COLUMBUS, Ohio — Northwest Bancshares Inc. has announced net income for the quarter ended Sept. 30, 2023, of $39.2 million, or 31 cents per diluted share.

Net income represents an increase of $1.9 million, or 5.1%, compared to the same quarter last year, when net income was $37.3 million, or 29 cents per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended Sept. 30, 2023, were 10.27% and 1.08% compared to 9.84% and 1.05% for the same quarter last year.

The company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on Nov. 14, 2023, to shareholders of record as of Nov. 2, 2023. This is the 116th consecutive quarter in which the company has paid a cash dividend. Based on the market value of the company’s common stock as of September 30, 2023, this represents an annualized dividend yield of 7.8%.

“Despite the economic, liquidity and interest rate headwinds, we are very pleased with current quarter results including strong net income of $39.2 million, or 31 cents per share,” said Louis J. Torchio, Northwest Bancshares Inc. president and CEO. “While net interest margins are still a challenge for the industry, we are encouraged by our decline of just five basis points during the quarter. Expenses were higher as we continue to hire the talent and build out the infrastructure necessary to propel the organization to a higher level of performance. Finally, asset quality remains positively resilient and overall stable. We continue to execute upon our strategic direction of transforming our organization into a more innovative and proactive commercial institution. Our year-to-date commercial loan growth of $480.0 million, or 12.1%, has pushed our overall commercial loan mix from 36% of total loans at the beginning of the year to over 39% at September 30. In addition, noninterest income represented over 22% of total revenue in the current quarter compared to just 19% during the same quarter last year. From a funding perspective, our deposit base remains strong and stable, and we have the advantage of being able to redirect cashflows from investment securities, mortgage loans and consumer loans to continue to grow more profitable commercial relationships.”

Net interest income decreased by $4.4 million, or 3.9%, to $108.4 million for the quarter ended Sept. 30, 2023, from $112.7 million for the quarter ended Sept. 30, 2022. The decrease in net interest income resulted primarily from a $37.4 million increase in interest expense as result of increases in both the average balance and average cost of interest-bearing liabilities. The average balance of interest-bearing liabilities increased $603.5 million, or 6.5%, to $9.850 billion for the quarter ended September 30, 2023 from $9.246 billion for the quarter ended September 30, 2022, driven by an increase in time deposits and borrowed funds. In addition, the cost of interest-bearing liabilities increased to 1.74% for the quarter ended September 30, 2023 from .25% for the quarter ended September 30, 2022 due to higher market interest rates. Partially offsetting this increase in interest expense was a $33.0 million increase in interest income. Cash and marketable securities were redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest-earning assets to increase to 4.51% for the quarter ended September 30, 2023 from 3.60% for the quarter ended September 30, 2022. Interest income on loans receivable increased $33.7 million, or 31.5%, due to an increase of $710.4 million, or 6.8%, in the average balance of loans in addition to an increase in the yield on loans to 5.01% for the quarter ended September 30, 2023 from 4.07% for the quarter ended September 30, 2022. The net effect of these changes in interest rates and average balances was a decrease in the company’s net interest margin to 3.23% for the quarter ended September 30, 2023 from 3.42% for the same quarter last year.

The provision for credit losses decreased by $10.3 million, or 91.1%, to $1.0 million for the current quarter ended September 30, 2023, from $11.3 million for the quarter ended September 30, 2022. Economic forecasts continued to improve and the company continued to experience decreases in classified loans by $29.1 million, or 12.2%, to $208.6 million, or 1.84% of total loans, at September 30, 2023 from $237.7 million, or 2.21% of total loans, at September 30, 2022.

Noninterest income increased by $4.1 million, or 15.2%, to $30.9 million for the quarter ended September 30, 2023, from $26.8 million for the quarter ended September 30, 2022. This increase was primarily due to an increase in bank owned life insurance income of $3.1 million, or 209.2%, to $4.6 million for the quarter ended September 30, 2023