0001471265false00014712652023-04-242023-04-24

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):   April 24, 2023

 

Northwest Bancshares, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland

001-34582

27-0950358

(State or other jurisdiction of incorporation)

(Commission File No.)

(I.R.S. Employer Identification No.)

 

3 Easton Oval Suite 500

Columbus

Ohio

43219

(Address of principal executive office)

(Zip code)

 

(814) 726-2140

(Registrant’s telephone number, including area code)  

Not Applicable

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, 0.01 Par Value

NWBI

NASDAQ Stock Market, LLC

    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:

 

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

 

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

 

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

 

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

    Indicate by a check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange act. ☐

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Item 2.02                                           Results of Operations and Financial Condition

 

    On April 24, 2023, Northwest Bancshares, Inc. issued an earnings release for the quarter ended March 31, 2023.  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 April 24, 2023
104						Press release dated Cover Page Interactive Data File (embedded within the Inline XBRL document)

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:

April 24, 2023

By:

/s/ William W. Harvey, Jr.

William W. Harvey, Jr.

Chief Operating Officer and Chief Financial Officer

EXHIBIT 99.1

 

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

EARNINGS RELEASE

 

FOR IMMEDIATE RELEASE

 

Contact:			Louis J. Torchio, President and Chief Executive Officer
			William W. Harvey, Jr., Senior Executive Vice President, Chief Operating Officer and Chief Financial Officer (814) 726-2140

 

Northwest Bancshares, Inc. Announces First Quarter 2023 Earnings and Quarterly Dividend

 

Columbus, Ohio — April 24, 2023

 

Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2023 of $33.7 million, or $0.26 per diluted share. This represents an increase of $5.4 million, or 19.1%, compared to the same quarter last year, when net income was $28.3 million, or $0.22 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended March 31, 2023 were 9.11% and 0.97% compared to 7.17% and 0.80% 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 May 15, 2023 to shareholders of record as of May 4, 2023. This is the 114th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of March 31, 2023, this represents an annualized dividend yield of approximately 6.7%.

 

Louis J. Torchio, President and CEO, added, “The loan growth momentum during the prior year carried into the current quarter with loan growth of $171.8 million, or 1.6%, primarily in our commercial loan portfolios generated through our Corporate Finance group, and our newly launched Equipment Finance and Small Business teams. We are pleased to see this loan growth was funded primarily through the growth in our deposit base, which increased $72.6 million from the prior quarter. Although our yield on interest earning assets has continued to increase to 4.15%, our net interest margin began to tighten, declining by 10 basis points to 3.47%, due to the current interest rate environment and our funding needs. Asset quality metrics remain strong with nonperforming and classified assets dropping to $79.8 million and $208.6 million, respectively.”

Mr. Torchio continued, “I am also pleased to report that we have been able to maintain our current deposit base and have not seen outsized deposit outflows due to the recent events in the banking industry. Our uninsured deposits, excluding intercompany accounts and collateralized public funds, continue to remain low at $1.6 billion, or 13.6% of our total deposit base. This low level of uninsured deposits also emphasizes the granularity and diversity of our deposit base with an overall average balance of approximately $16,000. Additionally, our funding availability at March 31, 2023 was approximately $3.6 billion while borrowed funds outstanding were $688.6 million. We are pleased with our current liquidity levels and deposit mix and believe they leave us well positioned for the year.”

Net interest income increased by $21.8 million, or 24.1%, to $112.5 million for the quarter ended March 31, 2023, from $90.6 million for the quarter ended March 31, 2022. This increase in net interest income is a result of both the increase in market interest rates and the change in our interest-earning asset mix throughout 2022 and continuing in the first quarter of 2023. Cash in interest-earning deposits was redeployed into higher yielding loans, which, along with higher market interest rates, caused the yield on interest-earning asset to increase to 4.15% for the quarter ended March 31, 2023 from 2.93% for the quarter ended March 31, 2022. Interest income on loans receivable increased $35.6 million, or 40.3%, due to an increase of $988.3 million, or 10.0%, in the average balance of loans in addition to an increase in the yield on loans to 4.63% for the quarter ended March 31, 2023 from 3.63% for the quarter ended March 31, 2022. Partially offsetting this increase in interest income was an increase in the cost of interest-bearing liabilities to 0.96% for the quarter ended March 31, 2023 from 0.25% for the quarter ended March 31, 2022. This increase was largely due to higher market interest rates causing an increase in both deposit and borrowing costs. The net effect of these changes in interest rates and average balances was an increase in the Company's net interest margin to 3.47% for the quarter ended March 31, 2023 from 2.75% for the same quarter last year.

The provision for credit losses increased by $4.9 million, to $5.0 million for the current quarter ended March 31, 2023 from $115,000 for the quarter ended March 31, 2022. This increase was primarily due to growth within our loan portfolio year over year, as well as forecasted economic deterioration reflected in our allowance for credit loss models. The Company continued to experience improvement in asset quality as classified loans decreased by $111.3 million, or 34.8%, to $208.6 million, or 1.88% of total loans, at March 31, 2023 from $319.9 million, or 3.15% of total loans, at March 31, 2022. Total delinquent loans also

1

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decreased to $73.4 million, or just 0.66% of loans receivable, at March 31, 2023 from $75.4 million, or 0.74% of gross loans, at March 31, 2022.

     

Noninterest income decreased by $1.8 million, or 6.9%, to $24.0 million for the quarter ended March 31, 2023, from $25.7 million for the quarter ended March 31, 2022. This decrease was primarily due to a decrease in mortgage banking income of $941,000, or 64.2%, to $524,000 for the quarter ended March 31, 2023 from $1.5 million for the quarter ended March 31, 2022. This decrease reflects the impact of less favorable pricing in the secondary market, due primarily to the volatile interest rate environment, as well as a decrease in mortgage volumes primarily due to higher market interest rates.

Noninterest expense increased by $7.1 million, or 8.8%, to $87.5 million for the quarter ended March 31, 2023 from $80.3 million for the quarter ended March 31, 2022. This increase primarily resulted from a $2.2 million, or 84.9%, increase in professional services to $4.8 million for the quarter ended March 31, 2023 from $2.6 million for the quarter ended March 31, 2022 due to the use of third-party consulting and staffing support. Also contributing to this variance was a $1.8 million increase in processing expenses to $14.4 million for the quarter ended March 31, 2023, from $12.5 million for the quarter ended March 31, 2022 due to the implementation of additional third party software programs. Merger, asset disposition and restructuring expense increased $1.4 million for the quarter ended March 31, 2023 due to the severance and fixed asset charges related to the branch optimization and personnel reduction announced during the fourth quarter of 2022. Lastly, FDIC insurance premiums increased $1.1 million to $2.2 million for the quarter ended March 31, 2023 from $1.1 million for the quarter ended March 31, 2022 due to an increase in the deposit insurance assessment rate beginning in the first quarter of 2023.

The provision for income taxes increased by $2.7 million, or 35.4%, to $10.3 million for the quarter ended March 31, 2023 from $7.6 million for the quarter ended March 31, 2022 due primarily to an increase in income before taxes in the current year.

Headquartered in Columbus, Ohio, Northwest Bancshares, Inc. is the bank holding company of Northwest Bank. Founded in 1896 and headquartered in Warren, Pennsylvania, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of March 31, 2023, Northwest operated 142 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

 

#                      #                      #

 

Forward-Looking Statements - This 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 inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; and (9) the effect of any pandemic, including COVID-19, war or act of terrorism. 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.

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Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(dollars in thousands, except per share amounts)

			March 31, 2023						December 31, 2022						March 31, 2022
Assets
Cash and cash equivalents			$	96,497					139,365						1,161,006
Marketable securities available-for-sale (amortized cost of $1,402,805, $1,431,728 and $1,542,170, respectively)			1,205,510						1,218,108						1,442,098
Marketable securities held-to-maturity (fair value of $750,345, $751,384 and $677,376, respectively)			866,022						881,249						737,730
Total cash and cash equivalents and marketable securities			2,168,029						2,238,722						3,340,834
Loans held-for-sale			7,006						9,913						19,272
Residential mortgage loans			3,499,078						3,488,686						3,102,617
Home equity loans			1,281,546						1,297,674						1,286,520
Consumer loans			2,232,133						2,168,655						1,895,981
Commercial real estate loans			2,826,485						2,823,555						2,959,893
Commercial loans			1,246,023						1,131,969						874,751
Total loans receivable			11,092,271						10,920,452						10,139,034
Allowance for credit losses			(121,257)						(118,036)						(99,295)
Loans receivable, net			10,971,014						10,802,416						10,039,739
FHLB stock, at cost			41,519						40,143						13,318
Accrued interest receivable			36,177						35,528						26,268
Real estate owned, net			524						413						929
Premises and equipment, net			140,301						145,909						149,970
Bank-owned life insurance			256,310						255,062						254,109
Goodwill			380,997						380,997						380,997
Other intangible assets, net			7,651						8,560						11,654
Other assets			191,294						205,574						193,365
Total assets			$	14,193,816					14,113,324						14,411,183
Liabilities and shareholders’ equity
Liabilities
Noninterest-bearing demand deposits			$	2,896,092					2,993,243						3,128,849
Interest-bearing demand deposits			2,541,503						2,686,431						2,891,622
Money market deposit accounts			2,328,050						2,457,569						2,680,613
Savings deposits			2,194,743						2,275,020						2,367,438
Time deposits			1,576,791						1,052,285						1,251,878
Total deposits			11,537,179						11,464,548						12,320,400
Borrowed funds			688,641						681,166						121,436
Subordinated debt			113,927						113,840						123,670
Junior subordinated debentures			129,379						129,314						129,119
Advances by borrowers for taxes and insurance			49,893						47,613						44,022
Accrued interest payable			2,236						3,231						563
Other liabilities			159,286						182,126						148,461
Total liabilities			12,680,541						12,621,838						12,887,671
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, 127,065,400, 127,028,848 and 126,686,373 shares issued and outstanding, respectively			1,271						1,270						1,267
Additional paid-in capital			1,020,855						1,019,647						1,012,308
Retained earnings			649,672						641,727						612,481
Accumulated other comprehensive loss			(158,523)						(171,158)						(102,544)
Total shareholders’ equity			1,513,275						1,491,486						1,523,512
Total liabilities and shareholders’ equity			$	14,193,816					14,113,324						14,411,183
Equity to assets			10.66		%				10.57		%				10.57		%
Tangible common equity to assets*			8.15		%				8.03		%				8.07		%
Book value per share			$	11.91					11.74						12.03
Tangible book value per share*			$	8.85					8.67						8.93
Closing market price per share			$	12.03					13.98						13.51
Full time equivalent employees			2,066						2,160						2.268
Number of banking offices			150						150						170

*    Excludes goodwill and other intangible assets (non-GAAP).

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Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)

			Quarter ended
			March 31, 2023						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022
Interest income:
Loans receivable			$	123,745					117,137						106,943						95,574						88,174
Mortgage-backed securities			8,537						8,603						8,683						7,158						6,360
Taxable investment securities			845						840						838						715						677
Tax-free investment securities			700						701						709						683						674
FHLB stock dividends			690						419						148						82						81
Interest-earning deposits			423						153						1,295						1,684						467
Total interest income			134,940						127,853						118,616						105,896						96,433
Interest expense:
Deposits			11,238						3,871						3,157						3,341						3,751
Borrowed funds			11,238						6,938						2,710						2,290						2,059
Total interest expense			22,476						10,809						5,867						5,631						5,810
Net interest income			112,464						117,044						112,749						100,265						90,623
Provision for credit losses - loans			4,870						9,023						7,689						2,629						(1,481)
Provision for credit losses - unfunded commitments (1)			126						1,876						3,585						3,396						1,596
Net interest income after provision for credit losses			107,468						106,145						101,475						94,240						90,508
Noninterest income:
Loss on sale of investments			—						(1)						(2)						(3)						(2)
Service charges and fees			13,189						14,125						14,323						13,673						13,067
Trust and other financial services income			6,449						6,642						6,650						7,461						7,012
Gain/(loss) on real estate owned, net			108						51						290						291						(29)
Income from bank-owned life insurance			1,269						1,663						1,475						2,008						1,983
Mortgage banking income			524						477						766						2,157						1,465
Other operating income			2,430						4,901						3,301						4,861						2,244
Total noninterest income			23,969						27,858						26,803						30,448						25,740
Noninterest expense:
Compensation and employee benefits			46,604						46,658						46,711						48,073						46,917
Premises and occupancy costs			7,471						7,370						7,171						7,280						7,797
Office operations			3,010						3,544						3,229						3,162						3,383
Collections expense			387						563						322						403						520
Processing expenses			14,350						13,585						13,416						12,947						12,548
Marketing expenses			2,892						2,773						2,147						2,047						2,128
Federal deposit insurance premiums			2,223						1,319						1,200						1,130						1,129
Professional services			4,758						5,434						3,363						3,333						2,573
Amortization of intangible assets			909						932						1,047						1,115						1,183
Real estate owned expense			181						53						61						72						37
Merger, asset disposition and restructuring expense			2,802						4,243						—						—						1,374
Other expenses			1,863						2,304						321						1,849						759
Total noninterest expense			87,450						88,778						78,988						81,411						80,348
Income before income taxes			43,987						45,225						49,290						43,277						35,900
Income tax expense			10,308						10,576						11,986						9,851						7,613
Net income			$	33,679					34,649						37,304						33,426						28,287
Basic earnings per share			$	0.27					0.27						0.29						0.26						0.22
Diluted earnings per share			$	0.26					0.27						0.29						0.26						0.22
Annualized return on average equity			9.11		%				9.38		%				9.84		%				8.90		%				7.17		%
Annualized return on average assets			0.97		%				0.98		%				1.05		%				0.94		%				0.80		%
Annualized return on tangible common equity *			12.15		%				12.48		%				13.84		%				12.16		%				10.14		%
Efficiency ratio (1) **			61.38		%				57.70		%				55.85		%				61.43		%				66.85		%
Annualized noninterest expense to average assets (1) **			2.40		%				2.37		%				2.20		%				2.26		%				2.19		%

(1)     Reclassified from other expenses for periods prior to March 31, 2023. Respective ratios updated for reclassification.

*    Excludes goodwill and other intangible assets (non-GAAP).

**     Excludes amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP).

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Northwest Bancshares, Inc. and Subsidiaries

Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) *

(dollars in thousands, except per share amounts)

			Quarter ended March 31,
			2023						2022
Operating results (non-GAAP):
Net interest income			$	112,464					90,623
Provision for credit losses			4,996						115
Noninterest income			23,969						25,740
Noninterest expense			84,648						78,974
Income taxes			11,093						7,998
Net operating income (non-GAAP)			$	35,696					29,276
Diluted earnings per share (non-GAAP)			$	0.28					0.23
Average equity			$	1,498,825					1,600,728
Average assets			14,121,496						14,423,574
Annualized return on average equity (non-GAAP)			9.66		%				7.42		%
Annualized return on average assets (non-GAAP)			1.03		%				0.82		%
Reconciliation of net operating income to net income:
Net operating income (non-GAAP)			$	35,696					29,276
Non-GAAP adjustments, net of tax:
Merger, asset disposition and restructuring expense			(2,017)						(989)
Net income (GAAP)			$	33,679					28,287
Diluted earnings per share (GAAP)			$	0.26					0.22
Annualized return on average equity (GAAP)			9.11		%				7.17		%
Annualized return on average assets (GAAP)			0.97		%				0.80		%
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments
Total shareholders’ equity			1,513,275						1,523,512
Less: goodwill and intangible assets			388,648						392,651
Less: unrealized losses on held-to-maturity investments, net of tax			83,287						43,455
Tangible common equity, including unrealized losses on held-to-maturity investments			1,041,340						1,087,406
Total assets			14,193,816						14,411,183
Less: goodwill and intangible assets			388,648						392,651
Tangible assets			13,805,168						14,018,532
Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments			7.54		%				7.76		%

* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude merger, asset disposition and restructuring expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.

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Northwest Bancshares, Inc. and Subsidiaries

Deposits (Unaudited)

(dollars in thousands)

Generally, deposits in excess of $250,000 are not federally insured. The following table provides details around the Company’s uninsured deposits portfolio:

			As of March 31, 2023
			Balance						Percent of total deposits						Number of relationships
Uninsured deposits per the Call Report (1)			$	2,917,743					25.29		%				4,950
Less intercompany deposit accounts			787,363						6.82		%				13
Less collateralized deposit accounts			564,787						4.90		%				275
Adjusted balance of uninsured deposits			$	1,565,593					13.57		%				4,662

(1)     Uninsured deposits presented may be different from actual amounts due to titling of accounts.

Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $34.0 million, or 0.29% of total deposits, as of March 31, 2023. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $148.2 million, or 1.28% of total deposits, as of March 31, 2023. The average adjusted uninsured deposit account balance was $336,000 as of March 31, 2023.

The following table provides additional details over the Company’s deposit portfolio:

			As of March 31, 2023
			Balance						Percent of total deposits						Number of accounts
Personal noninterest bearing demand deposits			$	1,428,232					12.38		%				291,561
Business noninterest bearing demand deposits			1,467,860						12.72		%				45,924
Personal interest-bearing demand deposits			1,627,546						14.11		%				60,459
Business interest-bearing demand deposits			913,957						7.92		%				8,451
Personal money market deposits			1,626,614						14.10		%				26,867
Business money market deposits			701,436						6.08		%				3,008
Savings deposits			2,194,743						19.02		%				216,358
Time deposits			1,576,791						13.67		%				61,779
Total deposits			$	11,537,179					100.00		%				714,407

Our average deposit account balance as of March 31, 2023 was $16,000. The Company’s insured cash sweep deposit balance was $161.6 million as of March 31, 2023.

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Northwest Bancshares, Inc. and Subsidiaries

Marketable Securities (Unaudited)

(dollars in thousands)

						March 31, 2023
Marketable securities available-for-sale						Amortized cost						Gross unrealized holding gains						Gross unrealized holding losses						Fair value						Weighted average duration
Debt issued by the U.S. government and agencies:
Due after one year through five years						$	20,000					—						(1,421)						18,579						3.60
Due after ten years						52,089						—						(9,653)						42,436						6.28
Debt issued by government sponsored enterprises:
Due after one year through five years						20,983						—						(2,680)						18,303						4.73
Due after five years through ten years						25,600						—						(3,623)						21,977						5.25
Municipal securities:
Due within one year						503						—						—						503						0.25
Due after one year through five years						990						27						(12)						1,005						2.59
Due after five years through ten years						38,384						1						(1,612)						36,773						4.72
Due after ten years						87,322						131						(11,059)						76,394						9.04
Corporate debt issues:
Due after five years through ten years						13,528						—						(958)						12,570						5.62
Residential mortgage-backed agency securities:
Fixed rate pass-through						221,361						49						(28,136)						193,274						6.02
Variable rate pass-through						8,287						4						(149)						8,142						4.24
Fixed rate agency CMOs						886,717						—						(137,663)						749,054						5.22
Variable rate agency CMOs						27,041						35						(576)						26,500						3.98
Total residential mortgage-backed agency securities						1,143,406						88						(166,524)						976,970						5.34
Total marketable securities available-for-sale						$	1,402,805					247						(197,542)						1,205,510						5.55
Marketable securities held-to-maturity
Government sponsored
Due after one year through five years						$	29,477					—						(3,131)						26,346						3.68
Due after five years through ten years						94,978						—						(15,560)						79,418						5.72
Residential mortgage-backed agency securities:
Fixed rate pass-through						$	159,504					—						(22,260)						137,244						5.58
Variable rate pass-through						521						—						(7)						514						4.64
Fixed rate agency CMOs						581,013						—						(74,710)						506,303						6.76
Variable rate agency CMOs						529						—						(9)						520						6.16
Total residential mortgage-backed agency securities						741,567						—						(96,986)						644,581						6.51
Total marketable securities held-to-maturity						$	866,022					—						(115,677)						750,345						6.32

7

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Northwest Bancshares, Inc. and Subsidiaries

Borrowed Funds (Unaudited)

(dollars in thousands)

			March 31, 2023
			Amount						Average rate
Term notes payable to the FHLB of Pittsburgh, due within one year			$	403,000					5.17		%
Notes payable to the FHLB of Pittsburgh, due within one year			183,700						5.15		%
Total term notes payable to the FHLB			586,700						5.17		%
Collateralized borrowings, due within one year			83,290						1.16		%
Collateral received, due within one year			18,651						5.17		%
Subordinated debentures, net of issuance costs			113,927						4.28		%
Junior subordinated debentures			129,379						6.77		%
Total borrowed funds *			$	931,947					4.92		%

* As of March 31, 2023, the Company had $3.2 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250.0 million overnight line of credit, which had a $183.7 million drawn balance, as well as $305.0 million of borrowing capacity available with the Federal Reserve Bank and $105.0 million with two correspondent banks.

8

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Northwest Bancshares, Inc. and Subsidiaries

Analysis of Loan Portfolio by Loan Sector (Unaudited)

Commercial real estate loans outstanding

The following table provides the various loan sectors in our commercial real estate portfolio at March 31, 2023:

									March 31, 2023
Property type									Percent of portfolio
5 or more unit dwelling									14.1		%
Nursing home									13.4		%
Retail building									11.9		%
Commercial office building - non-owner occupied									8.6		%
Residential acquisition & development - 1-4 family, townhouses and apartments									5.7		%
Manufacturing & industrial building									3.6		%
Commercial acquisition and development									3.6		%
Warehouse/storage building									3.5		%
Multi-use building - office and warehouse									3.5		%
Commercial office building - owner occupied									3.4		%
Hotel/motel									3.1		%
Single family dwelling									3.0		%
Other medical facility									2.7		%
Student housing									2.7		%
Multi-use building - commercial, retail and residential									2.6		%
2-4 family									2.4		%
Agricultural real estate									2.3		%
All other									9.9		%
Total									100.0		%

The following table provides our commercial real estate portfolio by state at March 31, 2023:

									March 31, 2023
State									Percent of portfolio
New York									31.0		%
Pennsylvania									30.6		%
Ohio									19.4		%
Indiana									8.7		%
Virginia									2.3		%
All other									8.0		%
Total									100.0		%

9

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Northwest Bancshares, Inc. and Subsidiaries

Asset Quality (Unaudited)

(dollars in thousands)

			March 31, 2023						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022
Nonaccrual loans current:
Residential mortgage loans			$	1,423					1,496						2,186						1,970						1,884
Home equity loans			1,084						1,418						1,158						1,337						1,376
Consumer loans			911						836						833						976						1,148
Commercial real estate loans			50,045						53,303						56,193						60,537						79,810
Commercial loans			1,468						895						1,801						5,270						6,060
Total nonaccrual loans current			$	54,931					57,948						62,171						70,090						90,278
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans			$	688					473						54						2						760
Home equity loans			18						180						316						172						195
Consumer loans			223						178						155						158						190
Commercial real estate loans			1,900						1,220						55						911						333
Commercial loans			341						145						237						358						4
Total nonaccrual loans delinquent 30 days to 59 days			$	3,170					2,196						817						1,601						1,482
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans			$	919					31						32						199						830
Home equity loans			338						290						432						566						371
Consumer loans			340						341						382						226						280
Commercial real estate loans			1,355						473						848						630						—
Commercial loans			126						96						132						73						—
Total nonaccrual loans delinquent 60 days to 89 days			$	3,078					1,231						1,826						1,694						1,481
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans			$	3,300					5,574						5,544						5,445						3,976
Home equity loans			2,190						2,257						1,779						2,081						2,968
Consumer loans			2,791						2,672						2,031						1,942						1,782
Commercial real estate loans			8,010						7,867						8,821						14,949						21,399
Commercial loans			1,139						1,491						638						583						795
Total nonaccrual loans delinquent 90 days or more			$	17,430					19,861						18,813						25,000						30,920
Total nonaccrual loans			$	78,609					81,236						83,627						98,385						124,161
Total nonaccrual loans			$	78,609					81,236						83,627						98,385						124,161
Loans 90 days past due and still accruing			652						744						357						379						420
Nonperforming loans			79,261						81,980						83,984						98,764						124,581
Real estate owned, net			524						413						450						1,205						929
Nonperforming assets			$	79,785					82,393						84,434						99,969						125,510
Nonperforming loans to total loans			0.71		%				0.75		%				0.78		%				0.95		%				1.23		%
Nonperforming assets to total assets			0.56		%				0.58		%				0.61		%				0.71		%				0.87		%
Allowance for credit losses to total loans			1.09		%				1.08		%				1.02		%				0.94		%				0.98		%
Allowance for total loans excluding PPP loan balances			1.09		%				1.08		%				1.02		%				0.95		%				0.98		%
Allowance for credit losses to nonperforming loans			152.98		%				143.98		%				130.76		%				99.59		%				79.70		%

10

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Northwest Bancshares, Inc. and Subsidiaries

Loans by Credit Quality Indicators (Unaudited)

(dollars in thousands)

At March 31, 2023						Pass						Special    mention *						Substandard **						Doubtful						Loss						Loans receivable
Personal Banking:
Residential mortgage loans						$	3,499,135					—						6,330						—						—						3,505,465
Home equity loans						1,277,915						—						3,631						—						—						1,281,546
Consumer loans						2,227,379						—						4,754						—						—						2,232,133
Total Personal Banking						7,004,429						—						14,715						—						—						7,019,144
Commercial Banking:
Commercial real estate loans						2,585,676						69,837						171,591						—						—						2,827,104
Commercial loans						1,217,344						6,381						22,298						—						—						1,246,023
Total Commercial Banking						3,803,020						76,218						193,889						—						—						4,073,127
Total loans						$	10,807,449					76,218						208,604						—						—						11,092,271
At December 31, 2022
Personal Banking:
Residential mortgage loans						$	3,484,870					—						13,729						—						—						3,498,599
Home equity loans						1,292,146						—						5,528						—						—						1,297,674
Consumer loans						2,164,220						—						4,435						—						—						2,168,655
Total Personal Banking						6,941,236						—						23,692						—						—						6,964,928
Commercial Banking:
Commercial real estate loans						2,579,809						55,076						188,670						—						—						2,823,555
Commercial loans						1,100,707						7,384						23,878						—						—						1,131,969
Total Commercial Banking						3,680,516						62,460						212,548						—						—						3,955,524
Total loans						$	10,621,752					62,460						236,240						—						—						10,920,452
At September 30, 2022
Personal Banking:
Residential mortgage loans						$	3,388,168					—						13,730						—						—						3,401,898
Home equity loans						1,279,968						—						5,021						—						—						1,284,989
Consumer loans						2,112,478						—						3,760						—						—						2,116,238
Total Personal Banking						6,780,614						—						22,511						—						—						6,803,125
Commercial Banking:
Commercial real estate loans						2,589,648						34,684						188,498						—						—						2,812,830
Commercial loans						1,094,830						4,004						26,736						—						—						1,125,570
Total Commercial Banking						3,684,478						38,688						215,234						—						—						3,938,400
Total loans						$	10,465,092					38,688						237,745						—						—						10,741,525
At June 30, 2022
Personal Banking:
Residential mortgage loans						$	3,273,117					—						13,658						—						—						3,286,775
Home equity loans						1,275,124						—						5,368						—						—						1,280,492
Consumer loans						1,998,863						—						3,682						—						—						2,002,545
Total Personal Banking						6,547,104						—						22,708						—						—						6,569,812
Commercial Banking:
Commercial real estate loans						2,600,207						51,540						224,429						—						—						2,876,176
Commercial loans						954,129						2,468						30,239						—						—						986,836
Total Commercial Banking						3,554,336						54,008						254,668						—						—						3,863,012
Total loans						$	10,101,440					54,008						277,376						—						—						10,432,824
At March 31, 2022
Personal Banking:
Residential mortgage loans						$	3,108,366					—						13,523						—						—						3,121,889
Home equity loans						1,280,342						—						6,178						—						—						1,286,520
Consumer loans						1,892,162						—						3,819						—						—						1,895,981
Total Personal Banking						6,280,870						—						23,520						—						—						6,304,390
Commercial Banking:
Commercial real estate loans						2,633,808						62,091						263,994						—						—						2,959,893
Commercial loans						839,125						3,277						32,349						—						—						874,751
Total Commercial Banking						3,472,933						65,368						296,343						—						—						3,834,644
Total loans						$	9,753,803					65,368						319,863						—						—						10,139,034

*    Includes $7.4 million, $7.4 million, $4.5 million, $7.4 million, and $4.4 million of acquired loans at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

**    Includes $31.9 million, $39.1 million, $51.4 million, $59.3 million, and $71.9 million of acquired loans at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

11

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Northwest Bancshares, Inc. and Subsidiaries

Loan Delinquency (Unaudited)

(dollars in thousands)

			March 31, 2023												*						December 31, 2022												*						September 30, 2022												*						June 30, 2022												*						March 31, 2022												*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans			259						$	26,992					0.8		%				304						$	29,487					0.8		%				26						$	1,052					—		%				20						$	785					—		%				281						$	24,057					0.8		%
Home equity loans			111						4,235						0.3		%				145						6,657						0.5		%				88						3,278						0.3		%				107						3,664						0.3		%				105						3,867						0.3		%
Consumer loans			587						6,930						0.3		%				737						9,435						0.4		%				549						6,546						0.3		%				563						6,898						0.3		%				523						6,043						0.3		%
Commercial real estate loans			23						4,834						0.2		%				29						4,008						0.1		%				13						1,332						—		%				26						2,701						0.1		%				25						3,643						0.1		%
Commercial loans			46						4,253						0.3		%				51						2,648						0.2		%				48						2,582						0.2		%				24						1,486						0.2		%				16						1,268						0.1		%
Total loans delinquent 30 days to 59 days			1,026						$	47,244					0.4		%				1,266						$	52,235					0.5		%				724						$	14,790					0.1		%				740						$	15,534					0.1		%				950						$	38,878					0.4		%
Loans delinquent 60 days to 89 days:
Residential mortgage loans			23						$	1,922					0.1		%				65						$	5,563					0.2		%				51						$	4,320					0.1		%				61						$	5,941					0.2		%				24						$	1,950					0.1		%
Home equity loans			31						1,061						0.1		%				29						975						0.1		%				36						1,227						0.1		%				28						952						0.1		%				28						1,138						0.1		%
Consumer loans			185						2,083						0.1		%				255						3,070						0.1		%				223						2,663						0.1		%				178						1,460						0.1		%				159						1,839						0.1		%
Commercial real estate loans			17						1,949						0.1		%				16						2,377						0.1		%				13						1,741						0.1		%				9						1,472						0.1		%				1						112						—		%
Commercial loans			19						1,088						0.1		%				24						1,115						0.1		%				14						808						0.1		%				6						341						—		%				3						103						—		%
Total loans delinquent 60 days to 89 days			275						$	8,103					0.1		%				389						$	13,100					0.1		%				337						$	10,759					0.1		%				282						$	10,166					0.1		%				215						$	5,142					0.1		%
Loans delinquent 90 days or more: **
Residential mortgage loans			39						$	3,300					0.1		%				65						$	5,574					0.2		%				64						$	5,544					0.2		%				63						$	5,445					0.2		%				47						$	3,976					0.1		%
Home equity loans			65						2,190						0.2		%				68						2,257						0.2		%				65						1,779						0.1		%				69						2,081						0.2		%				91						2,968						0.2		%
Consumer loans			313						3,279						0.1		%				334						3,079						0.1		%				289						2,388						0.1		%				286						2,321						0.1		%				287						2,202						0.1		%
Commercial real estate loans			18						8,010						0.3		%				19						7,867						0.3		%				22						8,821						0.3		%				31						14,949						0.5		%				41						21,399						0.7		%
Commercial loans			24						1,302						0.1		%				15						1,829						0.2		%				11						638						0.1		%				10						583						0.1		%				10						795						0.1		%
Total loans delinquent 90 days or more			459						$	18,081					0.2		%				501						$	20,606					0.2		%				451						$	19,170					0.2		%				459						$	25,379					0.2		%				476						$	31,340					0.3		%
Total loans delinquent			1,760						$	73,428					0.7		%				2,156						$	85,941					0.8		%				1,512						$	44,719					0.4		%				1,481						$	51,079					0.5		%				1,641						$	75,360					0.7		%

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

**    Includes purchased credit deteriorated loans of $331,000, $1.7 million, $783,000, $6.3 million, and $7.1 million at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

12

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Northwest Bancshares, Inc. and Subsidiaries

Allowance for Credit Losses (Unaudited)

(dollars in thousands)

			Quarter ended
			March 31, 2023						December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022
Beginning balance			$	118,036					109,819						98,355						99,295						102,241
ASU 2022-02 Adoption			426						—						—						—						—
Provision			4,870						9,023						7,689						2,629						(1,481)
Charge-offs residential mortgage			(207)						(546)						(166)						(138)						(1,183)
Charge-offs home equity			(164)						(232)						(535)						(255)						(447)
Charge-offs consumer			(2,734)						(2,430)						(2,341)						(1,912)						(1,723)
Charge-offs commercial real estate			(657)						(621)						(1,329)						(4,392)						(1,024)
Charge-offs commercial			(865)						(404)						(243)						(329)						(681)
Recoveries			2,552						3,427						8,389						3,457						3,593
Ending balance			$	121,257					118,036						109,819						98,355						99,295
Net charge-offs to average loans, annualized			0.08		%				0.03		%				(0.14)		%				0.14		%				0.06		%

13

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Northwest Bancshares, Inc. and Subsidiaries

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. 

			Quarter ended
			March 31, 2023																		December 31, 2022																		September 30, 2022																		June 30, 2022																		March 31, 2022
			Average balance						Interest						Avg. yield/ cost (h)						Average balance						Interest						Avg. yield/ cost (h)						Average balance						Interest						Avg. yield/ cost (h)						Average balance						Interest						Avg. yield/ cost (h)						Average balance						Interest						Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans			$	3,493,617					32,009						3.66		%				$	3,439,401					30,974						3.60		%				$	3,331,173					29,414						3.53		%				$	3,171,469					27,327						3.45		%				$	2,980,788					25,542						3.43		%
Home equity loans			1,284,425						16,134						5.09		%				1,282,733						15,264						4.72		%				1,274,918						13,658						4.25		%				1,277,440						11,961						3.76		%				1,293,986						11,472						3.60		%
Consumer loans			2,123,672						20,794						3.97		%				2,069,207						19,709						3.78		%				1,981,754						17,256						3.45		%				1,880,769						15,777						3.36		%				1,799,037						14,907						3.36		%
Commercial real estate loans			2,824,120						37,031						5.24		%				2,822,008						35,428						4.91		%				2,842,597						34,158						4.70		%				2,915,750						31,844						4.32		%				3,000,204						29,757						3.97		%
Commercial loans			1,161,298						18,353						6.32		%				1,113,178						16,315						5.74		%				1,050,124						12,978						4.84		%				912,454						9,090						3.94		%				824,770						6,897						3.34		%
Total loans receivable (a) (b) (d)			10,887,132						124,321						4.63		%				10,726,527						117,690						4.35		%				10,480,566						107,464						4.07		%				10,157,882						95,999						3.79		%				9,898,785						88,575						3.63		%
Mortgage-backed securities (c)			1,909,676						8,537						1.79		%				1,956,167						8,603						1.76		%				2,019,715						8,683						1.72		%				1,952,375						7,158						1.47		%				1,945,173						6,360						1.31		%
Investment securities (c) (d)			384,717						1,761						1.83		%				386,468						1,753						1.81		%				388,755						1,762						1.81		%				376,935						1,590						1.69		%				373,694						1,540						1.65		%
FHLB stock, at cost			39,631						690						7.06		%				26,827						419						6.19		%				14,028						148						4.19		%				13,428						82						2.44		%				13,870						81						2.38		%
Other interest-earning deposits			30,774						423						5.50		%				9,990						153						5.99		%				253,192						1,295						2.00		%				846,142						1,684						0.79		%				1,218,960						467						0.15		%
Total interest-earning assets			13,251,930						135,732						4.15		%				13,105,979						128,618						3.89		%				13,156,256						119,352						3.60		%				13,346,762						106,513						3.20		%				13,450,482						97,023						2.93		%
Noninterest-earning assets (e)			869,566																		877,121																		896,663																		909,943																		973,092
Total assets			$	14,121,496																	$	13,983,100																	$	14,052,919																	$	14,256,705																	$	14,423,574
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings deposits (g)			$	2,198,988					690						0.13		%				$	2,298,451					585						0.10		%				$	2,350,248					594						0.10		%				$	2,361,919					589						0.10		%				$	2,334,494					592						0.10		%
Interest-bearing demand deposits (g)			2,612,883						951						0.15		%				2,718,360						509						0.07		%				2,794,338						360						0.05		%				2,857,336						310						0.04		%				2,875,430						321						0.05		%
Money market deposit accounts (g)			2,408,582						4,403						0.74		%				2,512,892						1,310						0.21		%				2,620,850						692						0.10		%				2,653,467						668						0.10		%				2,668,105						653						0.10		%
Time deposits (g)			1,293,609						5,194						1.63		%				1,024,895						1,467						0.57		%				1,110,906						1,511						0.54		%				1,220,815						1,774						0.58		%				1,292,608						2,185						0.69		%
Borrowed funds (f)			740,218						7,938						4.35		%				451,369						3,967						3.49		%				127,073						239						0.75		%				123,749						167						0.54		%				135,289						158						0.47		%
Subordinated debt			113,870						1,148						4.03		%				113,783						1,148						4.04		%				113,695						1,149						4.04		%				119,563						1,203						4.03		%				123,608						1,250						4.05		%
Junior subordinated debentures			129,335						2,152						6.66		%				129,271						1,823						5.52		%				129,207						1,322						4.00		%				129,142						920						2.82		%				129,077						651						2.02		%
Total interest-bearing liabilities			9,497,485						22,476						0.96		%				9,249,021						10,809						0.46		%				9,246,317						5,867						0.25		%				9,465,991						5,631						0.24		%				9,558,611						5,810						0.25		%
Noninterest-bearing demand deposits (g)			2,889,973																		3,039,000																		3,093,490																		3,090,372																		3,060,698
Noninterest-bearing liabilities			235,213																		229,794																		209,486																		193,510																		203,537
Total liabilities			12,622,671																		12,517,815																		12,549,293																		12,749,873																		12,822,846
Shareholders’ equity			1,498,825																		1,465,285																		1,503,626																		1,506,832																		1,600,728
Total liabilities and shareholders’ equity			$	14,121,496																	$	13,983,100																	$	14,052,919																	$	14,256,705																	$	14,423,574
Net interest income/Interest rate spread									113,256						3.19		%										117,809						3.43		%										113,485						3.35		%										100,882						2.96		%										91,213						2.68		%
Net interest-earning assets/Net interest margin			$	3,754,445											3.47		%				$	3,856,958											3.57		%				$	3,909,939											3.42		%				$	3,880,771											3.07		%				$	3,891,871											2.75		%
Ratio of interest-earning assets to interest-bearing liabilities			1.40X																		1.42X																		1.42X																		1.41X																		1.41X

(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 (“FTE”) 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 and collateralized borrowings.

(g)    Average cost of deposits were 0.40%, 0.13%, 0.11%, 0.11%, and 0.12%, respectively and average cost of Interest-bearing deposits were 0.54%, 0.18%, 0.14%, 0.15%, and 0.17%, respectively.

(h)    Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 4.61%, 4.33%, 4.05%, 3.77%, and 3.61%, respectively, Investment securities — 1.61%, 1.59%, 1.59%, 1.48%, and 1.45%, respectively, Interest-earning assets — 4.13%, 3.87%, 3.58%, 3.18%, and 2.91%, respectively. GAAP basis net interest rate spreads were 3.17%, 3.41%, 3.33%, 2.94%, and 2.66%, respectively, and GAAP basis net interest margins were 3.44%, 3.54%, 3.40%, 3.05%, and 2.73%, respectively.

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