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Regional bank releases quarterly financial figures

Northwest Bancshares Inc. announced net income for the quarter ended June 30 of $31.0 million, or $0.30 per diluted share, according to a news release.

This represents an increase of $38.0 million compared to the same quarter last year when the company reported a net loss of $7.0 million or $0.07 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended June 30 were 10.48 percent and 1.30 percent compared to 2.44 percent and 0.32 percent for the same quarter last year. 

The current quarter’s earnings were significantly augmented by the sale of the company’s three Maryland offices at a profit of $17.2 million, or $10.3 million after tax, while earnings for the same quarter in the previous year were negatively impacted by a penalty of $37.0 million, or $22.2 million after tax, relating to the prepayment of $700.0 million of long-term, fixed-rate Federal Home Loan Bank borrowings.

The company also announced that its board of directors declared a quarterly cash dividend of $0.16 per share payable on Aug. 17 to shareholders of record as of Aug. 3, the news release said. This is the 91st consecutive quarter in which the company has paid a cash dividend. Based on the market value of the company’s stock as of June 30 this dividend represents an annualized yield of approximately 4.1 percent.

“Excluding the aforementioned profit on the sale of the Maryland offices and costs associated with the closure of our consumer finance business, adjusted non-GAAP earnings for the quarter were $22.3 million, or $0.22 per share, a significant improvement over the first quarter of 2017,” William J. Wagner, president and CEO, said, according to the news release. “With the sale of the Maryland offices and closure of the consumer finance business now completed, our efforts will be focused on the lines of business and markets that are scalable, efficient, and offer meaningful opportunities for growth and earnings enhancement.”

Net interest income increased by $7.2 million, or 9.5 percent, to $82.7 million for the quarter ended June 30 from $75.5 million for the quarter ended June 30, 2016. This increase is due primarily to a $3.2 million, or 3.9 percent, increase in interest income on loans receivable as a result of a $396.9 million, or 5.5 percent, increase in average loans receivable from the prior year period. Also contributing to the increase in net interest income is a $2.9 million, or 70.1 percent, decrease in interest expense on borrowed funds as a result of the prepayment of $700.0 million of long-term FHLB borrowings in the second quarter of 2016.

The provision for loan losses increased by $1.4 million, or 32.5 percent, to $5.6 million for the quarter ended June 30, from $4.2 million for the quarter ended June 30, 2016. This increase relates to the growth in the indirect automobile and commercial business loan portfolios as well as for the closure of the company’s consumer finance subsidiary. Overall credit quality improved slightly with nonaccrual loans decreasing to $72.8 million, or 0.95 percent of total loans, at June 30 from $75.9 million, or 1.04 percent of total loans, at June 30, 2016 and total loan delinquency decreasing to $82.5 million, or 1.07 percent of total loans outstanding, at June 30 from $83.8 million, or 1.15 percent of total loans outstanding, at June 30, 2016.

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