Columbus, Ohio — January 22, 2024
Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2023 of $29.0 million, or $0.23 per diluted share. This represents a decrease of $5.6 million, or 16.3%, compared to the same quarter last year, when net income was $34.6 million, or $0.27 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended December 31, 2023 were 7.64% and 0.80% compared to 9.38% and 0.98% 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, 2024 to shareholders of record as of February 2, 2024. This is the 117th 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, 2023, this represents an annualized dividend yield of approximately 6.4%.
Louis J. Torchio, President and CEO, added, “We were very pleased with 2023 results as we continue to execute upon our commercial banking strategy despite the current year liquidity and interest rate challenges for the industry. We grew loans at a measured pace of 4.5%, but more importantly we reallocated over $440.0 million from lower yielding investment securities, retail loans and consumer loans into the more profitable commercial portfolio, which grew $677.2 million, or 17.1%. We were also pleased with the stability of our deposit base throughout the year which grew $515.4 million, enabling us to reduce more expensive borrowed funds by $282.3 million, and our tangible common equity grew to 8.30%, which provides flexibility for growth going forward.”
Mr. Torchio continued, “We have also taken additional measures to control our noninterest expense growth by consolidating three more branches, rightsizing our retail and consumer staff, and renegotiating third-party contracts across the board. These measures required severance and professional service costs in the fourth quarter of approximately $3.5 million. The expense savings going forward will be allocated to the continued build-out of our credit administration, risk management, and internal audit functions that support our focus on commercial loan growth.”
Net interest income decreased by $10.7 million, or 9.2%, to $106.3 million for the quarter ended December 31, 2023, from $117.0 million for the quarter ended December 31, 2022. This decrease in net interest income resulted primarily from a
$40.3 million increase in interest expense due to increases in both the average balance and average cost of interest-bearing liabilities. The average balance of interest-bearing liabilities increased $663.1 million, or 7.2%, to $9.912 billion for the quarter ended December 31, 2023 from $9.249 billion for the quarter ended December 31, 2022, driven by an increase in time deposits and borrowed funds. In addition, the cost of interest-bearing liabilities increased to 2.04% for the quarter ended December 31, 2023 from 0.46% for the quarter ended December 31, 2022 due to higher market interest rates and competitive pressure for liquidity. Partially offsetting this increase in interest expense was a $29.5 million increase in interest income. Cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest- earning assets to increase to 4.67% for the quarter ended December 31, 2023 from 3.89% for the quarter ended December 31, 2022. Interest income on loans receivable increased $29.4 million, or 25.1%, due to an increase of $525.2 million, or 4.9%, in the average balance of loans in addition to an increase in the yield on loans to 5.19% for the quarter ended December 31, 2023 from 4.35% for the quarter ended December 31, 2022. The net effect of these changes in interest rates and average balances was a decrease in the Company's net interest margin to 3.16% for the quarter ended December 31, 2023 from 3.57% for the same quarter last year.
The provision for credit losses decreased by $3.0 million, or 27.1%, to $7.9 million for the current quarter ended December 31, 2023 from $10.9 million for the quarter ended December 31, 2022. Economic forecasts continued to improve, and the Company continued to experience a decrease in substandard loans by $17.8 million, or 7.5%, to $218.5 million, or 1.91% of
total loans, at December 31, 2023 from $236.2 million, or 2.16% of total loans, at December 31, 2022. This decrease was assisted by the note sale of approximately $8.0 million of nonperforming loans for a net gain of approximately $726,000. In addition, delinquencies remain well controlled.
Noninterest income increased by $1.3 million, or 4.7%, to $29.2 million for the quarter ended December 31, 2023, from
$27.9 million for the quarter ended December 31, 2022. This increase was driven by increases in core businesses such as service charges and fees on deposits and loans, trust and other financial services income and the net gain on the sale of SBA loans and other real estate owned. Service charges and fees increased $1.8 million, or 12.7%, to $15.9 million for the quarter ended December 31, 2023 from $14.1 million for the quarter ended December 31, 2022 driven by deposit-related fees based on customer activity as well as commercial loan fees, and the net gain on real estate owned increased $1.0 million to $1.1 million for the quarter ended December 31, 2023 from $51,000 for the quarter ended December 31, 2022 as a result of gains on property sales in the current period. These increases were partially offset by a $2.4 million, or 49.7%, decrease in other operating income to
$2.5 million for the quarter ended December 31, 2023 from $4.9 million for the quarter ended December 31, 2022 as a result of gains from the sales of branch buildings associated with the previously announced branch consolidations during the quarter ended December 31, 2022.
Noninterest expense increased by $1.9 million, or 2.1%, to $90.7 million for the quarter ended December 31, 2023 from
$88.8 million for the quarter ended December 31, 2022. This increase primarily resulted from a $3.5 million, or 7.6%, increase in compensation and employee benefits to $50.2 million for the quarter ended December 31, 2023, from $46.7 million for the quarter ended December 31, 2022 driven primarily by the buildout of the commercial business and related credit, risk management and internal audit support functions over the past twelve months. Processing expenses increased $1.4 million, or 10.5%, to
$15.0 million for the quarter ended December 31, 2023, from $13.6 million for the quarter ended December 31, 2022 due to the implementation of additional third-party software platforms. FDIC insurance premiums increased $1.3 million, or 100.4%, to $2.6 million for the quarter ended December 31, 2023 from $1.3 million for the quarter ended December 31, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
The provision for income taxes decreased by $2.7 million, or 25.9%, to $7.8 million for the quarter ended December 31, 2023 from $10.6 million for the quarter ended December 31, 2022 due primarily to lower income before income taxes.
Net income for the year ended December 31, 2023 was $135.0 million, or $1.06 per diluted share. This represents an increase of $1.3 million, or 1.0%, compared to the year ended December 31, 2022, when net income was $133.7 million, or $1.05 per diluted share. The annualized returns on average shareholders' equity and average assets for the year ended December 31, 2023 were 8.94% and 0.95% compared to 8.80% and 0.94% for the prior year. This increase in net income was the result of an increase in net interest income of $15.0 million, or 3.6%, to $435.7 million for the year ended December 31, 2023 from
$420.7 million for the year ended December 31, 2022. This increase in net interest income was primarily due to an increase in the average yield on interest-earning assets, partially offset by increases in the average balance and average cost of interest-bearing liabilities. The average yield on interest-earning assets increased to 4.42% for the year ended December 31, 2023 compared to 3.41% for the prior year due to the rising interest rate environment as well as the change in asset mix to higher yielding commercial loans. The average balance of interest-bearing liabilities increased by $355.6 million, or 3.8% and the average cost increased to 1.56% for the year ended December 31, 2023 from 0.30% for the year ended December 31, 2022 due to rising interest rates throughout the year as well as competitive pressure for funding and liquidity. In addition, the total provision for credit losses decreased $5.4 million, or 19.2% compared to the prior year, specifically within the provision for unfunded commitments as a result of the timing of the origination of loans with off balance sheet exposures. Noninterest income increased
$3.0 million, or 2.7% to $113.8 million for the year ended December 31, 2023 from $110.8 million for the year ended December 31, 2022, driven by a $4.0 million increase in service charges and fees, $1.8 million in gains on sales of SBA loans during the current year, and a $1.5 million increase in income from bank owned life insurance as a result of death benefits received in the current year. These changes were partially offset by a $22.0 million, or 6.7%, increase in noninterest expense to
$351.6 million for the year ended December 31, 2023 from $329.5 million for the year ended December 31, 2022, driven by a
$7.3 million increase in compensation and employee benefits expense, a $6.2 million increase in processing expenses due to the implementation of additional third-party software platforms, and a $4.5 million increase in federal deposit insurance premiums due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of December 31, 2023, Northwest operated 134 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
# # #
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities:
(1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
| December 31, 2023 | September 30, 2023 | December 31, 2022 |
Assets | | | |
Cash and cash equivalents | $ 122,260 | 161,995 | 139,365 |
Marketable securities available-for-sale (amortized cost of $1,240,003, $1,262,080 and $1,431,728, respectively) | 1,043,359 | 1,010,076 | 1,218,108 |
Marketable securities held-to-maturity (fair value of $699,506, $682,681 and $751,384, respectively) | 814,839 | 830,106 | 881,249 |
Total cash and cash equivalents and marketable securities | 1,980,458 | 2,002,177 | 2,238,722 |
| | | |
Loans held-for-sale | 8,768 | 10,592 | 9,913 |
Residential mortgage loans | 3,419,417 | 3,462,606 | 3,488,686 |
Home equity loans | 1,227,858 | 1,258,765 | 1,297,674 |
Consumer loans | 2,126,027 | 2,155,119 | 2,168,655 |
Commercial real estate loans | 2,974,010 | 2,922,582 | 2,823,555 |
Commercial loans | 1,658,729 | 1,500,609 | 1,131,969 |
Total loans receivable | 11,414,809 | 11,310,273 | 10,920,452 |
Allowance for credit losses | (125,243) | (124,841) | (118,036) |
Loans receivable, net | 11,289,566 | 11,185,432 | 10,802,416 |
| | | |
FHLB stock, at cost | 30,146 | 40,404 | 40,143 |
Accrued interest receivable | 47,353 | 42,624 | 35,528 |
Real estate owned, net | 104 | 363 | 413 |
Premises and equipment, net | 138,838 | 138,041 | 145,909 |
Bank-owned life insurance | 251,895 | 250,502 | 255,062 |
Goodwill | 380,997 | 380,997 | 380,997 |
Other intangible assets, net | 5,290 | 6,013 | 8,560 |
Other assets | 294,458 | 315,648 | 205,574 |
Total assets | $ 14,419,105 | 14,362,201 | 14,113,324 |
Liabilities and shareholders’ equity | | | |
Liabilities |
Noninterest-bearing demand deposits | $ 2,669,023 | 2,774,291 | 2,993,243 |
Interest-bearing demand deposits | 2,634,546 | 2,598,080 | 2,686,431 |
Money market deposit accounts | 1,968,218 | 2,042,813 | 2,457,569 |
Savings deposits | 2,105,234 | 2,116,360 | 2,275,020 |
Time deposits | 2,602,881 | 2,258,338 | 1,052,285 |
Total deposits | 11,979,902 | 11,789,882 | 11,464,548 |
| | | |
Borrowed funds | 398,895 | 604,587 | 681,166 |
Subordinated debt | 114,189 | 114,102 | 113,840 |
Junior subordinated debentures | 129,574 | 129,509 | 129,314 |
Advances by borrowers for taxes and insurance | 45,253 | 27,653 | 47,613 |
Accrued interest payable | 13,669 | 7,915 | 3,231 |
Other liabilities | 186,306 | 190,122 | 182,126 |
Total liabilities | 12,867,788 | 12,863,770 | 12,621,838 |
Shareholders’ equity | | | |
Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued | — | — | — |
Common stock, $0.01 par value: 500,000,000 shares authorized, 127,110,453, 127,101,349 and 127,028,848 shares issued and outstanding, respectively | 1,271 | 1,271 | 1,270 |
Additional paid-in capital | 1,024,852 | 1,023,591 | 1,019,647 |
Retained earnings | 674,686 | 671,092 | 641,727 |
Accumulated other comprehensive loss | (149,492) | (197,523) | (171,158) |
Total shareholders’ equity | 1,551,317 | 1,498,431 | 1,491,486 |
Total liabilities and shareholders’ equity | $ 14,419,105 | 14,362,201 | 14,113,324 |
Equity to assets | 10.76 % | 10.43 % | 10.57 % |
Tangible common equity to assets* | 8.30 % | 7.95 % | 8.03 % |
Book value per share | $ 12.20 | 11.79 | 11.74 |
Tangible book value per share* | $ 9.17 | 8.74 | 8.67 |
Closing market price per share | $ 12.48 | 10.23 | 13.98 |
Full time equivalent employees | 2,098 | 2,084 | 2,160 |
Number of banking offices | 142 | 142 | 150 |
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
| Quarter ended | |
| December 31, | September 30, | June 30, | March 31, | December 31, |
| 2023 | 2023 | 2023 | 2023 | 2022 |
Interest income: | | | | | |
Loans receivable | $ 146,523 | 140,667 | 132,724 | 123,745 | 117,137 |
Mortgage-backed securities | 7,951 | 8,072 | 8,326 | 8,537 | 8,603 |
Taxable investment securities | 786 | 786 | 841 | 845 | 840 |
Tax-free investment securities | 492 | 491 | 667 | 700 | 701 |
FHLB stock dividends | 666 | 668 | 844 | 690 | 419 |
Interest-earning deposits | 970 | 914 | 594 | 423 | 153 |
Total interest income | 157,388 | 151,598 | 143,996 | 134,940 | 127,853 |
Interest expense: | | | | | |
Deposits | 40,600 | 31,688 | 21,817 | 11,238 | 3,871 |
Borrowed funds | 10,486 | 11,542 | 13,630 | 11,238 | 6,938 |
Total interest expense | 51,086 | 43,230 | 35,447 | 22,476 | 10,809 |
Net interest income | 106,302 | 108,368 | 108,549 | 112,464 | 117,044 |
Provision for credit losses - loans | 3,801 | 3,983 | 6,010 | 4,870 | 9,023 |
Provision for credit losses - unfunded commitments (1) | 4,145 | (2,981) | 2,920 | 126 | 1,876 |
Net interest income after provision for credit losses | 98,356 | 107,366 | 99,619 | 107,468 | 106,145 |
Noninterest income: | | | | | |
Loss on sale of investments | (1) | — | (8,306) | — | (1) |
Gain on sale of mortgage servicing rights | — | — | 8,305 | — | — |
Gain on sale of SBA loans | 388 | 301 | 832 | 279 | — |
Gain on sale of loans | 726 | — | — | — | — |
Service charges and fees | 15,922 | 15,270 | 14,833 | 13,189 | 14,125 |
Trust and other financial services income | 6,884 | 7,085 | 6,866 | 6,449 | 6,642 |
Gain on real estate owned, net | 1,084 | 29 | 785 | 108 | 51 |
Income from bank-owned life insurance | 1,454 | 4,561 | 1,304 | 1,269 | 1,663 |
Mortgage banking income | 247 | 632 | 1,028 | 524 | 477 |
Other operating income | 2,465 | 3,010 | 4,150 | 2,151 | 4,901 |
Total noninterest income | 29,169 | 30,888 | 29,797 | 23,969 | 27,858 |
Noninterest expense: | | | | | |
Compensation and employee benefits | 50,194 | 51,243 | 47,650 | 46,604 | 46,658 |
Premises and occupancy costs | 7,049 | 7,052 | 7,579 | 7,471 | 7,370 |
Office operations | 3,747 | 3,398 | 2,800 | 3,010 | 3,544 |
Collections expense | 328 | 551 | 429 | 387 | 563 |
Processing expenses | 15,017 | 14,672 | 14,648 | 14,350 | 13,585 |
Marketing expenses | 1,317 | 2,379 | 2,856 | 2,892 | 2,773 |
Federal deposit insurance premiums | 2,643 | 2,341 | 2,064 | 2,223 | 1,319 |
Professional services | 6,255 | 3,002 | 3,804 | 4,758 | 5,434 |
Amortization of intangible assets | 724 | 795 | 842 | 909 | 932 |
Real estate owned expense | 51 | 141 | 83 | 181 | 53 |
Merger, asset disposition and restructuring expense | 2,354 | — | 1,593 | 2,802 | 4,243 |
Other expenses | 997 | 1,996 | 1,510 | 1,863 | 2,304 |
Total noninterest expense | 90,676 | 87,570 | 85,858 | 87,450 | 88,778 |
Income before income taxes | 36,849 | 50,684 | 43,558 | 43,987 | 45,225 |
Income tax expense | 7,835 | 11,464 | 10,514 | 10,308 | 10,576 |
Net income | $ 29,014 | 39,220 | 33,044 | 33,679 | 34,649 |
Basic earnings per share | $ 0.23 | 0.31 | 0.26 | 0.27 | 0.27 |
Diluted earnings per share | $ 0.23 | 0.31 | 0.26 | 0.26 | 0.27 |
Annualized return on average equity | 7.64 % | 10.27 % | 8.72 % | 9.11 % | 9.38 % |
Annualized return on average assets | 0.80 % | 1.08 % | 0.93 % | 0.97 % | 0.98 % |
Annualized return on tangible common equity * | 9.88 % | 14.00 % | 11.79 % | 12.15 % | 12.48 % |
Efficiency ratio | 66.93 % | 62.88 % | 62.06 % | 64.10 % | 61.27 % |
Efficiency ratio, excluding certain items (1) ** | 64.66 % | 62.31 % | 60.30 % | 61.38 % | 57.70 % |
Annualized noninterest expense to average assets | 2.51 % | 2.42 % | 2.42 % | 2.51 % | 2.52 % |
Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.43 % | 2.39 % | 2.35 % | 2.40 % | 2.37 % |
| Year ended December 31, | |
| | 2023 | | 2022 | |
Interest income: | | | | | |
Loans receivable | $ | | 543,659 | | 407,828 |
Mortgage-backed securities | | | 32,886 | | 30,804 |
Taxable investment securities | | | 3,258 | | 3,070 |
Tax-free investment securities | | | 2,350 | | 2,767 |
FHLB stock dividends | | | 2,868 | | 730 |
Interest-earning deposits | | | 2,901 | | 3,599 |
Total interest income | | | 587,922 | | 448,798 |
Interest expense: | | | | | |
Deposits | | | 105,343 | | 14,120 |
Borrowed funds | | | 46,896 | | 13,997 |
Total interest expense | | | 152,239 | | 28,117 |
Net interest income | | | 435,683 | | 420,681 |
Provision for credit losses - loans | | | 18,664 | | 17,860 |
Provision for credit losses - unfunded commitments (1) | | | 4,210 | | 10,453 |
Net interest income after provision for credit losses | | | 412,809 | | 392,368 |
Noninterest income: | | | | | |
Loss on sale of investments | | | (8,307) | | (8) |
Gain on sale of mortgage servicing rights | | | 8,305 | | — |
Gain on sale of SBA loans | | | 1,800 | | — |
Gain on sale of loans | | | 726 | | — |
Service charges and fees | | | 59,214 | | 55,188 |
Trust and other financial services income | | | 27,284 | | 27,765 |
Gain on real estate owned, net | | | 2,006 | | 603 |
Income from bank-owned life insurance | | | 8,588 | | 7,129 |
Mortgage banking income | | | 2,431 | | 4,865 |
Other operating income | | | 11,776 | | 15,307 |
Total noninterest income | | | 113,823 | | 110,849 |
Noninterest expense: | | | | | |
Compensation and employee benefits | | | 195,691 | | 188,359 |
Premises and occupancy costs | | | 29,151 | | 29,618 |
Office operations | | | 12,955 | | 13,318 |
Collections expense | | | 1,695 | | 1,808 |
Processing expenses | | | 58,687 | | 52,496 |
Marketing expenses | | | 9,444 | | 9,095 |
Federal deposit insurance premiums | | | 9,271 | | 4,778 |
Professional services | | | 17,819 | | 14,703 |
Amortization of intangible assets | | | 3,270 | | 4,277 |
Real estate owned expense | | | 456 | | 223 |
Merger, asset disposition and restructuring expense | | | 6,749 | | 5,617 |
Other expenses | | | 6,366 | | 5,233 |
Total noninterest expense | | | 351,554 | | 329,525 |
Income before income taxes | | | 175,078 | | 173,692 |
Income tax expense | | | 40,121 | | 40,026 |
Net income | $ | | 134,957 | | 133,666 |
Basic earnings per share | $ | 1.06 | 1.05 |
Diluted earnings per share | $ | 1.06 | 1.05 |
| | | |
Annualized return on average equity | 8.94 % | 8.80 % |
Annualized return on average assets | 0.95 % | 0.94 % |
Annualized return on tangible common equity * | 11.58 % | 12.13 % |
Efficiency ratio | 63.98 % | 62.00 % |
Efficiency ratio, excluding certain items (1) ** | 62.15 % | 60.13 % |
Annualized noninterest expense to average assets | 2.46 % | 2.32 % |
Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.39 % | 2.25 % |
Quarter ended December 31, Year ended December 31,
| 2023 | 2022 | 2023 | 2022 |
Reconciliation of net income to adjusted net operating income: | | | | |
Net income (GAAP) | $ 29,014 | 34,649 | 134,957 | 133,666 |
Non-GAAP adjustments | | | | |
Add: merger, asset disposition and restructuring expense | 2,354 | 4,243 | 6,749 | 5,617 |
Less: tax benefit of merger, asset disposition and restructuring expense | (659) | (1,188) | (1,890) | (1,573) |
Adjusted net operating income (non-GAAP) | $ 30,709 | 37,704 | 139,816 | 137,710 |
Diluted earnings per share (GAAP) | $ 0.23 0.27 1.06 | 1.05 |
Diluted adjusted operating earnings per share (non-GAAP) | $ 0.24 0.30 1.10 | 1.08 |
| | |
Average equity | $ 1,506,895 | 1,465,285 | 1,510,285 | 1,518,704 |
Average assets | 14,329,020 | 13,983,100 | 14,269,809 | 14,177,698 |
Annualized return on average equity (GAAP) | 7.64 % | 9.38 % | 8.94 % | 8.80 % |
Annualized return on average assets (GAAP) | 0.80 % | 0.98 % | 0.95 % | 0.94 % |
Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 8.09 % | 10.21 % | 9.26 % | 9.07 % |
Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 0.85 % | 1.07 % | 0.98 % | 0.97 % |
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s Consolidated Statements of Financial Condition.
| December 31, 2023 | September 30, 2023 | December 31, 2022 |
Tangible common equity to assets | | | |
Total shareholders’ equity | $ 1,551,317 | 1,498,431 | 1,491,486 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (389,557) |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
| | | |
Total assets | $ 14,419,105 | 14,362,201 | 14,113,324 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (389,557) |
Tangible assets | $ 14,032,818 | 13,975,191 | 13,723,767 |
| | | |
Tangible common equity to tangible assets | 8.30 % | 7.95 % | 8.03 % |
| | | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | | | |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
Less: unrealized losses on held to maturity investments | (115,334) | (147,425) | (129,865) |
Add: deferred taxes on unrealized losses on held to maturity investments | 32,294 | 41,279 | 36,362 |
Tangible common equity, including unrealized losses on held-to-maturity investments | $ 1,081,990 | 1,005,275 | 1,008,426 |
| | | |
Tangible assets | 14,032,818 | 13,975,191 | 13,723,767 |
| | | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | 7.71 % | 7.19 % | 7.35 % |
| | | |
Tangible book value per share | | | |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
Common shares outstanding | 127,110,453 | 127,101,349 | 127,028,848 |
Tangible book value per share | 9.17 | 8.74 | 8.67 |
Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) *
(dollars in thousands, except per share amounts)
The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Income.
Quarter ended Year ended December 30, |
December 31, | September 30, | June 30, | March 31, | December 31, | | |
2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 |
Annualized return on tangible common equity | | | | | | | |
Net income | $ 29,014 | 39,220 | 33,044 | 33,679 | 34,649 | 134,957 | 133,666 |
| | | | | | | |
Total shareholders’ equity | 1,551,317 | 1,498,431 | 1,511,501 | 1,513,275 | 1,491,486 | 1,551,317 | 1,491,486 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (387,806) | (388,648) | (389,557) | (386,287) | (389,557) |
Tangible common equity $ 1,165,030 1,111,421 1,123,695 1,124,627 1,101,929 1,165,030 1,101,929 |
| | | | | | | |
Annualized return on tangible common equity | 9.88 % | 14.00 % | 11.79 % | 12.15 % | 12.48 % | 11.58 % | 12.13 % |
| | | | | | | |
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | | | | | | | |
Non-interest expense | $ 90,676 | 87,570 | 85,858 | 87,450 | 88,778 | 351,554 | 329,525 |
Less: amortization expense | (724) | (795) | (842) | (909) | (932) | (3,270) | (4,277) |
Less: merger, asset disposition and restructuring expenses | (2,354) | — | (1,593) | (2,802) | (4,243) | (6,749) | (5,617) |
Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses $ 87,598 86,775 83,423 83,739 83,603 341,535 319,631 |
| | | | | | | |
Net interest income | $ 106,302 | 108,368 | 108,549 | 112,464 | 117,044 | 435,683 | 420,681 |
Non-interest income | 29,169 | 30,888 | 29,797 | 23,969 | 27,858 | 113,823 | 110,849 |
Net interest income plus non-interest income | $ 135,471 | 139,256 | 138,346 | 136,433 | 144,902 | 549,506 | 531,530 |
| | | | | | | |
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | 64.66 % | 62.31 % | 60.30 % | 61.38 % | 57.70 % | 62.15 % | 60.13 % |
| | | | | | | |
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | | | | | | | |
Non-interest expense excluding amortization and merger, asset disposition and restructuring expenses | 87,598 | 86,775 | 83,423 | 83,739 | 83,603 | 341,535 | 319,631 |
Average assets | 14,329,020 | 14,379,323 | 14,245,917 | 14,121,496 | 13,983,100 | 14,269,809 | 14,177,698 |
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | 2.43 % | 2.39 % | 2.35 % | 2.40 % | 2.37 % | 2.39 % | 2.25 % |
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude merger, asset disposition and restructuring expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
Deposits (Unaudited) (dollars in thousands)
Generally, deposits in excess of $250,000 are not federally insured. The following table provides details regarding the Company’s uninsured deposits portfolio:
As of December 31, 2023
| Balance | Percent of total deposits | Number of relationships |
Uninsured deposits per the Call Report (1) | $ 2,810,966 | 23.46 % | 4,924 |
Less intercompany deposit accounts | 976,113 | 8.15 % | 12 |
Less collateralized deposit accounts | 432,443 | 3.61 % | 239 |
Uninsured deposits excluding intercompany and collateralized accounts | $ 1,402,410 | 11.71 % |
4,673 |
Uninsured deposits presented may be different from actual amounts due to titling of accounts.
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19.0 million, or 0.16% of total deposits, as of December 31, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $105.8 million, or 0.88% of total deposits, as of December 31, 2023. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $300,000 as of December 31, 2023.
The following table provides additional details over the Company’s deposit portfolio:
Balance
As of December 31, 2023 Percent of
total deposits
Number of accounts
Personal noninterest bearing demand deposits | $ 1,357,875 | 11.33 % | 288,919 |
Business noninterest bearing demand deposits | 1,311,148 | 10.94 | 44,306 |
Personal interest-bearing demand deposits | 1,464,058 | 12.22 | 58,543 |
Business interest-bearing demand deposits | 1,170,488 | 9.77 | 7,953 |
Personal money market deposits | 1,435,939 | 11.99 | 25,556 |
Business money market deposits | 532,279 | 4.44 | 2,841 |
Savings deposits | 2,105,234 | 17.57 | 206,127 |
Time deposits | 2,602,881 | 21.74 | 74,330 |
Total deposits | $ 11,979,902 | 100.00 % | 708,575 |
Our average deposit account balance as of December 31, 2023 was $17,000. The Company’s insured cash sweep deposit balance was $357.0 million as of December 31, 2023.
The following table provides additional details regarding the Company’s deposit portfolio over time:
| 6/30/2022 | 9/30/2022 | 12/31/2022 | 3/31/2023 | 6/30/2023 | 9/30/2023 | 12/31/2023 |
Personal noninterest bearing demand deposits | 1,388,690 | 1,413,781 | 1,412,227 | 1,428,232 | 1,397,167 | 1,375,144 | 1,357,875 |
Business noninterest bearing demand deposits | 1,669,559 | 1,680,339 | 1,581,016 | 1,467,860 | 1,423,396 | 1,399,147 | 1,311,148 |
Personal interest-bearing demand deposits | 1,785,761 | 1,742,173 | 1,718,806 | 1,627,546 | 1,535,254 | 1,477,617 | 1,464,058 |
Business interest-bearing demand deposits | 529,357 | 498,937 | 499,059 | 466,105 | 624,252 | 689,914 | 812,433 |
Municipal demand deposits | 543,573 | 571,620 | 468,566 | 447,852 | 418,147 | 430,549 | 358,055 |
Personal money market deposits | 1,994,907 | 1,949,379 | 1,832,583 | 1,626,614 | 1,511,652 | 1,463,689 | 1,435,939 |
Business money market deposits | 636,805 | 627,634 | 624,986 | 701,436 | 642,601 | 579,124 | 532,279 |
Savings deposits | 2,362,725 | 2,327,419 | 2,275,020 | 2,194,743 | 2,120,215 | 2,116,360 | 2,105,234 |
Time deposits | 1,155,878 | 1,067,110 | 1,052,285 | 1,576,791 | 1,989,711 | 2,258,338 | 2,602,881 |
Total deposits | 12,067,255 | 11,878,392 | 11,464,548 11,537,179 | 11,662,395 11,789,882 | 11,979,902 |
Regulatory Capital Requirements (Unaudited) (dollars in thousands)
| At December 31, 2023 | |
| Actual | | Minimum capital requirements (1) | Well capitalized requirements |
| Amount | Ratio | Amount Ratio | Amount Ratio |
Total capital (to risk weighted assets) | | | | |
Northwest Bancshares, Inc. | $ 1,799,883 | 16.040 % | $ 1,178,234 10.500 % | $ 1,122,128 10.000 % |
Northwest Bank | 1,520,736 | 13.564 % | 1,177,257 10.500 % | 1,121,197 10.000 % |
Tier 1 capital (to risk weighted assets) |
Northwest Bancshares, Inc. | 1,553,766 | 13.847 % | 953,809 | 8.500 % | 897,702 | 8.000 % |
Northwest Bank | 1,388,808 | 12.387 % | 953,018 | 8.500 % | 896,958 | 8.000 % |
Common equity tier 1 capital (to risk weighted assets) |
Northwest Bancshares, Inc. | 1,428,181 | 12.727 % | 785,489 | 7.000 % | 729,383 | 6.500 % |
Northwest Bank | 1,388,808 | 12.387 % | 784,838 | 7.000 % | 728,778 | 6.500 % |
Tier 1 capital (leverage) (to average assets) |
Northwest Bancshares, Inc. | 1,553,766 | 10.841 % | 573,290 | 4.000 % | 716,612 | 5.000 % |
Northwest Bank | 1,388,808 | 9.697 % | 572,903 | 4.000 % | 716,128 | 5.000 % |
Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2020 Annual Report on Form 10-K.
Marketable securities available-for-sale Amortized cost
Gross unrealized holding gains
December 31, 2023 Gross unrealized
holding losses Fair value
Weighted average duration
Debt issued by the U.S. government and agencies: | |
Due after one year through five years | $ 20,000 | — | (1,135) | 18,865 | 2.90 |
Due after ten years | 49,383 | — | (9,934) | 39,449 | 6.15 |
Debt issued by government sponsored enterprises: |
Due after one year through five years | 45,986 | — | (5,763) | 40,223 | 4.34 |
Due after five years through ten years | 386 | — | (12) | 374 | 1.84 |
Municipal securities: |
Due after one year through five years | 4,279 | 22 | (427) | 3,874 | 3.99 |
Due after five years through ten years | 20,725 | — | (1,437) | 19,288 | 7.10 |
Due after ten years | 60,762 | 125 | (8,580) | 52,307 | 10.30 |
| | | | | |
Corporate debt issues:
Due after five years through ten years 8,466 — (778) 7,688 5.35
Residential mortgage-backed agency securities: |
Fixed rate pass-through | 209,069 | 27 | (25,222) | 183,874 | 6.49 |
Variable rate pass-through | 7,140 | 11 | (71) | 7,080 | 4.50 |
Fixed rate agency CMOs | 789,842 | — | (143,055) | 646,787 | 5.20 |
Variable rate agency CMOs | 23,965 | 38 | (453) | 23,550 | 3.57 |
Total residential mortgage-backed agency securities | 1,030,016 | 76 | (168,801) | 861,291 | 5.42 |
Total marketable securities available-for-sale | $ 1,240,003 | 223 | (196,867) | 1,043,359 5.63 |
Marketable securities held-to-maturity
Government sponsored
Due after one year through five years | $ 69,471 | — | (8,100) | 61,371 | 3.90 |
Due after five years through ten years | 54,987 | — | (8,700) | 46,287 | 5.33 |
| | | | | |
Residential mortgage-backed agency securities: | | | | | |
Fixed rate pass-through | 147,874 | — | (20,834) | 127,040 | 5.26 |
Variable rate pass-through | 449 | 1 | — | 450 | 4.47 |
Fixed rate agency CMOs | 541,529 | — | (77,694) | 463,835 | 6.28 |
Variable rate agency CMOs | 529 | — | (6) | 523 | 5.33 |
Total residential mortgage-backed agency securities | 690,381 | 1 | (98,534) | 591,848 | 6.06 |
Total marketable securities held-to-maturity | $ 814,839 | 1 | (115,334) | 699,506 | 5.83 |
December 31, 2023
| Amount | | Average rate |
Term notes payable to the FHLB of Pittsburgh, due within one year | $ | | 175,000 | 5.71 % |
Notes payable to the FHLB of Pittsburgh, due within one year | | | 163,500 | 5.70 % |
Total term notes payable to the FHLB | | | 338,500 | 5.70 % |
Collateralized borrowings, due within one year | 35,495 | 1.72 % |
Collateral received, due within one year | 24,900 | 5.26 % |
Subordinated debentures, net of issuance costs | 114,189 | 4.28 % |
Junior subordinated debentures | 129,574 | 7.88 % |
Total borrowed funds * | $ 642,658 | 5.65 % |
* As of December 31, 2023, the Company had $3.3 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $163.5 million drawn balance, as well as $297.5 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks.
Commercial real estate loans outstanding
The following table provides the various loan sectors in our commercial real estate portfolio at December 31, 2023:
December 31, 2023
Property type | Percent of portfolio |
5 or More Unit Dwelling | 14.5 % |
Nursing Home | 12.8 |
Retail Building | 12.0 |
Commercial Office Building - non-owner occupied | 9.3 |
Residential acquisition & development - 1-4 family, townhouses and apartments | 4.8 |
Manufacturing & Industrial Building | 4.8 |
Multi-use building - commercial, retail and residential | 4.4 |
Warehouse/Storage Building | 3.9 |
Commercial office building - owner occupied | 3.3 |
Multi-use building - office and warehouse | 3.3 |
Single Family Dwelling | 2.7 |
Other Medical Facility | 2.5 |
Student Housing | 2.2 |
Hotel/Motel | 2.1 |
2-4 Family | 2.1 |
Agricultural Real Estate | 2.1 |
All Other Types | 13.2 |
Total | 100.0 % |
The following table describes our commercial real estate portfolio by state at December 31, 2023:
| | December 31, 2023 |
State | Percent of portfolio |
New York | | 32.4 % |
Pennsylvania | | 30.9 |
Ohio | | 20.0 |
Indiana | | 7.9 |
All other | | 8.8 |
Total | | 100.0 % |
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 |
Nonaccrual loans current: | | | | | |
Residential mortgage loans | $ 959 | 1,951 | 1,559 | 1,423 | 1,496 |
Home equity loans | 871 | 947 | 1,089 | 1,084 | 1,418 |
Consumer loans | 1,051 | 1,049 | 1,009 | 911 | 836 |
Commercial real estate loans | 64,603 | 44,639 | 48,468 | 50,045 | 53,303 |
Commercial loans | 1,182 | 1,369 | 995 | 1,468 | 895 |
Total nonaccrual loans current $ 68,666 49,955 53,120 54,931 57,948 |
Nonaccrual loans delinquent 30 days to 59 days: | | | | | |
Residential mortgage loans | $ 933 | 48 | 49 | 688 | 473 |
Home equity loans | 174 | 92 | 37 | 18 | 180 |
Consumer loans | 225 | 274 | 309 | 223 | 178 |
Commercial real estate loans | 51 | 1,913 | 1,697 | 1,900 | 1,220 |
Commercial loans | 139 | 90 | 855 | 341 | 145 |
Total nonaccrual loans delinquent 30 days to 59 days $ 1,522 2,417 2,947 3,170 2,196 |
Nonaccrual loans delinquent 60 days to 89 days: |
Residential mortgage loans | $ 511 | 66 | 185 | 919 | 31 |
Home equity loans | 347 | 319 | 363 | 338 | 290 |
Consumer loans | 557 | 312 | 360 | 340 | 341 |
Commercial real estate loans | 831 | 212 | 210 | 1,355 | 473 |
Commercial loans | 56 | 291 | 245 | 126 | 96 |
Total nonaccrual loans delinquent 60 days to 89 days | $ 2,302 | 1,200 | 1,363 | 3,078 | 1,231 |
Nonaccrual loans delinquent 90 days or more: | | | | | |
Residential mortgage loans | $ 6,324 | 7,695 | 6,290 | 3,300 | 5,574 |
Home equity loans | 3,100 | 2,073 | 1,965 | 2,190 | 2,257 |
Consumer loans | 3,212 | 2,463 | 2,033 | 2,791 | 2,672 |
Commercial real estate loans | 6,488 | 8,416 | 8,575 | 8,010 | 7,867 |
Commercial loans | 2,770 | 2,435 | 2,296 | 1,139 | 1,491 |
Total nonaccrual loans delinquent 90 days or more | $ 21,894 | 23,082 | 21,159 | 17,430 | 19,861 |
Total nonaccrual loans | $ 94,384 | 76,654 | 78,589 | 78,609 | 81,236 |
Total nonaccrual loans | $ 94,384 | 76,654 | 78,589 | 78,609 | 81,236 |
Loans 90 days past due and still accruing | 2,698 | 728 | 532 | 652 | 744 |
Nonperforming loans | 97,082 | 77,382 | 79,121 | 79,261 | 81,980 |
Real estate owned, net | 104 | 363 | 371 | 524 | 413 |
Nonperforming assets | $ 97,186 | 77,745 | 79,492 | 79,785 | 82,393 |
| | | | | |
Nonperforming loans to total loans | 0.85 % | 0.68 % | 0.70 % | 0.71 % | 0.75 % |
Nonperforming assets to total assets | 0.67 % | 0.54 % | 0.56 % | 0.56 % | 0.58 % |
Allowance for credit losses to total loans | 1.10 % | 1.10 % | 1.10 % | 1.09 % | 1.08 % |
Allowance for credit losses to nonperforming loans | 129.01 % | 161.33 % | 157.26 % | 152.98 % | 143.98 % |
At December 31, 2023 | Pass | Special mention * | Substandard ** | Doubtful | Loss | Loans receivable |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,413,846 | — | 14,339 | | — — | 3,428,185 |
Home equity loans | 1,223,097 | — | 4,761 | | — — | 1,227,858 |
Consumer loans | 2,120,216 | — | 5,811 | | — — | 2,126,027 |
Total Personal Banking | 6,757,159 | — | 24,911 | | — — | 6,782,070 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,670,510 | 124,116 | 179,384 | | — — | 2,974,010 |
Commercial loans | 1,637,879 | 6,678 | 14,172 | | — — | 1,658,729 |
Total Commercial Banking | 4,308,389 | 130,794 | 193,556 | | — — | 4,632,739 |
Total loans | $ 11,065,548 | 130,794 | 218,467 | | — — | 11,414,809 |
At September 30, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,459,251 | — | 13,512 | | — — | 3,472,763 |
Home equity loans | 1,254,985 | — | 3,780 | | — — | 1,258,765 |
Consumer loans | 2,150,464 | — | 4,655 | | — — | 2,155,119 |
Total Personal Banking | 6,864,700 | — | 21,947 | | — — | 6,886,647 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,632,472 | 123,935 | 166,610 | | — — | 2,923,017 |
Commercial loans | 1,476,833 | 3,690 | 20,086 | | — — | 1,500,609 |
Total Commercial Banking | 4,109,305 | 127,625 | 186,696 | | — — | 4,423,626 |
Total loans | $ 10,974,005 | 127,625 | 208,643 | | — — | 11,310,273 |
At June 30, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,483,098 | — | 12,059 | | — — | 3,495,157 |
Home equity loans | 1,272,363 | — | 3,699 | | — — | 1,276,062 |
Consumer loans | 2,196,938 | — | 4,124 | | — — | 2,201,062 |
Total Personal Banking | 6,952,399 | — | 19,882 | | — — | 6,972,281 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,649,535 | 74,170 | 171,519 | | — — | 2,895,224 |
Commercial loans | 1,377,981 | 3,040 | 22,705 | | — — | 1,403,726 |
Total Commercial Banking | 4,027,516 | 77,210 | 194,224 | | — — | 4,298,950 |
Total loans | $ 10,979,915 | 77,210 | 214,106 | | — — | 11,271,231 |
At March 31, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,499,135 | — | 6,330 | | — — | 3,505,465 |
Home equity loans | 1,277,915 | — | 3,631 | | — — | 1,281,546 |
Consumer loans | 2,227,379 | — | 4,754 | | — — | 2,232,133 |
Total Personal Banking | 7,004,429 | — | 14,715 | | — — | 7,019,144 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,585,676 | 69,837 | 171,591 | | — — | 2,827,104 |
Commercial loans | 1,217,344 | 6,381 | 22,298 | | — — | 1,246,023 |
Total Commercial Banking | 3,803,020 | 76,218 | 193,889 | | — — | 4,073,127 |
Total loans | $ 10,807,449 | 76,218 | 208,604 | | — — | 11,092,271 |
At December 31, 2022 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,484,870 | — | 13,729 | | — — | 3,498,599 |
Home equity loans | 1,292,146 | — | 5,528 | | — — | 1,297,674 |
Consumer loans | 2,164,220 | — | 4,435 | | — — | 2,168,655 |
Total Personal Banking | 6,941,236 | — | 23,692 | | — — | 6,964,928 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,579,809 | 55,076 | 188,670 | | — — | 2,823,555 |
Commercial loans | 1,100,707 | 7,384 | 23,878 | | — — | 1,131,969 |
Total Commercial Banking | 3,680,516 | 62,460 | 212,548 | | — — | 3,955,524 |
Total loans | $ 10,621,752 | 62,460 | 236,240 | | — — | 10,920,452 |
* Includes $7.8 million, $6.9 million, $4.9 million, $7.4 million, and $7.4 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
** Includes $20.3 million, $28.9 million, $31.2 million, $31.9 million, and $39.1 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited)
(dollars in thousands)
December 31,
(Number of loans and dollar amount of loans)
2023 *
September 30,
2023 *
June 30,
2023 *
March 31,
2023 *
December 31,
2022 *
Loans delinquent 30 days to 59 days:
Residential mortgage loans | 307 | $ 30,041 | 0.9 % | 6 | $ 573 | — % | 14 | $ 627 | — % | 259 | $ 26,992 | 0.8 % | 304 | $ 29,487 | 0.8 % |
Home equity loans | 121 | 5,761 | 0.5 % | 112 | 4,707 | 0.4 % | 92 | 3,395 | 0.3 % | 111 | 4,235 | 0.3 % | 145 | 6,657 | 0.5 % |
Consumer loans | 896 | 11,211 | 0.5 % | 733 | 9,874 | 0.5 % | 602 | 7,955 | 0.4 % | 587 | 6,930 | 0.3 % | 737 | 9,435 | 0.4 % |
Commercial real estate loans | 23 | 3,204 | 0.1 % | 22 | 3,411 | 0.1 % | 13 | 2,710 | 0.1 % | 23 | 4,834 | 0.2 % | 29 | 4,008 | 0.1 % |
Commercial loans | 59 | 4,196 | 0.3 % | 52 | 2,847 | 0.2 % | 38 | 15,658 | 1.1 % | 46 | 4,253 | 0.3 % | 51 | 2,648 | 0.2 % |
Total loans delinquent 30 days to 59 days | 1,406
| $ 54,413
| 0.5 % | 925
| $ 21,412
| 0.2 % | 759
| $ 30,345
| 0.3 % | 1,026
| $ 47,244
| 0.4 % | 1,266
| $ 52,235
| 0.5 % |
| | | | | | | | | | | | | | | |
Loans delinquent 60 days to 89 days: | | | | | | | | | | | | | | | |
Residential mortgage loans | 69 | $ 7,796 | 0.2 % | 56 | $ 5,395 | 0.2 % | 52 | $ 3,521 | 0.1 % | 23 | $ 1,922 | 0.1 % | 65 | $ 5,563 | 0.2 % |
Home equity loans | 37 | 982 | 0.1 % | 40 | 1,341 | 0.1 % | 31 | 1,614 | 0.1 % | 31 | 1,061 | 0.1 % | 29 | 975 | 0.1 % |
Consumer loans | 322 | 3,754 | 0.2 % | 236 | 2,707 | 0.1 % | 250 | 2,584 | 0.1 % | 185 | 2,083 | 0.1 % | 255 | 3,070 | 0.1 % |
Commercial real estate loans | 9 | 1,031 | — % | 13 | 1,588 | 0.1 % | 12 | 1,288 | — % | 17 | 1,949 | 0.1 % | 16 | 2,377 | 0.1 % |
Commercial loans | 16 | 703 | — % | 15 | 981 | 0.1 % | 23 | 11,092 | 0.8 % | 19 | 1,088 | 0.1 % | 24 | 1,115 | 0.1 % |
Total loans delinquent 60 days to 89 days | 453
| $ 14,266
| 0.1 % | 360
| $ 12,012
| 0.1 % | 368
| $ 20,099
| 0.2 % | 275
| $ 8,103
| 0.1 % | 389
| $ 13,100
| 0.1 % |
| | | | | | | | | | | | | | | |
Loans delinquent 90 days or more: ** | | | | | | | | | | | | | | | |
Residential mortgage loans | 70 | $ 7,995 | 0.2 % | 79 | $ 7,695 | 0.2 % | 63 | $ 6,290 | 0.2 % | 39 | $ 3,300 | 0.1 % | 65 | $ 5,574 | 0.2 % |
Home equity loans | 81 | 3,126 | 0.3 % | 73 | 2,206 | 0.2 % | 68 | 1,965 | 0.2 % | 65 | 2,190 | 0.2 % | 68 | 2,257 | 0.2 % |
Consumer loans | 440 | 3,978 | 0.2 % | 357 | 3,020 | 0.1 % | 314 | 2,447 | 0.1 % | 313 | 3,279 | 0.1 % | 334 | 3,079 | 0.1 % |
Commercial real estate loans | 27 | 6,712 | 0.2 % | 27 | 8,416 | 0.3 % | 20 | 8,575 | 0.3 % | 18 | 8,010 | 0.3 % | 19 | 7,867 | 0.3 % |
Commercial loans | 53 | 2,780 | 0.2 % | 39 | 2,472 | 0.2 % | 38 | 2,414 | 0.2 % | 24 | 1,302 | 0.1 % | 15 | 1,829 | 0.2 % |
Total loans delinquent 90 days or more | 671
| $ 24,591
| 0.2 % | 575
| $ 23,809
| 0.2 % | 503
| $ 21,691
| 0.2 % | 459
| $ 18,081
| 0.2 % | 501
| $ 20,606
| 0.2 % |
| | | | | | | | | | | | | | | |
Total loans delinquent | 2,530 | $ 93,270 | 0.8 % | 1,860 | $ 57,233 | 0.5 % | 1,630 | $ 72,135 | 0.6 % | 1,760 | $ 73,428 | 0.7 % | 2,156 | $ 85,941 | 0.8 % |
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit deteriorated loans of $646,000, $1.4 million, $605,000, $331,000, and $1.7 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
| Quarter ended | |
| December 31, | September 30, | June 30, | March 31, | December 31, |
| 2023 | 2023 | 2023 | 2023 | 2022 |
Beginning balance | $ 124,841 | 124,423 | 121,257 | 118,036 | 109,819 |
ASU 2022-02 Adoption | — | — | — | 426 | — |
Provision | 3,801 | 3,983 | 6,010 | 4,870 | 9,023 |
Charge-offs residential mortgage | (266) | (171) | (545) | (207) | (546) |
Charge-offs home equity | (133) | (320) | (235) | (164) | (232) |
Charge-offs consumer | (3,860) | (3,085) | (2,772) | (2,734) | (2,430) |
Charge-offs commercial real estate | (742) | (484) | (483) | (657) | (621) |
Charge-offs commercial | (806) | (1,286) | (1,209) | (865) | (404) |
Recoveries | 2,408 | 1,781 | 2,400 | 2,552 | 3,427 |
Net charge-offs to average loans, annualized 0.12 % 0.13 % 0.10 % 0.08 % 0.03 %
Ending balance $ 125,243 124,841 124,423 121,257 118,036
Year ended December 31,
| 2023 | 2022 |
Beginning balance | $ 118,036 | 102,241 |
ASU 2022-02 Adoption | 426 | — |
Provision | 18,664 | 17,860 |
Charge-offs residential mortgage | (1,189) | (2,033) |
Charge-offs home equity | (852) | (1,469) |
Charge-offs consumer | (12,451) | (8,406) |
Charge-offs commercial real estate | (2,366) | (7,366) |
Charge-offs commercial | (4,166) | (1,657) |
Recoveries | 9,141 | 18,866 |
Ending balance | $ 125,243 | 118,036 |
Net charge-offs to average loans, annualized | 0.11 % | 0.02 % |
Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited)
(dollars in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
Quarter ended
December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | |
Average | Avg. yield/ | Average | Avg. yield/ Average | | Avg. yield/ | Average | Avg. yield/ | Average | Avg. yield/ |
| balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) |
Assets: | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | |
Residential mortgage loans | $ 3,442,308 | 32,739 | 3.80 % | $ 3,476,446 | 32,596 | 3.75 % | $ 3,485,517 | 32,485 | 3.73 % | $ 3,493,617 | 32,009 | 3.66 % | $ 3,439,401 | 30,974 | 3.60 % |
Home equity loans | 1,238,420 | 17,590 | 5.64 % | 1,264,134 | 17,435 | 5.47 % | 1,273,298 | 16,898 | 5.32 % | 1,284,425 | 16,134 | 5.09 % | 1,282,733 | 15,264 | 4.72 % |
Consumer loans | 2,055,783 | 24,667 | 4.76 % | 2,092,023 | 23,521 | 4.46 % | 2,143,804 | 22,662 | 4.24 % | 2,123,672 | 20,794 | 3.97 % | 2,069,207 | 19,709 | 3.78 % |
Commercial real estate loans | 2,950,589 | 43,337 | 5.83 % | 2,911,145 | 41,611 | 5.67 % | 2,836,443 | 38,426 | 5.43 % | 2,824,120 | 37,031 | 5.24 % | 2,822,008 | 35,428 | 4.91 % |
Commercial loans | 1,564,617 | 28,801 | 7.30 % | 1,447,211 | 26,239 | 7.19 % | 1,326,598 | 22,872 | 6.92 % | 1,161,298 | 18,353 | 6.32 % | 1,113,178 | 16,315 | 5.74 % |
Total loans receivable (a) (b) (d) | 11,251,717 | 147,134 | 5.19 % | 11,190,959 | 141,402 | 5.01 % | 11,065,660 | 133,343 | 4.83 % | 10,887,132 | 124,321 | 4.63 % | 10,726,527 | 117,690 | 4.35 % |
Mortgage-backed securities (c) | 1,741,687 | 7,951 | 1.83 % | 1,781,010 | 8,072 | 1.81 % | 1,859,427 | 8,326 | 1.79 % | 1,909,676 | 8,537 | 1.79 % | 1,956,167 | 8,603 | 1.76 % |
Investment securities (c) (d) | 335,121 | 1,425 | 1.70 % | 336,125 | 1,431 | 1.70 % | 374,560 | 1,715 | 1.83 % | 384,717 | 1,761 | 1.83 % | 386,468 | 1,753 | 1.81 % |
FHLB stock, at cost | 35,082 | 665 | 7.52 % | 37,722 | 668 | 7.03 % | 45,505 | 844 | 7.44 % | 39,631 | 690 | 7.06 % | 26,827 | 419 | 6.19 % |
Other interest-earning deposits | 62,027 | 970 | 6.20 % | 59,433 | 915 | 6.11 % | 38,912 | 594 | 6.12 % | 30,774 | 423 | 5.50 % | 9,990 | 153 | 5.99 % |
Total interest-earning assets | 13,425,634 | 158,145 | 4.67 % | 13,405,249 | 152,488 | 4.51 % | 13,384,064 | 144,822 | 4.34 % | 13,251,930 | 135,732 | 4.15 % | 13,105,979 | 128,618 | 3.89 % |
Noninterest-earning assets (e) | 903,386 | | | 974,074 | | | 861,853 | | | 869,566 | | | 877,121 | | |
Total assets | $14,329,020 | | | $14,379,323 | | | $14,245,917 | | | $14,121,496 | | | $13,983,100 | | |
Liabilities and shareholders’ equity: | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | |
Savings deposits (g) | $ 2,102,320 | 4,045 | 0.76 % | $ 2,116,759 | 2,695 | 0.51 % | $ 2,142,941 | 1,393 | 0.26 % | $ 2,198,988 | 690 | 0.13 % | $ 2,298,451 | 585 | 0.10 % |
Interest-bearing demand deposits (g) | 2,573,634 | 4,921 | 0.76 % | 2,569,229 | 4,086 | 0.63 % | 2,469,666 | 1,648 | 0.27 % | 2,612,883 | 951 | 0.15 % | 2,718,360 | 509 | 0.07 % |
Money market deposit accounts (g) | 1,997,116 | 7,446 | 1.48 % | 2,112,228 | 6,772 | 1.27 % | 2,221,713 | 6,113 | 1.10 % | 2,408,582 | 4,403 | 0.74 % | 2,512,892 | 1,310 | 0.21 % |
Time deposits (g) | 2,447,335 | 24,187 | 3.92 % | 2,164,559 | 18,136 | 3.32 % | 1,765,454 | 12,663 | 2.88 % | 1,293,609 | 5,194 | 1.63 % | 1,024,895 | 1,467 | 0.57 % |
Borrowed funds (f) | 548,089 | 6,826 | 4.94 % | 643,518 | 7,937 | 4.89 % | 837,358 | 10,202 | 4.89 % | 740,218 | 7,938 | 4.35 % | 451,369 | 3,967 | 3.49 % |
Subordinated debt | 114,134 | 1,148 | 4.02 % | 114,045 | 1,148 | 4.03 % | 113,958 | 1,148 | 4.03 % | 113,870 | 1,148 | 4.03 % | 113,783 | 1,148 | 4.04 % |
Junior subordinated debentures | 129,532 | 2,512 | 7.59 % | 129,466 | 2,456 | 7.42 % | 129,401 | 2,280 | 6.97 % | 129,335 | 2,152 | 6.66 % | 129,271 | 1,823 | 5.52 % |
Total interest-bearing liabilities | 9,912,160 | 51,085 | 2.04 % | 9,849,804 | 43,230 | 1.74 % | 9,680,491 | 35,447 | 1.47 % | 9,497,485 | 22,476 | 0.96 % | 9,249,021 | 10,809 | 0.46 % |
Noninterest-bearing demand deposits (g) | 2,675,788 | | | 2,757,091 | | | 2,820,928 | | | 2,889,973 | | | 3,039,000 | | |
Noninterest-bearing liabilities | 234,177 | | | 257,141 | | | 224,508 | | | 235,213 | | | 229,794 | | |
Total liabilities | 12,822,125 | | | 12,864,036 | | | 12,725,927 | | | 12,622,671 | | | 12,517,815 | | |
Shareholders’ equity | 1,506,895 | | | 1,515,287 | | | 1,519,990 | | | 1,498,825 | | | 1,465,285 | | |
Total liabilities and shareholders’ equity | $14,329,020 | | | $14,379,323 | | | $14,245,917 | | | $14,121,496 | | | $13,983,100 | | |
Net interest income/Interest rate spread | | 107,060 | 2.63 % | | 109,258 | 2.77 % | | 109,375 | 2.87 % | | 113,256 | 3.19 % | | 117,809 | 3.43 % |
Net interest-earning assets/Net interest margin | $ 3,513,474 | | 3.16 % | $ 3,555,445 | | 3.23 % | $ 3,703,573 | | 3.28 % | $ 3,754,445 | | 3.47 % | $ 3,856,958 | | 3.57 % |
Ratio of interest-earning assets to interest- bearing liabilities | 1.35X | | | 1.36X | | | 1.38X | | | 1.40X | | | 1.42X | | |
Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
Average balances include FHLB borrowings and collateralized borrowings.
Average cost of deposits were 1.37%, 1.07%, 0.77%, 0.40%, and 0.13%, respectively and average cost of Interest-bearing deposits were 1.77%, 1.40%, 1.02%, 0.54%, and 0.18%, respectively.
Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 5.17%, 4.99%, 4.81%, 4.61%, and 4.33%, respectively, Investment securities — 1.52%, 1.52%, 1.61%, 1.61%, and 1.59%, respectively, Interest-earning assets
— 4.65%, 4.49%, 4.32%, 4.13%, and 3.87%, respectively. GAAP basis net interest rate spreads were 2.61%, 2.75%, 2.85%, 3.17%, and 3.41%, respectively, and GAAP basis net interest margins were 3.14%, 3.21%, 3.25%, 3.44%, and
3.54%, respectively.
Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited)
(in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
Year ended December 31,
| | 2023 | | | 2022 | |
Average | | Avg. yield/ | Average | | Avg. yield/ |
balance | Interest | cost (h) | balance | Interest | cost (h) |
Assets | | | | | | |
Interest-earning assets: | | | | | | |
Residential mortgage loans | $ 3,474,336 | 129,828 | 3.74 % | $ 3,232,487 | 113,256 | 3.50 % |
Home equity loans | 1,264,941 | 68,058 | 5.38 % | 1,282,218 | 52,707 | 4.11 % |
Consumer loans | 2,103,602 | 91,645 | 4.36 % | 1,933,557 | 67,296 | 3.48 % |
Commercial real estate loans | 2,881,005 | 160,352 | 5.57 % | 2,894,508 | 131,230 | 4.47 % |
Commercial loans | 1,376,234 | 96,253 | 6.99 % | 976,128 | 45,293 | 4.58 % |
Loans receivable (a) (b) (d) | 11,100,118 | 546,136 | 4.92 % | 10,318,898 | 409,782 | 3.97 % |
Mortgage-backed securities (c) | 1,822,375 | 32,886 | 1.80 % | 1,968,528 | 30,804 | 1.56 % |
Investment securities (c) (d) | 357,436 | 6,312 | 1.77 % | 381,518 | 6,671 | 1.75 % |
FHLB stock, at cost | 39,467 | 2,868 | 7.27 % | 17,065 | 730 | 4.27 % |
Other interest-earning deposits | 47,787 | 2,901 | 6.07 % | 567,609 | 3,599 | 0.63 % |
Total interest-earning assets | 13,367,183 | 591,103 | 4.42 % | 13,253,618 | 451,586 | 3.41 % |
Noninterest-earning assets (e) | 902,626 | | | 924,080 | | |
| | | | | | |
Total assets | $ 14,269,809 | | | $ 14,177,698 | | |
| | | | | | |
Liabilities and shareholders’ equity | | | | | | |
Interest-bearing liabilities: | | | | | | |
Savings deposits (g) | $ 2,148,127 | 8,822 | 0.41 % | $ 2,336,217 | 2,343 | 0.10 % |
Interest-bearing demand deposits (g) | 2,556,281 | 11,606 | 0.45 % | 2,810,889 | 1,517 | 0.05 % |
Money market deposit accounts (g) | 2,183,583 | 24,734 | 1.13 % | 2,613,422 | 3,377 | 0.13 % |
Time deposits (g) | 1,913,372 | 60,181 | 3.15 % | 1,161,432 | 6,883 | 0.59 % |
Borrowed funds (f) | 691,636 | 32,903 | 4.76 % | 212,026 | 4,531 | 2.14 % |
Subordinated debt | 114,002 | 4,592 | 4.03 % | 117,625 | 4,750 | 4.04 % |
Junior subordinated debentures | 129,434 | 9,401 | 7.26 % | 129,175 | 4,716 | 3.60 % |
Total interest-bearing liabilities | 9,736,435 | 152,239 | 1.56 % | 9,380,786 | 28,117 | 0.30 % |
Noninterest-bearing demand deposits (g) | 2,785,279 | | | 3,070,892 | | |
Noninterest-bearing liabilities | 237,810 | | | 207,316 | | |
| | | | | | |
Total liabilities | 12,759,524 | | | 12,658,994 | | |
| | | | | | |
Shareholders’ equity | 1,510,285 | | | 1,518,704 | | |
| | | | | | |
Total liabilities and shareholders’ equity | $ 14,269,809 | | | $ 14,177,698 | | |
| | | | | | |
Net interest income/Interest rate spread | | 438,864 | 2.86 % | | 423,469 | 3.11 % |
| | | | | | |
Net interest-earning assets/Net interest margin | $ 3,630,748 | | 3.28 % | $ 3,872,832 | | 3.20 % |
| | | | | | |
Ratio of interest-earning assets to interest-bearing liabilities | 1.37X | | | 1.41X | | |
Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material.
Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
Average balances include FHLB borrowings and collateralized borrowings.
Average cost of deposits were 0.91% and 0.12%, respectively and average cost of Interest-bearing deposits were 1.20% and 0.16%, respectively.
Shown on a FTE basis. GAAP basis yields were: Loans — 4.90% and 3.95%, respectively; Investment securities — 1.57% and 1.53%, respectively; Interest-earning assets — 4.40% and 3.39%, respectively. GAAP basis net interest rate spreads were 2.83% and 3.09%, respectively; and GAAP basis net interest margins were 3.26% and 3.17%, respectively
Columbus, Ohio — January 22, 2024
Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2023 of $29.0 million, or $0.23 per diluted share. This represents a decrease of $5.6 million, or 16.3%, compared to the same quarter last year, when net income was $34.6 million, or $0.27 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended December 31, 2023 were 7.64% and 0.80% compared to 9.38% and 0.98% 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, 2024 to shareholders of record as of February 2, 2024. This is the 117th 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, 2023, this represents an annualized dividend yield of approximately 6.4%.
Louis J. Torchio, President and CEO, added, “We were very pleased with 2023 results as we continue to execute upon our commercial banking strategy despite the current year liquidity and interest rate challenges for the industry. We grew loans at a measured pace of 4.5%, but more importantly we reallocated over $440.0 million from lower yielding investment securities, retail loans and consumer loans into the more profitable commercial portfolio, which grew $677.2 million, or 17.1%. We were also pleased with the stability of our deposit base throughout the year which grew $515.4 million, enabling us to reduce more expensive borrowed funds by $282.3 million, and our tangible common equity grew to 8.30%, which provides flexibility for growth going forward.”
Mr. Torchio continued, “We have also taken additional measures to control our noninterest expense growth by consolidating three more branches, rightsizing our retail and consumer staff, and renegotiating third-party contracts across the board. These measures required severance and professional service costs in the fourth quarter of approximately $3.5 million. The expense savings going forward will be allocated to the continued build-out of our credit administration, risk management, and internal audit functions that support our focus on commercial loan growth.”
Net interest income decreased by $10.7 million, or 9.2%, to $106.3 million for the quarter ended December 31, 2023, from $117.0 million for the quarter ended December 31, 2022. This decrease in net interest income resulted primarily from a
$40.3 million increase in interest expense due to increases in both the average balance and average cost of interest-bearing liabilities. The average balance of interest-bearing liabilities increased $663.1 million, or 7.2%, to $9.912 billion for the quarter ended December 31, 2023 from $9.249 billion for the quarter ended December 31, 2022, driven by an increase in time deposits and borrowed funds. In addition, the cost of interest-bearing liabilities increased to 2.04% for the quarter ended December 31, 2023 from 0.46% for the quarter ended December 31, 2022 due to higher market interest rates and competitive pressure for liquidity. Partially offsetting this increase in interest expense was a $29.5 million increase in interest income. Cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest- earning assets to increase to 4.67% for the quarter ended December 31, 2023 from 3.89% for the quarter ended December 31, 2022. Interest income on loans receivable increased $29.4 million, or 25.1%, due to an increase of $525.2 million, or 4.9%, in the average balance of loans in addition to an increase in the yield on loans to 5.19% for the quarter ended December 31, 2023 from 4.35% for the quarter ended December 31, 2022. The net effect of these changes in interest rates and average balances was a decrease in the Company's net interest margin to 3.16% for the quarter ended December 31, 2023 from 3.57% for the same quarter last year.
The provision for credit losses decreased by $3.0 million, or 27.1%, to $7.9 million for the current quarter ended December 31, 2023 from $10.9 million for the quarter ended December 31, 2022. Economic forecasts continued to improve, and the Company continued to experience a decrease in substandard loans by $17.8 million, or 7.5%, to $218.5 million, or 1.91% of
total loans, at December 31, 2023 from $236.2 million, or 2.16% of total loans, at December 31, 2022. This decrease was assisted by the note sale of approximately $8.0 million of nonperforming loans for a net gain of approximately $726,000. In addition, delinquencies remain well controlled.
Noninterest income increased by $1.3 million, or 4.7%, to $29.2 million for the quarter ended December 31, 2023, from
$27.9 million for the quarter ended December 31, 2022. This increase was driven by increases in core businesses such as service charges and fees on deposits and loans, trust and other financial services income and the net gain on the sale of SBA loans and other real estate owned. Service charges and fees increased $1.8 million, or 12.7%, to $15.9 million for the quarter ended December 31, 2023 from $14.1 million for the quarter ended December 31, 2022 driven by deposit-related fees based on customer activity as well as commercial loan fees, and the net gain on real estate owned increased $1.0 million to $1.1 million for the quarter ended December 31, 2023 from $51,000 for the quarter ended December 31, 2022 as a result of gains on property sales in the current period. These increases were partially offset by a $2.4 million, or 49.7%, decrease in other operating income to
$2.5 million for the quarter ended December 31, 2023 from $4.9 million for the quarter ended December 31, 2022 as a result of gains from the sales of branch buildings associated with the previously announced branch consolidations during the quarter ended December 31, 2022.
Noninterest expense increased by $1.9 million, or 2.1%, to $90.7 million for the quarter ended December 31, 2023 from
$88.8 million for the quarter ended December 31, 2022. This increase primarily resulted from a $3.5 million, or 7.6%, increase in compensation and employee benefits to $50.2 million for the quarter ended December 31, 2023, from $46.7 million for the quarter ended December 31, 2022 driven primarily by the buildout of the commercial business and related credit, risk management and internal audit support functions over the past twelve months. Processing expenses increased $1.4 million, or 10.5%, to
$15.0 million for the quarter ended December 31, 2023, from $13.6 million for the quarter ended December 31, 2022 due to the implementation of additional third-party software platforms. FDIC insurance premiums increased $1.3 million, or 100.4%, to $2.6 million for the quarter ended December 31, 2023 from $1.3 million for the quarter ended December 31, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
The provision for income taxes decreased by $2.7 million, or 25.9%, to $7.8 million for the quarter ended December 31, 2023 from $10.6 million for the quarter ended December 31, 2022 due primarily to lower income before income taxes.
Net income for the year ended December 31, 2023 was $135.0 million, or $1.06 per diluted share. This represents an increase of $1.3 million, or 1.0%, compared to the year ended December 31, 2022, when net income was $133.7 million, or $1.05 per diluted share. The annualized returns on average shareholders' equity and average assets for the year ended December 31, 2023 were 8.94% and 0.95% compared to 8.80% and 0.94% for the prior year. This increase in net income was the result of an increase in net interest income of $15.0 million, or 3.6%, to $435.7 million for the year ended December 31, 2023 from
$420.7 million for the year ended December 31, 2022. This increase in net interest income was primarily due to an increase in the average yield on interest-earning assets, partially offset by increases in the average balance and average cost of interest-bearing liabilities. The average yield on interest-earning assets increased to 4.42% for the year ended December 31, 2023 compared to 3.41% for the prior year due to the rising interest rate environment as well as the change in asset mix to higher yielding commercial loans. The average balance of interest-bearing liabilities increased by $355.6 million, or 3.8% and the average cost increased to 1.56% for the year ended December 31, 2023 from 0.30% for the year ended December 31, 2022 due to rising interest rates throughout the year as well as competitive pressure for funding and liquidity. In addition, the total provision for credit losses decreased $5.4 million, or 19.2% compared to the prior year, specifically within the provision for unfunded commitments as a result of the timing of the origination of loans with off balance sheet exposures. Noninterest income increased
$3.0 million, or 2.7% to $113.8 million for the year ended December 31, 2023 from $110.8 million for the year ended December 31, 2022, driven by a $4.0 million increase in service charges and fees, $1.8 million in gains on sales of SBA loans during the current year, and a $1.5 million increase in income from bank owned life insurance as a result of death benefits received in the current year. These changes were partially offset by a $22.0 million, or 6.7%, increase in noninterest expense to
$351.6 million for the year ended December 31, 2023 from $329.5 million for the year ended December 31, 2022, driven by a
$7.3 million increase in compensation and employee benefits expense, a $6.2 million increase in processing expenses due to the implementation of additional third-party software platforms, and a $4.5 million increase in federal deposit insurance premiums due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of December 31, 2023, Northwest operated 134 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
# # #
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities:
(1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
| December 31, 2023 | September 30, 2023 | December 31, 2022 |
Assets | | | |
Cash and cash equivalents | $ 122,260 | 161,995 | 139,365 |
Marketable securities available-for-sale (amortized cost of $1,240,003, $1,262,080 and $1,431,728, respectively) | 1,043,359 | 1,010,076 | 1,218,108 |
Marketable securities held-to-maturity (fair value of $699,506, $682,681 and $751,384, respectively) | 814,839 | 830,106 | 881,249 |
Total cash and cash equivalents and marketable securities | 1,980,458 | 2,002,177 | 2,238,722 |
| | | |
Loans held-for-sale | 8,768 | 10,592 | 9,913 |
Residential mortgage loans | 3,419,417 | 3,462,606 | 3,488,686 |
Home equity loans | 1,227,858 | 1,258,765 | 1,297,674 |
Consumer loans | 2,126,027 | 2,155,119 | 2,168,655 |
Commercial real estate loans | 2,974,010 | 2,922,582 | 2,823,555 |
Commercial loans | 1,658,729 | 1,500,609 | 1,131,969 |
Total loans receivable | 11,414,809 | 11,310,273 | 10,920,452 |
Allowance for credit losses | (125,243) | (124,841) | (118,036) |
Loans receivable, net | 11,289,566 | 11,185,432 | 10,802,416 |
| | | |
FHLB stock, at cost | 30,146 | 40,404 | 40,143 |
Accrued interest receivable | 47,353 | 42,624 | 35,528 |
Real estate owned, net | 104 | 363 | 413 |
Premises and equipment, net | 138,838 | 138,041 | 145,909 |
Bank-owned life insurance | 251,895 | 250,502 | 255,062 |
Goodwill | 380,997 | 380,997 | 380,997 |
Other intangible assets, net | 5,290 | 6,013 | 8,560 |
Other assets | 294,458 | 315,648 | 205,574 |
Total assets | $ 14,419,105 | 14,362,201 | 14,113,324 |
Liabilities and shareholders’ equity | | | |
Liabilities |
Noninterest-bearing demand deposits | $ 2,669,023 | 2,774,291 | 2,993,243 |
Interest-bearing demand deposits | 2,634,546 | 2,598,080 | 2,686,431 |
Money market deposit accounts | 1,968,218 | 2,042,813 | 2,457,569 |
Savings deposits | 2,105,234 | 2,116,360 | 2,275,020 |
Time deposits | 2,602,881 | 2,258,338 | 1,052,285 |
Total deposits | 11,979,902 | 11,789,882 | 11,464,548 |
| | | |
Borrowed funds | 398,895 | 604,587 | 681,166 |
Subordinated debt | 114,189 | 114,102 | 113,840 |
Junior subordinated debentures | 129,574 | 129,509 | 129,314 |
Advances by borrowers for taxes and insurance | 45,253 | 27,653 | 47,613 |
Accrued interest payable | 13,669 | 7,915 | 3,231 |
Other liabilities | 186,306 | 190,122 | 182,126 |
Total liabilities | 12,867,788 | 12,863,770 | 12,621,838 |
Shareholders’ equity | | | |
Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued | — | — | — |
Common stock, $0.01 par value: 500,000,000 shares authorized, 127,110,453, 127,101,349 and 127,028,848 shares issued and outstanding, respectively | 1,271 | 1,271 | 1,270 |
Additional paid-in capital | 1,024,852 | 1,023,591 | 1,019,647 |
Retained earnings | 674,686 | 671,092 | 641,727 |
Accumulated other comprehensive loss | (149,492) | (197,523) | (171,158) |
Total shareholders’ equity | 1,551,317 | 1,498,431 | 1,491,486 |
Total liabilities and shareholders’ equity | $ 14,419,105 | 14,362,201 | 14,113,324 |
Equity to assets | 10.76 % | 10.43 % | 10.57 % |
Tangible common equity to assets* | 8.30 % | 7.95 % | 8.03 % |
Book value per share | $ 12.20 | 11.79 | 11.74 |
Tangible book value per share* | $ 9.17 | 8.74 | 8.67 |
Closing market price per share | $ 12.48 | 10.23 | 13.98 |
Full time equivalent employees | 2,098 | 2,084 | 2,160 |
Number of banking offices | 142 | 142 | 150 |
* Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items.
| Quarter ended | |
| December 31, | September 30, | June 30, | March 31, | December 31, |
| 2023 | 2023 | 2023 | 2023 | 2022 |
Interest income: | | | | | |
Loans receivable | $ 146,523 | 140,667 | 132,724 | 123,745 | 117,137 |
Mortgage-backed securities | 7,951 | 8,072 | 8,326 | 8,537 | 8,603 |
Taxable investment securities | 786 | 786 | 841 | 845 | 840 |
Tax-free investment securities | 492 | 491 | 667 | 700 | 701 |
FHLB stock dividends | 666 | 668 | 844 | 690 | 419 |
Interest-earning deposits | 970 | 914 | 594 | 423 | 153 |
Total interest income | 157,388 | 151,598 | 143,996 | 134,940 | 127,853 |
Interest expense: | | | | | |
Deposits | 40,600 | 31,688 | 21,817 | 11,238 | 3,871 |
Borrowed funds | 10,486 | 11,542 | 13,630 | 11,238 | 6,938 |
Total interest expense | 51,086 | 43,230 | 35,447 | 22,476 | 10,809 |
Net interest income | 106,302 | 108,368 | 108,549 | 112,464 | 117,044 |
Provision for credit losses - loans | 3,801 | 3,983 | 6,010 | 4,870 | 9,023 |
Provision for credit losses - unfunded commitments (1) | 4,145 | (2,981) | 2,920 | 126 | 1,876 |
Net interest income after provision for credit losses | 98,356 | 107,366 | 99,619 | 107,468 | 106,145 |
Noninterest income: | | | | | |
Loss on sale of investments | (1) | — | (8,306) | — | (1) |
Gain on sale of mortgage servicing rights | — | — | 8,305 | — | — |
Gain on sale of SBA loans | 388 | 301 | 832 | 279 | — |
Gain on sale of loans | 726 | — | — | — | — |
Service charges and fees | 15,922 | 15,270 | 14,833 | 13,189 | 14,125 |
Trust and other financial services income | 6,884 | 7,085 | 6,866 | 6,449 | 6,642 |
Gain on real estate owned, net | 1,084 | 29 | 785 | 108 | 51 |
Income from bank-owned life insurance | 1,454 | 4,561 | 1,304 | 1,269 | 1,663 |
Mortgage banking income | 247 | 632 | 1,028 | 524 | 477 |
Other operating income | 2,465 | 3,010 | 4,150 | 2,151 | 4,901 |
Total noninterest income | 29,169 | 30,888 | 29,797 | 23,969 | 27,858 |
Noninterest expense: | | | | | |
Compensation and employee benefits | 50,194 | 51,243 | 47,650 | 46,604 | 46,658 |
Premises and occupancy costs | 7,049 | 7,052 | 7,579 | 7,471 | 7,370 |
Office operations | 3,747 | 3,398 | 2,800 | 3,010 | 3,544 |
Collections expense | 328 | 551 | 429 | 387 | 563 |
Processing expenses | 15,017 | 14,672 | 14,648 | 14,350 | 13,585 |
Marketing expenses | 1,317 | 2,379 | 2,856 | 2,892 | 2,773 |
Federal deposit insurance premiums | 2,643 | 2,341 | 2,064 | 2,223 | 1,319 |
Professional services | 6,255 | 3,002 | 3,804 | 4,758 | 5,434 |
Amortization of intangible assets | 724 | 795 | 842 | 909 | 932 |
Real estate owned expense | 51 | 141 | 83 | 181 | 53 |
Merger, asset disposition and restructuring expense | 2,354 | — | 1,593 | 2,802 | 4,243 |
Other expenses | 997 | 1,996 | 1,510 | 1,863 | 2,304 |
Total noninterest expense | 90,676 | 87,570 | 85,858 | 87,450 | 88,778 |
Income before income taxes | 36,849 | 50,684 | 43,558 | 43,987 | 45,225 |
Income tax expense | 7,835 | 11,464 | 10,514 | 10,308 | 10,576 |
Net income | $ 29,014 | 39,220 | 33,044 | 33,679 | 34,649 |
Basic earnings per share | $ 0.23 | 0.31 | 0.26 | 0.27 | 0.27 |
Diluted earnings per share | $ 0.23 | 0.31 | 0.26 | 0.26 | 0.27 |
Annualized return on average equity | 7.64 % | 10.27 % | 8.72 % | 9.11 % | 9.38 % |
Annualized return on average assets | 0.80 % | 1.08 % | 0.93 % | 0.97 % | 0.98 % |
Annualized return on tangible common equity * | 9.88 % | 14.00 % | 11.79 % | 12.15 % | 12.48 % |
Efficiency ratio | 66.93 % | 62.88 % | 62.06 % | 64.10 % | 61.27 % |
Efficiency ratio, excluding certain items (1) ** | 64.66 % | 62.31 % | 60.30 % | 61.38 % | 57.70 % |
Annualized noninterest expense to average assets | 2.51 % | 2.42 % | 2.42 % | 2.51 % | 2.52 % |
Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.43 % | 2.39 % | 2.35 % | 2.40 % | 2.37 % |
| Year ended December 31, | |
| | 2023 | | 2022 | |
Interest income: | | | | | |
Loans receivable | $ | | 543,659 | | 407,828 |
Mortgage-backed securities | | | 32,886 | | 30,804 |
Taxable investment securities | | | 3,258 | | 3,070 |
Tax-free investment securities | | | 2,350 | | 2,767 |
FHLB stock dividends | | | 2,868 | | 730 |
Interest-earning deposits | | | 2,901 | | 3,599 |
Total interest income | | | 587,922 | | 448,798 |
Interest expense: | | | | | |
Deposits | | | 105,343 | | 14,120 |
Borrowed funds | | | 46,896 | | 13,997 |
Total interest expense | | | 152,239 | | 28,117 |
Net interest income | | | 435,683 | | 420,681 |
Provision for credit losses - loans | | | 18,664 | | 17,860 |
Provision for credit losses - unfunded commitments (1) | | | 4,210 | | 10,453 |
Net interest income after provision for credit losses | | | 412,809 | | 392,368 |
Noninterest income: | | | | | |
Loss on sale of investments | | | (8,307) | | (8) |
Gain on sale of mortgage servicing rights | | | 8,305 | | — |
Gain on sale of SBA loans | | | 1,800 | | — |
Gain on sale of loans | | | 726 | | — |
Service charges and fees | | | 59,214 | | 55,188 |
Trust and other financial services income | | | 27,284 | | 27,765 |
Gain on real estate owned, net | | | 2,006 | | 603 |
Income from bank-owned life insurance | | | 8,588 | | 7,129 |
Mortgage banking income | | | 2,431 | | 4,865 |
Other operating income | | | 11,776 | | 15,307 |
Total noninterest income | | | 113,823 | | 110,849 |
Noninterest expense: | | | | | |
Compensation and employee benefits | | | 195,691 | | 188,359 |
Premises and occupancy costs | | | 29,151 | | 29,618 |
Office operations | | | 12,955 | | 13,318 |
Collections expense | | | 1,695 | | 1,808 |
Processing expenses | | | 58,687 | | 52,496 |
Marketing expenses | | | 9,444 | | 9,095 |
Federal deposit insurance premiums | | | 9,271 | | 4,778 |
Professional services | | | 17,819 | | 14,703 |
Amortization of intangible assets | | | 3,270 | | 4,277 |
Real estate owned expense | | | 456 | | 223 |
Merger, asset disposition and restructuring expense | | | 6,749 | | 5,617 |
Other expenses | | | 6,366 | | 5,233 |
Total noninterest expense | | | 351,554 | | 329,525 |
Income before income taxes | | | 175,078 | | 173,692 |
Income tax expense | | | 40,121 | | 40,026 |
Net income | $ | | 134,957 | | 133,666 |
Basic earnings per share | $ | 1.06 | 1.05 |
Diluted earnings per share | $ | 1.06 | 1.05 |
| | | |
Annualized return on average equity | 8.94 % | 8.80 % |
Annualized return on average assets | 0.95 % | 0.94 % |
Annualized return on tangible common equity * | 11.58 % | 12.13 % |
Efficiency ratio | 63.98 % | 62.00 % |
Efficiency ratio, excluding certain items (1) ** | 62.15 % | 60.13 % |
Annualized noninterest expense to average assets | 2.46 % | 2.32 % |
Annualized noninterest expense to average assets, excluding certain items (1) ** | 2.39 % | 2.25 % |
Quarter ended December 31, Year ended December 31,
| 2023 | 2022 | 2023 | 2022 |
Reconciliation of net income to adjusted net operating income: | | | | |
Net income (GAAP) | $ 29,014 | 34,649 | 134,957 | 133,666 |
Non-GAAP adjustments | | | | |
Add: merger, asset disposition and restructuring expense | 2,354 | 4,243 | 6,749 | 5,617 |
Less: tax benefit of merger, asset disposition and restructuring expense | (659) | (1,188) | (1,890) | (1,573) |
Adjusted net operating income (non-GAAP) | $ 30,709 | 37,704 | 139,816 | 137,710 |
Diluted earnings per share (GAAP) | $ 0.23 0.27 1.06 | 1.05 |
Diluted adjusted operating earnings per share (non-GAAP) | $ 0.24 0.30 1.10 | 1.08 |
| | |
Average equity | $ 1,506,895 | 1,465,285 | 1,510,285 | 1,518,704 |
Average assets | 14,329,020 | 13,983,100 | 14,269,809 | 14,177,698 |
Annualized return on average equity (GAAP) | 7.64 % | 9.38 % | 8.94 % | 8.80 % |
Annualized return on average assets (GAAP) | 0.80 % | 0.98 % | 0.95 % | 0.94 % |
Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 8.09 % | 10.21 % | 9.26 % | 9.07 % |
Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) | 0.85 % | 1.07 % | 0.98 % | 0.97 % |
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s Consolidated Statements of Financial Condition.
| December 31, 2023 | September 30, 2023 | December 31, 2022 |
Tangible common equity to assets | | | |
Total shareholders’ equity | $ 1,551,317 | 1,498,431 | 1,491,486 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (389,557) |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
| | | |
Total assets | $ 14,419,105 | 14,362,201 | 14,113,324 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (389,557) |
Tangible assets | $ 14,032,818 | 13,975,191 | 13,723,767 |
| | | |
Tangible common equity to tangible assets | 8.30 % | 7.95 % | 8.03 % |
| | | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | | | |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
Less: unrealized losses on held to maturity investments | (115,334) | (147,425) | (129,865) |
Add: deferred taxes on unrealized losses on held to maturity investments | 32,294 | 41,279 | 36,362 |
Tangible common equity, including unrealized losses on held-to-maturity investments | $ 1,081,990 | 1,005,275 | 1,008,426 |
| | | |
Tangible assets | 14,032,818 | 13,975,191 | 13,723,767 |
| | | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | 7.71 % | 7.19 % | 7.35 % |
| | | |
Tangible book value per share | | | |
Tangible common equity | $ 1,165,030 | 1,111,421 | 1,101,929 |
Common shares outstanding | 127,110,453 | 127,101,349 | 127,028,848 |
Tangible book value per share | 9.17 | 8.74 | 8.67 |
Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) *
(dollars in thousands, except per share amounts)
The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Income.
Quarter ended Year ended December 30, |
December 31, | September 30, | June 30, | March 31, | December 31, | | |
2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 |
Annualized return on tangible common equity | | | | | | | |
Net income | $ 29,014 | 39,220 | 33,044 | 33,679 | 34,649 | 134,957 | 133,666 |
| | | | | | | |
Total shareholders’ equity | 1,551,317 | 1,498,431 | 1,511,501 | 1,513,275 | 1,491,486 | 1,551,317 | 1,491,486 |
Less: goodwill and intangible assets | (386,287) | (387,010) | (387,806) | (388,648) | (389,557) | (386,287) | (389,557) |
Tangible common equity $ 1,165,030 1,111,421 1,123,695 1,124,627 1,101,929 1,165,030 1,101,929 |
| | | | | | | |
Annualized return on tangible common equity | 9.88 % | 14.00 % | 11.79 % | 12.15 % | 12.48 % | 11.58 % | 12.13 % |
| | | | | | | |
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | | | | | | | |
Non-interest expense | $ 90,676 | 87,570 | 85,858 | 87,450 | 88,778 | 351,554 | 329,525 |
Less: amortization expense | (724) | (795) | (842) | (909) | (932) | (3,270) | (4,277) |
Less: merger, asset disposition and restructuring expenses | (2,354) | — | (1,593) | (2,802) | (4,243) | (6,749) | (5,617) |
Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses $ 87,598 86,775 83,423 83,739 83,603 341,535 319,631 |
| | | | | | | |
Net interest income | $ 106,302 | 108,368 | 108,549 | 112,464 | 117,044 | 435,683 | 420,681 |
Non-interest income | 29,169 | 30,888 | 29,797 | 23,969 | 27,858 | 113,823 | 110,849 |
Net interest income plus non-interest income | $ 135,471 | 139,256 | 138,346 | 136,433 | 144,902 | 549,506 | 531,530 |
| | | | | | | |
Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses | 64.66 % | 62.31 % | 60.30 % | 61.38 % | 57.70 % | 62.15 % | 60.13 % |
| | | | | | | |
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | | | | | | | |
Non-interest expense excluding amortization and merger, asset disposition and restructuring expenses | 87,598 | 86,775 | 83,423 | 83,739 | 83,603 | 341,535 | 319,631 |
Average assets | 14,329,020 | 14,379,323 | 14,245,917 | 14,121,496 | 13,983,100 | 14,269,809 | 14,177,698 |
Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense | 2.43 % | 2.39 % | 2.35 % | 2.40 % | 2.37 % | 2.39 % | 2.25 % |
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude merger, asset disposition and restructuring expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
Deposits (Unaudited) (dollars in thousands)
Generally, deposits in excess of $250,000 are not federally insured. The following table provides details regarding the Company’s uninsured deposits portfolio:
As of December 31, 2023
| Balance | Percent of total deposits | Number of relationships |
Uninsured deposits per the Call Report (1) | $ 2,810,966 | 23.46 % | 4,924 |
Less intercompany deposit accounts | 976,113 | 8.15 % | 12 |
Less collateralized deposit accounts | 432,443 | 3.61 % | 239 |
Uninsured deposits excluding intercompany and collateralized accounts | $ 1,402,410 | 11.71 % |
4,673 |
Uninsured deposits presented may be different from actual amounts due to titling of accounts.
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19.0 million, or 0.16% of total deposits, as of December 31, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $105.8 million, or 0.88% of total deposits, as of December 31, 2023. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $300,000 as of December 31, 2023.
The following table provides additional details over the Company’s deposit portfolio:
Balance
As of December 31, 2023 Percent of
total deposits
Number of accounts
Personal noninterest bearing demand deposits | $ 1,357,875 | 11.33 % | 288,919 |
Business noninterest bearing demand deposits | 1,311,148 | 10.94 | 44,306 |
Personal interest-bearing demand deposits | 1,464,058 | 12.22 | 58,543 |
Business interest-bearing demand deposits | 1,170,488 | 9.77 | 7,953 |
Personal money market deposits | 1,435,939 | 11.99 | 25,556 |
Business money market deposits | 532,279 | 4.44 | 2,841 |
Savings deposits | 2,105,234 | 17.57 | 206,127 |
Time deposits | 2,602,881 | 21.74 | 74,330 |
Total deposits | $ 11,979,902 | 100.00 % | 708,575 |
Our average deposit account balance as of December 31, 2023 was $17,000. The Company’s insured cash sweep deposit balance was $357.0 million as of December 31, 2023.
The following table provides additional details regarding the Company’s deposit portfolio over time:
| 6/30/2022 | 9/30/2022 | 12/31/2022 | 3/31/2023 | 6/30/2023 | 9/30/2023 | 12/31/2023 |
Personal noninterest bearing demand deposits | 1,388,690 | 1,413,781 | 1,412,227 | 1,428,232 | 1,397,167 | 1,375,144 | 1,357,875 |
Business noninterest bearing demand deposits | 1,669,559 | 1,680,339 | 1,581,016 | 1,467,860 | 1,423,396 | 1,399,147 | 1,311,148 |
Personal interest-bearing demand deposits | 1,785,761 | 1,742,173 | 1,718,806 | 1,627,546 | 1,535,254 | 1,477,617 | 1,464,058 |
Business interest-bearing demand deposits | 529,357 | 498,937 | 499,059 | 466,105 | 624,252 | 689,914 | 812,433 |
Municipal demand deposits | 543,573 | 571,620 | 468,566 | 447,852 | 418,147 | 430,549 | 358,055 |
Personal money market deposits | 1,994,907 | 1,949,379 | 1,832,583 | 1,626,614 | 1,511,652 | 1,463,689 | 1,435,939 |
Business money market deposits | 636,805 | 627,634 | 624,986 | 701,436 | 642,601 | 579,124 | 532,279 |
Savings deposits | 2,362,725 | 2,327,419 | 2,275,020 | 2,194,743 | 2,120,215 | 2,116,360 | 2,105,234 |
Time deposits | 1,155,878 | 1,067,110 | 1,052,285 | 1,576,791 | 1,989,711 | 2,258,338 | 2,602,881 |
Total deposits | 12,067,255 | 11,878,392 | 11,464,548 11,537,179 | 11,662,395 11,789,882 | 11,979,902 |
Regulatory Capital Requirements (Unaudited) (dollars in thousands)
| At December 31, 2023 | |
| Actual | | Minimum capital requirements (1) | Well capitalized requirements |
| Amount | Ratio | Amount Ratio | Amount Ratio |
Total capital (to risk weighted assets) | | | | |
Northwest Bancshares, Inc. | $ 1,799,883 | 16.040 % | $ 1,178,234 10.500 % | $ 1,122,128 10.000 % |
Northwest Bank | 1,520,736 | 13.564 % | 1,177,257 10.500 % | 1,121,197 10.000 % |
Tier 1 capital (to risk weighted assets) |
Northwest Bancshares, Inc. | 1,553,766 | 13.847 % | 953,809 | 8.500 % | 897,702 | 8.000 % |
Northwest Bank | 1,388,808 | 12.387 % | 953,018 | 8.500 % | 896,958 | 8.000 % |
Common equity tier 1 capital (to risk weighted assets) |
Northwest Bancshares, Inc. | 1,428,181 | 12.727 % | 785,489 | 7.000 % | 729,383 | 6.500 % |
Northwest Bank | 1,388,808 | 12.387 % | 784,838 | 7.000 % | 728,778 | 6.500 % |
Tier 1 capital (leverage) (to average assets) |
Northwest Bancshares, Inc. | 1,553,766 | 10.841 % | 573,290 | 4.000 % | 716,612 | 5.000 % |
Northwest Bank | 1,388,808 | 9.697 % | 572,903 | 4.000 % | 716,128 | 5.000 % |
Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2020 Annual Report on Form 10-K.
Marketable securities available-for-sale Amortized cost
Gross unrealized holding gains
December 31, 2023 Gross unrealized
holding losses Fair value
Weighted average duration
Debt issued by the U.S. government and agencies: | |
Due after one year through five years | $ 20,000 | — | (1,135) | 18,865 | 2.90 |
Due after ten years | 49,383 | — | (9,934) | 39,449 | 6.15 |
Debt issued by government sponsored enterprises: |
Due after one year through five years | 45,986 | — | (5,763) | 40,223 | 4.34 |
Due after five years through ten years | 386 | — | (12) | 374 | 1.84 |
Municipal securities: |
Due after one year through five years | 4,279 | 22 | (427) | 3,874 | 3.99 |
Due after five years through ten years | 20,725 | — | (1,437) | 19,288 | 7.10 |
Due after ten years | 60,762 | 125 | (8,580) | 52,307 | 10.30 |
| | | | | |
Corporate debt issues:
Due after five years through ten years 8,466 — (778) 7,688 5.35
Residential mortgage-backed agency securities: |
Fixed rate pass-through | 209,069 | 27 | (25,222) | 183,874 | 6.49 |
Variable rate pass-through | 7,140 | 11 | (71) | 7,080 | 4.50 |
Fixed rate agency CMOs | 789,842 | — | (143,055) | 646,787 | 5.20 |
Variable rate agency CMOs | 23,965 | 38 | (453) | 23,550 | 3.57 |
Total residential mortgage-backed agency securities | 1,030,016 | 76 | (168,801) | 861,291 | 5.42 |
Total marketable securities available-for-sale | $ 1,240,003 | 223 | (196,867) | 1,043,359 5.63 |
Marketable securities held-to-maturity
Government sponsored
Due after one year through five years | $ 69,471 | — | (8,100) | 61,371 | 3.90 |
Due after five years through ten years | 54,987 | — | (8,700) | 46,287 | 5.33 |
| | | | | |
Residential mortgage-backed agency securities: | | | | | |
Fixed rate pass-through | 147,874 | — | (20,834) | 127,040 | 5.26 |
Variable rate pass-through | 449 | 1 | — | 450 | 4.47 |
Fixed rate agency CMOs | 541,529 | — | (77,694) | 463,835 | 6.28 |
Variable rate agency CMOs | 529 | — | (6) | 523 | 5.33 |
Total residential mortgage-backed agency securities | 690,381 | 1 | (98,534) | 591,848 | 6.06 |
Total marketable securities held-to-maturity | $ 814,839 | 1 | (115,334) | 699,506 | 5.83 |
December 31, 2023
| Amount | | Average rate |
Term notes payable to the FHLB of Pittsburgh, due within one year | $ | | 175,000 | 5.71 % |
Notes payable to the FHLB of Pittsburgh, due within one year | | | 163,500 | 5.70 % |
Total term notes payable to the FHLB | | | 338,500 | 5.70 % |
Collateralized borrowings, due within one year | 35,495 | 1.72 % |
Collateral received, due within one year | 24,900 | 5.26 % |
Subordinated debentures, net of issuance costs | 114,189 | 4.28 % |
Junior subordinated debentures | 129,574 | 7.88 % |
Total borrowed funds * | $ 642,658 | 5.65 % |
* As of December 31, 2023, the Company had $3.3 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $163.5 million drawn balance, as well as $297.5 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks.
Commercial real estate loans outstanding
The following table provides the various loan sectors in our commercial real estate portfolio at December 31, 2023:
December 31, 2023
Property type | Percent of portfolio |
5 or More Unit Dwelling | 14.5 % |
Nursing Home | 12.8 |
Retail Building | 12.0 |
Commercial Office Building - non-owner occupied | 9.3 |
Residential acquisition & development - 1-4 family, townhouses and apartments | 4.8 |
Manufacturing & Industrial Building | 4.8 |
Multi-use building - commercial, retail and residential | 4.4 |
Warehouse/Storage Building | 3.9 |
Commercial office building - owner occupied | 3.3 |
Multi-use building - office and warehouse | 3.3 |
Single Family Dwelling | 2.7 |
Other Medical Facility | 2.5 |
Student Housing | 2.2 |
Hotel/Motel | 2.1 |
2-4 Family | 2.1 |
Agricultural Real Estate | 2.1 |
All Other Types | 13.2 |
Total | 100.0 % |
The following table describes our commercial real estate portfolio by state at December 31, 2023:
| | December 31, 2023 |
State | Percent of portfolio |
New York | | 32.4 % |
Pennsylvania | | 30.9 |
Ohio | | 20.0 |
Indiana | | 7.9 |
All other | | 8.8 |
Total | | 100.0 % |
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 |
Nonaccrual loans current: | | | | | |
Residential mortgage loans | $ 959 | 1,951 | 1,559 | 1,423 | 1,496 |
Home equity loans | 871 | 947 | 1,089 | 1,084 | 1,418 |
Consumer loans | 1,051 | 1,049 | 1,009 | 911 | 836 |
Commercial real estate loans | 64,603 | 44,639 | 48,468 | 50,045 | 53,303 |
Commercial loans | 1,182 | 1,369 | 995 | 1,468 | 895 |
Total nonaccrual loans current $ 68,666 49,955 53,120 54,931 57,948 |
Nonaccrual loans delinquent 30 days to 59 days: | | | | | |
Residential mortgage loans | $ 933 | 48 | 49 | 688 | 473 |
Home equity loans | 174 | 92 | 37 | 18 | 180 |
Consumer loans | 225 | 274 | 309 | 223 | 178 |
Commercial real estate loans | 51 | 1,913 | 1,697 | 1,900 | 1,220 |
Commercial loans | 139 | 90 | 855 | 341 | 145 |
Total nonaccrual loans delinquent 30 days to 59 days $ 1,522 2,417 2,947 3,170 2,196 |
Nonaccrual loans delinquent 60 days to 89 days: |
Residential mortgage loans | $ 511 | 66 | 185 | 919 | 31 |
Home equity loans | 347 | 319 | 363 | 338 | 290 |
Consumer loans | 557 | 312 | 360 | 340 | 341 |
Commercial real estate loans | 831 | 212 | 210 | 1,355 | 473 |
Commercial loans | 56 | 291 | 245 | 126 | 96 |
Total nonaccrual loans delinquent 60 days to 89 days | $ 2,302 | 1,200 | 1,363 | 3,078 | 1,231 |
Nonaccrual loans delinquent 90 days or more: | | | | | |
Residential mortgage loans | $ 6,324 | 7,695 | 6,290 | 3,300 | 5,574 |
Home equity loans | 3,100 | 2,073 | 1,965 | 2,190 | 2,257 |
Consumer loans | 3,212 | 2,463 | 2,033 | 2,791 | 2,672 |
Commercial real estate loans | 6,488 | 8,416 | 8,575 | 8,010 | 7,867 |
Commercial loans | 2,770 | 2,435 | 2,296 | 1,139 | 1,491 |
Total nonaccrual loans delinquent 90 days or more | $ 21,894 | 23,082 | 21,159 | 17,430 | 19,861 |
Total nonaccrual loans | $ 94,384 | 76,654 | 78,589 | 78,609 | 81,236 |
Total nonaccrual loans | $ 94,384 | 76,654 | 78,589 | 78,609 | 81,236 |
Loans 90 days past due and still accruing | 2,698 | 728 | 532 | 652 | 744 |
Nonperforming loans | 97,082 | 77,382 | 79,121 | 79,261 | 81,980 |
Real estate owned, net | 104 | 363 | 371 | 524 | 413 |
Nonperforming assets | $ 97,186 | 77,745 | 79,492 | 79,785 | 82,393 |
| | | | | |
Nonperforming loans to total loans | 0.85 % | 0.68 % | 0.70 % | 0.71 % | 0.75 % |
Nonperforming assets to total assets | 0.67 % | 0.54 % | 0.56 % | 0.56 % | 0.58 % |
Allowance for credit losses to total loans | 1.10 % | 1.10 % | 1.10 % | 1.09 % | 1.08 % |
Allowance for credit losses to nonperforming loans | 129.01 % | 161.33 % | 157.26 % | 152.98 % | 143.98 % |
At December 31, 2023 | Pass | Special mention * | Substandard ** | Doubtful | Loss | Loans receivable |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,413,846 | — | 14,339 | | — — | 3,428,185 |
Home equity loans | 1,223,097 | — | 4,761 | | — — | 1,227,858 |
Consumer loans | 2,120,216 | — | 5,811 | | — — | 2,126,027 |
Total Personal Banking | 6,757,159 | — | 24,911 | | — — | 6,782,070 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,670,510 | 124,116 | 179,384 | | — — | 2,974,010 |
Commercial loans | 1,637,879 | 6,678 | 14,172 | | — — | 1,658,729 |
Total Commercial Banking | 4,308,389 | 130,794 | 193,556 | | — — | 4,632,739 |
Total loans | $ 11,065,548 | 130,794 | 218,467 | | — — | 11,414,809 |
At September 30, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,459,251 | — | 13,512 | | — — | 3,472,763 |
Home equity loans | 1,254,985 | — | 3,780 | | — — | 1,258,765 |
Consumer loans | 2,150,464 | — | 4,655 | | — — | 2,155,119 |
Total Personal Banking | 6,864,700 | — | 21,947 | | — — | 6,886,647 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,632,472 | 123,935 | 166,610 | | — — | 2,923,017 |
Commercial loans | 1,476,833 | 3,690 | 20,086 | | — — | 1,500,609 |
Total Commercial Banking | 4,109,305 | 127,625 | 186,696 | | — — | 4,423,626 |
Total loans | $ 10,974,005 | 127,625 | 208,643 | | — — | 11,310,273 |
At June 30, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,483,098 | — | 12,059 | | — — | 3,495,157 |
Home equity loans | 1,272,363 | — | 3,699 | | — — | 1,276,062 |
Consumer loans | 2,196,938 | — | 4,124 | | — — | 2,201,062 |
Total Personal Banking | 6,952,399 | — | 19,882 | | — — | 6,972,281 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,649,535 | 74,170 | 171,519 | | — — | 2,895,224 |
Commercial loans | 1,377,981 | 3,040 | 22,705 | | — — | 1,403,726 |
Total Commercial Banking | 4,027,516 | 77,210 | 194,224 | | — — | 4,298,950 |
Total loans | $ 10,979,915 | 77,210 | 214,106 | | — — | 11,271,231 |
At March 31, 2023 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,499,135 | — | 6,330 | | — — | 3,505,465 |
Home equity loans | 1,277,915 | — | 3,631 | | — — | 1,281,546 |
Consumer loans | 2,227,379 | — | 4,754 | | — — | 2,232,133 |
Total Personal Banking | 7,004,429 | — | 14,715 | | — — | 7,019,144 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,585,676 | 69,837 | 171,591 | | — — | 2,827,104 |
Commercial loans | 1,217,344 | 6,381 | 22,298 | | — — | 1,246,023 |
Total Commercial Banking | 3,803,020 | 76,218 | 193,889 | | — — | 4,073,127 |
Total loans | $ 10,807,449 | 76,218 | 208,604 | | — — | 11,092,271 |
At December 31, 2022 | | | | | | |
Personal Banking: | | | | | | |
Residential mortgage loans | $ 3,484,870 | — | 13,729 | | — — | 3,498,599 |
Home equity loans | 1,292,146 | — | 5,528 | | — — | 1,297,674 |
Consumer loans | 2,164,220 | — | 4,435 | | — — | 2,168,655 |
Total Personal Banking | 6,941,236 | — | 23,692 | | — — | 6,964,928 |
Commercial Banking: | | | | | | |
Commercial real estate loans | 2,579,809 | 55,076 | 188,670 | | — — | 2,823,555 |
Commercial loans | 1,100,707 | 7,384 | 23,878 | | — — | 1,131,969 |
Total Commercial Banking | 3,680,516 | 62,460 | 212,548 | | — — | 3,955,524 |
Total loans | $ 10,621,752 | 62,460 | 236,240 | | — — | 10,920,452 |
* Includes $7.8 million, $6.9 million, $4.9 million, $7.4 million, and $7.4 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
** Includes $20.3 million, $28.9 million, $31.2 million, $31.9 million, and $39.1 million of acquired loans at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited)
(dollars in thousands)
December 31,
(Number of loans and dollar amount of loans)
2023 *
September 30,
2023 *
June 30,
2023 *
March 31,
2023 *
December 31,
2022 *
Loans delinquent 30 days to 59 days:
Residential mortgage loans | 307 | $ 30,041 | 0.9 % | 6 | $ 573 | — % | 14 | $ 627 | — % | 259 | $ 26,992 | 0.8 % | 304 | $ 29,487 | 0.8 % |
Home equity loans | 121 | 5,761 | 0.5 % | 112 | 4,707 | 0.4 % | 92 | 3,395 | 0.3 % | 111 | 4,235 | 0.3 % | 145 | 6,657 | 0.5 % |
Consumer loans | 896 | 11,211 | 0.5 % | 733 | 9,874 | 0.5 % | 602 | 7,955 | 0.4 % | 587 | 6,930 | 0.3 % | 737 | 9,435 | 0.4 % |
Commercial real estate loans | 23 | 3,204 | 0.1 % | 22 | 3,411 | 0.1 % | 13 | 2,710 | 0.1 % | 23 | 4,834 | 0.2 % | 29 | 4,008 | 0.1 % |
Commercial loans | 59 | 4,196 | 0.3 % | 52 | 2,847 | 0.2 % | 38 | 15,658 | 1.1 % | 46 | 4,253 | 0.3 % | 51 | 2,648 | 0.2 % |
Total loans delinquent 30 days to 59 days | 1,406
| $ 54,413
| 0.5 % | 925
| $ 21,412
| 0.2 % | 759
| $ 30,345
| 0.3 % | 1,026
| $ 47,244
| 0.4 % | 1,266
| $ 52,235
| 0.5 % |
| | | | | | | | | | | | | | | |
Loans delinquent 60 days to 89 days: | | | | | | | | | | | | | | | |
Residential mortgage loans | 69 | $ 7,796 | 0.2 % | 56 | $ 5,395 | 0.2 % | 52 | $ 3,521 | 0.1 % | 23 | $ 1,922 | 0.1 % | 65 | $ 5,563 | 0.2 % |
Home equity loans | 37 | 982 | 0.1 % | 40 | 1,341 | 0.1 % | 31 | 1,614 | 0.1 % | 31 | 1,061 | 0.1 % | 29 | 975 | 0.1 % |
Consumer loans | 322 | 3,754 | 0.2 % | 236 | 2,707 | 0.1 % | 250 | 2,584 | 0.1 % | 185 | 2,083 | 0.1 % | 255 | 3,070 | 0.1 % |
Commercial real estate loans | 9 | 1,031 | — % | 13 | 1,588 | 0.1 % | 12 | 1,288 | — % | 17 | 1,949 | 0.1 % | 16 | 2,377 | 0.1 % |
Commercial loans | 16 | 703 | — % | 15 | 981 | 0.1 % | 23 | 11,092 | 0.8 % | 19 | 1,088 | 0.1 % | 24 | 1,115 | 0.1 % |
Total loans delinquent 60 days to 89 days | 453
| $ 14,266
| 0.1 % | 360
| $ 12,012
| 0.1 % | 368
| $ 20,099
| 0.2 % | 275
| $ 8,103
| 0.1 % | 389
| $ 13,100
| 0.1 % |
| | | | | | | | | | | | | | | |
Loans delinquent 90 days or more: ** | | | | | | | | | | | | | | | |
Residential mortgage loans | 70 | $ 7,995 | 0.2 % | 79 | $ 7,695 | 0.2 % | 63 | $ 6,290 | 0.2 % | 39 | $ 3,300 | 0.1 % | 65 | $ 5,574 | 0.2 % |
Home equity loans | 81 | 3,126 | 0.3 % | 73 | 2,206 | 0.2 % | 68 | 1,965 | 0.2 % | 65 | 2,190 | 0.2 % | 68 | 2,257 | 0.2 % |
Consumer loans | 440 | 3,978 | 0.2 % | 357 | 3,020 | 0.1 % | 314 | 2,447 | 0.1 % | 313 | 3,279 | 0.1 % | 334 | 3,079 | 0.1 % |
Commercial real estate loans | 27 | 6,712 | 0.2 % | 27 | 8,416 | 0.3 % | 20 | 8,575 | 0.3 % | 18 | 8,010 | 0.3 % | 19 | 7,867 | 0.3 % |
Commercial loans | 53 | 2,780 | 0.2 % | 39 | 2,472 | 0.2 % | 38 | 2,414 | 0.2 % | 24 | 1,302 | 0.1 % | 15 | 1,829 | 0.2 % |
Total loans delinquent 90 days or more | 671
| $ 24,591
| 0.2 % | 575
| $ 23,809
| 0.2 % | 503
| $ 21,691
| 0.2 % | 459
| $ 18,081
| 0.2 % | 501
| $ 20,606
| 0.2 % |
| | | | | | | | | | | | | | | |
Total loans delinquent | 2,530 | $ 93,270 | 0.8 % | 1,860 | $ 57,233 | 0.5 % | 1,630 | $ 72,135 | 0.6 % | 1,760 | $ 73,428 | 0.7 % | 2,156 | $ 85,941 | 0.8 % |
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit deteriorated loans of $646,000, $1.4 million, $605,000, $331,000, and $1.7 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
| Quarter ended | |
| December 31, | September 30, | June 30, | March 31, | December 31, |
| 2023 | 2023 | 2023 | 2023 | 2022 |
Beginning balance | $ 124,841 | 124,423 | 121,257 | 118,036 | 109,819 |
ASU 2022-02 Adoption | — | — | — | 426 | — |
Provision | 3,801 | 3,983 | 6,010 | 4,870 | 9,023 |
Charge-offs residential mortgage | (266) | (171) | (545) | (207) | (546) |
Charge-offs home equity | (133) | (320) | (235) | (164) | (232) |
Charge-offs consumer | (3,860) | (3,085) | (2,772) | (2,734) | (2,430) |
Charge-offs commercial real estate | (742) | (484) | (483) | (657) | (621) |
Charge-offs commercial | (806) | (1,286) | (1,209) | (865) | (404) |
Recoveries | 2,408 | 1,781 | 2,400 | 2,552 | 3,427 |
Net charge-offs to average loans, annualized 0.12 % 0.13 % 0.10 % 0.08 % 0.03 %
Ending balance $ 125,243 124,841 124,423 121,257 118,036
Year ended December 31,
| 2023 | 2022 |
Beginning balance | $ 118,036 | 102,241 |
ASU 2022-02 Adoption | 426 | — |
Provision | 18,664 | 17,860 |
Charge-offs residential mortgage | (1,189) | (2,033) |
Charge-offs home equity | (852) | (1,469) |
Charge-offs consumer | (12,451) | (8,406) |
Charge-offs commercial real estate | (2,366) | (7,366) |
Charge-offs commercial | (4,166) | (1,657) |
Recoveries | 9,141 | 18,866 |
Ending balance | $ 125,243 | 118,036 |
Net charge-offs to average loans, annualized | 0.11 % | 0.02 % |
Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited)
(dollars in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
Quarter ended
December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | |
Average | Avg. yield/ | Average | Avg. yield/ Average | | Avg. yield/ | Average | Avg. yield/ | Average | Avg. yield/ |
| balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) | balance | Interest | cost (h) |
Assets: | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | |
Residential mortgage loans | $ 3,442,308 | 32,739 | 3.80 % | $ 3,476,446 | 32,596 | 3.75 % | $ 3,485,517 | 32,485 | 3.73 % | $ 3,493,617 | 32,009 | 3.66 % | $ 3,439,401 | 30,974 | 3.60 % |
Home equity loans | 1,238,420 | 17,590 | 5.64 % | 1,264,134 | 17,435 | 5.47 % | 1,273,298 | 16,898 | 5.32 % | 1,284,425 | 16,134 | 5.09 % | 1,282,733 | 15,264 | 4.72 % |
Consumer loans | 2,055,783 | 24,667 | 4.76 % | 2,092,023 | 23,521 | 4.46 % | 2,143,804 | 22,662 | 4.24 % | 2,123,672 | 20,794 | 3.97 % | 2,069,207 | 19,709 | 3.78 % |
Commercial real estate loans | 2,950,589 | 43,337 | 5.83 % | 2,911,145 | 41,611 | 5.67 % | 2,836,443 | 38,426 | 5.43 % | 2,824,120 | 37,031 | 5.24 % | 2,822,008 | 35,428 | 4.91 % |
Commercial loans | 1,564,617 | 28,801 | 7.30 % | 1,447,211 | 26,239 | 7.19 % | 1,326,598 | 22,872 | 6.92 % | 1,161,298 | 18,353 | 6.32 % | 1,113,178 | 16,315 | 5.74 % |
Total loans receivable (a) (b) (d) | 11,251,717 | 147,134 | 5.19 % | 11,190,959 | 141,402 | 5.01 % | 11,065,660 | 133,343 | 4.83 % | 10,887,132 | 124,321 | 4.63 % | 10,726,527 | 117,690 | 4.35 % |
Mortgage-backed securities (c) | 1,741,687 | 7,951 | 1.83 % | 1,781,010 | 8,072 | 1.81 % | 1,859,427 | 8,326 | 1.79 % | 1,909,676 | 8,537 | 1.79 % | 1,956,167 | 8,603 | 1.76 % |
Investment securities (c) (d) | 335,121 | 1,425 | 1.70 % | 336,125 | 1,431 | 1.70 % | 374,560 | 1,715 | 1.83 % | 384,717 | 1,761 | 1.83 % | 386,468 | 1,753 | 1.81 % |
FHLB stock, at cost | 35,082 | 665 | 7.52 % | 37,722 | 668 | 7.03 % | 45,505 | 844 | 7.44 % | 39,631 | 690 | 7.06 % | 26,827 | 419 | 6.19 % |
Other interest-earning deposits | 62,027 | 970 | 6.20 % | 59,433 | 915 | 6.11 % | 38,912 | 594 | 6.12 % | 30,774 | 423 | 5.50 % | 9,990 | 153 | 5.99 % |
Total interest-earning assets | 13,425,634 | 158,145 | 4.67 % | 13,405,249 | 152,488 | 4.51 % | 13,384,064 | 144,822 | 4.34 % | 13,251,930 | 135,732 | 4.15 % | 13,105,979 | 128,618 | 3.89 % |
Noninterest-earning assets (e) | 903,386 | | | 974,074 | | | 861,853 | | | 869,566 | | | 877,121 | | |
Total assets | $14,329,020 | | | $14,379,323 | | | $14,245,917 | | | $14,121,496 | | | $13,983,100 | | |
Liabilities and shareholders’ equity: | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | |
Savings deposits (g) | $ 2,102,320 | 4,045 | 0.76 % | $ 2,116,759 | 2,695 | 0.51 % | $ 2,142,941 | 1,393 | 0.26 % | $ 2,198,988 | 690 | 0.13 % | $ 2,298,451 | 585 | 0.10 % |
Interest-bearing demand deposits (g) | 2,573,634 | 4,921 | 0.76 % | 2,569,229 | 4,086 | 0.63 % | 2,469,666 | 1,648 | 0.27 % | 2,612,883 | 951 | 0.15 % | 2,718,360 | 509 | 0.07 % |
Money market deposit accounts (g) | 1,997,116 | 7,446 | 1.48 % | 2,112,228 | 6,772 | 1.27 % | 2,221,713 | 6,113 | 1.10 % | 2,408,582 | 4,403 | 0.74 % | 2,512,892 | 1,310 | 0.21 % |
Time deposits (g) | 2,447,335 | 24,187 | 3.92 % | 2,164,559 | 18,136 | 3.32 % | 1,765,454 | 12,663 | 2.88 % | 1,293,609 | 5,194 | 1.63 % | 1,024,895 | 1,467 | 0.57 % |
Borrowed funds (f) | 548,089 | 6,826 | 4.94 % | 643,518 | 7,937 | 4.89 % | 837,358 | 10,202 | 4.89 % | 740,218 | 7,938 | 4.35 % | 451,369 | 3,967 | 3.49 % |
Subordinated debt | 114,134 | 1,148 | 4.02 % | 114,045 | 1,148 | 4.03 % | 113,958 | 1,148 | 4.03 % | 113,870 | 1,148 | 4.03 % | 113,783 | 1,148 | 4.04 % |
Junior subordinated debentures | 129,532 | 2,512 | 7.59 % | 129,466 | 2,456 | 7.42 % | 129,401 | 2,280 | 6.97 % | 129,335 | 2,152 | 6.66 % | 129,271 | 1,823 | 5.52 % |
Total interest-bearing liabilities | 9,912,160 | 51,085 | 2.04 % | 9,849,804 | 43,230 | 1.74 % | 9,680,491 | 35,447 | 1.47 % | 9,497,485 | 22,476 | 0.96 % | 9,249,021 | 10,809 | 0.46 % |
Noninterest-bearing demand deposits (g) | 2,675,788 | | | 2,757,091 | | | 2,820,928 | | | 2,889,973 | | | 3,039,000 | | |
Noninterest-bearing liabilities | 234,177 | | | 257,141 | | | 224,508 | | | 235,213 | | | 229,794 | | |
Total liabilities | 12,822,125 | | | 12,864,036 | | | 12,725,927 | | | 12,622,671 | | | 12,517,815 | | |
Shareholders’ equity | 1,506,895 | | | 1,515,287 | | | 1,519,990 | | | 1,498,825 | | | 1,465,285 | | |
Total liabilities and shareholders’ equity | $14,329,020 | | | $14,379,323 | | | $14,245,917 | | | $14,121,496 | | | $13,983,100 | | |
Net interest income/Interest rate spread | | 107,060 | 2.63 % | | 109,258 | 2.77 % | | 109,375 | 2.87 % | | 113,256 | 3.19 % | | 117,809 | 3.43 % |
Net interest-earning assets/Net interest margin | $ 3,513,474 | | 3.16 % | $ 3,555,445 | | 3.23 % | $ 3,703,573 | | 3.28 % | $ 3,754,445 | | 3.47 % | $ 3,856,958 | | 3.57 % |
Ratio of interest-earning assets to interest- bearing liabilities | 1.35X | | | 1.36X | | | 1.38X | | | 1.40X | | | 1.42X | | |
Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
Average balances include FHLB borrowings and collateralized borrowings.
Average cost of deposits were 1.37%, 1.07%, 0.77%, 0.40%, and 0.13%, respectively and average cost of Interest-bearing deposits were 1.77%, 1.40%, 1.02%, 0.54%, and 0.18%, respectively.
Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 5.17%, 4.99%, 4.81%, 4.61%, and 4.33%, respectively, Investment securities — 1.52%, 1.52%, 1.61%, 1.61%, and 1.59%, respectively, Interest-earning assets
— 4.65%, 4.49%, 4.32%, 4.13%, and 3.87%, respectively. GAAP basis net interest rate spreads were 2.61%, 2.75%, 2.85%, 3.17%, and 3.41%, respectively, and GAAP basis net interest margins were 3.14%, 3.21%, 3.25%, 3.44%, and
3.54%, respectively.
Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited)
(in thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
Year ended December 31,
| | 2023 | | | 2022 | |
Average | | Avg. yield/ | Average | | Avg. yield/ |
balance | Interest | cost (h) | balance | Interest | cost (h) |
Assets | | | | | | |
Interest-earning assets: | | | | | | |
Residential mortgage loans | $ 3,474,336 | 129,828 | 3.74 % | $ 3,232,487 | 113,256 | 3.50 % |
Home equity loans | 1,264,941 | 68,058 | 5.38 % | 1,282,218 | 52,707 | 4.11 % |
Consumer loans | 2,103,602 | 91,645 | 4.36 % | 1,933,557 | 67,296 | 3.48 % |
Commercial real estate loans | 2,881,005 | 160,352 | 5.57 % | 2,894,508 | 131,230 | 4.47 % |
Commercial loans | 1,376,234 | 96,253 | 6.99 % | 976,128 | 45,293 | 4.58 % |
Loans receivable (a) (b) (d) | 11,100,118 | 546,136 | 4.92 % | 10,318,898 | 409,782 | 3.97 % |
Mortgage-backed securities (c) | 1,822,375 | 32,886 | 1.80 % | 1,968,528 | 30,804 | 1.56 % |
Investment securities (c) (d) | 357,436 | 6,312 | 1.77 % | 381,518 | 6,671 | 1.75 % |
FHLB stock, at cost | 39,467 | 2,868 | 7.27 % | 17,065 | 730 | 4.27 % |
Other interest-earning deposits | 47,787 | 2,901 | 6.07 % | 567,609 | 3,599 | 0.63 % |
Total interest-earning assets | 13,367,183 | 591,103 | 4.42 % | 13,253,618 | 451,586 | 3.41 % |
Noninterest-earning assets (e) | 902,626 | | | 924,080 | | |
| | | | | | |
Total assets | $ 14,269,809 | | | $ 14,177,698 | | |
| | | | | | |
Liabilities and shareholders’ equity | | | | | | |
Interest-bearing liabilities: | | | | | | |
Savings deposits (g) | $ 2,148,127 | 8,822 | 0.41 % | $ 2,336,217 | 2,343 | 0.10 % |
Interest-bearing demand deposits (g) | 2,556,281 | 11,606 | 0.45 % | 2,810,889 | 1,517 | 0.05 % |
Money market deposit accounts (g) | 2,183,583 | 24,734 | 1.13 % | 2,613,422 | 3,377 | 0.13 % |
Time deposits (g) | 1,913,372 | 60,181 | 3.15 % | 1,161,432 | 6,883 | 0.59 % |
Borrowed funds (f) | 691,636 | 32,903 | 4.76 % | 212,026 | 4,531 | 2.14 % |
Subordinated debt | 114,002 | 4,592 | 4.03 % | 117,625 | 4,750 | 4.04 % |
Junior subordinated debentures | 129,434 | 9,401 | 7.26 % | 129,175 | 4,716 | 3.60 % |
Total interest-bearing liabilities | 9,736,435 | 152,239 | 1.56 % | 9,380,786 | 28,117 | 0.30 % |
Noninterest-bearing demand deposits (g) | 2,785,279 | | | 3,070,892 | | |
Noninterest-bearing liabilities | 237,810 | | | 207,316 | | |
| | | | | | |
Total liabilities | 12,759,524 | | | 12,658,994 | | |
| | | | | | |
Shareholders’ equity | 1,510,285 | | | 1,518,704 | | |
| | | | | | |
Total liabilities and shareholders’ equity | $ 14,269,809 | | | $ 14,177,698 | | |
| | | | | | |
Net interest income/Interest rate spread | | 438,864 | 2.86 % | | 423,469 | 3.11 % |
| | | | | | |
Net interest-earning assets/Net interest margin | $ 3,630,748 | | 3.28 % | $ 3,872,832 | | 3.20 % |
| | | | | | |
Ratio of interest-earning assets to interest-bearing liabilities | 1.37X | | | 1.41X | | |
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent (“FTE”) basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings and collateralized borrowings.
(g) Average cost of deposits were 0.91% and 0.12%, respectively and average cost of Interest-bearing deposits were 1.20% and 0.16%, respectively.
(h) Shown on a FTE basis. GAAP basis yields were: Loans — 4.90% and 3.95%, respectively; Investment securities — 1.57% and 1.53%, respectively; Interest-earning assets — 4.40% and 3.39%, respectively. GAAP basis net interest rate spreads were 2.83% and 3.09%, respectively; and GAAP basis net interest margins were 3.26% and 3.17%, respectively