NWSB Northwest Bancorp (MM)

WARREN, Pa., April 6 /PRNewswire-FirstCall/ -- Calling the year ended December 31, 2008 a turbulent period for all financial institutions and one of the most challenging periods he has witnessed in a banking career of thirty years, William J. Wagner, President and Chief Executive Officer of Northwest Bancorp, Inc. (NASDAQ:NWSB), the parent company of Northwest Savings Bank, summed up 2008 by saying, "While our industry struggles to navigate the current stormy seas, the outlook for Northwest Bancorp, Inc. remains bright." His remarks came at the start of the letter to shareholders in the Annual Report for 2008 that the company recently released. In speaking about the Annual Report, Mr. Wagner pointed out three vital areas of concern. In today's economy, he noted that earnings, capital, and asset quality are considered the three most important indicators of any financial institution's health. It is a pleasure, he said, to report that Northwest is healthy. Northwest reached record levels for core earnings during 2008. When computing core earnings, gains and losses on the sale of assets, noncash losses in the market value of assets and the amount by which the provision for loan losses exceeds actual loan charge-offs are removed. Without these non-core items, core earnings in 2008 were $62.9 million or $1.29 per share compared to $52.7 million or $1.07 per share for 2007. The most significant contributor to this improvement was a sizable increase in net interest margin, which averaged 3.57% in 2008 versus 3.10% in 2007. This improvement resulted from the bank's continued efforts to improve its loan mix and to decrease its cost of funds. Northwest improved its loan mix by increasing its commercial loans by $251 million, yet the local bank remains a premier originator of mortgage, home equity and consumer loans. Its cost of funds dropped dramatically with the re-pricing of $2.5 billion of certificates of deposit and a change in its funding mix as it moved to increase long-term borrowings. Capital, Mr. Wagner said, typically consists of common stock, preferred stock, retained earnings, and certain types of subordinated debt. In assessing capital adequacy, regulators and investors subtract intangible assets from total capital to determine a bank's "tangible" capital. Given this definition, Northwest had capital of $543 million at December 31, 2008 and a ratio of tangible capital to assets of 8.05%, an extremely healthy ratio. Asset quality challenged the entire financial industry in 2008, yet asset quality remains strong at Northwest Bancorp, Inc. With loan delinquency increasing roughly parallel with the increase in the financial industry as a whole, Northwest enjoyed a highly favorable loan loss ratio, far below that of the rest of the industry. Thanks to stringent underwriting guidelines and diligent lending oversight, Northwest's ratio of net losses to average loans was only .19% in the fourth quarter of 2008 compared to a national average of 1.19% for all banks. Earnings, capital, and asset quality can show the fiscal strength of a financial company, Mr. Wagner concluded. Northwest is blessed with human strength as well. He ended his remarks by stating, "We have a seasoned and dedicated team...All Northwest employees understand the goals of our Company and share the vision of making Northwest the most highly-respected provider of financial services in our markets." The entire text of the 2008 Annual Report for Northwest Savings Bank may be found at http://www.northwestsavingsbank.com/. Northwest Bancorp, Inc. is the parent bank of Northwest Savings Bank, a community bank that holds $7 billion in assets and operates 167 banking locations in Pennsylvania, Ohio, New York, Maryland and Florida. Its stock trades on the Nasdaq Global Market under the symbol NWSB. DATASOURCE: Northwest Bancorp, Inc. CONTACT: Jim Holding, Vice President, Communications of Northwest Bancorp, Inc., +1-814-728-7670 Web Site: http://www.northwestsavingsbank.com/

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