WARREN - Northwest Bancshares, Inc. announced net income of $14.6 million for the quarter ended March 31 of $14.6 million, or 16 cents per diluted share.
This represents a decrease of $658,000, or 4.3 percent, over the same quarter last year and a decrease of $5.8 million, or 28.1 percent, compared to the quarter ended Dec. 31. The annualized returns on average shareholders' equity and average assets for the current quarter were 5.16 percent and .75 percent compared to 5.45 percent and 0.78 percent for the same quarter last year and 7.06 percent and 1.02 percent for the quarter ended Dec. 31.
The company also announced that its board of directors declared a regular quarterly cash dividend of 13 cents per share in addition to the $1 special dividend announced on April 14. Both dividends are payable on May 15 to shareholders of record as of May 1, with an ex-dividend date as established by Nasdaq of April 29.
Northwest's President and CEO William J. Wagner attributed the decrease to the deterioration of two commercial loans. He noted that the net interest margin remained the same, and income from fees increased. Operating expenses increased as well, Wagner said.
Wagner said Northwest was named to Forbes list of America's 50 most trustworthy financial companies.
Net interest income decreased by $3.1 million, or 4.8 percent, to $60.9 million for the quarter ended March 31 from $64 million for the quarter ended March 31, 2013, as decreases in interest income on loans and investment securities of $3.6 million and $881,000 respectively were partially offset by a $1.3 million decrease in interest paid on deposit accounts. These changes from the previous year were due primarily to the continued low level of market interest rates.
The provision for loan losses increased by $327,000, or 4.6 percent, to $7.5 million for the quarter ended March 31, from $7.2 million for the quarter ended March 31, 2013, and increased by $6.5 million compared to the quarter ended Dec. 31. This increase is due primarily to two commercial loans requiring reserves of $4.9 million and $1.2 million, respectively. Asset quality has improved, with loans 90 days or more delinquent decreasing $21.2 million, or 29.2 percent, from a year ago. At March 31, the allowance for loan losses was $76.2 million, or 1.3 percent of total loans, compared to $72 million, or 1.28 percent of total loans, at March 31, 2013. Net charge-offs were $2.6 million, or .18 percent of average loans for the quarter ended March 31 compared to $8.4 million, or 0.59 percent, for the same quarter last year.
Noninterest income increased by $3.3 million, or 20 percent, to $19.7 million for the quarter ended March 31, from $16.4 million for the quarter ended March 31, 2013. This increase is due primarily to a $3.2 million increase in the gain on sale of investments. Additionally, trust and other financial services income increased by $843,000, due primarily to the acquisition of Evans Capital Management Inc. as of January 1. Partially offsetting these increases was a decrease in mortgage banking income of $707,000, due primarily to the retention of the residential mortgage loans that we originated during the current quarter.
Noninterest expense increased by $1.7 million, or 3.3 percent, to $53.2 million for the quarter ended March 31, from $51.5 million for the quarter ended March 31, 2013. This increase was due primarily to a $736,000 increase in processing expense as the result of software upgrades. Additionally, office operations increased by $489,000, due primarily to increased collections costs. Partially offsetting these increases was a decrease in marketing expense of $263,000, which was due to the timing of various campaigns in the current and prior year.
The effective tax rate of 26.5 percent during the quarter ended March 31 is reflective of the expected lower annual tax rate due primarily to the deductibility of dividends paid on the Company's stock held in our Employee Stock Ownership Plan and 401(k) plan.
Headquartered in Warren, Northwest Bancshares Inc. is the holding company of Northwest Savings Bank. Founded in 1896, Northwest Savings Bank is a full-service financial institution. Northwest operates 165 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 under the symbol NWBI.