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Press release from PR Newswire

Northwest Bancshares, Inc. Announces Third Quarter 2012 Earnings and Dividend Declaration

Monday, October 22, 2012

Northwest Bancshares, Inc. Announces Third Quarter 2012 Earnings and Dividend Declaration10:37 EDT Monday, October 22, 2012WARREN, Pa., Oct. 22, 2012 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2012 of $15.7 million, or $0.17 per diluted share.  This represents a decrease of $1.0 million, or 6.1%, over the same quarter last year when net income was $16.7 million, or $0.17 per diluted share, and a decrease of $668,000, or 4.1%, over the quarter ended June 30, 2012 when net income was $16.4 million, or $0.17 per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 5.37% and 0.78% compared to 5.62% and 0.83% for the same quarter last year and 5.63% and 0.82% for the quarter ended June 30, 2012.  The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share payable on November 15, 2012, to shareholders of record as of November 1, 2012.  This represents the 72nd consecutive quarter in which the Company has paid a cash dividend.  In making this announcement, William J. Wagner, President and CEO, noted, "We are pleased to have maintained a stable net interest margin of approximately 3.65% over the past year despite ongoing economic uncertainty and the challenges of the prolonged low interest rate environment. Largely contributing to this success was a $177 million, or 3.2%, increase in our loan portfolio over the past nine months.  Asset quality continues to improve from the beginning of the year with loans 90 or more days delinquent at the lowest level since the second quarter of 2008 and net charge-offs for the quarter down more than 40% from the same quarter last year.  Finally, we continued to manage our excess capital position during the quarter by repurchasing 183,780 of our common shares at an average price of $12.00 per share.Net interest income decreased by $1.0 million, or 1.5%, to $66.0 million for the quarter ended September 30, 2012, from $67.0 million for the quarter ended September 30, 2011, which was primarily attributable to a decrease in interest income from loans of $3.5 million, or 4.3%, and from investment securities of $2.3 million, or 25.7%.  Partially offsetting this decrease was a $4.8 million, or 31.8%, decrease in interest expense on deposit accounts. These changes from the previous year were primarily due to decreases in market interest rates and continued competitive pricing pressure.The provision for loan losses decreased by $1.2 million, or 14.2%, to $6.9 million for the quarter ended September 30, 2012, from $8.1 million for the quarter ended September 30, 2011.  As of September 30, 2012, the allowance for loan losses was $71.2 million, or 1.24% of total loans, compared to $73.2 million, or 1.33% of total loans, as of September 30, 2011.  The decrease in the provision for loan losses is partially attributable to a decrease in loans that are 90 days or more delinquent to $80.4 million as of September 30, 2012, from $112.2 million as of September 30, 2011 and $84.7 million as of June 30, 2012.  Additionally, net charge-offs for the quarter ended September 30, 2012, decreased by $4.5 million, or 43.2%, to $5.8 million compared to $10.3 million in the same quarter last year.Noninterest income increased by $425,000, or 2.9%, to $14.9 million for the quarter ended September 30, 2012, from $14.5 million for the quarter ended September 30, 2011, due primarily to an increase in mortgage banking income of $1.1 million, as an increased number of residential mortgage loans were sold at favorable pricing levels. Noninterest expense increased by $1.9 million, or 3.8%, to $51.8 million for the quarter ended September 30, 2012, from $49.9 million for the quarter ended September 30, 2011, due primarily to an increase in compensation and employee benefits of $2.2 million.  This increase is the result of increased health insurance costs and an increase in lending and compliance personnel.  Partially offsetting this increase in compensation expense was a decrease in marketing expense of $958,000, which was due to the timing of several marketing campaigns.Net income for the nine-month period ended September 30, 2012 of $47.2 million represents a decrease of $1.8 million, or 3.6%, compared to net income of $49.0 million for the nine-month period ended September 30, 2011.  However, diluted earnings per share increased to $0.50 from $0.48 in the previous year, as there were 7,677,525 fewer diluted average shares outstanding in 2012.  The annualized returns on average shareholders' equity and average assets were 5.42% and 0.79%, respectively, for the current nine-month period compared to 5.25% and 0.81%, respectively, in the prior year.     Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank.  Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products as well as benefits and wealth management services. Northwest operates 166 community banking offices in Pennsylvania, New York, Ohio and Maryland and 52 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company.  Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.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 that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing 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 SubsidiariesConsolidated Statements of Financial Condition(Dollars in thousands, except per share amounts)(Unaudited)September 30,December 31,Assets20122011Cash and cash equivalents$              91,28694,276Interest-earning deposits in other financial institutions546,149593,388Federal funds sold and other short-term investments633633Marketable securities available-for-sale (amortized cost of $922,684 and $885,408)951,879908,349Marketable securities held-to-maturity (fair value of $174,821 and $239,412)167,739231,389Total cash, interest-earning deposits and marketable securities1,757,6861,828,035Residential mortgage loans held for sale14,152967Residential mortgage loans2,410,1242,396,399Home equity loans 1,100,8791,084,786Other consumer loans235,693245,689Commercial real estate loans1,560,9661,435,767Commercial loans406,819387,911Total loans receivable5,728,6335,551,519Allowance for loan losses(71,177)(71,138)Loans receivable, net5,657,4565,480,381Federal Home Loan Bank stock, at cost46,83448,935Accrued interest receivable25,32424,599Real estate owned, net29,29126,887Premises and Equipment, net135,455132,152Bank owned life insurance136,871133,524Goodwill171,882171,882Other intangible assets1,3302,123Other assets85,542109,187Total assets$      8,047,6717,957,705Liabilities and Shareholders' equityLiabilitiesNoninterest-bearing demand deposits$           763,839658,560Interest-bearing demand deposits842,389800,676Savings deposits2,256,5442,036,272Time deposits1,961,9842,284,817Total deposits5,824,7565,780,325Borrowed funds855,552827,925Advances by borrowers for taxes and insurance11,57023,571Accrued interest payable1,1111,104Other liabilities76,96266,782Junior subordinated debentures103,094103,094Total liabilities6,873,0456,802,801Shareholders' equityPreferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued--Common stock, $0.01 par value: 500,000,000 shares authorized, 97,844,382 sharesand 97,493,046 shares issued and outstanding, respectively978975Paid-in-capital661,589659,523Retained earnings556,502543,598Unallocated common stock of Employee Stock Ownership Plan(24,817)(25,966)Accumulated other comprehensive loss(19,626)(23,226)Total shareholders' equity1,174,6261,154,904Total liabilities and shareholders' equity$      8,047,6717,957,705Equity to assets14.60%14.51%Tangible common equity to assets12.72%12.60%Book value per share$                 12.00$               11.85Tangible book value per share$                 10.23$               10.06Closing market price per share$                 12.23$               12.44Full time equivalent employees2,0271,950Number of banking offices166168   Northwest Bancshares, Inc. and SubsidiariesConsolidated Statements of Income - Unaudited(Dollars in thousands, except per share amounts)Quarter endedSeptember 30,June 30,201220112012Interest income:Loans receivable$         77,10980,56277,422Mortgage-backed securities3,9415,5444,409Taxable investment securities577684435Tax-free investment securities2,2232,8482,318Interest-earning deposits364393473Total interest income84,21490,03185,057Interest expense:Deposits10,20714,95811,184Borrowed funds8,0138,0617,912Total interest expense18,22023,01919,096Net interest income65,99467,01265,961Provision for loan losses6,9158,0574,963Net interest income after provisionfor loan losses59,07958,95560,998Noninterest income:Impairment losses on securities(340)--Noncredit related losses on securities not expectedto be sold (recognized in other comprehensive income)247--Net impairment losses(93)--Gain/ (loss) on sale of investments, net260152(44)Service charges and fees8,7728,4998,702Trust and other financial services income2,1222,0632,018Insurance commission income1,4801,7961,603Loss on real estate owned, net(1,187)(1,340)(582)Income from bank owned life insurance1,1481,9381,107Mortgage banking income1,484400789Other operating income9491,0021,244Total noninterest income14,93514,51014,837Noninterest expense:Compensation and employee benefits28,17126,00427,416Premises and occupancy costs5,4985,6585,483Office operations3,1413,2093,340Processing expenses6,3405,8966,059Marketing expenses1,8302,7883,829Federal deposit insurance premiums1,3051,3861,418Professional services1,9391,2381,500Amortization of intangible assets219475279Real estate owned expense832483571Other expense2,5282,7862,071Total noninterest expense51,80349,92351,966Income before income taxes22,21123,54223,869Income tax expense6,5186,8227,508Net income$           15,69316,72016,361Basic earnings per share$               0.170.170.17Diluted earnings per share$               0.170.170.17Annualized return on average equity5.37%5.62%5.63%Annualized return on average assets0.78%0.83%0.82%Basic common shares outstanding94,422,87896,918,01694,294,956Diluted common shares outstanding94,610,65697,124,32894,500,877   Northwest Bancshares, Inc. and SubsidiariesConsolidated Statements of Income - Unaudited(Dollars in thousands, except per share amounts)Nine months ended September 30,20122011Interest income:Loans receivable$      232,690241,012Mortgage-backed securities13,04118,373Taxable investment securities1,5851,676Tax-free investment securities6,9878,914Interest-earning deposits1,2171,289Total interest income255,520271,264Interest expense:Deposits34,33546,494Borrowed funds23,82424,039Total interest expense58,15970,533Net interest income197,361200,731Provision for loan losses18,16523,668Net interest income after provisionfor loan losses179,196177,063Noninterest income:Impairment losses on securities(885)(577)Noncredit related losses on securities not expectedto be sold (recognized in other comprehensive income)55470Net impairment losses(331)(507)Gain on sale of investments, net260201Service charges and fees25,89926,748Trust and other financial services income6,2566,158Insurance commission income4,8014,966Loss on real estate owned, net(2,839)(1,960)Income from bank owned life insurance3,3724,820Mortgage banking income2,804887Other operating income3,1902,785Total noninterest income43,41244,098Noninterest expense:Compensation and employee benefits83,42581,161Premises and occupancy costs16,72917,499Office operations9,8059,564Processing expenses18,54117,350Marketing expenses7,6956,855Federal deposit insurance premiums4,3436,168Professional services5,1363,783Amortization of intangible assets7931,445Real estate owned expense2,1431,163Other expense6,4356,803Total noninterest expense155,045151,791Income before income taxes67,56369,370Income tax expense20,32820,394Net income$         47,23548,976Basic earnings per share$               0.500.48Diluted earnings per share$               0.500.48Annualized return on average equity5.42%5.25%Annualized return on average assets0.79%0.81%Basic common shares outstanding94,277,362101,866,461Diluted common shares outstanding94,591,402102,268,927   Northwest Bancshares, Inc. and SubsidiariesAsset quality(Dollars in thousands)September 30,2012June 30,2012September 30, 2011December 31,2011Non-accrual loans current:Residential mortgage loans$                             ----Home equity loans----Other consumer loans----Commercial real estate loans18,13816,77317,29613,057Commercial loans12,29010,16820,53413,480Total non-accrual loans current$                   30,42826,94137,83026,537Non-accrual loans delinquent 30 days to 59 days:Residential mortgage loans$                             ----Home equity loans----Other consumer loans----Commercial real estate loans6,4043,2305,5573,274Commercial loans3114891,23890Total non-accrual loans delinquent 30 days to 59 days$                     6,7153,7196,7953,364Non-accrual loans delinquent 60 days to 89 days:Residential mortgage loans$                             ----Home equity loans----Other consumer loans----Commercial real estate loans1,8601,6002,0521,560Commercial loans1,3403442,4713,808Total non-accrual loans delinquent 60 days to 89 days$                     3,2001,9444,5235,368Non-accrual loans delinquent 90 days or more:Residential mortgage loans$                   24,47625,33631,70528,221Home equity loans9,3659,7709,3409,560Other consumer loans1,4941,5802,1172,667Commercial real estate loans35,23033,95650,39544,603Commercial loans9,86414,00818,67010,785Total non- accrual loans delinquent 90 days or more$                   80,42984,650112,22795,836Total non-accrual loans$                 120,772117,254161,375131,105September 30,June 30,September 30,December 31,2012201220112011Nonperforming loans$                 120,772117,254161,375131,105Real estate owned, net29,29130,47020,64826,887Nonperforming assets$                 150,063147,724182,023157,992Non-accrual troubled debt restructuring *$                   29,26128,34227,42129,575Accruing troubled debt restructuring57,00450,12939,41739,854Total troubled debt restructuring$                   86,26578,47166,83869,429Nonperforming loans to total loans2.11%2.07%2.92%2.36%Nonperforming assets to total assets1.86%1.84%2.28%1.99%Allowance for loan losses to total loans1.24%1.24%1.33%1.28%Allowance for loan losses to nonperforming loans58.94%59.79%45.37%54.26%* Amounts included in nonperforming loans above.   Northwest Bancshares, Inc. and SubsidiariesDelinquency(Dollars in thousands)Loan delinquency schedule(Number of loans and dollar amount of loans)September 30,June 30,September 30,December 31,2012*2012*2011*2011*Loans delinquent 30 days to 59 days:Residential mortgage loans99$        5,9710.2%70$        4,4700.2%733,7240.2%427$     33,6711.4%Home equity loans1545,0270.5%1535,8420.5%1787,1250.7%2227,4260.7%Consumer loans1,0194,4701.9%8473,5131.5%8574,1891.7%9034,8542.0%Commercial real estate loans10118,5121.2%588,1490.5%5710,4890.7%10410,6800.7%Commercial loans227910.2%331,8390.5%402,6900.7%322,0270.5%Total loans delinquent 30 days to 59 days1,395$     34,7710.6%1,161$     23,8130.4%1,20528,2170.5%1,68858,6581.1%Loans delinquent 60 days to 89 days:Residential mortgage loans83$        7,6210.3%83$        6,9320.3%857,4300.3%99$        8,6290.4%Home equity loans532,1160.2%722,8240.3%451,5470.1%471,9530.2%Consumer loans3831,4240.6%3191,2730.5%3311,3370.5%4121,7870.7%Commercial real estate loans192,5440.2%233,0810.2%192,4710.2%383,1220.2%Commercial loans211,8550.5%169800.2%294,4661.1%254,9581.3%Total loans delinquent 60 days to 89 days559$     15,5600.3%513$     15,0900.3%50917,2510.3%62120,4490.4%Loans delinquent 90 days or more:Residential mortgage loans255$     24,4761.0%265$     25,3361.0%27431,7051.3%273$     28,2211.2%Home equity loans1819,3650.9%1809,7700.9%1719,3400.9%1779,5600.9%Consumer loans3511,4940.6%3081,5800.7%4072,1170.9%4562,6671.1%Commercial real estate loans13335,2302.3%12833,9562.3%14250,3953.5%13144,6033.1%Commercial loans539,8642.4%5714,0083.5%4618,6704.6%6610,7852.8%Total loans delinquent 90 days or more973$     80,4291.4%938$     84,6501.5%1,040112,2272.0%1,10395,8361.7%Total loans delinquent2,927$  130,7602.3%2,612$  123,5532.2%2,754$  157,6952.8%3,412$  174,9433.2%* - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.     Northwest Bancshares, Inc. and SubsidiariesLoans by credit quality indicators as of September 30, 2012 (Dollars in thousands)RecordedinvestmentSpecialin loansPassmentionSubstandard Doubtful  Loss receivablePersonal Banking:Residential mortgage loans$  2,403,993-18,910161,3572,424,276Home equity loans1,091,530-9,349--1,100,879Other consumer loans234,765-928--235,693Total Personal Banking3,730,288-29,187161,3573,760,848Business Banking:Commercial real estate loans1,327,79981,854147,0634,250-1,560,966Commercial loans326,22915,41561,7473,428-406,819Total Business Banking1,654,02897,269208,8107,678-1,967,785$  5,384,31697,269237,9977,6941,3575,728,633Northwest Bancshares, Inc. and SubsidiariesLoans by credit quality indicators as of December 31, 2011(Dollars in thousands)RecordedinvestmentSpecialin loansPassmentionSubstandard Doubtful  Loss receivablePersonal Banking:Residential mortgage loans$  2,373,275-22,843111,2372,397,366Home equity loans1,074,512-10,274--1,084,786Other consumer loans244,491-1,198--245,689Total Personal Banking3,692,278-34,315111,2373,727,841Business Banking:Commercial real estate loans1,211,58375,981144,9473,256-1,435,767Commercial loans298,59723,88762,7532,674-387,911Total Business Banking1,510,18099,868207,7005,930-1,823,678$  5,202,45899,868242,0155,9411,2375,551,519   Northwest Bancshares, Inc. and SubsidiariesAllowance for loan losses(Dollars in thousands)Quarter endedNine months endedSeptember 30, September 30, 2012201120122011Allowance for loan losses Beginning balance$  70,11075,45571,13876,412Provision6,9158,05718,16523,668Charge-offs residential mortgage(1,197)(634)(3,459)(2,668)Charge-offs home equity(1,268)(588)(2,749)(3,736)Charge-offs other consumer(1,536)(1,307)(4,327)(3,816)Charge-offs commercial real estate(1,385)(3,675)(5,817)(8,220)Charge-offs commercial(1,641)(4,791)(5,009)(10,706)Recoveries1,1796913,2352,274Ending balance$  71,17773,20871,17773,208Net charge-offs to average loans, annualized0.41%0.75%0.43%0.65%   Northwest Bancshares, Inc. and SubsidiariesMunicipal securities portfolio(Dollars in thousands)September 30, 2012As a %Market Book Unrealizedof book value  value gainvalueMunicipal securities by state:PennsylvaniaSchool districts$  100,81395,9284,88547.1%General obligations                      37,27535,4311,84417.4%Revenue bonds4,3864,313732.1%Total Pennsylvania142,474135,6726,80266.6%New York28,12527,0511,07413.3%Ohio6,8876,4284593.2%All other states37,89834,6533,24517.0%$  215,384203,80411,580December 31, 2011As a %Market Book Unrealizedof book value  value gainvalueMunicipal securities by state:PennsylvaniaSchool districts$  119,920114,6995,22148.4%General obligations43,12941,7661,36317.6%Revenue bonds4,7174,70982.0%Total Pennsylvania167,766161,1746,59268.0%New York35,26933,6791,59014.2%Ohio6,6616,4262352.7%All other states38,07335,9042,16915.1%$  247,769237,18310,586   Northwest Bancshares, Inc. and SubsidiariesAverage balance sheet (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 andaverage cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance ofassets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages. Quarters ended September 30, 20122011 Average  Interest  Avg.  Average  Interest  Avg.  Balance  Yield/  Balance  Yield/  Cost (h)  Cost (h) Assets:Interest-earning assets:   Loans receivable (a) (b) (d)$  5,703,38077,6985.43%5,490,79581,0255.86%   Mortgage-backed securities (c) 722,3683,9412.18%857,8985,5442.58%   Investment securities (c) (d) 350,0813,9974.57%412,9275,0664.91%   FHLB stock46,834120.10%52,336--   Other interest-earning deposits598,1143640.24%652,9583930.24%Total interest-earning assets 7,420,77786,0124.62%7,466,91492,0284.90%Noninterest earning assets (e)625,460560,951Total assets$  8,046,2378,027,865Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,154,1041,0600.37%1,081,7211,1570.42%   Interest-bearing demand accounts834,8901800.09%798,4242440.12%   Money market accounts1,076,7999200.34%950,1131,0160.42%   Certificate accounts1,991,9878,0471.61%2,338,43612,5412.13%   Borrowed funds (f)856,2926,5763.06%840,5606,6253.13%   Junior subordinated debentures103,0941,4375.45%103,0941,4365.45%Total interest-bearing liabilities6,017,16618,2201.20%6,112,34823,0191.49%Noninterest bearing liabilities (g)859,553726,173Total liabilities6,876,7196,838,521Shareholders' equity1,169,5181,189,344Total liabilities and shareholders' equity$  8,046,2378,027,865Net interest income/ Interest rate spread67,7923.42%69,0093.41%Net interest-earning assets/ Net interest margin$  1,403,6113.65%1,354,5663.70%Ratio of interest-earning assets to interest-bearing liabilities 1.23X  1.22X (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 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 securities sold under agreements to repurchase.(g) Average balances include non-interest bearing demand deposits (checking accounts).(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.39% and 5.82%, respectively, Investment securities - 3.20%       and 3.42%, respectively, Interest-earning assets - 4.52% and 4.79%, respectively. GAAP basis net interest rate spreads were 3.32% and       3.29%, respectively, and GAAP basis net interest margins were 3.56% and 3.59%, respectively.   Northwest Bancshares, Inc. and SubsidiariesAverage balance sheet (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 andaverage cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance ofassets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages. Nine months ended June 30, 20122011 Average  Interest  Avg.  Average  Interest  Avg.  Balance  Yield/  Balance  Yield/  Cost (h)  Cost (h) Assets:Interest-earning assets:   Loans receivable (a) (b) (d)$  5,636,905234,3715.55%5,496,988242,2625.87%   Mortgage-backed securities (c) 743,56813,0412.34%900,41418,3732.72%   Investment securities (c) (d) 334,79912,3354.91%387,03415,3905.30%   FHLB stock47,330360.10%55,403--   Other interest-earning deposits644,6021,2170.25%681,4641,2890.25%Total interest-earning assets 7,407,204261,0004.70%7,521,303277,3144.91%Noninterest earning assets (e)611,578570,231Total assets$  8,018,7828,091,534Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,133,8763,2000.38%1,079,7183,8610.48%   Interest-bearing demand accounts817,4746480.11%795,1837220.12%   Money market accounts1,024,9712,7620.36%932,6173,2310.46%   Certificate accounts2,105,36727,7251.76%2,380,46638,6802.17%   Borrowed funds (f)845,49919,5433.09%843,36619,7783.14%   Junior subordinated debentures103,0944,2815.46%103,0944,2615.45%Total interest-bearing liabilities6,030,28158,1591.29%6,134,44470,5331.54%Noninterest bearing liabilities (g)826,038712,678Total liabilities6,856,3196,847,122Shareholders' equity1,162,4631,244,412Total liabilities and shareholders' equity$  8,018,7828,091,534Net interest income/ Interest rate spread202,8413.41%206,7813.37%Net interest-earning assets/ Net interest margin$  1,376,9233.65%1,386,8593.67%Ratio of interest-earning assets to interest-bearing liabilities 1.23X  1.23X (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 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 securities sold under agreements to repurchase.(g) Average balances include non-interest bearing demand deposits (checking accounts).(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.51% and 5.84%, respectively, Investment securities - 3.41%       and 3.65%, respectively, Interest-earning assets - 4.60% and 4.80%, respectively. GAAP basis net interest rate spreads were 3.31% and       3.27%, respectively, and GAAP basis net interest margins were 3.55% and 3.56%, respectively.   Northwest Bancshares, Inc. and SubsidiariesAverage balance sheet (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 andaverage cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance ofassets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages. Quarter ended  Quarter ended September 30, 2012June 30, 2012 Average  Interest  Avg.  Average  Interest  Avg.  Balance  Yield/  Balance  Yield/  Cost (h)  Cost (h) Assets:Interest-earning assets:   Loans receivable (a) (b) (d)$  5,703,38077,6985.43%$  5,627,45977,9815.54%   Mortgage-backed securities (c) 722,3683,9412.18%761,6164,4092.32%   Investment securities (c) (d) 350,0813,9974.57%311,0874,0015.14%   FHLB stock46,834120.10%46,916250.21%   Other interest-earning deposits598,1143640.24%679,2174730.28%Total interest-earning assets 7,420,77786,0124.62%7,426,29586,8894.68%Noninterest earning assets (e)625,460592,004Total assets$  8,046,237$  8,018,299Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,154,1041,0600.37%$  1,146,9891,0340.36%   Interest-bearing demand accounts834,8901800.09%831,4142400.12%   Money market accounts1,076,7999200.34%1,021,4858780.35%   Certificate accounts1,991,9878,0471.61%2,088,5389,0321.74%   Borrowed funds (f)856,2926,5763.06%846,2446,4903.08%   Junior subordinated debentures103,0941,4375.45%103,0941,4225.46%Total interest-bearing liabilities6,017,16618,2201.20%6,037,76419,0961.27%Noninterest bearing liabilities (g)859,553817,118Total liabilities6,876,7196,854,882Shareholders' equity1,169,5181,163,417Total liabilities and shareholders' equity $  8,046,237$  8,018,299Net interest income/ Interest rate spread67,7923.42%67,7933.41%Net interest-earning assets/ Net interest margin$  1,403,6113.65%$  1,388,5313.65%Ratio of interest-earning assets to interest-bearing liabilities 1.23X  1.23X (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 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 securities sold under agreements to repurchase.(g) Average balances include non-interest bearing demand deposits (checking accounts).(h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 5.39% and 5.50%, respectively, Investment securities - 3.20%       and 3.54%, respectively, Interest-earning assets - 4.52% and 4.58%, respectively. GAAP basis net interest rate spreads were 3.32% and       3.31%, respectively, and GAAP basis net interest margins were 3.56% and 3.55%, respectively. SOURCE Northwest Bancshares, Inc.For further information: William J. Wagner, President and Chief Executive Officer, +1-814-726-2140, or William W. Harvey, Jr., Executive Vice President and Chief Financial Officer, +1-814-726-2140