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Northwest Bancshares, Inc. Announces First Quarter 2023 Earnings and Quarterly Dividend
Northwest Bancshares, Inc. Announces First Quarter 2023 Earnings and Quarterly Dividend
PR Newswire
COLUMBUS, Ohio, April 24, 2023
COLUMBUS, Ohio, April 24, 2023 /PRNewswire/ — Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announce…
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Northwest Bancshares, Inc. Announces First Quarter 2023 Earnings and Quarterly Dividend
PR Newswire
COLUMBUS, Ohio, April 24, 2023
COLUMBUS, Ohio, April 24, 2023 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2023 of $33.7 million, or $0.26 per diluted share. This represents an increase of $5.4 million, or 19.1%, compared to the same quarter last year, when net income was $28.3 million, or $0.22 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2023 were 9.11% and 0.97% compared to 7.17% and 0.80% 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 May 15, 2023 to shareholders of record as of May 4, 2023. This is the 114th 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, 2023, this represents an annualized dividend yield of approximately 6.7%.
Louis J. Torchio, President and CEO, added, "The loan growth momentum during the prior year carried into the current quarter with loan growth of $171.8 million, or 1.6%, primarily in our commercial loan portfolios generated through our Corporate Finance group, and our newly launched Equipment Finance and Small Business teams. We are pleased to see this loan growth was funded primarily through the growth in our deposit base, which increased $72.6 million from the prior quarter. Although our yield on interest earning assets has continued to increase to 4.15%, our net interest margin began to tighten, declining by 10 basis points to 3.47%, due to the current interest rate environment and our funding needs. Asset quality metrics remain strong with nonperforming and classified assets dropping to $79.8 million and $208.6 million, respectively."
Mr. Torchio continued, "I am also pleased to report that we have been able to maintain our current deposit base and have not seen outsized deposit outflows due to the recent events in the banking industry. Our uninsured deposits, excluding intercompany accounts and collateralized public funds, continue to remain low at $1.6 billion, or 13.6% of our total deposit base. This low level of uninsured deposits also emphasizes the granularity and diversity of our deposit base with an overall average balance of approximately $16,000. Additionally, our funding availability at March 31, 2023 was approximately $3.6 billion while borrowed funds outstanding were $688.6 million. We are pleased with our current liquidity levels and deposit mix and believe they leave us well positioned for the year."
Net interest income increased by $21.8 million, or 24.1%, to $112.5 million for the quarter ended March 31, 2023, from $90.6 million for the quarter ended March 31, 2022. This increase in net interest income is a result of both the increase in market interest rates and the change in our interest-earning asset mix throughout 2022 and continuing in the first quarter of 2023. Cash in interest-earning deposits was redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest-earning asset to increase to 4.15% for the quarter ended March 31, 2023 from 2.93% for the quarter ended March 31, 2022. Interest income on loans receivable increased $35.6 million, or 40.3%, due to an increase of $988.3 million, or 10.0%, in the average balance of loans in addition to an increase in the yield on loans to 4.63% for the quarter ended March 31, 2023 from 3.63% for the quarter ended March 31, 2022. Partially offsetting this increase in interest income was an increase in the cost of interest-bearing liabilities to 0.96% for the quarter ended March 31, 2023 from 0.25% for the quarter ended March 31, 2022. This increase was largely due to higher market interest rates causing an increase in both deposit and borrowing costs. The net effect of these changes in interest rates and average balances was an increase in the Company's net interest margin to 3.47% for the quarter ended March 31, 2023 from 2.75% for the same quarter last year.
The provision for credit losses increased by $4.9 million, to $5.0 million for the current quarter ended March 31, 2023 from $115,000 for the quarter ended March 31, 2022. This increase was primarily due to growth within our loan portfolio year over year, as well as forecasted economic deterioration reflected in our allowance for credit loss models. The Company continued to experience improvement in asset quality as classified loans decreased by $111.3 million, or 34.8%, to $208.6 million, or 1.88% of total loans, at March 31, 2023 from $319.9 million, or 3.15% of total loans, at March 31, 2022. Total delinquent loans also decreased to $73.4 million, or just 0.66% of loans receivable, at March 31, 2023 from $75.4 million, or 0.74% of gross loans, at March 31, 2022.
Noninterest income decreased by $1.8 million, or 6.9%, to $24.0 million for the quarter ended March 31, 2023, from $25.7 million for the quarter ended March 31, 2022. This decrease was primarily due to a decrease in mortgage banking income of $941,000, or 64.2%, to $524,000 for the quarter ended March 31, 2023 from $1.5 million for the quarter ended March 31, 2022. This decrease reflects the impact of less favorable pricing in the secondary market, due primarily to the volatile interest rate environment, as well as a decrease in mortgage volumes primarily due to higher market interest rates.
Noninterest expense increased by $7.1 million, or 8.8%, to $87.5 million for the quarter ended March 31, 2023 from $80.3 million for the quarter ended March 31, 2022. This increase primarily resulted from a $2.2 million, or 84.9%, increase in professional services to $4.8 million for the quarter ended March 31, 2023 from $2.6 million for the quarter ended March 31, 2022 due to the use of third-party consulting and staffing support. Also contributing to this variance was a $1.8 million increase in processing expenses to $14.4 million for the quarter ended March 31, 2023, from $12.5 million for the quarter ended March 31, 2022 due to the implementation of additional third party software programs. Merger, asset disposition and restructuring expense increased $1.4 million for the quarter ended March 31, 2023 due to the severance and fixed asset charges related to the branch optimization and personnel reduction announced during the fourth quarter of 2022. Lastly, FDIC insurance premiums increased $1.1 million to $2.2 million for the quarter ended March 31, 2023 from $1.1 million for the quarter ended March 31, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.
The provision for income taxes increased by $2.7 million, or 35.4%, to $10.3 million for the quarter ended March 31, 2023 from $7.6 million for the quarter ended March 31, 2022 due primarily to an increase in income before taxes in the current year.
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 March 31, 2023, Northwest operated 142 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; and (9) 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, | December 31, | March 31, | |||
Assets | |||||
Cash and cash equivalents | $ 96,497 | 139,365 | 1,161,006 | ||
Marketable securities available-for-sale (amortized cost of $1,402,805, $1,431,728 and $1,542,170, respectively) | 1,205,510 | 1,218,108 | 1,442,098 | ||
Marketable securities held-to-maturity (fair value of $750,345, $751,384 and $677,376, respectively) | 866,022 | 881,249 | 737,730 | ||
Total cash and cash equivalents and marketable securities | 2,168,029 | 2,238,722 | 3,340,834 | ||
Loans held-for-sale | 7,006 | 9,913 | 19,272 | ||
Residential mortgage loans | 3,499,078 | 3,488,686 | 3,102,617 | ||
Home equity loans | 1,281,546 | 1,297,674 | 1,286,520 | ||
Consumer loans | 2,232,133 | 2,168,655 | 1,895,981 | ||
Commercial real estate loans | 2,826,485 | 2,823,555 | 2,959,893 | ||
Commercial loans | 1,246,023 | 1,131,969 | 874,751 | ||
Total loans receivable | 11,092,271 | 10,920,452 | 10,139,034 | ||
Allowance for credit losses | (121,257) | (118,036) | (99,295) | ||
Loans receivable, net | 10,971,014 | 10,802,416 | 10,039,739 | ||
FHLB stock, at cost | 41,519 | 40,143 | 13,318 | ||
Accrued interest receivable | 36,177 | 35,528 | 26,268 | ||
Real estate owned, net | 524 | 413 | 929 | ||
Premises and equipment, net | 140,301 | 145,909 | 149,970 | ||
Bank-owned life insurance | 256,310 | 255,062 | 254,109 | ||
Goodwill | 380,997 | 380,997 | 380,997 | ||
Other intangible assets, net | 7,651 | 8,560 | 11,654 | ||
Other assets | 191,294 | 205,574 | 193,365 | ||
Total assets | $ 14,193,816 | 14,113,324 | 14,411,183 | ||
Liabilities and shareholders' equity | |||||
Liabilities | |||||
Noninterest-bearing demand deposits | $ 2,896,092 | 2,993,243 | 3,128,849 | ||
Interest-bearing demand deposits | 2,541,503 | 2,686,431 | 2,891,622 | ||
Money market deposit accounts | 2,328,050 | 2,457,569 | 2,680,613 | ||
Savings deposits | 2,194,743 | 2,275,020 | 2,367,438 | ||
Time deposits | 1,576,791 | 1,052,285 | 1,251,878 | ||
Total deposits | 11,537,179 | 11,464,548 | 12,320,400 | ||
Borrowed funds | 688,641 | 681,166 | 121,436 | ||
Subordinated debt | 113,927 | 113,840 | 123,670 | ||
Junior subordinated debentures | 129,379 | 129,314 | 129,119 | ||
Advances by borrowers for taxes and insurance | 49,893 | 47,613 | 44,022 | ||
Accrued interest payable | 2,236 | 3,231 | 563 | ||
Other liabilities | 159,286 | 182,126 | 148,461 | ||
Total liabilities | 12,680,541 | 12,621,838 | 12,887,671 | ||
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, 127,065,400, 127,028,848 and 126,686,373 shares issued and outstanding, respectively | 1,271 | 1,270 | 1,267 | ||
Additional paid-in capital | 1,020,855 | 1,019,647 | 1,012,308 | ||
Retained earnings | 649,672 | 641,727 | 612,481 | ||
Accumulated other comprehensive loss | (158,523) | (171,158) | (102,544) | ||
Total shareholders' equity | 1,513,275 | 1,491,486 | 1,523,512 | ||
Total liabilities and shareholders' equity | $ 14,193,816 | 14,113,324 | 14,411,183 | ||
Equity to assets | 10.66 % | 10.57 % | 10.57 % | ||
Tangible common equity to assets* | 8.15 % | 8.03 % | 8.07 % | ||
Book value per share | $ 11.91 | 11.74 | 12.03 | ||
Tangible book value per share* | $ 8.85 | 8.67 | 8.93 | ||
Closing market price per share | $ 12.03 | 13.98 | 13.51 | ||
Full time equivalent employees | 2,066 | 2,160 | 2.268 | ||
Number of banking offices | 150 | 150 | 170 | ||
* | 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) | |||||||||
Quarter ended | |||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||
Interest income: | |||||||||
Loans receivable | $ 123,745 | 117,137 | 106,943 | 95,574 | 88,174 | ||||
Mortgage-backed securities | 8,537 | 8,603 | 8,683 | 7,158 | 6,360 | ||||
Taxable investment securities | 845 | 840 | 838 | 715 | 677 | ||||
Tax-free investment securities | 700 | 701 | 709 | 683 | 674 | ||||
FHLB stock dividends | 690 | 419 | 148 | 82 | 81 | ||||
Interest-earning deposits | 423 | 153 | 1,295 | 1,684 | 467 | ||||
Total interest income | 134,940 | 127,853 | 118,616 | 105,896 | 96,433 | ||||
Interest expense: | |||||||||
Deposits | 11,238 | 3,871 | 3,157 | 3,341 | 3,751 | ||||
Borrowed funds | 11,238 | 6,938 | 2,710 | 2,290 | 2,059 | ||||
Total interest expense | 22,476 | 10,809 | 5,867 | 5,631 | 5,810 | ||||
Net interest income | 112,464 | 117,044 | 112,749 | 100,265 | 90,623 | ||||
Provision for credit losses - loans | 4,870 | 9,023 | 7,689 | 2,629 | (1,481) | ||||
Provision for credit losses - unfunded commitments (1) | 126 | 1,876 | 3,585 | 3,396 | 1,596 | ||||
Net interest income after provision for credit losses | 107,468 | 106,145 | 101,475 | 94,240 | 90,508 | ||||
Noninterest income: | |||||||||
Loss on sale of investments | — | (1) | (2) | (3) | (2) | ||||
Service charges and fees | 13,189 | 14,125 | 14,323 | 13,673 | 13,067 | ||||
Trust and other financial services income | 6,449 | 6,642 | 6,650 | 7,461 | 7,012 | ||||
Gain/(loss) on real estate owned, net | 108 | 51 | 290 | 291 | (29) | ||||
Income from bank-owned life insurance | 1,269 | 1,663 | 1,475 | 2,008 | 1,983 | ||||
Mortgage banking income | 524 | 477 | 766 | 2,157 | 1,465 | ||||
Other operating income | 2,430 | 4,901 | 3,301 | 4,861 | 2,244 | ||||
Total noninterest income | 23,969 | 27,858 | 26,803 | 30,448 | 25,740 | ||||
Noninterest expense: | |||||||||
Compensation and employee benefits | 46,604 | 46,658 | 46,711 | 48,073 | 46,917 | ||||
Premises and occupancy costs | 7,471 | 7,370 | 7,171 | 7,280 | 7,797 | ||||
Office operations | 3,010 | 3,544 | 3,229 | 3,162 | 3,383 | ||||
Collections expense | 387 | 563 | 322 | 403 | 520 | ||||
Processing expenses | 14,350 | 13,585 | 13,416 | 12,947 | 12,548 | ||||
Marketing expenses | 2,892 | 2,773 | 2,147 | 2,047 | 2,128 | ||||
Federal deposit insurance premiums | 2,223 | 1,319 | 1,200 | 1,130 | 1,129 | ||||
Professional services | 4,758 | 5,434 | 3,363 | 3,333 | 2,573 | ||||
Amortization of intangible assets | 909 | 932 | 1,047 | 1,115 | 1,183 | ||||
Real estate owned expense | 181 | 53 | 61 | 72 | 37 | ||||
Merger, asset disposition and restructuring expense | 2,802 | 4,243 | — | — | 1,374 | ||||
Other expenses | 1,863 | 2,304 | 321 | 1,849 | 759 | ||||
Total noninterest expense | 87,450 | 88,778 | 78,988 | 81,411 | 80,348 | ||||
Income before income taxes | 43,987 | 45,225 | 49,290 | 43,277 | 35,900 | ||||
Income tax expense | 10,308 | 10,576 | 11,986 | 9,851 | 7,613 | ||||
Net income | $ 33,679 | 34,649 | 37,304 | 33,426 | 28,287 | ||||
Basic earnings per share | $ 0.27 | 0.27 | 0.29 | 0.26 | 0.22 | ||||
Diluted earnings per share | $ 0.26 | 0.27 | 0.29 | 0.26 | 0.22 | ||||
Annualized return on average equity | 9.11 % | 9.38 % | 9.84 % | 8.90 % | 7.17 % | ||||
Annualized return on average assets | 0.97 % | 0.98 % | 1.05 % | 0.94 % | 0.80 % | ||||
Annualized return on tangible common equity * | 12.15 % | 12.48 % | 13.84 % | 12.16 % | 10.14 % | ||||
Efficiency ratio (1) ** | 61.38 % | 57.70 % | 55.85 % | 61.43 % | 66.85 % | ||||
Annualized noninterest expense to average assets (1) ** | 2.40 % | 2.37 % | 2.20 % | 2.26 % | 2.19 % | ||||
(1) | Reclassified from other expenses for periods prior to March 31, 2023. Respective ratios updated for reclassification. |
* | Excludes goodwill and other intangible assets (non-GAAP). |
** | Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (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 March 31, | |||
2023 | 2022 | ||
Operating results (non-GAAP): | |||
Net interest income | $ 112,464 | 90,623 | |
Provision for credit losses | 4,996 | 115 | |
Noninterest income | 23,969 | 25,740 | |
Noninterest expense | 84,648 | 78,974 | |
Income taxes | 11,093 | 7,998 | |
Net operating income (non-GAAP) | $ 35,696 | 29,276 | |
Diluted earnings per share (non-GAAP) | $ 0.28 | 0.23 | |
Average equity | $ 1,498,825 | 1,600,728 | |
Average assets | 14,121,496 | 14,423,574 | |
Annualized return on average equity (non-GAAP) | 9.66 % | 7.42 % | |
Annualized return on average assets (non-GAAP) | 1.03 % | 0.82 % | |
Reconciliation of net operating income to net income: | |||
Net operating income (non-GAAP) | $ 35,696 | 29,276 | |
Non-GAAP adjustments, net of tax: | |||
Merger, asset disposition and restructuring expense | (2,017) | (989) | |
Net income (GAAP) | $ 33,679 | 28,287 | |
Diluted earnings per share (GAAP) | $ 0.26 | 0.22 | |
Annualized return on average equity (GAAP) | 9.11 % | 7.17 % | |
Annualized return on average assets (GAAP) | 0.97 % | 0.80 % | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | |||
Total shareholders' equity | 1,513,275 | 1,523,512 | |
Less: goodwill and intangible assets | 388,648 | 392,651 | |
Less: unrealized losses on held-to-maturity investments, net of tax | 83,287 | 43,455 | |
Tangible common equity, including unrealized losses on held-to-maturity investments | 1,041,340 | 1,087,406 | |
Total assets | 14,193,816 | 14,411,183 | |
Less: goodwill and intangible assets | 388,648 | 392,651 | |
Tangible assets | 13,805,168 | 14,018,532 | |
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments | 7.54 % | 7.76 % | |
* | 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. |
Northwest Bancshares, Inc. and Subsidiaries Deposits (Unaudited) (dollars in thousands) | |||||
Generally, deposits in excess of $250,000 are not federally insured. The following table | |||||
As of March 31, 2023 | |||||
Balance | Percent of | Number of | |||
Uninsured deposits per the Call Report (1) | $ 2,917,743 | 25.29 % | 4,950 | ||
Less intercompany deposit accounts | 787,363 | 6.82 % | 13 | ||
Less collateralized deposit accounts | 564,787 | 4.90 % | 275 | ||
Adjusted balance of uninsured deposits | $ 1,565,593 | 13.57 % | 4,662 | ||
(1) | 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 $34.0 million, or 0.29% of total deposits, as of March 31, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $148.2 million, or 1.28% of total deposits, as of March 31, 2023. The average adjusted uninsured deposit account balance was $336,000 as of March 31, 2023. |
The following table provides additional details over the Company's deposit portfolio: | |||||
As of March 31, 2023 | |||||
Balance | Percent of | Number of | |||
Personal noninterest bearing demand deposits | $ 1,428,232 | 12.38 % | 291,561 | ||
Business noninterest bearing demand deposits | 1,467,860 | 12.72 % | 45,924 | ||
Personal interest-bearing demand deposits | 1,627,546 | 14.11 % | 60,459 | ||
Business interest-bearing demand deposits | 913,957 | 7.92 % | 8,451 | ||
Personal money market deposits | 1,626,614 | 14.10 % | 26,867 | ||
Business money market deposits | 701,436 | 6.08 % | 3,008 | ||
Savings deposits | 2,194,743 | 19.02 % | 216,358 | ||
Time deposits | 1,576,791 | 13.67 % | 61,779 | ||
Total deposits | $ 11,537,179 | 100.00 % | 714,407 | ||
Our average deposit account balance as of March 31, 2023 was $16,000. The Company's insured cash sweep deposit balance was $161.6 million as of March 31, 2023. |
Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands) | ||||||||||
March 31, 2023 | ||||||||||
Marketable securities available-for-sale | Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Fair value | Weighted average | |||||
Debt issued by the U.S. government and agencies: | ||||||||||
Due after one year through five years | $ 20,000 | — | (1,421) | 18,579 | 3.60 | |||||
Due after ten years | 52,089 | — | (9,653) | 42,436 | 6.28 | |||||
Debt issued by government sponsored enterprises: | ||||||||||
Due after one year through five years | 20,983 | — | (2,680) | 18,303 | 4.73 | |||||
Due after five years through ten years | 25,600 | — | (3,623) | 21,977 | 5.25 | |||||
Municipal securities: | ||||||||||
Due within one year | 503 | — | — | 503 | 0.25 | |||||
Due after one year through five years | 990 | 27 | (12) | 1,005 | 2.59 | |||||
Due after five years through ten years | 38,384 | 1 | (1,612) | 36,773 | 4.72 | |||||
Due after ten years | 87,322 | 131 | (11,059) | 76,394 | 9.04 | |||||
Corporate debt issues: | ||||||||||
Due after five years through ten years | 13,528 | — | (958) | 12,570 | 5.62 | |||||
Residential mortgage-backed agency securities: | ||||||||||
Fixed rate pass-through | 221,361 | 49 | (28,136) | 193,274 | 6.02 | |||||
Variable rate pass-through | 8,287 | 4 | (149) | 8,142 | 4.24 | |||||
Fixed rate agency CMOs | 886,717 | — | (137,663) | 749,054 | 5.22 | |||||
Variable rate agency CMOs | 27,041 | 35 | (576) | 26,500 | 3.98 | |||||
Total residential mortgage-backed agency securities | 1,143,406 | 88 | (166,524) | 976,970 | 5.34 | |||||
Total marketable securities available-for-sale | $ 1,402,805 | 247 | (197,542) | 1,205,510 | 5.55 | |||||
Marketable securities held-to-maturity | ||||||||||
Government sponsored | ||||||||||
Due after one year through five years | $ 29,477 | — | (3,131) | 26,346 | 3.68 | |||||
Due after five years through ten years | 94,978 | — | (15,560) | 79,418 | 5.72 | |||||
Residential mortgage-backed agency securities: | ||||||||||
Fixed rate pass-through | $ 159,504 | — | (22,260) | 137,244 | 5.58 | |||||
Variable rate pass-through | 521 | — | (7) | 514 | 4.64 | |||||
Fixed rate agency CMOs | 581,013 | — | (74,710) | 506,303 | 6.76 | |||||
Variable rate agency CMOs | 529 | — | (9) | 520 | 6.16 | |||||
Total residential mortgage-backed agency securities | 741,567 | — | (96,986) | 644,581 | 6.51 | |||||
Total marketable securities held-to-maturity | $ 866,022 | — | (115,677) | 750,345 | 6.32 | |||||
Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands) | |||
March 31, 2023 | |||
Amount | Average rate | ||
Term notes payable to the FHLB of Pittsburgh, due within one year | $ 403,000 | 5.17 % | |
Notes payable to the FHLB of Pittsburgh, due within one year | 183,700 | 5.15 % | |
Total term notes payable to the FHLB | 586,700 | 5.17 % | |
Collateralized borrowings, due within one year | 83,290 | 1.16 % | |
Collateral received, due within one year | 18,651 | 5.17 % | |
Subordinated debentures, net of issuance costs | 113,927 | 4.28 % | |
Junior subordinated debentures | 129,379 | 6.77 % | |
Total borrowed funds * | $ 931,947 | 4.92 % | |
* | As of March 31, 2023, the Company had $3.2 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $183.7 million drawn balance, as well as $305.0 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks. |
Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited) | ||
Commercial real estate loans outstanding | ||
The following table provides the various loan sectors in our commercial real estate portfolio at March 31, 2023: | ||
March 31, 2023 | ||
Property type | Percent of portfolio | |
5 or more unit dwelling | 14.1 % | |
Nursing home | 13.4 % | |
Retail building | 11.9 % | |
Commercial office building - non-owner occupied | 8.6 % | |
Residential acquisition & development - 1-4 family, townhouses and apartments | 5.7 % | |
Manufacturing & industrial building | 3.6 % | |
Commercial acquisition and development | 3.6 % | |
Warehouse/storage building | 3.5 % | |
Multi-use building - office and warehouse | 3.5 % | |
Commercial office building - owner occupied | 3.4 % | |
Hotel/motel | 3.1 % | |
Single family dwelling | 3.0 % | |
Other medical facility | 2.7 % | |
Student housing | 2.7 % | |
Multi-use building - commercial, retail and residential | 2.6 % | |
2-4 family | 2.4 % | |
Agricultural real estate | 2.3 % | |
All other | 9.9 % | |
Total | 100.0 % | |
The following table provides our commercial real estate portfolio by state at March 31, 2023: | ||
March 31, 2023 | ||
State | Percent of portfolio | |
New York | 31.0 % | |
Pennsylvania | 30.6 % | |
Ohio | 19.4 % | |
Indiana | 8.7 % | |
Virginia | 2.3 % | |
All other | 8.0 % | |
Total | 100.0 % | |
Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands) | |||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||
Nonaccrual loans current: | |||||||||
Residential mortgage loans | $ 1,423 | 1,496 | 2,186 | 1,970 | 1,884 | ||||
Home equity loans | 1,084 | 1,418 | 1,158 | 1,337 | 1,376 | ||||
Consumer loans | 911 | 836 | 833 | 976 | 1,148 | ||||
Commercial real estate loans | 50,045 | 53,303 | 56,193 | 60,537 | 79,810 | ||||
Commercial loans | 1,468 | 895 | 1,801 | 5,270 | 6,060 | ||||
Total nonaccrual loans current | $ 54,931 | 57,948 | 62,171 | 70,090 | 90,278 | ||||
Nonaccrual loans delinquent 30 days to 59 days: | |||||||||
Residential mortgage loans | $ 688 | 473 | 54 | 2 | 760 | ||||
Home equity loans | 18 | 180 | 316 | 172 | 195 | ||||
Consumer loans | 223 | 178 | 155 | 158 | 190 | ||||
Commercial real estate loans | 1,900 | 1,220 | 55 | 911 | 333 | ||||
Commercial loans | 341 | 145 | 237 | 358 | 4 | ||||
Total nonaccrual loans delinquent 30 days to 59 days | $ 3,170 | 2,196 | 817 | 1,601 | 1,482 | ||||
Nonaccrual loans delinquent 60 days to 89 days: | |||||||||
Residential mortgage loans | $ 919 | 31 | 32 | 199 | 830 | ||||
Home equity loans | 338 | 290 | 432 | 566 | 371 | ||||
Consumer loans | 340 | 341 | 382 | 226 | 280 | ||||
Commercial real estate loans | 1,355 | 473 | 848 | 630 | — | ||||
Commercial loans | 126 | 96 | 132 | 73 | — | ||||
Total nonaccrual loans delinquent 60 days to 89 days | $ 3,078 | 1,231 | 1,826 | 1,694 | 1,481 | ||||
Nonaccrual loans delinquent 90 days or more: | |||||||||
Residential mortgage loans | $ 3,300 | 5,574 | 5,544 | 5,445 | 3,976 | ||||
Home equity loans | 2,190 | 2,257 | 1,779 | 2,081 | 2,968 | ||||
Consumer loans | 2,791 | 2,672 | 2,031 | 1,942 | 1,782 | ||||
Commercial real estate loans | 8,010 | 7,867 | 8,821 | 14,949 | 21,399 | ||||
Commercial loans | 1,139 | 1,491 | 638 | 583 | 795 | ||||
Total nonaccrual loans delinquent 90 days or more | $ 17,430 | 19,861 | 18,813 | 25,000 | 30,920 | ||||
Total nonaccrual loans | $ 78,609 | 81,236 | 83,627 | 98,385 | 124,161 | ||||
Total nonaccrual loans | $ 78,609 | 81,236 | 83,627 | 98,385 | 124,161 | ||||
Loans 90 days past due and still accruing | 652 | 744 | 357 | 379 | 420 | ||||
Nonperforming loans | 79,261 | 81,980 | 83,984 | 98,764 | 124,581 | ||||
Real estate owned, net | 524 | 413 | 450 | 1,205 | 929 | ||||
Nonperforming assets | $ 79,785 | 82,393 | 84,434 | 99,969 | 125,510 | ||||
Nonperforming loans to total loans | 0.71 % | 0.75 % | 0.78 % | 0.95 % | 1.23 % | ||||
Nonperforming assets to total assets | 0.56 % | 0.58 % | 0.61 % | 0.71 % | 0.87 % | ||||
Allowance for credit losses to total loans | 1.09 % | 1.08 % | 1.02 % | 0.94 % | 0.98 % | ||||
Allowance for total loans excluding PPP loan balances | 1.09 % | 1.08 % | 1.02 % | 0.95 % | 0.98 % | ||||
Allowance for credit losses to nonperforming loans | 152.98 % | 143.98 % | 130.76 % | 99.59 % | 79.70 % | ||||
Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands) | ||||||||||||
At March 31, 2023 | Pass | Special mention * | Substandard ** | Doubtful | Loss | Loans receivable | ||||||
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 | ||||||
At September 30, 2022 | ||||||||||||
Personal Banking: | ||||||||||||
Residential mortgage loans | $ 3,388,168 | — | 13,730 | — | — | 3,401,898 | ||||||
Home equity loans | 1,279,968 | — | 5,021 | — | — | 1,284,989 | ||||||
Consumer loans | 2,112,478 | — | 3,760 | — | — | 2,116,238 | ||||||
Total Personal Banking | 6,780,614 | — | 22,511 | — | — | 6,803,125 | ||||||
Commercial Banking: | ||||||||||||
Commercial real estate loans | 2,589,648 | 34,684 | 188,498 | — | — | 2,812,830 | ||||||
Commercial loans | 1,094,830 | 4,004 | 26,736 | — | — | 1,125,570 | ||||||
Total Commercial Banking | 3,684,478 | 38,688 | 215,234 | — | — | 3,938,400 | ||||||
Total loans | $ 10,465,092 | 38,688 | 237,745 | — | — | 10,741,525 | ||||||
At June 30, 2022 | ||||||||||||
Personal Banking: | ||||||||||||
Residential mortgage loans | $ 3,273,117 | — | 13,658 | — | — | 3,286,775 | ||||||
Home equity loans | 1,275,124 | — | 5,368 | — | — | 1,280,492 | ||||||
Consumer loans | 1,998,863 | — | 3,682 | — | — | 2,002,545 | ||||||
Total Personal Banking | 6,547,104 | — | 22,708 | — | — | 6,569,812 | ||||||
Commercial Banking: | ||||||||||||
Commercial real estate loans | 2,600,207 | 51,540 | 224,429 | — | — | 2,876,176 | ||||||
Commercial loans | 954,129 | 2,468 | 30,239 | — | — | 986,836 | ||||||
Total Commercial Banking | 3,554,336 | 54,008 | 254,668 | — | — | 3,863,012 | ||||||
Total loans | $ 10,101,440 | 54,008 | 277,376 | — | — | 10,432,824 | ||||||
At March 31, 2022 | ||||||||||||
Personal Banking: | ||||||||||||
Residential mortgage loans | $ 3,108,366 | — | 13,523 | — | — | 3,121,889 | ||||||
Home equity loans | 1,280,342 | — | 6,178 | — | — | 1,286,520 | ||||||
Consumer loans | 1,892,162 | — | 3,819 | — | — | 1,895,981 | ||||||
Total Personal Banking | 6,280,870 | — | 23,520 | — | — | 6,304,390 | ||||||
Commercial Banking: | ||||||||||||
Commercial real estate loans | 2,633,808 | 62,091 | 263,994 | — | — | 2,959,893 | ||||||
Commercial loans | 839,125 | 3,277 | 32,349 | — | — | 874,751 | ||||||
Total Commercial Banking | 3,472,933 | 65,368 | 296,343 | — | — | 3,834,644 | ||||||
Total loans | $ 9,753,803 | 65,368 | 319,863 | — | — | 10,139,034 | ||||||
* | Includes $7.4 million, $7.4 million, $4.5 million, $7.4 million, and $4.4 million of acquired loans at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively. |
** | Includes $31.9 million, $39.1 million, $51.4 million, $59.3 million, and $71.9 million of acquired loans at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively. |
Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands) | |||||||||||||||||||||||||||||
March 31, | * | December 31, | * | September 30, | * | June 30, | * | March 31, | * | ||||||||||||||||||||
(Number of loans and dollar amount of loans) | |||||||||||||||||||||||||||||
Loans delinquent 30 days to 59 days: | |||||||||||||||||||||||||||||
Residential mortgage loans | 259 | $ 26,992 | 0.8 % | 304 | $ 29,487 | 0.8 % | 26 | $ 1,052 | — % | 20 | $ 785 | — % | 281 | $ 24,057 | 0.8 % | ||||||||||||||
Home equity loans | 111 | 4,235 | 0.3 % | 145 | 6,657 | 0.5 % | 88 | 3,278 | 0.3 % | 107 | 3,664 | 0.3 % | 105 | 3,867 | 0.3 % | ||||||||||||||
Consumer loans | 587 | 6,930 | 0.3 % | 737 | 9,435 | 0.4 % | 549 | 6,546 | 0.3 % | 563 | 6,898 | 0.3 % | 523 | 6,043 | 0.3 % | ||||||||||||||
Commercial real estate loans | 23 | 4,834 | 0.2 % | 29 | 4,008 | 0.1 % | 13 | 1,332 | — % | 26 | 2,701 | 0.1 % | 25 | 3,643 | 0.1 % | ||||||||||||||
Commercial loans | 46 | 4,253 | 0.3 % | 51 | 2,648 | 0.2 % | 48 | 2,582 | 0.2 % | 24 | 1,486 | 0.2 % | 16 | 1,268 | 0.1 % | ||||||||||||||
Total loans delinquent 30 days to 59 days | 1,026 | $ 47,244 | 0.4 % | 1,266 | $ 52,235 | 0.5 % | 724 | $ 14,790 | 0.1 % | 740 | $ 15,534 | 0.1 % | 950 | $ 38,878 | 0.4 % | ||||||||||||||
Loans delinquent 60 days to 89 days: | |||||||||||||||||||||||||||||
Residential mortgage loans | 23 | $ 1,922 | 0.1 % | 65 | $ 5,563 | 0.2 % | 51 | $ 4,320 | 0.1 % | 61 | $ 5,941 | 0.2 % | 24 | $ 1,950 | 0.1 % | ||||||||||||||
Home equity loans | 31 | 1,061 | 0.1 % | 29 | 975 | 0.1 % | 36 | 1,227 | 0.1 % | 28 | 952 | 0.1 % | 28 | 1,138 | 0.1 % | ||||||||||||||
Consumer loans | 185 | 2,083 | 0.1 % | 255 | 3,070 | 0.1 % | 223 | 2,663 | 0.1 % | 178 | 1,460 | 0.1 % | 159 | 1,839 | 0.1 % | ||||||||||||||
Commercial real estate loans | 17 | 1,949 | 0.1 % | 16 | 2,377 | 0.1 % | 13 | 1,741 | 0.1 % | 9 | 1,472 | 0.1 % | 1 | 112 | — % | ||||||||||||||
Commercial loans | 19 | 1,088 | 0.1 % | 24 | 1,115 | 0.1 % | 14 | 808 | 0.1 % | 6 | 341 | — % | 3 | 103 | — % | ||||||||||||||
Total loans delinquent 60 days to 89 days | 275 | $ 8,103 | 0.1 % | 389 | $ 13,100 | 0.1 % | 337 | $ 10,759 | 0.1 % | 282 | $ 10,166 | 0.1 % | 215 | $ 5,142 | 0.1 % | ||||||||||||||
Loans delinquent 90 days or more: ** | |||||||||||||||||||||||||||||
Residential mortgage loans | 39 | $ 3,300 | 0.1 % | 65 | $ 5,574 | 0.2 % | 64 | $ 5,544 | 0.2 % | 63 | $ 5,445 | 0.2 % | 47 | $ 3,976 | 0.1 % | ||||||||||||||
Home equity loans | 65 | 2,190 | 0.2 % | 68 | 2,257 | 0.2 % | 65 | 1,779 | 0.1 % | 69 | 2,081 | 0.2 % | 91 | 2,968 | 0.2 % | ||||||||||||||
Consumer loans | 313 | 3,279 | 0.1 % | 334 | 3,079 | 0.1 % | 289 | 2,388 | 0.1 % | 286 | 2,321 | 0.1 % | 287 | 2,202 | 0.1 % | ||||||||||||||
Commercial real estate loans | 18 | 8,010 | 0.3 % | 19 | 7,867 | 0.3 % | 22 | 8,821 | 0.3 % | 31 | 14,949 | 0.5 % | 41 | 21,399 | 0.7 % | ||||||||||||||
Commercial loans | 24 | 1,302 | 0.1 % | 15 | 1,829 | 0.2 % | 11 | 638 | 0.1 % | 10 | 583 | 0.1 % | 10 | 795 | 0.1 % | ||||||||||||||
Total loans delinquent 90 days or more | 459 | $ 18,081 | 0.2 % | 501 | $ 20,606 | 0.2 % | 451 | $ 19,170 | 0.2 % | 459 | $ 25,379 | 0.2 % | 476 | $ 31,340 | 0.3 % | ||||||||||||||
Total loans delinquent | 1,760 | $ 73,428 | 0.7 % | 2,156 | $ 85,941 | 0.8 % | 1,512 | $ 44,719 | 0.4 % | 1,481 | $ 51,079 | 0.5 % | 1,641 | $ 75,360 | 0.7 % | ||||||||||||||
* | Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding. |
** | Includes purchased credit deteriorated loans of $331,000, $1.7 million, $783,000, $6.3 million, and $7.1 million at March 31, 2023, December 31, 2022, |
Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands) | |||||||||
Quarter ended | |||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||
Beginning balance | $ 118,036 | 109,819 | 98,355 | 99,295 | 102,241 | ||||
ASU 2022-02 Adoption | 426 | — | — | — | — | ||||
Provision | 4,870 | 9,023 | 7,689 | 2,629 | (1,481) | ||||
Charge-offs residential mortgage | (207) | (546) | (166) | (138) | (1,183) | ||||
Charge-offs home equity | (164) | (232) | (535) | (255) | (447) | ||||
Charge-offs consumer | (2,734) | (2,430) | (2,341) | (1,912) | (1,723) | ||||
Charge-offs commercial real estate | (657) | (621) | (1,329) | (4,392) | (1,024) | ||||
Charge-offs commercial | (865) | (404) | (243) | (329) | (681) | ||||
Recoveries | 2,552 | 3,427 | 8,389 | 3,457 | 3,593 | ||||
Ending balance | $ 121,257 | 118,036 | 109,819 | 98,355 | 99,295 | ||||
Net charge-offs to average loans, annualized | 0.08 % | 0.03 % | (0.14) % | 0.14 % | 0.06 % | ||||
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, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||
Average balance | Interest | Avg. | 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 | $ 3,493,617 | 32,009 | 3.66 % | $ 3,439,401 | 30,974 | 3.60 % | $ 3,331,173 | 29,414 | 3.53 % | $ 3,171,469 | 27,327 | 3.45 % | $ 2,980,788 | 25,542 | 3.43 % | ||||||||||||||
Home equity loans | 1,284,425 | 16,134 | 5.09 % | 1,282,733 | 15,264 | 4.72 % | 1,274,918 | 13,658 | 4.25 % | 1,277,440 | 11,961 | 3.76 % | 1,293,986 | 11,472 | 3.60 % | ||||||||||||||
Consumer loans | 2,123,672 | 20,794 | 3.97 % | 2,069,207 | 19,709 | 3.78 % | 1,981,754 | 17,256 | 3.45 % | 1,880,769 | 15,777 | 3.36 % | 1,799,037 | 14,907 | 3.36 % | ||||||||||||||
Commercial real estate loans | 2,824,120 | 37,031 | 5.24 % | 2,822,008 | 35,428 | 4.91 % | 2,842,597 | 34,158 | 4.70 % | 2,915,750 | 31,844 | 4.32 % | 3,000,204 | 29,757 | 3.97 % | ||||||||||||||
Commercial loans | 1,161,298 | 18,353 | 6.32 % | 1,113,178 | 16,315 | 5.74 % | 1,050,124 | 12,978 | 4.84 % | 912,454 | 9,090 | 3.94 % | 824,770 | 6,897 | 3.34 % | ||||||||||||||
Total loans receivable (a) (b) (d) | 10,887,132 | 124,321 | 4.63 % | 10,726,527 | 117,690 | 4.35 % | 10,480,566 | 107,464 | 4.07 % | 10,157,882 | 95,999 | 3.79 % | 9,898,785 | 88,575 | 3.63 % | ||||||||||||||
Mortgage-backed securities (c) | 1,909,676 | 8,537 | 1.79 % | 1,956,167 | 8,603 | 1.76 % | 2,019,715 | 8,683 | 1.72 % | 1,952,375 | 7,158 | 1.47 % | 1,945,173 | 6,360 | 1.31 % | ||||||||||||||
Investment securities (c) (d) | 384,717 | 1,761 | 1.83 % | 386,468 | 1,753 | 1.81 % | 388,755 | 1,762 | 1.81 % | 376,935 | 1,590 | 1.69 % | 373,694 | 1,540 | 1.65 % | ||||||||||||||
FHLB stock, at cost | 39,631 | 690 | 7.06 % | 26,827 | 419 | 6.19 % | 14,028 | 148 | 4.19 % | 13,428 | 82 | 2.44 % | 13,870 | 81 | 2.38 % | ||||||||||||||
Other interest-earning deposits | 30,774 | 423 | 5.50 % | 9,990 | 153 | 5.99 % | 253,192 | 1,295 | 2.00 % | 846,142 | 1,684 | 0.79 % | 1,218,960 | 467 | 0.15 % | ||||||||||||||
Total interest-earning assets | 13,251,930 | 135,732 | 4.15 % | 13,105,979 | 128,618 | 3.89 % | 13,156,256 | 119,352 | 3.60 % | 13,346,762 | 106,513 | 3.20 % | 13,450,482 | 97,023 | 2.93 % | ||||||||||||||
Noninterest-earning assets (e) | 869,566 | 877,121 | 896,663 | 909,943 | 973,092 | ||||||||||||||||||||||||
Total assets | $ 14,121,496 | $ 13,983,100 | $ 14,052,919 | $ 14,256,705 | $ 14,423,574 | ||||||||||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||
Savings deposits (g) | $ 2,198,988 | 690 | 0.13 % | $ 2,298,451 | 585 | 0.10 % | $ 2,350,248 | 594 | 0.10 % | $ 2,361,919 | 589 | 0.10 % | $ 2,334,494 | 592 | 0.10 % | ||||||||||||||
Interest-bearing demand deposits (g) | 2,612,883 | 951 | 0.15 % | 2,718,360 | 509 | 0.07 % | 2,794,338 | 360 | 0.05 % | 2,857,336 | 310 | 0.04 % | 2,875,430 | 321 | 0.05 % | ||||||||||||||
Money market deposit accounts (g) | 2,408,582 | 4,403 | 0.74 % | 2,512,892 | 1,310 | 0.21 % | 2,620,850 | 692 | 0.10 % | 2,653,467 | 668 | 0.10 % | 2,668,105 | 653 | 0.10 % | ||||||||||||||
Time deposits (g) | 1,293,609 | 5,194 | 1.63 % | 1,024,895 | 1,467 | 0.57 % | 1,110,906 | 1,511 | 0.54 % | 1,220,815 | 1,774 | 0.58 % | 1,292,608 | 2,185 | 0.69 % | ||||||||||||||
Borrowed funds (f) | 740,218 | 7,938 | 4.35 % | 451,369 | 3,967 | 3.49 % | 127,073 | 239 | 0.75 % | 123,749 | 167 | 0.54 % | 135,289 | 158 | 0.47 % | ||||||||||||||
Subordinated debt | 113,870 | 1,148 | 4.03 % | 113,783 | 1,148 | 4.04 % | 113,695 | 1,149 | 4.04 % | 119,563 | 1,203 | 4.03 % | 123,608 | 1,250 | 4.05 % | ||||||||||||||
Junior subordinated debentures | 129,335 | 2,152 | 6.66 % | 129,271 | 1,823 | 5.52 % | 129,207 | 1,322 | 4.00 % | 129,142 | 920 | 2.82 % | 129,077 | 651 | 2.02 % | ||||||||||||||
Total interest-bearing liabilities | 9,497,485 | 22,476 | 0.96 % | 9,249,021 | 10,809 | 0.46 % | 9,246,317 | 5,867 | 0.25 % | 9,465,991 | 5,631 | 0.24 % | 9,558,611 | 5,810 | 0.25 % | ||||||||||||||
Noninterest-bearing demand deposits (g) | 2,889,973 | 3,039,000 | 3,093,490 | 3,090,372 | 3,060,698 | ||||||||||||||||||||||||
Noninterest-bearing liabilities | 235,213 | 229,794 | 209,486 | 193,510 | 203,537 | ||||||||||||||||||||||||
Total liabilities | 12,622,671 | 12,517,815 | 12,549,293 | 12,749,873 | 12,822,846 | ||||||||||||||||||||||||
Shareholders' equity | 1,498,825 | 1,465,285 | 1,503,626 | 1,506,832 | 1,600,728 | ||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ 14,121,496 | $ 13,983,100 | $ 14,052,919 | $ 14,256,705 | $ 14,423,574 | ||||||||||||||||||||||||
Net interest income/Interest rate spread | 113,256 | 3.19 % | 117,809 | 3.43 % | 113,485 | 3.35 % | 100,882 | 2.96 % | 91,213 | 2.68 % | |||||||||||||||||||
Net interest-earning assets/Net interest margin | $ 3,754,445 | 3.47 % | $ 3,856,958 | 3.57 % | $ 3,909,939 | 3.42 % | $ 3,880,771 | 3.07 % | $ 3,891,871 | 2.75 % | |||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 1.40X | 1.42X | 1.42X | 1.41X | 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 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 and collateralized borrowings. |
(g) | Average cost of deposits were 0.40%, 0.13%, 0.11%, 0.11%, and 0.12%, respectively and average cost of Interest-bearing deposits were 0.54%, 0.18%, 0.14%, 0.15%, and 0.17%, respectively. |
(h) | Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 4.61%, 4.33%, 4.05%, 3.77%, and 3.61%, respectively, Investment securities — 1.61%, 1.59%, 1.59%, 1.48%, and 1.45%, respectively, Interest-earning assets — 4.13%, 3.87%, 3.58%, 3.18%, and 2.91%, respectively. GAAP basis net interest rate spreads were 3.17%, 3.41%, 3.33%, 2.94%, and 2.66%, respectively, and GAAP basis net interest margins were 3.44%, 3.54%, 3.40%, 3.05%, and 2.73%, respectively. |
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SOURCE Northwest Bancshares, Inc.
Uncategorized
February Employment Situation
By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…
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By Paul Gomme and Peter Rupert
The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.
Temporary help services employment continues a steep decline after a sharp post-pandemic rise.
Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.
The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.
The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.
Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.
As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.
Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.
The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.
unemployment pandemic unemploymentUncategorized
Mortgage rates fall as labor market normalizes
Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.
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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.
The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.
From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250
Below is an explanation of how we got here with the labor market, which all started during COVID-19.
1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.
2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.
Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.
3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too
Total employment data
4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels.
From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.
Here are the jobs that were created and lost in the previous month:
In this jobs report, the unemployment rate for education levels looks like this:
- Less than a high school diploma: 6.1%
- High school graduate and no college: 4.2%
- Some college or associate degree: 3.1%
- Bachelor’s degree or higher: 2.2%
Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.
recession unemployment covid-19 fed federal reserve mortgage rates recession recovery unemploymentUncategorized
Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month
Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month
Last month we though that the January…
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Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush.
What happened? Let's take a closer look.
On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.
Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.
Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K, a 124K revision, which was the biggest one-month negative revision in two years!
Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.
In the past month the Biden department of goalseeking stuff higher before revising it lower, has revised the following data sharply lower:
— zerohedge (@zerohedge) August 30, 2023
- Jobs
- JOLTS
- New Home sales
- Housing Starts and Permits
- Industrial Production
- PCE and core PCE
To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).
And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...
... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...
... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.
While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.
But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).
This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.
There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).
Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!
But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!
The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!
Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...
... but there has been zero job-creation for native born workers since June 2018!
This is a huge issue - especially at a time of an illegal alien flood at the southwest border...
... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.
Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.
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