Northwest Bankshares' first-quarter profits jumped by 31 percent, topping analyst forecasts by a penny per share, as the Warren, Pa.-based firm's basic banking business became more profitable.
The parent company of Northwest Savings Bank said it earned $17.3 million, or 16 cents per share, up from $13.2 million, or 12 cents per share, a year earlier. The earnings were slightly better than the 15 cents per share that analysts surveyed by Thomson Reuters were expecting.
Northwest's net interest income, which is the difference between the interest the bank pays out on deposits and earns on its loans, rose by 12 percent, mainly because of a drop in the interest rates it pays on deposits.
The bank's provision for loan losses fell by 18 percent to $7.2 million, its lowest level in two years.
William J. Wagner, Northwest's president and chief executive officer, said "the only negative trend" during the first quarter was a 1 percent drop in the size of the bank's loan portfolio, which he blamed on more aggressive competition for new loans at a time when loan demand was relatively weak.
The bank also said it is increasing its quarterly dividend by a penny per share, or 10 percent, to 11 cents per share. It is the first dividend increase by Northwest since June 2007.
Northwest, which has 14 branches in Western New York, including five in Chautauqua County branded as Jamestown Savings Bank, and four in Monroe County, also said it has repurchased 3.2 million shares of its stock at an average price of $11.96 per share under a stock buyback program it launched in December.
In all, Northwest has 172 branches in Pennsylvania, New York, Ohio and Maryland, along with three branches in southeastern Florida that will close at the end of June.