WARREN, Pa. — Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2014, of $17.3 million, or $0.19 per diluted share.
This represents a decrease of $235,000, or 1.3%, compared to the same quarter last year when net income was $17.6 million, or $0.19 per diluted share, and an increase of $4.6 million, or 36.8%, compared to the quarter ended June 30, 2014 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 September 30, 2014 were 6.43% and 0.87% compared to 6.18% and 0.88% for the same quarter last year and 4.77% and 0.64% for the quarter ended June 30, 2014.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.13 per share payable on November 10, 2014, to shareholders of record as of October 27, 2014. This represents the 80th consecutive quarter in which the Company has paid a cash dividend.
In making this announcement, William J. Wagner, President and CEO, noted, “We are pleased to report more normal earnings this quarter following a second quarter report that was below expectations. The substantial increase in earnings over the previous quarter resulted almost entirely from continued improvement in credit quality which provided an opportunity to reduce the quarterly provision for loan losses by $4.8 million. All other major components of income remained consistent with the previous quarter. Looking ahead we remain focused on improving shareholder returns by enhancing production and increasing revenues while improving efficiency and controlling operating expense.”
Net interest income decreased by $565,000, or 0.9%, to $61.9 million for the quarter ended September 30, 2014, from $62.5 million for the quarter ended September 30, 2013. Interest income on loans receivable and investment securities decreased by $1.6 million from the prior year which was partially offset by a $1.1 million decrease in interest paid on deposit accounts and borrowed funds. These changes from the previous year were due primarily to the continued low level of market interest rates.
The provision for loan losses decreased by $1.5 million, or 30.6%, to $3.5 million for the quarter ended September 30, 2014, from $5.0 million for the quarter ended September 30, 2013. This decrease is due primarily to the improvement in overall asset quality with loans 90 days or more delinquent decreasing $12.6 million, or 21.5%, and total nonaccrual loans decreasing $33.1 million, or 26.9%, compared to a year ago. Additionally, classified loans and troubled debt restructurings decreased by $35.6 million and $17.5 million, respectively, over the past year
Noninterest income increased by $2.1 million, or 12.9%, to $18.2 million for the quarter ended September 30, 2014, from $16.1 million for the quarter ended September 30, 2013. This increase is due primarily to increases in gain on sale of investments of $743,000 and an increase in other operating income of $787,000, as a result of an increase in the dividends paid on Federal Home Loan Bank stock. Additionally, trust and other financial services income increased by $596,000, due primarily to the acquisition of Evans Capital Management, Inc. on January 1, 2014.
Noninterest expense increased by $3.1 million, or 6.1%, to $53.4 million for the quarter ended September 30, 2014, from $50.3 million for the quarter ended September 30, 2013. This increase was due primarily to a $1.2 million increase in marketing expense relating to an ongoing effort to promote the acquisition of home equity loans and checking accounts. Processing expense increased by $687,000 and professional services increased by $523,000, due primarily to amortization of software upgrades made during the past two years and compliance related consulting engagements designed to enhance and strengthen our compliance management system.
Net income for the nine-month period ended September 30, 2014 of $44.6 million represents a decrease of $1.6 million, or 3.4%, compared to net income of $46.2 million for the nine-month period ended September 30, 2013. Diluted earnings per share for the nine-month period ended September 30, 2014 decreased to $0.48 per share from $0.51 per share in the same period last year. The annualized returns on average shareholders’ equity and average assets were 5.44% and 0.75%, respectively, for the current nine-month period compared to 5.46% and 0.78%, respectively, in the prior year.
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 164 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 (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Savings Bank can be accessed on-line at www.northwestsavingsbank.com.
