PR Newswire
WARREN, Pa., April 21, 2014
WARREN, Pa., April 21, 2014 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2014 of $14.6 million, or $0.16 per diluted share. This represents a decrease of $658,000, or 4.3%, over the same quarter last year when net income was $15.3 million, or $0.17 per diluted share, and a decrease of $5.8 million, or 28.1%, compared to the quarter ended December 31, 2013 when net income was $20.4 million, or $0.22 per diluted share. The annualized returns on average shareholders' equity and average assets for the current quarter were 5.16% and 0.75% compared to 5.45% and 0.78% for the same quarter last year and 7.06% and 1.02% for the quarter ended December 31, 2013.
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.13 per share in addition to the $1.00 special dividend announced on April 14, 2014. Both dividends are payable on May 15, 2014, to shareholders of record as of May 1, 2014 with an ex-dividend date, as established by Nasdaq, of April 29, 2014. This represents the 78th consecutive quarter in which the Company has paid a cash dividend.
In making this announcement, William J. Wagner, President and CEO, noted, "Our operating results for the first quarter did not meet our expectations due primarily to the deterioration of two commercial loans. However, core earnings remained relatively consistent with little change in our net interest margin during the quarter, a 6.3% increase in fee-based income from a year ago and a 3.3% year-over-year increase in operating expense. Market reaction to the $1.00 per share special dividend has been positive. We are hopeful that the significant increase in the market value of our shares that followed the announcement will enable Northwest to achieve greater success in pursuing mergers and acquisitions that are beneficial to our shareholders. Finally, we were pleased to learn that Forbes named our company to its list of America's 50 Most Trustworthy Financial Companies."
Net interest income decreased by $3.1 million, or 4.8%, to $60.9 million for the quarter ended March 31, 2014, from $64.0 million for the quarter ended March 31, 2013, as decreases in interest income on loans receivable and investment securities of $3.6 million and $881,000, respectively, were partially offset by a $1.3 million decrease in interest paid on deposit accounts. These changes from the previous year were due primarily to the continued low level of market interest rates.
The provision for loan losses increased by $327,000, or 4.6%, to $7.5 million for the quarter ended March 31, 2014, from $7.2 million for the quarter ended March 31, 2013 and increased by $6.5 million compared to the quarter ended December 31, 2013. This increase is due primarily to two commercial loans requiring reserves of $4.9 million and $1.2 million, respectively. Had it not been for these two extraordinary items, the quarterly provision would have been significantly less as asset quality has improved greatly with loans 90 days or more delinquent decreasing $21.2 million, or 29.2%, from a year ago. At March 31, 2014, the allowance for loan losses was $76.2 million, or 1.30% of total loans, compared to $72.0 million, or 1.28% of total loans, at March 31, 2013. Net charge-offs were $2.6 million, or 0.18% of average loans for the quarter ended March 31, 2014 compared to $8.4 million, or 0.59% for the same quarter last year.
Noninterest income increased by $3.3 million, or 20.0%, to $19.7 million for the quarter ended March 31, 2014, from $16.4 million for the quarter ended March 31, 2013. This increase is due primarily to a $3.2 million increase in the gain on sale of investments. Additionally, trust and other financial services income increased by $843,000, due primarily to our acquisition of Evans Capital Management, Inc. as of January 1, 2014. Partially offsetting these increases was a decrease in mortgage banking income of $707,000, due primarily to the retention of the residential mortgage loans that we originated during the current quarter.
Noninterest expense increased by $1.7 million, or 3.3%, to $53.2 million for the quarter ended March 31, 2014, from $51.5 million for the quarter ended March 31, 2013. This increase was due primarily to a $736,000 increase in processing expense as the result of software upgrades. Additionally, office operations increased by $489,000, due primarily to increased collections costs. Partially offsetting these increases was a decrease in marketing expense of $263,000, which was due to the timing of various campaigns in the current and prior year.
Our effective tax rate of 26.5% during the quarter ended March 31, 2014 is reflective of the expected lower annual tax rate due primarily to the deductibility of dividends paid on the Company's stock held in our Employee Stock Ownership Plan and 401(k) plan.
Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 165 community banking offices in Pennsylvania, New York, Ohio and Maryland and 50 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans. 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 | ||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||
| | | | | | | | (Unaudited) | | |
| | | | | | | | March 31, | | December 31, |
Assets | | 2014 | | 2013 | ||||||
Cash and cash equivalents | | | | $ 81,927 | | 98,122 | ||||
Interest-earning deposits in other financial institutions | | 379,765 | | 293,149 | ||||||
Federal funds sold and other short-term investments | | 634 | | 634 | ||||||
Marketable securities available-for-sale (amortized cost of $1,008,975 and $1,022,078) | 1,009,717 | | 1,016,767 | |||||||
Marketable securities held-to-maturity (fair value of $120,933 and $124,061) | 117,724 | | 121,366 | |||||||
| Total cash, interest-earning deposits and marketable securities | 1,589,767 | | 1,530,038 | ||||||
| | | | | | | | | | |
Residential mortgage loans held for sale | | | - | | 221 | |||||
Residential mortgage loans | | | | 2,485,688 | | 2,482,783 | ||||
Home equity loans | | | | | | 1,065,988 | | 1,083,939 | ||
Other consumer loans | | | | | 223,045 | | 228,348 | |||
Commercial real estate loans | | | 1,664,255 | | 1,608,399 | |||||
Commercial loans | | | | | | 412,098 | | 402,601 | ||
| Total loans receivable | | | | 5,851,074 | | 5,806,291 | |||
Allowance for loan losses | | | | (76,234) | | (71,348) | ||||
| Loans receivable, net | | | | 5,774,840 | | 5,734,943 | |||
| | | | | | | | | | |
Federal Home Loan Bank stock, at cost | | | 43,714 | | 43,715 | |||||
Accrued interest receivable | | | | 22,188 | | 21,821 | ||||
Real estate owned, net | | | | | 16,692 | | 18,203 | |||
Premises and Equipment, net | | | 146,880 | | 146,139 | |||||
Bank owned life insurance | | | | 141,173 | | 140,172 | ||||
Goodwill | | | | | | 175,988 | | 174,463 | ||
Other intangible assets | | | | | 4,025 | | 2,319 | |||
Other assets | | | | | | 59,693 | | 69,663 | ||
| Total assets | | | | | | $ 7,974,960 | | 7,881,476 | |
| | | | | | | | | | |
Liabilities and Shareholders' equity | | | | | ||||||
Liabilities | | | | | ||||||
Noninterest-bearing demand deposits | | | $ 844,743 | | 789,135 | |||||
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