Northwest Bancshares, Inc. · NASDAQ:NWBI
Northwest Bancshares — Investor Presentation (May 2010)
38 slides from Northwest Bancshares's investor presentation, May 18, 2010
Slide 1: Northwest Bancshares Investor Presentation
NASDAQ: NWBI Current Market Value: $12.00 As of May 7, 2010 N O R T H W E S T
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation contains forward-looking statements, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and words of similar meaning. These forward-looking statements include, but are n
Slide 3: Corporate Profile and Overview
Holding Company is regulated by the OTS, Bank is regulated by the FDIC and PA Department of Banking 171 retail banking locations 51 consumer finance locations ($116.3 mil in assets, $2.7 mil in net income for year ended 12/31/09) 1,697 full-time and 316 part-time employees Total assets of $8.0 billi
Slide 4: Capital Transactions
Common Stock Offerings 1994 - MHC IPO - $69.0 million 2003 - MHC Incremental Offering - $115 million 2009 - Second -step Offering - $688 million Trust Preferred Stock Offerings 2001 - $69 million public offering 2005 - $100 million private offering Capital Transactions 4
Slide 5: Trading Multiples of Common Shares
Current Market Price $12.00 Price to Book Value 102% Price to Tangible Book Value 118% Price as a Multiple of Earnings 25x Trading Multiples of Common Shares 5
Slide 6: Attractive Franchise
Attractive Franchise © Corporate Headquarters Hi Northwest Savings Bankand Northwest Consumer Discount Company I Northwest Savings Bank Northwest Consumer Discount Company Pennsfania 12 st New Yor 7 ° ono 2 8 Mayan 5 ° TOTAL m 3
Slide 7: Experienced Management & Board of Directors
Experienced Management & Board of Directors 7 Executive officers average 27 years of banking experience. Average tenure for executive officers at Northwest is approximately 19 years. Stable and experienced Board of Directors; 8 out of 9 Independent Directors
Slide 8: Historical Performance
4omsI2IAWOeL Historical Performance
Slide 9: Asset Growth
Asset Growth 9 Northwest has demonstrated the ability to both safely leverage its capital and change its strategic direction when necessary. Leveraging Strategy Diversification & Profitability Strategy
Slide 10: Growth of Our Franchise Since IPO
Growth of Our Franchise Since IPO 10 About 50% of our balance sheet growth was organic, the other 50% was accomplished through mergers and acquisitions. Organic Growth 55 De Novo Branch Openings 24 Northwest Consumer Discount offices Merger and Acquisition activity: Branch Purchases - 10 acquisition
Slide 11: Composition of Loan Portfolio
Commercial Business One-to-Four Family Multi-Family & Commerical Consumer & Home Equity East 3.3 59.5 12.6 24.6 Composition of Loan Portfolio 11 December 2005 Commercial Business One-to-Four Family Multi-Family & Commerical Consumer & Home Equity East 7 44.1 23.3 25.6 December 2009
Slide 12: Composition of Deposits
Composition of Deposits 12 Checking Savings Money Market Certificates of Deposit East 18.3 17.9 11.4 52.4 12 December 2005 December 2009 Checking Savings Money Market Certificates of Deposit East 22.3 16.4 14.6 46.7
Slide 13: Interest Rate Spread
Interest Rate Spread 13 While organic and acquisition growth successfully leveraged Northwest's capital, net interest spread was relatively flat and below peer averages. Changes in loan and deposit mix were needed to improve profitability ratios.
Slide 14: Deposit Growth
Deposit Grow $7.08 $6.08 $55 $52 $52 $62 S54 $5.08 saz $4.08 $3.08 $2.08 i i I $1.08 $0.08 an LEE EEE PES ES NonJnterest Bearing Demand «$93,025 (23.60% Interest bearing Demand, $61,980 3.20% Savings Deposits si4s077 18.60% MMDA sitgado 16.90% Time Deposits $167,281 6.20% TOTAL S506219_ 11.60% 4
Slide 15: Stock Performance and Per Share Information
Stock Performance and Per Share Information
Slide 16: Price Performance Since IPO
Price Performance Since IPO (11/4/94) 16 Source: SNL Financial As of February 3, 2010 Since its IPO in 1994, Northwest has significantly outperformed the Nasdaq Bank Index and the S&P 500 Index.
Slide 17: Tangible Book Value Per Share
Tangible Book Value Per Share 17 (Adjusted for Splits and Second-Step Exchange) 233% Increase 610% Increase
Slide 18: Annual Dividends Paid Per Share
Annual Dividends Paid Per Share (adjusted for splits and exchanges) 18 In early years, dividend payments were controlled as Northwest was focused on retaining capital and growing its franchise. In recent years, as acquisitions became expensive, Northwest steadily increased its dividends and provided
Slide 19: Asset Quality
4omsI2IAWOeL Asset Quality
Slide 20: Reserve & Charge-Offs History
Reserve & Charge-Offs History 20 Northwest's actual losses have historically been much lower than its peer group. Conservative underwriting and a commitment to working with our borrowers, have kept our losses at comparatively low levels during the current economic crisis. ( Dollars in thousands)
Slide 21: Delinquent Loans As a % of Total Loans
Delinquent Loans As a % of Total Loans (30 to 90+ days) Total Delinquency % by Loan Type (30 to 90+ days) Delinquent Loans 21
Slide 22: Loan Breakdown By State
Loan Breakdown By State 22 Dollars in thousands Loans by State (based on borrowers' residence) at December 31, 2009 90% of our loans are located in our core market of Pennsylvania and New York.
Slide 23: Average Mortgage Loan Balance and LTV
Average Mortgage Loan Balance and LTV Northwest's average mortgage balance is extremely low which enables borrowers to continue making their payments during times of economic challenge. Conservative underwriting has ensured that Northwest's mortgage customers have a significant equity position in th
Slide 24: Strategic Direction
4omsS2IAWDOe Strategic Direction
Slide 25: Investment and Leveraging of Second Step
Investment of Proceeds of Second-Step Funds temporarily invested in overnight deposits Difficult environment to improve yield Want to stay short-term or variable rate Do not want to increase credit-risk exposure in investment portfolio Use funds to grow loan portfolio while being mindful of interest
Slide 26: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy 26 Opportunity in our market areas: In PA, NY, OH and MD - approximately 170 public and private banks and thrifts with assets between $300 million and $3 billion On a selective basis, we would consider: whole bank acquisitions FDIC assisted transactions branch divest
Slide 27: Disciplined Acquisition Strategy: Criteria
Disciplined Acquisition Strategy 27 Acquisition criteria Strategic first preference is for acquisitions within our current markets secondarily, we prefer acquisitions in contiguous or near contiguous market areas prefer banks that add complementary products and services, diversified deposit mixes an
Slide 28: Investment Opportunity
4omsI2IAWOeL Investment Opportunity
Slide 29: Investment Opportunity in Northwest
Investment Opportunity in Northwest 29 Things we plan to do: Continuing our evolution of becoming more bank-like Continue our disciplined acquisition strategy in our current or adjacent markets Focus on self-originated small business and commercial credits vs. residential loans Dividends and stock b
Slide 30: Northwest announces the acquisition of NexTier
N O R T H W E S T announces the acquisition of
Slide 31: NexTier Overview
NexTier Overview 31 NexTier Bank is a privately held commercial bank founded in 1878 and headquartered in Butler, PA, 30 miles north of downtown Pittsburgh At March 31, 2010 the Company had: $584 million in assets $376 million in gross loans $514 million in deposits $18 million in tangible common eq
Slide 32: Transaction Summary
Transaction Summary 32 Acquisition of an extremely attractive core deposit base 38% demand deposits Cost of deposits of 0.58% Attractively priced transaction 100% cash, $200 per share or $20.3 mm in total consideration 113% of tangible book value, 88% of book value $2.3 mm premium on tangible book,
Slide 33: Asset Quality
Asset Quality 33 $376 million loan portfolio $314 million of loans are in the Pennsylvania market $62 million of loans are in Arizona and other markets $37.6 million in non-performing assets $8.5 million of non-performing assets are in the Pennsylvania market $29.2 million of non-performing assets a
Slide 34: Extensive Credit Review Process
Extensive Credit Review Process 34 NexTier engaged a third party credit review firm in December 2009 who reviewed 222 commercial loans with an aggregate balance of $240 mm (70%) NWBI engaged a third party credit review firm in March 2010 who reviewed 129 loans with an aggregate balance of $175 mm (6
Slide 35: Transaction Highlights
Transaction Highlights 35 Northwest Savings Bank NexTier Bank, NA Acquisition Criteria NexTier Transaction Preference for in-market transactions NWBI's market share moves from #7 in Butler County to #2 Adds 12 branches and $345 mm of deposits in Butler County Adds 3 branches and $64 mm of deposits i
Slide 36: Market Share
Market Share 36 Allegheny Deposit Market Share Armstrong Deposit Market Share Butler Deposit Market Share Deposit market share as of June 30, 2009 and June 30, 2008.
Slide 37: Composition of Deposits
Composition of Deposits 37 Transaction MMDA & Savings Certificates of Deposit East 22.9 32.8 44.3 Transaction MMDA & Savings Certificates of Deposit East 18.3 29.3 52.4 Transaction MMDA & Savings Certificates of Deposit East 22.3 31 46.7 NWBI December 2005 NWBI December 2009 NexTier December 2009 Pr
Slide 38: Composition of Loan Portfolio
Commercial Business One-to-Four Family Multi-Family & Commerical Construction Consumer & Home Equity East 12.3 16.6 52.7 6.8 11.6 Composition of Loan Portfolio 38 Commercial Business One-to-Four Family Multi-Family & Commerical Construction Consumer & Home Equity East 7.4 42.3 25.3 0.5 24.7 Commerci
Northwest Bancshares — Investor Presentation (May 2010) on 6ix