PR Newswire
WARREN, Pa., July 16, 2015
WARREN, Pa., July 16, 2015 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2015 of $15.3 million, or $0.17 per diluted share. This represents an increase of $2.6 million, or 20.8%, compared to the same quarter last year when net income was $12.7 million, or $0.14 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2015 were 5.77% and 0.78% compared to 4.77% and 0.64% for the same quarter last year.
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 83rd 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.
Net income for the six month period ended June 30, 2015 was $31.5 million, or $0.34 per diluted share. This represents an increase of $4.2 million, or 15.4%, compared to the six-month period ended June 30, 2014 when net income was $27.3 million, or $0.30 per diluted share. The annualized returns on average shareholders' equity and average assets for the six month period ended June 30, 2015 were 5.97% and 0.81% compared to 4.97% and 0.69% for the same period last year. Improvement in asset quality was also the primary reason for the increase in net income for the six month period, as the provision for loan losses decreased by $13.8 million, or 87.6%. Partially offsetting this factor was a decrease in the gain on sale of investments of $3.0 million as a portion of the Company's bank stock portfolio was divested in the previous year at a significant gain.
On December 15, 2014, the Company announced that it had entered into a definitive merger agreement to acquire LNB Bancorp, Inc. and its wholly-owned subsidiary, Lorain National Bank, which operates 21 community banking offices in northeast Ohio and has assets of approximately $1.3 billion. The acquisition has been approved by all regulatory agencies and LNB shareholders and is expected to close on August 14, 2015.
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 161 community banking offices in Pennsylvania, New York, Ohio and Maryland and 51 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 ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank 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 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.
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Northwest Bancshares, Inc. and Subsidiaries | | ||||||||||
Consolidated Statements of Financial Condition | | ||||||||||
(Dollars in thousands, except per share amounts) | | ||||||||||
| | | | | | | | (Unaudited) | | | |
| | | | | | | | June 30, | | December 31, | |
Assets | | 2015 | | 2014 | |||||||
Cash and cash equivalents | | | | $ 84,000 | | 87,401 | |||||
Interest-earning deposits in other financial institutions | | 208,311 | | 152,671 | |||||||
Federal funds sold and other short-term investments | | 637 | | 634 | |||||||
Marketable securities available-for-sale (amortized cost of $854,147 and $906,702) | 861,157 | | 912,371 | ||||||||
Marketable securities held-to-maturity (fair value of $62,957 and $106,292) | | 61,464 | | 103,695 | |||||||
| Total cash, interest-earning deposits and marketable securities | | 1,215,569 | | 1,256,772 | ||||||
| | | | | | | | | | | |
Residential mortgage loans | | | | 2,597,170 | | 2,521,456 | |||||
Home equity loans | | | | | | 1,055,829 | | 1,066,131 | |||
Other consumer loans | | | | | 252,391 | | 242,744 | ||||
Commercial real estate loans | | | 1,859,743 | | 1,801,184 | ||||||
Commercial loans | | | | | | 359,524 | | 358,376 | |||
| Total loans receivable | | | | 6,124,657 | | 5,989,891 | ||||
Allowance for loan losses | | | | (59,057) | | (67,518) | |||||
| Loans receivable, net | | | | 6,065,600 | | 5,922,373 | ||||
| | | | | | | | | | | |
Federal Home Loan Bank stock, at cost | | | 38,066 | | 33,293 | ||||||
Accrued interest receivable | | | | 18,682 | | 18,623 | |||||
Real estate owned, net | | | | | 13,864 | | 16,759 | ||||
Premises and Equipment, net | | | 142,302 | | 143,909 | ||||||
Bank owned life insurance | | | | 146,283 | | 144,362 | |||||
Goodwill | | | | | | 175,498 | | 175,323 | |||
Other intangible assets | | | | | 2,759 | | 3,033 | ||||
Other assets | | | | | | 45,887 | | 60,586 | |||
| Total assets | | | | | | $ 7,864,510 | | 7,775,033 | ||
| | | | | | | | | | | |
Liabilities and Shareholders' equity | | | | | |||||||
Liabilities | | | | ||||||||
Noninterest-bearing demand deposits | | | $ 962,347 | | 891,248 | ||||||
Interest-bearing demand deposits | | | 928,417 | | 874,623 | ||||||
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