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


PR Newswire | Jan 24, 2022 09:01AM EST

Dividend

01/24 08:00 CST

Northwest Bancshares, Inc. Announces Fourth Quarter 2021 Earnings and Quarterly Dividend COLUMBUS, Ohio, Jan. 24, 2022

COLUMBUS, Ohio, Jan. 24, 2022 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2021 of $30.1 million, or $0.24 per diluted share. This represents a decrease of $5.0 million, or 14.3%, compared to the same quarter last year when net income was $35.1 million, or $0.28 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2021 were 7.65% and 0.82% compared to 9.00% and 1.01% for the same quarter last year.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on February 14, 2022 to shareholders of record as of February 3, 2022. This is the 109th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of December 31, 2021, this represents an annualized dividend yield of approximately 5.6%.

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

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

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

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

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

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

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

Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services. As of December 31, 2021, Northwest operates 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

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

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(dollars in thousands, except per share amounts)

December 31, September 30, December 31, 2021 2021 2020

Assets

Cash and cash equivalents $ 1,279,259 1,090,485 736,277

Marketable securities available-for-sale (amortized cost 1,548,592 1,583,715 1,398,941of $1,565,002, $1,587,105 and $1,375,685, respectively)

Marketable securities held-to-maturity (fair value of 768,154 618,395 178,887$751,513, $609,777 and $179,666, respectively)

Total cash and cash equivalents and marketable securities 3,596,005 3,292,595 2,314,105

Residential mortgage loans held-for-sale 25,056 27,411 58,786

Residential mortgage loans 2,969,564 2,962,110 3,009,335

Home equity loans 1,319,931 1,350,348 1,467,736

Consumer loans 1,838,748 1,816,836 1,507,993

Commercial real estate loans 3,015,484 3,162,551 3,345,889

Commercial loans 847,609 879,712 1,191,110

Total loans receivable 10,016,392 10,198,968 10,580,849

Allowance for credit losses (102,241) (109,767) (134,427)

Loans receivable, net 9,914,151 10,089,201 10,446,422

FHLB stock, at cost 14,184 14,567 21,748

Accrued interest receivable 25,599 26,995 35,554

Real estate owned, net 873 809 2,232

Premises and equipment, net 156,524 155,740 161,538

Bank-owned life insurance 256,213 254,871 253,951

Goodwill 380,997 380,997 382,279

Other intangible assets, net 12,836 14,041 19,936

Other assets 144,126 159,419 168,503

Total assets $ 14,501,508 14,389,235 13,806,268

Liabilities and shareholders' equity

Liabilities

Noninterest-bearing demand deposits $ 3,099,526 3,052,115 2,716,224

Interest-bearing demand deposits 2,940,442 2,926,351 2,755,950

Money market deposit accounts 2,629,882 2,584,424 2,437,539

Savings deposits 2,303,760 2,271,496 2,047,424

Time deposits 1,327,555 1,387,827 1,642,096

Total deposits 12,301,165 12,222,213 11,599,233

Borrowed funds 139,093 126,496 159,715

Subordinated debt 123,575 123,486 123,329

Junior subordinated debentures 129,054 128,989 128,794

Advances by borrowers for taxes and insurance 44,582 26,951 45,230

Accrued interest payable 1,804 589 2,054

Other liabilities 178,664 198,743 209,210

Total liabilities 12,917,937 12,827,467 12,267,565

Shareholders' equity

Preferred stock, $0.01 par value: 50,000,000 shares - - -authorized, no shares issued

Common stock, $0.01 par value: 500,000,000 sharesauthorized, 126,612,183, 126,521,344, and 127,019,452 1,266 1,265 1,270shares issued and outstanding, respectively

Additional paid-in capital 1,010,405 1,008,099 1,015,502

Retained earnings 609,529 604,787 555,480

Accumulated other comprehensive loss (37,629) (52,383) (33,549)

Total shareholders' equity 1,583,571 1,561,768 1,538,703

Total liabilities and shareholders' equity $ 14,501,508 14,389,235 13,806,268

Equity to assets 10.92 % 10.85 % 11.14 %

Tangible common equity to assets* 8.43 % 8.34 % 8.48 %

Book value per share $ 12.51 12.34 12.11

Tangible book value per share* $ 9.40 9.22 8.95

Closing market price per share $ 14.16 13.28 12.74

Full time equivalent employees 2,332 2,404 2,421

Number of banking offices 170 170 170

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

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)

Quarter ended

December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020

Interest income:

Loans receivable $ 95,295 97,475 95,255 102,318 105,681

Mortgage-backed securities 5,743 5,840 5,680 4,200 4,551

Taxable investment securities 640 649 693 634 471

Tax-free investment securities 688 628 594 575 656

FHLB stock dividends 82 71 138 116 192

Interest-earning deposits 467 352 192 183 178

Total interest income 102,915 105,015 102,552 108,026 111,729

Interest expense:

Deposits 4,295 4,540 4,773 5,514 6,714

Borrowed funds 1,964 2,056 2,050 2,054 2,127

Total interest expense 6,259 6,596 6,823 7,568 8,841

Net interest income 96,656 98,419 95,729 100,458 102,888

Provision for credit losses (1,909) (4,354) - (5,620) (2,230)

Net interest income after provision for credit losses 98,565 102,773 95,729 106,078 105,118

Noninterest income:

Gain/(loss) on sale of investments (4) (46) (105) (21) 75

Service charges and fees 13,500 13,199 12,744 12,394 13,074

Trust and other financial services income 6,820 7,182 7,435 6,484 5,722

Insurance commission income - 44 1,043 2,546 2,034

Gain/(loss) on real estate owned, net 71 247 166 (42) 114

Income from bank-owned life insurance 1,343 1,332 1,639 1,736 1,330

Mortgage banking income 2,120 3,941 3,811 6,020 7,120

Gain on sale of insurance business - - 25,327 - -

Other operating income 3,192 3,287 2,648 2,836 2,654

Total noninterest income 27,042 29,186 54,708 31,953 32,123

Noninterest expense:

Compensation and employee benefits 48,691 49,063 48,894 47,239 48,209

Premises and occupancy costs 7,104 7,745 7,410 8,814 7,614

Office operations 3,144 4,143 3,317 3,165 4,009

Collections expense 602 411 303 616 893

Processing expenses 13,639 13,517 15,151 13,456 12,186

Marketing expenses 2,054 2,102 2,101 1,980 1,994

Federal deposit insurance premiums 1,131 1,184 1,353 1,307 1,651

Professional services 4,513 4,295 4,231 4,582 3,599

Amortization of intangible assets 1,205 1,321 1,433 1,594 1,664

Real estate owned expense 44 94 85 75 64

Merger, asset disposition and restructuring expense 2,812 - 632 9 7,238

Other expenses 1,346 2,227 1,422 3,354 3,728

Total noninterest expense 86,285 86,102 86,332 86,191 92,849

Income before income taxes 39,322 45,857 64,105 51,840 44,392

Income tax expense 9,266 10,794 15,138 11,603 9,327

Net income $ 30,056 35,063 48,967 40,237 35,065

Basic earnings per share $ 0.24 0.28 0.38 0.32 0.28

Diluted earnings per share $ 0.24 0.27 0.38 0.32 0.28

Annualized return on average equity 7.65 % 8.86 % 12.58 % 10.61 % 9.00 %

Annualized return on average assets 0.82 % 0.97 % 1.37 % 1.17 % 1.01 %

Annualized return on tangible common equity * 10.02 % 11.92 % 16.66 % 14.31 % 12.27 %

Efficiency ratio ** 66.51 % 66.44 % 67.35 % 63.88 % 62.18 %

Annualized noninterest expense to average assets *** 2.25 % 2.33 % 2.35 % 2.45 % 2.42 %

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

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

*** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)

Year ended December 31,

2021 2020

Interest income:

Loans receivable $ 390,343 410,907

Mortgage-backed securities 21,463 17,416

Taxable investment securities 2,616 1,985

Tax-free investment securities 2,485 2,060

FHLB dividends 407 981

Interest-earning deposits 1,194 719

Total interest income 418,508 434,068

Interest expense:

Deposits 19,122 35,896

Borrowed funds 8,124 6,444

Total interest expense 27,246 42,340

Net interest income 391,262 391,728

Provision for credit losses (11,883) 83,975

Net interest income after provision for credit losses 403,145 307,753

Noninterest income:

Gain/(loss) on sale of investments (176) 236

Gain on sale of loans - 1,302

Service charges and fees 51,837 55,613

Trust and other financial services income 27,921 20,922

Insurance commission income 3,633 9,132

Gain/(loss) on real estate owned, net 442 (106)

Income from bank-owned life insurance 6,050 5,190

Mortgage banking income 15,892 31,391

Gain on sale of insurance business 25,327 -

Other operating income 11,963 8,585

Total noninterest income 142,889 132,265

Noninterest expense:

Compensation and employee benefits 193,887 178,375

Premises and occupancy costs 31,073 30,622

Office operations 13,769 15,728

Collections expense 1,932 3,275

Processing expenses 55,763 50,050

Marketing expenses 8,237 7,695

Federal deposit insurance premiums 4,975 4,767

Professional services 17,621 12,482

Amortization of intangible assets 5,553 6,856

Real estate owned expense 298 359

Merger, asset disposition and restructuring expense 3,453 20,789

Other expenses 8,349 16,494

Total noninterest expense 344,910 347,492

Income before income taxes 201,124 92,526

Income tax expense 46,801 17,672

Net income $ 154,323 74,854

Basic earnings per share $ 1.22 0.62

Diluted earnings per share $ 1.21 0.62

Annualized return on average equity 9.91 % 4.72 %

Annualized return on average assets 1.08 % 0.58 %

Annualized return on tangible common equity * 12.97 % 6.59 %

Efficiency ratio ** 66.02 % 61.04 %

Annualized noninterest expense to average assets *** 2.35 % 2.48 %

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

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

*** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries

Asset Quality (Unaudited)

(dollars in thousands)

December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020

Nonaccrual loans current:

Residential mortgage loans $ 1,354 2,015 189 164 21

Home equity loans 1,212 1,267 170 268 154

Consumer loans 1,336 1,465 188 225 207

Commercial real estate loans 106,233 111,075 138,820 146,304 20,317

Commercial loans 6,098 17,021 17,545 6,361 16,027

Total nonaccrual loans current $ 116,233 132,843 156,912 153,322 36,726

Nonaccrual loans delinquent 30 days to 59 days:

Residential mortgage loans $ 244 99 68 1,261 647

Home equity loans 223 328 229 340 338

Consumer loans 241 152 230 254 301

Commercial real estate loans 239 205 1,589 965 1,416

Commercial loans 53 102 406 1,538 87

Total nonaccrual loans delinquent 30 days to 59 days $ 1,000 886 2,522 4,358 2,789

Nonaccrual loans delinquent 60 days to 89 days:

Residential mortgage loans $ 1,163 527 207 813 767

Home equity loans 61 142 310 417 190

Consumer loans 292 291 297 649 583

Commercial real estate loans 364 419 198 1,877 714

Commercial loans 218 170 21 7,919 48

Total nonaccrual loans delinquent 60 days to 89 days $ 2,098 1,549 1,033 11,675 2,302

Nonaccrual loans delinquent 90 days or more:

Residential mortgage loans $ 7,641 8,069 10,007 9,333 14,489

Home equity loans 4,262 4,745 6,256 7,044 8,441

Consumer loans 2,069 2,184 2,341 3,625 5,473

Commercial real estate loans 24,063 25,562 23,564 29,737 25,287

Commercial loans 1,105 1,104 4,126 4,860 7,325

Total nonaccrual loans delinquent 90 days or more $ 39,140 41,664 46,294 54,599 61,015

Total nonaccrual loans $ 158,471 176,942 206,761 223,954 102,832

Total nonaccrual loans $ 158,471 176,942 206,761 223,954 102,832

Loans 90 days past due and still accruing 331 386 302 197 585

Nonperforming loans 158,802 177,328 207,063 224,151 103,417

Real estate owned, net 873 809 1,353 1,738 2,232

Nonperforming assets $ 159,675 178,137 208,416 225,889 105,649

Nonaccrual troubled debt restructuring * $ 17,216 12,858 8,951 7,390 10,704

Accruing troubled debt restructuring 13,072 13,664 18,480 20,120 21,431

Total troubled debt restructuring $ 30,288 26,522 27,431 27,510 32,135

Nonperforming loans to total loans 1.59 % 1.74 % 2.01 % 2.16 % 0.98 %

Nonperforming assets to total assets 1.10 % 1.24 % 1.46 % 1.58 % 0.77 %

Allowance for credit losses to total loans 1.02 % 1.08 % 1.14 % 1.20 % 1.27 %

Allowance for total loans excluding PPP loan balances 1.03 % 1.09 % 1.17 % 1.24 % 1.32 %

Allowance for credit losses to nonperforming loans 64.38 % 61.90 % 56.66 % 55.32 % 129.99 %

* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries

Loans by Credit Quality Indicators (Unaudited)

(dollars in thousands)

Special Substandard LoansAt December 31, 2021 Pass Doubtful Loss mention* ** receivable

Personal Banking:

Residential mortgage loans $ 2,978,080 - 16,540 - - 2,994,620

Home equity loans 1,312,820 - 7,111 - - 1,319,931

Consumer loans 1,834,478 - 4,270 - - 1,838,748

Total Personal Banking 6,125,378 - 27,921 - - 6,153,299

Commercial Banking:

Commercial real estate loans 2,639,676 74,123 301,685 - - 3,015,484

Commercial loans 808,323 5,730 33,556 - - 847,609

Total Commercial Banking 3,447,999 79,853 335,241 - - 3,863,093

Total loans $ 9,573,377 79,853 363,162 - - 10,016,392

At September 30, 2021

Personal Banking:

Residential mortgage loans $ 2,972,489 - 17,032 - - 2,989,521

Home equity loans 1,342,479 - 7,869 - - 1,350,348

Consumer loans 1,812,360 - 4,476 - - 1,816,836

Total Personal Banking 6,127,328 - 29,377 - - 6,156,705

Commercial Banking:

Commercial real estate loans 2,799,592 63,034 299,925 - - 3,162,551

Commercial loans 813,665 10,976 55,071 - - 879,712

Total Commercial Banking 3,613,257 74,010 354,996 - - 4,042,263

Total loans $ 9,740,585 74,010 384,373 - - 10,198,968

At June 30, 2021

Personal Banking:

Residential mortgage loans $ 2,937,418 - 17,133 - - 2,954,551

Home equity loans 1,367,765 - 8,463 - - 1,376,228

Consumer loans 1,741,872 - 3,359 - - 1,745,231

Total Personal Banking 6,047,055 - 28,955 - - 6,076,010

Commercial Banking:

Commercial real estate loans 2,781,734 73,167 360,288 - - 3,215,189

Commercial loans 943,665 11,266 63,850 - - 1,018,781

Total Commercial Banking 3,725,399 84,433 424,138 - - 4,233,970

Total loans $ 9,772,454 84,433 453,093 - - 10,309,980

At March 31, 2021

Personal Banking:

Residential mortgage loans $ 2,950,103 - 21,575 - - 2,971,678

Home equity loans 1,396,757 - 10,767 - - 1,407,524

Consumer loans 1,547,502 - 6,853 - - 1,554,355

Total Personal Banking 5,894,362 - 39,195 - - 5,933,557

Commercial Banking:

Commercial real estate loans 2,801,082 120,345 368,009 - - 3,289,436

Commercial loans 1,061,884 22,623 60,540 - - 1,145,047

Total Commercial Banking 3,862,966 142,968 428,549 - - 4,434,483

Total loans $ 9,757,328 142,968 467,744 - - 10,368,040

At December 31, 2020

Personal Banking:

Residential mortgage loans $ 3,042,544 - 25,577 - - 3,068,121

Home equity loans 1,455,474 - 12,262 - - 1,467,736

Consumer loans 1,499,004 - 8,989 - - 1,507,993

Total Personal Banking 5,997,022 - 46,828 - - 6,043,850

Commercial Banking:

Commercial real estate loans 2,852,705 108,021 385,163 - - 3,345,889

Commercial loans 1,092,498 41,278 57,334 - - 1,191,110

Total Commercial Banking 3,945,203 149,299 442,497 - - 4,536,999

Total loans $ 9,942,225 149,299 489,325 - - 10,580,849

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

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

Northwest Bancshares, Inc. and Subsidiaries

Loan Delinquency (Unaudited)

(dollars in thousands)

December 31, * September 30, * June 30, * March 31, * December 31, * 2021 2021 2021 2021 2020

(Number of loans and dollar amount of loans)

Loans delinquent 30 days to 59 days:

Residential mortgage loans 277 $ 20,567 0.7 % 17 $ 765 - % 13 $ 606 - % 248 $ 22,236 0.7 % 315 $ 28,797 0.9 %

Home equity loans 112 3,153 0.2 % 101 3,351 0.2 % 91 3,677 0.3 % 84 3,334 0.2 % 138 4,763 0.3 %

Consumer loans 589 6,536 0.4 % 576 6,146 0.3 % 532 5,571 0.3 % 535 5,732 0.4 % 1,279 10,574 0.7 %

Commercial real estate loans 17 17,065 0.6 % 19 2,004 0.1 % 13 2,857 0.1 % 33 12,240 0.4 % 43 10,923 0.3 %

Commercial loans 12 193 - % 10 692 0.1 % 15 686 0.1 % 16 3,032 0.3 % 37 6,405 0.5 %

Total loans delinquent 30 days to 59 days 1,007 $ 47,514 0.5 % 723 $ 12,958 0.1 % 664 $ 13,397 0.1 % 916 $ 46,574 0.4 % 1,812 $ 61,462 0.6 %

Loans delinquent 60 days to 89 days:

Residential mortgage loans 59 $ 5,433 0.2 % 55 $ 4,907 0.2 % 58 $ 4,051 0.1 % 26 $ 2,062 0.1 % 84 $ 5,083 0.2 %

Home equity loans 30 949 0.1 % 29 1,024 0.1 % 36 1,502 0.1 % 31 953 0.1 % 47 1,656 0.1 %

Consumer loans 195 2,006 0.1 % 180 1,757 0.1 % 181 1,988 0.1 % 169 1,868 0.1 % 322 2,742 0.2 %

Commercial real estate loans 5 769 - % 8 1,170 - % 9 1,335 - % 14 7,609 0.2 % 11 1,615 - %

Commercial loans 10 727 0.1 % 2 170 - % 2 27 - % 12 8,979 0.8 % 10 864 0.1 %

Total loans delinquent 60 days to 89 days 299 $ 9,884 0.1 % 274 $ 9,028 0.1 % 286 $ 8,903 0.1 % 252 $ 21,471 0.2 % 474 $ 11,960 0.1 %

Loans delinquent 90 days or more: **

Residential mortgage loans 87 $ 7,641 0.3 % 95 $ 8,069 0.3 % 115 $ 10,007 0.3 % 121 $ 9,333 0.3 % 168 $ 14,489 0.5 %

Home equity loans 105 4,262 0.3 % 119 4,745 0.4 % 146 6,256 0.5 % 176 7,044 0.5 % 207 8,441 0.6 %

Consumer loans 296 2,400 0.1 % 308 2,568 0.1 % 356 2,643 0.2 % 454 3,822 0.2 % 720 6,058 0.4 %

Commercial real estate loans 52 24,063 0.8 % 59 25,562 0.8 % 83 23,564 0.7 % 113 29,737 0.9 % 119 25,287 0.8 %

Commercial loans 8 1,105 0.1 % 10 1,104 0.1 % 18 4,126 0.4 % 31 4,860 0.4 % 37 7,325 0.6 %

Total loans delinquent 90 days or more 548 $ 39,471 0.4 % 591 $ 42,048 0.4 % 718 $ 46,596 0.5 % 895 $ 54,796 0.5 % 1,251 $ 61,600 0.6 %

Total loans delinquent 1,854 $ 96,869 1.0 % 1,588 $ 64,034 0.6 % 1,668 $ 68,896 0.7 % 2,063 $ 122,841 1.2 % 3,537 $ 135,022 1.3 %

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

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

Northwest Bancshares, Inc. and Subsidiaries

Allowance for Credit Losses (Unaudited)

(dollars in thousands)

Quarter ended

December September June March December 31, 30, 30, 31, 31, 2021 2021 2021 2021 2020

Beginning balance $ 117,330 123,997 134,427 140,209 109,767

Provision (1,909) (4,354) - (5,620) (2,230)

Charge-offs residential (784) (1,263) (770) (855) (407)mortgage

Charge-offs home equity (1,299) (1,474) (379) (228) (58)

Charge-offs consumer (2,897) (2,148) (2,401) (2,603) (2,623)

Charge-offs commercial real (2,652) (1,581) (3,964) (4,626) (2,770)estate

Charge-offs commercial (2,586) (412) (1,161) (54) (156)

Recoveries 4,601 3,669 2,008 3,556 2,462

Ending balance $ 109,767 117,330 123,997 134,427 102,241

Net charge-offs to average 0.22 % 0.12 % 0.26 % 0.19 % 0.13 %loans, annualized

Year ended December 31,

2021 2020

Beginning balance $ 57,941 134,427

CECL adoption - 10,792

Initial allowance on loans purchased with credit - 8,845 deterioration

Provision (11,883) 83,975

Charge-offs residential mortgage (3,672) (917)

Charge-offs home equity (3,380) (608)

Charge-offs consumer (10,049) (12,658)

Charge-offs commercial real estate (12,823) (4,323)

Charge-offs commercial (4,213) (16,212)

Recoveries 13,834 7,592

Ending balance $ 134,427 102,241

Net charge-offs to average loans 0.20 % 0.27 %

December 31, 2021

Originated loans Acquired loans Total loans

Balance ReserveBalance ReserveBalance Reserve

Residential $ 6,621 211,161 752 2,994,620 7,373 mortgage loans 2,783,459

Home equity loans1,107,2024,243 212,729 1,057 1,319,931 5,300

Consumer loans 1,692,20716,775 146,541 1,592 1,838,748 18,367

Personal Banking 5,582,86827,639 570,431 3,401 6,153,299 31,040 Loans

Commercial real 2,523,28048,503 492,204 9,521 3,015,484 58,024 estate loans

Commercial loans 765,877 10,608 81,732 2,569 847,609 13,177

Commercial 3,289,15759,111 573,936 12,090 3,863,093 71,201 Banking Loans

Total Loans $ 86,750 1,144,36715,491 10,016,392102,241 8,872,025

Northwest Bancshares, Inc. and Subsidiaries

Average Balance Sheet (Unaudited)

(dollars in thousands)

The following table sets forth certain information relating to the Company'saverage balance sheet and reflects the average yield on assets and average costof liabilities for the periods indicated. Such yields and costs are derived bydividing income or expense by the average balance of assets or liabilities,respectively, for the periods presented. Average balances are calculated usingdaily averages.

Quarter ended

December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020

Avg. Avg. Avg. Avg. Avg. Average Average Average Average Average Interest yield/ Interest yield/ Interest yield/ Interest yield/ Interest yield/ balance balance balance balance balance cost (i) cost (i) cost (i) cost (i) cost (i)

Assets:

Interest-earning assets:

Residential mortgage loans $ 2,977,942 25,269 3.39 % $ 2,959,794 25,398 3.43 % $ 2,935,034 25,609 3.49 % $ 3,007,439 26,366 3.51 % $ 3,089,916 27,503 3.56 %

Home equity loans 1,328,553 11,750 3.51 % 1,356,131 11,993 3.51 % 1,380,794 12,232 3.55 % 1,432,009 12,815 3.63 % 1,472,527 13,535 3.66 %

Consumer loans 1,756,620 15,514 3.50 % 1,728,563 16,220 3.72 % 1,589,739 14,555 3.67 % 1,463,284 14,566 4.04 % 1,444,860 15,874 4.37 %

Commercial real estate loans 3,113,924 34,062 4.28 % 3,205,839 35,305 4.31 % 3,257,810 33,349 4.05 % 3,313,892 38,471 4.64 % 3,317,418 37,965 4.48 %

Commercial loans 855,998 9,154 4.18 % 975,603 9,096 3.65 % 1,133,969 9,978 3.48 % 1,189,812 10,566 3.55 % 1,325,047 11,414 3.37 %

Total loans receivable (a) (b) (d) 10,033,037 95,749 3.79 % 10,225,930 98,012 3.80 % 10,297,346 95,723 3.73 % 10,406,436 102,784 4.01 % 10,649,768 106,291 3.97 %

Mortgage-backed securities (c) 1,894,683 5,743 1.21 % 1,832,876 5,840 1.27 % 1,756,227 5,680 1.29 % 1,324,558 4,200 1.27 % 1,166,739 4,551 1.56 %

Investment securities (c) (d) 358,558 1,535 1.71 % 348,619 1,466 1.68 % 364,414 1,466 1.61 % 331,358 1,381 1.67 % 252,898 1,380 2.18 %

FHLB stock, at cost 14,459 82 2.25 % 21,607 71 1.31 % 23,107 138 2.40 % 21,811 116 2.17 % 23,346 192 3.27 %

Other interest-earning deposits 1,168,449 467 0.16 % 905,130 352 0.15 % 810,741 192 0.09 % 801,119 183 0.09 % 632,494 178 0.11 %

Total interest-earning assets 13,469,186 103,576 3.05 % 13,334,162 105,741 3.15 % 13,251,835 103,199 3.12 % 12,885,282 108,664 3.42 % 12,725,245 112,592 3.52 %

Noninterest-earning assets (e) 1,004,905 1,074,122 1,104,924 1,102,477 1,066,609

Total assets $ 14,474,091 $ 14,408,284 $ 14,356,759 $ 13,987,759 $ 13,791,854

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Savings deposits $ 2,282,606 622 0.11 % $ 2,271,365 603 0.11 % $ 2,255,578 590 0.10 % $ 2,118,030 625 0.12 % $ 2,028,155 617 0.12 %

Interest-bearing demand deposits 2,933,466 411 0.06 % 2,890,905 414 0.06 % 2,840,949 407 0.06 % 2,783,429 429 0.06 % 2,699,515 476 0.07 %

Money market deposit accounts 2,618,177 656 0.10 % 2,565,159 637 0.10 % 2,537,629 621 0.10 % 2,497,495 657 0.11 % 2,426,513 960 0.16 %

Time deposits 1,356,513 2,606 0.76 % 1,423,041 2,886 0.80 % 1,493,947 3,155 0.85 % 1,583,525 3,803 0.97 % 1,676,094 4,660 1.11 %

Borrowed funds (f) 135,038 159 0.47 % 131,199 154 0.47 % 131,240 150 0.46 % 143,806 154 0.43 % 229,109 213 0.37 %

Subordinated debt (g) 123,514 1,180 3.82 % 123,513 1,277 4.10 % 123,443 1,264 4.11 % 123,357 1,258 4.14 % 123,283 1,256 4.05 %

Junior subordinated debentures 129,012 625 1.89 % 128,946 625 1.90 % 128,882 636 1.95 % 128,817 642 1.99 % 128,752 659 2.00 %

Total interest-bearing liabilities 9,578,326 6,259 0.26 % 9,534,128 6,596 0.27 % 9,511,668 6,823 0.29 % 9,378,459 7,568 0.33 % 9,311,421 8,841 0.38 %

Noninterest-bearing demand deposits (h) 3,093,518 3,058,819 3,036,202 2,805,206 2,675,986

Noninterest-bearing liabilities 242,620 244,402 247,930 265,667 253,966

Total liabilities 12,914,464 12,837,349 12,795,800 12,449,332 12,241,373

Shareholders' equity 1,559,627 1,570,935 1,560,959 1,538,427 1,550,481

Total liabilities and shareholders' equity $ 14,474,091 $ 14,408,284 $ 14,356,759 $ 13,987,759 $ 13,791,854

Net interest income/Interest rate spread 97,317 2.79 % 99,145 2.87 % 96,376 2.84 % 101,096 3.09 % 103,751 3.14 %

Net interest-earning assets/Net interest margin $ 3,890,860 2.89 % $ 3,800,034 2.97 % $ 3,740,167 2.91 % $ 3,506,823 3.18 % $ 3,413,824 3.26 %

Ratio of interest-earning assets to interest-bearing liabilities 1.41X 1.40X 1.39X 1.37X 1.37X

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

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

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

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, collateralized borrowings.

(g) On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.

(h) Average cost of deposits were 0.14%, 0.15%, 0.16%, 0.19%, and 0.23%, respectively.

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

Northwest Bancshares, Inc. and Subsidiaries

Average Balance Sheet (Unaudited)

(dollars in thousands)

The following table sets forth certain information relating to the Company'saverage balance sheet and reflects the average yield on assets and average costof liabilities for the periods indicated. Such yields and costs are derived bydividing income or expense by the average balance of assets or liabilities,respectively, for the periods presented. Average balances are calculated usingdaily averages.

Year ended December 31,

2021 2020

Avg. Avg. Average Average Interest yield/ Interest yield/ balance balance cost (i) cost (i)

Assets:

Interest-earning assets:

Residential mortgage loans $ 2,969,939 102,642 3.46 % $ 3,051,582 113,353 3.71 %

Home equity loans 1,374,038 48,789 3.55 % 1,436,632 55,875 3.89 %

Consumer loans 1,635,613 60,854 3.72 % 1,338,120 58,878 4.40 %

Commercial real estate loans 3,222,272 141,186 4.32 % 3,132,976 140,883 4.42 %

Commercial loans 1,037,758 38,794 3.69 % 1,145,143 44,142 3.79 %

Loans receivable (a) (b) (d) 10,239,620 392,265 3.83 % 10,104,453 413,131 4.09 %

Mortgage-backed securities (c) 1,704,006 21,463 1.26 % 889,744 17,416 1.96 %

Investment securities (c) (d) 350,806 5,848 1.67 % 196,071 4,841 2.47 %

FHLB stock, at cost 20,229 407 2.01 % 21,781 981 4.50 %

Other interest-earning deposits 921,360 1,194 0.13 % 520,666 719 0.14 %

Total interest-earning assets 13,236,021 421,177 3.18 % 11,732,715 437,088 3.73 %

Noninterest-earning assets (e) 1,072,313 1,159,405

Total assets $ 14,308,334 $ 12,892,120

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Savings deposits $ 2,232,454 2,440 0.11 % $ 1,885,517 2,640 0.14 %

Interest-bearing demand deposits 2,862,677 1,660 0.06 % 2,432,427 3,358 0.14 %

Money market deposit accounts 2,554,975 2,570 0.10 % 2,224,904 6,995 0.31 %

Time deposits 1,463,522 12,452 0.85 % 1,687,381 22,903 1.36 %

Borrowed funds (f) 135,285 616 0.46 % 346,442 3,190 0.92 %

Subordinated debt (g) 123,457 4,980 4.03 % - - - %

Junior subordinated debentures 128,915 2,528 1.93 % 126,683 3,254 2.53 %

Total interest-bearing liabilities 9,501,285 27,246 0.29 % 8,703,354 42,340 0.49 %

Noninterest-bearing demand deposits (h) 2,999,392 2,357,725

Noninterest-bearing liabilities 250,075 246,294

Total liabilities 12,750,752 11,307,373

Shareholders' equity 1,557,582 1,584,747

Total liabilities and shareholders' equity $ 14,308,334 $ 12,892,120

Net interest income/Interest rate spread 393,931 2.89 % 394,748 3.24 %

Net interest-earning assets/Net interest margin $ 3,734,736 2.98 % $ 3,029,361 3.36 %

Ratio of interest-earning assets to interest-bearing liabilities 1.39X 1.35X

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

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

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

(d) Interest income on tax-free investment securities and tax-free loans are presented on a FTE basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings and collateralized borrowings.

(g) On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.

(h) Average cost of deposits were 0.16% and 0.34%, respectively.

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

View original content to download multimedia: https://www.prnewswire.com/news-releases/northwest-bancshares-inc-announces-fourth-quarter-2021-earnings-and-quarterly-dividend-301465817.html

SOURCE Northwest Bancshares, Inc.






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