Northwest Bancshares, Inc. Announces Second Quarter 2015 Earnings and Quarterly Dividend

WARREN, Pa., July 16, 2015

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.14 per share payable on August 13, 2015, to shareholders of record as of July 30, 2015.  This represents the 83^rd consecutive quarter in which the Company has paid a cash dividend. 

In making this announcement, William J. Wagner, President and CEO, noted, "The continued improvement in asset quality was the primary driver for earnings improvement for this quarter versus a year ago.  The provision for loan losses was $7.2 million less this quarter than in 2014.  All other components of income and expense are relatively consistent with the previous year.  We continue to exhibit success in growing our loan portfolio, which increased by $60 million during the quarter and $135 million year-to-date. Unfortunately, charge-offs were elevated this quarter by two commercial loans, a $6.1 million loan to a seed wholesaler and a $2.0 million loan to a hotel operator. These charge-offs did not impact quarterly earnings as reserves had been provided for in earlier periods.  Finally, we remain keenly focused on the integration of LNB Bancorp, Inc. which is anticipated to close on August 14, 2015, and will assist in the continued deployment of our excess capital." 

Net interest income decreased by $373,000, or 0.6%, to $61.7 million for the quarter ended June 30, 2015, from $62.1 million for the quarter ended June 30, 2014 due primarily to a decrease in interest on investment securities of $948,000 which was partially offset by a decrease in interest paid on deposit accounts of $730,000. The decrease in interest on investment securities was a result of higher rate municipal securities being called or maturing and an overall decrease in investment balances as excess liquidity was used to fund loan growth. The decrease in interest paid on deposits reflects the continued shift of customer deposits from time accounts to non-maturity deposits.  

The provision for loan losses decreased by $7.2 million, or 87.3%, to $1.1 million for the quarter ended June 30, 2015, from $8.3 million for the quarter ended June 30, 2014 as overall asset quality continued to improve. Loans 90 days or more delinquent decreased by $13.8 million, or 26.9%, to $37.5 million at June 30, 2015 from $51.3 million at June 30, 2014, while total nonaccrual loans decreased by $38.8 million, or 40.1%, to $58.0 at June 30, 2015 from $96.8 million last year.

Noninterest income decreased by $124,000, or 0.7%, to $17.0 million for the quarter ended June 30, 2015, from $17.1 million for the quarter ended June 30, 2014.  This decrease is due to a decrease in other operating income of $471,000, or 27.9%, due primarily to the timing of FHLB dividend payments in 2014.

Noninterest expense increased by $1.3 million, or 2.5%, to $55.1 million for the quarter ended June 30, 2015, from $53.8 million for the quarter ended June 30, 2014. Processing expenses increased by $753,000 due primarily to recent technology upgrades including the implementation of software that provides Northwest's customers enhanced security for online financial transactions.  Additionally, expenses totaling $467,000 were incurred during the quarter ended June 30, 2015 related to the acquisition of LNB Bancorp, Inc.  Partially offsetting these increases was a decrease in office operations of $360,000 due primarily to reduced collection costs.