8-K
Northwest Bancshares, Inc. (NWBI)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 2024
Northwest Bancshares, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 001-34582 | 27-0950358 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | |
| 3 Easton Oval Suite 500 | Columbus | Ohio | 43219 |
| --- | --- | --- | --- |
| (Address of principal executive office) | (Zip code) |
(814) 726-2140
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, 0.01 Par Value | NWBI | NASDAQ Stock Market, LLC |
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Indicate by a check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange act. ☐
Item 2.02 Results of Operations and Financial Condition
On April 22, 2024, Northwest Bancshares, Inc. issued an earnings release for the quarter ended March 31, 2024. A copy of the release is included as exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed “filed” for any purpose.
Item 9.01 Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated April 22, 2024 |
| 104 | Press release dated Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| NORTHWEST BANCSHARES, INC. | |||
|---|---|---|---|
| Date: | April 22, 2024 | By: | /s/ Douglas M. Schosser |
| Douglas M. Schosser | |||
| Chief Financial Officer |
Document
EXHIBIT 99.1
PRESS RELEASE OF NORTHWEST BANCSHARES, INC.
EARNINGS RELEASE
FOR IMMEDIATE RELEASE
| Contact: | Louis J. Torchio, President and Chief Executive Officer |
|---|---|
| Douglas M. Schosser, Senior Executive Vice President, Chief Financial Officer (814) 726-2140 |
Northwest Bancshares, Inc. Announces First Quarter 2024 Earnings and Quarterly Dividend
118th consecutive quarterly dividend of $0.20 per share declared.
Columbus, Ohio — April 22, 2024
Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2024 of $29 million, or $0.23 per diluted share. This represents a decrease of $5 million, or 13%, compared to the same quarter last year, when net income was $34 million, or $0.26 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended March 31, 2024 were 7.57% and 0.81% compared to 9.11% and 0.97% for the same quarter last year.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on May 15, 2024 to shareholders of record as of May 2, 2024. This is the 118th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company’s common stock as of March 31, 2024, this represents an annualized dividend yield of approximately 6.9%.
The Company is announcing its intentions to pursue a limited, strategic repositioning of the securities portfolio to optimize its balance sheet by liquidating lower-yielding securities in an effort to generate additional future earnings. This initiative will be accomplished through the sale of up to 15% of the Company’s investment securities portfolio. The securities losses recognized will be limited to $40 million, equivalent to approximately $30 million after tax. The Company expects a yield pickup of 375-400 basis points from the repositioning and will look to manage the payback period so that it will be approximately three years. The characteristics of investment securities to be sold have an average yield less than 2.00% with a remaining maturity of greater than four years. The proceeds will be used to reduce borrowings in the short term while also opportunistically reinvesting into securities with similar risk, maturity and duration characteristics.
Louis J. Torchio, President and CEO, added, “As part of the Company’s ongoing efforts to enhance future profitability, we have proactively chosen to reposition our securities portfolio. By executing this strategic securities transaction, we will significantly improve the Company’s future earnings potential while simultaneously maintaining our robust capital levels and liquidity. This strategic move aligns with our commitment to long-term financial stability and growth, ensuring that we are well-positioned to capitalize on future opportunities and navigate any potential challenges in the market.”
“In addition, we are proud of our first quarter earnings, which demonstrate our focus and commitment to achieving solid results in a challenging environment. Our strong performance is a testament to our robust business model, dedicated team, and the trust of our customers,” added Mr. Torchio. “Despite industry headwinds, we have emerged stronger by staying true to our core values, prioritizing growth and transformation, and maintaining a customer-centric approach. Our first quarter results provide a solid foundation for continued growth. We are grateful for the support of our employees, customers, partners, and shareholders. Together, we will continue driving success and shape the future of our organization.”
Balance Sheet Highlights
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2024 | March 31, 2023 | Dollar change | Percent change | |||
| Average loans receivable | $ | 11,345,308 | 10,887,132 | 458,176 | 4.2 | % |
| Average investments | 2,051,058 | 2,294,393 | (243,335) | (10.6) | % | |
| Average deposits | 11,887,954 | 11,404,035 | 483,919 | 4.2 | % | |
| Average borrowed funds | 469,697 | 740,218 | (270,521) | (36.5) | % |
•Average loans receivable increased 4% from the quarter ended March 31, 2023 driven by commercial loans, which grew by $553 million as we have continued to build-out our commercial lending verticals.
•Average investments declined 11% from the quarter ended March 31, 2023. The decline in investments was driven by the sale of investment securities during the prior year.
•Average deposits grew 4% from the quarter ended March 31, 2023 driven by a $1.404 billion increase in our average time deposits as we continued competitively positioning our deposit products. This increase was partially offset by a decrease in money market balances as customers shifted balances into higher yielding time deposit accounts.
•Compared to the quarter ending March 31, 2023, average borrowings saw a significant 37% reduction, primarily attributable to the strategic pay down of wholesale borrowings. This decrease was made possible by a substantial increase in cash reserves, resulting from a notable rise in the average balance of deposits.
Income Statement Highlights
| Quarter ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| March 31, 2024 | March 31, 2023 | Dollar change | Percent change | |||||
| Interest income | $ | 160,239 | 134,940 | 25,299 | 18.7 | % | ||
| Interest expense | 57,001 | 22,476 | 34,525 | 153.6 | % | |||
| Net interest income | $ | 103,238 | 112,464 | (9,226) | (8.2) | % | ||
| Net interest margin | 3.10 | % | 3.46 | % | N/A |
Net interest income decreased 8%, and net interest margin decreased to 3.10% from the quarter ended March 31, 2023. This decrease in net interest income resulted primarily from:
•A $25 million increase in interest income as cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on loans to improve to 5.33% for the quarter ended March 31, 2024 from 4.63% for the quarter ended March 31, 2023.
•A $35 million increase in interest expense as the result of higher costs of deposits and borrowings due to the higher interest rate environment and competitive pressure for liquidity. The cost of interest-bearing liabilities increased to 2.28% for the quarter ended March 31, 2024 from 0.96% for the quarter ended March 31, 2023.
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2024 | March 31, 2023 | Dollar change | Percent change | |||
| Provision for credit losses - loans | $ | 4,234 | 4,870 | (636) | (13.1) | % |
| Provision for credit losses - unfunded commitments | (799) | 126 | (925) | (734.1) | % | |
| Total provision for credit losses expense | $ | 3,435 | 4,996 | (1,561) | (31.2) | % |
The provision for credit losses decreased by 31% from the quarter ended March 31, 2023 primarily driven by a decline in our reserves for unfunded commitments in the current period based on the timing of origination and funding of commercial construction loans and lines of credit coupled with improvements in the economic forecasts. Additionally, the Company continued to experience low levels of classified loans with a slight increase to $229 million or 1.99% of total loans at March 31, 2024 from $209 million, or 1.88% of total loans, at March 31, 2023.
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2024 | March 31, 2023 | Dollar change | Percent change | |||
| Noninterest income: | ||||||
| Gain on sale of SBA loans | $ | 873 | 279 | 594 | 212.9 | % |
| Service charges and fees | 15,523 | 13,189 | 2,334 | 17.7 | % | |
| Trust and other financial services income | 7,127 | 6,449 | 678 | 10.5 | % | |
| Gain on real estate owned, net | 57 | 108 | (51) | (47.2) | % | |
| Income from bank-owned life insurance | 1,502 | 1,269 | 233 | 18.4 | % | |
| Mortgage banking income | 452 | 524 | (72) | (13.7) | % | |
| Other operating income | 2,429 | 2,151 | 278 | 12.9 | % | |
| Total noninterest income | $ | 27,963 | 23,969 | 3,994 | 16.7 | % |
Noninterest income increased 17% from the quarter ended March 31, 2023. This increase was primarily due to an increase in service charges and fees driven by deposit-related fees based on customer activity as well as commercial loans fees, gain on sale of SBA loans, and improvements in trust and other financial services income.
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2024 | March 31, 2023 | Dollar change | Percent change | |||
| Noninterest expense: | ||||||
| Personnel expense | $ | 51,540 | 46,604 | 4,936 | 10.6 | % |
| Non personnel expense | 38,484 | 40,846 | (2,362) | (5.8) | % | |
| Total noninterest expense | $ | 90,024 | 87,450 | 2,574 | 2.9 | % |
Noninterest expense increased 3% from the quarter ended March 31, 2023. This increase primarily resulted from a rise in personnel expense driven by the build-out of the commercial business and related credit, risk management and internal audit support functions over the past year. This was offset by a decrease in non-personnel expense related to a decline in merger, asset disposition and restructuring expense due to the severance and fixed asset charges related to the branch optimization and personnel reduction announced during the fourth quarter of 2022 as well as improvements in marketing expense and professional services expense.
The provision for income taxes decreased by $1.7 million, or 17%, to $8.6 million for the quarter ended March 31, 2024 from $10.3 million for the quarter ended March 31, 2023 due primarily to lower income before income taxes.
Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of March 31, 2024, Northwest operated 134 full-service branches and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
# # #
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(dollars in thousands, except per share amounts)
| March 31,<br>2024 | December 31,<br>2023 | March 31,<br>2023 | |||||
|---|---|---|---|---|---|---|---|
| Assets | |||||||
| Cash and cash equivalents | $ | 119,319 | 122,260 | 96,497 | |||
| Marketable securities available-for-sale (amortized cost of $1,298,108, $1,240,003 and $1,402,805, respectively) | 1,094,009 | 1,043,359 | 1,205,510 | ||||
| Marketable securities held-to-maturity (fair value of $680,353, $699,506 and $750,345, respectively) | 801,107 | 814,839 | 866,022 | ||||
| Total cash and cash equivalents and marketable securities | 2,014,435 | 1,980,458 | 2,168,029 | ||||
| Loans held-for-sale | 8,082 | 8,768 | 7,006 | ||||
| Residential mortgage loans | 3,374,980 | 3,419,417 | 3,499,078 | ||||
| Home equity loans | 1,196,607 | 1,227,858 | 1,281,546 | ||||
| Consumer loans | 2,118,367 | 2,126,027 | 2,232,133 | ||||
| Commercial real estate loans | 3,028,314 | 2,974,010 | 2,826,485 | ||||
| Commercial loans | 1,774,896 | 1,658,729 | 1,246,023 | ||||
| Total loans receivable | 11,501,246 | 11,414,809 | 11,092,271 | ||||
| Allowance for credit losses | (124,897) | (125,243) | (121,257) | ||||
| Loans receivable, net | 11,376,349 | 11,289,566 | 10,971,014 | ||||
| FHLB stock, at cost | 30,811 | 30,146 | 41,519 | ||||
| Accrued interest receivable | 50,680 | 47,353 | 36,177 | ||||
| Real estate owned, net | 50 | 104 | 524 | ||||
| Premises and equipment, net | 130,565 | 138,838 | 140,301 | ||||
| Bank-owned life insurance | 252,842 | 251,895 | 256,310 | ||||
| Goodwill | 380,997 | 380,997 | 380,997 | ||||
| Other intangible assets, net | 4,589 | 5,290 | 7,651 | ||||
| Other assets | 268,945 | 294,458 | 191,294 | ||||
| Total assets | $ | 14,510,263 | 14,419,105 | 14,193,816 | |||
| Liabilities and shareholders’ equity | |||||||
| Liabilities | |||||||
| Noninterest-bearing demand deposits | $ | 2,618,379 | 2,669,023 | 2,896,092 | |||
| Interest-bearing demand deposits | 2,557,866 | 2,634,546 | 2,541,503 | ||||
| Money market deposit accounts | 1,952,537 | 1,968,218 | 2,328,050 | ||||
| Savings deposits | 2,156,048 | 2,105,234 | 2,194,743 | ||||
| Time deposits | 2,786,814 | 2,602,881 | 1,576,791 | ||||
| Total deposits | 12,071,644 | 11,979,902 | 11,537,179 | ||||
| Borrowed funds | 400,783 | 398,895 | 688,641 | ||||
| Subordinated debt | 114,276 | 114,189 | 113,927 | ||||
| Junior subordinated debentures | 129,639 | 129,574 | 129,379 | ||||
| Advances by borrowers for taxes and insurance | 46,970 | 45,253 | 49,893 | ||||
| Accrued interest payable | 17,395 | 13,669 | 2,236 | ||||
| Other liabilities | 177,107 | 186,306 | 159,286 | ||||
| Total liabilities | 12,957,814 | 12,867,788 | 12,680,541 | ||||
| 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, 127,253,189, 127,110,453 and 127,065,400 shares issued and outstanding, respectively | 1,273 | 1,271 | 1,271 | ||||
| Additional paid-in capital | 1,026,173 | 1,024,852 | 1,020,855 | ||||
| Retained earnings | 678,427 | 674,686 | 649,672 | ||||
| Accumulated other comprehensive loss | (153,424) | (149,492) | (158,523) | ||||
| Total shareholders’ equity | 1,552,449 | 1,551,317 | 1,513,275 | ||||
| Total liabilities and shareholders’ equity | $ | 14,510,263 | 14,419,105 | 14,193,816 | |||
| Equity to assets | 10.70 | % | 10.76 | % | 10.66 | % | |
| Tangible common equity to assets* | 8.26 | % | 8.30 | % | 8.15 | % | |
| Book value per share | $ | 12.20 | 12.20 | 11.91 | |||
| Tangible book value per share* | $ | 9.17 | 9.17 | 8.85 | |||
| Closing market price per share | $ | 11.65 | 12.48 | 12.03 | |||
| Full time equivalent employees | 2,060 | 2,098 | 2,066 | ||||
| Number of banking offices | 142 | 142 | 150 |
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)
| Quarter ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||
| Interest income: | |||||||||||
| Loans receivable | $ | 149,571 | 146,523 | 140,667 | 132,724 | 123,745 | |||||
| Mortgage-backed securities | 7,944 | 7,951 | 8,072 | 8,326 | 8,537 | ||||||
| Taxable investment securities | 794 | 786 | 786 | 841 | 845 | ||||||
| Tax-free investment securities | 491 | 492 | 491 | 667 | 700 | ||||||
| FHLB stock dividends | 607 | 666 | 668 | 844 | 690 | ||||||
| Interest-earning deposits | 832 | 970 | 914 | 594 | 423 | ||||||
| Total interest income | 160,239 | 157,388 | 151,598 | 143,996 | 134,940 | ||||||
| Interest expense: | |||||||||||
| Deposits | 47,686 | 40,600 | 31,688 | 21,817 | 11,238 | ||||||
| Borrowed funds | 9,315 | 10,486 | 11,542 | 13,630 | 11,238 | ||||||
| Total interest expense | 57,001 | 51,086 | 43,230 | 35,447 | 22,476 | ||||||
| Net interest income | 103,238 | 106,302 | 108,368 | 108,549 | 112,464 | ||||||
| Provision for credit losses - loans | 4,234 | 3,801 | 3,983 | 6,010 | 4,870 | ||||||
| Provision for credit losses - unfunded commitments | (799) | 4,145 | (2,981) | 2,920 | 126 | ||||||
| Net interest income after provision for credit losses | 99,803 | 98,356 | 107,366 | 99,619 | 107,468 | ||||||
| Noninterest income: | |||||||||||
| Loss on sale of investments | — | (1) | — | (8,306) | — | ||||||
| Gain on sale of mortgage servicing rights | — | — | — | 8,305 | — | ||||||
| Gain on sale of SBA loans | 873 | 388 | 301 | 832 | 279 | ||||||
| Gain on sale of loans | — | 726 | — | — | — | ||||||
| Service charges and fees | 15,523 | 15,922 | 15,270 | 14,833 | 13,189 | ||||||
| Trust and other financial services income | 7,127 | 6,884 | 7,085 | 6,866 | 6,449 | ||||||
| Gain on real estate owned, net | 57 | 1,084 | 29 | 785 | 108 | ||||||
| Income from bank-owned life insurance | 1,502 | 1,454 | 4,561 | 1,304 | 1,269 | ||||||
| Mortgage banking income | 452 | 247 | 632 | 1,028 | 524 | ||||||
| Other operating income | 2,429 | 2,465 | 3,010 | 4,150 | 2,151 | ||||||
| Total noninterest income | 27,963 | 29,169 | 30,888 | 29,797 | 23,969 | ||||||
| Noninterest expense: | |||||||||||
| Compensation and employee benefits | 51,540 | 50,194 | 51,243 | 47,650 | 46,604 | ||||||
| Premises and occupancy costs | 7,627 | 7,049 | 7,052 | 7,579 | 7,471 | ||||||
| Office operations | 2,767 | 3,747 | 3,398 | 2,800 | 3,010 | ||||||
| Collections expense | 336 | 328 | 551 | 429 | 387 | ||||||
| Processing expenses | 14,725 | 15,017 | 14,672 | 14,648 | 14,350 | ||||||
| Marketing expenses | 2,149 | 1,317 | 2,379 | 2,856 | 2,892 | ||||||
| Federal deposit insurance premiums | 3,023 | 2,643 | 2,341 | 2,064 | 2,223 | ||||||
| Professional services | 4,065 | 6,255 | 3,002 | 3,804 | 4,758 | ||||||
| Amortization of intangible assets | 701 | 724 | 795 | 842 | 909 | ||||||
| Real estate owned expense | 66 | 51 | 141 | 83 | 181 | ||||||
| Merger, asset disposition and restructuring expense | 955 | 2,354 | — | 1,593 | 2,802 | ||||||
| Other expenses | 2,070 | 997 | 1,996 | 1,510 | 1,863 | ||||||
| Total noninterest expense | 90,024 | 90,676 | 87,570 | 85,858 | 87,450 | ||||||
| Income before income taxes | 37,742 | 36,849 | 50,684 | 43,558 | 43,987 | ||||||
| Income tax expense | 8,579 | 7,835 | 11,464 | 10,514 | 10,308 | ||||||
| Net income | $ | 29,163 | 29,014 | 39,220 | 33,044 | 33,679 | |||||
| Basic earnings per share | $ | 0.23 | 0.23 | 0.31 | 0.26 | 0.27 | |||||
| Diluted earnings per share | $ | 0.23 | 0.23 | 0.31 | 0.26 | 0.26 | |||||
| Annualized return on average equity | 7.57 | % | 7.64 | % | 10.27 | % | 8.72 | % | 9.11 | % | |
| Annualized return on average assets | 0.81 | % | 0.80 | % | 1.08 | % | 0.93 | % | 0.97 | % | |
| Annualized return on average tangible common equity * | 10.08 | % | 10.28 | % | 13.80 | % | 11.71 | % | 12.31 | % | |
| Efficiency ratio | 68.62 | % | 66.93 | % | 62.88 | % | 62.06 | % | 64.10 | % | |
| Efficiency ratio, excluding certain items ** | 67.35 | % | 64.66 | % | 62.31 | % | 60.30 | % | 61.38 | % | |
| Annualized noninterest expense to average assets | 2.51 | % | 2.51 | % | 2.42 | % | 2.42 | % | 2.51 | % | |
| Annualized noninterest expense to average assets, excluding certain items** | 2.47 | % | 2.43 | % | 2.39 | % | 2.35 | % | 2.40 | % |
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).See reconciliation of non-GAAP financial measures for additional information relating to these items.
Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited) *
(dollars in thousands, except per share amounts)
| Quarter ended March 31, | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| Reconciliation of net income to adjusted net operating income: | |||||
| Net income (GAAP) | $ | 29,163 | 33,679 | ||
| Non-GAAP adjustments | |||||
| Add: merger, asset disposition and restructuring expense | 955 | 2,802 | |||
| Less: tax benefit of merger, asset disposition and restructuring expense | (267) | (785) | |||
| Adjusted net operating income (non-GAAP) | $ | 29,851 | 35,696 | ||
| Diluted earnings per share (GAAP) | $ | 0.23 | 0.26 | ||
| Diluted adjusted operating earnings per share (non-GAAP) | $ | 0.23 | 0.28 | ||
| Average equity | $ | 1,549,870 | 1,498,825 | ||
| Average assets | 14,408,612 | 14,121,496 | |||
| Annualized return on average equity (GAAP) | 7.57 | % | 9.11 | % | |
| Annualized return on average assets (GAAP) | 0.81 | % | 0.97 | % | |
| Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 7.75 | % | 9.66 | % | |
| Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 0.83 | % | 1.03 | % |
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s Consolidated Statements of Financial Condition.
| March 31,<br>2024 | December 31,<br>2023 | March 31,<br>2023 | |||||
|---|---|---|---|---|---|---|---|
| Tangible common equity to assets | |||||||
| Total shareholders’ equity | $ | 1,552,449 | 1,551,317 | 1,513,275 | |||
| Less: goodwill and intangible assets | (385,586) | (386,287) | (388,648) | ||||
| Tangible common equity | $ | 1,166,863 | 1,165,030 | 1,124,627 | |||
| Total assets | $ | 14,510,263 | 14,419,105 | 14,193,816 | |||
| Less: goodwill and intangible assets | (385,586) | (386,287) | (388,648) | ||||
| Tangible assets | $ | 14,124,677 | 14,032,818 | 13,805,168 | |||
| Tangible common equity to tangible assets | 8.26 | % | 8.30 | % | 8.15 | % | |
| Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | |||||||
| Tangible common equity | $ | 1,166,863 | 1,165,030 | 1,124,627 | |||
| Less: unrealized losses on held to maturity investments | (120,754) | (115,334) | (115,677) | ||||
| Add: deferred taxes on unrealized losses on held to maturity investments | 33,811 | 32,294 | 32,390 | ||||
| Tangible common equity, including unrealized losses on held-to-maturity investments | $ | 1,079,920 | 1,081,990 | 1,041,340 | |||
| Tangible assets | $ | 14,124,677 | 14,032,818 | 13,805,168 | |||
| Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | 7.65 | % | 7.71 | % | 7.54 | % | |
| Tangible book value per share | |||||||
| Tangible common equity | $ | 1,166,863 | 1,165,030 | 1,124,627 | |||
| Common shares outstanding | 127,253,189 | 127,110,453 | 127,065,400 | ||||
| Tangible book value per share | 9.17 | 9.17 | 8.85 |
Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited) *
(dollars in thousands, except per share amounts)
The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s Consolidated Statements of Income.
| Quarter ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31,<br>2024 | December 31,<br>2023 | September 30,<br>2023 | June 30,<br>2023 | March 31,<br>2023 | |||||||
| Annualized return on average tangible common equity | |||||||||||
| Net income | $ | 29,163 | 29,014 | 39,220 | 33,044 | 33,679 | |||||
| Average shareholders’ equity | 1,549,870 | 1,506,895 | 1,515,287 | 1,519,990 | 1,498,825 | ||||||
| Less: average goodwill and intangible assets | (386,038) | (386,761) | (387,523) | (388,354) | (389,236) | ||||||
| Average tangible common equity | $ | 1,163,832 | 1,120,134 | 1,127,764 | 1,131,636 | 1,109,589 | |||||
| Annualized return on average tangible common equity | 10.08 | % | 10.28 | % | 13.80 | % | 11.71 | % | 12.31 | % | |
| Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | |||||||||||
| Non-interest expense | $ | 90,024 | 90,676 | 87,570 | 85,858 | 87,450 | |||||
| Less: amortization expense | (701) | (724) | (795) | (842) | (909) | ||||||
| Less: merger, asset disposition and restructuring expenses | (955) | (2,354) | — | (1,593) | (2,802) | ||||||
| Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses | $ | 88,368 | 87,598 | 86,775 | 83,423 | 83,739 | |||||
| Net interest income | $ | 103,238 | 106,302 | 108,368 | 108,549 | 112,464 | |||||
| Non-interest income | 27,963 | 29,169 | 30,888 | 29,797 | 23,969 | ||||||
| Net interest income plus non-interest income | $ | 131,201 | 135,471 | 139,256 | 138,346 | 136,433 | |||||
| Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | 67.35 | % | 64.66 | % | 62.31 | % | 60.30 | % | 61.38 | % | |
| Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | |||||||||||
| Non-interest expense excluding amortization and merger, asset disposition and restructuring expenses | $ | 88,368 | 87,598 | 86,775 | 83,423 | 83,739 | |||||
| Average assets | 14,408,612 | 14,329,020 | 14,379,323 | 14,245,917 | 14,121,496 | ||||||
| Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | 2.47 | % | 2.43 | % | 2.39 | % | 2.35 | % | 2.40 | % |
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude merger, asset disposition and restructuring expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
Northwest Bancshares, Inc. and Subsidiaries
Deposits (Unaudited)
(dollars in thousands)
Generally, deposits in excess of $250,000 are not federally insured. The following table provides details regarding the Company’s uninsured deposits portfolio:
| As of March 31, 2024 | |||||
|---|---|---|---|---|---|
| Balance | Percent of <br>total deposits | Number of relationships | |||
| Uninsured deposits per the Call Report (1) | $ | 2,806,650 | 23.25 | % | 4,965 |
| Less intercompany deposit accounts | 1,019,792 | 8.45 | % | 12 | |
| Less collateralized deposit accounts | 408,083 | 3.38 | % | 255 | |
| Uninsured deposits excluding intercompany and collateralized accounts | $ | 1,378,775 | 11.42 | % | 4,698 |
(1) Uninsured deposits presented may be different from actual amounts due to titling of accounts.
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19.2 million, or 0.16% of total deposits, as of March 31, 2024. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $103.0 million, or 0.85% of total deposits, as of March 31, 2024. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $293,000 as of March 31, 2024.
The following table provides additional details for the Company’s deposit portfolio:
| As of March 31, 2024 | |||||
|---|---|---|---|---|---|
| Balance | Percent of <br>total deposits | Number of <br>accounts | |||
| Personal noninterest bearing demand deposits | $ | 1,369,294 | 11.34 | % | 287,824 |
| Business noninterest bearing demand deposits | 1,249,085 | 10.35 | 43,868 | ||
| Personal interest-bearing demand deposits | 1,427,140 | 11.82 | 57,909 | ||
| Business interest-bearing demand deposits | 1,130,726 | 9.37 | 7,921 | ||
| Personal money market deposits | 1,393,532 | 11.54 | 25,156 | ||
| Business money market deposits | 559,005 | 4.63 | 2,805 | ||
| Savings deposits | 2,156,048 | 17.86 | 194,542 | ||
| Time deposits | 2,786,814 | 23.09 | 79,611 | ||
| Total deposits | $ | 12,071,644 | 100.00 | % | 699,636 |
Our average deposit account balance as of March 31, 2024 was $17,000. The Company’s insured cash sweep deposit balance was $393.2 million as of March 31, 2024.
The following table provides additional details regarding the Company’s deposit portfolio over time:
| 9/30/2022 | 12/31/2022 | 3/31/2023 | 6/30/2023 | 9/30/2023 | 12/31/2023 | 3/31/2024 | ||
|---|---|---|---|---|---|---|---|---|
| Personal noninterest bearing demand deposits | $ | 1,413,781 | 1,412,227 | 1,428,232 | 1,397,167 | 1,375,144 | 1,357,875 | 1,369,294 |
| Business noninterest bearing demand deposits | 1,680,339 | 1,581,016 | 1,467,860 | 1,423,396 | 1,399,147 | 1,311,148 | 1,249,085 | |
| Personal interest-bearing demand deposits | 1,742,173 | 1,718,806 | 1,627,546 | 1,535,254 | 1,477,617 | 1,464,058 | 1,427,140 | |
| Business interest-bearing demand deposits | 498,937 | 499,059 | 466,105 | 624,252 | 689,914 | 812,433 | 805,069 | |
| Municipal demand deposits | 571,620 | 468,566 | 447,852 | 418,147 | 430,549 | 358,055 | 325,657 | |
| Personal money market deposits | 1,949,379 | 1,832,583 | 1,626,614 | 1,511,652 | 1,463,689 | 1,435,939 | 1,393,532 | |
| Business money market deposits | 627,634 | 624,986 | 701,436 | 642,601 | 579,124 | 532,279 | 559,005 | |
| Savings deposits | 2,327,419 | 2,275,020 | 2,194,743 | 2,120,215 | 2,116,360 | 2,105,234 | 2,156,048 | |
| Time deposits | 1,067,110 | 1,052,285 | 1,576,791 | 1,989,711 | 2,258,338 | 2,602,881 | 2,786,814 | |
| Total deposits | $ | 11,878,392 | 11,464,548 | 11,537,179 | 11,662,395 | 11,789,882 | 11,979,902 | 12,071,644 |
Northwest Bancshares, Inc. and Subsidiaries
Regulatory Capital Requirements (Unaudited)
(dollars in thousands)
| At March 31, 2024 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Actual | Minimum capital<br>requirements (1) | Well capitalized<br>requirements | ||||||||||
| Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||
| Total capital (to risk weighted assets) | ||||||||||||
| Northwest Bancshares, Inc. | $ | 1,805,374 | 15.951 | % | $ | 1,188,406 | 10.500 | % | $ | 1,131,815 | 10.000 | % |
| Northwest Bank | 1,529,840 | 13.529 | % | 1,187,335 | 10.500 | % | 1,130,795 | 10.000 | % | |||
| Tier 1 capital (to risk weighted assets) | ||||||||||||
| Northwest Bancshares, Inc. | 1,555,043 | 13.739 | % | 962,043 | 8.500 | % | 905,452 | 8.000 | % | |||
| Northwest Bank | 1,393,786 | 12.326 | % | 961,176 | 8.500 | % | 904,636 | 8.000 | % | |||
| Common equity tier 1 capital (to risk weighted assets) | ||||||||||||
| Northwest Bancshares, Inc. | 1,429,393 | 12.629 | % | 792,270 | 7.000 | % | 735,680 | 6.500 | % | |||
| Northwest Bank | 1,393,786 | 12.326 | % | 791,557 | 7.000 | % | 735,017 | 6.500 | % | |||
| Tier 1 capital (leverage) (to average assets) | ||||||||||||
| Northwest Bancshares, Inc. | 1,555,043 | 10.828 | % | 574,453 | 4.000 | % | 718,066 | 5.000 | % | |||
| Northwest Bank | 1,393,786 | 9.712 | % | 574,060 | 4.000 | % | 717,575 | 5.000 | % |
(1) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2023 Annual Report on Form 10-K.
Northwest Bancshares, Inc. and Subsidiaries
Marketable Securities (Unaudited)
(dollars in thousands)
| March 31, 2024 | ||||||
|---|---|---|---|---|---|---|
| Marketable securities available-for-sale | Amortized cost | Gross unrealized<br>holding gains | Gross unrealized<br>holding losses | Fair value | Weighted average duration | |
| Debt issued by the U.S. government and agencies: | ||||||
| Due after one year through five years | $ | 20,000 | — | (1,204) | 18,796 | 2.65 |
| Due after ten years | 48,182 | — | (10,260) | 37,922 | 6.13 | |
| Debt issued by government sponsored enterprises: | ||||||
| Due after one year through five years | 45,987 | — | (5,819) | 40,168 | 4.11 | |
| Due after five years through ten years | 360 | — | (9) | 351 | 1.73 | |
| Municipal securities: | ||||||
| Due after one year through five years | 4,279 | 14 | (426) | 3,867 | 3.79 | |
| Due after five years through ten years | 27,921 | 47 | (1,886) | 26,082 | 6.68 | |
| Due after ten years | 53,464 | — | (9,142) | 44,322 | 10.81 | |
| Corporate debt issues: | ||||||
| Due after five years through ten years | 8,467 | — | (833) | 7,634 | 5.14 | |
| Residential mortgage-backed agency securities: | ||||||
| Fixed rate pass-through | 232,854 | 93 | (26,711) | 206,236 | 6.55 | |
| Variable rate pass-through | 6,738 | 12 | (69) | 6,681 | 3.82 | |
| Fixed rate agency CMOs | 776,087 | — | (147,127) | 628,960 | 5.30 | |
| Variable rate agency CMOs | 73,769 | 35 | (814) | 72,990 | 5.01 | |
| Total residential mortgage-backed agency securities | 1,089,448 | 140 | (174,721) | 914,867 | 5.55 | |
| Total marketable securities available-for-sale | $ | 1,298,108 | 201 | (204,300) | 1,094,009 | 5.69 |
| Marketable securities held-to-maturity | ||||||
| Government sponsored | ||||||
| Due after one year through five years | $ | 89,472 | — | (11,232) | 78,240 | 3.89 |
| Due after five years through ten years | 34,987 | — | (5,877) | 29,110 | 5.31 | |
| Residential mortgage-backed agency securities: | ||||||
| Fixed rate pass-through | 144,158 | — | (21,062) | 123,096 | 5.06 | |
| Variable rate pass-through | 432 | 1 | — | 433 | 4.39 | |
| Fixed rate agency CMOs | 531,529 | — | (82,578) | 448,951 | 6.81 | |
| Variable rate agency CMOs | 529 | — | (6) | 523 | 4.96 | |
| Total residential mortgage-backed agency securities | 676,648 | 1 | (103,646) | 573,003 | 6.44 | |
| Total marketable securities held-to-maturity | $ | 801,107 | 1 | (120,755) | 680,353 | 6.10 |
Northwest Bancshares, Inc. and Subsidiaries
Borrowed Funds (Unaudited)
(dollars in thousands)
| March 31, 2024 | ||||
|---|---|---|---|---|
| Amount | Average rate | |||
| Term notes payable to the FHLB of Pittsburgh, due within one year | $ | 275,000 | 5.65 | % |
| Notes payable to the FHLB of Pittsburgh, due within one year | 55,600 | 5.67 | % | |
| Total term notes payable to the FHLB | 330,600 | 5.66 | % | |
| Collateralized borrowings, due within one year | 29,882 | 1.62 | % | |
| Collateral received, due within one year | 40,301 | 5.08 | % | |
| Subordinated debentures, net of issuance costs | 114,276 | 4.28 | % | |
| Junior subordinated debentures | 129,639 | 7.61 | % | |
| Total borrowed funds * | $ | 644,698 | 5.58 | % |
* As of March 31, 2024, the Company had $3.3 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $55.6 million drawn balance, as well as $264.1 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks.
Northwest Bancshares, Inc. and Subsidiaries
Analysis of Loan Portfolio by Loan Sector (Unaudited)
Commercial real estate loans outstanding
The following table provides the various loan sectors in our commercial real estate portfolio at March 31, 2024:
| March 31, 2024 | ||
|---|---|---|
| Property type | Percent of portfolio | |
| 5 or more unit dwelling | 15.2 | % |
| Nursing home | 12.8 | |
| Retail building | 11.8 | |
| Commercial office building - non-owner occupied | 9.1 | |
| Manufacturing & industrial building | 5.0 | |
| Residential acquisition & development - 1-4 family, townhouses and apartments | 4.3 | |
| Multi-use building - commercial, retail and residential | 4.1 | |
| Warehouse/storage building | 3.9 | |
| Multi-use building - office and warehouse | 3.3 | |
| Commercial office building - owner occupied | 3.3 | |
| Other medical facility | 3.1 | |
| Single family dwelling | 2.7 | |
| Student housing | 2.2 | |
| Hotel/motel | 2.1 | |
| Agricultural real estate | 2.0 | |
| 2-4 family | 2.0 | |
| All other | 13.1 | |
| Total | 100.0 | % |
The following table describes the collateral of our commercial real estate portfolio by state at March 31, 2024:
| March 31, 2024 | ||
|---|---|---|
| State | Percent of portfolio | |
| New York | 33.0 | % |
| Pennsylvania | 30.2 | |
| Ohio | 20.3 | |
| Indiana | 8.1 | |
| All other | 8.4 | |
| Total | 100.0 | % |
Northwest Bancshares, Inc. and Subsidiaries
Asset Quality (Unaudited)
(dollars in thousands)
| March 31,<br>2024 | December 31,<br>2023 | September 30,<br>2023 | June 30,<br>2023 | March 31,<br>2023 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nonaccrual loans current: | |||||||||||
| Residential mortgage loans | $ | 1,351 | 959 | 1,951 | 1,559 | 1,423 | |||||
| Home equity loans | 974 | 871 | 947 | 1,089 | 1,084 | ||||||
| Consumer loans | 1,295 | 1,051 | 1,049 | 1,009 | 911 | ||||||
| Commercial real estate loans | 66,895 | 64,603 | 44,639 | 48,468 | 50,045 | ||||||
| Commercial loans | 934 | 1,182 | 1,369 | 995 | 1,468 | ||||||
| Total nonaccrual loans current | $ | 71,449 | 68,666 | 49,955 | 53,120 | 54,931 | |||||
| Nonaccrual loans delinquent 30 days to 59 days: | |||||||||||
| Residential mortgage loans | $ | 1,454 | 933 | 48 | 49 | 688 | |||||
| Home equity loans | 125 | 174 | 92 | 37 | 18 | ||||||
| Consumer loans | 294 | 225 | 274 | 309 | 223 | ||||||
| Commercial real estate loans | 574 | 51 | 1,913 | 1,697 | 1,900 | ||||||
| Commercial loans | 161 | 139 | 90 | 855 | 341 | ||||||
| Total nonaccrual loans delinquent 30 days to 59 days | $ | 2,608 | 1,522 | 2,417 | 2,947 | 3,170 | |||||
| Nonaccrual loans delinquent 60 days to 89 days: | |||||||||||
| Residential mortgage loans | $ | — | 511 | 66 | 185 | 919 | |||||
| Home equity loans | 488 | 347 | 319 | 363 | 338 | ||||||
| Consumer loans | 381 | 557 | 312 | 360 | 340 | ||||||
| Commercial real estate loans | 52 | 831 | 212 | 210 | 1,355 | ||||||
| Commercial loans | 201 | 56 | 291 | 245 | 126 | ||||||
| Total nonaccrual loans delinquent 60 days to 89 days | $ | 1,122 | 2,302 | 1,200 | 1,363 | 3,078 | |||||
| Nonaccrual loans delinquent 90 days or more: | |||||||||||
| Residential mortgage loans | $ | 4,304 | 6,324 | 7,695 | 6,290 | 3,300 | |||||
| Home equity loans | 2,822 | 3,100 | 2,073 | 1,965 | 2,190 | ||||||
| Consumer loans | 2,659 | 3,212 | 2,463 | 2,033 | 2,791 | ||||||
| Commercial real estate loans | 6,931 | 6,488 | 8,416 | 8,575 | 8,010 | ||||||
| Commercial loans | 3,165 | 2,770 | 2,435 | 2,296 | 1,139 | ||||||
| Total nonaccrual loans delinquent 90 days or more | $ | 19,881 | 21,894 | 23,082 | 21,159 | 17,430 | |||||
| Total nonaccrual loans | $ | 95,060 | 94,384 | 76,654 | 78,589 | 78,609 | |||||
| Total nonaccrual loans | $ | 95,060 | 94,384 | 76,654 | 78,589 | 78,609 | |||||
| Loans 90 days past due and still accruing | 2,452 | 2,698 | 728 | 532 | 652 | ||||||
| Nonperforming loans | 97,512 | 97,082 | 77,382 | 79,121 | 79,261 | ||||||
| Real estate owned, net | 50 | 104 | 363 | 371 | 524 | ||||||
| Nonperforming assets | $ | 97,562 | 97,186 | 77,745 | 79,492 | 79,785 | |||||
| Nonperforming loans to total loans | 0.85 | % | 0.85 | % | 0.68 | % | 0.70 | % | 0.71 | % | |
| Nonperforming assets to total assets | 0.67 | % | 0.67 | % | 0.54 | % | 0.56 | % | 0.56 | % | |
| Allowance for credit losses to total loans | 1.09 | % | 1.10 | % | 1.10 | % | 1.10 | % | 1.09 | % | |
| Allowance for credit losses to nonperforming loans | 128.08 | % | 129.01 | % | 161.33 | % | 157.26 | % | 152.98 | % |
Northwest Bancshares, Inc. and Subsidiaries
Loans by Credit Quality Indicators (Unaudited)
(dollars in thousands)
| At March 31, 2024 | Pass | Special<br> mention * | Substandard ** | Doubtful | Loss | Loans<br>receivable | |
|---|---|---|---|---|---|---|---|
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,370,307 | — | 12,541 | — | — | 3,382,848 |
| Home equity loans | 1,191,957 | — | 4,650 | — | — | 1,196,607 | |
| Consumer loans | 2,113,050 | — | 5,317 | — | — | 2,118,367 | |
| Total Personal Banking | 6,675,314 | — | 22,508 | — | — | 6,697,822 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,714,857 | 131,247 | 182,424 | — | — | 3,028,528 | |
| Commercial loans | 1,698,519 | 52,461 | 23,916 | — | — | 1,774,896 | |
| Total Commercial Banking | 4,413,376 | 183,708 | 206,340 | — | — | 4,803,424 | |
| Total loans | $ | 11,088,690 | 183,708 | 228,848 | — | — | 11,501,246 |
| At December 31, 2023 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,413,846 | — | 14,339 | — | — | 3,428,185 |
| Home equity loans | 1,223,097 | — | 4,761 | — | — | 1,227,858 | |
| Consumer loans | 2,120,216 | — | 5,811 | — | — | 2,126,027 | |
| Total Personal Banking | 6,757,159 | — | 24,911 | — | — | 6,782,070 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,670,510 | 124,116 | 179,384 | — | — | 2,974,010 | |
| Commercial loans | 1,637,879 | 6,678 | 14,172 | — | — | 1,658,729 | |
| Total Commercial Banking | 4,308,389 | 130,794 | 193,556 | — | — | 4,632,739 | |
| Total loans | $ | 11,065,548 | 130,794 | 218,467 | — | — | 11,414,809 |
| At September 30, 2023 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,459,251 | — | 13,512 | — | — | 3,472,763 |
| Home equity loans | 1,254,985 | — | 3,780 | — | — | 1,258,765 | |
| Consumer loans | 2,150,464 | — | 4,655 | — | — | 2,155,119 | |
| Total Personal Banking | 6,864,700 | — | 21,947 | — | — | 6,886,647 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,632,472 | 123,935 | 166,610 | — | — | 2,923,017 | |
| Commercial loans | 1,476,833 | 3,690 | 20,086 | — | — | 1,500,609 | |
| Total Commercial Banking | 4,109,305 | 127,625 | 186,696 | — | — | 4,423,626 | |
| Total loans | $ | 10,974,005 | 127,625 | 208,643 | — | — | 11,310,273 |
| At June 30, 2023 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,483,098 | — | 12,059 | — | — | 3,495,157 |
| Home equity loans | 1,272,363 | — | 3,699 | — | — | 1,276,062 | |
| Consumer loans | 2,196,938 | — | 4,124 | — | — | 2,201,062 | |
| Total Personal Banking | 6,952,399 | — | 19,882 | — | — | 6,972,281 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,649,535 | 74,170 | 171,519 | — | — | 2,895,224 | |
| Commercial loans | 1,377,981 | 3,040 | 22,705 | — | — | 1,403,726 | |
| Total Commercial Banking | 4,027,516 | 77,210 | 194,224 | — | — | 4,298,950 | |
| Total loans | $ | 10,979,915 | 77,210 | 214,106 | — | — | 11,271,231 |
| At March 31, 2023 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,499,135 | — | 6,330 | — | — | 3,505,465 |
| Home equity loans | 1,277,915 | — | 3,631 | — | — | 1,281,546 | |
| Consumer loans | 2,227,379 | — | 4,754 | — | — | 2,232,133 | |
| Total Personal Banking | 7,004,429 | — | 14,715 | — | — | 7,019,144 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,585,676 | 69,837 | 171,591 | — | — | 2,827,104 | |
| Commercial loans | 1,217,344 | 6,381 | 22,298 | — | — | 1,246,023 | |
| Total Commercial Banking | 3,803,020 | 76,218 | 193,889 | — | — | 4,073,127 | |
| Total loans | $ | 10,807,449 | 76,218 | 208,604 | — | — | 11,092,271 |
* Includes $2.4 million, $7.8 million, $6.9 million, $4.9 million, and $7.4 million of acquired loans at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
** Includes $27.2 million, $20.3 million, $28.9 million, $31.2 million, and $31.9 million of acquired loans at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Loan Delinquency (Unaudited)
(dollars in thousands)
| March 31,<br>2024 | * | December 31,<br>2023 | * | September 30,<br>2023 | * | June 30,<br>2023 | * | March 31,<br>2023 | * | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Number of loans and dollar amount of loans) | |||||||||||||||||||||||||
| Loans delinquent 30 days to 59 days: | |||||||||||||||||||||||||
| Residential mortgage loans | 351 | $ | 38,502 | 1.1 | % | 307 | $ | 30,041 | 0.9 | % | 6 | $ | 573 | — | % | 14 | $ | 627 | — | % | 259 | $ | 26,992 | 0.8 | % |
| Home equity loans | 113 | 4,608 | 0.4 | % | 121 | 5,761 | 0.5 | % | 112 | 4,707 | 0.4 | % | 92 | 3,395 | 0.3 | % | 111 | 4,235 | 0.3 | % | |||||
| Consumer loans | 737 | 9,911 | 0.5 | % | 896 | 11,211 | 0.5 | % | 733 | 9,874 | 0.5 | % | 602 | 7,955 | 0.4 | % | 587 | 6,930 | 0.3 | % | |||||
| Commercial real estate loans | 25 | 6,396 | 0.2 | % | 23 | 3,204 | 0.1 | % | 22 | 3,411 | 0.1 | % | 13 | 2,710 | 0.1 | % | 23 | 4,834 | 0.2 | % | |||||
| Commercial loans | 62 | 3,091 | 0.2 | % | 59 | 4,196 | 0.3 | % | 52 | 2,847 | 0.2 | % | 38 | 15,658 | 1.1 | % | 46 | 4,253 | 0.3 | % | |||||
| Total loans delinquent 30 days to 59 days | 1,288 | $ | 62,508 | 0.5 | % | 1,406 | $ | 54,413 | 0.5 | % | 925 | $ | 21,412 | 0.2 | % | 759 | $ | 30,345 | 0.3 | % | 1,026 | $ | 47,244 | 0.4 | % |
| Loans delinquent 60 days to 89 days: | |||||||||||||||||||||||||
| Residential mortgage loans | 3 | $ | 70 | — | % | 69 | $ | 7,796 | 0.2 | % | 56 | $ | 5,395 | 0.2 | % | 52 | $ | 3,521 | 0.1 | % | 23 | $ | 1,922 | 0.1 | % |
| Home equity loans | 26 | 761 | 0.1 | % | 37 | 982 | 0.1 | % | 40 | 1,341 | 0.1 | % | 31 | 1,614 | 0.1 | % | 31 | 1,061 | 0.1 | % | |||||
| Consumer loans | 231 | 2,545 | 0.1 | % | 322 | 3,754 | 0.2 | % | 236 | 2,707 | 0.1 | % | 250 | 2,584 | 0.1 | % | 185 | 2,083 | 0.1 | % | |||||
| Commercial real estate loans | 5 | 807 | — | % | 9 | 1,031 | — | % | 13 | 1,588 | 0.1 | % | 12 | 1,288 | — | % | 17 | 1,949 | 0.1 | % | |||||
| Commercial loans | 27 | 1,284 | 0.1 | % | 16 | 703 | — | % | 15 | 981 | 0.1 | % | 23 | 11,092 | 0.8 | % | 19 | 1,088 | 0.1 | % | |||||
| Total loans delinquent 60 days to 89 days | 292 | $ | 5,467 | — | % | 453 | $ | 14,266 | 0.1 | % | 360 | $ | 12,012 | 0.1 | % | 368 | $ | 20,099 | 0.2 | % | 275 | $ | 8,103 | 0.1 | % |
| Loans delinquent 90 days or more: ** | |||||||||||||||||||||||||
| Residential mortgage loans | 50 | $ | 5,813 | 0.2 | % | 70 | $ | 7,995 | 0.2 | % | 79 | $ | 7,695 | 0.2 | % | 63 | $ | 6,290 | 0.2 | % | 39 | $ | 3,300 | 0.1 | % |
| Home equity loans | 71 | 2,823 | 0.2 | % | 81 | 3,126 | 0.3 | % | 73 | 2,206 | 0.2 | % | 68 | 1,965 | 0.2 | % | 65 | 2,190 | 0.2 | % | |||||
| Consumer loans | 398 | 3,345 | 0.2 | % | 440 | 3,978 | 0.2 | % | 357 | 3,020 | 0.1 | % | 314 | 2,447 | 0.1 | % | 313 | 3,279 | 0.1 | % | |||||
| Commercial real estate loans | 22 | 6,931 | 0.2 | % | 27 | 6,712 | 0.2 | % | 27 | 8,416 | 0.3 | % | 20 | 8,575 | 0.3 | % | 18 | 8,010 | 0.3 | % | |||||
| Commercial loans | 62 | 3,421 | 0.2 | % | 53 | 2,780 | 0.2 | % | 39 | 2,472 | 0.2 | % | 38 | 2,414 | 0.2 | % | 24 | 1,302 | 0.1 | % | |||||
| Total loans delinquent 90 days or more | 603 | $ | 22,333 | 0.2 | % | 671 | $ | 24,591 | 0.2 | % | 575 | $ | 23,809 | 0.2 | % | 503 | $ | 21,691 | 0.2 | % | 459 | $ | 18,081 | 0.2 | % |
| Total loans delinquent | 2,183 | $ | 90,308 | 0.8 | % | 2,530 | $ | 93,270 | 0.8 | % | 1,860 | $ | 57,233 | 0.5 | % | 1,630 | $ | 72,135 | 0.6 | % | 1,760 | $ | 73,428 | 0.7 | % |
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit deteriorated loans of $446,000, $646,000, $1.4 million, $605,000, and $331,000 at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Allowance for Credit Losses (Unaudited)
(dollars in thousands)
| Quarter ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31,<br>2024 | December 31,<br>2023 | September 30,<br>2023 | June 30,<br>2023 | March 31,<br>2023 | |||||||
| Beginning balance | $ | 125,243 | 124,841 | 124,423 | 121,257 | 118,036 | |||||
| ASU 2022-02 Adoption | — | — | — | — | 426 | ||||||
| Provision | 4,234 | 3,801 | 3,983 | 6,010 | 4,870 | ||||||
| Charge-offs residential mortgage | (162) | (266) | (171) | (545) | (207) | ||||||
| Charge-offs home equity | (412) | (133) | (320) | (235) | (164) | ||||||
| Charge-offs consumer | (4,573) | (3,860) | (3,085) | (2,772) | (2,734) | ||||||
| Charge-offs commercial real estate | (349) | (742) | (484) | (483) | (657) | ||||||
| Charge-offs commercial | (1,163) | (806) | (1,286) | (1,209) | (865) | ||||||
| Recoveries | 2,079 | 2,408 | 1,781 | 2,400 | 2,552 | ||||||
| Ending balance | $ | 124,897 | 125,243 | 124,841 | 124,423 | 121,257 | |||||
| Net charge-offs to average loans, annualized | 0.16 | % | 0.12 | % | 0.13 | % | 0.10 | % | 0.08 | % |
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 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||
| Average<br>balance | Interest | Avg. yield/ cost (h) | Average<br>balance | Interest | Avg.<br>yield/<br>cost (h) | Average<br>balance | Interest | Avg.<br>yield/<br>cost (h) | Average<br>balance | Interest | Avg.<br>yield/<br>cost (h) | Average<br>balance | Interest | Avg.<br>yield/<br>cost (h) | |||||||||||
| Assets: | |||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||
| Residential mortgage loans | $ | 3,392,524 | 32,674 | 3.85 | % | $ | 3,442,308 | 32,739 | 3.80 | % | $ | 3,476,446 | 32,596 | 3.75 | % | $ | 3,485,517 | 32,485 | 3.73 | % | $ | 3,493,617 | 32,009 | 3.66 | % |
| Home equity loans | 1,205,273 | 17,294 | 5.77 | % | 1,238,420 | 17,590 | 5.64 | % | 1,264,134 | 17,435 | 5.47 | % | 1,273,298 | 16,898 | 5.32 | % | 1,284,425 | 16,134 | 5.09 | % | |||||
| Consumer loans | 2,033,620 | 25,033 | 4.95 | % | 2,055,783 | 24,667 | 4.76 | % | 2,092,023 | 23,521 | 4.46 | % | 2,143,804 | 22,662 | 4.24 | % | 2,123,672 | 20,794 | 3.97 | % | |||||
| Commercial real estate loans | 2,999,224 | 43,425 | 5.73 | % | 2,950,589 | 43,337 | 5.75 | % | 2,911,145 | 41,611 | 5.59 | % | 2,836,443 | 38,426 | 5.36 | % | 2,824,120 | 37,031 | 5.24 | % | |||||
| Commercial loans | 1,714,667 | 31,857 | 7.35 | % | 1,564,617 | 28,801 | 7.20 | % | 1,447,211 | 26,239 | 7.09 | % | 1,326,598 | 22,872 | 6.82 | % | 1,161,298 | 18,353 | 6.32 | % | |||||
| Total loans receivable (a) (b) (d) | 11,345,308 | 150,283 | 5.33 | % | 11,251,717 | 147,134 | 5.19 | % | 11,190,959 | 141,402 | 5.01 | % | 11,065,660 | 133,343 | 4.83 | % | 10,887,132 | 124,321 | 4.63 | % | |||||
| Mortgage-backed securities (c) | 1,717,306 | 7,944 | 1.85 | % | 1,741,687 | 7,951 | 1.83 | % | 1,781,010 | 8,072 | 1.81 | % | 1,859,427 | 8,326 | 1.79 | % | 1,909,676 | 8,537 | 1.79 | % | |||||
| Investment securities (c) (d) | 333,752 | 1,430 | 1.71 | % | 335,121 | 1,425 | 1.70 | % | 336,125 | 1,431 | 1.70 | % | 374,560 | 1,715 | 1.83 | % | 384,717 | 1,761 | 1.83 | % | |||||
| FHLB stock, at cost | 32,249 | 607 | 7.57 | % | 35,082 | 665 | 7.52 | % | 37,722 | 668 | 7.03 | % | 45,505 | 844 | 7.44 | % | 39,631 | 690 | 7.06 | % | |||||
| Other interest-earning deposits | 61,666 | 832 | 5.34 | % | 71,987 | 970 | 5.27 | % | 67,143 | 915 | 5.33 | % | 46,536 | 594 | 5.05 | % | 38,324 | 423 | 4.41 | % | |||||
| Total interest-earning assets | 13,490,281 | 161,096 | 4.80 | % | 13,435,594 | 158,145 | 4.67 | % | 13,412,959 | 152,488 | 4.51 | % | 13,391,688 | 144,822 | 4.34 | % | 13,259,480 | 135,732 | 4.15 | % | |||||
| Noninterest-earning assets (e) | 918,331 | 893,426 | 966,364 | 854,229 | 862,016 | ||||||||||||||||||||
| Total assets | $ | 14,408,612 | $ | 14,329,020 | $ | 14,379,323 | $ | 14,245,917 | $ | 14,121,496 | |||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||
| Savings deposits (g) | $ | 2,122,035 | 5,036 | 0.95 | % | $ | 2,102,320 | 4,045 | 0.76 | % | $ | 2,116,759 | 2,695 | 0.51 | % | $ | 2,142,941 | 1,393 | 0.26 | % | $ | 2,198,988 | 690 | 0.13 | % |
| Interest-bearing demand deposits (g) | 2,538,823 | 5,402 | 0.86 | % | 2,573,634 | 4,921 | 0.76 | % | 2,569,229 | 4,086 | 0.63 | % | 2,469,666 | 1,648 | 0.27 | % | 2,612,883 | 951 | 0.15 | % | |||||
| Money market deposit accounts (g) | 1,961,332 | 7,913 | 1.62 | % | 1,997,116 | 7,446 | 1.48 | % | 2,112,228 | 6,772 | 1.27 | % | 2,221,713 | 6,113 | 1.10 | % | 2,408,582 | 4,403 | 0.74 | % | |||||
| Time deposits (g) | 2,697,983 | 29,335 | 4.37 | % | 2,447,335 | 24,187 | 3.92 | % | 2,164,559 | 18,136 | 3.32 | % | 1,765,454 | 12,663 | 2.88 | % | 1,293,609 | 5,194 | 1.63 | % | |||||
| Borrowed funds (f) | 469,697 | 5,708 | 4.89 | % | 548,089 | 6,826 | 4.94 | % | 643,518 | 7,937 | 4.89 | % | 837,358 | 10,202 | 4.89 | % | 740,218 | 7,938 | 4.35 | % | |||||
| Subordinated debt | 114,225 | 1,148 | 4.02 | % | 114,134 | 1,148 | 4.02 | % | 114,045 | 1,148 | 4.03 | % | 113,958 | 1,148 | 4.03 | % | 113,870 | 1,148 | 4.03 | % | |||||
| Junior subordinated debentures | 129,597 | 2,459 | 7.51 | % | 129,532 | 2,512 | 7.59 | % | 129,466 | 2,456 | 7.42 | % | 129,401 | 2,280 | 6.97 | % | 129,335 | 2,152 | 6.66 | % | |||||
| Total interest-bearing liabilities | 10,033,692 | 57,001 | 2.28 | % | 9,912,160 | 51,085 | 2.04 | % | 9,849,804 | 43,230 | 1.74 | % | 9,680,491 | 35,447 | 1.47 | % | 9,497,485 | 22,476 | 0.96 | % | |||||
| Noninterest-bearing demand deposits (g) | 2,567,781 | 2,675,788 | 2,757,091 | 2,820,928 | 2,889,973 | ||||||||||||||||||||
| Noninterest-bearing liabilities | 257,269 | 234,177 | 257,141 | 224,508 | 235,213 | ||||||||||||||||||||
| Total liabilities | 12,858,742 | 12,822,125 | 12,864,036 | 12,725,927 | 12,622,671 | ||||||||||||||||||||
| Shareholders’ equity | 1,549,870 | 1,506,895 | 1,515,287 | 1,519,990 | 1,498,825 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 14,408,612 | $ | 14,329,020 | $ | 14,379,323 | $ | 14,245,917 | $ | 14,121,496 | |||||||||||||||
| Net interest income/Interest rate spread | 104,095 | 2.52 | % | 107,060 | 2.63 | % | 109,258 | 2.77 | % | 109,375 | 2.87 | % | 113,256 | 3.19 | % | ||||||||||
| Net interest-earning assets/Net interest margin | $ | 3,456,589 | 3.10 | % | $ | 3,523,434 | 3.16 | % | $ | 3,563,155 | 3.23 | % | $ | 3,711,197 | 3.28 | % | $ | 3,761,995 | 3.46 | % | |||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.34X | 1.36X | 1.36X | 1.38X | 1.40X |
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings and collateralized borrowings.
(g) Average cost of deposits were 1.61%, 1.37%, 1.07%, 0.77%, and 0.40%, respectively, and average cost of Interest-bearing deposits were 2.06%, 1.77%, 1.40%, 1.02%, and 0.54%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 5.30%, 5.17%, 4.99%, 4.81%, and 4.61%, respectively, Investment securities — 1.54%, 1.52%, 1.52%, 1.61%, and 1.61%, respectively, Interest-earning assets — 4.78%, 4.65%, 4.48%, 4.31%, and 4.13%, respectively. GAAP basis net interest rate spreads were 2.49%, 2.60%, 2.74%, 2.84%, and 3.17%, respectively, and GAAP basis net interest margins were 3.08%, 3.14%, 3.21%, 3.25%, and 3.44%, respectively.
17