Northwest Bancshares, Inc. Announces Record Annual Earnings and Increased Dividend Declaration

WARREN, Pa., Jan. 23, 2012 /PRNewswire/ -- Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended December 31, 2011of $15.2 million, or $0.16per diluted share.  This represents an increase of $2.5 million, or 19.1%, over the same quarter last year when net income was $12.7 million, or $0.12per diluted share, and a decrease of $1.5 millioncompared to the quarter ended September 30, 2011when net income was $16.7 million, or $0.17per diluted share.  The annualized returns on average shareholders' equity and average assets for the current quarter were 5.23% and 0.76% compared to 3.90% and 0.63% for the same quarter last year and 5.62% and 0.83% for the quarter ended September 30, 2011.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.12per share, an increase of $0.01per share, or 9.1%, payable on February 16, 2012, to shareholders of record as of February 2, 2012.  This represents the 69th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, "We were pleased with most areas of our operations for the most recent quarter and the 2011 calendar year.  Compared to prior year periods, net interest income remained at historically strong levels and all other sources of income remained relatively consistent as a reduction in service charges on deposits was offset by an increase in fee income from trust and insurance services.  Increases in operating expense resulted primarily from additional compensation expense and professional fees that were incurred in conjunction with initiatives to strengthen our compliance management system.  Although delinquency continues to improve, loan loss provisions and loan charge-offs remain at elevated levels as we continue to work through the credit challenges that have accumulated over the past three years.  Stock repurchases were curtailed in the most recent quarter with only 170,000 shares purchased, as the market value of our stock increased substantially.  Given our strong capital position, the Board of Directors elected to increase the dividend by $0.01per quarter for the third consecutive year, resulting in a dividend yield of approximately 3.8%."

Net interest income decreased by $692,000, or 1.0%, to $66.5 millionfor the quarter ended December 31, 2011, from $67.2 millionfor the quarter ended December 31, 2010, which was primarily attributable to a decrease in interest income from loans of $3.2 million, or 3.8%, to $79.9 million. Partially offsetting this decrease was a decrease in interest on deposits of $2.8 million, or 16.4%, to $14.2 million. Both of these decreases were primarily due to decreases in market interest rates.  

The provision for loan losses decreased by $3.4 million, or 24.5%, to $10.5 millionfor the quarter ended December 31, 2011, from $13.9 milliona year ago.  As of December 31, 2011, the allowance for loan losses was $71.1 million, or 1.28% of total loans, compared to $76.4 million, or 1.38% of total loans, as of December 31, 2010.  Nonperforming loans decreased $17.3 million, or 11.6%, to $131.1 millionat December 31, 2011, from $148.4 millionat December 31, 2010. The ratio of nonperforming assets to total assets decreased to 1.99% at December 31, 2011from 2.08% at December 31, 2010.

Noninterest income decreased by $1.2 million, or 7.4%, to $14.0 millionfor the quarter ended December 31, 2011, from $15.2 millionfor the quarter ended December 31, 2010primarily due to a decrease in mortgage banking income of $1.5 million, or 102.0%. This reduction resulted from the Company retaining most of the mortgage loans originated rather than selling those loans into the secondary market.

Noninterest expense decreased by $2.3 million, or 4.5%, to $48.4 millionfor the quarter ended December 31, 2011, from $50.7 millionin the prior year due primarily to a decrease in federal deposit insurance premiums of $1.4 million, or 60.0%, to $933,000as the assessment formula was changed to calculate premiums based on assets rather than deposits.

Net income for the year ended December 31, 2011of $64.1 million, or $0.64per diluted share represents an increase of $6.6 million, or 11.5% compared to net income of $57.5 million, or $0.53per diluted share, for the year ended December 31, 2010.  The annual returns on average shareholders' equity and average assets were 5.24% and 0.80%, respectively, for the current year compared to 4.40% and 0.71%, respectively, in the prior year.  Year over year net interest income increased by $9.6 million, or 3.7%, and the provision for loan losses decreased by $6.3 million, or 15.6%.  Partially offsetting these improvements was a decrease in noninterest income of $2.3 million, or 3.7%, and an increase in noninterest expense of $3.7 million, or 1.9%.

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 as well as benefits and wealth management services. Northwest operates 168 community banking offices in Pennsylvania, New York, Ohioand Marylandand 52 consumer finance offices in Pennsylvaniathrough its subsidiary, Northwest Consumer Discount Company.  Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market.  Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at .

Forward-Looking Statements - This press 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 that could result from an economic downturn; (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 an increase in commercial real-estate and business loans and non-performing 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.

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)
								December 31,
Assets								2011		2010
Cash and cash equivalents								$                      94,276		40,708
Interest-earning deposits in other financial institutions								593,388		677,771
Federal funds sold and other short-term investments								633		632
Marketable securities available-for-sale (amortized cost of $885,408 and $945,571)								908,349		950,463
Marketable securities held-to-maturity (fair value of $239,412 and $354,126)								231,389		357,922
	Total cash, interest-earning deposits and marketable securities							1,828,035		2,027,496
Loans held for sale								967		11,376
Residential mortgage loans								2,396,399		2,386,928
Home equity loans								1,084,786		1,095,953
Other consumer loans								245,689		255,776
Commercial real estate loans								1,435,767		1,350,319
Commercial loans								387,911		433,653
	Total loans receivable							5,551,519		5,534,005
Allowance for loan losses								(71,138)		(76,412)
	Loans receivable, net							5,480,381		5,457,593
Federal Home Loan Bank stock, at cost								48,935		60,080
Accrued interest receivable								25,502		26,216
Real estate owned, net								26,887		20,780
Premises and Equipment, net								132,152		128,101
Bank owned life insurance								133,524		132,237
Goodwill								171,882		171,882
Other intangible assets								2,123		3,942
Other assets								107,203		119,828
	Total assets							$              7,956,624		8,148,155
Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits								$                   658,560		575,281
Interest-bearing demand deposits								800,676		782,257
Savings deposits								2,036,272		1,948,882
Time deposits								2,284,817		2,457,916
	Total deposits							5,780,325		5,764,336
Borrowed funds								827,925		891,293
Advances by borrowers for taxes and insurance								23,571		22,868
Accrued interest payable								1,104		1,716
Other liabilities								66,782		57,398
Junior subordinated debentures								103,094		103,094
	Total liabilities							6,802,801		6,840,705
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, 97,493,046 shares
	and 110,295,117 shares issued, respectively							975		1,103
Paid-in-capital								659,523		824,164
Retained earnings								543,598		523,089
Unallocated common stock of Employee Stock Ownership Plan								(27,047)		(27,409)
Accumulated other comprehensive loss								(23,226)		(13,497)
	Total shareholders' equity							1,153,823		1,307,450
	Total liabilities and shareholders' equity							$              7,956,624		8,148,155
					Equity to assets			14.50%		16.05%
					Tangible common equity to assets			12.59%		14.19%
					Book value per share			$11.83		$11.85
					Tangible book value per share			$10.05		$10.26
					Closing market price per share			$12.44		$11.78
					Full time equivalent employees			1,950		1,897
					Number of banking offices			168		171

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
					Three months ended
					December 31,				September 30,
					2011		2010		2011
Interest income:
	Loans receivable				$                  79,930		83,096		80,562
	Mortgage-backed securities				5,077		5,886		5,544
	Taxable investment securities				776		428		684
	Tax-free investment securities				2,600		3,111		2,848
	Interest-earning deposits				423		496		393
		Total interest income			88,806		93,017		90,031
Interest expense:
	Deposits				14,227		17,025		14,958
	Borrowed funds				8,041		8,762		8,061
		Total interest expense			22,268		25,787		23,019
		Net interest income			66,538		67,230		67,012
Provision for loan losses					10,502		13,918		8,057
		Net interest income after provision
		for loan losses			56,036		53,312		58,955
Noninterest income:
	Impairment losses on securities				(1,205)		(1,841)		-
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)			775		1,006		-
	Net impairment losses				(430)		(835)		-
	Gain on sale of investments, net				157		8		152
	Service charges and fees				8,630		9,296		8,499
	Trust and other financial services income				1,967		1,907		2,063
	Insurance commission income				1,582		1,362		1,796
	Loss on real estate owned, net				(466)		(279)		(1,340)
	Income from bank owned life insurance				1,199		1,228		1,938
	Mortgage banking income/(loss)				(29)		1,423		400
	Other operating income				1,428		1,058		1,002
		Total noninterest income			14,038		15,168		14,510
Noninterest expense:
	Compensation and employee benefits				25,434		25,328		26,004
	Premises and occupancy costs				5,556		5,675		5,658
	Office operations				3,286		3,233		3,209
	Processing expenses				5,982		6,041		5,896
	Marketing expenses				3,098		2,930		2,788
	Federal deposit insurance premiums				933		2,334		1,386
	Professional services				1,441		291		1,238
	Amortization of intangible assets				374		518		475
	Real estate owned expense				462		636		483
	Acquisition expense				-		591		-
	Other expense				1,870		3,122		2,786
		Total noninterest expense			48,436		50,699		49,923
		Income before income taxes			21,638		17,781		23,542
	Income tax expense				6,463		5,043		6,822
			Net income		$                  15,175		12,738		16,720
Basic earnings per share					$                      0.16		0.12		0.17
Diluted earnings per share					$                      0.16		0.12		0.17
Annualized return on average shareholders' equity					5.23%		3.90%		5.62%
Annualized return on average assets					0.76%		0.63%		0.83%
Basic common shares outstanding					93,675,589		108,337,001		96,918,016
Diluted common shares outstanding					93,972,187		108,848,189		97,124,328

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
					Year ended
					December 31,
					2011		2010
Interest income:
	Loans receivable				$                      320,942		328,948
	Mortgage-backed securities				23,450		25,271
	Taxable investment securities				2,452		2,514
	Tax-free investment securities				11,514		11,738
	Interest-earning deposits				1,712		2,097
		Total interest income			360,070		370,568
Interest expense:
	Deposits				60,721		75,174
	Borrowed funds				32,080		37,753
		Total interest expense			92,801		112,927
		Net interest income			267,269		257,641
Provision for loan losses					34,170		40,486
		Net interest income after provision
		for loan losses			233,099		217,155
Noninterest income:
	Impairment losses on securities				(1,782)		(2,741)
	Noncredit related losses on securities not expected
		to be sold (recognized in other comprehensive income)			845		1,193
	Net impairment losses				(937)		(1,548)
	Gain on sale of investments, net				358		2,208
	Service charges and fees				35,378		37,921
	Trust and other financial services income				8,125		7,252
	Insurance commission income				6,548		5,190
	Loss on real estate owned, net				(2,426)		(2,572)
	Income from bank owned life insurance				6,019		5,080
	Mortgage banking income				858		2,196
	Other operating income				4,213		4,671
		Total noninterest income			58,136		60,398
Noninterest expense:
	Compensation and employee benefits				106,595		100,709
	Premises and occupancy costs				23,055		22,665
	Office operations				12,850		13,864
	Processing expenses				23,332		23,152
	Marketing expenses				9,953		9,875
	Federal deposit insurance premiums				7,101		9,054
	Professional services				5,224		2,728
	Amortization of intangible assets				1,819		2,784
	Real estate owned expense				1,625		2,901
	Acquisition expense				-		1,229
	Other expense				8,673		7,547
		Total noninterest expense			200,227		196,508
		Income before income taxes			91,008		81,045
	Income tax expense				26,857		23,522
			Net income		$                        64,151		57,523
Basic earnings per share					$                            0.64		0.53
Diluted earnings per share					$                            0.64		0.53
Annualized return on average shareholders' equity					5.24%		4.40%
Annualized return on average assets					0.80%		0.71%
Basic common shares outstanding					99,801,783		108,308,834
Diluted common shares outstanding					100,177,564		108,931,377

Northwest Bancshares, Inc. and Subsidiaries
Asset Quality
(Dollars in thousands)
			Three months ended				Year ended
			December 31,				December 31,
			2011		2010		2011		2010
Allowance for loan losses
	Beginning balance		$        73,208		77,245		76,412		70,403
	Provision		10,502		13,918		34,170		40,486
	Charge-offs residential mortgage		(1,530)		(2,550)		(4,198)		(4,497)
	Charge-offs home equity		(998)		(1,146)		(4,734)		(4,104)
	Charge-offs other consumer		(1,467)		(1,643)		(5,283)		(6,390)
	Charge-offs commercial real estate		(4,288)		(5,953)		(12,508)		(12,576)
	Charge-offs commercial		(4,935)		(4,365)		(15,641)		(9,305)
	Recoveries		646		906		2,920		2,395
	Ending balance		$        71,138		76,412		71,138		76,412
Net charge-offs to average loans, annualized			0.91%		1.06%		0.72%		0.63%
			December 31,
			2011		2010		2009		2008
Nonperforming loans			$     131,105		148,391		124,626		99,203
Real estate owned, net			26,887		20,780		20,257		16,844
Nonperforming assets			$     157,992		169,171		144,883		116,047
Non-accrual troubled debt restructuring *			$        26,908		41,740		2,908		-
Accruing troubled debt restructuring			39,854		10,865		18,177		-
Total troubled debt restructuring			$        66,762		52,605		21,085		-
Nonperforming loans to total loans			2.36%		2.68%		2.35%		1.91%
Nonperforming assets to total assets			1.99%		2.08%		1.81%		1.67%
Allowance for loan losses to total loans			1.28%		1.38%		1.33%		1.06%
Allowance for loan losses to nonperforming loans			54.26%		51.49%		56.49%		55.37%
* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries
Non-accrual loans delinquency
(Dollars in thousands)
			December 31, 2011		December 31, 2010		December 31, 2009
Non-accrual loans current:
	Residential mortgage loans	$	-		-		-
	Home equity loans		-		-		-
	Other consumer loans		-		-		-
	Commercial real estate loans		13,057		7,378		-
	Commercial loans		13,480		23,317		13,141
Total non-accrual loans current		$	26,537		30,695		13,141
Non-accrual loans delinquent 30 days to 59 days:
	Residential mortgage loans	$	-		-		-
	Home equity loans		-		-		-
	Other consumer loans		-		-		-
	Commercial real estate loans		3,274		4,039		-
	Commercial loans		90		1,465		-
Total non-accrual loans delinquent 30 days to 59 days		$	3,364		5,504		-
Non-accrual loans delinquent 60 days to 89 days:
	Residential mortgage loans	$	-		-		-
	Home equity loans		-		-		-
	Other consumer loans		-		-		-
	Commercial real estate loans		1,560		10,923		1,705
	Commercial loans		3,808		848		-
Total non-accrual loans delinquent 60 days to 89 days		$	5,368		11,771		1,705
Non-accrual loans delinquent 90 days or more:
	Residential mortgage loans	$	28,221		29,751		29,134
	Home equity loans		9,560		10,263		10,008
	Other consumer loans		2,667		2,565		2,775
	Commercial real estate loans		44,603		44,965		49,594
	Commercial loans		10,785		12,877		18,269
Total non- accrual loans delinquent 90 days or more		$	95,836		100,421		109,780
Total non-accrual loans		$	131,105		148,391		124,626

Northwest Bancshares, Inc. and Subsidiaries
Delinquency
(Dollars in thousands)
Loan delinquency schedule
	(Number of loans and dollar amount of loans)
		December 31,
		2011		*		2010		*		2009		*
Loans delinquent 30 days to 59 days:
	Residential mortgage loans	427	$      33,671	1.4%		427	$      35,329	1.5%		343	$      27,913	1.2%
	Home equity loans	222	7,426	0.7%		230	7,317	0.7%		184	7,014	0.6%
	Other consumer loans	903	4,854	2.0%		1,008	5,318	2.1%		923	4,297	1.6%
	Commercial real estate loans	104	10,680	0.7%		82	16,287	1.2%		85	16,152	1.3%
	Commercial loans	32	2,027	0.5%		48	6,590	1.5%		48	3,293	0.9%
Total loans delinquent 30 days to 59 days		1,688	$      58,658	1.1%		1,795	$      70,841	1.3%		1,583	$      58,669	1.1%
Loans delinquent 60 days to 89 days:
	Residential mortgage loans	99	$         8,629	0.4%		106	$         9,848	0.4%		77	$         6,657	0.3%
	Home equity loans	47	1,953	0.2%		81	3,249	0.3%		52	1,719	0.2%
	Other consumer loans	412	1,787	0.7%		356	1,331	0.5%		348	1,425	0.5%
	Commercial real estate loans	38	3,122	0.2%		39	14,365	1.1%		35	5,811	0.5%
	Commercial loans	25	4,958	1.3%		9	1,678	0.4%		26	2,474	0.7%
Total loans delinquent 60 days to 89 days		621	$      20,449	0.4%		591	$      30,471	0.6%		538	$      18,086	0.3%
Loans delinquent 90 days or more:
	Residential mortgage loans	273	$      28,221	1.2%		275	$      29,751	1.2%		265	$      29,134	1.2%
	Home equity loans	177	9,560	0.9%		190	10,263	0.9%		195	10,008	0.9%
	Other consumer loans	456	2,667	1.1%		374	2,565	1.0%		546	2,775	1.0%
	Commercial real estate loans	131	44,603	3.1%		181	44,965	3.3%		199	49,594	4.0%
	Commercial loans	66	10,785	2.8%		111	12,877	3.0%		124	18,269	4.9%
Total loans delinquent 90 days or more		1,103	$      95,836	1.7%		1,131	$   100,421	1.8%		1,329	$   109,780	2.1%
Total loans delinquent		3,412	$   174,943	3.2%		3,517	$   201,733	3.7%		3,450	$   186,535	3.5%
	* - Represents delinquency, in dollars, divided by the respective total amount of that class of loan outstanding.

Northwest Bancshares, Inc. and Subsidiaries
Analysis of loan portfolio by geographic location as of December 31, 2011:
(Dollars in thousands)
Loans outstanding:
			Residential Mortgage	(1)	Home equity	(2)	Other consumer	(3)	Commercial real estate loans	(4)	Commercial loans	(5)	Total	(6)
	Pennsylvania		$   1,978,512	82.5%	925,368	85.3%	225,827	91.9%	849,702	59.2%	258,775	66.7%	4,238,184	76.3%
	New York		159,389	6.6%	104,194	9.6%	11,191	4.6%	356,868	24.9%	56,128	14.5%	687,770	12.4%
	Ohio		19,895	0.8%	11,677	1.1%	3,022	1.2%	35,882	2.5%	10,072	2.6%	80,548	1.5%
	Maryland		168,247	7.0%	33,816	3.1%	1,417	0.6%	114,839	8.0%	25,942	6.7%	344,261	6.2%
	Florida		27,551	1.1%	8,057	0.7%	1,473	0.6%	40,904	2.8%	17,340	4.5%	95,325	1.7%
	All other		43,772	1.8%	1,674	0.2%	2,759	1.1%	37,572	2.6%	19,654	5.1%	105,431	1.9%
	Total		$   2,397,366	100.0%	1,084,786	100.0%	245,689	100.0%	1,435,767	100.0%	387,911	100.0%	5,551,519	100.0%
	(1) - Percentage of total mortgage loans
	(2) - Percentage of total home equity loans
	(3) - Percentage of total other consumer loans
	(4) - Percentage of total commercial real estate loans
	(5) - Percentage of total commercial loans
	(6) - Percentage of total loans
Loans 90 or more past due:
			Residential Mortgage	(7)	Home equity	(8)	Other consumer	(9)	Commercial real estate loans	(10)	Commercial loans	(11)	Total	(12)
	Pennsylvania		$          16,971	0.9%	6,559	0.7%	2,537	1.1%	17,753	2.1%	5,075	2.0%	48,895	1.2%
	New York		1,358	0.9%	1,031	1.0%	54	0.5%	8,625	2.4%	281	0.5%	11,349	1.7%
	Ohio		305	1.5%	23	0.2%	23	0.8%	88	0.2%	-	0.0%	439	0.5%
	Maryland		4,436	2.6%	1,496	4.4%	-	0.0%	6,573	5.7%	2,514	9.7%	15,019	4.4%
	Florida		4,312	15.7%	422	5.2%	53	3.6%	4,407	10.8%	2,915	16.8%	12,109	12.7%
	All other		839	1.9%	29	1.7%	-	0.0%	7,157	19.0%	-	0.0%	8,025	7.6%
	Total		$          28,221	1.2%	9,560	0.9%	2,667	1.1%	44,603	3.1%	10,785	2.8%	95,836	1.7%
	(7) - Percentage of total mortgage loans in that geographic area
	(8) - Percentage of total home equity loans in that geographic area
	(9) - Percentage of total other consumer loans in that geographic area
	(10) - Percentage of total commercial real estate loans in that geographic area
	(11) - Percentage of total commercial loans in that geographic area
	(12) - Percentage of total loans in that geographic area

Northwest Bancshares, Inc. and Subsidiaries
Investment Portfolio
(Dollars in thousands)
Marketable securities available-for-sale as of December 31, 2011:
					Gross		Gross
					unrealized		unrealized
			Amortized		holding		holding		Market
			cost		gains		losses		value
Debt issued by the U.S. government and agencies:
	Due in one year or less		$                     59		-		-		59
Debt issued by government sponsored enterprises:
	Due in one year - five years		36,295		134		-		36,429
	Due in five years - ten years		29,557		638		(61)		30,134
	Due after ten years		9,665		-		(49)		9,616
Equity securities			12,080		644		(259)		12,465
Municipal securities:
	Due in one year - five years		10,633		291		-		10,924
	Due in five years - ten years		27,817		1,336		-		29,153
	Due after ten years		124,041		5,350		(180)		129,211
Corporate trust preferred securities:
	Due in one year or less		500		-		-		500
	Due after ten years		25,036		233		(4,635)		20,634
Mortgage-backed securities:
	Fixed rate pass-through		110,364		8,201		(1)		118,564
	Variable rate pass-through		135,103		6,679		(4)		141,778
	Fixed rate non-agency CMO		9,521		188		(735)		8,974
	Fixed rate agency CMO		112,670		3,466		-		116,136
	Variable rate non-agency CMO		1,104		-		(154)		950
	Variable rate agency CMO		240,963		1,991		(132)		242,822
	Total mortgage-backed securities		609,725		20,525		(1,026)		629,224
	Total marketable securities available-for-sale		$       885,408		29,151		(6,210)		908,349
Marketable securities held-to-maturity as of December 31, 2011:
					Gross		Gross
					unrealized		unrealized
			Amortized		holding		holding		Market
			cost		gains		losses		value
Municipal securities:
	Due in five years - ten years		3,677		174		-		3,851
	Due after ten years		71,015		3,615		-		74,630
Mortgage-backed securities:
	Fixed rate pass-through		24,160		1,099		-		25,259
	Variable rate pass-through		9,066		94		-		9,160
	Fixed rate agency CMO		108,881		2,761		-		111,642
	Variable rate agency CMO		14,590		280		-		14,870
	Total mortgage-backed securities		156,697		4,234		-

Northwest Bancshares, Inc. and Subsidiaries
Investment Portfolio - Continued
(Dollars in thousands)
			Book		As a %
			Value		of Book
			12/31/2011		Value
Municipal securities by state:
	Pennsylvania
	School district		$       114,699		48.4%
	General obligation		41,766		17.6%
	Revenue bonds		4,709		2.0%
	Total Pennsylvania		161,174		68.0%
	New York		33,679		14.2%
	Ohio		6,426		2.7%
	All other states		35,904		15.1%
			$       237,183

Average Balance Sheet - unaudited
(Dollars in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and
average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of
assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.
	Three months ended December 31,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$  5,544,194	80,395	5.79%	5,565,989	83,491	5.99%
Mortgage-backed securities (c)	797,071	5,077	2.55%	879,958	5,886	2.68%
Investment securities (c) (d)	376,545	4,776	5.07%	365,003	5,213	5.71%
FHLB stock	49,775	-	-	61,042	-	-
Other interest-earning deposits	615,906	423	0.27%	721,174	496	0.27%
Total interest-earning assets	7,383,491	90,671	4.90%	7,593,166	95,086	5.00%
Noninterest earning assets (e)	571,873			588,945
Total assets	$  7,955,364			8,182,111
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$  1,064,533	1,139	0.42%	1,058,373	1,695	0.64%
Interest-bearing demand accounts	787,674	238	0.12%	786,488	249	0.13%
Money market accounts	959,378	1,013	0.42%	906,414	1,209	0.53%
Certificate accounts	2,308,440	11,837	2.03%	2,456,893	13,872	2.24%
Borrowed funds (f)	836,948	6,604	3.13%	892,461	7,326	3.26%
Junior subordinated debentures	103,094	1,437	5.45%	103,094	1,436	5.45%
Total interest-bearing liabilities	6,060,067	22,268	1.46%	6,203,723	25,787	1.65%
Noninterest bearing liabilities (g)	734,898			671,412
Total liabilities	6,794,965			6,875,135
Shareholders' equity	1,160,399			1,306,976
Total liabilities and shareholders' equity	$  7,955,364			8,182,111
Net interest income/ Interest rate spread		68,403	3.44%		69,299	3.35%
Net interest-earning assets/ Net interest margin	$  1,323,424		3.71%	1,389,443		3.65%
Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.96%, respectively, Investment securities - 3.59% and 3.88%, respectively,
Interest-earning assets - 4.80% and 4.89%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.24%, respectively,
and GAAP basis net interest margins were 3.60% and 3.54%, respectively.

Average Balance Sheet - unaudited
(Dollars in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and
average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of
assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.
	Year ended December 31,
	2011			2010
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$  5,508,790	322,656	5.85%	5,487,645	330,431	6.03%
Mortgage-backed securities (c)	874,366	23,450	2.68%	816,182	25,271	3.10%
Investment securities (c) (d)	384,389	20,166	5.25%	369,858	20,572	5.56%
FHLB stock	53,985	-	-	62,688	-	-
Other interest-earning deposits	665,074	1,712	0.25%	805,161	2,097	0.26%
Total interest-earning assets	7,486,604	367,984	4.91%	7,541,534	378,371	5.02%
Noninterest earning assets (e)	570,888			578,317
Total assets	$  8,057,492			8,119,851
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$  1,075,890	5,000	0.46%	1,031,362	8,166	0.79%
Interest-bearing demand accounts	793,287	960	0.12%	776,091	1,211	0.16%
Money market accounts	939,317	4,243	0.45%	888,081	5,977	0.67%
Certificate accounts	2,362,313	50,518	2.14%	2,483,481	59,820	2.41%
Borrowed funds (f)	841,748	26,381	3.13%	896,843	32,054	3.57%
Junior subordinated debentures	103,094	5,699	5.45%	103,094	5,699	5.45%
Total interest-bearing liabilities	6,115,649	92,801	1.52%	6,178,952	112,927	1.83%
Noninterest bearing liabilities (g)	718,434			634,119
Total liabilities	6,834,083			6,813,071
Shareholders' equity	1,223,409			1,306,780
Total liabilities and shareholders' equity	$  8,057,492			8,119,851
Net interest income/ Interest rate spread		275,183	3.39%		265,444	3.19%
Net interest-earning assets/ Net interest margin	$  1,370,955		3.68%	1,362,582		3.52%
Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.82% and 6.00%, respectively, Investment securities - 3.63% and 3.85%, respectively,
Interest-earning assets - 4.80% and 4.92%, respectively. GAAP basis net interest rate spreads were 3.29% and 3.09%, respectively,
and GAAP basis net interest margins were 3.57% and 3.42%, respectively.

Average Balance Sheet - unaudited
(Dollars in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and
average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of
assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages.
	Three months ended			Three months ended
	December 31, 2011			September 30, 2011
	Average	Interest	Avg.	Average	Interest	Avg.
	Balance	(h)	Yield/	Balance	(h)	Yield/
			Cost			Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$  5,544,194	80,395	5.79%	5,490,795	81,025	5.86%
Mortgage-backed securities (c)	797,071	5,077	2.55%	857,898	5,544	2.58%
Investment securities (c) (d)	376,545	4,776	5.07%	412,927	5,066	4.91%
FHLB stock	49,775	-	-	52,336	-	-
Other interest-earning deposits	615,906	423	0.27%	652,958	393	0.24%
Total interest-earning assets	7,383,491	90,671	4.90%	7,466,914	92,028	4.90%
Noninterest earning assets (e)	571,873			560,951
Total assets	$  7,955,364			8,027,865
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$  1,064,533	1,139	0.42%	1,081,721	1,157	0.42%
Interest-bearing demand accounts	787,674	238	0.12%	798,424	244	0.12%
Money market accounts	959,378	1,013	0.42%	950,113	1,016	0.42%
Certificate accounts	2,308,440	11,837	2.03%	2,338,436	12,541	2.13%
Borrowed funds (f)	836,948	6,604	3.13%	840,560	6,625	3.13%
Junior subordinated debentures	103,094	1,437	5.45%	103,094	1,436	5.45%
Total interest-bearing liabilities	6,060,067	22,268	1.46%	6,112,348	23,019	1.49%
Noninterest bearing liabilities (g)	734,898			726,173
Total liabilities	6,794,965			6,838,521
Shareholders' equity	1,160,399			1,189,344
Total liabilities and shareholders' equity	$  7,955,364			8,027,865
Net interest income/ Interest rate spread		68,403	3.44%		69,009	3.41%
Net interest-earning assets/ Net interest margin	$  1,323,424		3.71%	1,354,566		3.70%
Ratio of interest-earning assets to
interest-bearing liabilities	1.22X			1.22X
(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
(c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.
(g) Average balances include non-interest bearing demand deposits (checking accounts).
(h) Shown on a FTE basis. GAAP basis yields were: Loans - 5.76% and 5.82%, respectively, Investment securities - 3.59% and 3.42%, respectively,
Interest-earning assets - 4.80% and 4.79%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.29%, respectively,
and GAAP basis net interest margins were 3.60% and 3.59%, respectively.

SOURCE Northwest Bancshares, Inc.