Northwest Bancshares, parent of Northwest Savings Bank, said fourth-quarter profits soared twelve-fold, largely because it incurred a significant one-time charge a year ago that kept that quarter's earnings artificially low.
The Warren, Pa.-based company reported net income of $12.7 million, or 12 cents per share, up from $1 million, or 1 cent per share, in the same quarter a year ago.
However, the fourth quarter of 2009 included a $13.8 million pretax charge, or $8.3 million after taxes, to establish a charitable foundation along with the company's "second-step" common stock offering that completed its conversion from a depositor-owned mutual company to a full public company. Without that, profits rose 37 percent.
Profits fell 18 percent from the third quarter of 2010, when the bank earned $15.5 million, or 14 cents per share.
For the full year, profits soared 76.2 percent to $57.5 million, or 53 cents per share, from $32.7 million, or 30 cents per share, in 2009.
The company declared a quarterly cash dividend of 10 cents per share, payable Feb. 17 to shareholders of record on Feb. 4. That's the 65th straight quarterly cash dividend. And it started a common stock buyback program on Dec. 20, buying back 555,000 shares over the next 11 days, at an average price of $11.69 per share.
Northwest operates 171 branches in Pennsylvania, New York, Ohio, Maryland and Florida, as well as 52 consumer finance offices in Pennsylvania called Northwest Consumer Discount Company. It has 14 branches in Western New York, including five in Chautauqua County branded as Jamestown Savings Bank, and four in Monroe County.
However, the bank disclosed that it will close its three offices in South Florida, with $59 million in deposits and $106.1 million in loans, sometime this year. President and CEO William J. Wagner cited the difficult real estate market for lending in Florida, as well as the "challenges we faced in running a small operation, with just three branches, in a large metro area that is such a great distance from our corporate headquarters."
During the quarter, Northwest was forced by federal regulators to terminate a $20.3 million cash purchase of NexTier Inc. of Butler, Pa., north of Pittsburgh, after the Federal Deposit Insurance Corp. criticized Northwest for unspecified consumer compliance violations.
Wagner said there's no new developments on the violations, which are expected to lead to an "enforcement action," as the bank is still waiting for regulators to finalize the examination process.
For the quarter, net interest income from taking deposits and making loans rose 15.8 percent to $67.2 million.
The bank set aside $13.9 million for loan losses, down 4 percent.