Northwest Bancshares, Inc. Announces Fourth Quarter 2014 Earnings and Increase in Quarterly Dividend

WARREN, Pa., Jan. 26, 2015 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2014 of $17.3 million, or $0.19 per diluted share.  This represents a decrease of $3.1 million, or 14.9%, compared to the same quarter last year when net income was $20.4 million, or $0.22 per diluted share, which was augmented by after tax gains in investment security activity of $3.1 million.  Net income was unchanged from the quarter ended September 30, 2014 which also was $17.3 million, or $0.19 per diluted share.  The annualized returns on average shareholders' equity and average assets for the quarter ended December 31, 2014 were 6.42% and 0.88% compared to 7.08% and 1.02% for the same quarter last year and 6.43% and 0.87% for the quarter ended September 30, 2014. 

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.14 per share payable on February 13, 2015, to shareholders of record as of February 5, 2015.  This represents the 81^st consecutive quarter in which the Company has paid a cash dividend. 

Previously, December 15, 2014, the Company announced entering into a definitive merger agreement pursuant to which the Company will acquire LNB Bancorp, Inc. and its wholly-owned subsidiary, The Lorain National Bank which operates 20 community banking offices in northeast Ohio, and as of September 30, 2014, had assets of approximately $1.2 billion.  The acquisition is expected to close during the third quarter of 2015.

In making this announcement, William J. Wagner, President and CEO, noted, "Earnings for the fourth quarter of 2014, excluding the gains on the sale of securities, were essentially unchanged from the previous calendar quarter and the fourth quarter of 2013.  While we strive for continuous improvement in earnings, we continue to be challenged by external forces that have created additional loan losses, placed pressure on our net interest margin and increased operating costs.  Fortunately, our efforts to grow fee generating activities have been successful and this additional non-interest income has offset the negative impact of external events.  Throughout 2014, we actively pursued opportunities to either leverage our excess capital or return it to our shareholders.  In this regard, dividends of $1.62 per share were paid during 2014 providing a dividend yield of approximately 13%.  When the market price of bank stocks came under pressure during the fourth quarter, we resumed our stock buyback program with the repurchase of nearly 424,000 shares at an average price of $12.45 per share.  Finally, we were excited to secure an opportunity to leverage our capital and return to the merger and acquisition arena with the announcement of the merger agreement with LNB Bancorp, Inc.  When completed, this acquisition will provide a significant increase in earnings-per-share and an attractive franchise with great market potential to complement our existing presence in northeastern Ohio." 

Net interest income increased by $156,000, or 0.3%, to $62.2 million for the quarter ended December 31, 2014, from $62.1 million for the quarter ended December 31, 2013. This increase was due primarily to an increase in interest income on loans receivable of $318,000 and a decrease in interest paid on deposit accounts of $805,000.  Partially offsetting these factors was a decrease in interest received on investment securities of $900,000.  These changes from the previous year were due primarily to loan growth and our continued efforts to procure new checking account customers and increase low-cost deposits.  

The provision for loan losses increased by $114,000, or 11.8%, to $1.1 million for the quarter ended December 31, 2014, from $964,000 for the quarter ended December 31, 2013.  The current and prior year provisions represent the lowest quarterly provisions over the past six years.  Asset quality continues to improve with loans 90 days or more delinquent decreasing $16.4 million, or 28.5%, and total nonaccrual loans decreasing $27.4 million, or 25.6%, compared to a year ago.

Noninterest income decreased by $3.3 million, or 16.0%, to $17.6 million for the quarter ended December 31, 2014, from $20.9 million for the quarter ended December 31, 2013.  This decrease is due primarily to decreases in gain on sale of investments of $5.5 million and income from bank owned life insurance of $789,000, as a result of death benefits received in the fourth quarter last year. Partially offsetting these decreases was an increase in trust and other financial services income of $808,000, due primarily to the acquisition of Evans Capital Management, Inc. on January 1, 2014 and a decrease in loss on real estate owned of $630,000. 

Noninterest expense increased by $2.6 million, or 5.0%, to $55.2 million for the quarter ended December 31, 2014, from $52.6 million for the quarter ended December 31, 2013. This increase was due primarily to a $2.9 million increase in compensation and employee benefits, primarily due to severance paid as a result of the corporate restructuring which was announced in the third quarter. Processing expense increased by $451,000 due primarily to amortization of software upgrades made during the past two years to strengthen compliance management capabilities.

Net income for the year ended December 31, 2014 of $62.0 million represents a decrease of $4.6 million, or 6.9%, compared to net income of $66.6 million for the year ended December 31, 2013.  This decrease in annual earnings was due to a $4.5 million, or 1.8%, decrease in net interest income, a $1.8 million, or 9.7%, increase in provision for loan losses and a $8.4 million, or 4.1%, increase in noninterest expense.  These factors were partially offset by a $5.7 million, or 8.6%, increase in noninterest income. Diluted earnings per share for the year ended December 31, 2014 decreased to $0.67 per share from $0.73 per share in the same period last year.  The annualized returns on average shareholders' equity and average assets were 5.69% and 0.79%, respectively, for the current year compared to 5.87% and 0.84%, respectively, in the prior year.   

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank.  Founded in 1896, Northwest Savings 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 community banking offices in Pennsylvania, New York, Ohio and Maryland and 51 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 ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Savings Bank can be accessed on-line at www.northwestsavingsbank.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; 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. 

Important Additional Information and Where to Find It

In connection with the proposed acquisition of LNB Bancorp, Inc. the Company  will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of LNB Bancorp, Inc. and a Prospectus of Northwest Bancshares, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF LNB BANCORP ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Northwest Bancshares and LNB Bancorp, may be obtained at the SEC's Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Northwest Bancshares at www.northwestsavingsbank.com under the heading "Investor Relations" and then under "SEC Filings" or from LNB Bancorp by accessing LNB Bancorp's website at www.4lnb.com under the heading "Investor Relations" and then under "SEC Filings." Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Northwest Bancshares, Inc., 100 Liberty Street, Warren, Pennsylvania 16365, Attention: Investor Relations, Telephone: (814) 726-2140 or to LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052, Attention: Investor Relations, Telephone: (440) 244-7317.

LNB Bancorp and Northwest Bancshares and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of LNB Bancorp in connection with the proposed merger. Information about the directors and executive officers of LNB Bancorp and their ownership of LNB Bancorp common stock is set forth in the proxy statement for LNB Bancorp's 2014 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 11, 2014. Information about the directors and executive officers of Northwest Bancshares is set forth in the proxy statement for Northwest Bancshares' 2014 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 5, 2014.  Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

SOURCE Northwest Savings Bank

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http://www.northwestsavingsbank.com