WARREN, Pa., Jan. 23 /PRNewswire-FirstCall/ -- Northwest Bancorp,
Inc. (NASDAQ:NWSB) announced net income for the quarter ended
December 31, 2007 of $15.9 million, or $0.33 per diluted share.
This represents an increase of $6.1 million, or 61.7%, over the
same quarter last year when net income was $9.8 million, or $0.20
per diluted share. The annualized returns on average shareholders'
equity and average assets for the current quarter were 10.54% and
0.95% compared to 6.42% and 0.60% for the same quarter last year.
Earnings in the current quarter were positively impacted by an
after-tax gain on the sale of investment securities of
approximately $3.0 million, and were negatively affected by an
after-tax non-cash impairment charge of $1.1 million relating to
the write-down of its $7.5 million investment in Freddie Mac
("FHLMC") preferred stock securities. Earnings were also negatively
impacted by the establishment of a litigation reserve in the amount
of $300,000, after tax, relating to the Company's affiliation with
Visa Inc. Prior year quarterly earnings included expense of
approximately $1.9 million, after tax, relating to the retirement
of the Company's trust preferred debt. Adjusting both periods for
these non-core items, earnings were $14.4 million in the current
quarter versus $11.7 million last year. In making this
announcement, William J. Wagner, President and CEO, noted, "We were
pleased to see a positive trend in earnings throughout this
calendar year, primarily due to the increases in net interest
margin and fee income. Much of this increase is due to the success
we have had in changing our balance sheet mix as the commercial
loan portfolio grew 29% and consumer loans increased 9%. With
production personnel near full strength and the recent steepening
of the yield curve, we look forward to continuing a positive trend
in earnings in 2008." Net interest income increased by
approximately $5.0 million, or 11.6%, for the quarter ended
December 31, 2007 compared to the same quarter last year and
increased $734,000, or 1.6%, compared to the quarter ended
September 30, 2007. The net interest margin for the quarter ended
December 31, 2007 was 3.21% compared to 2.96% for the quarter ended
December 31, 2006 and 3.10% for the quarter ended September 30,
2007. Noninterest income increased by approximately $5.4 million,
or 51.9%, for the quarter ended December 31, 2007 compared to the
same quarter last year. This increase resulted primarily from a
gain on the sale of investments of $5.0 million which was partially
offset by a non-cash impairment charge on Freddie Mac preferred
stock of $1.9 million. The remainder of the increase was primarily
attributed to an increase in service charges and fees of
approximately $1.6 million, or 25.0%. Noninterest expense increased
by $304,000, or less than 1%, to $38.6 million for the quarter
ended December 31, 2007, from $38.3 million for the quarter ended
December 31, 2006. Included in the current quarter was legal
expense of $500,000 related to litigation of Visa Inc. reflecting
possible damages for which the Company may be liable as a Visa
member. Included in the prior year quarter is a loss on the early
extinguishment of the Company's trust preferred debt of $3.1
million. The Company also announced that its Board of Directors
declared a quarterly cash dividend of $0.22 per share payable on
February 14, 2008 to shareholders of record as of February 1, 2008.
Net income for the year ended December 31, 2007 of $49.1 million,
or $0.99 per diluted share, represents a decrease of $2.4 million,
or 4.7% compared to net income of $51.5 million, or $1.03 per
diluted share, for the year ended December 31, 2006. The returns on
average shareholders' equity and average assets were 8.18% and
0.73% for the current year compared to 8.60% and 0.79% in the prior
year. In comparing the two calendar years, an increase in net
interest income of $7.6 million, or 4.3%, was partially offset by a
decrease in noninterest income of $3.0 million, or 6.5%. The
increase in net interest income resulted from an increase in net
interest margin of 4 basis points to 3.10% from 3.06%. The decrease
in noninterest income was primarily the result of investment
security losses and write-downs of $3.5 million in the current year
and a gain on the sale of the education loan portfolio of $4.8
million in the prior year. In addition, noninterest expense
increased $12.2 million, or 8.7%, from the prior year excluding the
prior year expense of $3.1 million on the retirement of trust
preferred debt. Adjusting both periods for these non-core items,
earnings were $51.5 million in the current year versus $50.3
million in the prior year. Founded in 1896 and headquartered in
Warren, Pennsylvania, Northwest Bancorp, Inc., through its
subsidiary Northwest Savings Bank, currently operates 166
community-banking offices 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 investment management and trust services. The
Company also operates 51 consumer finance offices in Pennsylvania
and New York through its subsidiary, Northwest Consumer Discount
Company. Northwest Bancorp, Inc.'s stock is listed on the NASDAQ
Global Select Market. Additional information regarding Northwest
Bancorp, Inc. can be accessed on-line at
http://www.northwestsavingsbank.com/. Forward-Looking Statements -
This press release may contain forward- looking statements with
respect to the financial condition and results of operations of
Northwest Bancorp, 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 that could result from an economic downturn;
(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 and non-performing 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 Bancorp, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Dollars in
thousands, except per share amounts) December 31, December 31,
Assets 2007 2006 Cash and cash equivalents $75,905 99,013
Interest-earning deposits in other financial institutions 153,160
41,387 Federal funds sold and other short- term investments 1,551
13,933 Marketable securities available-for- sale (amortized cost of
$1,125,426 and $770,967) 1,133,367 767,514 Marketable securities
held-to-maturity (market value of $0 and $720,515) - 716,967 Total
cash, interest-earning deposits and marketable securities 1,363,983
1,638,814 Loans held for sale 28,412 23,390 Mortgage loans - one-
to four- family 2,386,506 2,371,010 Home equity loans 973,161
867,039 Consumer loans 272,867 278,330 Commercial real estate loans
845,397 693,982 Commercial business loans 331,063 216,345 Total
loans receivable 4,837,406 4,450,096 Allowance for loan losses
(41,784) (37,655) Loans receivable, net 4,795,622 4,412,441 Federal
Home Loan Bank stock, at cost 31,304 34,289 Accrued interest
receivable 27,084 28,033 Real estate owed, net 8,667 6,653 Premises
and equipment, net 110,894 104,866 Bank owned life insurance
118,682 110,864 Goodwill 171,614 155,770 Mortgage servicing rights
8,955 7,688 Other intangible assets 11,782 9,581 Other assets
14,929 18,816 Total assets $6,663,516 6,527,815 Liabilities and
Shareholders' equity Liabilities: Noninterest-bearing demand
deposits $361,102 317,389 Interest-bearing demand deposits 717,991
677,394 Savings deposits 1,426,545 1,402,345 Time deposits
3,036,696 2,969,622 Total deposits 5,542,334 5,366,750 Borrowed
funds 339,115 392,814 Advances by borrowers for taxes and insurance
24,159 22,600 Accrued interest payable 4,356 4,038 Other
liabilities 32,354 33,958 Junior subordinated debentures 108,320
103,094 Total liabilities 6,050,638 5,923,254 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, 51,191,109 and 51,137,227 issued, respectively 5,119
5,114 Paid-in-capital 214,606 211,295 Retained earnings 458,425
425,024 Accumulated other comprehensive loss 816 (11,609) Treasury
stock of 2,610,800 and 1,107,900 shares, respectively, at cost
(66,088) (25,263) Total shareholders' equity 612,878 604,561 Total
liabilities and shareholders' equity $6,663,516 6,527,815 Equity to
assets 9.20% 9.26% Book value per share $12.62 $12.08 Closing
market price per share $26.57 $27.46 Full time equivalent employees
1,805 1,777 Number of banking offices 166 160 Northwest Bancorp,
Inc. and Subsidiaries Consolidated Statements of Income (Dollars in
thousands, except per share amounts) Three months ended Year ended
December 31, December 31, 2007 2006 2007 2006 Interest income:
Loans receivable $82,731 73,617 315,570 286,316 Mortgage-backed
securities 6,993 8,020 29,385 31,523 Taxable investment securities
6,523 8,095 30,583 31,164 Tax-free investment securities 3,078
3,332 12,626 12,986 Interest-earning deposits 729 1,426 7,867 6,584
Total interest income 100,054 94,490 396,031 368,573 Interest
expense: Deposits 46,370 43,164 186,540 156,985 Borrowed funds
5,862 8,467 24,475 34,124 Total interest expense 52,232 51,631
211,015 191,109 Net interest income 47,822 42,859 185,016 177,464
Provision for loan losses 2,522 2,077 8,743 8,480 Net interest
income after provision for loan losses 45,300 40,782 176,273
168,984 Noninterest income: Service charges and fees 7,978 6,380
27,754 24,459 Trust and other financial services income 1,705 1,385
6,223 5,321 Insurance commission income 712 672 2,705 2,550 Gain on
sale of loans, net 94 111 728 4,832 Gain/ (loss) on sale of real
estate owned, net (91) 103 (83) 735 Gain/ (loss) on investment
securities, net 3,058 30 (3,454) 368 Income from bank owned life
insurance 1,160 1,105 4,460 4,344 Mortgage banking income 554 (3)
1,643 479 Other operating income 750 699 3,046 2,938 Total
noninterest income 15,920 10,482 43,022 46,026 Noninterest expense:
Compensation and employee benefits 21,421 19,389 84,217 78,611
Premises and occupancy costs 5,276 5,101 21,375 20,368 Office
operations 3,167 2,994 12,788 12,411 Processing expenses 3,917
3,229 15,019 12,051 Advertising 537 794 3,742 2,818 Amortization of
intangible assets 1,306 921 4,499 3,876 Loss on early
extinguishment of debt - 3,124 - 3,124 Other expense 2,984 2,752
11,102 10,423 Total noninterest expense 38,608 38,304 152,742
143,682 Income before income taxes 22,612 12,960 66,553 71,328
Income taxes 6,698 3,120 17,456 19,792 Net income $15,914 9,840
49,097 51,536 Basic earnings per share $0.33 $0.20 $1.00 $1.03
Diluted earnings per share $0.33 $0.20 $0.99 $1.03 Return on
average equity 10.54% 6.42% 8.18% 8.60% Return on average assets
0.95% 0.60% 0.73% 0.79% Basic common shares outstanding 48,486,394
49,847,297 49,040,617 49,878,812 Diluted common shares outstanding
48,830,692 50,195,839 49,354,161 50,136,308 Northwest Bancorp, Inc.
and Subsidiaries Supplementary data (Dollars in thousands) Three
months Year ended December 31, ended December 31, 2007 2006 2007
2006 Allowance for loan losses Beginning balance $41,669 37,297
37,655 33,411 Provision 2,522 2,077 8,743 8,480 Charge-offs (2,765)
(1,874) (8,190) (7,617) Recoveries 358 155 1,457 1,399 Acquisitions
- - 2,119 1,982 Ending balance $41,784 37,655 41,784 37,655 Net
charge-offs to average loans, annualized 0.20% 0.16% 0.14% 0.14%
December 31, 2007 2006 Non-performing loans $49,610 40,525 Real
estate owned, net 8,667 6,653 Non-performing assets $58,277 47,178
Non-performing loans to total loans 1.03% 0.91% Non-performing
assets to total assets 0.87% 0.72% Allowance for loan losses to
total loans 0.86% 0.85% Allowance for loan losses to non-
performing loans 84.22% 92.92% Reconciliation of the GAAP financial
measures to the aforementioned non- GAAP measures: Three months
Year ended December 31, ended December 31, 2007 2006 2007 2006 GAAP
net income $15,914 9,840 49,097 51,536 Excluding (after-tax):
(Gain)/ loss on investments securities, net (2,975) - 932 (221)
Freddie Mac impairment write- down 1,140 - 1,140 - Visa litigation
reserve 300 - 300 - Gain on sale of education loan portfolio - - -
(2,899) Prior year retirement of trust preferred debt - 1,874 -
1,874 Non-GAAP net income $14,379 11,714 51,469 50,290 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, 2007 2006 Average Interest Avg. Average Interest
Avg. Balance Yield/ Balance Yield/ Cost Cost ASSETS: Interest
earning assets: Loans receivable (a) (b) (d) $4,833,537 $83,147
6.82% 4,423,845 74,048 6.70% Mortgage-backed securities ( c )
549,050 6,993 5.09% 656,494 8,019 4.89% Investment securities ( c )
(d) (e) 732,265 10,764 5.88% 876,549 12,768 5.83% FHLB stock 32,697
494 6.04% 34,282 453 5.29% Other interest earning deposits 66,123
729 4.31% 104,738 1,426 5.33% Total interest earning assets
6,213,672 102,127 6.53% 6,095,908 96,714 6.35% Noninterest earning
assets (f) 473,056 436,445 TOTAL ASSETS 6,686,728 6,532,353
LIABILITIES AND SHAREHOLDERS' EQUITY: Interest bearing liabilities:
Savings accounts 755,354 2,297 1.21% 819,614 2,977 1.44% Now
accounts 712,967 2,532 1.41% 661,518 2,670 1.60% Money market
demand accounts 663,556 6,128 3.66% 588,714 5,414 3.65% Certificate
accounts 3,058,449 35,413 4.59% 2,922,014 32,103 4.36% Borrowed
funds (g) 357,502 3,988 4.43% 391,026 4,528 4.59% Debentures
108,325 1,874 6.77% 198,315 3,939 7.77% Total interest bearing
liabilities 5,656,153 52,232 3.66% 5,581,201 51,631 3.67%
Noninterest bearing liabilities 426,361 337,925 Total liabilities
6,082,514 5,919,126 Shareholders' equity 604,214 613,227 TOTAL
LIABILITIES AND EQUITY 6,686,728 6,532,353 Net interest income/
Interest rate spread 49,895 2.87% 45,083 2.68% Net interest earning
assets/ Net interest margin 557,519 3.21% 514,707 2.96% Ratio of
interest earning assets to interest bearing liabilities 1.10X 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. Year Ended December 31, 2007 2006 Average Interest Avg.
Average Interest Avg. Balance Yield/ Balance Yield/ Cost Cost
ASSETS: Interest earning assets: Loans receivable (a) (b) (d)
$4,660,693 $317,321 6.78% 4,395,274 288,037 6.59% Mortgage-backed
securities ( c ) 584,053 29,385 5.03% 660,986 31,523 4.77%
Investment securities ( c ) (d) (e) 820,337 47,990 5.85% 861,411
49,450 5.74% FHLB stock 33,348 2,017 6.05% 34,292 1,692 4.93% Other
interest earning deposits 150,665 7,867 5.15% 133,218 6,584 4.87%
Total interest earning assets 6,249,096 404,580 6.45% 6,085,181
377,286 6.20% Noninterest earning assets (f) 453,922 437,607 TOTAL
ASSETS 6,703,018 6,522,788 LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest bearing liabilities: Savings accounts 793,172 10,909 1.38%
882,974 12,619 1.43% Now accounts 698,585 11,038 1.58% 663,046
9,396 1.42% Money market demand accounts 637,983 23,551 3.69%
574,820 19,446 3.38% Certificate accounts 3,076,693 141,042 4.58%
2,850,548 115,524 4.05% Borrowed funds (g) 381,262 17,225 4.52%
402,789 18,508 4.59% Debentures 105,850 7,250 6.76% 203,413 15,616
7.57% Total interest bearing liabilities 5,693,545 211,015 3.71%
5,577,590 191,109 3.43% Noninterest bearing liabilities 409,096
346,016 Total liabilities 6,102,641 5,923,606 Shareholders' equity
600,377 599,182 TOTAL LIABILITIES AND EQUITY 6,703,018 6,522,788
Net interest income/ Interest rate spread 193,565 2.74% 186,177
2.77% Net interest earning assets/ Net interest margin 555,551
3.10% 507,591 3.06% Ratio of interest earning assets to interest
bearing liabilities 1.10X 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. DATASOURCE: Northwest Bancorp,
Inc. CONTACT: William J. Wagner, President and Chief Executive
Officer, or William W. Harvey, Jr., Executive Vice President and
Chief Financial Officer of Northwest Bancorp, Inc., +1-814-726-2140
Web site: http://www.northwestsavingsbank.com/
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