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): July 24, 2023
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 July 24, 2023, Northwest Bancshares, Inc. issued an earnings release for the quarter ended June 30, 2023. 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 July 24, 2023 |
| 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: | July 24, 2023 | By: | /s/ William W. Harvey, Jr. |
| William W. Harvey, Jr. | |||
| Chief Operating Officer and 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 |
|---|---|
| William W. Harvey, Jr., Senior Executive Vice President, Chief Operating Officer and Chief Financial Officer (814) 726-2140 |
Northwest Bancshares, Inc. Announces Second Quarter 2023 Earnings and Quarterly Dividend
Columbus, Ohio — July 24, 2023
Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2023 of $33.0 million, or $0.26 per diluted share. This represents a decrease of $382,000, or 1.1%, compared to the same quarter last year, when net income was $33.4 million, or $0.26 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended June 30, 2023 were 8.72% and 0.93% compared to 8.90% and 0.94% 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 August 14, 2023 to shareholders of record as of August 3, 2023. This is the 115th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of June 30, 2023, this represents an annualized dividend yield of approximately 7.5%.
Louis J. Torchio, President and CEO, added, “We are very pleased with the positioning and strength of our balance sheet during the past twelve months as we have been able to grow loans by almost $840.0 million, or approximately 8.0%, over that time period by reallocating cash and investments to higher yielding earning assets. Specifically, as a result of the new commercial lending verticals we have recently implemented, commercial loans have grown $416.9 million, or 42.2%, over the past year. As part of this balance sheet shift towards commercial banking, we sold the mortgage servicing rights on approximately $1.3 billion of one- to four family mortgage loans for an $8.3 million gain, which enabled us to sell approximately $110.0 million of investment securities for an equivalent loss, resulting in no impact to tangible capital. We were then able to reallocate these funds from investments yielding approximately 2.0% into commercial loan originations yielding over 7.0%. In addition, our overall deposit balances remained stable during the most recent quarter, although we continue to see customers shift into higher yielding deposit products. Tangible common equity remains strong at over 8.0% and asset quality continues to perform well.”
Mr. Torchio continued, “with the continued inversion in the yield curve and the change in our customer deposit mix, as well as higher borrowing costs and balances, the increase in our overall cost of funds continued to outpace our yield improvement, which resulted in net interest margin compression on a linked quarter basis to 3.28% from 3.47%. We expect some additional net interest margin compression could continue for the remainder of the year.”
Net interest income increased by $8.3 million, or 8.3%, to $108.5 million for the quarter ended June 30, 2023, from $100.3 million for the quarter ended June 30, 2022. This increase in net interest income is a result of both the increase in market interest rates and the change in our interest-earning asset mix throughout the past year. Cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest-earning assets to increase to 4.34% for the quarter ended June 30, 2023 from 3.20% for the quarter ended June 30, 2022. Interest income on loans receivable increased $37.2 million, or 38.9%, due to an increase of $907.8 million, or 8.9%, in the average balance of loans in addition to an increase in the yield on loans to 4.83% for the quarter ended June 30, 2023 from 3.79% for the quarter ended June 30, 2022. Partially offsetting this increase in interest income was an increase in the cost of interest-bearing liabilities to 1.47% for the quarter ended June 30, 2023 from 0.24% for the quarter ended June 30, 2022. This increase was largely due to higher market interest rates causing an increase in both deposit and borrowing costs. The net effect of these changes in interest rates and average balances was an increase in the Company's net interest margin to 3.28% for the quarter ended June 30, 2023 from 3.07% for the same quarter last year.
The provision for credit losses increased by $2.9 million, or 48.2%, to $8.9 million for the current quarter ended June 30, 2023 from $6.0 million for the quarter ended June 30, 2022. This increase was primarily due to growth within our commercial loan portfolio year over year, as well as forecasted economic deterioration reflected in our allowance for credit loss models. The Company continued to experience improvement in asset quality as classified loans decreased by $63.3 million, or 22.8%, to
$214.1 million, or 1.90% of total loans, at June 30, 2023 from $277.4 million, or 2.66% of total loans, at June 30, 2022. Total delinquent loans increased to $72.1 million, or 0.64% of loans receivable, at June 30, 2023 from $51.1 million, or 0.49% of loans receivable, at June 30, 2022. The increase was primarily driven by two commercial loan administrative delinquencies totaling $22.9 million at June 30, 2023, which have subsequently been brought current.
Noninterest income decreased by $651,000, or 2.1%, to $29.8 million for the quarter ended June 30, 2023, from $30.4 million for the quarter ended June 30, 2022. This decrease was primarily due to a decrease in mortgage banking income of $1.1 million, or 52.3%, to $1.0 million for the quarter ended June 30, 2023 from $2.2 million for the quarter ended June 30, 2022. This decrease reflects the impact of less favorable pricing in the secondary market, due primarily to the volatile interest rate environment, as well as a decrease in mortgage volumes primarily due to higher market interest rates.
Noninterest expense increased by $4.4 million, or 5.5%, to $85.9 million for the quarter ended June 30, 2023 from $81.4 million for the quarter ended June 30, 2022. This increase primarily resulted from a $1.7 million, or 13.1%, increase in processing expenses to $14.6 million for the quarter ended June 30, 2023, from $12.9 million for the quarter ended June 30, 2022 due to the implementation of additional third party software programs. Also contributing to this variance was a restructuring expense of $1.6 million for the quarter ended June 30, 2023 due to the severance charge for personnel changes during the current quarter. Lastly, FDIC insurance premiums increased $934,000, or 82.7%, to $2.1 million for the quarter ended June 30, 2023 from $1.1 million for the quarter ended June 30, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
The provision for income taxes increased by $663,000, or 6.7%, to $10.5 million for the quarter ended June 30, 2023 from $9.9 million for the quarter ended June 30, 2022 due primarily to an increase in income before taxes in the current year.
Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of June 30, 2023, Northwest operated 134 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
# # #
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; and (9) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(dollars in thousands, except per share amounts)
| June 30,<br>2023 | December 31,<br>2022 | June 30,<br>2022 | |||||
|---|---|---|---|---|---|---|---|
| Assets | |||||||
| Cash and cash equivalents | $ | 127,627 | 139,365 | 504,532 | |||
| Marketable securities available-for-sale (amortized cost of $1,287,101, $1,431,728 and $1,516,743, respectively) | 1,073,952 | 1,218,108 | 1,364,743 | ||||
| Marketable securities held-to-maturity (fair value of $718,676, $751,384 and $835,565, respectively) | 847,845 | 881,249 | 923,180 | ||||
| Total cash and cash equivalents and marketable securities | 2,049,424 | 2,238,722 | 2,792,455 | ||||
| Loans held-for-sale | 16,077 | 9,913 | 31,153 | ||||
| Residential mortgage loans | 3,479,080 | 3,488,686 | 3,255,622 | ||||
| Home equity loans | 1,276,062 | 1,297,674 | 1,280,492 | ||||
| Consumer loans | 2,201,062 | 2,168,655 | 2,002,545 | ||||
| Commercial real estate loans | 2,895,224 | 2,823,555 | 2,876,176 | ||||
| Commercial loans | 1,403,726 | 1,131,969 | 986,836 | ||||
| Total loans receivable | 11,271,231 | 10,920,452 | 10,432,824 | ||||
| Allowance for credit losses | (124,423) | (118,036) | (98,355) | ||||
| Loans receivable, net | 11,146,808 | 10,802,416 | 10,334,469 | ||||
| FHLB stock, at cost | 44,613 | 40,143 | 13,362 | ||||
| Accrued interest receivable | 37,281 | 35,528 | 27,708 | ||||
| Real estate owned, net | 371 | 413 | 1,205 | ||||
| Premises and equipment, net | 139,915 | 145,909 | 146,869 | ||||
| Bank-owned life insurance | 257,614 | 255,062 | 254,109 | ||||
| Goodwill | 380,997 | 380,997 | 380,997 | ||||
| Other intangible assets, net | 6,809 | 8,560 | 10,538 | ||||
| Other assets | 227,659 | 205,574 | 192,983 | ||||
| Total assets | $ | 14,291,491 | 14,113,324 | 14,154,695 | |||
| Liabilities and shareholders’ equity | |||||||
| Liabilities | |||||||
| Noninterest-bearing demand deposits | $ | 2,820,563 | 2,993,243 | 3,058,249 | |||
| Interest-bearing demand deposits | 2,577,653 | 2,686,431 | 2,858,691 | ||||
| Money market deposit accounts | 2,154,253 | 2,457,569 | 2,631,712 | ||||
| Savings deposits | 2,120,215 | 2,275,020 | 2,362,725 | ||||
| Time deposits | 1,989,711 | 1,052,285 | 1,155,878 | ||||
| Total deposits | 11,662,395 | 11,464,548 | 12,067,255 | ||||
| Borrowed funds | 632,313 | 681,166 | 130,490 | ||||
| Subordinated debt | 114,015 | 113,840 | 113,666 | ||||
| Junior subordinated debentures | 129,444 | 129,314 | 129,184 | ||||
| Advances by borrowers for taxes and insurance | 57,143 | 47,613 | 55,622 | ||||
| Accrued interest payable | 4,936 | 3,231 | 1,725 | ||||
| Other liabilities | 179,744 | 182,126 | 162,214 | ||||
| Total liabilities | 12,779,990 | 12,621,838 | 12,660,156 | ||||
| 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, 127,088,963, 127,028,848 and 126,881,766 shares issued and outstanding, respectively | 1,271 | 1,270 | 1,269 | ||||
| Additional paid-in capital | 1,022,189 | 1,019,647 | 1,015,349 | ||||
| Retained earnings | 657,292 | 641,727 | 620,551 | ||||
| Accumulated other comprehensive loss | (169,251) | (171,158) | (142,630) | ||||
| Total shareholders’ equity | 1,511,501 | 1,491,486 | 1,494,539 | ||||
| Total liabilities and shareholders’ equity | $ | 14,291,491 | 14,113,324 | 14,154,695 | |||
| Equity to assets | 10.58 | % | 10.57 | % | 10.56 | % | |
| Tangible common equity to assets* | 8.08 | % | 8.03 | % | 8.01 | % | |
| Book value per share | $ | 11.89 | 11.74 | 11.78 | |||
| Tangible book value per share* | $ | 8.84 | 8.67 | 8.69 | |||
| Closing market price per share | $ | 10.60 | 13.98 | 12.80 | |||
| Full time equivalent employees | 2,025 | 2,160 | 2,188 | ||||
| Number of banking offices | 142 | 150 | 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 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br>2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30,<br>2022 | |||||||
| Interest income: | |||||||||||
| Loans receivable | $ | 132,724 | 123,745 | 117,137 | 106,943 | 95,574 | |||||
| Mortgage-backed securities | 8,326 | 8,537 | 8,603 | 8,683 | 7,158 | ||||||
| Taxable investment securities | 841 | 845 | 840 | 838 | 715 | ||||||
| Tax-free investment securities | 667 | 700 | 701 | 709 | 683 | ||||||
| FHLB stock dividends | 844 | 690 | 419 | 148 | 82 | ||||||
| Interest-earning deposits | 594 | 423 | 153 | 1,295 | 1,684 | ||||||
| Total interest income | 143,996 | 134,940 | 127,853 | 118,616 | 105,896 | ||||||
| Interest expense: | |||||||||||
| Deposits | 21,817 | 11,238 | 3,871 | 3,157 | 3,341 | ||||||
| Borrowed funds | 13,630 | 11,238 | 6,938 | 2,710 | 2,290 | ||||||
| Total interest expense | 35,447 | 22,476 | 10,809 | 5,867 | 5,631 | ||||||
| Net interest income | 108,549 | 112,464 | 117,044 | 112,749 | 100,265 | ||||||
| Provision for credit losses - loans | 6,010 | 4,870 | 9,023 | 7,689 | 2,629 | ||||||
| Provision for credit losses - unfunded commitments (1) | 2,920 | 126 | 1,876 | 3,585 | 3,396 | ||||||
| Net interest income after provision for credit losses | 99,619 | 107,468 | 106,145 | 101,475 | 94,240 | ||||||
| Noninterest income: | |||||||||||
| Loss on sale of investments | (8,306) | — | (1) | (2) | (3) | ||||||
| Gain on sale of mortgage servicing rights | 8,305 | — | — | — | — | ||||||
| Gain on sale of SBA loans | 832 | 279 | — | — | — | ||||||
| Service charges and fees | 14,833 | 13,189 | 14,125 | 14,323 | 13,673 | ||||||
| Trust and other financial services income | 6,866 | 6,449 | 6,642 | 6,650 | 7,461 | ||||||
| Gain on real estate owned, net | 785 | 108 | 51 | 290 | 291 | ||||||
| Income from bank-owned life insurance | 1,304 | 1,269 | 1,663 | 1,475 | 2,008 | ||||||
| Mortgage banking income | 1,028 | 524 | 477 | 766 | 2,157 | ||||||
| Other operating income | 4,150 | 2,151 | 4,901 | 3,301 | 4,861 | ||||||
| Total noninterest income | 29,797 | 23,969 | 27,858 | 26,803 | 30,448 | ||||||
| Noninterest expense: | |||||||||||
| Compensation and employee benefits | 47,650 | 46,604 | 46,658 | 46,711 | 48,073 | ||||||
| Premises and occupancy costs | 7,579 | 7,471 | 7,370 | 7,171 | 7,280 | ||||||
| Office operations | 2,800 | 3,010 | 3,544 | 3,229 | 3,162 | ||||||
| Collections expense | 429 | 387 | 563 | 322 | 403 | ||||||
| Processing expenses | 14,648 | 14,350 | 13,585 | 13,416 | 12,947 | ||||||
| Marketing expenses | 2,856 | 2,892 | 2,773 | 2,147 | 2,047 | ||||||
| Federal deposit insurance premiums | 2,064 | 2,223 | 1,319 | 1,200 | 1,130 | ||||||
| Professional services | 3,804 | 4,758 | 5,434 | 3,363 | 3,333 | ||||||
| Amortization of intangible assets | 842 | 909 | 932 | 1,047 | 1,115 | ||||||
| Real estate owned expense | 83 | 181 | 53 | 61 | 72 | ||||||
| Merger, asset disposition and restructuring expense | 1,593 | 2,802 | 4,243 | — | — | ||||||
| Other expenses | 1,510 | 1,863 | 2,304 | 321 | 1,849 | ||||||
| Total noninterest expense | 85,858 | 87,450 | 88,778 | 78,988 | 81,411 | ||||||
| Income before income taxes | 43,558 | 43,987 | 45,225 | 49,290 | 43,277 | ||||||
| Income tax expense | 10,514 | 10,308 | 10,576 | 11,986 | 9,851 | ||||||
| Net income | $ | 33,044 | 33,679 | 34,649 | 37,304 | 33,426 | |||||
| Basic earnings per share | $ | 0.26 | 0.27 | 0.27 | 0.29 | 0.26 | |||||
| Diluted earnings per share | $ | 0.26 | 0.26 | 0.27 | 0.29 | 0.26 | |||||
| Annualized return on average equity | 8.72 | % | 9.11 | % | 9.38 | % | 9.84 | % | 8.90 | % | |
| Annualized return on average assets | 0.93 | % | 0.97 | % | 0.98 | % | 1.05 | % | 0.94 | % | |
| Annualized return on tangible common equity * | 11.79 | % | 12.15 | % | 12.48 | % | 13.84 | % | 12.16 | % | |
| Efficiency ratio | 62.06 | % | 64.10 | % | 61.27 | % | 56.60 | % | 62.28 | % | |
| Efficiency ratio, excluding certain items (1) ** | 60.30 | % | 61.38 | % | 57.70 | % | 55.85 | % | 61.43 | % | |
| Annualized noninterest expense to average assets | 2.42 | % | 2.51 | % | 2.52 | % | 2.23 | % | 2.29 | % | |
| Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.35 | % | 2.40 | % | 2.37 | % | 2.20 | % | 2.26 | % |
(1) Reclassified from other expenses for periods prior to March 31, 2023. Respective ratios updated for reclassification.
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).See reconciliation of non-GAAP financial measures for additional information relating to these items.
Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)
| Six months ended June 30, | |||||
|---|---|---|---|---|---|
| 2023 | 2022 | ||||
| Interest income: | |||||
| Loans receivable | $ | 256,469 | 183,748 | ||
| Mortgage-backed securities | 16,863 | 13,518 | |||
| Taxable investment securities | 1,686 | 1,392 | |||
| Tax-free investment securities | 1,367 | 1,357 | |||
| FHLB stock dividends | 1,534 | 163 | |||
| Interest-earning deposits | 1,017 | 2,151 | |||
| Total interest income | 278,936 | 202,329 | |||
| Interest expense: | |||||
| Deposits | 33,055 | 7,092 | |||
| Borrowed funds | 24,868 | 4,349 | |||
| Total interest expense | 57,923 | 11,441 | |||
| Net interest income | 221,013 | 190,888 | |||
| Provision for credit losses - loans | 10,880 | 1,148 | |||
| Provision for credit losses - unfunded commitments (1) | 3,046 | 4,992 | |||
| Net interest income after provision for credit losses | 207,087 | 184,748 | |||
| Noninterest income: | |||||
| Loss on sale of investments | (8,306) | (5) | |||
| Gain on sale of mortgage servicing rights | 8,305 | — | |||
| Gain on sale of SBA loans | 1,111 | — | |||
| Service charges and fees | 28,022 | 26,740 | |||
| Trust and other financial services income | 13,315 | 14,473 | |||
| Gain on real estate owned, net | 893 | 262 | |||
| Income from bank-owned life insurance | 2,573 | 3,991 | |||
| Mortgage banking income | 1,552 | 3,622 | |||
| Other operating income | 6,301 | 7,105 | |||
| Total noninterest income | 53,766 | 56,188 | |||
| Noninterest expense: | |||||
| Compensation and employee benefits | 94,254 | 94,990 | |||
| Premises and occupancy costs | 15,050 | 15,077 | |||
| Office operations | 5,810 | 6,545 | |||
| Collections expense | 816 | 923 | |||
| Processing expenses | 28,998 | 25,495 | |||
| Marketing expenses | 5,748 | 4,175 | |||
| Federal deposit insurance premiums | 4,287 | 2,259 | |||
| Professional services | 8,562 | 5,906 | |||
| Amortization of intangible assets | 1,751 | 2,298 | |||
| Real estate owned expense | 264 | 109 | |||
| Merger, asset disposition and restructuring expense | 4,395 | 1,374 | |||
| Other expenses | 3,373 | 2,608 | |||
| Total noninterest expense | 173,308 | 161,759 | |||
| Income before income taxes | 87,545 | 79,177 | |||
| Income tax expense | 20,822 | 17,464 | |||
| Net income | $ | 66,723 | 61,713 | ||
| Basic earnings per share | $ | 0.53 | 0.49 | ||
| Diluted earnings per share | $ | 0.52 | 0.49 | ||
| Annualized return on average equity | 8.91 | % | 8.01 | % | |
| Annualized return on average assets | 0.95 | % | 0.87 | % | |
| Annualized return on tangible common equity * | 11.97 | % | 11.28 | % | |
| Efficiency ratio | 63.07 | % | 65.47 | % | |
| Efficiency ratio, excluding certain items (1) ** | 60.84 | % | 63.98 | % | |
| Annualized noninterest expense to average assets | 2.46 | % | 2.27 | % | |
| Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.38 | % | 2.22 | % |
(1) Reclassified from other expenses for periods prior to March 31, 2023. Respective ratios updated for reclassification.
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (Unaudited) *
(dollars in thousands, except per share amounts)
| Quarter ended June 30, | Six months ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | ||||||
| Reconciliation of net income to adjusted net operating income: | |||||||||
| Net income (GAAP) | $ | 33,044 | 33,426 | 66,723 | 61,713 | ||||
| Non-GAAP adjustments | |||||||||
| Add: merger, asset disposition and restructuring expense | 1,593 | — | 4,395 | 1,374 | |||||
| Less: tax benefit of merger, asset disposition and restructuring expense | (446) | — | (1,231) | (385) | |||||
| Adjusted net operating income (non-GAAP) | $ | 34,191 | 33,426 | 69,887 | 62,702 | ||||
| Diluted earnings per share (GAAP) | $ | 0.26 | 0.26 | 0.52 | 0.49 | ||||
| Diluted adjusted operating earnings per share (non-GAAP) | $ | 0.27 | 0.26 | 0.55 | 0.49 | ||||
| Average equity | $ | 1,519,990 | 1,506,832 | 1,509,466 | 1,553,520 | ||||
| Average assets | 14,245,917 | 14,256,705 | 14,184,050 | 14,340,034 | |||||
| Annualized return on average equity (GAAP) | 8.72 | % | 8.90 | % | 8.91 | % | 8.01 | % | |
| Annualized return on average assets (GAAP) | 0.93 | % | 0.94 | % | 0.95 | % | 0.87 | % | |
| Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 9.02 | % | 8.90 | % | 9.34 | % | 8.14 | % | |
| Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 0.96 | % | 0.94 | % | 0.99 | % | 0.88 | % |
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.
| June 30,<br>2023 | December 31,<br>2022 | June 30,<br>2022 | |||||
|---|---|---|---|---|---|---|---|
| Tangible common equity to assets | |||||||
| Total shareholders’ equity | $ | 1,511,501 | 1,491,486 | 1,494,539 | |||
| Less: goodwill and intangible assets | (387,806) | (389,557) | (391,535) | ||||
| Tangible common equity | 1,123,695 | 1,101,929 | 1,103,004 | ||||
| Total assets | 14,291,491 | 14,113,324 | 14,154,695 | ||||
| Less: goodwill and intangible assets | (387,806) | (389,557) | (391,535) | ||||
| Tangible assets | 13,903,685 | 13,723,767 | 13,763,160 | ||||
| Tangible common equity to tangible assets | 8.08 | % | 8.03 | % | 8.01 | % | |
| Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | |||||||
| Tangible common equity | $ | 1,123,695 | 1,101,929 | 1,103,004 | |||
| Less: unrealized losses on held to maturity investments | (129,169) | (129,865) | (87,615) | ||||
| Add: deferred taxes on unrealized losses on held to maturity investments | 36,167 | 36,362 | 24,532 | ||||
| Tangible common equity, including unrealized losses on held-to-maturity investments | 1,030,693 | 1,008,426 | 1,039,921 | ||||
| Tangible assets | 13,903,685 | 13,723,767 | 13,763,160 | ||||
| Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | 7.41 | % | 7.35 | % | 7.56 | % | |
| Tangible book value per share | |||||||
| Tangible common equity | $ | 1,123,695 | 1,101,929 | 1,103,004 | |||
| Common shares outstanding | 127,088,963 | 127,028,848 | 126,881,766 | ||||
| Tangible book value per share | 8.84 | 8.67 | 8.69 |
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 | Six months ended June 30, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br>2023 | March 31,<br>2023 | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | 2023 | 2022 | |||||||||
| Annualized return on tangible common equity | |||||||||||||||
| Net income | $ | 33,044 | 33,679 | 34,649 | 37,304 | 33,426 | 66,723 | 61,713 | |||||||
| Total shareholders’ equity | 1,511,501 | 1,513,275 | 1,491,486 | 1,459,786 | 1,494,539 | 1,511,501 | 1,494,539 | ||||||||
| Less: goodwill and intangible assets | (387,806) | (388,648) | (389,557) | (390,488) | (391,535) | (387,806) | (391,535) | ||||||||
| Tangible common equity | 1,123,695 | 1,124,627 | 1,101,929 | 1,069,298 | 1,103,004 | 1,123,695 | 1,103,004 | ||||||||
| Annualized return on tangible common equity | 11.79 | % | 12.15 | % | 12.48 | % | 13.84 | % | 12.16 | % | 11.97 | % | 11.28 | % | |
| Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | |||||||||||||||
| Non-interest expense | 85,858 | 87,450 | 88,778 | 78,988 | 81,411 | 173,308 | 161,759 | ||||||||
| Less: amortization expense | (842) | (909) | (932) | (1,047) | (1,115) | (1,751) | (2,298) | ||||||||
| Less: merger, asset disposition and restructuring expenses | (1,593) | (2,802) | (4,243) | — | — | (4,395) | (1,374) | ||||||||
| Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses | 83,423 | 83,739 | 83,603 | 77,941 | 80,296 | 167,162 | 158,087 | ||||||||
| Net interest income | 108,549 | 112,464 | 117,044 | 112,749 | 100,265 | 221,013 | 190,888 | ||||||||
| Non-interest income | 29,797 | 23,969 | 27,858 | 26,803 | 30,448 | 53,766 | 56,188 | ||||||||
| Net interest income plus non-interest income | 138,346 | 136,433 | 144,902 | 139,552 | 130,713 | 274,779 | 247,076 | ||||||||
| Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | 60.30 | % | 61.38 | % | 57.70 | % | 55.85 | % | 61.43 | % | 60.84 | % | 63.98 | % | |
| 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 | 83,423 | 83,739 | 83,603 | 77,941 | 80,296 | 167,162 | 158,087 | ||||||||
| Average assets | 14,245,917 | 14,121,496 | 13,983,100 | 14,052,919 | 14,256,705 | 14,184,050 | 14,340,034 | ||||||||
| Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | 2.35 | % | 2.40 | % | 2.37 | % | 2.20 | % | 2.26 | % | 2.38 | % | 2.22 | % |
* 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 around the Company’s uninsured deposits portfolio:
| As of June 30, 2023 | |||||
|---|---|---|---|---|---|
| Balance | Percent of <br>total deposits | Number of relationships | |||
| Uninsured deposits per the Call Report (1) | $ | 2,895,624 | 24.83 | % | 4,892 |
| Less intercompany deposit accounts | 889,157 | 7.62 | % | 12 | |
| Less collateralized deposit accounts | 553,128 | 4.74 | % | 255 | |
| Adjusted balance of uninsured deposits | $ | 1,453,339 | 12.47 | % | 4,625 |
(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 $18.6 million, or 0.16% of total deposits, as of June 30, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $112.2 million, or 0.96% of total deposits, as of June 30, 2023. The average adjusted uninsured deposit account balance was $314,000 as of June 30, 2023.
The following table provides additional details over the Company’s deposit portfolio:
| As of June 30, 2023 | |||||
|---|---|---|---|---|---|
| Balance | Percent of <br>total deposits | Number of <br>accounts | |||
| Personal noninterest bearing demand deposits | $ | 1,397,167 | 11.98 | % | 291,177 |
| Business noninterest bearing demand deposits | 1,423,396 | 12.21 | % | 45,911 | |
| Personal interest-bearing demand deposits | 1,535,254 | 13.16 | % | 59,784 | |
| Business interest-bearing demand deposits | 1,042,399 | 8.94 | % | 8,354 | |
| Personal money market deposits | 1,511,652 | 12.96 | % | 26,488 | |
| Business money market deposits | 642,601 | 5.51 | % | 2,980 | |
| Savings deposits | 2,120,215 | 18.18 | % | 216,105 | |
| Time deposits | 1,989,711 | 17.06 | % | 67,662 | |
| Total deposits | $ | 11,662,395 | 100.00 | % | 718,461 |
Our average deposit account balance as of June 30, 2023 was $16,000. The Company’s insured cash sweep deposit balance was $205.7 million as of June 30, 2023.
The following table provides additional details over the Company’s deposit portfolio over time:
| 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 12/31/2022 | 3/31/2023 | 6/30/2023 | ||
|---|---|---|---|---|---|---|---|---|
| Personal noninterest bearing demand deposits | $ | 1,419,806 | 1,413,732 | 1,388,690 | 1,413,781 | 1,412,227 | 1,428,232 | 1,397,167 |
| Business noninterest bearing demand deposits | 1,679,720 | 1,715,117 | 1,669,559 | 1,680,339 | 1,581,016 | 1,467,860 | 1,423,396 | |
| Personal interest-bearing demand deposits | 1,768,910 | 1,787,295 | 1,785,761 | 1,742,173 | 1,718,806 | 1,627,546 | 1,535,254 | |
| Business interest-bearing demand deposits | 639,529 | 588,850 | 529,357 | 498,937 | 499,059 | 466,105 | 624,252 | |
| Municipal demand deposits | 532,003 | 515,477 | 543,573 | 571,620 | 468,566 | 447,852 | 418,147 | |
| Personal money market deposits | 1,972,603 | 1,999,564 | 1,994,907 | 1,949,379 | 1,832,583 | 1,626,614 | 1,511,652 | |
| Business money market deposits | 657,279 | 681,049 | 636,805 | 627,634 | 624,986 | 701,436 | 642,601 | |
| Savings deposits | 2,303,760 | 2,367,438 | 2,362,725 | 2,327,419 | 2,275,020 | 2,194,743 | 2,120,215 | |
| Time deposits | 1,327,555 | 1,251,878 | 1,155,878 | 1,067,110 | 1,052,285 | 1,576,791 | 1,989,711 | |
| Total deposits | $ | 12,301,165 | 12,320,400 | 12,067,255 | 11,878,392 | 11,464,548 | 11,537,179 | 11,662,395 |
Northwest Bancshares, Inc. and Subsidiaries
Marketable Securities (Unaudited)
(dollars in thousands)
| June 30, 2023 | ||||||
|---|---|---|---|---|---|---|
| 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 | — | (1,676) | 18,324 | 3.37 |
| Due after ten years | 51,124 | — | (10,627) | 40,497 | 6.23 | |
| Debt issued by government sponsored enterprises: | ||||||
| Due after one year through five years | 20,984 | — | (2,940) | 18,044 | 4.48 | |
| Due after five years through ten years | 25,516 | — | (4,027) | 21,489 | 5.02 | |
| Municipal securities: | ||||||
| Due within one year | 500 | — | — | 500 | — | |
| Due after one year through five years | 950 | 17 | (9) | 958 | 2.41 | |
| Due after five years through ten years | 20,481 | — | (1,845) | 18,636 | 7.2 | |
| Due after ten years | 64,589 | 59 | (10,409) | 54,239 | 10.45 | |
| Corporate debt issues: | ||||||
| Due after five years through ten years | 8,463 | — | (917) | 7,546 | 5.70 | |
| Residential mortgage-backed agency securities: | ||||||
| Fixed rate pass-through | 219,643 | 4 | (28,705) | 190,942 | 6.4 | |
| Variable rate pass-through | 7,861 | 2 | (215) | 7,648 | 4.36 | |
| Fixed rate agency CMOs | 821,371 | — | (151,317) | 670,054 | 5.01 | |
| Variable rate agency CMOs | 25,619 | 35 | (579) | 25,075 | 3.09 | |
| Total residential mortgage-backed agency securities | 1,074,494 | 41 | (180,816) | 893,719 | 5.24 | |
| Total marketable securities available-for-sale | $ | 1,287,101 | 117 | (213,266) | 1,073,952 | 5.53 |
| Marketable securities held-to-maturity | ||||||
| Government sponsored | ||||||
| Due after one year through five years | $ | 49,471 | — | (6,541) | 42,930 | 3.99 |
| Due after five years through ten years | 74,985 | — | (13,586) | 61,399 | 5.67 | |
| Residential mortgage-backed agency securities: | ||||||
| Fixed rate pass-through | $ | 155,431 | — | (23,770) | 131,661 | 5.27 |
| Variable rate pass-through | 495 | — | (10) | 485 | 3.95 | |
| Fixed rate agency CMOs | 566,934 | — | (85,253) | 481,681 | 5.90 | |
| Variable rate agency CMOs | 529 | — | (9) | 520 | 5.61 | |
| Total residential mortgage-backed agency securities | 723,389 | — | (109,042) | 614,347 | 5.76 | |
| Total marketable securities held-to-maturity | $ | 847,845 | — | (129,169) | 718,676 | 5.65 |
Northwest Bancshares, Inc. and Subsidiaries
Borrowed Funds (Unaudited)
(dollars in thousands)
| June 30, 2023 | ||||
|---|---|---|---|---|
| Amount | Average rate | |||
| Term notes payable to the FHLB of Pittsburgh, due within one year | $ | 500,000 | 5.43 | % |
| Notes payable to the FHLB of Pittsburgh, due within one year | 28,000 | 5.39 | % | |
| Total term notes payable to the FHLB | 528,000 | 5.43 | % | |
| Collateralized borrowings, due within one year | 63,863 | 1.24 | % | |
| Collateral received, due within one year | 40,450 | 5.16 | % | |
| Subordinated debentures, net of issuance costs | 114,015 | 4.28 | % | |
| Junior subordinated debentures | 129,444 | 7.21 | % | |
| Total borrowed funds * | $ | 875,772 | 5.22 | % |
* As of June 30, 2023, the Company had $3.2 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $28.0 million drawn balance, as well as $309.0 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 June 30, 2023:
| June 30, 2023 | ||
|---|---|---|
| Property type | Percent of portfolio | |
| 5 or more unit dwelling | 13.9 | % |
| Nursing home | 12.8 | % |
| Retail building | 11.4 | % |
| Commercial office building - non-owner occupied | 8.5 | % |
| Residential acquisition & development - 1-4 family, townhouses and apartments | 4.5 | % |
| Warehouse/storage building | 3.6 | % |
| Manufacturing & industrial building | 3.5 | % |
| Commercial office building - owner occupied | 3.5 | % |
| Commercial acquisition and development | 3.4 | % |
| Multi-use building - office and warehouse | 3.2 | % |
| Single family dwelling | 3.2 | % |
| Hotel/motel | 2.9 | % |
| Other medical facility | 2.9 | % |
| Student housing | 2.6 | % |
| Multi-use building - commercial, retail and residential | 2.6 | % |
| 2-4 family | 2.4 | % |
| Agricultural real estate | 2.1 | % |
| All other | 13.0 | % |
| Total | 100.0 | % |
The following table provides our commercial real estate portfolio by state at June 30, 2023:
| June 30, 2023 | ||
|---|---|---|
| State | Percent of portfolio | |
| Pennsylvania | 32.0 | % |
| New York | 31.7 | % |
| Ohio | 20.0 | % |
| Indiana | 8.8 | % |
| All other | 7.5 | % |
| Total | 100.0 | % |
Northwest Bancshares, Inc. and Subsidiaries
Asset Quality (Unaudited)
(dollars in thousands)
| June 30,<br>2023 | March 31,<br>2023 | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nonaccrual loans current: | |||||||||||
| Residential mortgage loans | $ | 1,559 | 1,423 | 1,496 | 2,186 | 1,970 | |||||
| Home equity loans | 1,089 | 1,084 | 1,418 | 1,158 | 1,337 | ||||||
| Consumer loans | 1,009 | 911 | 836 | 833 | 976 | ||||||
| Commercial real estate loans | 48,468 | 50,045 | 53,303 | 56,193 | 60,537 | ||||||
| Commercial loans | 995 | 1,468 | 895 | 1,801 | 5,270 | ||||||
| Total nonaccrual loans current | $ | 53,120 | 54,931 | 57,948 | 62,171 | 70,090 | |||||
| Nonaccrual loans delinquent 30 days to 59 days: | |||||||||||
| Residential mortgage loans | $ | 49 | 688 | 473 | 54 | 2 | |||||
| Home equity loans | 37 | 18 | 180 | 316 | 172 | ||||||
| Consumer loans | 309 | 223 | 178 | 155 | 158 | ||||||
| Commercial real estate loans | 1,697 | 1,900 | 1,220 | 55 | 911 | ||||||
| Commercial loans | 855 | 341 | 145 | 237 | 358 | ||||||
| Total nonaccrual loans delinquent 30 days to 59 days | $ | 2,947 | 3,170 | 2,196 | 817 | 1,601 | |||||
| Nonaccrual loans delinquent 60 days to 89 days: | |||||||||||
| Residential mortgage loans | $ | 185 | 919 | 31 | 32 | 199 | |||||
| Home equity loans | 363 | 338 | 290 | 432 | 566 | ||||||
| Consumer loans | 360 | 340 | 341 | 382 | 226 | ||||||
| Commercial real estate loans | 210 | 1,355 | 473 | 848 | 630 | ||||||
| Commercial loans | 245 | 126 | 96 | 132 | 73 | ||||||
| Total nonaccrual loans delinquent 60 days to 89 days | $ | 1,363 | 3,078 | 1,231 | 1,826 | 1,694 | |||||
| Nonaccrual loans delinquent 90 days or more: | |||||||||||
| Residential mortgage loans | $ | 6,290 | 3,300 | 5,574 | 5,544 | 5,445 | |||||
| Home equity loans | 1,965 | 2,190 | 2,257 | 1,779 | 2,081 | ||||||
| Consumer loans | 2,033 | 2,791 | 2,672 | 2,031 | 1,942 | ||||||
| Commercial real estate loans | 8,575 | 8,010 | 7,867 | 8,821 | 14,949 | ||||||
| Commercial loans | 2,296 | 1,139 | 1,491 | 638 | 583 | ||||||
| Total nonaccrual loans delinquent 90 days or more | $ | 21,159 | 17,430 | 19,861 | 18,813 | 25,000 | |||||
| Total nonaccrual loans | $ | 78,589 | 78,609 | 81,236 | 83,627 | 98,385 | |||||
| Total nonaccrual loans | $ | 78,589 | 78,609 | 81,236 | 83,627 | 98,385 | |||||
| Loans 90 days past due and still accruing | 532 | 652 | 744 | 357 | 379 | ||||||
| Nonperforming loans | 79,121 | 79,261 | 81,980 | 83,984 | 98,764 | ||||||
| Real estate owned, net | 371 | 524 | 413 | 450 | 1,205 | ||||||
| Nonperforming assets | $ | 79,492 | 79,785 | 82,393 | 84,434 | 99,969 | |||||
| Nonperforming loans to total loans | 0.70 | % | 0.71 | % | 0.75 | % | 0.78 | % | 0.95 | % | |
| Nonperforming assets to total assets | 0.56 | % | 0.56 | % | 0.58 | % | 0.61 | % | 0.71 | % | |
| Allowance for credit losses to total loans | 1.10 | % | 1.09 | % | 1.08 | % | 1.02 | % | 0.94 | % | |
| Allowance for total loans excluding PPP loan balances | 1.10 | % | 1.09 | % | 1.08 | % | 1.02 | % | 0.95 | % | |
| Allowance for credit losses to nonperforming loans | 157.26 | % | 152.98 | % | 143.98 | % | 130.76 | % | 99.59 | % |
Northwest Bancshares, Inc. and Subsidiaries
Loans by Credit Quality Indicators (Unaudited)
(dollars in thousands)
| At June 30, 2023 | Pass | Special<br> mention * | Substandard<br>** | Doubtful | Loss | Loans<br>receivable | |
|---|---|---|---|---|---|---|---|
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,483,098 | — | 12,059 | — | — | 3,495,157 |
| Home equity loans | 1,272,363 | — | 3,699 | — | — | 1,276,062 | |
| Consumer loans | 2,196,938 | — | 4,124 | — | — | 2,201,062 | |
| Total Personal Banking | 6,952,399 | — | 19,882 | — | — | 6,972,281 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,649,535 | 74,170 | 171,519 | — | — | 2,895,224 | |
| Commercial loans | 1,377,981 | 3,040 | 22,705 | — | — | 1,403,726 | |
| Total Commercial Banking | 4,027,516 | 77,210 | 194,224 | — | — | 4,298,950 | |
| Total loans | $ | 10,979,915 | 77,210 | 214,106 | — | — | 11,271,231 |
| At March 31, 2023 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,499,135 | — | 6,330 | — | — | 3,505,465 |
| Home equity loans | 1,277,915 | — | 3,631 | — | — | 1,281,546 | |
| Consumer loans | 2,227,379 | — | 4,754 | — | — | 2,232,133 | |
| Total Personal Banking | 7,004,429 | — | 14,715 | — | — | 7,019,144 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,585,676 | 69,837 | 171,591 | — | — | 2,827,104 | |
| Commercial loans | 1,217,344 | 6,381 | 22,298 | — | — | 1,246,023 | |
| Total Commercial Banking | 3,803,020 | 76,218 | 193,889 | — | — | 4,073,127 | |
| Total loans | $ | 10,807,449 | 76,218 | 208,604 | — | — | 11,092,271 |
| At December 31, 2022 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,484,870 | — | 13,729 | — | — | 3,498,599 |
| Home equity loans | 1,292,146 | — | 5,528 | — | — | 1,297,674 | |
| Consumer loans | 2,164,220 | — | 4,435 | — | — | 2,168,655 | |
| Total Personal Banking | 6,941,236 | — | 23,692 | — | — | 6,964,928 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,579,809 | 55,076 | 188,670 | — | — | 2,823,555 | |
| Commercial loans | 1,100,707 | 7,384 | 23,878 | — | — | 1,131,969 | |
| Total Commercial Banking | 3,680,516 | 62,460 | 212,548 | — | — | 3,955,524 | |
| Total loans | $ | 10,621,752 | 62,460 | 236,240 | — | — | 10,920,452 |
| At September 30, 2022 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,388,168 | — | 13,730 | — | — | 3,401,898 |
| Home equity loans | 1,279,968 | — | 5,021 | — | — | 1,284,989 | |
| Consumer loans | 2,112,478 | — | 3,760 | — | — | 2,116,238 | |
| Total Personal Banking | 6,780,614 | — | 22,511 | — | — | 6,803,125 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,589,648 | 34,684 | 188,498 | — | — | 2,812,830 | |
| Commercial loans | 1,094,830 | 4,004 | 26,736 | — | — | 1,125,570 | |
| Total Commercial Banking | 3,684,478 | 38,688 | 215,234 | — | — | 3,938,400 | |
| Total loans | $ | 10,465,092 | 38,688 | 237,745 | — | — | 10,741,525 |
| At June 30, 2022 | |||||||
| Personal Banking: | |||||||
| Residential mortgage loans | $ | 3,273,117 | — | 13,658 | — | — | 3,286,775 |
| Home equity loans | 1,275,124 | — | 5,368 | — | — | 1,280,492 | |
| Consumer loans | 1,998,863 | — | 3,682 | — | — | 2,002,545 | |
| Total Personal Banking | 6,547,104 | — | 22,708 | — | — | 6,569,812 | |
| Commercial Banking: | |||||||
| Commercial real estate loans | 2,600,207 | 51,540 | 224,429 | — | — | 2,876,176 | |
| Commercial loans | 954,129 | 2,468 | 30,239 | — | — | 986,836 | |
| Total Commercial Banking | 3,554,336 | 54,008 | 254,668 | — | — | 3,863,012 | |
| Total loans | $ | 10,101,440 | 54,008 | 277,376 | — | — | 10,432,824 |
* Includes $4.9 million, $7.4 million, $7.4 million, $4.5 million, and $7.4 million of acquired loans at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.
** Includes $31.2 million, $31.9 million, $39.1 million, $51.4 million, and $59.3 million of acquired loans at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Loan Delinquency (Unaudited)
(dollars in thousands)
| June 30,<br>2023 | * | March 31,<br>2023 | * | December 31,<br>2022 | * | September 30,<br>2022 | * | June 30,<br>2022 | * | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Number of loans and dollar amount of loans) | |||||||||||||||||||||||||
| Loans delinquent 30 days to 59 days: | |||||||||||||||||||||||||
| Residential mortgage loans | 14 | $ | 627 | — | % | 259 | $ | 26,992 | 0.8 | % | 304 | $ | 29,487 | 0.8 | % | 26 | $ | 1,052 | — | % | 20 | $ | 785 | — | % |
| Home equity loans | 92 | 3,395 | 0.3 | % | 111 | 4,235 | 0.3 | % | 145 | 6,657 | 0.5 | % | 88 | 3,278 | 0.3 | % | 107 | 3,664 | 0.3 | % | |||||
| Consumer loans | 602 | 7,955 | 0.4 | % | 587 | 6,930 | 0.3 | % | 737 | 9,435 | 0.4 | % | 549 | 6,546 | 0.3 | % | 563 | 6,898 | 0.3 | % | |||||
| Commercial real estate loans | 13 | 2,710 | 0.1 | % | 23 | 4,834 | 0.2 | % | 29 | 4,008 | 0.1 | % | 13 | 1,332 | — | % | 26 | 2,701 | 0.1 | % | |||||
| Commercial loans | 38 | 15,658 | 1.1 | % | 46 | 4,253 | 0.3 | % | 51 | 2,648 | 0.2 | % | 48 | 2,582 | 0.2 | % | 24 | 1,486 | 0.2 | % | |||||
| Total loans delinquent 30 days to 59 days | 759 | $ | 30,345 | 0.3 | % | 1,026 | $ | 47,244 | 0.4 | % | 1,266 | $ | 52,235 | 0.5 | % | 724 | $ | 14,790 | 0.1 | % | 740 | $ | 15,534 | 0.1 | % |
| Loans delinquent 60 days to 89 days: | |||||||||||||||||||||||||
| Residential mortgage loans | 52 | $ | 3,521 | 0.1 | % | 23 | $ | 1,922 | 0.1 | % | 65 | $ | 5,563 | 0.2 | % | 51 | $ | 4,320 | 0.1 | % | 61 | $ | 5,941 | 0.2 | % |
| Home equity loans | 31 | 1,614 | 0.1 | % | 31 | 1,061 | 0.1 | % | 29 | 975 | 0.1 | % | 36 | 1,227 | 0.1 | % | 28 | 952 | 0.1 | % | |||||
| Consumer loans | 250 | 2,584 | 0.1 | % | 185 | 2,083 | 0.1 | % | 255 | 3,070 | 0.1 | % | 223 | 2,663 | 0.1 | % | 178 | 1,460 | 0.1 | % | |||||
| Commercial real estate loans | 12 | 1,288 | — | % | 17 | 1,949 | 0.1 | % | 16 | 2,377 | 0.1 | % | 13 | 1,741 | 0.1 | % | 9 | 1,472 | 0.1 | % | |||||
| Commercial loans | 23 | 11,092 | 0.8 | % | 19 | 1,088 | 0.1 | % | 24 | 1,115 | 0.1 | % | 14 | 808 | 0.1 | % | 6 | 341 | — | % | |||||
| Total loans delinquent 60 days to 89 days | 368 | $ | 20,099 | 0.2 | % | 275 | $ | 8,103 | 0.1 | % | 389 | $ | 13,100 | 0.1 | % | 337 | $ | 10,759 | 0.1 | % | 282 | $ | 10,166 | 0.1 | % |
| Loans delinquent 90 days or more: ** | |||||||||||||||||||||||||
| Residential mortgage loans | 63 | $ | 6,290 | 0.2 | % | 39 | $ | 3,300 | 0.1 | % | 65 | $ | 5,574 | 0.2 | % | 64 | $ | 5,544 | 0.2 | % | 63 | $ | 5,445 | 0.2 | % |
| Home equity loans | 68 | 1,965 | 0.2 | % | 65 | 2,190 | 0.2 | % | 68 | 2,257 | 0.2 | % | 65 | 1,779 | 0.1 | % | 69 | 2,081 | 0.2 | % | |||||
| Consumer loans | 314 | 2,447 | 0.1 | % | 313 | 3,279 | 0.1 | % | 334 | 3,079 | 0.1 | % | 289 | 2,388 | 0.1 | % | 286 | 2,321 | 0.1 | % | |||||
| Commercial real estate loans | 20 | 8,575 | 0.3 | % | 18 | 8,010 | 0.3 | % | 19 | 7,867 | 0.3 | % | 22 | 8,821 | 0.3 | % | 31 | 14,949 | 0.5 | % | |||||
| Commercial loans | 38 | 2,414 | 0.2 | % | 24 | 1,302 | 0.1 | % | 15 | 1,829 | 0.2 | % | 11 | 638 | 0.1 | % | 10 | 583 | 0.1 | % | |||||
| Total loans delinquent 90 days or more | 503 | $ | 21,691 | 0.2 | % | 459 | $ | 18,081 | 0.2 | % | 501 | $ | 20,606 | 0.2 | % | 451 | $ | 19,170 | 0.2 | % | 459 | $ | 25,379 | 0.2 | % |
| Total loans delinquent | 1,630 | $ | 72,135 | 0.6 | % | 1,760 | $ | 73,428 | 0.7 | % | 2,156 | $ | 85,941 | 0.8 | % | 1,512 | $ | 44,719 | 0.4 | % | 1,481 | $ | 51,079 | 0.5 | % |
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit deteriorated loans of $605,000, $331,000, $1.7 million, $783,000, and $6.3 million at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Allowance for Credit Losses (Unaudited)
(dollars in thousands)
| Quarter ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br>2023 | March 31,<br>2023 | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | |||||||
| Beginning balance | $ | 121,257 | 118,036 | 109,819 | 98,355 | 99,295 | |||||
| ASU 2022-02 Adoption | — | 426 | — | — | — | ||||||
| Provision | 6,010 | 4,870 | 9,023 | 7,689 | 2,629 | ||||||
| Charge-offs residential mortgage | (545) | (207) | (546) | (166) | (138) | ||||||
| Charge-offs home equity | (235) | (164) | (232) | (535) | (255) | ||||||
| Charge-offs consumer | (2,772) | (2,734) | (2,430) | (2,341) | (1,912) | ||||||
| Charge-offs commercial real estate | (483) | (657) | (621) | (1,329) | (4,392) | ||||||
| Charge-offs commercial | (1,209) | (865) | (404) | (243) | (329) | ||||||
| Recoveries | 2,400 | 2,552 | 3,427 | 8,389 | 3,457 | ||||||
| Ending balance | $ | 124,423 | 121,257 | 118,036 | 109,819 | 98,355 | |||||
| Net charge-offs to average loans, annualized | 0.10 | % | 0.08 | % | 0.03 | % | (0.14) | % | 0.14 | % | |
| Six months ended June 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | ||||||
| 2023 | 2022 | ||||||||||
| Beginning balance | $ | 118,036 | 102,241 | ||||||||
| ASU 2022-02 Adoption | 426 | — | |||||||||
| Provision | 10,880 | 1,148 | |||||||||
| Charge-offs residential mortgage | (752) | (1,321) | |||||||||
| Charge-offs home equity | (399) | (702) | |||||||||
| Charge-offs consumer | (5,506) | (3,635) | |||||||||
| Charge-offs commercial real estate | (1,140) | (5,416) | |||||||||
| Charge-offs commercial | (2,074) | (1,010) | |||||||||
| Recoveries | 4,952 | 7,050 | |||||||||
| Ending balance | $ | 124,423 | 98,355 | ||||||||
| Net charge-offs to average loans, annualized | 0.09 | % | 0.10 | % |
Northwest Bancshares, Inc. and Subsidiaries
Average Balance Sheet (Unaudited)
(dollars in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
| Quarter ended | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | ||||||||||||||||||||||
| 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 | $ | 3,485,517 | 32,485 | 3.73 | % | $ | 3,493,617 | 32,009 | 3.66 | % | $ | 3,439,401 | 30,974 | 3.60 | % | $ | 3,331,173 | 29,414 | 3.53 | % | $ | 3,171,469 | 27,327 | 3.45 | % | |
| Home equity loans | 1,273,298 | 16,898 | 5.32 | % | 1,284,425 | 16,134 | 5.09 | % | 1,282,733 | 15,264 | 4.72 | % | 1,274,918 | 13,658 | 4.25 | % | 1,277,440 | 11,961 | 3.76 | % | ||||||
| Consumer loans | 2,143,804 | 22,662 | 4.24 | % | 2,123,672 | 20,794 | 3.97 | % | 2,069,207 | 19,709 | 3.78 | % | 1,981,754 | 17,256 | 3.45 | % | 1,880,769 | 15,777 | 3.36 | % | ||||||
| Commercial real estate loans | 2,836,443 | 38,426 | 5.43 | % | 2,824,120 | 37,031 | 0.1 | 5.24 | % | 2,822,008 | 35,428 | 4.91 | % | 2,842,597 | 34,158 | 4.70 | % | 2,915,750 | 31,844 | 4.32 | % | |||||
| Commercial loans | 1,326,598 | 22,872 | 6.92 | % | 1,161,298 | 18,353 | 6.32 | % | 1,113,178 | 16,315 | 5.74 | % | 1,050,124 | 12,978 | 4.84 | % | 912,454 | 9,090 | 3.94 | % | ||||||
| Total loans receivable (a) (b) (d) | 11,065,660 | 133,343 | 4.83 | % | 10,887,132 | 124,321 | 4.63 | % | 10,726,527 | 117,690 | 4.35 | % | 10,480,566 | 107,464 | 4.07 | % | 10,157,882 | 95,999 | 3.79 | % | ||||||
| Mortgage-backed securities (c) | 1,859,427 | 8,326 | 1.79 | % | 1,909,676 | 8,537 | 1.79 | % | 1,956,167 | 8,603 | 1.76 | % | 2,019,715 | 8,683 | 1.72 | % | 1,952,375 | 7,158 | 1.47 | % | ||||||
| Investment securities (c) (d) | 374,560 | 1,715 | 1.83 | % | 384,717 | 1,761 | 1.83 | % | 386,468 | 1,753 | 1.81 | % | 388,755 | 1,762 | 1.81 | % | 376,935 | 1,590 | 1.69 | % | ||||||
| FHLB stock, at cost | 45,505 | 844 | 7.44 | % | 39,631 | 690 | 7.06 | % | 26,827 | 419 | 6.19 | % | 14,028 | 148 | 4.19 | % | 13,428 | 82 | 2.44 | % | ||||||
| Other interest-earning deposits | 38,912 | 594 | 6.12 | % | 30,774 | 423 | 5.50 | % | 9,990 | 153 | 5.99 | % | 253,192 | 1,295 | 2.00 | % | 846,142 | 1,684 | 0.79 | % | ||||||
| Total interest-earning assets | 13,384,064 | 144,822 | 4.34 | % | 13,251,930 | 135,732 | 4.15 | % | 13,105,979 | 128,618 | 3.89 | % | 13,156,256 | 119,352 | 3.60 | % | 13,346,762 | 106,513 | 3.20 | % | ||||||
| Noninterest-earning assets (e) | 861,853 | 869,566 | 877,121 | 896,663 | 909,943 | |||||||||||||||||||||
| Total assets | $ | 14,245,917 | $ | 14,121,496 | $ | 13,983,100 | $ | 14,052,919 | $ | 14,256,705 | ||||||||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Savings deposits (g) | $ | 2,142,941 | 1,393 | 0.26 | % | $ | 2,198,988 | 690 | 0.13 | % | $ | 2,298,451 | 585 | 0.10 | % | $ | 2,350,248 | 594 | 0.10 | % | $ | 2,361,919 | 589 | 0.10 | % | |
| Interest-bearing demand deposits (g) | 2,469,666 | 1,648 | 0.27 | % | 2,612,883 | 951 | 0.15 | % | 2,718,360 | 509 | 0.07 | % | 2,794,338 | 360 | 0.05 | % | 2,857,336 | 310 | 0.04 | % | ||||||
| Money market deposit accounts (g) | 2,221,713 | 6,113 | 1.10 | % | 2,408,582 | 4,403 | 0.74 | % | 2,512,892 | 1,310 | 0.21 | % | 2,620,850 | 692 | 0.10 | % | 2,653,467 | 668 | 0.10 | % | ||||||
| Time deposits (g) | 1,765,454 | 12,663 | 2.88 | % | 1,293,609 | 5,194 | 1.63 | % | 1,024,895 | 1,467 | 0.57 | % | 1,110,906 | 1,511 | 0.54 | % | 1,220,815 | 1,774 | 0.58 | % | ||||||
| Borrowed funds (f) | 837,358 | 10,202 | 4.89 | % | 740,218 | 7,938 | 4.35 | % | 451,369 | 3,967 | 3.49 | % | 127,073 | 239 | 0.75 | % | 123,749 | 167 | 0.54 | % | ||||||
| Subordinated debt | 113,958 | 1,148 | 4.03 | % | 113,870 | 1,148 | 4.03 | % | 113,783 | 1,148 | 4.04 | % | 113,695 | 1,149 | 4.04 | % | 119,563 | 1,203 | 4.03 | % | ||||||
| Junior subordinated debentures | 129,401 | 2,280 | 6.97 | % | 129,335 | 2,152 | 6.66 | % | 129,271 | 1,823 | 5.52 | % | 129,207 | 1,322 | 4.00 | % | 129,142 | 920 | 2.82 | % | ||||||
| Total interest-bearing liabilities | 9,680,491 | 35,447 | 1.47 | % | 9,497,485 | 22,476 | 0.96 | % | 9,249,021 | 10,809 | 0.46 | % | 9,246,317 | 5,867 | 0.25 | % | 9,465,991 | 5,631 | 0.24 | % | ||||||
| Noninterest-bearing demand deposits (g) | 2,820,928 | 2,889,973 | 3,039,000 | 3,093,490 | 3,090,372 | |||||||||||||||||||||
| Noninterest-bearing liabilities | 224,508 | 235,213 | 229,794 | 209,486 | 193,510 | |||||||||||||||||||||
| Total liabilities | 12,725,927 | 12,622,671 | 12,517,815 | 12,549,293 | 12,749,873 | |||||||||||||||||||||
| Shareholders’ equity | 1,519,990 | 1,498,825 | 1,465,285 | 1,503,626 | 1,506,832 | |||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 14,245,917 | $ | 14,121,496 | $ | 13,983,100 | $ | 14,052,919 | $ | 14,256,705 | ||||||||||||||||
| Net interest income/Interest rate spread | 109,375 | 2.87 | % | 113,256 | 3.19 | % | 117,809 | 3.43 | % | 113,485 | 3.35 | % | 100,882 | 2.96 | % | |||||||||||
| Net interest-earning assets/Net interest margin | $ | 3,703,573 | 3.28 | % | $ | 3,754,445 | 3.47 | % | $ | 3,856,958 | 3.57 | % | $ | 3,909,939 | 3.42 | % | $ | 3,880,771 | 3.07 | % | ||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.38X | 1.40X | 1.42X | 1.42X | 1.41X |
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/amortization of deferred loan fees/expenses, which 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 0.77%, 0.40%, 0.13%, 0.11%, and 0.11%, respectively and average cost of Interest-bearing deposits were 1.02%, 0.54%, 0.18%, 0.14%, and 0.15%, respectively.
(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 4.81%, 4.61%, 4.33%, 4.05%, and 3.77%, respectively, Investment securities — 1.61%, 1.61%, 1.59%, 1.59%, and 1.48%, respectively, Interest-earning assets — 4.32%, 4.13%, 3.87%, 3.58%, and 3.18%, respectively. GAAP basis net interest rate spreads were 2.85%, 3.17%, 3.41%, 3.33%, and 2.94%, respectively, and GAAP basis net interest margins were 3.25%, 3.44%, 3.54%, 3.40%, and 3.05%, respectively.
Northwest Bancshares, Inc. and Subsidiaries
Average Balance Sheet (Unaudited)
(in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
| Six months ended June 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||||||
| 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 | $ | 3,489,545 | 64,494 | 3.70 | % | $ | 3,077,155 | 52,868 | 3.44 | % |
| Home equity loans | 1,278,831 | 33,033 | 5.21 | % | 1,285,668 | 23,433 | 3.68 | % | ||
| Consumer loans | 2,133,794 | 43,457 | 4.11 | % | 1,840,110 | 30,684 | 3.36 | % | ||
| Commercial real estate loans | 2,830,316 | 75,463 | 5.38 | % | 2,957,744 | 61,601 | 4.14 | % | ||
| Commercial loans | 1,244,404 | 41,225 | 6.68 | % | 868,854 | 15,987 | 3.66 | % | ||
| Loans receivable (a) (b) (d) | 10,976,890 | 257,672 | 4.73 | % | 10,029,531 | 184,573 | 3.71 | % | ||
| Mortgage-backed securities (c) | 1,884,412 | 16,863 | 1.79 | % | 1,948,794 | 13,518 | 1.39 | % | ||
| Investment securities (c) (d) | 379,611 | 3,478 | 1.83 | % | 375,323 | 3,130 | 1.67 | % | ||
| FHLB stock, at cost | 42,584 | 1,534 | 7.26 | % | 13,648 | 163 | 2.41 | % | ||
| Other interest-earning deposits | 34,842 | 1,017 | 5.88 | % | 1,003,627 | 2,151 | 0.43 | % | ||
| Total interest-earning assets | 13,318,339 | 280,564 | 4.25 | % | 13,370,923 | 203,535 | 3.07 | % | ||
| Noninterest-earning assets (e) | 865,711 | 969,111 | ||||||||
| Total assets | $ | 14,184,050 | $ | 14,340,034 | ||||||
| Liabilities and shareholders’ equity | ||||||||||
| Interest-bearing liabilities: | ||||||||||
| Savings deposits (g) | $ | 2,187,355 | 2,082 | 0.19 | % | $ | 2,348,282 | 1,181 | 0.10 | % |
| Interest-bearing demand deposits (g) | 2,540,879 | 2,599 | 0.21 | % | 2,866,333 | 631 | 0.04 | % | ||
| Money market deposit accounts (g) | 2,314,631 | 10,516 | 0.92 | % | 2,660,745 | 1,321 | 0.10 | % | ||
| Time deposits (g) | 1,514,289 | 17,858 | 2.38 | % | 1,256,513 | 3,959 | 0.64 | % | ||
| Borrowed funds (f) | 789,057 | 18,139 | 4.64 | % | 129,487 | 324 | 0.50 | % | ||
| Subordinated debt | 113,914 | 2,296 | 4.03 | % | 121,574 | 2,454 | 4.04 | % | ||
| Junior subordinated debentures | 129,368 | 4,433 | 6.82 | % | 129,109 | 1,571 | 2.42 | % | ||
| Total interest-bearing liabilities | 9,589,493 | 57,923 | 1.22 | % | 9,512,043 | 11,441 | 0.24 | % | ||
| Noninterest-bearing demand deposits (g) | 2,855,260 | 3,075,617 | ||||||||
| Noninterest-bearing liabilities | 229,831 | 198,854 | ||||||||
| Total liabilities | 12,674,584 | 12,786,514 | ||||||||
| Shareholders’ equity | 1,509,466 | 1,553,520 | ||||||||
| Total liabilities and shareholders’ equity | $ | 14,184,050 | $ | 14,340,034 | ||||||
| Net interest income/Interest rate spread | 222,641 | 3.03 | % | 192,094 | 2.83 | % | ||||
| Net interest-earning assets/Net interest margin | $ | 3,728,846 | 3.37 | % | $ | 3,858,880 | 2.87 | % | ||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.39X | 1.41X |
(a)Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material.
(c)Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
(e)Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)Average balances include FHLB borrowings and collateralized borrowings.
(g)Average cost of deposits were 0.58% and 0.12%, respectively and average cost of Interest-bearing deposits were 0.78% and 0.16%, respectively.
(h)Shown on a FTE basis. GAAP basis yields were: Loans — 4.71% and 3.69%, respectively; Investment securities — 1.61% and 1.46%, respectively; Interest-earning assets — 4.22% and 3.05%, respectively. GAAP basis net interest rate spreads were 3.01% and 2.81%, respectively; and GAAP basis net interest margins were 3.35% and 2.86%, respectively.
17