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Sep 30, 2020
Northwest Bancshares Q3 2020 Earnings Report
Reported a net income of $38.1 million, representing an increase of 13.9% compared to the same quarter last year.
Key Takeaways
Northwest Bancshares reported a strong third quarter with a net income of $38.1 million, or $0.30 per diluted share, marking a 13.9% increase compared to the previous year. The company saw growth in net interest income and noninterest income, driven by mortgage banking operations, while also managing to significantly decrease loan payment deferrals.
Net income for the quarter ended September 30, 2020, was $38.1 million, or $0.30 per diluted share, compared to $33.4 million, or $0.31 per diluted share, for the same quarter last year.
Net interest income increased by $12.6 million, or 13.9%, to $103.5 million for the quarter ended September 30, 2020, from $90.9 million for the quarter ended September 30, 2019.
Noninterest income increased by $10.5 million, or 40.1%, to $36.7 million for the quarter ended September 30, 2020, from $26.2 million for the quarter ended September 30, 2019, primarily due to an increase in mortgage banking income.
Loans requesting payment deferrals have decreased significantly from last quarter from $1.312 billion, or 12.1% of the loan portfolio, at June 30, 2020 to just $212.7 million, or 2.0%, at September 30, 2020.
Forward Guidance
The company is focused on executing initiatives including branch optimization, digital strategy implementation, and leveraging the subordinated debt offering.
Positive Outlook
- Completing branch optimization in December.
- Continuing the implementation of the digital strategy.
- Capitalizing on the successful subordinated debt offering.
- Strong fee income led by mortgage banking operations.
- Credit loss provision decreased significantly.
Challenges Ahead
- Classified assets jumped by $161.3 million, or 54.4%, during the quarter.
- Net interest margin decreased to 3.26% for the quarter ended September 30, 2020 from 3.79% for the same quarter last year.
- Increase in provision for credit losses by $3.5 million to $6.8 million.
- The estimated economic impact of COVID-19 caused an increase in provision expense for the quarter by approximately $1.5 million.
Historical Earnings Impact
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