by Credit Quality Indicators (Unaudited)

(dollars in thousands)


At December 31, 2021


Pass


Special

   mention*


Substandard

**


Doubtful


Loss


Loans

receivable

Personal Banking:













Residential mortgage loans


$        2,978,080



16,540




2,994,620

Home equity loans


1,312,820



7,111




1,319,931

Consumer loans


1,834,478



4,270




1,838,748

Total Personal Banking


6,125,378



27,921




6,153,299

Commercial Banking:













Commercial real estate loans


2,639,676


74,123


301,685




3,015,484

Commercial loans


808,323


5,730


33,556




847,609

Total Commercial Banking


3,447,999


79,853


335,241




3,863,093

Total loans


$        9,573,377


79,853


363,162




10,016,392

At September 30, 2021













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



Includes $14.9 million, $16.7 million, $16.7 million, $26.4 million, and $31.3 million of acquired loans at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

**

Includes $81.5 million, $110.4 million, $122.5 million, $143.2 million, and $153.2 million of acquired loans at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

Northwest Bancshares, Inc. and Subsidiaries

Loan Delinquency (Unaudited)

(dollars in thousands)




December 31,
2021


*


September 30,
2021


*


June 30,
2021


*


March 31,
2021


*


December 31,
2020


*

(Number of loans and dollar amount of loans)































Loans delinquent 30 days to 59 days:































Residential mortgage loans


277


$   20,567


0.7      %


17


$        765


—     %


13


$        606


—     %


248


$   22,236


0.7      %


315


$   28,797


0.9      %

Home equity loans


112


3,153


0.2      %


101


3,351


0.2      %


91


3,677


0.3      %


84


3,334


0.2      %


138


4,763


0.3      %

Consumer loans


589


6,536


0.4      %


576


6,146


0.3      %


532


5,571


0.3      %


535


5,732


0.4      %


1,279


10,574


0.7      %

Commercial real estate loans


17


17,065


0.6      %


19


2,004


0.1      %


13


2,857


0.1      %


33


12,240


0.4      %


43


10,923


0.3      %

Commercial loans


12


193


—     %


10


692


0.1      %


15


686


0.1      %


16


3,032


0.3      %


37


6,405


0.5      %

Total loans delinquent 30 days to 59 days


1,007


$   47,514


0.5      %


723


$   12,958


0.1      %


664


$   13,397


0.1      %


916


$   46,574


0.4      %


1,812


$   61,462


0.6      %
































Loans delinquent 60 days to 89 days:































Residential mortgage loans


59


$     5,433


0.2      %


55


$     4,907


0.2      %


58


$     4,051


0.1      %


26


$     2,062


0.1      %


84


$     5,083


0.2      %

Home equity loans


30


949


0.1      %


29


1,024


0.1      %


36


1,502


0.1      %


31


953


0.1      %


47


1,656


0.1      %

Consumer loans


195


2,006


0.1      %


180


1,757


0.1      %


181


1,988


0.1      %


169


1,868


0.1      %


322


2,742


0.2      %

Commercial real estate loans


5


769


—     %


8


1,170


—     %


9


1,335


—     %


14


7,609


0.2      %


11


1,615


—     %

Commercial loans


10


727


0.1      %


2


170


—     %


2


27


—     %


12


8,979


0.8      %


10


864


0.1      %

Total loans delinquent 60 days to 89 days


299


$     9,884


0.1      %


274


$     9,028


0.1      %


286


$     8,903


0.1      %


252


$   21,471


0.2      %


474


$   11,960


0.1      %
































Loans delinquent 90 days or more: **































Residential mortgage loans


87


$     7,641


0.3      %


95


$     8,069


0.3      %


115


$   10,007


0.3      %


121


$     9,333


0.3      %


168


$   14,489


0.5      %

Home equity loans


105


4,262


0.3      %


119


4,745


0.4      %


146


6,256


0.5      %


176


7,044


0.5      %


207


8,441


0.6      %

Consumer loans


296


2,400


0.1      %


308


2,568


0.1      %


356


2,643


0.2      %


454


3,822


0.2      %


720


6,058


0.4      %

Commercial real estate loans


52


24,063


0.8      %


59


25,562


0.8      %


83


23,564


0.7      %


113


29,737


0.9      %


119


25,287


0.8      %

Commercial loans


8


1,105


0.1      %


10


1,104


0.1      %


18


4,126


0.4      %


31


4,860


0.4      %


37


7,325


0.6      %

Total loans delinquent 90 days or more


548


$   39,471


0.4      %


591


$   42,048


0.4      %


718


$   46,596


0.5      %


895


$   54,796


0.5      %


1,251


$   61,600


0.6      %
































Total loans delinquent


1,854


$   96,869


1.0      %


1,588


$   64,034


0.6      %


1,668


$   68,896


0.7      %


2,063


$ 122,841


1.2      %


3,537


$ 135,022


1.3      %



*

Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.

**

Includes purchased credit deteriorated loans of $7.3 million, $8.4 million, $10.3 million, $12.7 million, and $6.6 million at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020.

Northwest Bancshares, Inc. and Subsidiaries

Allowance for Credit Losses (Unaudited)

(dollars in thousands)



Quarter ended


December 31,
2021


September 30,
2021


June 30,
2021


March 31,
2021


December 31,
2020

Beginning balance

$      109,767


117,330


123,997


134,427


140,209

Provision

(1,909)


(4,354)



(5,620)


(2,230)

Charge-offs residential mortgage

(784)


(1,263)


(770)


(855)


(407)

Charge-offs home equity

(1,299)


(1,474)


(379)


(228)


(58)

Charge-offs consumer

(2,897)


(2,148)


(2,401)


(2,603)


(2,623)

Charge-offs commercial real estate

(2,652)


(1,581)


(3,964)


(4,626)


(2,770)

Charge-offs commercial

(2,586)


(412)


(1,161)


(54)


(156)

Recoveries

4,601


3,669


2,008


3,556


2,462

Ending balance

$      102,241


109,767


117,330


123,997


134,427

Net charge-offs to average loans, annualized

0.22  %


0.12  %


0.26  %


0.19  %


0.13  %


Year ended December 31,


2021


2020

Beginning balance

$            134,427


57,941

CECL adoption


10,792

Initial allowance on loans purchased with credit deterioration


8,845

Provision

(11,883)


83,975

Charge-offs residential mortgage

(3,672)


(917)

Charge-offs home equity

(3,380)


(608)

Charge-offs consumer

(10,049)


(12,658)

Charge-offs commercial real estate

(12,823)


(4,323)

Charge-offs commercial

(4,213)


(16,212)

Recoveries

13,834


7,592

Ending balance

$            102,241


134,427

Net charge-offs to average loans

0.20  %


0.27  %


December 31, 2021


Originated loans


Acquired loans


Total loans


Balance


Reserve


Balance


Reserve


Balance


Reserve

Residential mortgage loans

$     2,783,459


6,621


211,161


752


2,994,620


7,373

Home equity loans

1,107,202


4,243


212,729


1,057


1,319,931


5,300

Consumer loans

1,692,207


16,775


146,541


1,592


1,838,748


18,367

Personal Banking Loans

5,582,868


27,639


570,431


3,401


6,153,299


31,040

Commercial real estate loans

2,523,280


48,503


492,204


9,521


3,015,484


58,024

Commercial loans

765,877


10,608


81,732


2,569


847,609


13,177

Commercial Banking Loans

3,289,157


59,111


573,936


12,090


3,863,093


71,201

Total Loans

$     8,872,025


86,750


1,144,367


15,491


10,016,392


102,241

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, 2021


September 30, 2021


June 30, 2021


March 31, 2021


December 31, 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

$  2,977,942


25,269


3.39          %


$  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          %

Home equity loans

1,328,553


11,750


3.51          %


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          %

Consumer loans

1,756,620


15,514


3.50          %


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          %

Commercial real estate loans

3,113,924


34,062


4.28          %


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          %

Commercial loans

855,998


9,154


4.18          %


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          %

Total loans receivable (a) (b) (d)

10,033,037


95,749


3.79          %


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          %

Mortgage-backed securities (c)

1,894,683


5,743


1.21          %


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          %

Investment securities (c) (d)

358,558


1,535


1.71          %


348,619


1,466


1.68          %


364,414


1,466


1.61          %


331,358


1,381


1.67          %


252,898


1,380


2.18          %

FHLB stock, at cost

14,459


82


2.25          %


21,607


71


1.31          %


23,107


138


2.40          %


21,811


116


2.17          %


23,346


192


3.27          %

Other interest-earning deposits

1,168,449


467


0.16          %


905,130


352


0.15          %


810,741


192


0.09          %


801,119


183


0.09          %


632,494


178


0.11          %

Total interest-earning assets

13,469,186


103,576


3.05          %


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          %

Noninterest-earning assets (e)

1,004,905






1,074,122






1,104,924






1,102,477






1,066,609





Total assets

$   14,474,091






$   14,408,284






$   14,356,759






$   13,987,759






$   13,791,854





Liabilities and shareholders’ equity:






























Interest-bearing liabilities:






























Savings deposits

$  2,282,606


622


0.11          %


$  2,271,365


603


0.11          %


$  2,255,578


590


0.10          %


$  2,118,030


625


0.12          %


$  2,028,155


617


0.12          %

Interest-bearing demand deposits

2,933,466


411


0.06          %


2,890,905


414


0.06          %


2,840,949


407


0.06          %


2,783,429


429


0.06          %


2,699,515


476


0.07          %

Money market deposit accounts

2,618,177


656


0.10          %


2,565,159


637


0.10          %


2,537,629


621


0.10          %


2,497,495


657


0.11          %


2,426,513


960


0.16          %

Time deposits

1,356,513


2,606


0.76          %


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          %

Borrowed funds (f)

135,038


159


0.47          %


131,199


154


0.47          %


131,240


150


0.46          %


143,806


154


0.43          %


229,109


213


0.37          %

Subordinated debt (g)

123,514


1,180


3.82          %


123,513


1,277


4.10          %


123,443


1,264


4.11          %


123,357


1,258


4.14          %


123,283


1,256


4.05          %

Junior subordinated debentures

129,012


625


1.89          %


128,946


625


1.90          %


128,882


636


1.95          %


128,817


642


1.99          %


128,752


659


2.00          %

Total interest-bearing liabilities

9,578,326


6,259


0.26          %


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          %

Noninterest-bearing demand deposits (h)

3,093,518






3,058,819






3,036,202






2,805,206






2,675,986





Noninterest-bearing liabilities

242,620






244,402






247,930






265,667






253,966





Total liabilities

12,914,464






12,837,349






12,795,800






12,449,332






12,241,373





Shareholders’ equity

1,559,627






1,570,935






1,560,959






1,538,427






1,550,481





Total liabilities and shareholders’ equity

$   14,474,091






$   14,408,284






$   14,356,759






$   13,987,759






$   13,791,854





Net interest income/Interest rate spread



97,317


2.79          %




99,145


2.87          %




96,376


2.84          %




101,096


3.09          %




103,751


3.14          %

Net interest-earning assets/Net interest margin

$  3,890,860




2.89          %


$  3,800,034




2.97          %


$  3,740,167




2.91          %


$  3,506,823




3.18          %


$  3,413,824




3.26          %

Ratio of interest-earning assets to interest-bearing liabilities

1.41X   






1.40X   






1.39X   






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, 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 0.14%, 0.15%, 0.16%, 0.19%, and 0.23%, respectively.

(i) 

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 3.77%, 3.79%, 3.71%, 3.99%, and 3.94%, respectively, Investment securities — 1.48%, 1.47%, 1.41%, 1.46%, and 1.78%, respectively, Interest-earning assets — 3.03%, 3.13%, 3.10%, 3.40%, and 3.48%, respectively. GAAP basis net interest rate spreads were 2.77%, 2.86%, 2.82%, 3.07%, and 3.11%, respectively, and GAAP basis net interest margins were 2.87%, 2.95%, 2.89%, 3.16%, and 3.23%, respectively.

Northwest Bancshares, Inc. and Subsidiaries

Average Balance Sheet (Unaudited)

(dollars in thousands)


The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated.  Such yields and costs are derived by
dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.



Year ended December 31,


2021


2020


Average

balance


Interest


Avg.

yield/

cost (i)


Average

balance


Interest


Avg.

yield/

cost (i)

Assets:












Interest-earning assets:












Residential mortgage loans

$       2,969,939


102,642


3.46  %


$       3,051,582


113,353


3.71  %

Home equity loans

1,374,038


48,789


3.55  %


1,436,632


55,875


3.89  %

Consumer loans

1,635,613


60,854


3.72  %


1,338,120


58,878


4.40  %

Commercial real estate loans

3,222,272


141,186


4.32  %


3,132,976


140,883


4.42  %

Commercial loans

1,037,758


38,794


3.69  %


1,145,143


44,142


3.79  %

Loans receivable (a) (b) (d)

10,239,620


392,265


3.83  %


10,104,453


413,131


4.09  %

Mortgage-backed securities (c)

1,704,006


21,463


1.26  %


889,744


17,416


1.96  %

Investment securities (c) (d)

350,806


5,848


1.67  %


196,071


4,841


2.47  %

FHLB stock, at cost

20,229


407


2.01  %


21,781


981


4.50  %

Other interest-earning deposits

921,360


1,194


0.13  %


520,666


719


0.14  %

Total interest-earning assets

13,236,021


421,177


3.18  %


11,732,715


437,088


3.73  %

Noninterest-earning assets (e)

1,072,313






1,159,405





Total assets

$      14,308,334






$      12,892,120





Liabilities and shareholders’ equity:












Interest-bearing liabilities:












Savings deposits

$       2,232,454


2,440


0.11  %


$       1,885,517


2,640


0.14  %

Interest-bearing demand deposits

2,862,677


1,660


0.06  %


2,432,427


3,358


0.14  %

Money market deposit accounts

2,554,975


2,570


0.10  %


2,224,904


6,995


0.31  %

Time deposits

1,463,522


12,452


0.85  %


1,687,381


22,903


1.36  %

Borrowed funds (f)

135,285


616


0.46  %


346,442


3,190


0.92  %

Subordinated debt (g)

123,457


4,980


4.03  %




—  %

Junior subordinated debentures

128,915


2,528


1.93  %


126,683


3,254


2.53  %

Total interest-bearing liabilities

9,501,285


27,246


0.29  %


8,703,354


42,340


0.49  %

Noninterest-bearing demand deposits (h)

2,999,392






2,357,725





Noninterest-bearing liabilities

250,075






246,294





Total liabilities

12,750,752






11,307,373





Shareholders’ equity

1,557,582






1,584,747





Total liabilities and shareholders’ equity

$      14,308,334






$      12,892,120





Net interest income/Interest rate spread



393,931


2.89  %




394,748


3.24  %

Net interest-earning assets/Net interest margin

$       3,734,736




2.98  %


$       3,029,361




3.36  %

Ratio of interest-earning assets to interest-bearing liabilities

1.39X   






1.35X   







(a) 

Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(b) 

Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.

(c) 

Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.

(d) 

Interest income on tax-free investment securities and tax-free loans are presented on a 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 0.34%, respectively.

(i)

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 3.81% and 4.07%, respectively, Investment securities — 1.45% and 2.06%, respectively, Interest-earning assets — 3.16% and 3.70%, respectively. GAAP basis net interest rate spreads were 2.88% and 3.21%, respectively, and GAAP basis net interest margins were 2.96% and 3.34%, respectively.

SOURCE Northwest Bancshares, Inc.

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