Northwest Bancshares, Inc. Announces First Quarter 2021 Earnings and Quarterly Dividend Increase
04/26/2021 - 09:00 AM
WARREN, Pa. , April 26, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2021 of $40.2 million $0.32 per diluted share. This represents an increase of $32.3 million $7.9 million $0.07 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2021 were 10.61% and 1.17% compared to 2.37% and 0.30% for the same quarter last year.
The Company also announced that its Board of Directors increased the quarterly cash dividend by 5.3% to $0.20 per share payable on May 17, 2021 to shareholders of record as of May 6, 2021. This is the 106th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of March 31, 2021, this represents an annualized dividend yield of approximately 5.5% .
In making this announcement, Ronald J. Seiffert , Chairman, President and CEO, noted, "We are extremely pleased with the current quarter results beginning once again with strong fee income led by our mortgage banking operations. We are also delighted to report that our credit loss provision decreased significantly from prior year and prior quarter as we continue to see economic forecasts improve. From a credit quality perspective, delinquencies continue to be well maintained while payment deferrals on loans declined to just $53.8 million 0.5% of the loan portfolio, at March 31, 2021 as compared to $129.9 million December 31 , 2020. Despite the increase in nonperforming loans, or loans for which the accrual of interest has ceased, by $120.7 million $21.6 million 4.4% , indicating that these potential problem loans had already previously been identified and an adequate reserve has already been allocated."
Mr. Seiffert continued, "During the first quarter, we also announced the divestiture of our insurance business to a very qualified and compassionate buyer in USI Insurance Services. As we assessed this business line for the past several years, it became clear that we were not going to be able to scale this business line in a meaningful way and that our resources and capital are better spent on our core banking businesses. The sale is expected to close during the second quarter."
Net interest income increased by $13.2 million 15.2% , to $100.5 million $87.2 million $7.3 million 7.7% , increase in interest income on loans receivable. This increase in interest income on loans was mainly due to an increase of $1.633 billion 18.6% , in the average balance of loans, primarily as a result of the acquisition of MutualBank during the second quarter of 2020. Also contributing to this increase in net interest income was a decrease of $5.9 million 51.6% , in interest expense on deposits due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.33% for the quarter ended March 31, 2021 from 0.72% for the quarter ended March 31, 2020. Despite the overall increase in net interest income, net interest margin decreased to 3.18% for the quarter ended March 31, 2021 from 3.66% for the same quarter last year as interest earning asset yields decreased to 3.42% for the quarter ended March 31, 2021 from 4.21% for the quarter ended March 31, 2020. Contributing to the overall decline in average asset yield was the increase in average cash balances of $766.4 million 0.09% , due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks, as well as the overall decrease in market interest rates beginning with the decrease in the targeted federal funds rate of 1.25% by the Federal Reserve in March of 2020.
The provision for credit losses decreased by $33.3 million $5.6 million $27.6 million $253.6 million $467.7 million 4.51% of total loans, at March 31, 2021 from $214.1 million 2.42% of total loans, as of March 31, 2020. This increase was primarily due to the downgrade of commercial loans in certain industries impacted by COVID-19.
Noninterest income increased by $4.0 million 14.2% , to $32.0 million $28.0 million $4.8 million $6.0 million $1.2 million $1.5 million 29.7% , as a result of additional fee income from the MutualBank acquisition. Slightly offsetting these increases was a decrease in service charges and fees of $2.7 million 18.0% , due to the impact of the Durbin amendment on our interchange fees which came into effect in the second half of 2020.
Noninterest expense increased by $7.6 million 9.6% , to $86.2 million $78.6 million $4.5 million 10.5% , in compensation and employee benefits due primarily to the addition of MutualBank employees during the second quarter of 2020. Also contributing to this increase was an increase of $2.3 million 20.8% , in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for online and mobile banking has increased. Professional services expense increased $1.8 million 62.9% , due to the utilization of third-party experts to recruit talent and assist with our digital strategy rollout. Premises and occupancy costs increased $1.3 million 18.0% , over the prior year due primarily to additional snow removal costs. Lastly, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased $1.3 million
The provision for income taxes increased by $10.6 million $11.6 million $1.0 million
Northwest Bancshares, Inc. is the holding company of Northwest Bank, which is headquartered in Warren , Pennsylvania. Founded in 1896, 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 March 31, 2021, Northwest operated 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania , New York , Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com .
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
March 31, 2021
December 31, 2020
March 31, 2020
Assets
Cash and cash equivalents
$
979,290
736,277
276,454
Marketable securities available-for-sale (amortized cost of $1,430,352, $1,375,685 and $749,703, respectively)
1,430,131
1,398,941
765,579
Marketable securities held-to-maturity (fair value of $593,232, $179,666 and $17,968, respectively)
604,284
178,887
17,208
Total cash and cash equivalents and marketable securities
3,013,705
2,314,105
1,059,241
Residential mortgage loans held-for-sale
46,270
58,786
6,426
Residential mortgage loans
2,925,408
3,009,335
2,831,860
Home equity loans
1,407,524
1,467,736
1,353,263
Consumer loans
1,554,355
1,507,993
1,178,055
Commercial real estate loans
3,289,436
3,345,889
2,755,468
Commercial loans
1,145,047
1,191,110
711,802
Total loans receivable
10,368,040
10,580,849
8,836,874
Allowance for credit losses
(123,997)
(134,427)
(92,897)
Loans receivable, net
10,244,043
10,446,422
8,743,977
FHLB stock, at cost
21,861
21,748
13,131
Accrued interest receivable
28,732
35,554
25,531
Real estate owned, net
1,738
2,232
1,075
Premises and equipment, net
158,784
161,538
147,427
Bank-owned life insurance
252,599
253,951
190,127
Goodwill
382,356
382,279
346,103
Other intangible assets, net
18,342
19,936
21,425
Other assets
148,196
168,503
133,159
Total assets
$
14,270,356
13,806,268
10,681,196
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits
$
3,000,019
2,716,224
1,736,622
Interest-bearing demand deposits
2,826,461
2,755,950
1,975,830
Money market deposit accounts
2,521,881
2,437,539
1,946,113
Savings deposits
2,229,214
2,047,424
1,640,414
Time deposits
1,535,519
1,642,096
1,493,756
Total deposits
12,113,094
11,599,233
8,792,735
Borrowed funds
253,617
283,044
191,599
Junior subordinated debentures
128,859
128,794
121,813
Advances by borrowers for taxes and insurance
44,024
45,230
47,154
Accrued interest payable
659
2,054
834
Other liabilities
189,109
209,210
185,269
Total liabilities
12,729,362
12,267,565
9,339,404
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, 127,222,648, 127,019,452, and 106,933,483 shares issued and outstanding, respectively
1,272
1,270
1,069
Additional paid-in capital
1,018,822
1,015,502
808,250
Retained earnings
571,612
555,480
561,380
Accumulated other comprehensive loss
(50,712)
(33,549)
(28,907)
Total shareholders' equity
1,540,994
1,538,703
1,341,792
Total liabilities and shareholders' equity
$
14,270,356
13,806,268
10,681,196
Equity to assets
10.80
%
11.14
%
12.56
%
Tangible common equity to assets*
8.22
%
8.48
%
9.45
%
Book value per share
$
12.11
12.11
12.55
Tangible book value per share*
$
8.96
8.95
9.11
Closing market price per share
$
14.45
12.74
11.57
Full time equivalent employees
2,443
2,421
2,223
Number of banking offices
170
170
178
* Excludes goodwill and other intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income/(Loss) (Unaudited) (dollars in thousands, except per share amounts)
Quarter ended
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
Interest income:
Loans receivable
$
102,318
105,681
107,241
103,012
94,973
Mortgage-backed securities
4,200
4,551
4,652
4,038
4,175
Taxable investment securities
634
471
427
439
648
Tax-free investment securities
575
656
655
564
185
FHLB stock dividends
116
192
218
309
262
Interest-earning deposits
183
178
221
185
135
Total interest income
108,026
111,729
113,414
108,547
100,378
Interest expense:
Deposits
5,514
6,714
8,443
9,336
11,403
Borrowed funds
2,054
2,127
1,437
1,133
1,747
Total interest expense
7,568
8,841
9,880
10,469
13,150
Net interest income
100,458
102,888
103,534
98,078
87,228
Provision for credit losses
(5,620)
(2,230)
6,818
51,750
27,637
Net interest income after provision for credit losses
106,078
105,118
96,716
46,328
59,591
Noninterest income:
Gain/(loss) on sale of investments
(21)
75
(12)
(8)
181
Gain on sale of loans
—
—
—
—
1,302
Service charges and fees
12,394
13,074
14,354
13,069
15,116
Trust and other financial services income
6,484
5,722
5,376
4,823
5,001
Insurance commission income
2,546
2,034
2,331
2,395
2,372
Gain/(loss) on real estate owned, net
(42)
114
(32)
(97)
(91)
Income from bank-owned life insurance
1,736
1,330
1,576
1,248
1,036
Mortgage banking income
6,020
7,120
11,055
12,022
1,194
Other operating income
2,836
2,654
2,022
2,044
1,865
Total noninterest income
31,953
32,123
36,670
35,496
27,976
Noninterest expense:
Compensation and employee benefits
47,239
48,209
47,371
40,049
42,746
Premises and occupancy costs
8,814
7,614
8,342
7,195
7,471
Office operations
3,165
4,009
4,626
3,711
3,382
Collections expense
616
893
1,264
644
474
Processing expenses
13,456
12,186
15,042
11,680
11,142
Marketing expenses
1,980
1,994
2,147
2,047
1,507
Federal deposit insurance premiums
1,307
1,651
1,498
1,618
—
Professional services
4,582
3,599
3,246
2,825
2,812
Amortization of intangible assets
1,594
1,664
1,781
1,760
1,651
Real estate owned expense
75
64
111
89
95
Merger/asset disposition expense
9
7,238
1,414
9,679
2,458
Other expenses
3,354
3,728
27
7,866
4,873
Total noninterest expense
86,191
92,849
86,869
89,163
78,611
Income/(loss) before income taxes
51,840
44,392
46,517
(7,339)
8,956
Income tax expense/(benefit)
11,603
9,327
8,467
(1,139)
1,017
Net income/(loss)
$
40,237
35,065
38,050
(6,200)
7,939
Basic earnings/(loss) per share
$
0.32
0.28
0.30
(0.05)
0.08
Diluted earnings/(loss) per share
$
0.32
0.28
0.30
(0.05)
0.07
Weighted average common shares outstanding - basic
126,182,409
126,713,429
126,855,810
121,480,563
105,882,553
Weighted average common shares outstanding - diluted
126,700,024
126,728,602
126,855,810
121,480,563
106,148,247
Annualized return on average equity
10.61
%
9.00
%
9.82
%
(1.63)
%
2.37
%
Annualized return on average assets
1.17
%
1.01
%
1.09
%
(0.18)
%
0.30
%
Annualized return on tangible common equity **
14.31
%
12.27
%
13.28
%
(2.22)
%
3.28
%
Efficiency ratio *
63.88
%
62.18
%
59.68
%
58.19
%
64.67
%
Annualized noninterest expense to average assets *
2.45
%
2.42
%
2.39
%
2.30
%
2.83
%
* Excludes merger/asset disposition expenses and amortization of intangible assets (non-GAAP).
** Excludes goodwill and other intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
Nonaccrual loans current:
Residential mortgage loans
$
164
21
1,128
413
285
Home equity loans
268
154
366
481
592
Consumer loans
225
207
234
214
77
Commercial real estate loans
146,304
20,317
22,610
30,677
14,337
Commercial loans
6,361
16,027
6,488
6,551
3,514
Total nonaccrual loans current
$
153,322
36,726
30,826
38,336
18,805
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans
$
1,261
647
60
61
691
Home equity loans
340
338
445
247
159
Consumer loans
254
301
230
335
143
Commercial real estate loans
965
1,416
692
2,372
496
Commercial loans
1,538
87
57
—
—
Total nonaccrual loans delinquent 30 days to 59 days
$
4,358
2,789
1,484
3,015
1,489
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans
$
813
767
576
1,013
218
Home equity loans
417
190
618
960
539
Consumer loans
649
583
781
666
488
Commercial real estate loans
1,877
714
2,745
163
2,096
Commercial loans
7,919
48
15
768
37
Total nonaccrual loans delinquent 60 days to 89 days
$
11,675
2,302
4,735
3,570
3,378
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans
$
9,333
14,489
14,750
15,369
10,457
Home equity loans
7,044
8,441
7,845
7,060
5,816
Consumer loans
3,625
5,473
5,352
6,896
3,459
Commercial real estate loans
29,737
25,287
35,496
29,729
25,342
Commercial loans
4,860
7,325
6,310
11,535
16,685
Total nonaccrual loans delinquent 90 days or more
$
54,599
61,015
69,753
70,589
61,759
Total nonaccrual loans
$
223,954
102,832
106,798
115,510
85,431
Total nonaccrual loans
$
223,954
102,832
106,798
115,510
85,431
Loans 90 days past due and still accruing
197
585
495
77
31
Nonperforming loans
224,151
103,417
107,293
115,587
85,462
Real estate owned, net
1,738
2,232
2,575
1,897
1,075
Nonperforming assets
$
225,889
105,649
109,868
117,484
86,537
Nonaccrual troubled debt restructuring *
$
7,390
10,704
17,120
17,562
17,375
Accruing troubled debt restructuring
20,120
21,431
17,684
17,888
15,977
Total troubled debt restructuring
$
27,510
32,135
34,804
35,450
33,352
Nonperforming loans to total loans
2.16
%
0.98
%
1.00
%
1.06
%
0.97
%
Nonperforming assets to total assets
1.58
%
0.77
%
0.80
%
0.85
%
0.81
%
Allowance for credit losses to total loans
1.20
%
1.27
%
1.30
%
1.29
%
1.05
%
Allowance for total loans excluding PPP loan balances
1.24
%
1.32
%
1.36
%
1.36
%
N/A
Allowance for credit losses to nonperforming loans
55.32
%
129.99
%
130.68
%
121.63
%
108.70
%
* Amounts included in nonperforming loans above.
Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At March 31, 2021
Pass
Special mention *
Substandard **
Doubtful ***
Loss
Loans receivable
Personal Banking:
Residential mortgage loans
$
2,950,103
—
21,575
—
—
2,971,678
Home equity loans
1,396,757
—
10,767
—
—
1,407,524
Consumer loans
1,547,502
—
6,853
—
—
1,554,355
Total Personal Banking
5,894,362
—
39,195
—
—
5,933,557
Commercial Banking:
Commercial real estate loans
2,801,082
120,345
368,009
—
—
3,289,436
Commercial loans
1,061,884
22,623
60,540
—
—
1,145,047
Total Commercial Banking
3,862,966
142,968
428,549
—
—
4,434,483
Total loans
$
9,757,328
142,968
467,744
—
—
10,368,040
At December 31, 2020
Personal Banking:
Residential mortgage loans
$
3,042,544
—
25,577
—
—
3,068,121
Home equity loans
1,455,474
—
12,262
—
—
1,467,736
Consumer loans
1,499,004
—
8,989
—
—
1,507,993
Total Personal Banking
5,997,022
—
46,828
—
—
6,043,850
Commercial Banking:
Commercial real estate loans
2,852,705
108,021
385,163
—
—
3,345,889
Commercial loans
1,092,498
41,278
57,334
—
—
1,191,110
Total Commercial Banking
3,945,203
149,299
442,497
—
—
4,536,999
Total loans
$
9,942,225
149,299
489,325
—
—
10,580,849
At September 30, 2020
Personal Banking:
Residential mortgage loans
$
3,117,442
—
25,927
—
—
3,143,369
Home equity loans
1,471,919
—
12,446
—
—
1,484,365
Consumer loans
1,478,109
—
8,974
—
—
1,487,083
Total Personal Banking
6,067,470
—
47,347
—
—
6,114,817
Commercial Banking:
Commercial real estate loans
2,850,611
110,073
359,059
—
—
3,319,743
Commercial loans
1,255,255
40,631
51,406
—
—
1,347,292
Total Commercial Banking
4,105,866
150,704
410,465
—
—
4,667,035
Total loans
$
10,173,336
150,704
457,812
—
—
10,781,852
At June 30, 2020
Personal Banking:
Residential mortgage loans
$
3,196,304
—
26,451
—
—
3,222,755
Home equity loans
1,438,339
—
12,031
—
—
1,450,370
Consumer loans
1,508,129
—
9,990
—
—
1,518,119
Total Personal Banking
6,142,772
—
48,472
—
—
6,191,244
Commercial Banking:
Commercial real estate loans
3,034,984
72,755
199,993
1,092
—
3,308,824
Commercial loans
1,270,279
41,458
42,692
4,290
—
1,358,719
Total Commercial Banking
4,305,263
114,213
242,685
5,382
—
4,667,543
Total loans
$
10,448,035
114,213
291,157
5,382
—
10,858,787
At March 31, 2020
Personal Banking:
Residential mortgage loans
$
2,830,596
—
7,690
—
—
2,838,286
Home equity loans
1,345,052
—
8,211
—
—
1,353,263
Consumer loans
1,174,067
—
3,988
—
—
1,178,055
Total Personal Banking
5,349,715
—
19,889
—
—
5,369,604
Commercial Banking:
Commercial real estate loans
2,537,736
73,967
143,765
—
—
2,755,468
Commercial loans
618,267
43,071
50,464
—
—
711,802
Total Commercial Banking
3,156,003
117,038
194,229
—
—
3,467,270
Total loans
$
8,505,718
117,038
214,118
—
—
8,836,874
*
Includes $26.4 million , $31.3 million , $34.7 million , $37.4 million , and $13.1 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
**
Includes $143.2 million , $153.2 million , $129.2 million , $108.2 million , and $56.8 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
***
Includes $1.1 million of acquired loans at June 30, 2020.
Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) dollars in thousands)
March 31, 2021
*
December 31, 2020
*
September 30, 2020
*
June 30, 2020
*
March 31, 2020
*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans
248
$
22,236
0.7
%
315
$
28,797
0.9
%
17
$
736
—
%
15
$
629
—
%
358
$
32,755
1.2
%
Home equity loans
84
3,334
0.2
%
138
4,763
0.3
%
129
4,984
0.3
%
118
4,569
0.3
%
190
7,061
0.5
%
Consumer loans
535
5,732
0.4
%
1,279
10,574
0.7
%
1,078
8,586
0.6
%
629
7,199
0.5
%
953
8,774
0.7
%
Commercial real estate loans
33
12,240
0.4
%
43
10,923
0.3
%
28
5,090
0.2
%
46
14,177
0.4
%
58
12,895
0.5
%
Commercial loans
16
3,032
0.3
%
37
6,405
0.5
%
19
1,797
0.1
%
12
1,242
0.1
%
35
7,545
1.1
%
Total loans delinquent 30 days to 59 days
916
$
46,574
0.4
%
1,812
$
61,462
0.6
%
1,271
$
21,193
0.2
%
820
$
27,816
0.3
%
1,594
$
69,030
0.8
%
Loans delinquent 60 days to 89 days:
Residential mortgage loans
26
$
2,062
0.1
%
84
$
5,083
0.2
%
65
$
4,788
0.2
%
64
$
5,364
0.2
%
11
$
511
—
%
Home equity loans
31
953
0.1
%
47
1,656
0.1
%
56
1,860
0.1
%
59
2,326
0.2
%
65
2,652
0.2
%
Consumer loans
169
1,868
0.1
%
322
2,742
0.2
%
323
3,049
0.2
%
258
2,916
0.2
%
265
2,610
0.2
%
Commercial real estate loans
14
7,609
0.2
%
11
1,615
—
%
14
4,212
0.1
%
18
3,913
0.1
%
12
2,981
0.1
%
Commercial loans
12
8,979
0.8
%
10
864
0.1
%
7
357
—
%
15
1,151
0.1
%
10
309
—
%
Total loans delinquent 60 days to 89 days
252
$
21,471
0.2
%
474
$
11,960
0.1
%
465
$
14,266
0.1
%
414
$
15,670
0.1
%
363
$
9,063
0.1
%
Loans delinquent 90 days or more: **
Residential mortgage loans
121
$
9,333
0.3
%
168
$
14,489
0.5
%
168
$
14,750
0.5
%
185
$
15,369
0.5
%
129
$
10,457
0.4
%
Home equity loans
176
7,044
0.5
%
207
8,441
0.6
%
193
7,845
0.5
%
182
7,060
0.5
%
152
5,816
0.4
%
Consumer loans
454
3,822
0.2
%
720
6,058
0.4
%
696
5,847
0.4
%
709
6,896
0.5
%
445
3,459
0.3
%
Commercial real estate loans
113
29,737
0.9
%
119
25,287
0.8
%
136
35,496
1.1
%
149
29,729
0.9
%
139
25,342
0.9
%
Commercial loans
31
4,860
0.4
%
37
7,325
0.6
%
34
6,310
0.5
%
47
11,535
0.8
%
51
16,685
0.2
%
Total loans delinquent 90 days or more
895
$
54,796
0.5
%
1,251
$
61,600
0.6
%
1,227
$
70,248
0.7
%
1,272
$
70,589
0.7
%
916
$
61,759
0.7
%
Total loans delinquent
2,063
$
122,841
1.2
%
3,537
$
135,022
1.3
%
2,963
$
105,707
1.0
%
2,506
$
114,075
1.1
%
2,873
$
139,852
1.6
%
*
Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**
Includes purchased credit deteriorated loans of $12.7 million , $6.6 million , $20.3 million , $18.0 million , and $298,000 at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited) (dollars in thousands)
Loans outstanding The following table provides delinquency information for various loan sectors in our portfolio that are potentially vulnerable to the COVID-19 pandemic impacts at March 31, 2021:
At March 31, 2021
30-59 days
delinquent
*
60-89 days
delinquent
*
90 days
or greater
delinquent
*
Total
delinquent
*
Current
*
Total
loans
receivable
*
Restaurants/bars
$
310
—
%
$
355
—
%
$
759
—
%
$
1,424
—
%
$
103,097
1.0
%
$
104,521
1.0
%
Hotels/hospitality
4,285
—
%
367
—
%
7,963
0.1
%
12,615
0.1
%
166,694
1.6
%
179,309
1.7
%
Gyms and fitness
—
—
%
—
—
%
—
—
%
—
—
%
4,590
—
%
4,590
—
%
Transportation
275
—
%
14
—
%
296
—
%
585
—
%
70,994
0.7
%
71,579
0.7
%
Oil and gas
—
—
%
—
—
%
—
—
%
—
—
%
9,200
0.1
%
9,200
0.1
%
Residential care facilities
1,250
—
%
—
—
%
—
—
%
1,250
—
%
246,561
2.4
%
247,811
2.4
%
Retail buildings
1,692
—
%
—
—
%
938
—
%
2,630
—
%
445,102
4.3
%
447,732
4.3
%
Education/student housing
—
—
%
1,389
—
%
441
—
%
1,830
—
%
138,536
1.3
%
140,366
1.4
%
Construction/development:
Education/student housing
—
—
%
—
—
%
—
—
%
—
—
%
53,903
0.5
%
53,903
0.5
%
Hotels/hospitality
—
—
%
—
—
%
—
—
%
—
—
%
25,639
0.2
%
25,639
0.2
%
Residential care facilities
3,450
—
%
—
—
%
—
—
%
3,450
—
%
30,144
0.3
%
33,594
0.3
%
All other construction/development
319
—
%
804
—
%
4,193
—
%
5,316
0.1
%
178,109
1.7
%
183,425
1.8
%
All other sectors
34,993
0.3
%
18,542
0.2
%
40,206
0.4
%
93,741
0.9
%
8,772,630
84.6
%
8,866,371
85.5
%
Total loans
$
46,574
0.4
%
$
21,471
0.2
%
$
54,796
0.5
%
$
122,841
1.2
%
$
10,245,199
98.8
%
$
10,368,040
100.0
%
* Percent of total loans outstanding.
Loan deferrals The following table represents loans that entered into and are currently in a deferment offered by the Company to aid customers in the COVID-19 pandemic as of March 31, 2021.
Balance as of
December 31, 2020
Loans returned to full payment status, net of payments
New loans entered into
a deferral
Balance as of
March 31, 2021
Number of loans
Outstanding principal balance
*
Number of loans
Outstanding principal balance
Number of loans
Outstanding principal balance
Number of loans
Outstanding principal balance
*
Residential mortgage loans
43
$
6,442
0.2
%
42
$
6,119
29
$
4,484
30
$
4,807
0.2
%
Home equity loans
41
2,615
0.2
%
40
2,560
21
1,096
22
1,151
0.1
%
Consumer loans
83
1,299
0.1
%
83
1,299
21
546
21
546
—
%
Commercial real estate loans
34
118,212
3.5
%
29
80,666
20
6,068
25
43,614
1.3
%
Commercial loans
22
1,332
0.1
%
21
1,301
59
3,633
60
3,664
0.3
%
Total loans
223
$
129,900
1.2
%
215
$
91,945
150
$
15,827
158
$
53,782
**
0.5
%
* Percent of total loans outstanding by the respective total amount of that type of loan.
** As of March 31, 2021, $53.6 million of loan deferrals expire in Q2 2021 and $150,000 of loan deferrals expire in Q3 2021. Of the $53.8 t otal loan deferrals, $37.1 million are in the hospitality industry.
Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
Quarter ended
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
Beginning balance
$
134,427
140,209
140,586
92,897
57,941
CECL adoption
—
—
—
—
10,792
Initial allowance on loans purchased with credit deterioration
—
—
—
8,845
—
Provision
(5,620)
(2,230)
6,818
51,750
27,637
Charge-offs residential mortgage
(855)
(407)
(129)
(38)
(343)
Charge-offs home equity
(228)
(58)
(88)
(173)
(289)
Charge-offs consumer
(2,603)
(2,623)
(3,356)
(3,191)
(3,488)
Charge-offs commercial real estate
(4,626)
(2,770)
(532)
(690)
(331)
Charge-offs commercial
(54)
(156)
(4,892)
(10,349)
(815)
Recoveries
3,556
2,462
1,802
1,535
1,793
Ending balance
$
123,997
134,427
140,209
140,586
92,897
Net charge-offs to average loans, annualized
0.19
%
0.13
%
0.27
%
0.51
%
0.16
%
March 31, 2021
Originated loans
Acquired loans
Total loans
Balance
Reserve
Balance
Reserve
Balance
Reserve
Residential mortgage loans
$
2,693,075
5,117
278,603
744
2,971,678
5,861
Home equity loans
1,138,718
3,984
268,806
1,257
1,407,524
5,241
Consumer loans
1,351,401
15,026
202,954
2,425
1,554,355
17,451
Personal Banking Loans
5,183,194
24,127
750,363
4,426
5,933,557
28,553
Commercial real estate loans
2,568,567
60,874
720,869
16,085
3,289,436
76,959
Commercial loans
1,011,722
10,571
133,325
7,914
1,145,047
18,485
Commercial Banking Loans
3,580,289
71,445
854,194
23,999
4,434,483
95,444
Total Loans
$
8,763,483
95,572
1,604,557
28,425
10,368,040
123,997
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
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
Average
balance
Interest
Avg.
yield/
cost (h)
Average
balance
Interest
Avg.
yield/
cost (h)
Average
balance
Interest
Avg.
yield/
cost (h)
Average
balance
Interest
Avg.
yield/
cost (h)
Average
balance
Interest
Avg.
yield/
cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans
$
3,007,439
26,366
3.51
%
$
3,089,916
27,503
3.56
%
$
3,176,436
28,769
3.62
%
$
3,092,392
29,019
3.75
%
$
2,845,483
28,062
3.94
%
Home equity loans
1,432,009
12,815
3.63
%
1,472,527
13,535
3.66
%
1,479,429
13,732
3.69
%
1,415,091
13,806
3.92
%
1,345,059
14,801
4.43
%
Consumer loans
1,463,284
14,566
4.04
%
1,444,860
15,874
4.37
%
1,437,828
15,851
4.39
%
1,375,130
14,993
4.39
%
1,123,336
12,160
4.35
%
Commercial real estate loans
3,313,892
38,471
4.64
%
3,317,418
37,965
4.48
%
3,306,386
36,887
4.37
%
3,156,749
34,595
4.34
%
2,747,419
31,437
4.53
%
Commercial loans
1,189,812
10,566
3.55
%
1,325,047
11,414
3.37
%
1,377,223
12,603
3.58
%
1,161,228
11,269
3.84
%
712,621
8,856
4.92
%
Total loans receivable (a) (b) (d)
10,406,436
102,784
4.01
%
10,649,768
106,291
3.97
%
10,777,302
107,842
3.98
%
10,200,590
103,682
4.09
%
8,773,918
95,316
4.37
%
Mortgage-backed securities (c)
1,324,558
4,200
1.27
%
1,166,739
4,551
1.56
%
1,004,803
4,651
1.85
%
714,657
4,038
2.26
%
668,470
4,175
2.50
%
Investment securities (c) (d)
331,358
1,381
1.67
%
252,898
1,380
2.18
%
216,081
1,336
2.47
%
170,309
1,244
2.92
%
144,152
881
2.44
%
FHLB stock, at cost
21,811
116
2.17
%
23,346
192
3.27
%
25,595
218
3.39
%
22,192
309
5.60
%
15,931
262
6.61
%
Other interest-earning deposits
801,119
183
0.09
%
632,494
178
0.11
%
791,601
221
0.11
%
623,870
185
0.12
%
34,697
135
1.54
%
Total interest-earning assets
12,885,282
108,664
3.42
%
12,725,245
112,592
3.52
%
12,815,382
114,268
3.55
%
11,731,618
109,458
3.75
%
9,637,168
100,769
4.21
%
Noninterest-earning assets (e)
1,102,477
1,066,609
1,088,273
1,858,513
960,303
Total assets
$
13,987,759
$
13,791,854
$
13,903,655
$
13,590,131
$
10,597,471
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits
$
2,118,030
625
0.12
%
$
2,028,155
617
0.12
%
$
2,015,604
648
0.13
%
$
1,884,202
648
0.14
%
$
1,611,111
727
0.18
%
Interest-bearing demand deposits
2,783,429
429
0.06
%
2,699,515
476
0.07
%
2,680,591
763
0.11
%
2,428,060
812
0.13
%
1,915,871
1,307
0.27
%
Money market deposit accounts
2,497,495
657
0.11
%
2,426,513
960
0.16
%
2,347,097
1,347
0.23
%
2,204,810
1,600
0.29
%
1,921,243
3,088
0.65
%
Time deposits
1,583,525
3,803
0.97
%
1,676,094
4,660
1.11
%
1,782,350
5,685
1.27
%
1,761,260
6,276
1.43
%
1,528,891
6,281
1.65
%
Borrowed funds (f)
267,163
1,412
2.14
%
352,392
1,469
1.66
%
420,715
717
0.68
%
371,700
296
0.32
%
240,118
709
1.19
%
Junior subordinated debentures
128,817
642
1.99
%
128,752
659
2.00
%
128,658
720
2.19
%
127,472
837
2.60
%
121,809
1,038
3.37
%
Total interest-bearing liabilities
9,378,459
7,568
0.33
%
9,311,421
8,841
0.38
%
9,375,015
9,880
0.42
%
8,777,504
10,469
0.48
%
7,339,043
13,150
0.72
%
Noninterest-bearing demand deposits (g)
2,805,206
2,675,986
2,703,266
2,401,368
1,640,180
Noninterest-bearing liabilities
265,667
253,966
284,440
882,391
268,139
Total liabilities
12,449,332
12,241,373
12,362,721
12,061,263
9,247,362
Shareholders' equity
1,538,427
1,550,481
1,540,934
1,528,868
1,350,109
Total liabilities and shareholders' equity
$
13,987,759
$
13,791,854
$
13,903,655
$
13,590,131
$
10,597,471
Net interest income/Interest rate spread
101,096
3.09
%
103,751
3.14
%
104,388
3.13
%
98,989
3.27
%
87,619
3.48
%
Net interest-earning assets/Net interest margin
$
3,506,823
3.18
%
$
3,413,824
3.26
%
$
3,440,367
3.26
%
$
2,954,114
3.38
%
$
2,298,125
3.66
%
Ratio of interest-earning assets to interest-bearing liabilities
1.37X
1.37X
1.37X
1.34X
1.31X
(a)
Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)
Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)
Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)
Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.
(e)
Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)
Average balances include FHLB borrowings, collateralized borrowings and subordinated debt.
(g)
Average cost of deposits were 0.19% , 0.23% , 0.29% , 0.35% , and 0.53% , respectively.
(h)
Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.99% , 3.94% , 3.96% , 4.06% , and 4.35% , respectively, Investment securities - 1.46% , 1.78% , 2.00% , 2.36% , and 2.31% , respectively, Interest-earning assets - 3.40% , 3.48% , 3.52% , 3.72% , and 4.19% , respectively. GAAP basis net interest rate spreads were 3.07% , 3.11% , 3.10% , 3.24% , and 3.47% , respectively, and GAAP basis net interest margins were 3.16% , 3.23% , 3.23% , 3.34% , and 3.64% , respectively.
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SOURCE Northwest Bancshares, Inc.
