EX-99.1 2 l37053exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
EARNINGS RELEASE
FOR IMMEDIATE RELEASE
Contact:   William J. Wagner, President and Chief Executive Officer (814) 726-2140
William W. Harvey, Jr., Executive Vice President and Chief Financial Officer (814) 726-2140
Northwest Bancorp, Inc. Announces Quarterly Earnings and Dividend Declaration
Warren, Pennsylvania — July 20, 2009
Northwest Bancorp, Inc. (NasdaqGS: NWSB) announced net income for the quarter ended June 30, 2009 of $7.3 million, or $0.15 per diluted share. This represents a decrease of $7.1 million, or 49.5%, over the same quarter last year when net income was $14.4 million, or $0.30 per diluted share. The annualized returns on average shareholders’ equity and average assets for the current quarter were 4.62% and 0.41% compared to 9.30% and 0.83% for the same quarter last year.
The Company emphasized that the current period income was negatively impacted by several unusual items. Most significantly, the Company recorded a provision for loan losses of $11.7 million. This provision for the quarter was $8.3 million more than the same quarter last year and exceeded net charge-offs for the quarter by $5.6 million after tax. The current period also included a charge of $2.6 million, after tax, for the market value impairment of two non-agency CMOs and a charge of $2.0 million, after tax, for the FDIC’s Emergency Assessment.
In making this announcement, William J. Wagner, President and CEO, noted, “The length and severity of the current economic recession has greatly stressed the financial condition of some of Northwest’s loan customers and their ability to make timely payments on their loans. This situation in turn has forced our Company to significantly increase the reserve for loan losses even though our actual charge-offs remain at low levels. On a positive note, our core earnings remain strong with our net interest margin at 3.56%, our noninterest income continuing to increase, and our controllable expenses increasing only measurably.”
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.22 per share payable on August 13, 2009, to shareholders of record as of July 30, 2009. This represents the 59th consecutive quarter in which the Company has paid a cash dividend.
Net interest income increased by $2.8 million, or 5.3%, for the quarter ended June 30, 2009 compared to the same quarter last year. Net interest margin for the quarter ended June 30, 2009 was 3.56% compared to 3.47% for the quarter ended June 30, 2008. The increase resulted primarily from an improvement in funding mix, with a significant reduction in the reliance on high-cost certificates of deposit and generally lower rates on all other types of deposits.
The provision for loan losses increased by $8.3 million to $11.7 million for the quarter ended June 30, 2009 compared to $3.4 million for the same quarter last year. This increase is primarily attributable to a decline in general economic conditions and an increase in troubled loans.

 

 

Loans with payments 90 days or more delinquent have increased to $122.6 million at June 30, 2009 from $99.2 million at December 31, 2008 and $69.0 million at June 30, 2008. Net losses from loans charged-off were $2.4 million in each of the quarters ended June 30, 2009 and 2008 and were $3.2 million for the quarter ended March 31, 2009. Net losses from loans charged-off were $5.7 million and $4.2 million for the six-month periods ended June 30, 2009 and 2008, respectively.
Noninterest expense increased by $5.5 million, or 13.3%, to $47.0 million for the quarter ended June 30, 2009 from $41.5 million for the quarter ended June 30, 2008 primarily due to increases in FDIC insurance assessments, marketing expenses and other operating expense. Quarterly federal deposit insurance premiums increased by $870,000, or 85.3%, as the Company had credits available in the prior year quarter to offset premiums. Also, the Company incurred a $3.3 million charge for a FDIC Emergency Assessment. Marketing expenses increased by $585,000, or 40.9%, to $2.0 million for the quarter ended June 30, 2009 from $1.4 million for the quarter ended June 30, 2008. The increase is primarily the result of publicizing the Company’s recognition as one of Forbes.com’s 100 Most Trustworthy Companies.
Net income for the six-month period ended June 30, 2009 of $19.6 million, or $0.40 per diluted share, represents a decrease of $7.5 million, or 27.6% compared to net income of $27.1 million, or $0.56 per diluted share, for the six-month period ended June 30, 2008.
The annualized returns on average shareholders’ equity and average assets were 6.26% and 0.56%, respectively, for the current six-month period compared to 8.72% and 0.79%, respectively, in the prior year.
Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bancorp, Inc., through its subsidiary Northwest Savings Bank, currently operates 168 community-banking locations in Pennsylvania, New York, Ohio, Maryland and Florida. Northwest Savings Bank is a full-service financial institution offering a complete line of retail and business banking products as well as investment management and trust services. The Company also operates 49 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company.
Northwest Bancorp, Inc.’s stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancorp, Inc. can be accessed on-line at www.northwestsavingsbank.com.
# # #
 
Forward-Looking Statements — This press release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancorp, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

 

 

Northwest Bancorp, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)
                 
    June 30,     December 31,  
    2009     2008  
Assets
                
Cash and cash equivalents
   $ 43,841       55,815  
Interest-earning deposits in other financial institutions
     369,840       16,795  
Federal funds sold and other short-term investments
     1,385       7,312  
Marketable securities available-for-sale (amortized cost of $1,015,733 and $1,144,435)
     1,009,382       1,139,170  
 
            
Total cash, interest-earning deposits and marketable securities
     1,424,448       1,219,092  
 
                
Loans held for sale
     25,122       18,738  
Mortgage loans — one- to four- family
     2,328,211       2,447,506  
Home equity loans
     991,963       1,013,876  
Consumer loans
     303,115       289,602  
Commercial real estate loans
     1,137,763       1,071,182  
Commercial business loans
     372,121       355,917  
 
            
Total loans receivable
     5,158,295       5,196,821  
Allowance for loan losses
     (66,777 )     (54,929 )
 
            
Loans receivable, net
     5,091,518       5,141,892  
 
                
Federal Home Loan Bank stock, at cost
     63,143       63,143  
Accrued interest receivable
     25,852       27,252  
Real estate owned, net
     15,890       16,844  
Premises and Equipment, net
     119,943       115,842  
Bank owned life insurance
     125,867       123,479  
Goodwill
     171,363       171,363  
Mortgage servicing rights
     7,917       6,280  
Other intangible assets
     5,725       7,395  
Other assets
     40,625       37,659  
 
            
Total assets
   $ 7,092,291       6,930,241  
 
            
 
                
Liabilities and Shareholders’ equity
                
Liabilities:
                
Noninterest-bearing demand deposits
   $ 433,176       394,011  
Interest-bearing demand deposits
     745,440       706,120  
Savings deposits
     1,586,000       1,480,620  
Time deposits
     2,581,123       2,457,460  
 
            
Total deposits
     5,345,739       5,038,211  
 
                
Borrowed funds
     897,063       1,067,945  
Advances by borrowers for taxes and insurance
     30,268       26,190  
Accrued interest payable
     4,955       5,194  
Other liabilities
     73,482       70,663  
Junior subordinated debentures
     108,249       108,254  
 
            
Total liabilities
     6,459,756       6,316,457  
 
                
Shareholders’ equity:
                
Preferred stock, $0.10 par value: 50,000,000 shares authorized, no shares issued
     —       —  
Common stock, $0.10 par value: 500,000,000 shares authorized, 51,259,687 and 51,244,974 issued, respectively
     5,126       5,124  
Paid-in-capital
     219,335       218,332  
Retained earnings
     503,692       490,326  
Accumulated other comprehensive loss
     (26,195 )     (30,575 )
Treasury stock of 2,742,800 shares, at cost
     (69,423 )     (69,423 )
 
            
Total shareholders’ equity
     632,535       613,784  
 
            
Total liabilities and shareholders’ equity
   $ 7,092,291       6,930,241  
 
            
 
                
Equity to assets
     8.92 %     8.86 %
Book value per share
   $ 13.05     $ 12.65  
Closing market price per share
   $ 18.86     $ 21.38  
Full time equivalent employees
     1,855       1,860  
Number of banking offices
     168       167  

 

 

Northwest Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
Interest income:
                                
Loans receivable
   $ 79,892       80,520       160,763       161,409  
Mortgage-backed securities
     6,873       9,514       14,278       16,684  
Taxable investment securities
     1,350       3,217       2,896       7,066  
Tax-free investment securities
     2,728       3,028       5,660       6,021  
Interest-earning deposits
     123       710       162       2,506  
 
                        
Total interest income
     90,966       96,989       183,759       193,686  
 
                                
Interest expense:
                                
Deposits
     24,446       36,451       49,083       79,281  
Borrowed funds
     10,115       6,972       20,304       12,529  
 
                        
Total interest expense
     34,561       43,423       69,387       91,810  
 
                                
Net interest income
     56,405       53,566       114,372       101,876  
Provision for loan losses
     11,736       3,395       17,517       5,689  
 
                        
Net interest income after provision for loan losses
     44,669       50,171       96,855       96,187  
 
                                
Noninterest income:
                                
Impairment losses on securities
     (8,690 )     (1,152 )     (8,690 )     (1,472 )
Noncredit related losses on securities not expected to be sold (recognized in other comprehensive income)
     4,400       —       4,400       —  
 
                        
Net impairment losses
     (4,290 )     (1,152 )     (4,290 )     (1,472 )
Gain on sale of investments, net
     238       68       280       971  
Service charges and fees
     8,276       8,153       15,984       15,791  
Trust and other financial services income
     1,505       1,783       2,853       3,531  
Insurance commission income
     759       583       1,308       1,163  
Gain/ (loss) on sale of real estate owned, net
     7       (254 )     (3,872 )     (341 )
Income from bank owned life insurance
     1,201       1,177       2,388       2,369  
Mortgage banking income
     2,000       329       3,724       671  
Non-cash recovery of MSRs
     1,300       —       1,390       —  
Other operating income
     986       1,120       1,691       2,139  
 
                        
Total noninterest income
     11,982       11,807       21,456       24,822  
 
                                
Noninterest expense:
                                
Compensation and employee benefits
     22,739       22,244       46,665       44,966  
Premises and occupancy costs
     5,224       5,318       11,202       11,043  
Office operations
     3,292       3,263       6,305       6,520  
Processing expenses
     4,954       4,715       10,262       8,919  
Advertising
     2,015       1,430       2,944       2,409  
Federal deposit insurance premiums
     1,890       1,020       3,780       1,844  
FDIC Emergency Assessment
     3,288       —       3,288       —  
Professional services
     590       595       1,231       1,330  
Amortization of intangible assets
     826       1,284       1,670       2,586  
Loss on early extinguishment of debt
     —       —       —       705  
Other expense
     2,186       1,619       3,923       3,593  
 
                        
Total noninterest expense
     47,004       41,488       91,270       83,915  
 
                        
 
                                
Income before income taxes
     9,647       20,490       27,041       37,094  
Income taxes
     2,356       6,048       7,448       10,030  
 
                        
 
                                
Net income
   $ 7,291       14,442       19,593       27,064  
 
                        
 
                                
Basic earnings per share
   $ 0.15     $ 0.30     $ 0.40     $ 0.56  
 
                                
Diluted earnings per share
   $ 0.15     $ 0.30     $ 0.40     $ 0.56  
 
                                
Annualized return on average equity
     4.62 %     9.30 %     6.26 %     8.72 %
Annualized return on average assets
     0.41 %     0.83 %     0.56 %     0.79 %
 
                                
Basic common shares outstanding
     48,462,019       48,359,299       48,437,070       48,344,600  
Diluted common shares outstanding
     48,588,893       48,559,777       48,557,024       48,583,055  

 

 

Northwest Bancorp, Inc. and Subsidiaries
Supplementary data
(Dollars in thousands)
                                 
    Three months     Six months  
    ended June 30,     ended June 30,  
    2009     2008     2009     2008  
Allowance for loan losses
                                
Beginning balance
   $ 57,487       42,255       54,929       41,784  
Provision
     11,736       3,395       17,517       5,689  
Charge-offs
     (2,740 )     (2,705 )     (6,244 )     (4,996 )
Recoveries
     294       348       575       816  
 
                        
Ending balance
   $ 66,777       43,293       66,777       43,293  
 
                        
 
                                
Net charge-offs to average loans, annualized
     0.19 %     0.19 %     0.22 %     0.17 %
                                 
    June 30,     December 31,  
    2009     2008     2008     2007  
Nonperforming loans
   $ 122,557       69,023       99,203       49,610  
Real estate owned, net
     15,890       8,407       16,844       8,667  
 
                        
Nonperforming assets
   $ 138,447       77,430       116,047       58,277  
 
                        
 
                                
Nonperforming loans to total loans
     2.38 %     1.37 %     1.91 %     1.03 %
 
                                
Nonperforming assets to total assets
     1.95 %     1.12 %     1.67 %     0.87 %
 
                                
Allowance for loan losses to total loans
     1.29 %     0.86 %     1.06 %     0.86 %
 
                                
Allowance for loan losses to nonperforming loans
     54.49 %     62.72 %     55.37 %     84.22 %

 

 

Northwest Bancorp, Inc. and Subsidiaries
Supplementary data
(Dollars in thousands)
Loans past due schedule
     (Number of loans and dollar amount of loans)
                                                                         
    June 30,     December 31,  
    2009     *     2008     *     2007     *  
Loans past due 30 days to 59 days:
                                                                        
One- to four- family residential loans
     71     $ 3,206       0.1 %     392     $ 32,988       1.3 %     361     $ 27,270       1.1 %
Consumer loans
     822       7,987       0.6 %     1,157       11,295       0.9 %     1,331       10,550       0.8 %
Multifamily and commercial RE loans
     99       19,977       1.8 %     99       18,901       1.8 %     88       11,331       1.3 %
Commercial business loans
     48       3,847       1.0 %     86       7,700       2.2 %     70       9,947       3.0 %
 
                                                        
Total loans past due 30 days to 59 days
     1,040     $ 35,017       0.7 %     1,734     $ 70,884       1.4 %     1,850     $ 59,098       1.2 %
 
                                                        
 
                                                                        
Loans past due 60 days to 89 days:
                                                                        
One- to four- family residential loans
     78     $ 6,307       0.3 %     101     $ 7,599       0.3 %     99     $ 6,077       0.3 %
Consumer loans
     311       2,858       0.2 %     379       2,836       0.2 %     437       2,676       0.2 %
Multifamily and commercial RE loans
     54       9,152       0.8 %     54       8,432       0.8 %     41       4,984       0.6 %
Commercial business loans
     40       8,995       2.4 %     45       3,801       1.1 %     34       2,550       0.8 %
 
                                                        
Total loans past due 60 days to 89 days
     483     $ 27,312       0.5 %     579     $ 22,668       0.4 %     611     $ 16,287       0.3 %
 
                                                        
 
                                                                        
Loans past due 90 days or more:
                                                                        
One- to four- family residential loans
     263     $ 27,670       1.2 %     223     $ 20,435       0.8 %     193     $ 12,542       0.5 %
Consumer loans
     692       10,569       0.8 %     687       9,756       0.7 %     744       7,582       0.6 %
Multifamily and commercial RE loans
     198       52,601       4.6 %     155       43,828       4.1 %     105       24,323       2.9 %
Commercial business loans
     139       31,717       8.5 %     114       25,184       7.1 %     84       5,163       1.6 %
 
                                                        
Total loans past due 90 days or more
     1,292     $ 122,557       2.4 %     1,179     $ 99,203       1.9 %     1,126     $ 49,610       1.0 %
 
                                                        
 
*   - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.

 

 

Northwest Bancorp, Inc. and Subsidiaries
Analysis of loan portfolio by geographic location as of June 30, 2009:
(Dollars in thousands)
Loans outstanding:
                                                                 
    Mortgage     (1)     Consumer     (2)     Commercial     (3)     Total     (4)  
Pennsylvania
   $ 2,013,821       85.6 %     1,168,682       90.3 %     989,493       65.6 %     4,171,996       80.8 %
New York
     132,988       5.6 %     71,854       5.5 %     279,683       18.5 %     484,525       9.4 %
Ohio
     15,670       0.7 %     13,065       1.0 %     7,406       0.5 %     36,141       0.7 %
Maryland
     156,027       6.6 %     29,712       2.3 %     174,056       11.5 %     359,795       7.0 %
Florida
     34,827       1.5 %     11,765       0.9 %     59,246       3.9 %     105,838       2.1 %
 
                                                
Total
   $ 2,353,333       100.0 %     1,295,078       100.0 %     1,509,884       100.0 %     5,158,295       100.0 %
 
                                                
 
(1)   - Percentage of total mortgage loans
 
(2)   - Percentage of total consumer loans
 
(3)   - Percentage of total commercial loans
 
(4)   - Percentage of total loans
Loans 90 or more past due:
                                                                 
    Mortgage     (5)     Consumer     (6)     Commercial     (7)     Total     (8)  
Pennsylvania
   $ 19,863       1.0 %     8,128       0.7 %     54,775       5.5 %     82,766       2.0 %
New York
     102       0.1 %     412       0.6 %     1,230       0.4 %     1,744       0.4 %
Ohio
     108       0.7 %     72       0.6 %     180       2.4 %     360       1.0 %
Maryland
     595       0.4 %     555       1.9 %     9,389       5.4 %     10,539       2.9 %
Florida
     7,003       20.1 %     1,401       11.9 %     18,744       31.6 %     27,148       25.7 %
 
                                                
Total
   $ 27,671       1.2 %     10,568       0.8 %     84,318       5.6 %     122,557       2.4 %
 
                                                
 
(5)   - Percentage of mortgage loans in that geographic area
 
(6)   - Percentage of consumer loans in that geographic area
 
(7)   - Percentage of commercial loans in that geographic area
 
(8)   - Percentage of total loans in that geographic area

 

 

Northwest Bancorp, Inc. and Subsidiaries
Supplementary data
(Dollars in thousands)
                                 
            Gross     Gross        
            unrealized     unrealized        
    Amortized     holding     holding     Market  
    cost     gains     losses     value  
Marketable securities available-for-sale as of June 30, 2009:
                                
Debt issued by the U.S. government and agencies:
                                
Due in one year or less
   $ 80       —       (3 )     77  
 
                                
Debt issued by government sponsored enterprises:
                                
Due in one year or less
     995       13       —       1,008  
Due in one year – five years
     1,972       172       —       2,144  
Due in five years – ten years
     22,613       1,553       —       24,166  
Due after ten years
     56,087       2,118       (374 )     57,831  
 
                                
Equity securities
     954       138       (8 )     1,084  
 
                                
Municipal securities:
                                
Due in one year – five years
     913       18       —       931  
Due in five years — ten years
     39,929       739       (1 )     40,667  
Due after ten years
     199,416       1,930       (5,961 )     195,385  
 
                                
Corporate trust preferred securities:
                                
Due in one year – five years
     500       —       —       500  
Due after ten years
     23,577       42       (13,119 )     10,500  
 
                                
Mortgage-backed securities:
                                
Fixed rate pass-through
     160,821       5,458       (11 )     166,268  
Variable rate pass-through
     250,939       6,651       (139 )     257,451  
Fixed rate CMO
     48,165       639       (3,429 )     45,375  
Variable rate CMO
     208,772       985       (3,762 )     205,995  
 
                        
 
                                
Total mortgage-backed securities
     668,697       13,733       (7,341 )     675,089  
 
                        
 
                                
Total marketable securities available-for-sale
   $ 1,015,733       20,456       (26,807 )     1,009,382  
 
                        
 
                                
Issuers of mortgage-backed securities as of June 30, 2009:
                                
Fannie Mae
   $ 250,994       5,816       (466 )     256,344  
Ginnie Mae
     86,252       1,404       (34 )     87,622  
Freddie Mac
     296,498       6,513       (835 )     302,176  
Non-agency
     34,953       —       (6,006 )     28,947  
 
                        
Total
   $ 668,697       13,733       (7,341 )     675,089  
 
                        

 

 

Average Balance Sheet
(Dollars in Thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
                                                   
    Three months ended June 30,  
    2009       2008  
                    Avg.                       Avg.  
    Average             Yield/       Average             Yield/  
    Balance     Interest     Cost       Balance     Interest     Cost  
ASSETS:
                                                  
Interest-earning assets:
                                                  
Loans receivable (a) (b) (d)
   $ 5,180,219       80,307       6.17 %       4,957,008       81,078       6.51 %
Mortgage-backed securities (c)
     685,930       6,873       4.01 %       802,465       9,514       4.74 %
Investment securities (c) (d) (e)
     355,960       5,546       6.23 %       482,682       7,568       6.27 %
FHLB stock
     63,143       —       0.00 %       45,648       306       2.68 %
Other interest-earning deposits
     273,924       124       0.18 %       139,500       710       2.01 %
 
                                          
 
                                                  
Total interest-earning assets
     6,559,176       92,850       5.64 %       6,427,303       99,176       6.15 %
 
                                                  
Noninterest earning assets (f)
     483,632                         508,488                  
 
                                              
 
                                                  
TOTAL ASSETS
   $ 7,042,808                         6,935,791                  
 
                                              
 
                                                  
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                                                  
Interest-bearing liabilities:
                                                  
Savings accounts
   $ 834,007       1,605       0.77 %       783,099       2,303       1.18 %
Interest-bearing demand accounts
     745,657       741       0.40 %       748,735       1,578       0.85 %
Money market accounts
     729,613       2,272       1.25 %       738,252       3,363       1.83 %
Certificate accounts
     2,537,422       19,828       3.13 %       2,830,805       29,206       4.15 %
Borrowed funds (g)
     913,512       8,636       3.79 %       627,431       5,837       3.74 %
Junior subordinated debentures
     108,249       1,459       5.33 %       108,295       1,134       4.14 %
 
                                          
 
                                                  
Total interest-bearing liabilities
     5,868,460       34,541       2.36 %       5,836,617       43,421       2.99 %
 
                                                  
Noninterest bearing liabilities
     543,500                         477,733                  
 
                                              
 
                                                  
Total liabilities
     6,411,960                         6,314,350                  
 
                                                  
Shareholders’ equity
     630,848                         621,441                  
 
                                              
 
                                                  
TOTAL LIABILITIES AND EQUITY
   $ 7,042,808                         6,935,791                  
 
                                              
 
                                                  
Net interest income/ Interest rate spread
             58,309       3.28 %               55,755       3.16 %
 
                                                  
Net interest-earning assets/ Net interest margin
   $ 690,716               3.56 %       590,686               3.47 %
 
                                                  
Ratio of interest-earning assets to interest-bearing liabilities
     1.12X                         1.10X                  
 
(a)   Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
 
(b)   Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
 
(c)   Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
 
(d)   Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
 
(e)   Average balances include Fannie Mae and Freddie Mac stock.
 
(f)   Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
 
(g)   Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

 

 

Average Balance Sheet
(Dollars in Thousands)
The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
                                                   
    Six months ended June 30,  
    2009       2008  
                    Avg.                       Avg.  
    Average             Yield/       Average             Yield/  
    Balance     Interest     Cost       Balance     Interest     Cost  
ASSETS:
                                                  
Interest-earning assets:
                                                  
Loans receivable (a) (b) (d)
   $ 5,194,221       161,597       6.21 %       4,907,866       162,478       6.58 %
Mortgage-backed securities (c)
     711,842       14,278       4.01 %       688,911       16,684       4.84 %
Investment securities (c) (d) (e)
     370,922       11,603       6.26 %       502,370       15,611       6.21 %
FHLB stock
     63,143       —       0.00 %       39,174       717       3.66 %
Other interest-earning deposits
     175,431       162       0.18 %       185,255       2,506       2.68 %
 
                                          
 
                                                  
Total interest-earning assets
     6,515,559       187,640       5.75 %       6,323,576       197,996       6.23 %
 
                                                  
Noninterest earning assets (f)
     496,152                         497,741                  
 
                                              
 
                                                  
TOTAL ASSETS
   $ 7,011,711                         6,821,317                  
 
                                              
 
                                                  
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                                                  
Interest-bearing liabilities:
                                                  
Savings accounts
   $ 812,396       3,058       0.76 %       767,551       4,529       1.19 %
Interest-bearing demand accounts
     727,614       1,547       0.43 %       737,138       3,714       1.01 %
Money market accounts
     717,288       4,795       1.35 %       721,558       8,628       2.40 %
Certificate accounts
     2,504,253       39,683       3.20 %       2,913,135       62,410       4.31 %
Borrowed funds (g)
     977,856       17,335       3.57 %       503,179       9,740       3.89 %
Junior subordinated debentures
     108,249       2,948       5.42 %       108,303       2,789       5.09 %
 
                                          
 
                                                  
Total interest-bearing liabilities
     5,847,656       69,366       2.39 %       5,750,864       91,810       3.21 %
 
                                                  
Noninterest bearing liabilities
     538,188                         449,991                  
 
                                              
 
                                                  
Total liabilities
     6,385,844                         6,200,855                  
 
                                                  
Shareholders’ equity
     625,867                         620,462                  
 
                                              
 
                                                  
TOTAL LIABILITIES AND EQUITY
   $ 7,011,711                         6,821,317                  
 
                                              
 
                                                  
Net interest income/ Interest rate spread
             118,274       3.36 %               106,186       3.02 %
 
                                                  
Net interest-earning assets/ Net interest margin
   $ 667,903               3.63 %       572,712               3.36 %
 
                                                  
Ratio of interest-earning assets to interest-bearing liabilities
     1.11X                         1.10X                  
 
(a)   Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
 
(b)   Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.
 
(c)   Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
 
(d)   Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.
 
(e)   Average balances include Fannie Mae and Freddie Mac stock.
 
(f)   Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
 
(g)   Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.