118th consecutive quarterly dividend of $0.20 per share declared. COLUMBUS, Ohio, April 22, 2024 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NASDAQ:NWBI) announced net income for the quarter ended March 31, 2024 of $29 million, or $0.23 per diluted share. This represents a decrease of $5 million, or 13%, compared to the same quarter last year, when net income was $34 million, or $0.26 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2024 were 7.57% and 0.81% compared to 9.11% and 0.97% for the same quarter last year. The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on May 15, 2024 to shareholders of record as of May 2, 2024. This is the 118th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of March 31, 2024, this represents an annualized dividend yield of approximately 6.9%. The Company is announcing its intentions to pursue a limited, strategic repositioning of the securities portfolio to optimize its balance sheet by liquidating lower-yielding securities in an effort to generate additional future earnings. This initiative will be accomplished through the sale of up to 15% of the Company's investment securities portfolio. The securities losses recognized will be limited to $40 million, equivalent to approximately $30 million after tax. The Company expects a yield pickup of 375-400 basis points from the repositioning and will look to manage the payback period so that it will be approximately three years. The characteristics of investment securities to be sold have an average yield less than 2.00% with a remaining maturity of greater than four years. The proceeds will be used to reduce borrowings in the short term while also opportunistically reinvesting into securities with similar risk, maturity and duration characteristics. Louis J. Torchio, President and CEO, added, "As part of the Company's ongoing efforts to enhance future profitability, we have proactively chosen to reposition our securities portfolio. By executing this strategic securities transaction, we will significantly improve the Company's future earnings potential while simultaneously maintaining our robust capital levels and liquidity. This strategic move aligns with our commitment to long-term financial stability and growth, ensuring that we are well-positioned to capitalize on future opportunities and navigate any potential challenges in the market." "In addition, we are proud of our first quarter earnings, which demonstrate our focus and commitment to achieving solid results in a challenging environment. Our strong performance is a testament to our robust business model, dedicated team, and the trust of our customers," added Mr. Torchio. "Despite industry headwinds, we have emerged stronger by staying true to our core values, prioritizing growth and transformation, and maintaining a customer-centric approach. Our first quarter results provide a solid foundation for continued growth. We are grateful for the support of our employees, customers, partners, and shareholders. Together, we will continue driving success and shape the future of our organization." Balance Sheet Highlights Quarter ended March 31, 2024 March 31, 2023 Dollar change Percent change Average loans receivable $            11,345,308 10,887,132 458,176 4.2 % Average investments 2,051,058 2,294,393 (243,335) (10.6) % Average deposits 11,887,954 11,404,035 483,919 4.2 % Average borrowed funds 469,697 740,218 (270,521) (36.5) %   Average loans receivable increased 4% from the quarter ended March 31, 2023 driven by commercial loans, which grew by $553 million as we have continued to build-out our commercial lending verticals. Average investments declined 11% from the quarter ended March 31, 2023. The decline in investments was driven by the sale of investment securities during the prior year. Average deposits grew 4% from the quarter ended March 31, 2023 driven by a $1.404 billion increase in our average time deposits as we continued competitively positioning our deposit products. This increase was partially offset by a decrease in money market balances as customers shifted balances into higher yielding time deposit accounts. Compared to the quarter ending March 31, 2023, average borrowings saw a significant 37% reduction, primarily attributable to the strategic pay down of wholesale borrowings. This decrease was made possible by a substantial increase in cash reserves, resulting from a notable rise in the average balance of deposits. Income Statement Highlights Quarter ended March 31, 2024 March 31, 2023 Dollar change Percent change Interest income $              160,239 134,940 25,299 18.7 % Interest expense 57,001 22,476 34,525 153.6 % Net interest income $              103,238 112,464 (9,226) (8.2) % Net interest margin 3.10 % 3.46 % N/A Net interest income decreased 8%, and net interest margin decreased to 3.10% from the quarter ended March 31, 2023.  This decrease in net interest income resulted primarily from: A $25 million increase in interest income as cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on loans to improve to 5.33% for the quarter ended March 31, 2024 from 4.63% for the quarter ended March 31, 2023. A $35 million increase in interest expense as the result of higher costs of deposits and borrowings due to the higher interest rate environment and competitive pressure for liquidity. The cost of interest-bearing liabilities increased to 2.28% for the quarter ended March 31, 2024 from 0.96% for the quarter ended March 31, 2023.   Quarter ended March 31, 2024 March 31, 2023 Dollar change Percent change Provision for credit losses - loans $                    4,234 4,870 (636) (13.1) % Provision for credit losses - unfunded commitments (799) 126 (925) (734.1) % Total provision for credit losses expense $                    3,435 4,996 (1,561) (31.2) % The provision for credit losses decreased by 31% from the quarter ended March 31, 2023 primarily driven by a decline in our reserves for unfunded commitments in the current period based on the timing of origination and funding of commercial construction loans and lines of credit coupled with improvements in the economic forecasts. Additionally, the Company continued to experience low levels of classified loans with a slight increase to $229 million or 1.99% of total loans at March 31, 2024 from $209 million, or 1.88% of total loans, at March 31, 2023. Quarter ended March 31, 2024 March 31, 2023 Dollar change Percent change Noninterest income: Gain on sale of SBA loans $                       873 279 594 212.9 % Service charges and fees 15,523 13,189 2,334 17.7 % Trust and other financial services income 7,127 6,449 678 10.5 % Gain on real estate owned, net 57 108 (51) (47.2) % Income from bank-owned life insurance 1,502 1,269 233 18.4 % Mortgage banking income 452 524 (72) (13.7) % Other operating income 2,429 2,151 278 12.9 % Total noninterest income $                  27,963 23,969 3,994 16.7 % Noninterest income increased 17% from the quarter ended March 31, 2023. This increase was primarily due to an increase in service charges and fees driven by deposit-related fees based on customer activity as well as commercial loans fees, gain on sale of SBA loans, and improvements in trust and other financial services income.     Quarter ended March 31, 2024 March 31, 2023 Dollar change Percent change Noninterest expense: Personnel expense $                   51,540 46,604 4,936 10.6 % Non personnel expense 38,484 40,846 (2,362) (5.8) % Total noninterest expense $                   90,024 87,450 2,574 2.9 % Noninterest expense increased 3% from the quarter ended March 31, 2023. This increase primarily resulted from a rise in personnel expense driven by the build-out of the commercial business and related credit, risk management and internal audit support functions over the past year. This was offset by a decrease in non-personnel expense related to a decline in merger, asset disposition and restructuring expense due to the severance and fixed asset charges related to the branch optimization and personnel reduction announced during the fourth quarter of 2022 as well as improvements in marketing expense and professional services expense. The provision for income taxes decreased by $1.7 million, or 17%, to $8.6 million for the quarter ended March 31, 2024 from $10.3 million for the quarter ended March 31, 2023 due primarily to lower income before income taxes. Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank 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, as well as employee benefits and wealth management services. As of March 31, 2024, Northwest operated 134 full-service branches and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. 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 inflation and 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; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) the effect of any pandemic, including COVID-19, war or act of terrorism. 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 31,2024 December 31,2023 March 31,2023 Assets Cash and cash equivalents $       119,319 122,260 96,497 Marketable securities available-for-sale (amortized cost of $1,298,108, $1,240,003 and $1,402,805, respectively) 1,094,009 1,043,359 1,205,510 Marketable securities held-to-maturity (fair value of $680,353, $699,506 and $750,345, respectively) 801,107 814,839 866,022 Total cash and cash equivalents and marketable securities 2,014,435 1,980,458 2,168,029 Loans held-for-sale 8,082 8,768 7,006 Residential mortgage loans 3,374,980 3,419,417 3,499,078 Home equity loans 1,196,607 1,227,858 1,281,546 Consumer loans 2,118,367 2,126,027 2,232,133 Commercial real estate loans 3,028,314 2,974,010 2,826,485 Commercial loans 1,774,896 1,658,729 1,246,023 Total loans receivable 11,501,246 11,414,809 11,092,271 Allowance for credit losses (124,897) (125,243) (121,257) Loans receivable, net 11,376,349 11,289,566 10,971,014 FHLB stock, at cost 30,811 30,146 41,519 Accrued interest receivable 50,680 47,353 36,177 Real estate owned, net 50 104 524 Premises and equipment, net 130,565 138,838 140,301 Bank-owned life insurance 252,842 251,895 256,310 Goodwill 380,997 380,997 380,997 Other intangible assets, net 4,589 5,290 7,651 Other assets 268,945 294,458 191,294 Total assets $   14,510,263 14,419,105 14,193,816 Liabilities and shareholders' equity Liabilities Noninterest-bearing demand deposits $     2,618,379 2,669,023 2,896,092 Interest-bearing demand deposits 2,557,866 2,634,546 2,541,503 Money market deposit accounts 1,952,537 1,968,218 2,328,050 Savings deposits 2,156,048 2,105,234 2,194,743 Time deposits 2,786,814 2,602,881 1,576,791 Total deposits 12,071,644 11,979,902 11,537,179 Borrowed funds 400,783 398,895 688,641 Subordinated debt 114,276 114,189 113,927 Junior subordinated debentures 129,639 129,574 129,379 Advances by borrowers for taxes and insurance 46,970 45,253 49,893 Accrued interest payable 17,395 13,669 2,236 Other liabilities 177,107 186,306 159,286 Total liabilities 12,957,814 12,867,788 12,680,541 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, 127,253,189, 127,110,453 and 127,065,400 shares issued and outstanding, respectively 1,273 1,271 1,271 Additional paid-in capital 1,026,173 1,024,852 1,020,855 Retained earnings 678,427 674,686 649,672 Accumulated other comprehensive loss (153,424) (149,492) (158,523) Total shareholders' equity 1,552,449 1,551,317 1,513,275 Total liabilities and shareholders' equity $   14,510,263 14,419,105 14,193,816 Equity to assets 10.70 % 10.76 % 10.66 % Tangible common equity to assets* 8.26 % 8.30 % 8.15 % Book value per share $           12.20 12.20 11.91 Tangible book value per share* $             9.17 9.17 8.85 Closing market price per share $           11.65 12.48 12.03 Full time equivalent employees 2,060 2,098 2,066 Number of banking offices 142 142 150 * Excludes goodwill and other intangible assets (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items.   Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts) Quarter ended March 31,2024 December 31,2023 September 30,2023 June 30,2023 March 31,2023 Interest income: Loans receivable $     149,571 146,523 140,667 132,724 123,745 Mortgage-backed securities 7,944 7,951 8,072 8,326 8,537 Taxable investment securities 794 786 786 841 845 Tax-free investment securities 491 492 491 667 700 FHLB stock dividends 607 666 668 844 690 Interest-earning deposits 832 970 914 594 423 Total interest income 160,239 157,388 151,598 143,996 134,940 Interest expense: Deposits 47,686 40,600 31,688 21,817 11,238 Borrowed funds 9,315 10,486 11,542 13,630 11,238 Total interest expense 57,001 51,086 43,230 35,447 22,476 Net interest income 103,238 106,302 108,368 108,549 112,464 Provision for credit losses - loans 4,234 3,801 3,983 6,010 4,870 Provision for credit losses - unfunded commitments (799) 4,145 (2,981) 2,920 126 Net interest income after provision for credit losses 99,803 98,356 107,366 99,619 107,468 Noninterest income: Loss on sale of investments — (1) — (8,306) — Gain on sale of mortgage servicing rights — — — 8,305 — Gain on sale of SBA loans 873 388 301 832 279 Gain on sale of loans — 726 — — — Service charges and fees 15,523 15,922 15,270 14,833 13,189 Trust and other financial services income 7,127 6,884 7,085 6,866 6,449 Gain on real estate owned, net 57 1,084 29 785 108 Income from bank-owned life insurance 1,502 1,454 4,561 1,304 1,269 Mortgage banking income 452 247 632 1,028 524 Other operating income 2,429 2,465 3,010 4,150 2,151 Total noninterest income 27,963 29,169 30,888 29,797 23,969 Noninterest expense: Compensation and employee benefits 51,540 50,194 51,243 47,650 46,604 Premises and occupancy costs 7,627 7,049 7,052 7,579 7,471 Office operations 2,767 3,747 3,398 2,800 3,010 Collections expense 336 328 551 429 387 Processing expenses 14,725 15,017 14,672 14,648 14,350 Marketing expenses 2,149 1,317 2,379 2,856 2,892 Federal deposit insurance premiums 3,023 2,643 2,341 2,064 2,223 Professional services 4,065 6,255 3,002 3,804 4,758 Amortization of intangible assets 701 724 795 842 909 Real estate owned expense 66 51 141 83 181 Merger, asset disposition and restructuring expense 955 2,354 — 1,593 2,802 Other expenses 2,070 997 1,996 1,510 1,863 Total noninterest expense 90,024 90,676 87,570 85,858 87,450 Income before income taxes 37,742 36,849 50,684 43,558 43,987 Income tax expense 8,579 7,835 11,464 10,514 10,308 Net income $       29,163 29,014 39,220 33,044 33,679 Basic earnings per share $           0.23 0.23 0.31 0.26 0.27 Diluted earnings per share $           0.23 0.23 0.31 0.26 0.26 Annualized return on average equity 7.57 % 7.64 % 10.27 % 8.72 % 9.11 % Annualized return on average assets 0.81 % 0.80 % 1.08 % 0.93 % 0.97 % Annualized return on average tangible common equity * 10.08 % 10.28 % 13.80 % 11.71 % 12.31 % Efficiency ratio 68.62 % 66.93 % 62.88 % 62.06 % 64.10 % Efficiency ratio, excluding certain items  ** 67.35 % 64.66 % 62.31 % 60.30 % 61.38 % Annualized noninterest expense to average assets 2.51 % 2.51 % 2.42 % 2.42 % 2.51 % Annualized noninterest expense to average assets, excluding certain items** 2.47 % 2.43 % 2.39 % 2.35 % 2.40 % * Excludes goodwill and other intangible assets (non-GAAP).  See reconciliation of non-GAAP financial measures for additional information relating to these items. ** Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).See reconciliation of non-GAAP financial measures for additional information relating to these items.   Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts) Quarter ended March 31, 2024 2023 Reconciliation of net income to adjusted net operating income: Net income (GAAP) $          29,163 33,679 Non-GAAP adjustments  Add: merger, asset disposition and restructuring expense 955 2,802  Less: tax benefit of merger, asset disposition and restructuring expense (267) (785) Adjusted net operating income (non-GAAP) $          29,851 35,696  Diluted earnings per share (GAAP) $              0.23 0.26  Diluted adjusted operating earnings per share (non-GAAP) $              0.23 0.28 Average equity $     1,549,870 1,498,825 Average assets 14,408,612 14,121,496 Annualized return on average equity (GAAP) 7.57 % 9.11 % Annualized return on average assets (GAAP) 0.81 % 0.97 % Annualized return on average equity, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) 7.75 % 9.66 % Annualized return on average assets, excluding merger, asset disposition and restructuring expense, net of tax (non-GAAP) 0.83 % 1.03 %              The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Financial Condition. March 31,2024 December 31,2023 March 31,2023 Tangible common equity to assets Total shareholders' equity $       1,552,449 1,551,317 1,513,275   Less: goodwill and intangible assets (385,586) (386,287) (388,648) Tangible common equity $       1,166,863 1,165,030 1,124,627 Total assets $     14,510,263 14,419,105 14,193,816 Less: goodwill and intangible assets (385,586) (386,287) (388,648)   Tangible assets $     14,124,677 14,032,818 13,805,168 Tangible common equity to tangible assets 8.26 % 8.30 % 8.15 % Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments Tangible common equity $       1,166,863 1,165,030 1,124,627 Less: unrealized losses on held to maturity investments (120,754) (115,334) (115,677) Add: deferred taxes on unrealized losses on held to maturity investments 33,811 32,294 32,390 Tangible common equity, including unrealized losses on held-to-maturity investments $       1,079,920 1,081,990 1,041,340 Tangible assets $     14,124,677 14,032,818 13,805,168 Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments 7.65 % 7.71 % 7.54 % Tangible book value per share Tangible common equity $       1,166,863 1,165,030 1,124,627 Common shares outstanding 127,253,189 127,110,453 127,065,400 Tangible book value per share 9.17 9.17 8.85   Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts)              The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Income. Quarter ended March 31,2024 December 31,2023 September 30,2023 June 30,2023 March 31,2023 Annualized return on average tangible common equity Net income $        29,163 29,014 39,220 33,044 33,679 Average shareholders' equity 1,549,870 1,506,895 1,515,287 1,519,990 1,498,825  Less: average goodwill and intangible assets (386,038) (386,761) (387,523) (388,354) (389,236) Average tangible common equity $   1,163,832 1,120,134 1,127,764 1,131,636 1,109,589 Annualized return on average tangible common equity 10.08 % 10.28 % 13.80 % 11.71 % 12.31 % Efficiency ratio, excluding amortization and merger, asset disposition and restructuring expenses Non-interest expense $        90,024 90,676 87,570 85,858 87,450  Less: amortization expense (701)