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Press release from PR Newswire

Northwest Bancshares, Inc. Announces Fourth Quarter 2012 Earnings

Tuesday, January 22, 2013

Northwest Bancshares, Inc. Announces Fourth Quarter 2012 Earnings08:45 EST Tuesday, January 22, 2013WARREN, Pa., Jan. 22, 2013 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2012 of $16.3 million, or $0.18 per diluted share.  This represents an increase of $1.1 million, or 7.6%, over the same quarter last year when net income was $15.2 million, or $0.16 per diluted share, and an increase of $632,000, or 4.0%, over the quarter ended September 30, 2012 when net income was $15.7 million, or $0.17 per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 5.68% and 0.82% compared to 5.23% and 0.76% for the same quarter last year and 5.37% and 0.78% for the quarter ended September 30, 2012.  As previously announced the Board of Directors declared a quarterly cash dividend of $0.12 per share for the first quarter of 2013 and accelerated its payment into the fourth quarter of 2012. Paid on December 24, 2012, this represents the 73rd consecutive quarter in which the Company has declared a cash dividend.  Net interest income increased by $77,000, or 0.1%, to $66.6 million for the quarter ended December 31, 2012, from $66.5 million for the quarter ended December 31, 2011, as a $5.2 million decrease in interest paid on deposit accounts was partially offset by a $3.2 million decrease in interest income on loans receivable and a $1.9 million decrease in interest income from investment securities. 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 $2.3 million, or 22.2%, to $8.2 million for the quarter ended December 31, 2012, from $10.5 million for the quarter ended December 31, 2011.  As of December 31, 2012, the allowance for loan losses was $73.2 million, or 1.28% of total loans, compared to $71.1 million, or 1.28% of total loans, as of December 31, 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 $68.3 million as of December 31, 2012, from $95.8 million as of December 31, 2011 and $80.4 million as of September 30, 2012.  Additionally, net charge-offs for the quarter ended December 31, 2012, decreased by $6.5 million, or 51.2%, to $6.1 million compared to $12.6 million in the same quarter last year.Noninterest income increased by $1.1 million, or 7.8%, to $15.1 million for the quarter ended December 31, 2012, from $14.0 million for the quarter ended December 30, 2011, due primarily to an increase in mortgage banking income of $1.9 million, as an increased number of residential mortgage loans were sold at favorable pricing levels. Noninterest expense increased by $2.8 million, or 5.7%, to $51.2 million for the quarter ended December 31, 2012, from $48.4 million for the quarter ended December 30, 2011, due primarily to an increase in compensation and employee benefits of $2.9 million, or 11.3%.  This increase is the result of the addition of 92 full-time equivalent employees, primarily in our compliance and lending areas and increased benefit costs. Additionally, real estate owned expense increased by $799,000.  Partially offsetting these increases was a decrease in marketing expense of $3.0 million, which was due to the timing of marketing campaigns.Net income for the year ended December 31, 2012 of $63.6 million represents a decrease of $591,000, or 0.9%, compared to net income of $64.2 million for the year ended December 31, 2011.  Even though net income decreased slightly from the previous year, diluted earnings per share increased to $0.68 from $0.64, as there were 5,974,113 fewer diluted average shares outstanding in 2012.  The annualized returns on average shareholders' equity and average assets were 5.48% and 0.79%, respectively, for the year ended December 31, 2012 compared to 5.24% and 0.80%, respectively, in the prior year.     In making this announcement, William J. Wagner, President and CEO, noted, "2012 was a challenging but productive year. During the year, we further enhanced our compliance management system, restructured our Credit Department to strengthen our commercial lending process and exited some of our larger problem loans. In addition, we were able to deploy $230 million of interest-earning cash by increasing investments securities by approximately $100 million and growing our loan portfolio by $150 million. This use of cash, along with continued growth in checking balances enabled us to maintain our net interest margin at 3.65% throughout the year. Credit quality continued to improve and we were able to decrease our provision for loan losses by nearly $8 million from the prior year. Non-performing loans are now at their lowest level in four years and net charge-offs were down approximately 40% from the previous year. Finally, we continued to manage our excess capital position during the quarter by repurchasing more than 4.2 million of our common shares at an average price of $11.81 per share."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 165 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)December 31,Assets20122011Cash and cash equivalents$                      88,27794,276Interest-earning deposits in other financial institutions362,794593,388Federal funds sold and other short-term investments633633Marketable securities available-for-sale (amortized cost of $1,053,122 and $885,408)1,079,074908,349Marketable securities held-to-maturity (fair value of $161,969 and $239,412)155,081231,389Total cash, interest-earning deposits and marketable securities1,685,8591,828,035Residential mortgage loans held for sale15,441967Residential mortgage loans2,400,2082,396,399Home equity loans 1,076,6371,084,786Other consumer loans235,367245,689Commercial real estate loans1,585,8331,435,767Commercial loans388,994387,911Total loans receivable5,702,4805,551,519Allowance for loan losses(73,219)(71,138)Loans receivable, net5,629,2615,480,381Federal Home Loan Bank stock, at cost46,83448,935Accrued interest receivable23,31324,599Real estate owned, net26,16526,887Premises and Equipment, net138,824132,152Bank owned life insurance137,044133,524Goodwill and other intangible assets178,530174,005Other assets76,770109,187Total assets$              7,942,6007,957,705Liabilities and Shareholders' equityLiabilitiesNoninterest-bearing demand deposits$                  755,429658,560Interest-bearing demand deposits851,771800,676Savings deposits2,271,3112,036,272Time deposits1,886,0892,284,817Total deposits5,764,6005,780,325Borrowed funds860,047827,925Advances by borrowers for taxes and insurance23,32523,571Accrued interest payable8881,104Other liabilities62,17766,782Junior subordinated debentures103,094103,094Total liabilities6,814,1316,802,801Shareholders' equityPreferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued--Common stock, $0.01 par value: 500,000,000 shares authorized, 93,652,960 sharesand 97,493,046 shares issued and outstanding, respectively937975Paid-in-capital613,249659,523Retained earnings550,296543,598Unallocated common stock of Employee Stock Ownership Plan(24,525)(25,966)Accumulated other comprehensive loss(11,488)(23,226)Total shareholders' equity1,128,4691,154,904Total liabilities and shareholders' equity$              7,942,6007,957,705Equity to assets14.21%14.51%Tangible common equity to assets12.23%12.60%Book value per share$                      12.05$                         11.85Tangible book value per share$                      10.14$                         10.06Closing market price per share$                      12.14$                         12.44Full time equivalent employees2,0421,950Number of banking offices165168Northwest Bancshares, Inc. and SubsidiariesConsolidated Statements of Income(Dollars in thousands, except per share amounts)Quarter endedDecember 31,September 30,201220112012Interest income:Loans receivable$                    76,70179,93077,109Mortgage-backed securities3,6975,0773,941Taxable investment securities743776577Tax-free investment securities2,1322,6002,223Interest-earning deposits382423364Total interest income83,65588,80684,214Interest expense:Deposits9,04214,22710,207Borrowed funds7,9988,0418,013Total interest expense17,04022,26818,220Net interest income66,61566,53865,994Provision for loan losses8,17310,5026,915Net interest income after provisionfor loan losses58,44256,03659,079Noninterest income:Impairment losses on securities-(1,504)(340)Noncredit related losses on securities not expectedto be sold (recognized in other comprehensive income)-1,074247Net impairment losses-(430)(93)Gain/ (loss) on sale of investments, net394157260Service charges and fees8,5878,6308,772Trust and other financial services income2,2881,9672,122Insurance commission income1,4631,5821,480Loss on real estate owned, net(2,020)(466)(1,187)Income from bank owned life insurance1,5891,1991,148Mortgage banking income1,874(29)1,484Other operating income9641,428949Total noninterest income15,13914,03814,935Noninterest expense:Compensation and employee benefits28,30225,43428,171Premises and occupancy costs5,6805,5565,498Office operations3,4193,2863,141Processing expenses6,4595,9826,340Marketing expenses1343,0981,830Federal deposit insurance premiums1,2119331,305Professional services1,8691,4411,939Amortization of intangible assets219374219Real estate owned expense1,261462832Other expense2,6621,8702,528Total noninterest expense51,21648,43651,803Income before income taxes22,36521,63822,211Income tax expense6,0406,4636,518Net income$                    16,32515,17515,693Basic earnings per share$                        0.180.160.17Diluted earnings per share$                        0.180.160.17Annualized return on average equity5.68%5.23%5.37%Annualized return on average assets0.82%0.76%0.78%Basic common shares outstanding92,716,97393,675,58994,422,878Diluted common shares outstanding92,937,87793,972,18794,610,656Northwest Bancshares, Inc. and SubsidiariesConsolidated Statements of Income(Dollars in thousands, except per share amounts)Year ended December 31,20122011Interest income:Loans receivable$                            309,391320,942Mortgage-backed securities16,73823,450Taxable investment securities2,3282,452Tax-free investment securities9,11911,514Interest-earning deposits1,5991,712Total interest income339,175360,070Interest expense:Deposits43,37760,721Borrowed funds31,82232,080Total interest expense75,19992,801Net interest income263,976267,269Provision for loan losses26,33834,170Net interest income after provisionfor loan losses237,638233,099Noninterest income:Impairment losses on securities(996)(2,081)Noncredit related losses on securities not expectedto be sold (recognized in other comprehensive income)6651,144Net impairment losses(331)(937)Gain on sale of investments, net654358Service charges and fees34,48635,378Trust and other financial services income8,5448,125Insurance commission income6,2646,548Loss on real estate owned, net(4,859)(2,426)Income from bank owned life insurance4,9616,019Mortgage banking income4,678858Other operating income4,1544,213Total noninterest income58,55158,136Noninterest expense:Compensation and employee benefits111,727106,595Premises and occupancy costs22,40923,055Office operations13,22412,850Processing expenses25,00023,332Marketing expenses7,8299,953Federal deposit insurance premiums5,5547,101Professional services7,0055,224Amortization of intangible assets1,0121,819Real estate owned expense3,4041,625Other expense9,0978,673Total noninterest expense206,261200,227Income before income taxes89,92891,008Income tax expense26,36826,857Net income$                               63,56064,151Basic earnings per share$                                   0.680.64Diluted earnings per share$                                   0.680.64Annualized return on average equity5.48%5.24%Annualized return on average assets0.79%0.80%Basic common shares outstanding93,912,82199,801,783Diluted common shares outstanding94,203,451100,177,564Northwest Bancshares, Inc. and SubsidiariesAsset quality(Dollars in thousands)December 31,  2012December 31, 2011December 31, 2010December 31, 2009Non-accrual loans current:Residential mortgage loans$                  797---Home equity loans635---Other consumer loans44---Commercial real estate loans24,96013,0577,378-Commercial loans5,42413,48023,31713,141Total non-accrual loans current$             31,86026,53730,69513,141Non-accrual loans delinquent 30 days to 59 days:Residential mortgage loans$                       ----Home equity loans----Other consumer loans----Commercial real estate loans5,5493,2744,039-Commercial loans2,002901,465-Total non-accrual loans delinquent 30 days to 59 days$                7,5513,3645,504-Non-accrual loans delinquent 60 days to 89 days:Residential mortgage loans$                        ----Home equity loans----Other consumer loans----Commercial real estate loans2,8021,56010,9231,705Commercial loans9,6523,808848-Total non-accrual loans delinquent 60 days to 89 days$             12,4545,36811,7711,705Non-accrual loans delinquent 90 days or more:Residential mortgage loans$             24,28628,22129,75129,134Home equity loans8,4799,56010,26310,008Other consumer loans1,9362,6672,5652,775Commercial real estate loans24,55044,60344,96549,594Commercial loans9,09610,78512,87718,269Total non- accrual loans delinquent 90 days or more$             68,34795,836100,421109,780Total non-accrual loans$          120,212131,105148,391124,626December 31,December 31,December 31,December 31,2012201120102009Nonperforming loans$          120,212131,105148,391124,626Real estate owned, net26,16526,88720,78020,257Nonperforming assets$          146,377157,992169,171144,883Non-accrual troubled debt restructuring *$             39,61429,57541,7402,908Accruing troubled debt restructuring49,83039,85410,86518,177Total troubled debt restructuring$             89,44469,42952,60521,085Nonperforming loans to total loans2.11%2.36%2.68%2.35%Nonperforming assets to total assets1.84%1.99%2.08%1.81%Allowance for loan losses to total loans1.28%1.28%1.38%1.33%Allowance for loan losses to nonperforming loans60.91%54.26%51.49%56.49%* 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)December 31,December 31,December 31,December 31,2012*2011*2010*2009*Loans delinquent 30 days to 59 days:Residential mortgage loans430$      32,9211.4%427$      33,6711.4%427$      35,3291.5%343$      27,9131.2%Home equity loans2246,5340.6%2227,4260.7%2307,3170.7%1847,0140.6%Consumer loans1,1225,4562.3%9034,8542.0%1,0085,3182.1%9234,2971.6%Commercial real estate loans8713,0010.8%10410,6800.7%8216,2871.2%8516,1521.3%Commercial loans413,2330.8%322,0270.5%486,5901.5%483,2930.9%Total loans delinquent 30 days to 59 days1,904$      61,1451.1%1,68858,6581.1%1,795$      70,8411.3%1,583$      58,6691.1%Loans delinquent 60 days to 89 days:Residential mortgage loans100$         9,3870.4%99$         8,6290.4%106$         9,8480.4%77$         6,6570.3%Home equity loans651,9770.2%471,9530.2%813,2490.3%521,7190.2%Consumer loans4481,8300.8%4121,7870.7%3561,3310.5%3481,4250.5%Commercial real estate loans334,5960.3%383,1220.2%3914,3651.1%355,8110.5%Commercial loans1710,1582.5%254,9581.3%91,6780.4%262,4740.7%Total loans delinquent 60 days to 89 days663$      27,9480.5%62120,4490.4%591$      30,4710.6%538$      18,0860.3%Loans delinquent 90 days or more:Residential mortgage loans266$      24,2861.0%273$      28,2211.2%275$      29,7511.2%265$      29,1341.2%Home equity loans1758,4790.8%1779,5600.9%19010,2630.9%19510,0080.9%Consumer loans4271,9360.8%4562,6671.1%3742,5651.0%5462,7751.0%Commercial real estate loans14624,5501.6%13144,6033.1%18144,9653.3%19949,5944.0%Commercial loans619,0962.2%6610,7852.8%11112,8773.0%12418,2694.9%Total loans delinquent 90 days or more1,075$      68,3471.2%1,10395,8361.7%1,131$   100,4211.8%1,329$   109,7802.1%Total loans delinquent3,642$   157,4402.8%3,412$   174,9433.2%3,517$   201,7333.7%3,450$   186,5353.5%* - 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 December 31, 2012 (Dollars in thousands)RecordedinvestmentSpecialin loansPassmentionSubstandard Doubtful  Loss receivablePersonal Banking:Residential mortgage loans$         2,395,809-18,743481,0492,415,649Home equity loans1,068,183-8,454--1,076,637Other consumer loans234,106-1,261--235,367Total Personal Banking3,698,098-28,458481,0493,727,653Business Banking:Commercial real estate loans1,352,11868,130163,7511,834-1,585,833Commercial loans320,22813,07752,7422,947-388,994Total Business Banking1,672,34681,207216,4934,781-1,974,827$         5,370,44481,207244,9514,8291,0495,702,480Northwest 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 endedYear endedDecember 31, December 31, 2012201120122011Allowance for loan losses Beginning balance$             71,17773,20871,13876,412Provision8,17310,50226,33834,170Charge-offs residential mortgage(836)(1,530)(4,295)(4,198)Charge-offs home equity(1,317)(998)(4,066)(4,734)Charge-offs other consumer(1,592)(1,467)(5,919)(5,283)Charge-offs commercial real estate(4,102)(4,288)(9,919)(12,508)Charge-offs commercial(1,245)(4,935)(6,254)(15,641)Recoveries2,9616466,1962,920Ending balance$             73,21971,13873,21971,138Net charge-offs to average loans, annualized0.43%0.91%0.43%0.72% Northwest Bancshares, Inc. and SubsidiariesMunicipal securities portfolio(Dollars in thousands)December 31, 2012As a %Market Book Unrealizedof book value  value gainvalueMunicipal securities by state:PennsylvaniaSchool districts$                 96,27191,9514,32046.7%General obligations37,20535,4181,78718.0%Revenue bonds3,0062,948581.5%Total Pennsylvania136,482130,3176,16566.2%New York26,83125,95487713.2%Ohio6,3905,9734173.0%All other states37,68334,6593,02417.6%$              207,386196,90310,483December 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. Quarter ended December 31, 20122011 Average  Interest  Avg.  Average  Interest  Avg.  Balance  Yield/  Balance  Yield/  Cost (h)  Cost (h) Assets:Interest-earning assets:   Loans receivable (a) (b) (d)$  5,709,60377,2795.41%5,544,19480,3955.79%   Mortgage-backed securities (c) 717,0283,6972.06%797,0715,0772.55%   Investment securities (c) (d) 408,9254,0223.93%376,5454,7765.07%   FHLB stock46,833510.44%49,775--   Other interest-earning deposits608,7723820.25%615,9064230.27%Total interest-earning assets 7,491,16185,4314.56%7,383,49190,6714.90%Noninterest earning assets (e)502,514571,873Total assets$  7,993,6757,955,364Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,145,4051,0190.35%1,064,5331,1390.42%   Interest-bearing demand accounts837,9551450.07%787,6742380.12%   Money market accounts1,115,6558420.30%959,3781,0130.42%   Certificate accounts1,923,6997,0361.46%2,308,44011,8372.03%   Borrowed funds (f)864,0856,5623.02%836,9486,6043.13%   Junior subordinated debentures103,0941,4365.45%103,0941,4375.45%Total interest-bearing liabilities5,989,89317,0401.13%6,060,06722,2681.46%Noninterest bearing liabilities (g)854,786734,898Total liabilities6,844,6796,794,965Shareholders' equity1,148,9961,160,399Total liabilities and shareholders' equity$  7,993,6757,955,364Net interest income/ Interest rate spread68,3913.43%68,4033.44%Net interest-earning assets/ Net interest margin$  1,501,2683.65%1,323,4243.71%Ratio of interest-earning assets to interest-bearing liabilities 1.25X  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 - 5.37% and 5.76%, respectively, Investment securities - 2.81%        and 3.59%, respectively, Interest-earning assets - 4.47% and 4.80%, respectively. GAAP basis net interest rate spreads were 3.34% and       3.34%, respectively, and GAAP basis net interest margins were 3.56% and 3.60%, 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. Year ended December 31, 20122011 Average  Interest  Avg.  Average  Interest  Avg.  Balance  Yield/  Balance  Yield/  Cost (h)  Cost (h) Assets:Interest-earning assets:   Loans receivable (a) (b) (d)$  5,655,179311,6505.51%5,508,790322,6565.85%   Mortgage-backed securities (c) 736,89616,7382.27%874,36623,4502.68%   Investment securities (c) (d) 353,43116,3574.63%384,38920,1665.25%   FHLB stock47,205870.18%53,985--   Other interest-earning deposits638,3661,5990.25%665,0741,7120.25%Total interest-earning assets 7,431,077346,4314.66%7,486,604367,9844.91%Noninterest earning assets (e)581,429570,888Total assets$  8,012,5068,057,492Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,136,7744,2190.37%1,075,8905,0000.46%   Interest-bearing demand accounts822,6267920.10%793,2879600.12%   Money market accounts1,047,8943,6050.34%939,3174,2430.45%   Certificate accounts2,059,70234,7611.69%2,362,31350,5182.14%   Borrowed funds (f)850,17126,1053.07%841,74826,3813.13%   Junior subordinated debentures103,0945,7175.47%103,0945,6995.45%Total interest-bearing liabilities6,020,26175,1991.25%6,115,64992,8011.52%Noninterest bearing liabilities (g)833,149718,434Total liabilities6,853,4106,834,083Shareholders' equity1,159,0961,223,409Total liabilities and shareholders' equity$  8,012,5068,057,492Net interest income/ Interest rate spread271,2323.41%275,1833.39%Net interest-earning assets/ Net interest margin$  1,410,8163.65%1,370,9553.68%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 - 5.47% and 5.82%, respectively, Investment securities - 3.24%        and 3.63%, respectively, Interest-earning assets - 4.57% and 4.80%, respectively. GAAP basis net interest rate spreads were 3.32% and       3.28%, respectively, and GAAP basis net interest margins were 3.55% and 3.57%, 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 December 31, 2012September 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)$  5,709,60377,2795.41%5,703,38077,6985.43%   Mortgage-backed securities (c) 717,0283,6972.06%722,3683,9412.18%   Investment securities (c) (d) 408,9254,0223.93%350,0813,9974.57%   FHLB stock46,833510.44%46,834120.10%   Other interest-earning deposits608,7723820.25%598,1143640.24%Total interest-earning assets 7,491,16185,4314.56%7,420,77786,0124.62%Noninterest earning assets (e)502,514625,460Total assets$  7,993,6758,046,237Liabilities and shareholders' equity:Interest-bearing liabilities:   Savings accounts$  1,145,4051,0190.35%1,154,1041,0600.37%   Interest-bearing demand accounts837,9551450.07%834,8901800.09%   Money market accounts1,115,6558420.30%1,076,7999200.34%   Certificate accounts1,923,6997,0361.46%1,991,9878,0471.61%   Borrowed funds (f)864,0856,5623.02%856,2926,5763.06%   Junior subordinated debentures103,0941,4365.45%103,0941,4375.45%Total interest-bearing liabilities5,989,89317,0401.13%6,017,16618,2201.20%Noninterest bearing liabilities (g)854,786859,553Total liabilities6,844,6796,876,719Shareholders' equity1,148,9961,169,518Total liabilities and shareholders' equity $  7,993,6758,046,237Net interest income/ Interest rate spread68,3913.43%67,7923.42%Net interest-earning assets/ Net interest margin$  1,501,2683.65%1,403,6113.65%Ratio of interest-earning assets to interest-bearing liabilities 1.25X  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 - 5.37% and 5.39%, respectively, Investment securities - 2.81%        and 3.20%, respectively, Interest-earning assets - 4.47% and 4.52%, respectively. GAAP basis net interest rate spreads were 3.34% and       3.32%, respectively, and GAAP basis net interest margins were 3.56% and 3.56%, respectively. SOURCE Northwest Bancshares, Inc.For further information: William J. Wagner, President and Chief Executive Officer, or William W. Harvey, Jr., Executive Vice President and Chief Financial Officer, +1-814-726-2140