Northwest Bancorp, Inc. Announces Quarterly Earnings and Dividend Declaration25 January 2006
Northwest Bancorp, Inc. (Nasdaq: NWSB) announced net income for the quarter ended December 31, 2005 of $14.8 million, or $0.29 per diluted share. This represents an increase of $2.1 million, or 16.4%, over the same quarter last year when net income was $12.7 million, or $0.25 per diluted share. This increase resulted primarily from an increase in noninterest income and a decrease in income tax expense. The increase in noninterest income is primarily a result of increased service charges and fees and the decrease in income tax expense is the result of a lower effective tax rate due primarily to the receipt of federal and state tax credits.
The annualized returns on average shareholders' equity and average assets for the current quarter were 10.03% and 0.92%, respectively, compared to 9.16% and 0.80% for the same quarter last year.
Net income for the current quarter of $14.8 million increased by $807,000, or 5.8%, compared to the quarter ended September 30, 2005 when net income was $14.0 million. This increase is primarily attributable to an increase in noninterest income due to higher service charges and fees as well as a lower effective tax rate.
As previously announced, the Company has changed its fiscal year end from June 30 to December 31, and as such, the results currently being released represent the results of the Company's six-month transition period ended December 31, 2005.
Net income for the six-month transition period ended December 31, 2005 of $28.8 million, or $0.56 per diluted share, represents an increase of $1.9 million, or 7.2% over net income of $26.9 million, or $0.54 per diluted share, for the six-month period ended December 31, 2004.
The annualized returns on average shareholders' equity and average assets were 9.81% and 0.91%, respectively, for the current six-month period compared to 9.67% and 0.85% for the prior-year period.
In making this announcement, William J. Wagner, President and CEO, noted, "We are pleased to again report an increase in earnings despite the challenges of the current interest rate environment. Our net interest margin remained extremely stable over the past twelve months and we were able to realize significant increases in fee income to offset modest increases in operating expense. All things considered, we have realized significant increases in income over the last several years and we remain focused on making further improvements to our business model in the years ahead."
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per share to be paid on February 16, 2006 to shareholders of record as of February 2, 2006. Because of the change in the Company's year end to December 31, the next shareholders' meeting is scheduled to be conducted on May 17, 2006.
During the quarter, the Company announced that it had entered into a merger agreement with Maryland Permanent Bank in Owings Mills, Maryland. Maryland Permanent Bank, which has two offices and assets of $85.0 million, will complement the Company's two existing offices in Baltimore, which have assets of $341.0 million.
Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bancorp, Inc., through its subsidiary Northwest Savings Bank, currently operates 153 community banking locations in Pennsylvania, New York, Ohio, Maryland and Florida. Northwest Savings Bank is a full-service financial institution offering all lines of retail and business banking products as well as trust and investment management services. The Company also operates 50 consumer finance offices in Pennsylvania and New York through its subsidiary, Northwest Consumer Discount Company.
Additional information regarding Northwest Bancorp, Inc. can be accessed on-line at http://www.northwestsavingsbank.com.
In addition to historical information, this release may contain certain forward-looking statements that are based on assumptions and information currently available to management. These forward-looking statements are subject to various risks and uncertainties including, but not limited to, economic, regulatory, competitive and other factors affecting the Company and its operations. Readers are cautioned not to place undue reliance on these forward-looking statements as actual results may differ materially from those expressed or implied. 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 Bancorp, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)
December 31, June 30,
Assets 2005 2005 *
Cash and cash equivalents $83,685 83,651
Interest-earning deposits in other
financial institutions 67,243 52,237
Federal funds sold and other short-term
investments 1,164 -
Marketable securities available-for-sale
(amortized cost of $616,792 and $671,137) 613,836 675,183
Marketable securities held-to-maturity
(market value of $636,507 and $709,468) 634,258 702,979
Total cash, interest-earning deposits
and marketable securities 1,400,186 1,514,050
Mortgage loans -- one-to-four family 2,767,105 2,644,063
Commercial real estate loans 577,130 526,030
Consumer loans 1,160,930 1,099,470
Commercial business loans 150,515 138,884
Total loans receivable 4,655,680 4,408,447
Allowance for loan losses (33,411) (31,563)
Loans receivable, net 4,622,269 4,376,884
Federal Home Loan Bank stock, at cost 33,130 33,055
Accrued interest receivable 25,053 24,387
Real estate owed, net 4,872 6,685
Premises and Equipment, net 96,981 96,028
Bank owned life insurance 106,737 104,573
Goodwill 150,485 142,078
Other intangible assets 11,477 11,920
Other assets 26,117 20,822
Total assets $6,477,307 6,330,482
Liabilities and Shareholders' equity
Liabilities:
Noninterest-bearing demand deposits $289,427 264,746
Interest-bearing demand deposits 668,235 679,422
Savings deposits 1,531,916 1,681,291
Time deposits 2,738,901 2,562,487
Total deposits 5,228,479 5,187,946
Borrowed funds 417,356 410,344
Advances by borrowers for taxes and
insurance 24,742 30,769
Accrued interest payable 4,387 4,020
Other liabilities 11,529 13,151
Junior subordinated debentures 205,156 102,062
Total liabilities 5,891,649 5,748,292
Shareholders' equity:
Preferred stock, $0.10 par value:
50,000,000 shares authorized, no
shares issued - -
Common stock, $0.10 par value:
500,000,000 shares authorized
51,076,836 and 50,843,805 issued,
respectively 5,108 5,084
Paid-in-capital 213,018 210,804
Retained earnings 389,985 367,255
Accumulated other comprehensive income:
Net unrealized gain/(loss) on
securities, net of taxes (384) 4,514
Treasury stock of 766,400 and 0
shares, respectively, at cost (17,183) -
Unearned compensation - Recognition
and Retention Plan (4,886) (5,467)
Total shareholders' equity 585,658 582,190
Total liabilities and shareholders'
equity $6,477,307 6,330,482
Equity to assets 9.04% 9.20%
Book value per share * $11.64 $11.45
Closing market price per share $21.26 $21.26
Full time equivalent employees 1,686 1,660
Number of banking offices 153 153
* - Revised to reflect the adoption of SFAS 123 (revised).
Northwest Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
Three months ended Six months ended
December 31, December 31,
2005 2004* 2005 2004*
Interest income:
Loans receivable $72,155 64,571 141,164 127,998
Mortgage-backed
securities 5,579 6,590 11,332 13,286
Taxable investment
securities 5,607 3,926 10,943 7,688
Tax-free investment
securities 2,938 3,070 5,922 6,162
Interest-earning deposits 433 1,311 1,088 2,467
Total interest income 86,712 79,468 170,449 157,601
Interest expense:
Deposits 33,755 27,049 65,349 53,326
Borrowed funds 7,270 7,033 14,065 14,056
Total interest expense 41,025 34,082 79,414 67,382
Net interest income 45,687 45,386 91,035 90,219
Provision for loan losses 2,311 2,164 4,722 4,003
Net interest income
after provision
for loan losses 43,376 43,222 86,313 86,216
Noninterest income:
Service charges and fees 6,173 4,044 11,949 8,022
Trust and other financial
services income 1,187 1,057 2,267 2,112
Insurance commission
income 624 557 1,272 1,021
Gain on sale of investments - 12 - 142
Gain/(loss) on sale of
loans, net 233 (56) 308 (135)
Gain on sale of real
estate owned, net 301 127 788 152
Income from bank owned
life insurance 1,074 1,095 2,160 2,240
Other operating income 594 665 1,107 1,557
Total noninterest income 10,186 7,501 19,851 15,111
Noninterest expense:
Compensation and
employee benefits 18,909 18,407 36,382 35,537
Premises and occupancy costs 4,799 4,187 9,511 8,318
Office operations 2,894 2,984 5,910 5,677
Processing expenses 2,550 2,576 5,251 5,022
Advertising 595 1,083 1,308 1,701
Amortization of intangible
assets 947 1,075 1,932 2,457
Other expense 3,168 2,292 6,023 4,327
Total noninterest expense 33,862 32,604 66,317 63,039
Income before income taxes 19,700 18,119 39,847 38,288
Income taxes 4,872 5,380 10,998 11,374
Net income $14,828 12,739 28,849 26,914
Basic earnings per share $0.29 $0.26 $0.57 $0.55
Diluted earnings per share $0.29 $0.25 $0.56 $0.54
Return on average equity 10.03% 9.16% 9.81% 9.67%
Return on average assets 0.92% 0.80% 0.91% 0.85%
Basic common shares
outstanding 50,812,098 49,946,824 50,849,807 49,114,517
Diluted common shares
outstanding 51,079,138 50,469,053 51,164,118 49,634,548
* - Revised to reflect the adoption of SFAS 123 (revised).
Northwest Bancorp, Inc. and Subsidiaries
Supplementary data
(Dollars in thousands)
Three months ended Six months ended
December 31, December 31,
2005 2004 2005 2004
Allowance for loan losses
Beginning balance 32,577 29,999 31,563 30,670
Provision 2,311 2,164 4,722 4,003
Charge-offs (1,988) (2,724) (3,639) (5,349)
Recoveries 256 189 510 304
Acquisitions 255 - 255 -
Ending balance 33,411 29,628 33,411 29,628
Net charge-offs to average loans,
annualized 0.15% 0.24% 0.14% 0.24%
December 31, June 30,
2005 2004 2005 2004
Non-performing loans 43,016 32,038 33,610 32,505
Real estate owned, net 4,872 7,274 6,685 3,951
Non-performing assets 47,888 39,312 40,295 36,456
Non-performing loans to total loans 0.92% 0.76% 0.76% 0.80%
Non-performing assets to total assets 0.74% 0.62% 0.64% 0.57%
Allowance for loan losses to total
loans 0.72% 0.70% 0.72% 0.75%
Allowance for loan losses to
non-performing loans 77.67% 92.48% 93.91% 94.35%
Average Balance Sheet
(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.
Three Months Ended December 31,
2005
Average Interest Avg.
Balance Yield/
Cost
ASSETS:
Interest earning assets:
Loans receivable (a) (b) (d) $4,605,314 $72,575 6.30%
Mortgage-backed securities (c) $541,958 $5,579 4.12%
Investment securities (c) (d) (e) $730,216 $9,874 5.41%
FHLB stock $35,167 $252 2.87%
Other interest earning deposits $40,124 $433 4.32%
Total interest earning assets $5,952,779 $88,713 5.96%
Noninterest earning assets (f) $464,377
TOTAL ASSETS $6,417,156
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing liabilities:
Savings accounts $954,593 $3,416 1.42%
Now accounts $669,476 $2,019 1.20%
Money market demand accounts $606,859 $3,972 2.60%
Certificate accounts $2,693,261 $24,348 3.59%
Borrowed funds (g) $417,003 $4,765 4.53%
Debentures $124,233 $2,505 8.00%
Total interest bearing liabilities $5,465,425 $41,025 2.98%
Noninterest bearing liabilities $360,578
Total liabilities $5,826,003
Shareholders' equity $591,153
TOTAL LIABILITIES AND EQUITY $6,417,156
Net interest income/Interest rate
spread $47,688 2.98%
Net interest earning assets/Net
interest margin $487,354 3.20%
Ratio of interest earning assets to
interest bearing liabilities 1.09X
(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 Fannie Mae and FHLMC stock.
(f) Average balances include the effect of unrealized gains or losses
on securities held as available-for-sale.
(g) Average balances include FHLB borrowings, securities sold under
agreements to repurchase and other borrowings.
Average Balance Sheet
(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.
Three Months Ended December 31,
2004
Average Interest Avg.
Balance Yield/
Cost
ASSETS:
Interest earning assets:
Loans receivable (a) (b) (d) $4,193,225 $64,889 6.19%
Mortgage-backed securities (c) $753,321 $6,590 3.50%
Investment securities (c) (d) (e) $634,089 $8,495 5.36%
FHLB stock $37,262 $155 1.66%
Other interest earning deposits $297,722 $1,311 1.76%
Total interest earning assets $5,915,619 $81,440 5.51%
Noninterest earning assets (f) $427,617
TOTAL ASSETS $6,343,236
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing liabilities:
Savings accounts $1,095,351 $3,648 1.33%
Now accounts $664,768 $1,234 0.74%
Money market demand accounts $777,265 $3,467 1.78%
Certificate accounts $2,420,583 $18,700 3.09%
Borrowed funds (g) $443,979 $5,035 4.54%
Debentures $102,062 $1,998 7.83%
Total interest bearing liabilities $5,504,008 $34,082 2.48%
Noninterest bearing liabilities $282,922
Total liabilities $5,786,930
Shareholders' equity $556,306
TOTAL LIABILITIES AND EQUITY $6,343,236
Net interest income/Interest rate
spread $47,358 3.03%
Net interest earning assets/Net
interest margin $411,611 3.20%
Ratio of interest earning assets to
interest bearing liabilities 1.07X
(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 Fannie Mae and FHLMC stock.
(f) Average balances include the effect of unrealized gains or losses
on securities held as available-for-sale.
(g) Average balances include FHLB borrowings, securities sold under
agreements to repurchase and other borrowings.
Average Balance Sheet
(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.
Six Months Ended December 31,
2005
Average Interest Avg.
Balance Yield/
Cost
ASSETS:
Interest earning assets:
Loans receivable (a) (b) (d) $4,532,523 $141,983 6.27%
Mortgage-backed securities (c) $568,879 $11,332 3.98%
Investment securities (c) (d) (e) $731,612 $19,585 5.35%
FHLB stock $34,467 $468 2.72%
Other interest earning deposits $56,594 $1,088 3.84%
Total interest earning assets $5,924,075 $174,456 5.89%
Noninterest earning assets (f) $448,639
TOTAL ASSETS $6,372,714
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing liabilities:
Savings accounts $987,053 $7,035 1.41%
Now accounts $672,092 $3,839 1.13%
Money market demand accounts $610,655 $7,668 2.49%
Certificate accounts $2,642,507 $46,807 3.51%
Borrowed funds (g) $413,946 $9,443 4.53%
Debentures $113,147 $4,622 8.10%
Total interest bearing liabilities $5,439,400 $79,414 2.90%
Noninterest bearing liabilities $345,074
Total liabilities $5,784,474
Shareholders' equity $588,240
TOTAL LIABILITIES AND EQUITY $6,372,714
Net interest income/Interest rate
spread $95,042 2.99%
Net interest earning assets/Net
interest margin $484,675 3.21%
Ratio of interest earning assets to
interest bearing liabilities 1.09X
(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 Fannie Mae and FHLMC stock.
(f) Average balances include the effect of unrealized gains or losses
on securities held as available-for-sale.
(g) Average balances include FHLB borrowings, securities sold under
agreements to repurchase and other borrowings.
Average Balance Sheet
(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.
Six Months Ended December 31,
2004
Average Interest Avg.
Balance Yield/
Cost
ASSETS:
Interest earning assets:
Loans receivable (a) (b) (d) $4,157,376 $128,623 6.19%
Mortgage-backed securities (c) $772,434 $13,286 3.44%
Investment securities (c) (d) (e) $632,350 $16,877 5.34%
FHLB stock $38,073 $291 1.53%
Other interest earning deposits $324,120 $2,467 1.52%
Total interest earning assets $5,924,353 $161,544 5.45%
Noninterest earning assets (f) $423,843
TOTAL ASSETS $6,348,196
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing liabilities:
Savings accounts $1,088,531 $7,325 1.35%
Now accounts $665,356 $2,357 0.71%
Money market demand accounts $832,161 $7,167 1.72%
Certificate accounts $2,384,768 $36,477 3.06%
Borrowed funds (g) $446,854 $10,092 4.52%
Debentures $102,062 $3,964 7.77%
Total interest bearing liabilities $5,519,732 $67,382 2.44%
Noninterest bearing liabilities $272,046
Total liabilities $5,791,778
Shareholders' equity $556,418
TOTAL LIABILITIES AND EQUITY $6,348,196
Net interest income/Interest rate
spread $94,162 3.01%
Net interest earning assets/Net
interest margin $404,621 3.18%
Ratio of interest earning assets to
interest bearing liabilities 1.07X
(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 Fannie Mae and FHLMC stock.
(f) Average balances include the effect of unrealized gains or losses
on securities held as available-for-sale.
(g) Average balances include FHLB borrowings, securities sold under
agreements to repurchase and other borrowings.
Source: prnewswire
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