PR Newswire | Jul 27, 2020 09:25AM EDT

Dividend

07/27 08:24 CDT

Northwest Bancshares, Inc. Announces Second Quarter 2020 Earnings and Quarterly Dividend WARREN, Pa., July 27, 2020

WARREN, Pa., July 27, 2020 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced a net loss for the quarter ended June 30, 2020 of $6.2 million, or $(0.05) per diluted share. This represents a decrease of $32.6 million, or 123.5%, compared to the same quarter last year when net income was $26.4 million or $0.25 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2020 were (1.63)% and (0.18)% compared to 8.01% and 1.02% for the same quarter last year. As noted in our non-GAAP reconciliation, when adjusting for COVID-related provision expense and acquisition-related costs, non-GAAP net income was approximately $30.2 million, or $0.25, per diluted share, which would represent an increase over the same quarter in the prior year of $3.0 million, or 11.0%, and result in a return on average shareholders' equity of 7.95% and a return on average assets of 0.89%.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share payable on August 14, 2020 to shareholders of record as of August 6, 2020. This is the 103rd consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of June 30, 2020, this represents an annualized dividend yield of approximately 7.43%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "Obviously we are disappointed to report a loss for the quarter. However, as we assess the reasons for this loss, there is certainly cause for optimism as we enter the second half of the year. The primary drivers behind the quarterly loss are threefold. First, COVID-related loan loss provisions driven by a deteriorated economic forecast, which we estimate accounted for approximately $21.3 million of our elevated provision expense. Second, our loan loss provision expense during the quarter was also negatively impacted by the recording of provision expense for our MutualBank acquisition of approximately $18.2 million as promulgated by ASU 2016-13, also known as CECL. CECL requires an additional estimated loan loss provision or the "double count" for certain loans when integrating an acquisition. Third, acquisition costs of $9.7 million associated with the close and integration of MutualBank during the quarter negatively affected results as well. It should be noted, however, that year-to-date acquisition costs of $12.1 million were lower than originally projected."

Mr. Seiffert continued, "Assuming the current economic environment continues to remain stable, we believe that we have adequately provided for potential future losses during the first half of the year and have been able to do so with current earnings. In addition, as depicted in the attached non-GAAP pro forma financials, core quarterly earnings of approximately $30.2 million are strong and position us well for the remainder of the year. We are also fortunate to possess a robust capital position which has enabled us to maintain our regular quarterly cash dividend to common stock shareholders."

Mr. Seiffert concluded, "While most of our back-office and regional headquarter personnel continue to work effectively from home out of an abundance of caution, all of our branch offices have been re-opened for business as usual and we are very pleased, once again to offer our award-winning service to our loyal customers. I am so very honored and proud to be associated with our dedicated employees, our talented management team and our engaged Board of Directors who have all risen to the occasion during these extremely challenging times. They continue to stand tall in the face of adversity to service our customers and communities."

Net interest income increased by $5.5 million, or 5.9%, to $98.1 million for the quarter ended June 30, 2020, from $92.6 million for the quarter ended June 30, 2019, primarily due to a $3.1 million, or 25.2%, decrease in interest expense on deposits as well as a $587,000, or 34.1%, decrease in interest expense on borrowed funds. This decrease in interest expense was due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.48% for the quarter ended June 30, 2020 from 0.82% for the quarter ended June 30, 2019. Also contributing to the increase in net interest income was a $2.1 million, or 2.1%, increase in interest income on loans receivable primarily due to an increase of $1.606 billion, or 18.7%, in the average balance of loans as a result of the acquisition of MutualBank on April 24, 2020. Despite the overall increase in net interest income due primarily to balance sheet growth, the net interest margin decreased to 3.38% for the quarter ended June 30, 2020 from 3.91% for the same quarter last year as interest earning asset yields decreased to 3.75% for the quarter ended June 30, 2020 from 4.53% for the quarter ended June 30, 2019. Contributing to the decline in asset yields, was the increase in average cash balances of $602.9 million, earning just 0.12%, due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks. In addition, PPP loan balances of approximately $450.0 million with coupon rates of 1.00%, has negatively impacted overall interest earning asset yields.

The provision for loan losses increased by $47.1 million to $51.8 million for the quarter ended June 30, 2020, from $4.7 million for the quarter ended June 30, 2019. During the current year, the Company adopted CECL, which requires that all financial assets measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity's current estimate of all lifetime expected credit losses. In addition, the estimated economic impact of COVID-19 caused us to increase our provision expense for the quarter by approximately $21.3 million and provision expense for the integration of MutualBank loans amounted to approximately $18.2 million.

Noninterest income increased by $12.1 million, or 51.9%, to $35.5 million for the quarter ended June 30, 2020, from $23.4 million for the quarter ended June 30, 2019. This increase was primarily due to the increase in mortgage banking income of $11.8 million to $12.0 million for the quarter ended June 30, 2020 from $188,000 for the quarter ended June 30, 2019. This increase was due to continued efforts to expand our secondary market sales capabilities over the last year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. In addition, there was a $379,000 increase, or 8.5%, in trust and other financial services income primarily due to additional trust fee income in our Indiana region as a result of the acquisition of MutualBank.

Noninterest expense increased by $11.7 million, or 15.0%, to $89.2 million for the quarter ended June 30, 2020, from $77.5 million for the quarter ended June 30, 2019. This increase resulted primarily from an increase in acquisition expense of $8.6 million over the prior year, due to expenses incurred as a result of the acquisition of MutualBank on April 24, 2020. Also contributing to the increase was a $4.6 million increase in other expenses primarily due to the reserve for unfunded commitments during the second quarter of 2020 as a result of an increase in unfunded commitments and the estimated economic impact of COVID-19. Partially offsetting this increase was a decrease of $2.0 million, or 4.7%, in compensation and employee benefits primarily due to an increase in deferred loan costs directly related to the origination of PPP loans during the current quarter.

The provision for income taxes decreased by $8.5 million, or 115.4%, to $(1.1) million for the quarter ended June 30, 2020, from $7.4 million for the quarter ended June 30, 2019. This decrease was due primarily to the decrease in net income before taxes by $41.1 million, or 121.7%.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. As of June 30, 2020, Northwest operated 205 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 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; and (8) 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.

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(dollars in thousands, except per share amounts)



June 30, December 31,June 30, 2020 2019 2019

Assets

Cash and cash equivalents $837,227 60,846 106,988

Marketable securities available-for-sale (amortized cost of $1,176,258, $815,495 and $850,248, 1,198,792 819,901 854,765 respectively)

Marketable securities held-to-maturity (fair value of $17,245, $18,223 and 16,415 18,036 20,414 $20,676, respectively)

Total cash and cash equivalents and marketable securities 2,052,434 898,783 982,167



Residential mortgage loans held-for-sale 34,118 7,709 -

Residential mortgage loans 3,188,637 2,860,418 2,899,164

Home equity loans 1,450,370 1,342,918 1,314,947

Consumer loans 1,518,119 1,125,132 1,011,424

Commercial real estate loans 3,308,824 2,754,390 2,808,153

Commercial loans 1,358,719 718,107 703,194

Total loans receivable 10,858,787 8,808,674 8,736,882

Allowance for credit losses (140,586) (57,941) (53,107)

Loans receivable, net 10,718,201 8,750,733 8,683,775



Federal Home Loan Bank stock, at cost 25,542 14,740 14,966

Accrued interest receivable 40,510 25,755 28,742

Real estate owned, net 1,897 950 2,070

Premises and equipment, net 166,966 147,409 148,973

Bank-owned life insurance 251,897 189,091 186,870

Goodwill 386,044 346,103 344,720

Other intangible assets, net 23,381 23,076 24,112

Other assets 178,212 97,268 89,088

Total assets $13,845,084 10,493,908 10,505,483

Liabilities and shareholders' equity

Liabilities

Noninterest-bearing demand deposits $2,686,487 1,609,653 1,944,550

Interest-bearing demand deposits 2,632,310 1,944,108 1,670,983

Money market deposit accounts 2,327,286 1,863,998 1,784,437

Savings deposits 1,993,761 1,604,838 1,683,551

Time deposits 1,823,097 1,569,410 1,600,372

Total deposits 11,462,941 8,592,007 8,683,893



Borrowed funds 440,079 246,336 171,677

Junior subordinated debentures 128,630 121,800 121,757

Advances by borrowers for taxes and insurance 58,559 44,556 54,507

Accrued interest payable 1,389 1,142 1,207

Other liabilities 222,637 134,782 138,854

Total liabilities 12,314,235 9,140,623 9,171,895

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, 127,838,400, 106,859,088, and 1,278 1,069 1,066 106,614,607 shares issued and outstanding, respectively

Paid-in capital 1,023,083 805,750 798,942

Retained earnings 530,928 583,407 562,799

Accumulated other comprehensive loss (24,440) (36,941) (29,219)

Total shareholders' equity 1,530,849 1,353,285 1,333,588

Total liabilities and shareholders' equity $13,845,084 10,493,908 10,505,483



Equity to assets 11.06 %12.90 %12.69 %

Tangible common equity to assets 8.35 %9.72 %9.52 %

Book value per share $11.97 12.66 12.51

Tangible book value per share $8.77 9.21 9.05

Closing market price per share $10.23 16.63 17.61

Full time equivalent employees 2,518 2,209 2,238

Number of banking offices 213 181 182

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)



Quarter ended

June 30, March 31, December 31, September 30,June 30, 2020 2020 2019 2019 2019

Interest income:

Loans receivable $ 103,012 94,973 97,866 101,091 100,917

Mortgage-backed securities 4,038 4,175 4,237 4,188 4,280

Taxable investment securities 439 648 683 884 898

Tax-free investment securities 564 185 201 224 237

FHLB dividends 309 262 262 307 316

Interest-earning deposits 185 135 169 172 159

Total interest income 108,547 100,378 103,418 106,866 106,807

Interest expense:

Deposits 9,336 11,403 12,893 13,694 12,484

Borrowed funds 1,133 1,747 1,580 2,236 1,720

Total interest expense 10,469 13,150 14,473 15,930 14,204

Net interest income 98,078 87,228 88,945 90,936 92,603

Provision for credit losses 51,750 27,637 8,223 3,302 4,667

Net interest income after provision for credit losses46,328 59,591 80,722 87,634 87,936

Noninterest income:

Gain/(loss) on sale of investments (8) 181 27 - 29

Gain on sale of loans - 1,302 908 826 -

Service charges and fees 13,069 15,116 14,125 13,558 13,339

Trust and other financial services income 4,823 5,001 4,517 4,609 4,444

Insurance commission income 2,395 2,372 1,858 1,887 2,145

Gain/(loss) on real estate owned, net (97) (91) 86 (227) 91

Income from bank-owned life insurance 1,248 1,036 1,121 1,095 1,197

Mortgage banking income 12,022 1,194 1,494 1,921 188

Other operating income 2,044 1,865 4,077 2,500 1,930

Total noninterest income 35,496 27,976 28,213 26,169 23,363

Noninterest expense:

Compensation and employee benefits 40,049 42,746 42,074 40,816 42,008

Premises and occupancy costs 7,195 7,471 7,051 7,061 7,387

Office operations 3,711 3,382 4,097 3,197 3,708

Collections expense 644 474 566 747 939

Processing expenses 11,680 11,142 10,263 11,122 10,634

Marketing expenses 2,047 1,507 1,010 1,373 2,729

Federal deposit insurance premiums 1,618 - - (702) 681

Professional services 2,825 2,812 3,533 3,032 3,198

Amortization of intangible assets 1,760 1,651 1,634 1,702 1,760

Real estate owned expense 89 95 72 119 128

Restructuring/acquisition expense 9,679 2,458 1,114 23 1,105

Other expenses 7,866 4,873 5,157 2,106 3,235

Total noninterest expense 89,163 78,611 76,571 70,596 77,512

Income/(loss) before income taxes (7,339) 8,956 32,364 43,207 33,787

Income tax expense/(benefit) (1,139) 1,017 6,773 9,793 7,404

Net income/(loss) (6,200) 7,939 25,591 33,414 26,383



Basic earnings per share $ (0.05) 0.08 0.24 0.32 0.25

Diluted earnings per share $ (0.05) 0.07 0.24 0.31 0.25



Weighted average common shares outstanding - basic 121,480,563 105,882,553 105,627,194 105,517,707 105,233,635

Weighted average common shares outstanding - diluted 121,480,563 106,148,247 106,306,615 106,270,544 106,258,215



Annualized return on average equity (1.63) %2.37 %7.52 %9.90 %8.01 %

Annualized return on average assets (0.18) %0.30 %0.97 %1.25 %1.02 %

Annualized return on tangible common equity ** (2.22) %3.28 %10.32 %13.46 %10.97 %



Efficiency ratio * 58.19 %64.67 %63.01 %58.81 %64.37 %

Annualized noninterest expense to average assets * 2.30 %2.83 %2.80 %2.59 %2.88 %



* Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

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

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)



Six months ended June 30,

2020 2019

Interest income:

Loans receivable $197,985 195,852

Mortgage-backed securities 8,213 8,245

Taxable investment securities 1,087 1,834

Tax-free investment securities 749 419

FHLB dividends 571 487

Interest-earning deposits 320 259

Total interest income 208,925 207,096

Interest expense:

Deposits 20,739 22,629

Borrowed funds 2,880 3,882

Total interest expense 23,619 26,511

Net interest income 185,306 180,585

Provision for credit losses 79,387 11,134

Net interest income after provision for credit losses 105,919 169,451

Noninterest income:

Gain on sale of investments 173 23

Gain on sale of loans 1,302 -

Service charges and fees 28,185 25,382

Trust and other financial services income 9,824 8,639

Insurance commission income 4,767 4,323

Gain/(loss) on real estate owned, net (188) 88

Income from bank-owned life insurance 2,284 2,202

Mortgage banking income 13,216 404

Other operating income 3,909 3,964

Total noninterest income 63,472 45,025

Noninterest expense:

Compensation and employee benefits 82,795 80,196

Premises and occupancy costs 14,666 14,605

Office operations 7,093 6,839

Collections expense 1,118 1,247

Processing expenses 22,822 21,068

Marketing expenses 3,554 4,615

Federal deposit insurance premiums 1,618 1,387

Professional services 5,637 5,722

Amortization of intangible assets 3,411 3,207

Real estate owned expense 184 287

Restructuring/acquisition expense 12,137 3,031

Other expenses 12,739 6,732

Total noninterest expense 167,774 148,936

Income before income taxes 1,617 65,540

Income tax expense/(benefit) (122) 14,113

Net income $1,739 51,427



Basic earnings per share $0.02 0.49

Diluted earnings per share $0.02 0.49



Weighted average common shares outstanding - basic 113,672,131 104,173,601

Weighted average common shares outstanding - diluted 113,774,339 105,382,270



Annualized return on average equity 0.24 %7.99 %

Annualized return on average assets 0.03 %1.02 %

Annualized return on tangible common equity ** 0.31 %10.75 %



Efficiency ratio * 61.19 %63.25 %

Annualized noninterest expense to average assets * 2.53 %2.84 %



* Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

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

Northwest Bancshares, Inc. and Subsidiaries

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

(dollars in thousands, except per share amounts)



Quarter ended June 30, Six months ended June 30,

2020 2019 2020 2019

Operating results (non-GAAP):

Net interest income $98,078 92,603 185,306 180,585

Provision for credit losses 12,279 4,667 16,203 11,134

Noninterest income 35,496 23,363 63,472 45,025

Noninterest expense 83,368 76,407 157,637 145,905

Income taxes 7,708 7,657 14,216 14,807

Net operating income (non-GAAP) $30,219 27,235 60,722 53,764

Diluted earnings per share (non-GAAP) $0.25 0.26 0.53 0.51



Average equity $1,528,868 1,320,382 1,439,489 1,298,334

Average assets 13,590,131 10,412,664 12,093,801 10,150,040

Annualized return on average equity (non-GAAP) 7.95 %8.27 %8.48 %8.35 %

Annualized return on average assets (non-GAAP) 0.89 %1.05 %1.01 %1.07 %



Reconciliation of net operating income to net income:

Net operating income (non-GAAP) $30,219 27,235 60,722 53,764

Non-GAAP adjustments, net of tax:

COVID-related provision ** (17,121) - (36,189) -

CECL provision impact due to acquisition of MutualBank(14,618) - (14,618) -

PPP deferred origination costs 3,389 - 3,389 -

COVID-related off balance sheet provision ** (266) - (1,780) -

Restructuring/acquisition expense (7,803) (852) (9,785) (2,337)

Net income/(loss) (GAAP) $(6,200) 26,383 1,739 51,427

Diluted earnings per share (GAAP) $(0.05) 0.25 0.02 0.49



Annualized return on average equity (GAAP) (1.63) %8.01 %0.24 %7.99 %

Annualized return on average assets (GAAP) (0.18) %1.02 %0.03 %1.02 %



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 estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred * origination costs, estimated COVID-related off balance sheet provision and restructuring/acquisition expense. 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.

To arrive at the non-COVID related provision estimates, the Company ** applied Moody's forecast scenarios prior to the onset of COVID-19 to our loan portfolio at June 30, 2020.

Northwest Bancshares, Inc. and Subsidiaries

Regulatory capital requirements (Unaudited)

(dollars in thousands)



At June 30, 2020

Actual Minimum capital Well capitalized requirements (1) requirements

Amount Ratio Amount Ratio Amount Ratio

Total capital (to risk weighted assets)

Northwest Bancshares, Inc. $1,521,50614.454%$1,105,29910.500%$1,052,66610.000%

Northwest Bank 1,409,018 13.397%1,104,346 10.500%1,051,759 10.000%



Tier 1 capital (to risk weighted assets)

Northwest Bancshares, Inc. 1,383,261 13.141%894,766 8.500 %842,133 8.000 %

Northwest Bank 1,270,773 12.082%893,995 8.500 %841,407 8.000 %



Common equity tier 1 capital (to risk weighted assets)

Northwest Bancshares, Inc. 1,258,620 11.957%736,866 7.000 %684,233 6.500 %

Northwest Bank 1,270,773 12.082%736,231 7.000 %683,643 6.500 %



Tier 1 capital (leverage) (to average assets)

Northwest Bancshares, Inc. 1,383,261 10.488%527,571 4.000 %659,464 5.000 %

Northwest Bank 1,270,773 9.680 %525,093 4.000 %656,366 5.000 %



Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For (1)further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2019 Annual Report on Form 10-K.

Northwest Bancshares, Inc. and Subsidiaries

Marketable securities (Unaudited)

(dollars in thousands)



June 30, 2020

Marketable securities available-for-sale Amortized costGross unrealizedGross unrealizedFair value holding gains holding losses

Debt issued by the U.S. government and agencies:

Due after ten years $10,000 112 - 10,112



Debt issued by government sponsored enterprises:

Due in less than one year 35,751 228 - 35,979

Due in one year through five years 25,225 292 - 25,517

Due in five years through ten years 13,302 134 (93) 13,343



Municipal securities:

Due in less than one year 3,634 5 - 3,639

Due in one year through five years 4,005 95 (3) 4,097

Due in five years through ten years 8,489 228 - 8,717

Due after ten years 96,640 2,785 (7) 99,418



Residential mortgage-backed securities:

Fixed rate pass-through 324,026 5,782 (230) 329,578

Variable rate pass-through 17,190 585 (14) 17,761

Fixed rate agency CMOs 586,290 13,320 (788) 598,822

Variable rate agency CMOs 51,706 165 (62) 51,809

Total residential mortgage-backed securities 979,212 19,852 (1,094) 997,970

Total marketable securities available-for-sale $1,176,258 23,731 (1,197) 1,198,792



Marketable securities held-to-maturity

Residential mortgage-backed securities:

Fixed rate pass-through $1,969 126 - 2,095

Variable rate pass-through 1,058 38 - 1,096

Fixed rate agency CMOs 12,784 658 - 13,442

Variable rate agency CMOs 604 8 - 612

Total residential mortgage-backed securities 16,415 830 - 17,245

Total marketable securities held-to-maturity $16,415 830 - 17,245

Northwest Bancshares, Inc. and Subsidiaries

Borrowed funds (Unaudited)

(dollars in thousands)



June 30, 2020

Amount Average rate

Term notes payable to the Federal Home Loan Bank (FHLB):

Payable to FHLB of Pittsburgh $100,0000.48 %

Payable to the FHLB of Indianapolis acquired from MutualBank200,481 1.65 %

Total term notes payable to the FHLB 300,481

Collateralized borrowings, due within one year 139,598 0.29 %

Total borrowed funds * $440,079



As of June 30, 2020, the Company had $3.1 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including*a $250.0 million overnight line of credit, which had no balance, as well as $110.1 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million with three correspondent banks.

Northwest Bancshares, Inc. and Subsidiaries

Asset quality (Unaudited)

(dollars in thousands)



June 30, March December 31,September 30,June 30, 2020 31, 2019 2019 2019 2020

Nonaccrual loans current:

Residential mortgage loans $413 285 72 676 432

Home equity loans 481 592 197 607 475

Consumer loans 214 77 78 68 94

Commercial real estate loans 30,677 14,337 9,241 7,674 12,605

Commercial loans 6,551 3,514 3,424 3,777 5,666

Total nonaccrual loans current $38,336 18,805 13,012 12,802 19,272

Nonaccrual loans delinquent 30 days to 59 days:

Residential mortgage loans $61 691 674 40 13

Home equity loans 247 159 224 102 418

Consumer loans 335 143 121 246 172

Commercial real estate loans 2,372 496 196 925 469

Commercial loans - - 55 44 45

Total nonaccrual loans delinquent 30 days to 59 days $3,015 1,489 1,270 1,357 1,117

Nonaccrual loans delinquent 60 days to 89 days:

Residential mortgage loans $1,013 218 1,048 979 910

Home equity loans 960 539 689 436 717

Consumer loans 666 488 417 426 322

Commercial real estate loans 163 2,096 413 536 1,426

Commercial loans 768 37 341 - 780

Total nonaccrual loans delinquent 60 days to 89 days $3,570 3,378 2,908 2,377 4,155

Nonaccrual loans delinquent 90 days or more:

Residential mortgage loans $15,369 10,457 12,682 11,722 10,617

Home equity loans 7,060 5,816 5,635 5,966 5,591

Consumer loans 6,896 3,459 3,610 3,400 2,902

Commercial real estate loans 29,729 25,342 25,014 22,292 21,123

Commercial loans 11,535 16,685 4,739 5,741 2,920

Total nonaccrual loans delinquent 90 days or more $70,589 61,759 51,680 49,121 43,153

Total nonaccrual loans $115,510 85,431 68,870 65,657 67,697

Total nonaccrual loans $115,510 85,431 68,870 65,657 67,697

Loans 90 days past maturity and still accruing 77 31 32 85 55

Nonperforming loans 115,587 85,462 68,902 65,742 67,752

Real estate owned, net 1,897 1,075 950 1,237 2,070

Nonperforming assets $117,484 86,537 69,852 66,979 69,822

Nonaccrual troubled debt restructuring * $17,562 17,375 9,043 9,138 13,375

Accruing troubled debt restructuring 17,888 15,977 22,956 21,162 17,894

Total troubled debt restructuring $35,450 33,352 31,999 30,300 31,269



Nonperforming loans to total loans 1.06 %0.97 %0.78 % 0.74 % 0.78 %

Nonperforming assets to total assets 0.85 %0.81 %0.67 % 0.63 % 0.66 %

Allowance for credit losses to total loans 1.29 %1.05 %0.66 % 0.60 % 0.61 %

Allowance for total loans excluding PPP loan balances1.36 %N/A N/A N/A N/A

Allowance for credit losses to nonperforming loans 121.63 %108.70%84.09 % 80.40 % 78.38 %



* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries

Loans by credit quality indicators (Unaudited)

(dollars in thousands)



At June 30, 2020 Pass Special SubstandardDoubtfulLossLoans mention *** *** receivable

Personal Banking:

Residential mortgage loans $3,196,304 - 26,451 - - 3,222,755

Home equity loans 1,438,339 - 12,031 - - 1,450,370

Consumer loans 1,508,129 - 9,990 - - 1,518,119

Total Personal Banking 6,142,772 - 48,472 - - 6,191,244

Commercial Banking:

Commercial real estate loans3,034,984 72,755 199,993 1,092 - 3,308,824

Commercial loans 1,270,279 41,458 42,692 4,290 - 1,358,719

Total Commercial Banking 4,305,263 114,213 242,685 5,382 - 4,667,543

Total loans $10,448,035114,213 291,157 5,382 - 10,858,787

At March 31, 2020

Personal Banking:

Residential mortgage loans $2,830,596 - 7,690 - - 2,838,286

Home equity loans 1,345,052 - 8,211 - - 1,353,263

Consumer loans 1,174,067 - 3,988 - - 1,178,055

Total Personal Banking 5,349,715 - 19,889 - - 5,369,604

Commercial Banking:

Commercial real estate loans2,537,736 73,967 143,765 - - 2,755,468

Commercial loans 618,267 43,071 50,464 - - 711,802

Total Commercial Banking 3,156,003 117,038 194,229 - - 3,467,270

Total loans $8,505,718 117,038 214,118 - - 8,836,874

At December 31, 2019

Personal Banking:

Residential mortgage loans $2,858,582 - 9,545 - - 2,868,127

Home equity loans 1,336,111 - 6,807 - - 1,342,918

Consumer loans 1,120,732 - 4,400 - - 1,125,132

Total Personal Banking 5,315,425 - 20,752 - - 5,336,177

Commercial Banking:

Commercial real estate loans2,538,816 80,570 135,004 - - 2,754,390

Commercial loans 616,983 42,380 58,744 - - 718,107

Total Commercial Banking 3,155,799 122,950 193,748 - - 3,472,497

Total loans $8,471,224 122,950 214,500 - - 8,808,674

At September 30, 2019

Personal Banking:

Residential mortgage loans $2,887,077 - 9,056 - - 2,896,133

Home equity loans 1,320,930 - 7,243 - - 1,328,173

Consumer loans 1,090,030 - 4,263 - - 1,094,293

Total Personal Banking 5,298,037 - 20,562 - - 5,318,599

Commercial Banking:

Commercial real estate loans2,601,025 69,380 142,253 181 - 2,812,839

Commercial loans 639,998 37,666 42,800 115 - 720,579

Total Commercial Banking 3,241,023 107,046 185,053 296 - 3,533,418

Total loans $8,539,060 107,046 205,615 296 - 8,852,017

At June 30, 2019

Personal Banking:

Residential mortgage loans $2,890,472 - 8,692 - - 2,899,164

Home equity loans 1,307,887 - 7,060 - - 1,314,947

Consumer loans 1,007,813 - 3,611 - - 1,011,424

Total Personal Banking 5,206,172 - 19,363 - - 5,225,535

Commercial Banking:

Commercial real estate loans2,586,013 86,434 135,525 181 - 2,808,153

Commercial loans 621,889 38,182 42,141 982 - 703,194

Total Commercial Banking 3,207,902 124,616 177,666 1,163 - 3,511,347

Total loans $8,414,074 124,616 197,029 1,163 - 8,736,882



Includes $37.4 million, $13.1 million, $10.3 million, $8.7 million, and * $8.1 million of acquired loans at June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, respectively.

Includes $108.2 million, $56.8 million, $53.1 million, $46.6 million, and** $38.6 million of acquired loans at June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, respectively.

***Includes $1.1 million of acquired loans at June 30, 2020.

Northwest Bancshares, Inc. and Subsidiaries

Loan delinquency (Unaudited)

(dollars in thousands)



June 30, * March 31, * December 31, * September 30, * June 30, * 2020 2020 2019 2019 2019

(Number of loans and dollar amount of loans)

Loans delinquent 30 days to 59 days:

Residential mortgage loans 15 $629 - % 358 $32,755 1.2% 292 $23,296 0.8% 21 $1,236 - % 30 $1,629 0.1%

Home equity loans 118 4,569 0.3% 190 7,061 0.5% 173 6,469 0.5% 149 4,774 0.4% 148 4,573 0.3%

Consumer loans 629 7,199 0.5% 953 8,774 0.7% 960 9,208 0.8% 864 7,597 0.7% 856 7,630 0.7%

Commercial real estate loans 46 14,177 0.4% 58 12,895 0.5% 43 7,921 0.3% 27 5,308 0.2% 31 2,418 0.1%

Commercial loans 12 1,242 0.1% 35 7,545 1.1% 32 1,187 0.2% 20 362 0.1% 14 666 0.1%

Total loans delinquent 30 days to 59 days 820 $27,816 0.3% 1,594$69,030 0.8% 1,500$48,081 0.5% 1,081$19,2770.2% 1,079$16,9160.2%



Loans delinquent 60 days to 89 days:

Residential mortgage loans 64 $5,364 0.2% 11 $511 - % 67 $5,693 0.2% 95 $5,320 0.2% 78 $6,264 0.2%

Home equity loans 59 2,326 0.2% 65 2,652 0.2% 66 2,405 0.2% 66 2,103 0.2% 59 2,319 0.2%

Consumer loans 258 2,916 0.2% 265 2,610 0.2% 395 3,302 0.3% 288 2,632 0.2% 338 2,897 0.3%

Commercial real estate loans 18 3,913 0.1% 12 2,981 0.1% 19 1,690 0.1% 15 1,893 0.1% 16 2,617 0.1%

Commercial loans 15 1,151 0.1% 10 309 - % 17 6,403 0.9% 10 589 0.1% 16 1,725 0.2%

Total loans delinquent 60 days to 89 days 414 $15,670 0.1% 363 $9,063 0.1% 564 $19,493 0.2% 474 $12,5370.1% 507 $15,8220.2%



Loans delinquent 90 days or more: **

Residential mortgage loans 185 $15,369 0.5% 129 $10,457 0.4% 141 $12,775 0.4% 138 $11,8160.4% 129 $10,8000.4%

Home equity loans 182 7,060 0.5% 152 5,816 0.4% 159 5,688 0.4% 157 5,966 0.4% 136 5,591 0.4%

Consumer loans 709 6,896 0.5% 445 3,459 0.3% 590 3,611 0.3% 398 3,401 0.3% 710 2,908 0.3%

Commercial real estate loans 149 29,729 0.9% 139 25,342 0.9% 129 25,014 0.9% 118 22,292 0.8% 118 21,123 0.7%

Commercial loans 47 11,535 0.8% 51 16,685 2.3% 37 4,739 0.7% 40 5,741 0.8% 25 2,920 0.4%

Total loans delinquent 90 days or more 1,272$70,589 0.7% 916 $61,759 0.7% 1,056$51,827 0.6% 851 $49,2160.6% 1,118$43,3420.5%



Total loans delinquent 2,506$114,0751.1% 2,873$139,8521.6% 3,120$119,4011.4% 2,406$81,0300.9% 2,704$76,0800.9%



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

Includes purchased credit deteriorated loans of $18.0 million at June 30, **2020 and $298,000 at March 31, 2020, and purchased credit impaired loans of $147,000, $95,000, and $190,000 at December 31, 2019, September 30, 2019, and June 30, 2019, respectively.

Northwest Bancshares, Inc. and Subsidiaries

Analysis of loan portfolio by loan sector (Unaudited)

(dollars in thousands)



Loans outstanding

The following table provides delinquency information for various loan sectors in our portfolio that are potentially vulnerable to the COVID-19 pandemic impacts at June 30, 2020:



30-59 days 60-89 days 90 days Total Total At June 30, 2020 delinquent * delinquent * or greater * delinquent * Current * loans * delinquent receivable

Restaurants/bars $1,052 - %$- - %$171 - %$1,223 - %$96,211 0.9 %$97,434 0.9 %

Hotels/hospitality 3,368 - %- - %- - %3,368 - %183,232 1.7 %186,600 1.7 %

Gyms and fitness - - %- - %- - %- - %5,385 - %5,385 - %

Transportation 20 - %- - %3,353 - %3,373 - %61,485 0.6 %64,858 0.6 %

Oil and gas - - %- - %296 - %296 - %11,139 0.1 %11,435 0.1 %

Residential care facilities - - %- - %- - %- - %228,412 2.1 %228,412 2.1 %

Retail buildings 600 - %291 - %786 - %1,677 - %441,355 4.1 %443,032 4.1 %

Education/student housing - - %- - %503 - %503 - %143,306 1.3 %143,809 1.3 %

Construction/development:

Education/student housing - - %- - %- - %- - %33,520 0.3 %33,520 0.3 %

Hotels/hospitality - - %- - %- - %- - %25,514 0.2 %25,514 0.2 %

Residential care facilities - - %- - %- - %- - %35,861 0.3 %35,861 0.3 %

All other 2,650 - %351 - %5,587 0.1%8,588 0.1%193,589 1.8 %202,177 1.9 % construction/development

All other sectors 20,126 0.2%15,028 0.1%59,893 0.6%95,047 0.9%9,285,703 85.5 %9,380,750 86.4 %

Total loans $27,816 0.3%$15,670 0.1%$70,589 0.7%$114,075 1.1%$10,744,712 98.9 %$10,858,787 100.0 %



* Percent of total loans outstanding.

Loan deferrals

The following table represents loans that entered into various deferments offered by the Company to aid customers in the COVID-19 pandemic. The loan balances are as of June 30, 2020, however, the approval of the deferral occurred prior and was executed by the Company by June 30, 2020. Of these loan deferrals, 303 borrowers applied for and received PPP loans totaling approximately $51.8 million:



Total loan deferrals Second request deferrals approved

At June 30, 2020 Number Outstanding ** Number Outstanding ** of loansprincipal balance of loansprincipal balance

Residential mortgage loans 936 $ 131,567 4.1 %10 $ 1,660 0.1%

Home equity loans 652 42,836 3.0 %11 786 0.1%

Consumer loans 2,455 49,374 3.3 %128 3,033 0.2%

Commercial real estate loans1,511 967,340 29.2 %5 2,323 0.1%

Commercial loans 652 120,999 8.9 %5 630 - %

Total loans 6,206 $ 1,312,116 12.1 %159 $ 8,432 0.1%



** Percent of total loan type outstanding.

Northwest Bancshares, Inc. and Subsidiaries

Allowance for credit losses (Unaudited)

(dollars in thousands)



Quarter ended

June 30, March 31,December 31,September 30,June 30, 2020 2020 2019 2019 2019

Beginning balance $92,897 57,941 52,859 53,107 55,721

CECL adoption - 10,792 - - -

Initial allowance on loans purchased with credit deterioration8,845 - - - -

Provision 51,750 27,637 8,223 3,302 4,667

Charge-offs residential mortgage (38) (343) (222) (190) (397)

Charge-offs home equity (173) (289) (113) (466) (389)

Charge-offs consumer (3,191) (3,488) (3,142) (3,078) (2,566)

Charge-offs commercial real estate (690) (331) (107) (389) (4,367)

Charge-offs commercial (10,349) (815) (1,143) (1,151) (1,087)

Recoveries 1,535 1,793 1,586 1,724 1,525

Ending balance $140,586 92,897 57,941 52,859 53,107

Net charge-offs to average loans, annualized 0.51 %0.16 %0.14 % 0.16 % 0.34 %

Six months ended June 30,

2020 2019

Beginning balance $57,941 55,214

CECL adoption 10,792 -

Initial allowance on loans purchased with credit deterioration8,845 -

Provision 79,387 11,134

Charge-offs residential mortgage (381) (754)

Charge-offs home equity (462) (542)

Charge-offs consumer (6,679) (5,587)

Charge-offs commercial real estate (1,021) (4,971)

Charge-offs commercial (11,164) (4,357)

Recoveries 3,328 2,970

Ending balance $140,586 53,107

Net charge-offs to average loans, annualized 0.35 %0.34 %

June 30, 2020

Originated loans Acquired loans Total loans

Balance Reserve Balance ReserveBalance Reserve

Residential mortgage loans $2,840,4309,846 382,325 1,862 3,222,755 11,708

Home equity loans 1,153,969 7,272 296,401 2,091 1,450,370 9,363

Consumer loans 1,207,050 12,794 311,069 3,547 1,518,119 16,341

Personal Banking Loans 5,201,449 29,912 989,795 7,500 6,191,244 37,412

Commercial real estate loans2,422,605 63,654 886,219 24,0063,308,824 87,660

Commercial loans 1,140,714 12,497 218,005 3,017 1,358,719 15,514

Commercial Banking Loans 3,563,319 76,151 1,104,22427,0234,667,543 103,174

Total Loans $8,764,768106,0632,094,01934,52310,858,787140,586

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

June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019

Average Avg. Average Avg. Average Avg. Average Avg. Average Avg. balance Interest yield/ balance Interest yield/ balance Interest yield/ balance Interest yield/ balance Interest yield/ cost (h) cost (h) cost (h) cost (h) cost (h)

Assets:

Interest-earning assets:

Residential mortgage loans $ 3,092,392 29,019 3.75 % $ 2,845,483 28,062 3.94 % $ 2,847,932 28,011 3.93 % $ 2,894,716 28,991 4.01 % $ 2,857,425 29,300 4.10 %

Home equity loans 1,415,091 13,806 3.92 % 1,345,059 14,801 4.43 % 1,333,748 15,354 4.57 % 1,316,033 16,131 4.86 % 1,319,056 17,717 5.39 %

Consumer loans 1,375,130 14,993 4.39 % 1,123,336 12,160 4.35 % 1,073,565 12,016 4.44 % 1,028,579 11,916 4.60 % 945,080 10,736 4.57 %

Commercial real estate loans 3,156,749 34,595 4.34 % 2,747,419 31,437 4.53 % 2,741,687 32,985 4.71 % 2,796,351 34,441 4.82 % 2,801,953 35,537 5.02 %

Commercial loans 1,161,228 11,269 3.84 % 712,621 8,856 4.92 % 717,438 9,841 5.37 % 710,847 9,949 5.48 % 670,613 7,966 4.70 %

Total loans receivable (a) (b) (d) 10,200,590 103,682 4.09 % 8,773,918 95,316 4.37 % 8,714,370 98,207 4.47 % 8,746,526 101,428 4.60 % 8,594,127 101,256 4.73 %

Mortgage-backed securities (c) 714,657 4,038 2.26 % 668,470 4,175 2.50 % 667,910 4,237 2.54 % 641,085 4,188 2.61 % 644,887 4,280 2.65 %

Investment securities (c) (d) 170,309 1,244 2.92 % 144,152 881 2.44 % 151,289 938 2.48 % 218,753 1,168 2.14 % 226,325 1,198 2.12 %

FHLB stock, at cost 22,192 309 5.60 % 15,931 262 6.61 % 13,400 262 7.76 % 16,302 307 7.47 % 16,117 316 7.86 %

Other interest-earning deposits 623,870 185 0.12 % 34,697 135 1.54 % 31,624 169 2.09 % 28,832 172 2.33 % 20,983 159 3.00 %

Total interest-earning assets 11,731,618 109,458 3.75 % 9,637,168 100,769 4.21 % 9,578,593 103,813 4.30 % 9,651,498 107,263 4.41 % 9,502,439 107,209 4.53 %

Noninterest-earning assets (e) 1,858,513 960,303 869,117 916,781 910,225

Total assets $ 13,590,131 $ 10,597,471 $ 10,447,710 $ 10,568,279 $ 10,412,664

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Savings deposits $ 1,884,202 648 0.14 % $ 1,611,111 727 0.18 % $ 1,615,996 792 0.19 % $ 1,658,670 788 0.19 % $ 1,696,715 777 0.18 %

Interest-bearing demand deposits 2,428,060 812 0.13 % 1,915,871 1,307 0.27 % 1,769,623 1,570 0.35 % 1,655,952 1,711 0.41 % 1,674,779 1,569 0.38 %

Money market deposit accounts 2,204,810 1,600 0.29 % 1,921,243 3,088 0.65 % 1,845,535 3,226 0.69 % 1,798,175 3,772 0.83 % 1,776,558 3,433 0.78 %

Time deposits 1,761,260 6,276 1.43 % 1,528,891 6,281 1.65 % 1,607,992 7,305 1.80 % 1,618,591 7,423 1.82 % 1,561,034 6,705 1.72 %

Borrowed funds (f) 371,700 296 0.32 % 240,118 709 1.19 % 177,670 444 0.99 % 243,960 1,002 1.63 % 147,119 413 1.13 %

Junior subordinated debentures 127,472 837 2.60 % 121,809 1,038 3.37 % 121,796 1,136 3.65 % 121,767 1,235 3.97 % 121,757 1,307 4.25 %

Total interest-bearing liabilities 8,777,504 10,469 0.48 % 7,339,043 13,150 0.72 % 7,138,612 14,473 0.80 % 7,097,115 15,931 0.89 % 6,977,962 14,204 0.82 %

Noninterest-bearing demand deposits (g) 2,401,368 1,640,180 1,800,861 1,915,392 1,888,697

Noninterest-bearing liabilities 882,391 268,139 158,434 216,433 225,623

Total liabilities 12,061,263 9,247,362 9,097,907 9,228,940 9,092,282

Shareholders' equity 1,528,868 1,350,109 1,349,803 1,339,339 1,320,382

Total liabilities and shareholders' equity $ 13,590,131 $ 10,597,471 $ 10,447,710 $ 10,568,279 $ 10,412,664

Net interest income/Interest rate spread 98,989 3.27 % 87,619 3.48 % 89,340 3.50 % 91,332 3.52 % 93,005 3.71 %

Net interest-earning assets/Net interest $ 2,954,114 3.38 % $ 2,298,125 3.66 % $ 2,439,981 3.73 % $ 2,554,383 3.79 % $ 2,524,477 3.91 % margin

Ratio of interest-earning assets to interest- 1.34X 1.31X 1.34X 1.36X 1.36X bearing liabilities



(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 0.35%, 0.53%, 0.59%, 0.63%, and 0.58%, respectively.

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.06%, 4.35%, 4.46%, 4.59%, and 4.71%, respectively, Investment securities - 2.36%, 2.31%, 2.34%, 2.03%, and 2.01%, (h)respectively, Interest-earning assets - 3.72%, 4.19%, 4.28%, 4.39%, and 4.51%, respectively. GAAP basis net interest rate spreads were 3.24%, 3.47%, 3.48%, 3.50%, and 3.69%, respectively, and GAAP basis net interest margins were 3.34%, 3.64%, 3.71%, 3.77%, and 3.90%, respectively.

Average Balance Sheet

(in thousands)



The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing 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,

2020 2019

Average Avg. Average Avg. balance Interestyield/ balance Interest yield/ cost (h) cost (h)

Assets

Interest-earning assets:

Residential mortgage loans $2,969,096 57,081 3.85 % $2,850,031 58,582 4.11 %

Home equity loans 1,380,076 28,607 4.17 % 1,292,662 33,765 5.27 %

Consumer loans 1,249,233 27,153 4.37 % 909,007 20,927 4.64 %

Commercial real estate loans 2,952,084 66,032 4.42 % 2,681,848 66,303 4.92 %

Commercial loans 936,924 20,124 4.25 % 643,005 16,933 5.24 %

Loans receivable (a) (b) (d) 9,487,413 198,9974.22 % 8,376,553 196,510 4.73 %

Mortgage-backed securities (c) 691,564 8,213 2.38 % 624,786 8,245 2.64 %

Investment securities (c) (d) 157,231 2,125 2.70 % 226,815 2,364 2.08 %

FHLB stock, at cost 19,062 571 6.02 % 16,096 487 6.10 %

Other interest-earning deposits 329,284 320 0.19 % 16,381 259 3.14 %

Total interest-earning assets 10,684,554 210,2263.96 % 9,260,631 207,865 4.53 %

Noninterest-earning assets (e) 1,409,247 889,409



Total assets $12,093,801 $10,150,040



Liabilities and shareholders' equity

Interest-bearing liabilities:

Savings deposits $1,747,656 1,375 0.16 % $1,673,957 1,535 0.18 %

Interest-bearing demand deposits 2,171,970 2,119 0.20 % 1,588,989 2,732 0.35 %

Money market deposit accounts 2,061,226 4,688 0.46 % 1,735,185 6,011 0.70 %

Time deposits 1,645,077 12,557 1.54 % 1,497,208 12,351 1.66 %

Borrowed funds (f) 305,910 1,005 0.66 % 202,029 1,419 1.42 %

Junior subordinated debentures 124,638 1,875 2.98 % 118,242 2,463 4.14 %

Total interest-bearing liabilities 8,056,477 23,619 0.59 % 6,815,610 26,511 0.78 %

Noninterest-bearing demand deposits (g) 2,022,177 1,699,496

Noninterest-bearing liabilities 575,658 336,600



Total liabilities 10,654,312 8,851,706



Shareholders' equity 1,439,489 1,298,334



Total liabilities and shareholders' equity $12,093,801 $10,150,040



Net interest income/Interest rate spread 186,6073.37 % 181,354 3.75 %



Net interest-earning assets/Net interest $2,628,077 3.49 % $2,445,021 3.92 % margin



Ratio of interest-earning assets to interest-1.33X 1.36X bearing liabilities



(a)Average gross loans 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 were 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 0.43% and 0.56%, respectively.

Shown on a FTE basis. GAAP basis yields were: loans - 4.20% and 4.71%, respectively; investment securities - 2.34% and 1.99%, respectively; (h)interest-earning assets - 3.93% and 4.51%, respectively. GAAP basis net interest rate spreads were 3.34% and 3.73%, respectively; and GAAP basis net interest margins were 3.47% and 3.90%, respectively.

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SOURCE Northwest Bancshares, Inc.