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Northwest Bancshares (NWBI) Posts Lower-Than-Expected Q1

 April 23, 2012 12:37 PM

(By Balaseshan S) Northwest Bancshares Inc. (NASDAQ:NWBI) reported a 12% decline in first quarter earnings due to a decrease in interest income from loans and investment securities. Earnings and revenue missed Street's expectations.

Earnings for the first quarter were $15.18 million or $0.16 per share, compared to $17.25 million or $0.16 per share last year.

Net interest income for the quarter declined 2.4% to $65.41 million, primarily due to decrease in interest income from loans of $2.3 million, or 2.9%, and from investment securities of $2.5 million, or 24.6%. Partially offsetting this decrease was a $3.1 million, or 19.4% decrease in interest expense on deposit accounts.

Analysts had expected a profit of $0.17 per share on revenue of $66.91 million.

Total non-interest income decreased to $13.64 million from $14.33 million, due primarily to an increase in the loss on real estate owned of $1.0 million.

Non-interest expense increased 3.8% to $51.3 million, due primarily to an increase in compensation and employee benefits expense of $2.3 million, or 9.2%. This increase is the result of the adding employees, primarily in the areas of commercial lending, loan servicing, credit review and regulatory compliance and increases in pension expense and health insurance expense.

The annualized returns on average shareholders' equity for the latest quarter decreased to 5.29% from 5.39%, while annualized returns on average assets declined to 0.76% from 0.86%.

Net charge-offs were $4.5 million, or 0.32% of average loans on an annualized basis, compared to $7.2 million, or 0.52% of average loans on an annualized basis, in the previous year. Nonperforming loans decreased $31.1 million, or 19.9%, and the ratio of nonperforming loans to total assets decreased to 1.91% from 2.16% last year.

The company also said its board of directors declared a quarterly cash dividend of $0.12 per share, payable on May 17 to shareholders of record as of May 3. This represents the 70th consecutive quarter in which the company has paid a cash dividend.

The current dividend offers yield of 3.80%, whereas the average 5-year dividend yield is 3.60%. The latest dividend payout ratio is 67.0%.

NWBI is trading down 1.08% at $12.40 on Monday. The stock has been trading between $10.74 and $13.36 for the past 52 weeks.

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