0001144204-10-055285.txt : 20101025 0001144204-10-055285.hdr.sgml : 20101025 20101025131804 ACCESSION NUMBER: 0001144204-10-055285 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20101025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20101025 DATE AS OF CHANGE: 20101025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Northwest Bancshares, Inc. CENTRAL INDEX KEY: 0001471265 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34582 FILM NUMBER: 101139481 BUSINESS ADDRESS: STREET 1: 100 LIBERTY STREET CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: (814) 726-2140 MAIL ADDRESS: STREET 1: 100 LIBERTY STREET CITY: WARREN STATE: PA ZIP: 16365 8-K 1 v199812_8-k.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 25, 2010

Northwest Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Maryland	1-34582	27-0950358
(State or other jurisdiction	(Commission File No.)	(I.R.S. Employer
of incorporation)		Identification No.)

	100 Liberty Street
	Warren, Pennsylvania	16365
	(Address of principal executive office)	(Zip code)

Registrant’s telephone number, including area code: (814) 726-2140

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 2.02

Results of Operations and Financial Condition

On October 25, 2010, Northwest Bancshares, Inc. issued an earnings release for the quarter ended September 30, 2010. A copy of the release is included as exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed “filed” for any purpose.

Item 9.01

Financial Statements and Exhibits

(a)

Not applicable

(b)

Not applicable

(c)

Not applicable

(d)

Exhibits

Exhibit No.	Description
99.1	Press release dated October 25, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

		NORTHWEST BANCSHARES, INC.


DATE: October 25, 2010	By:	/s/ William W. Harvey, Jr.
		William W. Harvey, Jr.
		Chief Financial Officer

EX-99.1 2 v199812_ex99-1.htm

EXHIBIT 99.1

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

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 Bancshares, Inc. Announces Third Quarter

2010 Earnings and Dividend Declaration

Warren, Pennsylvania – October 25, 2010

Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2010 of $15.5 million, or $0.14 per diluted share. This represents an increase of $3.4 million over the same quarter last year when net income was $12.1 million, or $0.11 per diluted share, and a decrease of $650,000 compared to the quarter ended June 30, 2010 when net income was $16.1 million, or $0.15 per diluted share. The annualized returns on average shareholders’ equity and average assets for the current quarter were 4.72% and 0.76% compared to 7.48% and 0.68% for the same quarter last year and 4.95% and 0.79% for the quarter ended June 30, 2010.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share payable on November 18, 2010, to shareholders of record as of November 4, 2010. This represents the 64th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, “We are pleased to report another quarter of solid earnings despite the challenges of the current economic and interest rate environment. During the quarter, our net interest margin improved to 3.63% from 3.47% for the prior quarter and 3.54% for the same quarter last year. Other components of income remained relatively stable and our earnings were fairly consistent with the previous quarter. Our financial division was successful in restructuring $695.0 million of FHLB borrowings, extending the average maturities of these borrowings by almost four years, while reducing interest cost by approximately $1.0 million annually. Finally, we experienced strong lending and deposit growth. Loans increased by $47.6 million for the quarter and $293.0 million year-to-date while deposits increased $40.0 million for the quarter and $144.5 million year-to-date. Most encouraging was our growth in non-interest bearing checking accounts of $21.0 million for the quarter and $68.5 million year-to-date.”

Net interest income increased by $9.9 million, or 17.3%, to $66.7 million for the quarter ended September 30, 2010, from $56.8 million for the quarter ended September 30, 2009, which was primarily attributable to an increase in interest income from loans receivable and a decrease in the cost of deposits. Interest income on loans receivable increased by $3.7 million, or 4.7%, to $83.4 million as the Company’s average outstanding loans increased by $400.8 million, or 7.8%. Interest expense on deposits decreased by $5.7 million, or 24.3%, to $17.8 million as a result of a decrease in market interest rates and a continued change in the mix of deposits as lower-cost transaction accounts grew more rapidly than other types of deposits.

The provision for loan losses increased by $41,000, or 0.4%, to $9.9 million for the quarter ended September 30, 2010, from $9.8 million a year ago. As of September 30, 2010, the allowance for loan losses was $77.2 million, or 1.38% of total loans, compared to $67.8 million, or 1.32% of total loans, as of September 30, 2009. Loans 90 days or more delinquent were $103.5 million as of September 30, 2010, compared to $117.1 million as of September 30, 2009.

Noninterest income decreased by $157,000, or 1.1%, to $13.8 million for the quarter ended September 30, 2010, from $14.0 million for the quarter ended September 30, 2009. The Company recorded other-than-temporary impairment on investment securities of $392,000 for the quarter ended September 30, 2010 compared to $891,000 for the comparable quarter in 2009 as the fair value of the investment portfolio has increased over the past year. Mortgage banking income decreased from $1.3 million last year, to $752,000 for the quarter ended September 30, 2010 as a result of the Company significantly decreasing the percentage of mortgage loans that were sold into the secondary market. Service charges and fees increased by $938,000, or 10.6%, to $9.8 million for the quarter ended September 30, 2010 primarily as a result of loan production and an increase in the types of deposit accounts which typically generate fees. Also making a positive contribution to noninterest income was insurance commission income which increased by $662,000, or 90.6%, to $1.4 million for the quarter ended September 30, 2010 due to the acquisition of Veracity Benefits Design, Inc., an employee benefits firm specializing in services to employer and employee groups. Partially offsetting these increases was a write-down of real estate owned, which increased to $2.0 million for the quarter ended September 30, 2010, from $62,000 for the quarter ended September 30, 2009. This increase was primarily the result of a write-down on a parcel of property located in south Florida due to further deterioration of the market value of the property.

Noninterest expense increased by $4.0 million, or 9.0%, to $49.0 million for the quarter ended September 30, 2010, from $45.0 million in the prior year. This increase is primarily a result of increases in compensation and employee benefits, office operations, processing expenses and professional services. Compensation and employee benefits expenses increased by $1.3 million, or 5.5%, to $24.6 million for the quarter ended September 30, 2010. This increase is primarily attributable to an increase in health insurance expense and the expense of the employee stock ownership plan. Office operations expense increased by $1.2 million, to $4.5 million for the quarter ended September 30, 2010. This increase was entirely due to a large check kiting fraud. Processing expenses increased by $642,000, to $5.9 million for the quarter ended September 30, 2010. This increase is primarily due to the additional costs associated with annual software maintenance and software license fees. Professional services increased by $458,000, to $1.1 million for the quarter ended September 30, 2010. This increase is primarily a result of additional consulting fees related to bank compliance programs and fees associated with the restructuring of our FHLB borrowings.

Net income for the nine-month period ended September 30, 2010 of $44.8 million, or $0.41 per diluted share, represents an increase of $13.2 million, or 41.5% compared to net income of $31.6 million, or $0.29 per diluted share, for the nine-month period ended September 30, 2009. The annualized returns on average shareholders’ equity and average assets were 4.57% and 0.74%, respectively, for the current nine-month period compared to 6.68% and 0.60%, respectively, in the prior year.

Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc., through its subsidiary Northwest Savings Bank, currently operates 171 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 52 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.’s stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, 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 Bancshares, 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 Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except per share amounts)

	(Unaudited)
	September 30,			December 31,
Assets	2010			2009
Cash and cash equivalents	$	113,477			69,265
Interest-earning deposits in other financial institutions		561,634			1,037,893
Federal funds sold and other short-term investments		632			632
Marketable securities available-for-sale (amortized cost of $862,747 and $1,059,177)		884,158			1,067,089
Marketable securities held-to-maturity (fair value of $409,784 and $0)		399,324			-
Total cash, interest-earning deposits and marketable securities		1,959,225			2,174,879

Loans held for sale		18,020			1,164
Mortgage loans - one- to four- family		2,451,848			2,334,538
Home equity loans and lines of credit		1,102,252			1,067,584
Consumer loans		263,717			286,292
Commercial real estate loans		1,356,051			1,238,217
Commercial business loans		400,574			371,670
Total loans receivable		5,592,462			5,299,465
Allowance for loan losses		(77,245	)		(70,403	)
Loans receivable, net		5,515,217			5,229,062

Federal Home Loan Bank stock, at cost		63,242			63,242
Accrued interest receivable		27,590			25,780
Real estate owned, net		22,998			20,257
Premises and Equipment, net		126,999			124,316
Bank owned life insurance		131,009			128,270
Goodwill		171,682			171,363
Other intangible assets		4,419			4,678
Other assets		120,404			83,451
Total assets	$	8,142,785			8,025,298

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	555,491			487,036
Interest-bearing demand deposits		783,749			768,110
Savings deposits		1,977,249			1,744,537
Time deposits		2,452,451			2,624,741
Total deposits		5,768,940			5,624,424
Borrowed funds		876,068			897,326
Advances by borrowers for taxes and insurance		12,698			22,034
Accrued interest payable		1,725			4,493
Other liabilities		65,038			57,412
Junior subordinated debentures		103,094			103,094
Total liabilities		6,827,563			6,708,783

Shareholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued		-			-
Common stock, $0.01 par value: 500,000,000 shares authorized, 110,806,418 shares
and 110,641,858 shares issued, respectively		1,108			1,106
Paid-in-capital		829,929			828,195
Retained earnings		520,419			508,842
Unallocated common stock of Employee Stock Ownership Plan		(28,851	)		(11,651	)
Accumulated other comprehensive loss		(7,383	)		(9,977	)
Total shareholders' equity		1,315,222			1,316,515
Total liabilities and shareholders' equity	$	8,142,785			8,025,298

Equity to assets		16.15	%		16.40	%
Tangible common equity to assets		14.30	%		14.53	%
Book value per share	$	11.87		$	11.90
Tangible book value per share	$	10.28		$	10.31
Closing market price per share	$	11.18		$	11.27
Full time equivalent employees		1,879			1,867
Number of banking offices		171			171

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)

	Three months ended
	September 30,						June 30,
	2010			2009			2010
Interest income:
Loans receivable		83,372			79,637			81,734
Mortgage-backed securities		6,534			6,580			6,706
Taxable investment securities		489			1,242			599
Tax-free investment securities		3,090			2,716			2,853
Interest-earning deposits		524			253			512
Total interest income		94,009			90,428			92,404

Interest expense:
Deposits		17,772			23,472			18,973
Borrowed funds		9,587			10,114			9,704
Total interest expense		27,359			33,586			28,677

Net interest income		66,650			56,842			63,727
Provision for loan losses		9,871			9,830			7,896
Net interest income after provision
for loan losses		56,779			47,012			55,831

Noninterest income:
Impairment losses on securities		(1,830	)		(3,727	)		(1,824	)
Noncredit related losses on securities not expected
to be sold (recognized in other comprehensive income)		1,438			2,836			1,606
Net impairment losses		(392	)		(891	)		(218	)
Gain on sale of investments, net		17			97			94
Service charges and fees		9,821			8,883			9,902
Trust and other financial services income		1,600			1,496			1,912
Insurance commission income		1,393			731			1,293
Loss on real estate owned, net		(2,014	)		(62	)		(255	)
Income from bank owned life insurance		1,212			1,208			1,474
Mortgage banking income		752			1,328			29
Other operating income		1,439			1,195			1,314
Total noninterest income		13,828			13,985			15,545

Noninterest expense:
Compensation and employee benefits		24,565			23,292			24,960
Premises and occupancy costs		5,648			5,319			5,340
Office operations		4,460			3,270			2,934
Processing expenses		5,863			5,221			5,552
Marketing expenses		2,208			2,102			3,294
Federal deposit insurance premiums		2,424			2,381			2,148
Professional services		1,126			668			583
Amortization of intangible assets		725			701			759
Real estate owned expense		654			838			712
Other expense		1,375			1,195			1,875
Total noninterest expense		49,048			44,987			48,157

Income before income taxes		21,559			16,010			23,219
Income tax expense		6,068			3,956			7,078

Net income		15,491			12,054			16,141

Basic earnings per share	$	0.14		$	0.11	*	$	0.15

Diluted earnings per share	$	0.14		$	0.11	*	$	0.15

Annualized return on average equity		4.72	%		7.48	%		4.95	%
Annualized return on average assets		0.76	%		0.68	%		0.79	%

Basic common shares outstanding		108,340,566			109,056,008	*		108,227,678
Diluted common shares outstanding		108,914,069			109,505,921	*		108,960,333

* - Adjusted for 2.25 to 1 exchange ratio.

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)

	Nine months ended
	September 30,
	2010			2009
Interest income:
Loans receivable		245,852			240,400
Mortgage-backed securities		19,385			20,858
Taxable investment securities		2,086			4,138
Tax-free investment securities		8,627			8,376
Interest-earning deposits		1,601			415
Total interest income		277,551			274,187

Interest expense:
Deposits		58,149			72,555
Borrowed funds		28,991			30,418
Total interest expense		87,140			102,973

Net interest income		190,411			171,214
Provision for loan losses		26,568			27,347
Net interest income after provision
for loan losses		163,843			143,867

Noninterest income:
Impairment losses on securities		(1,994	)		(12,417	)
Noncredit related losses on securities not expected
to be sold (recognized in other comprehensive income)		1,287			7,236
Net impairment losses		(707	)		(5,181	)
Gain on sale of investments, net		2,194			377
Service charges and fees		28,625			24,867
Trust and other financial services income		5,345			4,349
Insurance commission income		3,828			2,039
Loss on real estate owned, net		(2,293	)		(3,934	)
Income from bank owned life insurance		3,852			3,596
Mortgage banking income		773			6,442
Other operating income		3,613			2,886
Total noninterest income		45,230			35,441

Noninterest expense:
Compensation and employee benefits		75,381			69,957
Premises and occupancy costs		16,990			16,521
Office operations		10,631			9,575
Processing expenses		17,111			15,483
Marketing expenses		6,945			5,046
Federal deposit insurance premiums		6,720			6,161
FDIC Special Assessment		-			3,288
Professional services		2,437			1,899
Amortization of intangible assets		2,266			2,371
Real estate owned expense		2,265			1,770
Other expense		5,063			4,186
Total noninterest expense		145,809			136,257

Income before income taxes		63,264			43,051
Income tax expense		18,479			11,404

Net income		44,785			31,647

Basic earnings per share	$	0.41		$	0.29

Diluted earnings per share	$	0.41		$	0.29

Annualized return on average equity		4.57	%		6.68	%
Annualized return on average assets		0.74	%		0.60	%

Basic common shares outstanding		108,299,515			109,007,874
Diluted common shares outstanding		108,959,585			109,338,435

* - Adjusted for 2.25 to 1 exchange ratio.

Northwest Bancshares, Inc. and Subsidiaries

Supplementary data - unaudited

(Dollars in thousands)

	Three months ended							Nine months ended
	September 30,							September 30,
	2010				2009			2010			2009
Allowance for loan losses
Beginning balance	$	75,417				66,777			70,403			54,929
Provision		9,871				9,830			26,568			27,347
Charge-offs mortgage		(682	)			(417	)		(1,947	)		(1,300	)
Charge-offs consumer		(3,040	)			(1,679	)		(7,705	)		(4,515	)
Charge-offs commercial		(4,811	)			(7,176	)		(11,563	)		(9,701	)
Recoveries		490		#		440			1,489			1,015
Ending balance	$	77,245				67,775			77,245			67,775

Net charge-offs to average loans, annualized		0.58	%			0.68	%		0.48	%		0.40	%

	September 30,							December 31,
	2010				2009			2009			2008
Nonperforming loans	$	151,217				117,138			124,626			99,203
Real estate owned, net		22,998				19,838			20,257			16,844
Nonperforming assets	$	174,215				136,976			144,883			116,047

Nonperforming loans to total loans		2.70	%			2.27	%		2.35	%		1.91	%

Nonperforming assets to total assets		2.14	%			1.92	%		1.81	%		1.67	%

Allowance for loan losses to total loans		1.38	%			1.32	%		1.33	%		1.06	%

Allowance for loan losses to nonperforming loans		51.08	%			57.86	%		56.49	%		55.37	%

Northwest Bancshares, Inc. and Subsidiaries

Supplementary data - unaudited

(Dollars in thousands)

Loans past due schedule
(Number of loans and dollar amount of loans)

	September 30,						December 31,
	2010				*		2009				*		2008				*
Loans past due 30 days to 59 days:
One- to four- family residential loans		97	$	6,696	0.3	%		350	$	27,998	1.2	%		392	$	32,988	1.3	%
Consumer loans		993		9,874	0.7	%		1,100		11,226	0.8	%		1,157		11,295	0.9	%
Multifamily and commercial RE loans		76		12,445	0.9	%		85		16,152	1.3	%		99		18,901	1.8	%
Commercial business loans		55		5,130	1.3	%		48		3,293	0.9	%		86		7,700	2.2	%
Total loans past due 30 days to 59 days		1,221	$	34,145	0.6	%		1,583	$	58,669	1.1	%		1,734	$	70,884	1.4	%

Loans past due 60 days to 89 days:
One- to four- family residential loans		76	$	6,505	0.3	%		85	$	6,772	0.3	%		101	$	7,599	0.3	%
Consumer loans		413		3,679	0.3	%		392		3,029	0.2	%		379		2,836	0.2	%
Multifamily and commercial RE loans		36		12,358	0.9	%		35		5,811	0.5	%		54		8,432	0.8	%
Commercial business loans		36		2,304	0.6	%		26		2,474	0.7	%		45		3,801	1.1	%
Total loans past due 60 days to 89 days		561	$	24,846	0.4	%		538	$	18,086	0.3	%		579	$	22,668	0.4	%

Loans past due 90 days or more:
One- to four- family residential loans		251	$	27,552	1.1	%		279	$	29,373	1.3	%		223	$	20,435	0.8	%
Consumer loans		600		11,936	0.9	%		727		12,544	0.9	%		687		9,756	0.7	%
Multifamily and commercial RE loans		186		41,605	3.1	%		199		49,594	4.0	%		155		43,828	4.1	%
Commercial business loans		104		22,431	5.6	%		124		18,269	4.9	%		114		25,184	7.1	%
Total loans past due 90 days or more		1,141	$	103,524	1.9	%		1,329	$	109,780	2.1	%		1,179	$	99,203	1.9	%

* - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.

Northwest Bancshares, Inc. and Subsidiaries

Analysis of loan portfolio by geographic location as of September 30, 2010 - unaudited:

(Dollars in thousands)

Loans outstanding:

	Mortgage		(1)			Consumer		(2)			Commercial		(3)			Total		(4)

Pennsylvania	$	2,055,065		83.2	%		1,189,160		87.1	%		1,161,039		66.1	%		4,405,264		78.9	%
New York		146,241		5.9	%		107,596		7.9	%		336,060		19.1	%		589,897		10.5	%
Ohio		26,637		1.1	%		17,947		1.3	%		46,234		2.6	%		90,818		1.6	%
Maryland		214,710		8.7	%		36,976		2.7	%		170,226		9.7	%		421,912		7.5	%
Florida		27,215		1.1	%		14,290		1.0	%		43,066		2.5	%		84,571		1.5	%
Total	$	2,469,868		100.0	%		1,365,969		100.0	%		1,756,625		100.0	%		5,592,462		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	$	18,828		0.9	%		9,328		0.8	%		41,854		3.6	%		70,010		1.6	%
New York		782		0.5	%		199		0.2	%		767		0.2	%		1,748		0.3	%
Ohio		134		0.5	%		135		0.8	%		219		0.5	%		488		0.5	%
Maryland		774		0.4	%		1,029		2.8	%		14,169		8.3	%		15,972		3.8	%
Florida		7,034		25.8	%		1,245		8.7	%		7,027		16.3	%		15,306		18.1	%
Total	$	27,552		1.1	%		11,936		0.9	%		64,036		3.6	%		103,524		1.9	%

(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 Bancshares, Inc. and Subsidiaries

Supplementary data - unaudited

(Dollars in thousands)

Marketable securities available-for-sale as of September 30, 2010:
			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	10,014		-		(1	)		10,013

Debt issued by government sponsored enterprises:
Due in one year - five years		1,986		117		-			2,103
Due in five years - ten years		7,074		737		-			7,811

Equity securities		954		95		(93	)		956

Municipal securities:
Due in one year - five years		3,099		176		-			3,275
Due in five years - ten years		35,944		1,596		-			37,540
Due after ten years		171,960		4,391		(497	)		175,854

Corporate trust preferred securities:
Due in one year or less		100		-		-			100
Due in one year - five years		500		-		-			500
Due after ten years		25,530		288		(7,021	)		18,797

Mortgage-backed securities:
Fixed rate pass-through		114,015		8,282		(5	)		122,292
Variable rate pass-through		181,804		8,120		(24	)		189,900
Fixed rate non-agency CMO		15,476		93		(1,187	)		14,382
Fixed rate agency CMO		28,622		1,243		-			29,865
Variable rate non-agency CMO		6,083		150		(180	)		6,053
Variable rate agency CMO		259,586		5,241		(110	)		264,717

Total mortgage-backed securities		605,586		23,129		(1,506	)		627,209

Total marketable securities available-for-sale	$	862,747		30,529		(9,118	)		884,158

Marketable securities held-to-maturity as of September 30, 2010:
			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value

Debt issued by government sponsored enterprises:
Due in one year - five years	$	26,500		84		-			26,584

Municipal securities:
Due after ten years		81,116		1,485		(31	)		82,570

Mortgage-backed securities:
Fixed rate pass-through		32,168		1,012		-			33,180
Variable rate pass-through		9,996		135		-			10,131
Fixed rate agency CMO		221,772		7,306		-			229,078
Variable rate agency CMO		27,772		469		-			28,241

Total mortgage-backed securities		291,708		8,922		-			300,630

Total marketable securities held-to-maturity	$	399,324		10,491		(31	)		409,784

Issuers of mortgage-backed securities as of September 30, 2010:
Fannie Mae	$	327,849		11,746		(123	)		339,472
Ginnie Mae		264,415		9,697		(8	)		274,104
Freddie Mac		258,273		10,365		(2	)		268,636
Non-agency		46,757		243		(1,373	)		45,627
Total	$	897,294		32,051		(1,506	)		927,839

Average Balance Sheet - unaudited

(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 September 30,
	2010					2009
	Average		Interest		Avg.	Average		Interest		Avg.
	Balance				Yield/	Balance				Yield/
					Cost					Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,569,014		83,753	6.00%		5,168,204		80,006		6.15%
Mortgage-backed securities (c)		853,714		6,534	3.06%		714,548		6,580		3.68%
Investment securities (c) (d)		378,145		5,243	5.55%		351,741		5,422		6.17%
FHLB stock		63,242		-	-		63,143		-		-
Other interest-earning deposits		706,829		524	0.29%		328,447		253		0.30%

Total interest-earning assets		7,570,944		96,054	5.06%		6,626,083		92,261		5.54%

Noninterest earning assets (e)		591,977					512,804

Total assets	$	8,162,921					7,138,887

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,071,708		2,203	0.82%		842,069		1,591		0.75%
Interest-bearing demand accounts		778,597		244	0.12%		746,125		555		0.30%
Money market accounts		903,278		1,301	0.57%		766,742		1,908		0.99%
Certificate accounts		2,446,317		14,024	2.27%		2,578,266		19,418		2.99%
Borrowed funds (f)		898,618		8,150	3.60%		892,081		8,665		3.85%
Junior subordinated debentures		103,094		1,437	5.45%		103,094		1,449		5.50%

Total interest-bearing liabilities		6,201,612		27,359	1.75%		5,928,377		33,586		2.25%

Noninterest bearing liabilities		648,905					566,250

Total liabilities		6,850,517					6,494,627

Shareholders' equity		1,312,404					644,260

Total liabilities and shareholders' equity	$	8,162,921					7,138,887

Net interest income/ Interest rate spread				68,695	3.31%				58,675		3.29%

Net interest-earning assets/ Net interest margin	$	1,369,332			3.63%		697,706				3.54%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22X					1.12X

(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.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

Average Balance Sheet - unaudited

(Dollars in thousands)

	Nine months ended September 30,
	2010					2009
	Average		Interest		Avg.	Average		Interest		Avg.
	Balance				Yield/	Balance				Yield/
					Cost					Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,461,244		246,941	6.05%		5,185,359		241,604	6.19%
Mortgage-backed securities (c)		794,691		19,385	3.25%		712,593		20,858	3.90%
Investment securities (c) (d)		371,587		15,358	5.51%		364,437		17,025	6.23%
FHLB stock		63,242		-	-		63,143		-	-
Other interest-earning deposits		833,157		1,601	0.25%		232,852		415	0.24%

Total interest-earning assets		7,523,921		283,285	5.04%		6,558,384		279,902	5.67%

Noninterest earning assets (e)		577,252					491,480

Total assets	$	8,101,173					7,049,864

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,022,259		6,472	0.85%		822,401		4,649	0.76%
Interest-bearing demand accounts		772,584		962	0.17%		733,714		2,102	0.38%
Money market accounts		881,983		4,768	0.72%		733,956		6,703	1.22%
Certificate accounts		2,492,344		45,947	2.46%		2,526,660		59,101	3.13%
Borrowed funds (f)		898,320		24,728	3.68%		948,981		26,020	3.67%
Junior subordinated debentures		103,094		4,263	5.45%		106,531		4,398	5.44%

Total interest-bearing liabilities		6,170,584		87,140	1.89%		5,872,243		102,973	2.34%

Noninterest bearing liabilities		623,875					545,623

Total liabilities		6,794,459					6,417,866

Shareholders' equity		1,306,714					631,998

Total liabilities and shareholders' equity	$	8,101,173					7,049,864

Net interest income/ Interest rate spread				196,145	3.15%				176,929	3.33%

Net interest-earning assets/ Net interest margin	$	1,353,337			3.48%		686,141			3.60%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22X					1.12X

(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.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

Average Balance Sheet - unaudited

(Dollars in thousands)

	Three months ended					Three months ended
	September 30, 2010					June 30, 2010
	Average		Interest		Avg.	Average		Interest		Avg.
	Balance				Yield/	Balance				Yield/
					Cost					Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,569,014		83,753	6.00%		5,465,373		81,866	6.03%
Mortgage-backed securities (c)		853,714		6,534	3.06%		792,412		6,706	3.39%
Investment securities (c) (d)		378,145		5,243	5.55%		376,206		4,989	5.30%
FHLB stock		63,242		-	-		63,242		-	-
Other interest-earning deposits		706,829		524	0.29%		845,947		512	0.24%

Total interest-earning assets		7,570,944		96,054	5.06%		7,543,180		94,073	5.02%

Noninterest earning assets (e)		591,977					584,203

Total assets	$	8,162,921					8,127,383

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,071,708		2,203	0.82%		1,033,707		2,236	0.87%
Interest-bearing demand accounts		778,597		244	0.12%		785,619		319	0.16%
Money market accounts		903,278		1,301	0.57%		901,439		1,630	0.73%
Certificate accounts		2,446,317		14,024	2.27%		2,470,706		14,788	2.40%
Borrowed funds (f)		898,618		8,150	3.60%		895,650		8,283	3.71%
Junior subordinated debentures		103,094		1,437	5.45%		103,094		1,421	5.45%

Total interest-bearing liabilities		6,201,612		27,359	1.75%		6,190,215		28,677	1.86%

Noninterest bearing liabilities		648,905					632,037

Total liabilities		6,850,517					6,822,252

Shareholders' equity		1,312,404					1,305,131

Total liabilities and shareholders' equity	$	8,162,921					8,127,383

Net interest income/ Interest rate spread				68,695	3.31%				65,396	3.16%

Net interest-earning assets/ Net interest margin	$	1,369,332			3.63%		1,352,965			3.47%

Ratio of interest-earning assets to
interest-bearing liabilities		1.22X					1.22X

(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.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.