WARREN — Northwest Bancshares Inc. announced net income for the quarter ended March 31 of $17.7 million, or $0.17 per diluted share.
This represents a decrease of $238,000 compared to the same quarter last year when net income was $18.0 million or $0.18 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended March 31 were 6.15 percent and 0.75 percent compared to 6.21 percent and 0.81 percent for the same quarter last year.
The company also announced that its board of directors declared a quarterly cash dividend of $0.16 per share payable on May 18, 2017, to shareholders of record as of May 4. This is the 90th consecutive quarter in which the company has paid a cash dividend. Based on the market value of the company’s stock as of March 31, this represents an annualized dividend yield of approximately 3.8 percent.
In making this announcement, William J. Wagner, President and CEO, noted, “We were disappointed with the first quarter earnings compared to both the same quarter last year and the fourth quarter of 2016 given the significant improvement we made to shareholder metrics during 2016. While our net interest margin remains near historic highs at 3.75 percent, and most components of noninterest income continue to grow, the quarter was negatively impacted by a higher provision for loan losses and a decrease in mortgage banking income. Additionally, net interest income was negatively impacted by the fewer number of days in the quarter while operating expenses were elevated due to seasonal issues. Given our current metrics, we recognize the area most in need of improvement is efficiency, which can best be addressed by reducing the ratio of expenses to assets. This challenge will receive considerable focus throughout 2017, as we strive to improve earnings each quarter and achieve our annual target for shareholder return.”
In an effort to improve efficiency, the company announced its intention to close the 44 offices of its consumer finance subsidiary, Northwest Consumer Discount Company (“NCDC”), effective July 14. As part of this closure, all NCDC loans will be transferred to Northwest Bank for servicing and collections. Northwest Bank will continue to make direct consumer loans to qualified customers as well as continue to offer indirect sales finance loans through various dealers and retailers.
