Northwest Bancshares, Inc. Announces Fourth Quarter 2020 Earnings and Quarterly Dividend
01/25/2021 - 09:00 AM
WARREN, Pa. , Jan. 25, 2021 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2020 of $35.1 million , or $0.28 per diluted share. This represents an increase of $9.5 million , or 37.0% , compared to the same quarter last year when net income was $25.6 million , or $0.24 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2020 were 9.00% and 1.01% compared to 7.52% and 0.97% for the same quarter last year.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share payable on February 15, 2021 to shareholders of record as of February 4, 2021. This is the 105th consecutive quarter in which the Company has paid a cash dividend. Ronald J. Seiffert , Chairman, President and CEO, added, "We are extremely proud that we were able to maintain our dividend throughout 2020 despite the challenges of COVID-19 on bank earnings. Based on the current market value of the Company's stock, this represents an annualized dividend yield of approximately 5.50% , which continues to be among the highest in our peer group."
Mr. Seiffert continued, "When looking back over a very challenging 2020, I am amazed at what our team accomplished during the midst of COVID-19. We successfully adopted CECL in the first quarter followed closely by the close and conversion of MutualBank on April 24th , the largest acquisition in the company's history. We also completed a very successful $125 million sub-debt offering in September. This additional liquidity and capital at the holding company allowed us to resume our existing five million share common stock buyback program, of which we successfully repurchased approximately 760,000 shares in the fourth quarter at an average price of $12.20 . Finally, we completed our branch optimization program which resulted in the consolidation of 43 offices in December 2020. In addition to all of these initiatives, we will be launching our digital strategy this year which will significantly enhance our online banking capabilities and streamline our account opening processes. We want to give our customers the same award winning experience online as they are accustomed to receiving in our branch offices. In addition, we are expanding our capabilities in mortgage banking to all of our markets and expanding our geographic footprint for dealer services' indirect auto and power sports lending. We have acquired talent to enhance our treasury management services, added resources to our corporate finance capabilities, created a healthcare vertical with a dedicated subject matter expert and will be opening a Loan Production Office in the greater Philadelphia market with the addition of a team of capable middle market bankers. As rewarding as 2020 was, we are even more optimistic about 2021."
Net interest income increased by $13.9 million , or 15.7% , to $102.9 million for the quarter ended December 31, 2020, from $88.9 million for the quarter ended December 31, 2019, primarily due to a $7.8 million , or 8.0% , increase in interest income on loans receivable and a $6.2 million , or 47.9% , decrease in interest expense on deposits. The increase in interest income was primarily due to an increase of $1.93 5 billion , or 22.2% , in the average balance of loans which more than offset the decline experienced from a reduction in the yield on loans to 3.97% for the quarter ended December 31, 2020 from 4.47% for the same quarter last year. The decrease in interest expense was primarily due to a decrease in our interest-bearing cost of deposits to 0.30% for the quarter ended December 31, 2020 from 0.75% for the quarter ended December 31, 2019 which was partially offset by the growth in the average balance of interest-bearing deposits by $1.99 1 billion , or 29.1% . The net impact of these changes caused the Company's net interest margin to decrease to 3.26% for the quarter ended December 31, 2020 from 3.73% for the same quarter last year.
The provision for credit losses decreased by $10.5 million , or 127.1% , due to a release of the allowance for credit losses of $2.2 million for the quarter ended December 31, 2020, compared to an expense of $8.2 million for the quarter ended December 31, 2019. This decrease in the provision was primarily the result of improvements in the economic forecasts.
Noninterest income increased by $3.9 million , or 13.9% , to $32.1 million for the quarter ended December 31, 2020, from $28.2 million for the quarter ended December 31, 2019. This increase was primarily due to the increase in mortgage banking income of $5.6 million to $7.1 million for the quarter ended December 31, 2020 from $1.5 million for the quarter ended December 31, 2019. Our successful mortgage banking income was the result of continued efforts to expand our secondary market sales capabilities over the past year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. Also contributing to this increase was a $1.2 million , or 26.7% , increase in trust and other financial services income due to additional fee income received as a result of the acquisition of MutualBank. Partially offsetting these increases was a decrease in other operating income of $1.4 million , or 34.9% , due to a decline in swap fee income as well as a decrease of service charges and fees of $1.1 million , or 7.4% , primarily as a result of the fee income cap of the Durbin amendment on debit card interchange revenue which took effect for Northwest on July 1, 2020 .
Noninterest expense increased by $16.3 million , or 21.3% , to $92.8 million for the quarter ended December 31, 2020, from $76.6 million for the quarter ended December 31, 2019. This increase primarily resulted from a $6.1 million increase in acquisition and branch optimization expense due to expenses incurred as part of the branch optimization initiative that occurred during December. In addition, compensation and employee benefits increased $6.1 million , or 14.6% , due to internal growth of compensation and staff as well as the addition of MutualBank employees. Also contributing to this increase was an increase in processing expenses of $1.9 million , or 18.7% , as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking and loan origination platforms has increased. Lastly, federal deposit insurance premiums increased $1.7 million due to assessment credits received in the previous year.
Net income for the year ended December 31, 2020 was $74.9 million , or $0.62 per diluted share. This represents a decrease of $35.6 million , or 32.2% , compared to the year ended December 31, 2019, when net income was $110.4 million , or $1.04 per diluted share. The annualized returns on average shareholders' equity and average assets for the year ended December 31, 2020 were 4.72% and 0.58% compared to 8.36% and 1.07% for the prior year. This decrease in net income was the result of an increase in provision for credit losses of $61.3 million primarily as a result of COVID-19 and the expected impact on the allowance for credit losses as well as the acquisition of MutualBank and the required provision associated with the adoption of ASU 2016-13, Current Expected Credit Losses ("CECL"). In addition, noninterest expense increased by $51.4 million , or 17.4% , primarily as a result of the additional operating expenses of MutualBank as well as the one-time costs associated with acquisitions and branch optimization costs which increased $16.6 million for the year. Partially offsetting these factors was an increase in net interest income over the prior year of $31.3 million , or 8.7% due to balance sheet growth during the year as well as a $32.9 million , or 33.1% , increase in fee income highlighted by a $27.6 million increase in mortgage banking income.
Headquartered in Warren, Pennsylvania , Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. As of December 31, 2020 , Northwest operates 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania , New York , Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com .
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; and (7) increased risk associated with commercial real-estate and business loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
December 31, 2020
September 30, 2020
December 31, 2019
Assets
Cash and cash equivalents
$
736,277
656,749
60,846
Marketable securities available-for-sale (amortized cost of $1,375,685 , $1,385,835 and $815,495 , respectively)
1,398,941
1,409,150
819,901
Marketable securities held-to-maturity (fair value of $179,666 , $16,168 and $18,223 , respectively)
178,887
15,333
18,036
Total cash and cash equivalents and marketable securities
2,314,105
2,081,232
898,783
Residential mortgage loans held-for-sale
58,786
25,140
7,709
Residential mortgage loans
3,009,335
3,118,229
2,860,418
Home equity loans
1,467,736
1,484,365
1,342,918
Consumer loans
1,507,993
1,487,083
1,125,132
Commercial real estate loans
3,345,889
3,319,743
2,754,390
Commercial loans
1,191,110
1,347,292
718,107
Total loans receivable
10,580,849
10,781,852
8,808,674
Allowance for credit losses
(134,427)
(140,209)
(57,941)
Loans receivable, net
10,446,422
10,641,643
8,750,733
Federal Home Loan Bank stock, at cost
21,748
23,171
14,740
Accrued interest receivable
35,554
36,916
25,755
Real estate owned, net
2,232
2,575
950
Premises and equipment, net
161,538
166,919
147,409
Bank-owned life insurance
253,951
252,621
189,091
Goodwill
382,279
386,044
346,103
Other intangible assets, net
19,936
21,601
23,076
Other assets
168,503
176,083
97,268
Total assets
$
13,806,268
13,788,805
10,493,908
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits
$
2,716,224
2,641,234
1,609,653
Interest-bearing demand deposits
2,755,950
2,663,878
1,944,108
Money market deposit accounts
2,437,539
2,396,567
1,863,998
Savings deposits
2,047,424
2,022,918
1,604,838
Time deposits
1,642,096
1,732,022
1,569,410
Total deposits
11,599,233
11,456,619
8,592,007
Borrowed funds
283,044
398,216
246,336
Junior subordinated debentures
128,794
128,729
121,800
Advances by borrowers for taxes and insurance
45,230
29,755
44,556
Accrued interest payable
2,054
1,002
1,142
Other liabilities
209,210
227,253
134,782
Total liabilities
12,267,565
12,241,574
9,140,623
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, 127,019,452, 127,801,297, and 106,859,088 shares issued and outstanding, respectively
1,270
1,278
1,069
Paid-in capital
1,015,502
1,023,827
805,750
Retained earnings
555,480
544,695
583,407
Accumulated other comprehensive loss
(33,549)
(22,569)
(36,941)
Total shareholders' equity
1,538,703
1,547,231
1,353,285
Total liabilities and shareholders' equity
$
13,806,268
13,788,805
10,493,908
Equity to assets
11.14
%
11.22
%
12.90
%
Tangible common equity to assets
8.48
%
8.52
%
9.72
%
Book value per share
$
12.11
12.11
12.66
Tangible book value per share
$
8.95
8.92
9.21
Closing market price per share
$
12.74
9.20
16.63
Full time equivalent employees
2,421
2,523
2,209
Number of banking offices
170
213
181
Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income/(Loss) (Unaudited) (dollars in thousands, except per share amounts)
Quarter ended
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Interest income:
Loans receivable
$
105,681
107,241
103,012
94,973
97,866
Mortgage-backed securities
4,551
4,652
4,038
4,175
4,237
Taxable investment securities
471
427
439
648
683
Tax-free investment securities
656
655
564
185
201
FHLB dividends
192
218
309
262
262
Interest-earning deposits
178
221
185
135
169
Total interest income
111,729
113,414
108,547
100,378
103,418
Interest expense:
Deposits
6,714
8,443
9,336
11,403
12,893
Borrowed funds
2,127
1,437
1,133
1,747
1,580
Total interest expense
8,841
9,880
10,469
13,150
14,473
Net interest income
102,888
103,534
98,078
87,228
88,945
Provision for credit losses
(2,230)
6,818
51,750
27,637
8,223
Net interest income after provision for credit losses
105,118
96,716
46,328
59,591
80,722
Noninterest income:
Gain/(loss) on sale of investments
75
(12)
(8)
181
27
Gain on sale of loans
—
—
—
1,302
908
Service charges and fees
13,074
14,354
13,069
15,116
14,125
Trust and other financial services income
5,722
5,376
4,823
5,001
4,517
Insurance commission income
2,034
2,331
2,395
2,372
1,858
Gain/(loss) on real estate owned, net
114
(32)
(97)
(91)
86
Income from bank-owned life insurance
1,330
1,576
1,248
1,036
1,121
Mortgage banking income
7,120
11,055
12,022
1,194
1,494
Other operating income
2,654
2,022
2,044
1,865
4,077
Total noninterest income
32,123
36,670
35,496
27,976
28,213
Noninterest expense:
Compensation and employee benefits
48,209
47,371
40,049
42,746
42,074
Premises and occupancy costs
7,614
8,342
7,195
7,471
7,051
Office operations
4,009
4,626
3,711
3,382
4,097
Collections expense
893
1,264
644
474
566
Processing expenses
12,186
15,042
11,680
11,142
10,263
Marketing expenses
1,994
2,147
2,047
1,507
1,010
Federal deposit insurance premiums
1,651
1,498
1,618
—
—
Professional services
3,599
3,246
2,825
2,812
3,533
Amortization of intangible assets
1,664
1,781
1,760
1,651
1,634
Real estate owned expense
64
111
89
95
72
Acquisition/branch optimization expense
7,238
1,414
9,679
2,458
1,114
Other expenses
3,728
27
7,866
4,873
5,157
Total noninterest expense
92,849
86,869
89,163
78,611
76,571
Income/(loss) before income taxes
44,392
46,517
(7,339)
8,956
32,364
Income tax expense/(benefit)
9,327
8,467
(1,139)
1,017
6,773
Net income/(loss)
$
35,065
38,050
(6,200)
7,939
25,591
Basic earnings/(loss) per share
$
0.28
0.30
(0.05)
0.08
0.24
Diluted earnings/(loss) per share
$
0.28
0.30
(0.05)
0.07
0.24
Weighted average common shares outstanding - basic
126,713,429
126,855,810
121,480,563
105,882,553
105,627,194
Weighted average common shares outstanding - diluted
126,728,602
126,855,810
121,480,563
106,148,247
106,306,615
Annualized return on average equity
9.00
%
9.82
%
(1.63)
%
2.37
%
7.52
%
Annualized return on average assets
1.01
%
1.09
%
(0.18)
%
0.30
%
0.97
%
Annualized return on tangible common equity **
12.27
%
13.28
%
(2.22)
%
3.28
%
10.32
%
Efficiency ratio *
62.18
%
59.68
%
58.19
%
64.67
%
63.01
%
Annualized noninterest expense to average assets *
2.42
%
2.39
%
2.30
%
2.83
%
2.80
%
*
Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
**
Excludes goodwill and other intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
Year ended December 31,
2020
2019
Interest income:
Loans receivable
$
410,907
394,809
Mortgage-backed securities
17,416
16,670
Taxable investment securities
1,985
3,401
Tax-free investment securities
2,060
844
FHLB dividends
981
1,056
Interest-earning deposits
719
600
Total interest income
434,068
417,380
Interest expense:
Deposits
35,896
49,216
Borrowed funds
6,444
7,698
Total interest expense
42,340
56,914
Net interest income
391,728
360,466
Provision for credit losses
83,975
22,659
Net interest income after provision for credit losses
307,753
337,807
Noninterest income:
Gain on sale of investments
236
50
Gain on sale of loans
1,302
1,734
Service charges and fees
55,613
53,065
Trust and other financial services income
20,922
17,765
Insurance commission income
9,132
8,068
Loss on real estate owned, net
(106)
(53)
Income from bank-owned life insurance
5,190
4,418
Mortgage banking income
31,391
3,819
Other operating income
8,585
10,541
Total noninterest income
132,265
99,407
Noninterest expense:
Compensation and employee benefits
178,375
163,086
Premises and occupancy costs
30,622
28,717
Office operations
15,728
14,133
Collections expense
3,275
2,560
Processing expenses
50,050
42,453
Marketing expenses
7,695
6,998
Federal deposit insurance premiums
4,767
685
Professional services
12,482
12,287
Amortization of intangible assets
6,856
6,543
Real estate owned expense
359
478
Acquisition/branch optimization expense
20,789
4,168
Other expenses
16,494
13,995
Total noninterest expense
347,492
296,103
Income before income taxes
92,526
141,111
Income tax expense
17,672
30,679
Net income
$
74,854
110,432
Basic earnings per share
$
0.62
1.05
Diluted earnings per share
$
0.62
1.04
Weighted average common shares outstanding - basic
120,244,474
104,878,774
Weighted average common shares outstanding - diluted
120,244,474
105,839,149
Return on average equity
4.72
%
8.36
%
Return on average assets
0.58
%
1.07
%
Return on tangible common equity **
6.59
%
11.22
%
Efficiency ratio *
61.04
%
62.06
%
Noninterest expense to average assets *
2.48
%
2.76
%
*
Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
**
Excludes goodwill and other intangible assets (non-GAAP).
Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) * (dollars in thousands, except per share amounts)
Quarter ended December 31,
Year ended December 31,
2020
2019
2020
2019
Operating results (non-GAAP):
Net interest income
$
102,888
88,945
391,728
360,466
Provision for credit losses
2,647
8,223
24,198
22,659
Noninterest income
32,123
28,213
132,265
99,407
Noninterest expense
85,611
75,457
328,703
291,935
Income taxes
9,988
7,085
39,670
31,846
Net operating income (non-GAAP)
$
36,765
26,393
131,422
113,433
Diluted earnings per share (non-GAAP)
$
0.29
0.25
1.09
1.07
Average equity
$
1,550,481
1,349,803
1,584,747
1,321,452
Average assets
13,791,854
10,447,710
12,892,120
10,329,017
Annualized return on average equity (non-GAAP)
9.43
%
7.76
%
8.29
%
8.58
%
Annualized return on average assets (non-GAAP)
1.06
%
1.00
%
1.02
%
1.10
%
Reconciliation of net operating income to net income:
Net operating income (non-GAAP)
$
36,765
26,393
131,422
113,433
Non-GAAP adjustments, net of tax:
COVID-related provision **
3,511
—
(29,951)
—
CECL provision impact due to acquisition of MutualBank
—
—
(13,089)
—
PPP deferred origination costs
—
—
3,034
—
COVID-related off balance sheet provision **
—
—
(1,594)
—
Acquisition/branch optimization expense
(5,211)
(802)
(14,968)
(3,001)
Net income (GAAP)
$
35,065
25,591
74,854
110,432
Diluted earnings per share (GAAP)
$
0.28
0.24
0.62
1.04
Annualized return on average equity (GAAP)
9.00
%
7.52
%
4.72
%
8.36
%
Annualized return on average assets (GAAP)
1.01
%
0.97
%
0.58
%
1.07
%
*
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 estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs, estimated COVID-related off balance sheet provision and acquisition/branch optimization 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.
**
To arrive at the non-COVID related provision estimates, the Company applied Moody's forecast scenarios prior to the onset of COVID-19 to the Company's loan portfolio at December 31, 2020.
Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands)
At December 31, 2020
Actual
Minimum capital requirements (1)
Well capitalized requirements
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.
$
1,654,208
16.641
%
$
1,043,790
10.500
%
$
994,086
10.000
%
Northwest Bank
1,478,320
14.886
%
1,042,751
10.500
%
993,096
10.000
%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.
1,406,320
14.147
%
844,973
8.500
%
795,268
8.000
%
Northwest Bank
1,354,027
13.634
%
844,132
8.500
%
794,477
8.000
%
Common equity tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.
1,281,515
12.891
%
695,860
7.000
%
646,156
6.500
%
Northwest Bank
1,354,027
13.634
%
695,167
7.000
%
645,513
6.500
%
Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.
1,406,320
10.145
%
554,501
4.000
%
693,126
5.000
%
Northwest Bank
1,354,027
9.903
%
546,905
4.000
%
683,631
5.000
%
(1)
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 2019 Annual Report on Form 10-K.
Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands)
At December 31, 2020
Marketable securities available-for-sale
Amortized cost
Gross unrealized holding gains
Gross unrealized holding losses
Fair value
Debt issued by the U.S. government and agencies:
Due after ten years
$
40,761
211
(55)
40,917
Debt issued by government sponsored enterprises:
Due in less than one year
24,976
159
—
25,135
Due in one year through five years
238
3
—
241
Due in five years through ten years
68,973
238
(80)
69,131
Municipal securities:
Due in less than one year
4,008
14
—
4,022
Due in one year through five years
2,803
63
(2)
2,864
Due in five years through ten years
16,045
429
(5)
16,469
Due after ten years
89,778
3,752
(72)
93,458
Residential mortgage-backed securities:
Fixed rate pass-through
339,406
7,125
(86)
346,445
Variable rate pass-through
14,778
431
(20)
15,189
Fixed rate agency CMOs
723,586
11,758
(1,093)
734,251
Variable rate agency CMOs
50,333
519
(33)
50,819
Total residential mortgage-backed securities
1,128,103
19,833
(1,232)
1,146,704
Total marketable securities available-for-sale
$
1,375,685
24,702
(1,446)
1,398,941
Marketable securities held-to-maturity
Debt issued by the U.S. government and agencies:
Due in five years through ten years
$
67,990
12
(123)
67,879
Residential mortgage-backed securities:
Fixed rate pass-through
22,039
135
—
22,174
Variable rate pass-through
919
30
—
949
Fixed rate agency CMOs
87,335
712
(2)
88,045
Variable rate agency CMOs
604
15
—
619
Total residential mortgage-backed securities
110,897
892
(2)
111,787
Total marketable securities held-to-maturity
$
178,887
904
(125)
179,666
Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands)
At December 31, 2020
Amount
Average rate
Term notes payable to the Federal Home Loan Bank (FHLB):
Payable to the FHLB of Indianapolis acquired from MutualBank
$
22,054
1.92
%
Total term notes payable to the FHLB
22,054
Collateralized borrowings, due within one year
137,661
0.19
%
Subordinated debentures, net of issuance costs
123,329
4.00
%
Total borrowed funds *
$
283,044
*
As of December 31, 2020, the Company had $3.9 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including a $250.0 million overnight line of credit, which had no balance, as well as $95.4 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million of borrowing capacity with three correspondent banks.
Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Nonaccrual loans current:
Residential mortgage loans
$
21
1,128
413
285
72
Home equity loans
154
366
481
592
197
Consumer loans
207
234
214
77
78
Commercial real estate loans
20,317
22,610
30,677
14,337
9,241
Commercial loans
16,027
6,488
6,551
3,514
3,424
Total nonaccrual loans current
$
36,726
30,826
38,336
18,805
13,012
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans
$
647
60
61
691
674
Home equity loans
338
445
247
159
224
Consumer loans
301
230
335
143
121
Commercial real estate loans
1,416
692
2,372
496
196
Commercial loans
87
57
—
—
55
Total nonaccrual loans delinquent 30 days to 59 days
$
2,789
1,484
3,015
1,489
1,270
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans
$
767
576
1,013
218
1,048
Home equity loans
190
618
960
539
689
Consumer loans
583
781
666
488
417
Commercial real estate loans
714
2,745
163
2,096
413
Commercial loans
48
15
768
37
341
Total nonaccrual loans delinquent 60 days to 89 days
$
2,302
4,735
3,570
3,378
2,908
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans
$
14,489
14,750
15,369
10,457
12,682
Home equity loans
8,441
7,845
7,060
5,816
5,635
Consumer loans
5,473
5,352
6,896
3,459
3,610
Commercial real estate loans
25,287
35,496
29,729
25,342
25,014
Commercial loans
7,325
6,310
11,535
16,685
4,739
Total nonaccrual loans delinquent 90 days or more
$
61,015
69,753
70,589
61,759
51,680
Total nonaccrual loans
$
102,832
106,798
115,510
85,431
68,870
Total nonaccrual loans
$
102,832
106,798
115,510
85,431
68,870
Loans 90 days past maturity and still accruing
585
495
77
31
32
Nonperforming loans
103,417
107,293
115,587
85,462
68,902
Real estate owned, net
2,232
2,575
1,897
1,075
950
Nonperforming assets
$
105,649
109,868
117,484
86,537
69,852
Nonaccrual troubled debt restructuring *
$
10,704
17,120
17,562
17,375
9,043
Accruing troubled debt restructuring
21,431
17,684
17,888
15,977
22,956
Total troubled debt restructuring
$
32,135
34,804
35,450
33,352
31,999
Nonperforming loans to total loans
0.98
%
1.00
%
1.06
%
0.97
%
0.78
%
Nonperforming assets to total assets
0.77
%
0.80
%
0.85
%
0.81
%
0.67
%
Allowance for credit losses to total loans
1.27
%
1.30
%
1.29
%
1.05
%
0.66
%
Allowance for total loans excluding PPP loan balance
1.32
%
1.36
%
1.36
%
N/A
N/A
Allowance for credit losses to nonperforming loans
129.99
%
130.68
%
121.63
%
108.70
%
84.09
%
*
Amounts included in nonperforming loans above.
Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) ( dollars in thousands)
At December 31, 2020
Pass
Special mention*
Substandard**
Doubtful***
Loss
Loans receivable
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
At December 31, 2019
Personal Banking:
Residential mortgage loans
$
2,858,582
—
9,545
—
—
2,868,127
Home equity loans
1,336,111
—
6,807
—
—
1,342,918
Consumer loans
1,120,732
—
4,400
—
—
1,125,132
Total Personal Banking
5,315,425
—
20,752
—
—
5,336,177
Commercial Banking:
Commercial real estate loans
2,538,816
80,570
135,004
—
—
2,754,390
Commercial loans
616,983
42,380
58,744
—
—
718,107
Total Commercial Banking
3,155,799
122,950
193,748
—
—
3,472,497
Total loans
$
8,471,224
122,950
214,500
—
—
8,808,674
*
Includes $31.3 million , $34.7 million , $37.4 million , $13.1 million , and $10.3 million of acquired loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
**
Includes $153.2 million , $129.2 million , $108.2 million , $56.8 million , and $53.1 million of acquired loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
***
Includes $1.1 million of acquired loans at June 30, 2020.
Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
December 31, 2020
*
September 30, 2020
*
June 30, 2020
*
March 31, 2020
*
December 31, 2019
*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans
315
$
28,797
0.9
%
17
$
736
—
%
15
$
629
—
%
358
$
32,755
1.2
%
292
$
23,296
0.8
%
Home equity loans
138
4,763
0.3
%
129
4,984
0.3
%
118
4,569
0.3
%
190
7,061
0.5
%
173
6,469
0.5
%
Consumer loans
1,279
10,574
0.7
%
1,078
8,586
0.6
%
629
7,199
0.5
%
953
8,774
0.7
%
960
9,208
0.8
%
Commercial real estate loans
43
10,923
0.3
%
28
5,090
0.2
%
46
14,177
0.4
%
58
12,895
0.5
%
43
7,921
0.3
%
Commercial loans
37
6,405
0.5
%
19
1,797
0.1
%
12
1,242
0.1
%
35
7,545
1.1
%
32
1,187
0.2
%
Total loans delinquent 30 days to 59 days
1,812
$
61,462
0.6
%
1,271
$
21,193
0.2
%
820
$
27,816
0.3
%
1,594
$
69,030
0.8
%
1,500
$
48,081
0.5
%
Loans delinquent 60 days to 89 days:
Residential mortgage loans
84
$
5,083
0.2
%
65
$
4,788
0.2
%
64
$
5,364
0.2
%
11
$
511
—
%
67
$
5,693
0.2
%
Home equity loans
47
1,656
0.1
%
56
1,860
0.1
%
59
2,326
0.2
%
65
2,652
0.2
%
66
2,405
0.2
%
Consumer loans
322
2,742
0.2
%
323
3,049
0.2
%
258
2,916
0.2
%
265
2,610
0.2
%
395
3,302
0.3
%
Commercial real estate loans
11
1,615
—
%
14
4,212
0.1
%
18
3,913
0.1
%
12
2,981
0.1
%
19
1,690
0.1
%
Commercial loans
10
864
0.1
%
7
357
—
%
15
1,151
0.1
%
10
309
—
%
17
6,403
0.9
%
Total loans delinquent 60 days to 89 days
474
$
11,960
0.1
%
465
$
14,266
0.1
%
414
$
15,670
0.1
%
363
$
9,063
0.1
%
564
$
19,493
0.2
%
Loans delinquent 90 days or more: **
Residential mortgage loans
168
$
14,489
0.5
%
168
$
14,750
0.5
%
185
$
15,369
0.5
%
129
$
10,457
0.4
%
141
$
12,775
0.4
%
Home equity loans
207
8,441
0.6
%
193
7,845
0.5
%
182
7,060
0.5
%
152
5,816
0.4
%
159
5,688
0.4
%
Consumer loans
720
6,058
0.4
%
696
5,847
0.4
%
709
6,896
0.5
%
445
3,459
0.3
%
590
3,611
0.3
%
Commercial real estate loans
119
25,287
0.8
%
136
35,496
1.1
%
149
29,729
0.9
%
139
25,342
0.9
%
129
25,014
0.9
%
Commercial loans
37
7,325
0.6
%
34
6,310
0.5
%
47
11,535
0.8
%
51
16,685
0.2
%
37
4,739
0.7
%
Total loans delinquent 90 days or more
1,251
$
61,600
0.6
%
1,227
$
70,248
0.7
%
1,272
$
70,589
0.7
%
916
$
61,759
0.7
%
1,056
$
51,827
0.6
%
Total loans delinquent
3,537
$
135,022
1.3
%
2,963
$
105,707
1.0
%
2,506
$
114,075
1.1
%
2,873
$
139,852
1.6
%
3,120
$
119,401
1.4
%
*
Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**
Includes purchased credit deteriorated loans of $6.6 million , $20.3 million , $18.0 million , and $298,000 at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, respectively, and purchased credit impaired loans of $147,000 at December 31, 2019.
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 December 31, 2020:
At December 31, 2020
30-59 days delinquent
*
60-89 days delinquent
*
90 days or greater delinquent
*
Total delinquent
*
Current
*
Total loans receivable
*
Restaurants/bars
$
417
—
%
$
276
—
%
$
754
—
%
$
1,447
—
%
$
91,703
0.9
%
$
93,150
0.9
%
Hotels/hospitality
—
—
%
—
—
%
1,074
—
%
1,074
—
%
177,016
1.7
%
178,090
1.7
%
Gyms and fitness
—
—
%
—
—
%
—
—
%
—
—
%
4,113
—
%
4,113
—
%
Transportation
33
—
%
43
—
%
431
—
%
507
—
%
72,786
0.7
%
73,293
0.7
%
Oil and gas
—
—
%
—
—
%
7
—
%
7
—
%
10,083
0.1
%
10,090
0.1
%
Residential care facilities
—
—
%
—
—
%
500
—
%
500
—
%
246,221
2.3
%
246,721
2.3
%
Retail buildings
1,072
—
%
—
—
%
520
—
%
1,592
—
%
443,275
4.2
%
444,867
4.2
%
Education/student housing
—
—
%
—
—
%
1,872
—
%
1,872
—
%
139,790
1.3
%
141,662
1.3
%
Construction/development:
Education/student housing
—
—
%
—
—
%
—
—
%
—
—
%
51,675
0.5
%
51,675
0.5
%
Hotels/hospitality
—
—
%
—
—
%
—
—
%
—
—
%
25,633
0.2
%
25,633
0.2
%
Residential care facilities
—
—
%
—
—
%
—
—
%
—
—
%
37,604
0.4
%
37,604
0.4
%
All other construction/development
268
—
%
—
—
%
5,465
0.1
%
5,733
0.1
%
183,947
1.7
%
189,680
1.8
%
All other sectors
59,672
0.6
%
11,641
0.1
%
50,977
0.5
%
122,290
1.2
%
8,961,981
84.7
%
9,084,271
85.9
%
Total loans
$
61,462
0.6
%
$
11,960
0.1
%
$
61,600
0.6
%
$
135,022
1.3
%
$
10,445,827
98.7
%
$
10,580,849
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 December 31, 2020. Of these loan deferrals, 257 borrowers applied for and received PPP loans totaling approximately $39.9 million :
Balance as of September 30, 2020
Loans returned to full payment status, net of payments
New loans entered into first deferral
Balance as of December 31, 2020
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
111
$
15,967
0.5
%
90
$
12,914
22
$
3,389
43
$
6,442
0.2
%
Home equity loans
48
3,639
0.2
%
37
2,536
30
1,512
41
2,615
0.2
%
Consumer loans
123
2,348
0.2
%
102
1,950
62
901
83
1,299
0.1
%
Commercial real estate loans
94
183,661
5.5
%
71
68,855
11
3,406
34
118,212
3.5
%
Commercial loans
28
7,085
0.5
%
14
6,071
8
318
22
1,332
0.1
%
Total loans
404
$
212,700
2.0
%
314
$
92,326
133
$
9,526
223
$
129,900
**
1.2
%
*
Percent of total loans outstanding by the respective total amount of that type of loan.
**
As of December 31, 2020, first loan deferrals totaled $9.5 million , second loan deferrals totaled $67.5 million , and third loan deferrals totaled $52.9 million . $91.9 million of loan deferrals expire in Q1 2021 and $38.0 million of loan deferrals expire in Q2 2021. In addition, of the $129.9 million total loan deferrals, $108.7 million are in the hospitality industry.
Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
Quarter ended
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Beginning balance
$
140,209
140,586
92,897
57,941
52,859
CECL adoption
—
—
—
10,792
—
Initial allowance on loans purchased with credit deterioration
—
—
8,845
—
—
Provision
(2,230)
6,818
51,750
27,637
8,223
Charge-offs residential mortgage
(407)
(129)
(38)
(343)
(222)
Charge-offs home equity
(58)
(88)
(173)
(289)
(113)
Charge-offs consumer
(2,623)
(3,356)
(3,191)
(3,488)
(3,142)
Charge-offs commercial real estate
(2,770)
(532)
(690)
(331)
(107)
Charge-offs commercial
(156)
(4,892)
(10,349)
(815)
(1,143)
Recoveries
2,462
1,802
1,535
1,793
1,586
Ending balance
$
134,427
140,209
140,586
92,897
57,941
Net charge-offs to average loans, annualized
0.13
%
0.27
%
0.51
%
0.16
%
0.14
%
Year ended December 31,
2020
2019
Beginning balance
$
57,941
55,214
CECL adoption
10,792
—
Initial allowance on loans purchased with credit deterioration
8,845
—
Provision
83,975
22,659
Charge-offs residential mortgage
(917)
(1,166)
Charge-offs home equity
(608)
(1,121)
Charge-offs consumer
(12,658)
(11,807)
Charge-offs commercial real estate
(4,323)
(5,467)
Charge-offs commercial
(16,212)
(6,651)
Recoveries
7,592
6,280
Ending balance
$
134,427
57,941
Net charge-offs to average loans
0.27
%
0.23
%
December 31, 2020
Originated loans
Acquired loans
Total loans
Balance
Reserve
Balance
Reserve
Balance
Reserve
Residential mortgage loans
$
2,753,593
6,049
314,528
1,217
3,068,121
7,266
Home equity loans
1,175,703
4,579
292,033
1,413
1,467,736
5,992
Consumer loans
1,283,106
14,949
224,887
2,747
1,507,993
17,696
Personal Banking Loans
5,212,402
25,577
831,448
5,377
6,043,850
30,954
Commercial real estate loans
2,567,124
70,707
778,765
19,192
3,345,889
89,899
Commercial loans
1,019,482
6,590
171,628
6,984
1,191,110
13,574
Commercial Banking Loans
3,586,606
77,297
950,393
26,176
4,536,999
103,473
Total Loans
$
8,799,008
102,874
1,781,841
31,553
10,580,849
134,427
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, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
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
$
3,089,916
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
%
$
2,847,932
28,011
3.93
%
Home equity loans
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
%
1,333,748
15,354
4.57
%
Consumer loans
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
%
1,073,565
12,016
4.44
%
Commercial real estate loans
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
%
2,741,687
32,985
4.71
%
Commercial loans
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
%
717,438
9,841
5.37
%
Total loans receivable (a) (b) (d)
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
%
8,714,370
98,207
4.47
%
Mortgage-backed securities (c)
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
%
667,910
4,237
2.54
%
Investment securities (c) (d)
252,898
1,380
2.18
%
216,081
1,336
2.47
%
170,309
1,244
2.92
%
144,152
881
2.44
%
151,289
938
2.48
%
FHLB stock, at cost
23,346
192
3.27
%
25,595
218
3.39
%
22,192
309
5.60
%
15,931
262
6.61
%
13,400
262
7.76
%
Other interest-earning deposits
632,494
178
0.11
%
791,601
221
0.11
%
623,870
185
0.12
%
34,697
135
1.54
%
31,624
169
2.09
%
Total interest-earning assets
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
%
9,578,593
103,813
4.30
%
Noninterest-earning assets (e)
1,066,609
1,088,273
1,858,513
960,303
869,117
Total assets
$
13,791,854
$
13,903,655
$
13,590,131
$
10,597,471
$
10,447,710
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits
$
2,028,155
617
0.12
%
$
2,015,604
648
0.13
%
$
1,884,202
648
0.14
%
$
1,611,111
727
0.18
%
$
1,615,996
792
0.19
%
Interest-bearing demand deposits
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
%
1,769,623
1,570
0.35
%
Money market deposit accounts
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
%
1,845,535
3,226
0.69
%
Time deposits
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
%
1,607,992
7,305
1.80
%
Borrowed funds (f)
352,392
1,469
1.66
%
420,715
717
0.68
%
371,700
296
0.32
%
240,118
709
1.19
%
177,670
444
0.99
%
Junior subordinated debentures
128,752
659
2.00
%
128,658
720
2.19
%
127,472
837
2.60
%
121,809
1,038
3.37
%
121,796
1,136
3.65
%
Total interest-bearing liabilities
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
%
7,138,612
14,473
0.80
%
Noninterest-bearing demand deposits (g)
2,675,986
2,703,266
2,401,368
1,640,180
1,800,861
Noninterest-bearing liabilities
253,966
284,440
882,391
268,139
158,434
Total liabilities
12,241,373
12,362,721
12,061,263
9,247,362
9,097,907
Shareholders' equity
1,550,481
1,540,934
1,528,868
1,350,109
1,349,803
Total liabilities and shareholders' equity
$
13,791,854
$
13,903,655
$
13,590,131
$
10,597,471
$
10,447,710
Net interest income/Interest rate spread
103,751
3.14
%
104,388
3.13
%
98,989
3.27
%
87,619
3.48
%
89,340
3.50
%
Net interest-earning assets/Net interest margin
$
3,413,824
3.26
%
$
3,440,367
3.26
%
$
2,954,114
3.38
%
$
2,298,125
3.66
%
$
2,439,981
3.73
%
Ratio of interest-earning assets to interest-bearing liabilities
1.37X
1.37X
1.34X
1.31X
1.34X
(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 0.23% , 0.29% , 0.35% , 0.53% , and 0.59% , respectively.
(h)
Shown on a FTE basis. GAAP basis yields for the periods indicated were — Loans: 3.94% , 3.96% , 4.06% , 4.35% , and 4.46% , respectively, Investment securities: 1.78% , 2.00% , 2.36% , 2.31% , and 2.34% , respectively, Interest-earning assets: 3.48% , 3.52% , 3.72% , 4.19% , and 4.28% , respectively. GAAP basis net interest rate spreads were 3.11% , 3.10% , 3.24% , 3.47% , and 3.48% , respectively, and GAAP basis net interest margins were 3.23% , 3.23% , 3.34% , 3.64% , and 3.71% , respectively.
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.
Year ended December 31,
2020
2019
Average balance
Interest
Avg. yield/ cost (h)
Average balance
Interest
Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans
$
3,051,582
113,353
3.71
%
$
2,860,765
115,583
4.04
%
Home equity loans
1,436,632
55,875
3.89
%
1,308,908
64,222
4.91
%
Consumer loans
1,338,120
58,878
4.40
%
980,623
44,859
4.57
%
Commercial real estate loans
3,132,976
140,883
4.42
%
2,725,792
132,915
4.81
%
Commercial loans
1,145,143
44,142
3.79
%
678,866
38,565
5.60
%
Loans receivable (a) (b) (d)
10,104,453
413,131
4.09
%
8,554,954
396,144
4.63
%
Mortgage-backed securities (c)
889,744
17,416
1.96
%
639,764
16,670
2.61
%
Investment securities (c) (d)
196,071
4,841
2.47
%
205,757
4,470
2.17
%
FHLB stock, at cost
21,781
981
4.50
%
14,477
1,056
7.29
%
Other interest-earning deposits
520,666
719
0.14
%
23,305
600
2.54
%
Total interest-earning assets
11,732,715
437,088
3.73
%
9,438,257
418,940
4.44
%
Noninterest-earning assets (e)
1,159,405
890,760
Total assets
$
12,892,120
$
10,329,017
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits
$
1,885,517
2,640
0.14
%
$
1,655,495
3,115
0.19
%
Interest-bearing demand deposits
2,432,427
3,358
0.14
%
1,651,393
6,012
0.36
%
Money market deposit accounts
2,224,904
6,995
0.31
%
1,778,661
13,010
0.73
%
Time deposits
1,687,381
22,903
1.36
%
1,555,726
27,079
1.74
%
Borrowed funds (f)
346,442
3,190
0.92
%
206,458
2,865
1.39
%
Junior subordinated debentures
126,683
3,254
2.53
%
120,012
4,833
3.97
%
Total interest-bearing liabilities
8,703,354
42,340
0.49
%
6,967,745
56,914
0.82
%
Noninterest-bearing demand deposits (g)
2,357,725
1,835,622
Noninterest-bearing liabilities
246,294
204,198
Total liabilities
11,307,373
9,007,565
Shareholders' equity
1,584,747
1,321,452
Total liabilities and shareholders' equity
$
12,892,120
$
10,329,017
Net interest income/Interest rate spread
394,748
3.24
%
362,026
3.62
%
Net interest-earning assets/Net interest margin
$
3,029,361
3.36
%
$
2,470,512
3.84
%
Ratio of interest-earning assets to interest-bearing liabilities
1.35X
1.35X
(a)
Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)
Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)
Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)
Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e)
Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)
Average balances include FHLB borrowings, collateralized borrowings, and subordinated debt.
(g)
Average cost of deposits were 0.34% and 0.58% , respectively.
(h)
Shown on a FTE basis. GAAP basis yields for the periods indicated were — Loans: 4.07% and 4.61% , respectively, Investment securities: 2.06% and 2.06% , respectively, Interest-earning assets: 3.70% and 4.42% , respectively. GAAP basis net interest rate spreads were 3.21% and 3.61% , respectively, and GAAP basis net interest margins were 3.34% and 3.82% , respectively.
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SOURCE Northwest Bancshares, Inc.