Northwest Bancshares, Inc. Announces First Quarter 2018 Earnings and Quarterly Dividend

WARREN, Pa., April 18, 2018 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2018 of $25.0 million, or $0.24 per diluted share. This represents an increase of $7.3 million, or 40.8%, compared to the same quarter last year when net income was $17.7 million or $0.17 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2018 were 8.40% and 1.08% compared to 6.15% and 0.75% for the same quarter last year.

Northwest Bank (PRNewsfoto/Northwest Bank)

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per share payable on May 17, 2018, to shareholders of record as of May 3, 2018. This is the 94th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's stock as of March 31, 2018, this represents an annualized dividend yield of approximately 4.1%.

In making this announcement, William J. Wagner, Chairman and CEO, noted, "We are pleased that the strategies employed over the past two years to simplify our business model and focus on our core competencies had a noticeable impact on our first quarter operating results. Primarily as a result of the divestiture last year of both our Maryland offices and retirement services business, combined with the closure of our consumer finance subsidiary, operating expenses in the first quarter of 2018 decreased $4.2 million or almost 6% over the previous year. With a greater focus on our core competencies of lending and deposit gathering, we were pleased to realize net loan growth in the first quarter of $88.9 million, or 4.4% on an annualized basis. In addition, deposits grew this quarter by $158.5 million, or 8.1%, on an annualized basis, with $102.7 million of that growth coming from checking accounts. Finally, due primarily to the combined decreases in operating expenses and income taxes, with the latter attributable to the Tax Cuts and Jobs Act in December 2017, our annualized return on assets for the quarter was 1.08%, the first time in recent history that core earnings exceeded 1.00% of assets."

Net interest income increased by $1.2 million, or 1.5%, to $81.8 million for the quarter ended March 31, 2018, from $80.6 million for the quarter ended March 31, 2017. This increase is due primarily to a $2.4 million, or 3.0%, increase in interest income on loans receivable and a $791,000, or 35.6%, increase in interest income on mortgage-backed securities. These increases were primarily the result of increases in the average balance of loans receivable and mortgage-backed securities of $116.8 million and $86.4 million, respectively. Additionally, the average yield on loans receivable and mortgage-backed securities increased by seven and 28 basis points, respectively. Partially offsetting these improvements was an increase in interest expense on deposits of $993,000, or 18.2%, due to the recent increase in market interest rates. The net impact of these changes caused the Company's net interest margin to increase to 3.72% for the quarter ended March 31, 2018 from 3.62% for the same quarter last year.

The provision for loan losses decreased by $428,000, or 9.2%, to $4.2 million for the quarter ended March 31, 2018, from $4.6 million for the quarter ended March 31, 2017. This decrease is due primarily to the improvement in the historical loss rates for commercial loans when compared to last year. Additionally, reserves in the first half of 2017 were elevated in connection with the closure of the Company's consumer finance subsidiary. Also, total nonaccrual loans decreased to $58.7 million, or 0.74% of total loans at March 31, 2018 from $73.3 million, or 0.97% of total loans, at March 31, 2017.

Noninterest income increased by $284,000, or 1.3%, to $21.8 million for the quarter ended March 31, 2018, from $21.5 million for the quarter ended March 31, 2017. Contributing to this increase was an increase in other operating income of $857,000, or 59.9%, which is primarily attributable to the growth in fee income associated with commercial lending activity. Partially offsetting this improvement was an increase in loss on real estate owned of $479,000, or 714.9%, to $546,000 for the current quarter compared to $67,000 for the prior year's quarter, primarily as a result of the sale of one commercial property.

Noninterest expense decreased by $4.2 million, or 5.9%, to $67.4 million for the quarter ended March 31, 2018, from $71.6 million for the quarter ended March 31, 2017. This decrease resulted primarily from a $1.8 million, or 4.6%, decrease in compensation and employee benefits due primarily to restructuring that occurred during 2017, including the closure of the Company's consumer finance subsidiary and the sale of the Company's three Maryland offices and retirement services business. Additionally, office operations decreased by $814,000, or 19.3%, due primarily to internal initiatives designed to reduce customer fraud related losses.

Income tax expense decreased by $1.2 million, or 13.8%, despite an increase in income before taxes of $6.1 million, or 23.7%. As a result of the enactment of the Tax Cuts and Jobs Act in December 2017, the Company's effective tax rate, which includes both federal and state income taxes, decreased to 21.7% for the quarter ended March 31, 2018 from 31.2% for last year's quarter.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest 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 162 full-service community banking offices and ten free standing drive-through facilities in Pennsylvania, New York and Ohio. 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.northwest.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 or the ability to complete sales transactions; 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.

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (Dollars in thousands, except per share amounts)

	March 31, 2018			December 31, 2017		March 31, 2017
Assets
Cash and cash equivalents	$	192,158		77,710		431,948
Marketable securities available-for-sale (amortized cost of $771,110, $800,094 and $874,446, respectively)	757,976			792,535		876,047
Marketable securities held-to-maturity (fair value of $27,324, $29,667 and $42,285, respectively)	27,709			29,678		41,888
Total cash and cash equivalents and marketable securities	977,843			899,923		1,349,883

Residential mortgage loans held for sale	—			3,128		1,595
Residential mortgage loans	2,772,148			2,773,075		2,704,474
Home equity loans	1,288,361			1,310,355		1,305,394
Consumer loans	686,038			671,389		643,105
Commercial real estate loans	2,512,257			2,454,726		2,378,474
Commercial loans	623,463			580,736		530,046
Total loans receivable	7,882,267			7,793,409		7,563,088
Allowance for loan losses	(55,211)			(56,795)		(61,104)
Loans receivable, net	7,827,056			7,736,614		7,501,984

Assets held-for-sale	—			—		150,940
Federal Home Loan Bank stock, at cost	7,694			11,733		7,362
Accrued interest receivable	23,051			23,352		20,945
Real estate owned, net	4,041			5,666		6,242
Premises and Equipment, net	148,184			151,944		159,823
Bank owned life insurance	172,537			171,547		172,516
Goodwill	307,420			307,420		307,420
Other intangible assets	24,149			25,669		30,684
Other assets	29,004			30,066		23,724
Total assets	$	9,520,979		9,363,934		9,731,523

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	1,679,853		1,610,409		1,530,026
Interest-bearing demand deposits	1,476,177			1,442,928		1,448,503
Money market deposit accounts	1,707,837			1,707,450		1,827,028
Savings deposits	1,701,022			1,653,579		1,685,103
Time deposits	1,420,600			1,412,623		1,495,095
Total deposits	7,985,489			7,826,989		7,985,755

Liabilities held-for-sale	—			—		220,627
Borrowed funds	104,558			108,238		137,191
Advances by borrowers for taxes and insurance	43,654			40,825		40,470
Accrued interest payable	528			460		586
Other liabilities	60,283			68,485		58,118
Junior subordinated debentures	111,213			111,213		111,213
Total liabilities	8,305,725			8,156,210		8,553,960

Shareholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued	—			—		—
Common stock, $0.01 par value, 500,000,000 shares authorized, 102,599,662 shares, 102,394,828 shares and 101,987,942 shares issued and outstanding, respectively	1,026			1,027		1,020
Paid-in-capital	734,065			730,719		723,055
Retained earnings	522,384			508,058		480,309
Accumulated other comprehensive loss	(42,221)			(32,080)		(26,821)
Total shareholders' equity	1,215,254			1,207,724		1,177,563
Total liabilities and shareholders' equity	$	9,520,979		9,363,934		9,731,523

Equity to assets	12.76		%	12.90	%	12.10	%
Tangible common equity to assets	9.62		%	9.68	%	8.94	%
Book value per share	$	11.84		11.79		11.55
Tangible book value per share	$	8.61		8.54		8.23
Closing market price per share	$	16.56		16.73		16.84
Full time equivalent employees	2,105			2,106		2,328
Number of banking offices	172			172		176

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share amounts)

	Quarter ended
	March 31,			December 31,		September 30,		June 30,		March 31,
	2018			2017		2017		2017		2017
Interest income:
Loans receivable	$	85,220		87,154		85,373		84,714		82,751
Mortgage-backed securities	3,013			3,016		3,118		2,987		2,222
Taxable investment securities	678			805		957		981		1,006
Tax-free investment securities	390			449		476		529		569
FHLB dividends	97			78		63		50		59
Interest-earning deposits	135			59		244		536		660
Total interest income	89,533			91,561		90,231		89,797		87,267

Interest expense:
Deposits	6,458			5,971		5,795		5,826		5,465
Borrowed funds	1,308			1,350		1,199		1,240		1,225
Total interest expense	7,766			7,321		6,994		7,066		6,690

Net interest income	81,767			84,240		83,237		82,731		80,577
Provision for loan losses	4,209			6,525		3,027		5,562		4,637
Net interest income after provision for loan losses	77,558			77,715		80,210		77,169		75,940

Noninterest income:
Gain/ (loss) on sale of investments	153			(369)		1,497		3		17
Service charges and fees	11,899			12,527		12,724		12,749		11,717
Trust and other financial services income	4,031			4,290		4,793		4,600		4,304
Insurance commission income	2,749			1,874		1,992		2,353		2,794
Loss on real estate owned, net	(546)			(307)		(193)		(230)		(67)
Income from bank owned life insurance	990			2,295		1,078		1,652		1,068
Mortgage banking income	224			225		519		434		240
Gain on sale of offices	—			—		—		17,186		—
Other operating income	2,288			2,370		2,184		2,730		1,431
Total noninterest income	21,788			22,905		24,594		41,477		21,504

Noninterest expense:
Compensation and employee benefits	36,510			39,293		36,556		38,175		38,272
Premises and occupancy costs	7,307			7,293		6,951		7,103		7,516
Office operations	3,408			4,011		3,939		4,170		4,222
Collections expense	512			1,179		568		553		549
Processing expenses	9,706			9,888		9,650		9,639		9,909
Marketing expenses	2,140			2,125		2,488		2,846		2,148
Federal deposit insurance premiums	717			724		771		856		1,167
Professional services	2,277			2,945		2,321		2,452		2,575
Amortization of intangible assets	1,520			1,575		1,691		1,749		1,749
Real estate owned expense	292			195		310		217		282
Restructuring/ acquisition expense	—			164		1,398		2,634		223
Other expense	3,032			2,504		2,156		2,868		3,034
Total noninterest expense	67,421			71,896		68,799		73,262		71,646
Income before income taxes	31,925			28,724		36,005		45,384		25,798

Income tax expense	6,940			6,576		12,414		14,402		8,052
Net income	$	24,985		22,148		23,591		30,982		17,746

Basic earnings per share	$	0.25		0.22		0.23		0.31		0.18
Diluted earnings per share	$	0.24		0.22		0.23		0.30		0.17

Weighted average common shares outstanding - basic	101,598,928			101,293,307		101,163,534		100,950,772		100,653,277
Weighted average common shares outstanding - diluted	103,136,497			102,643,726		102,564,476		102,449,693		102,480,549

Annualized return on average equity	8.40		%	7.31	%	7.81	%	10.48	%	6.15	%
Annualized return on average assets	1.08		%	0.94	%	0.99	%	1.30	%	0.75	%
Annualized return on tangible common equity	11.47		%	10.05	%	10.74	%	14.44	%	8.57	%

Efficiency ratio *	63.64		%	65.48	%	60.94	%	64.36	%	68.25	%
Annualized noninterest expense to average assets *	2.84		%	2.97	%	2.76	%	2.89	%	2.94	%

* Excludes gain on sale of offices, restructuring/ acquisition expenses, and amortization of intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries Asset quality (Unaudited) (Dollars in thousands)

	March 31, 2018			December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017
Nonaccrual loans current:
Residential mortgage loans	$	123		70		318		841		1,864
Home equity loans	269			615		439		158		1,244
Consumer loans	178			317		260		379		633
Commercial real estate loans	11,355			10,080		10,646		16,189		13,347
Commercial loans	2,381			4,178		4,098		5,262		5,335
Total nonaccrual loans current	$	14,306		15,260		15,761		22,829		22,423

Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	1,290		509		200		181		1,001
Home equity loans	232			167		466		164		328
Consumer loans	224			239		200		169		218
Commercial real estate loans	975			1,928		597		474		1,970
Commercial loans	140			25		—		32		328
Total nonaccrual loans delinquent 30 days to 59 days	$	2,861		2,868		1,463		1,020		3,845

Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	755		703		892		896		704
Home equity loans	465			874		499		326		408
Consumer loans	224			500		405		342		242
Commercial real estate loans	399			1,104		5,895		2,233		540
Commercial loans	80			69		3		—		23
Total nonaccrual loans delinquent 60 days to 89 days	$	1,923		3,250		7,694		3,797		1,917

Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	10,660		13,509		11,785		11,637		11,911
Home equity loans	6,707			7,251		6,295		5,744		6,194
Consumer finance loans	3			199		332		536		471
Consumer loans	2,931			3,617		3,244		2,273		2,888
Commercial real estate loans	16,145			15,361		22,583		21,295		20,897
Commercial loans	3,144			3,140		4,177		3,642		2,744
Total nonaccrual loans delinquent 90 days or more	$	39,590		43,077		48,416		45,127		45,105

Total nonaccrual loans	$	58,680		64,455		73,334		72,773		73,290

Total nonaccrual loans	$	58,680		64,455		73,334		72,773		73,290
Loans 90 days past maturity and still accruing	210			502		398		182		265
Nonperforming loans	58,890			64,957		73,732		72,955		73,555
Real estate owned, net	4,041			5,666		5,462		6,030		6,242
Nonperforming assets	$	62,931		70,623		79,194		78,985		79,797

Nonaccrual troubled debt restructuring *	$	11,217		12,285		17,809		17,873		18,273
Accruing troubled debt restructuring	19,749			19,819		20,660		23,987		25,305
Total troubled debt restructuring	$	30,966		32,104		38,469		41,860		43,578

Nonperforming loans to total loans	0.75		%	0.83	%	0.95	%	0.95	%	0.97	%
Nonperforming assets to total assets	0.66		%	0.75	%	0.84	%	0.83	%	0.82	%
Allowance for loan losses to total loans	0.70		%	0.73	%	0.74	%	0.82	%	0.81	%
Allowance for loan losses to nonperforming loans	93.75		%	87.43	%	77.16	%	86.20	%	83.07	%

* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries Loans by credit quality indicators (Unaudited) (Dollars in thousands)

At March 31, 2018	Pass		Special mention *	Substandard **	Doubtful	Loss	Loans receivable
Personal Banking:
Residential mortgage loans	$	2,755,078	—	17,070	—	—	2,772,148
Home equity loans	1,279,137		—	9,224	—	—	1,288,361
Consumer loans	682,433		—	3,605	—	—	686,038
Total Personal Banking	4,716,648		—	29,899	—	—	4,746,547
Commercial Banking:
Commercial real estate loans	2,256,054		57,690	198,513	—	—	2,512,257
Commercial loans	557,613		19,147	46,703	—	—	623,463
Total Commercial Banking	2,813,667		76,837	245,216	—	—	3,135,720
Total loans	$	7,530,315	76,837	275,115	—	—	7,882,267

At December 31, 2017
Personal Banking:
Residential mortgage loans	$	2,758,465	—	17,738	—	—	2,776,203
Home equity loans	1,300,277		—	10,078	—	—	1,310,355
Consumer loans	666,629		—	4,760	—	—	671,389
Total Personal Banking	4,725,371		—	32,576	—	—	4,757,947
Commercial Banking:
Commercial real estate loans	2,216,326		83,537	154,863		—	2,454,726
Commercial loans	511,035		19,297	50,404		—	580,736
Total Commercial Banking	2,727,361		102,834	205,267	—	—	3,035,462
Total loans	$	7,452,732	102,834	237,843	—	—	7,793,409

At September 30, 2017
Personal Banking:
Residential mortgage loans	$	2,725,060	—	18,166	—	—	2,743,226
Home equity loans	1,302,036		—	11,399	—	—	1,313,435
Consumer loans	669,532		—	4,388	—	—	673,920
Total Personal Banking	4,696,628		—	33,953	—	—	4,730,581
Commercial Banking:
Commercial real estate loans	2,196,510		56,118	146,258	—	—	2,398,886
Commercial loans	526,824		18,924	50,923	—	—	596,671
Total Commercial Banking	2,723,334		75,042	197,181	—	—	2,995,557
Total loans	$	7,419,962	75,042	231,134	—	—	7,726,138

At June 30, 2017
Personal Banking:
Residential mortgage loans	$	2,718,866	—	16,916	—	—	2,735,782
Home equity loans	1,307,022		—	8,699	—	—	1,315,721
Consumer loans	655,149		—	2,976	—	—	658,125
Total Personal Banking	4,681,037		—	28,591	—	—	4,709,628
Commercial Banking:
Commercial real estate loans	2,178,996		67,826	149,841	—	—	2,396,663
Commercial loans	521,520		10,269	48,657	—	—	580,446
Total Commercial Banking	2,700,516		78,095	198,498	—	—	2,977,109
Total loans	$	7,381,553	78,095	227,089	—	—	7,686,737

At March 31, 2017
Personal Banking:
Residential mortgage loans	$	2,673,678	—	16,866	—	—	2,690,544
Home equity loans	1,311,707		—	9,212	—	—	1,320,919
Consumer loans	639,574		—	3,531	—	—	643,105
Total Personal Banking	4,624,959		—	29,609	—	—	4,654,568
Commercial Banking:
Commercial real estate loans	2,187,545		48,189	142,740	—	—	2,378,474
Commercial loans	474,662		12,226	43,158	—	—	530,046
Total Commercial Banking	2,662,207		60,415	185,898	—	—	2,908,520
Total loans	$	7,287,166	60,415	215,507	—	—	7,563,088

* Includes $7.9 million $8.6 million, $8.9 million, $9.7 million, and $12.4 million of acquired loans at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, and March 31, 2017, respectively.
** Includes $45.2 million, $46.7 million, $48.2 million, $44.8 million, and $45.3 million of acquired loans at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, and March 31, 2017, respectively.

Northwest Bancshares, Inc. and Subsidiaries Loan delinquency (Unaudited) (Dollars in thousands)

	March 31, 2018			*		December 31, 2017			*		September 30, 2017			*		June 30, 2017			*		March 31, 2017			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	319	$	27,403	1.0	%	317	$	25,784	0.9	%	44	$	2,771	0.1	%	64	$	2,893	0.1	%	280	$	22,254	0.8	%
Home equity loans	200	7,406		0.6	%	218	7,461		0.6	%	191	7,330		0.6	%	111	4,058		0.3	%	125	4,586		0.4	%
Consumer finance loans	477	1,288		10.3	%	849	2,128		11.4	%	1,045	3,065		11.4	%	581	1,785		4.1	%	308	947		1.8	%
Consumer loans	871	8,252		1.2	%	1,295	10,912		1.7	%	1,119	9,510		1.5	%	818	6,793		1.1	%	714	6,210		1.1	%
Commercial real estate loans	58	20,303		0.8	%	53	8,315		0.3	%	27	5,753		0.2	%	38	4,629		0.2	%	60	9,364		0.4	%
Commercial loans	35	2,912		0.5	%	26	1,865		0.3	%	16	746		0.1	%	20	1,378		0.2	%	29	2,304		0.4	%
Total loans delinquent 30 days to 59 days	1,960	$	67,564	0.9	%	2,758	$	56,465	0.7	%	2,442	$	29,175	0.4	%	1,632	$	21,536	0.3	%	1,516	$	45,665	0.6	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	21	$	1,943	0.1	%	75	$	6,235	0.2	%	84	$	7,196	0.3	%	72	$	6,320	0.2	%	28	$	1,594	0.1	%
Home equity loans	52	2,040		0.2	%	72	2,871		0.2	%	73	2,390		0.2	%	44	1,522		0.1	%	36	1,145		0.1	%
Consumer finance loans	109	233		1.9	%	412	1,113		6.0	%	831	2,190		8.1	%	276	759		1.7	%	164	475		0.9	%
Consumer loans	296	2,259		0.3	%	463	3,351		0.5	%	473	3,283		0.5	%	347	2,475		0.4	%	266	1,766		0.3	%
Commercial real estate loans	23	1,809		0.1	%	25	2,539		0.1	%	22	7,666		0.3	%	14	3,368		0.1	%	19	3,034		0.1	%
Commercial loans	7	196		—	%	10	441		0.1	%	9	196		—	%	9	199		—	%	10	499		0.1	%
Total loans delinquent 60 days to 89 days	508	$	8,480	0.1	%	1,057	$	16,550	0.2	%	1,492	$	22,921	0.3	%	762	$	14,643	0.2	%	523	$	8,513	0.1	%

Loans delinquent 90 days or more: **
Residential mortgage loans	127	$	10,791	0.4	%	158	$	13,890	0.5	%	143	$	12,190	0.4	%	145	$	12,053	0.4	%	139	$	12,326	0.5	%
Home equity loans	148	6,750		0.5	%	177	7,349		0.6	%	150	6,397		0.5	%	126	5,800		0.4	%	143	6,258		0.5	%
Consumer finance loans	7	3		—	%	74	199		1.1	%	124	332		1.2	%	188	536		1.2	%	169	471		0.9	%
Consumer loans	659	2,939		0.4	%	719	3,627		0.6	%	428	3,254		0.5	%	299	2,285		0.4	%	363	2,901		0.5	%
Commercial real estate loans	106	16,723		0.7	%	109	16,284		0.7	%	113	23,310		1.0	%	108	22,044		0.9	%	106	23,009		1.0	%
Commercial loans	35	3,144		0.5	%	37	3,140		0.5	%	45	4,177		0.7	%	39	3,642		0.6	%	39	2,744		0.5	%
Total loans delinquent 90 days or more	1,082	$	40,350	0.5	%	1,274	$	44,489	0.6	%	1,003	$	49,660	0.6	%	905	$	46,360	0.6	%	959	$	47,709	0.6	%

Total loans delinquent	3,550	$	116,394	1.5	%	5,089	$	117,504	1.5	%	4,937	$	101,756	1.3	%	3,299	$	82,539	1.1	%	2,998	$	101,887	1.3	%

* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit impaired loans of $760,000, $1.4 million, $1.2 million, $1.2 million, and $2.6 million at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, respectively.

Northwest Bancshares, Inc. and Subsidiaries Allowance for loan losses (Unaudited) (Dollars in thousands)

	Quarter ended
	March 31, 2018			December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017
Beginning balance	$	56,795		56,927		62,885		61,104		60,939
Provision	4,209			6,525		3,027		5,562		4,637
Charge-offs residential mortgage	(201)			(162)		(215)		(372)		(290)
Charge-offs home equity	(611)			(393)		(528)		(689)		(649)
Charge-offs consumer finance	(1,553)			(2,900)		(3,891)		(782)		(796)
Charge-offs consumer	(3,249)			(3,322)		(3,002)		(2,735)		(2,864)
Charge-offs commercial real estate	(551)			(1,470)		(1,901)		(329)		(474)
Charge-offs commercial	(1,025)			(785)		(509)		(929)		(1,267)
Recoveries	1,397			2,375		1,061		2,055		1,868
Ending balance	$	55,211		56,795		56,927		62,885		61,104

Net charge-offs to average loans, annualized	0.30		%	0.34	%	0.47	%	0.20	%	0.23	%

	March 31, 2018
	Originated loans			Acquired loans		Total loans
	Balance		Reserve	Balance	Reserve	Balance	Reserve
Residential mortgage loans	$	2,663,578	3,724	108,570	89	2,772,148	3,813
Home equity loans	1,040,328		3,717	248,033	728	1,288,361	4,445
Legacy consumer finance loans	12,453		3,031	—	—	12,453	3,031
Consumer loans	588,145		9,140	85,440	807	673,585	9,947
Personal Banking Loans	4,304,504		19,612	442,043	1,624	4,746,547	21,236

Commercial real estate loans	2,235,244		20,218	277,013	3,430	2,512,257	23,648
Commercial loans	564,249		9,293	59,214	1,034	623,463	10,327
Commercial Banking Loans	2,799,493		29,511	336,227	4,464	3,135,720	33,975

Total Loans	$	7,103,997	49,123	778,270	6,088	7,882,267	55,211

Northwest Bancshares, Inc. and Subsidiaries Average balance sheet (Unaudited) (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.

	Quarter ended
	March 31, 2018					December 31, 2017					September 30, 2017					June 30, 2017					March 31, 2017
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,756,142	27,973	4.12	%	$	2,746,992	28,373	4.13	%	$	2,732,546	28,279	4.14	%	$	2,721,445	28,245	4.15	%	$	2,718,904	27,309	4.02	%
Home equity loans	1,298,780		14,786	4.62	%	1,312,146		15,187	4.59	%	1,299,473		14,694	4.49	%	1,311,274		14,344	4.39	%	1,332,647		14,201	4.32	%
Consumer loans	637,691		7,450	4.74	%	633,023		8,004	5.02	%	617,754		7,627	4.90	%	595,170		7,405	4.99	%	580,836		7,219	5.04	%
Consumer finance loans	15,254		768	20.14	%	22,469		1,151	20.32	%	33,469		1,433	17.13	%	40,945		2,110	20.61	%	46,452		2,482	21.37	%
Commercial real estate loans	2,471,422		27,384	4.43	%	2,442,528		28,251	4.53	%	2,389,969		27,234	4.46	%	2,430,594		27,071	4.41	%	2,456,070		26,562	4.33	%
Commercial loans	595,276		7,160	4.81	%	588,420		6,739	4.48	%	593,143		6,659	4.39	%	554,506		6,087	4.34	%	522,847		5,515	4.22	%
Total loans receivable (a) (b) (d)	7,774,565		85,521	4.46	%	7,745,578		87,705	4.49	%	7,666,354		85,926	4.45	%	7,653,934		85,262	4.47	%	7,657,756		83,288	4.41	%
Mortgage-backed securities (c)	558,055		3,013	2.16	%	581,055		3,016	2.08	%	607,454		3,118	2.05	%	592,917		2,987	2.02	%	471,674		2,222	1.88	%
Investment securities (c) (d)	256,287		1,172	1.83	%	301,268		1,495	1.98	%	352,813		1,690	1.92	%	372,398		1,796	1.93	%	377,819		1,881	1.99	%
FHLB stock	9,354		97	4.21	%	10,066		78	3.07	%	7,748		63	3.23	%	7,602		50	2.64	%	7,305		59	3.28	%
Other interest-earning deposits	34,200		135	1.58	%	13,515		59	1.71	%	71,482		243	1.33	%	208,141		536	1.02	%	294,391		660	0.90	%
Total interest-earning assets	8,632,461		89,938	4.23	%	8,651,482		92,353	4.24	%	8,705,851		91,040	4.15	%	8,834,992		90,631	4.11	%	8,808,945		88,110	4.06	%
Noninterest earning assets (e)	779,812					709,753					755,026					716,913					799,569
Total assets	$	9,412,273				$	9,361,235				$	9,460,877				$	9,551,905				$	9,608,514

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	1,670,491	749	0.18	%	$	1,655,798	763	0.18	%	$	1,681,777	776	0.18	%	$	1,714,290	768	0.18	%	$	1,702,528	755	0.18	%
Interest-bearing demand deposits	1,419,459		603	0.17	%	1,419,352		331	0.09	%	1,435,143		297	0.08	%	1,451,787		283	0.08	%	1,422,284		116	0.03	%
Money market deposit accounts	1,706,800		1,053	0.25	%	1,734,444		1,017	0.23	%	1,789,082		1,048	0.23	%	1,839,693		1,064	0.23	%	1,879,292		1,074	0.23	%
Time deposits	1,415,247		4,053	1.16	%	1,421,569		3,860	1.08	%	1,449,830		3,674	1.01	%	1,518,650		3,711	0.98	%	1,573,574		3,520	0.91	%
Borrowed funds (f)	133,231		124	0.38	%	159,599		187	0.46	%	106,282		49	0.18	%	126,685		55	0.17	%	136,872		58	0.17	%
Junior subordinated debentures	111,213		1,184	4.26	%	111,213		1,163	4.09	%	111,213		1,150	4.05	%	111,213		1,185	4.22	%	111,213		1,167	4.20	%
Total interest-bearing liabilities	6,456,441		7,766	0.49	%	6,501,975		7,321	0.45	%	6,573,327		6,994	0.42	%	6,762,318		7,066	0.42	%	6,825,763		6,690	0.40	%
Noninterest-bearing demand deposits (g)	1,606,247					1,599,834					1,573,112					1,544,953					1,506,268
Noninterest bearing liabilities	143,608					57,956					116,021					59,277					106,578
Total liabilities	8,206,296					8,159,765					8,262,460					8,366,548					8,438,609
Shareholders' equity	1,205,977					1,201,470					1,198,417					1,185,357					1,169,905
Total liabilities and shareholders' equity	$	9,412,273				$	9,361,235				$	9,460,877				$	9,551,905				$	9,608,514
Net interest income/ Interest rate spread			82,172	3.74	%			85,032	3.79	%			84,046	3.73	%			83,565	3.69	%			81,420	3.66	%
Net interest-earning assets/ Net interest margin	$	2,176,020		3.86	%	$	2,149,507		3.93	%	$	2,132,524		3.86	%	$	2,072,674		3.78	%	$	1,983,182		3.75	%
Ratio of interest-earning assets to interest-bearing liabilities	1.34X					1.33X					1.32X					1.31X					1.29X

(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 the effect of unrealized gains or losses on securities held as available-for-sale.
(f)	Average balances include FHLB borrowings and collateralized borrowings.
(g)	Average cost of deposits were 0.33%, 0.30%, 0.29%, 0.29 % and 0.27%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.45%, 4.46%, 4.42%, 4.44% and 4.38%, respectively, Investment securities - 1.67%, 1.66%, 1.62%, 1.62% and 1.67%, respectively, Interest-earning assets - 4.21%, 4.20%, 4.11%, 4.08% and 4.02%, respectively. GAAP basis net interest rate spreads were 3.72%, 3.75%, 3.69%, 3.66% and 3.62%, respectively, and GAAP basis net interest margins were 3.84%, 3.89%, 3.82%, 3.75% and 3.71%, respectively.

View original content with multimedia:http://www.prnewswire.com/news-releases/northwest-bancshares-inc-announces-first-quarter-2018-earnings-and-quarterly-dividend-300632118.html