PR Newswire | Oct 25, 2021 09:01AM EDT

Dividend

10/25 08:00 CDT

Northwest Bancshares, Inc. Announces Third Quarter 2021 Earnings and Quarterly Dividend WARREN, Pa., Oct. 25, 2021

WARREN, Pa., Oct. 25, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2021 of $35.1 million, or $0.27 per diluted share. This represents a decrease of $3.0 million, or 7.9%, compared to the same quarter last year, when net income was $38.1 million, or $0.30 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2021 were 8.86% and 0.97% compared to 9.82% and 1.09% 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 November 15, 2021 to shareholders of record as of November 5, 2021. This is the 108th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of September 30, 2021, this represents an annualized dividend yield of approximately 6.0%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We were pleased to see that, absent the approximately $125.0 million of PPP loan forgiveness/payoffs this quarter, loans outstanding grew approximately $14.0 million, or 0.14%. In addition, $17.2 million of classified loans refinanced out of the bank which contributed to the $30.3 million decrease in nonperforming assets while our delinquencies continue to remain very low. As a result of these credit improvements, we continued to release credit loss reserves that were built up last year during COVID-19."

Mr. Seiffert continued "Although challenges continue with net interest income due to the low interest rate environment and falling yields, interest income during the current quarter was augmented by $4.0 million of PPP fee accretion. In addition, noninterest income stabilized during the most recent quarter having absorbed approximately $1.0 million less per month in interchange revenue since August of last year as a result of the negative impact of the Durbin amendment for all institutions with over $10.0 billion in assets. Finally, core noninterest expense has remained flat over the last five quarters as the result of our continued efforts focused on expense control."

Net interest income decreased by $5.1 million, or 4.9%, to $98.4 million for the quarter ended September 30, 2021, from $103.5 million for the quarter ended September 30, 2020, largely due to a $9.8 million, or 9.1%, decrease in interest income on loans receivable. This decrease in interest income on loans was due to a decrease of $551.4 million, or 5.1%, in the average balance of loans. Contributing to this decrease in average balances were $580.0 million of PPP loan forgiveness/payoffs since September 30 of last year. Also contributing to lower interest income was a decrease in the average loan yield to 3.80% for the quarter ended September 30, 2021 from 3.98% for the quarter ended September 30, 2020. Partially offsetting this decrease in interest income was a decrease of $3.9 million, or 46.2%, in interest expense on deposits 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 0.27% for the quarter ended September 30, 2021 from 0.42% for the quarter ended September 30, 2020. The net effect of the changes in interest rates and average balances was a decrease in net interest margin to 2.97% for the quarter ended September 30, 2021 from 3.26% for the same quarter last year.

The provision for credit losses decreased by $11.2 million to a current period credit of $4.4 million for the quarter ended September 30, 2021 compared to a provision expense of $6.8 million for the quarter ended September 30, 2020 due to a release in the allowance for credit losses as economic forecasts continue to improve and classified assets declined. Total classified loans decreased by $73.4 million, or 16.0%, to $384.4 million, or 3.77% of total loans, at September 30, 2021 from $457.8 million, or 4.25% of total loans, at September 30, 2020.

Noninterest income decreased by $7.5 million, or 20.4%, to $29.2 million for the quarter ended September 30, 2021, from $36.7 million for the quarter ended September 30, 2020. This decrease was primarily due to a decrease in mortgage banking income of $7.1 million, or 64.4%, to $3.9 million for the quarter ended September 30, 2021 from $11.1 million for the quarter ended September 30, 2020. This decrease reflects the impact of less favorable pricing in the secondary market. In addition, there was a decrease in insurance commission income of $2.3 million, or 98.1%, to $44,000 for the quarter ended September 30, 2021 from $2.3 million for the quarter ended September 30, 2020 due to the sale of the insurance business during the second quarter of 2021. Lastly, service charges and fees decreased $1.2 million, or 8.0%, to $13.2 million for the quarter ended September 30, 2021 from $14.4 million for the quarter ended September 30, 2020 due primarily to the impact of being subject to the Durbin amendment on interchange revenue. Partially offsetting this decrease was an increase in trust and other financial services income of $1.8 million, or 33.6%, to $7.2 million for the quarter ended September 30, 2021 from $5.4 million for the quarter ended September 30, 2020, as a result of increases in both trust and brokerage advisory services. In addition, there was an increase in other operating income of $1.3 million, or 62.6%, to $3.3 million for the quarter ended September 30, 2021 from $2.0 million for the quarter ended September 30, 2020 primarily as a result of fees earned from debit/credit card volume-based incentives.

Noninterest expense decreased by $767,000, or 0.9%, to $86.1 million for the quarter ended September 30, 2021 from $86.9 million for the quarter ended September 30, 2020. This decrease was due to a decline in a majority of the noninterest expense categories. Processing expenses decreased $1.5 million, or 10.1%, to $13.5 million for the quarter ended September 30, 2021 from $15.0 million for the quarter ended September 30, 2020. Merger related expenses decreased $1.4 million, or 100.0%, due to expenses incurred in the prior year as a result of the acquisition of MutualFirst Financial, Inc. Partially offsetting these decreases was an increase of $1.7 million, or 3.6%, in compensation and employee benefits due primarily to increases in health insurance and other benefit costs, regular merit expense increases and the addition of strategic personnel. In addition, there was an increase in other expenses of $2.2 million for the quarter ended September 30, 2021 due primarily due to an increase in the unfunded reserve as a result of an increase in undrawn commitments in the commercial real estate and construction portfolios.

The provision for income taxes increased by $2.3 million, or 27.5%, to $10.8 million for the quarter ended September 30, 2021 from $8.5 million for the quarter ended September 30, 2020. This increase in income taxes was due to an increase in the annual effective tax rate for 2021 as the prior year had a greater percentage of net income generated by tax free or tax efficient earning assets.

Northwest Bancshares, Inc. is the holding company of Northwest Bank, which is headquartered in Warren, Pennsylvania. Founded in 1896, 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 September 30, 2021, Northwest operated 162 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.

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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)



September 30, December 31,September 2021 2020 30, 2020

Assets

Cash and cash equivalents $1,090,485 736,277 656,749

Marketable securities available-for-sale (amortized cost1,583,715 1,398,941 1,409,150 of $1,587,105, $1,375,685 and $1,385,835, respectively)

Marketable securities held-to-maturity (fair value of 618,395 178,887 15,333 $609,777, $179,666 and $16,168, respectively)

Total cash and cash equivalents 3,292,595 2,314,105 2,081,232 and marketable securities



Residential mortgage loans 27,411 58,786 25,140 held-for-sale

Residential mortgage loans 2,962,110 3,009,335 3,118,229

Home equity loans 1,350,348 1,467,736 1,484,365

Consumer loans 1,816,836 1,507,993 1,487,083

Commercial real estate loans 3,162,551 3,345,889 3,319,743

Commercial loans 879,712 1,191,110 1,347,292

Total loans receivable 10,198,968 10,580,849 10,781,852

Allowance for credit losses (109,767) (134,427) (140,209)

Loans receivable, net 10,089,201 10,446,422 10,641,643



FHLB stock, at cost 14,567 21,748 23,171

Accrued interest receivable 26,995 35,554 36,916

Real estate owned, net 809 2,232 2,575

Premises and equipment, net 155,740 161,538 166,919

Bank-owned life insurance 254,871 253,951 252,621

Goodwill 380,997 382,279 386,044

Other intangible assets, net 14,041 19,936 21,601

Other assets 159,419 168,503 176,083

Total assets $14,389,235 13,806,268 13,788,805

Liabilities and shareholders' equity

Liabilities

Noninterest-bearing demand $3,052,115 2,716,224 2,641,234 deposits

Interest-bearing demand deposits 2,926,351 2,755,950 2,663,878

Money market deposit accounts 2,584,424 2,437,539 2,396,567

Savings deposits 2,271,496 2,047,424 2,022,918

Time deposits 1,387,827 1,642,096 1,732,022

Total deposits 12,222,213 11,599,233 11,456,619



Borrowed funds 126,496 159,715 274,939

Subordinated debt 123,486 123,329 123,277

Junior subordinated debentures 128,989 128,794 128,729

Advances by borrowers for taxes 26,951 45,230 29,755 and insurance

Accrued interest payable 589 2,054 1,002

Other liabilities 198,743 209,210 227,253

Total liabilities 12,827,467 12,267,565 12,241,574

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, 126,521,344, 127,019,452, and 1,265 1,270 1,278 127,801,297 shares issued and outstanding, respectively

Additional paid-in capital 1,008,099 1,015,502 1,023,827

Retained earnings 604,787 555,480 544,695

Accumulated other comprehensive (52,383) (33,549) (22,569) loss

Total shareholders' equity 1,561,768 1,538,703 1,547,231

Total liabilities and $14,389,235 13,806,268 13,788,805 shareholders' equity



Equity to assets 10.85 %11.14 %11.22 %

Tangible common equity to assets* 8.34 %8.48 %8.52 %

Book value per share $12.34 12.11 12.11

Tangible book value per share* $9.22 8.95 8.92

Closing market price per share $13.28 12.74 9.20

Full time equivalent employees 2,404 2,421 2,523

Number of banking offices 170 170 213

* 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)



Quarter ended

September June 30, March 31,December September30, 2021 2021 31, 30, 2021 2020 2020

Interest income:

Loans receivable $97,475 95,255 102,318 105,681 107,241

Mortgage-backed 5,840 5,680 4,200 4,551 4,652 securities

Taxable investment 649 693 634 471 427 securities

Tax-free investment 628 594 575 656 655 securities

FHLB stock dividends 71 138 116 192 218

Interest-earning 352 192 183 178 221 deposits

Total interest income 105,015 102,552 108,026 111,729 113,414

Interest expense:

Deposits 4,540 4,773 5,514 6,714 8,443

Borrowed funds 2,056 2,050 2,054 2,127 1,437

Total interest expense 6,596 6,823 7,568 8,841 9,880

Net interest income 98,419 95,729 100,458 102,888 103,534

Provision for credit(4,354) - (5,620) (2,230) 6,818 losses

Net interest income after provision for 102,773 95,729 106,078 105,118 96,716 credit losses

Noninterest income:

Gain/(loss) on sale of (46) (105) (21) 75 (12) investments

Service charges and 13,199 12,744 12,394 13,074 14,354 fees

Trust and other financial services 7,182 7,435 6,484 5,722 5,376 income

Insurance commission 44 1,043 2,546 2,034 2,331 income

Gain/(loss) on real 247 166 (42) 114 (32) estate owned, net

Income from bank-owned 1,332 1,639 1,736 1,330 1,576 life insurance

Mortgage banking income3,941 3,811 6,020 7,120 11,055

Gain on sale of - 25,327 - - - insurance business

Other operating income 3,287 2,648 2,836 2,654 2,022

Total noninterest 29,186 54,708 31,953 32,123 36,670 income

Noninterest expense:

Compensation and 49,063 48,894 47,239 48,209 47,371 employee benefits

Premises and occupancy 7,745 7,410 8,814 7,614 8,342 costs

Office operations 4,143 3,317 3,165 4,009 4,626

Collections expense 411 303 616 893 1,264

Processing expenses 13,517 15,151 13,456 12,186 15,042

Marketing expenses 2,102 2,101 1,980 1,994 2,147

Federal deposit 1,184 1,353 1,307 1,651 1,498 insurance premiums

Professional services 4,295 4,231 4,582 3,599 3,246

Amortization of 1,321 1,433 1,594 1,664 1,781 intangible assets

Real estate owned 94 85 75 64 111 expense

Merger, asset disposition and - 632 9 7,238 1,414 restructuring expense

Other expenses 2,227 1,422 3,354 3,728 27

Total noninterest 86,102 86,332 86,191 92,849 86,869 expense

Income before income 45,857 64,105 51,840 44,392 46,517 taxes

Income tax expense 10,794 15,138 11,603 9,327 8,467

Net income $35,063 48,967 40,237 35,065 38,050



Basic earnings per $0.28 0.38 0.32 0.28 0.30 share

Diluted earnings per $0.27 0.38 0.32 0.28 0.30 share



Annualized return on 8.86 %12.58 %10.61 %9.00 %9.82 %average equity

Annualized return on 0.97 %1.37 %1.17 %1.01 %1.09 %average assets

Annualized return on tangible common equity 11.92 %16.66 %14.31 %12.27 %13.28 %*



Efficiency ratio ** 66.44 %67.35 %63.88 %62.18 %59.68 %

Annualized noninterest expense to average 2.33 %2.35 %2.45 %2.42 %2.39 %assets ***

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

Excludes gain on sale of insurance business, amortization of intangible** assets and merger, asset disposition and restructuring expenses (non-GAAP).

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

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)



Nine months ended September 30,

2021 2020

Interest income:

Loans receivable $295,048 305,226

Mortgage-backed securities 15,720 12,865

Taxable investment securities 1,976 1,514

Tax-free investment securities 1,797 1,404

FHLB stock dividends 325 789

Interest-earning deposits 727 541

Total interest income 315,593 322,339

Interest expense:

Deposits 14,827 29,182

Borrowed funds 6,160 4,317

Total interest expense 20,987 33,499

Net interest income 294,606 288,840

Provision for credit losses (9,974) 86,205

Net interest income after provision for credit 304,580 202,635 losses

Noninterest income:

Gain/(loss) on sale of investments (172) 161

Gain on sale of loans - 1,302

Service charges and fees 38,337 42,539

Trust and other financial services income 21,101 15,200

Insurance commission income 3,633 7,098

Gain/(loss) on real estate owned, net 371 (220)

Income from bank-owned life insurance 4,707 3,860

Mortgage banking income 13,772 24,271

Gain on sale of insurance business 25,327 -

Other operating income 8,771 5,931

Total noninterest income 115,847 100,142

Noninterest expense:

Compensation and employee benefits 145,196 130,166

Premises and occupancy costs 23,969 23,008

Office operations 10,625 11,719

Collections expense 1,330 2,382

Processing expenses 42,124 37,864

Marketing expenses 6,183 5,701

Federal deposit insurance premiums 3,844 3,116

Professional services 13,108 8,883

Amortization of intangible assets 4,348 5,192

Real estate owned expense 254 295

Merger, asset disposition and restructuring 641 13,551 expense

Other expenses 7,003 12,766

Total noninterest expense 258,625 254,643

Income before income taxes 161,802 48,134

Income tax expense 37,535 8,345

Net income $124,267 39,789



Basic earnings per share $0.98 0.34

Diluted earnings per share $0.97 0.34



Annualized return on average equity 10.67 %3.33 %

Annualized return on average assets 1.17 %0.42 %

Annualized return on tangible common equity * 14.24 %4.66 %



Efficiency ratio ** 65.86 %60.65 %

Annualized noninterest expense to average assets2.38 %2.50 %***

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

Excludes gain on sale of insurance business, amortization of intangible** assets and merger, asset disposition and restructuring expenses (non-GAAP).

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

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)



September June 30, March 31,December September 30, 2021 2021 31, 30, 2021 2020 2020

Nonaccrual loans current:

Residential mortgage $2,015 189 164 21 1,128 loans

Home equity loans 1,267 170 268 154 366

Consumer loans 1,465 188 225 207 234

Commercial real estate111,075 138,820 146,304 20,317 22,610 loans

Commercial loans 17,021 17,545 6,361 16,027 6,488

Total nonaccrual loans$132,843 156,912 153,322 36,726 30,826 current

Nonaccrual loans delinquent 30 days to 59 days:

Residential mortgage $99 68 1,261 647 60 loans

Home equity loans 328 229 340 338 445

Consumer loans 152 230 254 301 230

Commercial real estate205 1,589 965 1,416 692 loans

Commercial loans 102 406 1,538 87 57

Total nonaccrual loans delinquent 30 days to $886 2,522 4,358 2,789 1,484 59 days

Nonaccrual loans delinquent 60 days to 89 days:

Residential mortgage $527 207 813 767 576 loans

Home equity loans 142 310 417 190 618

Consumer loans 291 297 649 583 781

Commercial real estate419 198 1,877 714 2,745 loans

Commercial loans 170 21 7,919 48 15

Total nonaccrual loans delinquent 60 days to $1,549 1,033 11,675 2,302 4,735 89 days

Nonaccrual loans delinquent 90 days or more:

Residential mortgage $8,069 10,007 9,333 14,489 14,750 loans

Home equity loans 4,745 6,256 7,044 8,441 7,845

Consumer loans 2,184 2,341 3,625 5,473 5,352

Commercial real estate25,562 23,564 29,737 25,287 35,496 loans

Commercial loans 1,104 4,126 4,860 7,325 6,310

Total nonaccrual loans delinquent 90 days or $41,664 46,294 54,599 61,015 69,753 more

Total nonaccrual loans$176,942 206,761 223,954 102,832 106,798

Total nonaccrual loans$176,942 206,761 223,954 102,832 106,798

Loans 90 days past due386 302 197 585 495 and still accruing

Nonperforming loans 177,328 207,063 224,151 103,417 107,293

Real estate owned, net809 1,353 1,738 2,232 2,575

Nonperforming assets $178,137 208,416 225,889 105,649 109,868

Nonaccrual troubled $12,858 8,951 7,390 10,704 17,120 debt restructuring *

Accruing troubled debt13,664 18,480 20,120 21,431 17,684 restructuring

Total troubled debt $26,522 27,431 27,510 32,135 34,804 restructuring



Nonperforming loans to1.74 %2.01 %2.16 %0.98 %1.00 %total loans

Nonperforming assets 1.24 %1.46 %1.58 %0.77 %0.80 %to total assets

Allowance for credit 1.08 %1.14 %1.20 %1.27 %1.30 %losses to total loans

Allowance for total loans excluding PPP 1.09 %1.17 %1.24 %1.32 %1.36 %loan balances

Allowance for credit losses to 61.90 %56.66 %55.32 %129.99 %130.68 %nonperforming loans

* Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)



Special At September Substandard Loans 30, 2021 Pass DoubtfulLoss mention ** receivable *

Personal Banking:

Residential $2,972,489 - 17,032 - - 2,989,521 mortgage loans

Home equity 1,342,479 - 7,869 - - 1,350,348 loans

Consumer loans1,812,360 - 4,476 - - 1,816,836

Total Personal6,127,328 - 29,377 - - 6,156,705 Banking

Commercial Banking:

Commercial real estate 2,799,592 63,034 299,925 - - 3,162,551 loans

Commercial 813,665 10,976 55,071 - - 879,712 loans

Total Commercial 3,613,257 74,010 354,996 - - 4,042,263 Banking

Total loans $9,740,585 74,010 384,373 - - 10,198,968

At June 30, 2021

Personal Banking:

Residential $2,937,418 - 17,133 - - 2,954,551 mortgage loans

Home equity 1,367,765 - 8,463 - - 1,376,228 loans

Consumer loans1,741,872 - 3,359 - - 1,745,231

Total Personal6,047,055 - 28,955 - - 6,076,010 Banking

Commercial Banking:

Commercial real estate 2,781,734 73,167 360,288 - - 3,215,189 loans

Commercial 943,665 11,266 63,850 - - 1,018,781 loans

Total Commercial 3,725,399 84,433 424,138 - - 4,233,970 Banking

Total loans $9,772,454 84,433 453,093 - - 10,309,980

At March 31, 2021

Personal Banking:

Residential $2,950,103 - 21,575 - - 2,971,678 mortgage loans

Home equity 1,396,757 - 10,767 - - 1,407,524 loans

Consumer loans1,547,502 - 6,853 - - 1,554,355

Total Personal5,894,362 - 39,195 - - 5,933,557 Banking

Commercial Banking:

Commercial real estate 2,801,082 120,345368,009 - - 3,289,436 loans

Commercial 1,061,884 22,623 60,540 - - 1,145,047 loans

Total Commercial 3,862,966 142,968428,549 - - 4,434,483 Banking

Total loans $9,757,328 142,968467,744 - - 10,368,040

At December 31, 2020

Personal Banking:

Residential $3,042,544 - 25,577 - - 3,068,121 mortgage loans

Home equity 1,455,474 - 12,262 - - 1,467,736 loans

Consumer loans1,499,004 - 8,989 - - 1,507,993

Total Personal5,997,022 - 46,828 - - 6,043,850 Banking

Commercial Banking:

Commercial real estate 2,852,705 108,021385,163 - - 3,345,889 loans

Commercial 1,092,498 41,278 57,334 - - 1,191,110 loans

Total Commercial 3,945,203 149,299442,497 - - 4,536,999 Banking

Total loans $9,942,225 149,299489,325 - - 10,580,849

At September 30, 2020

Personal Banking:

Residential $3,117,442 - 25,927 - - 3,143,369 mortgage loans

Home equity 1,471,919 - 12,446 - - 1,484,365 loans

Consumer loans1,478,109 - 8,974 - - 1,487,083

Total Personal6,067,470 - 47,347 - - 6,114,817 Banking

Commercial Banking:

Commercial real estate 2,850,611 110,073359,059 - - 3,319,743 loans

Commercial 1,255,255 40,631 51,406 - - 1,347,292 loans

Total Commercial 4,105,866 150,704410,465 - - 4,667,035 Banking

Total loans $10,173,336150,704457,812 - - 10,781,852

Includes $16.7 million, $16.7 million, $26.4 million, $31.3 million, and* $34.7 million of acquired loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

Includes $110.4 million, $122.5 million, $143.2 million, $153.2 million,** and $129.2 million of acquired loans at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)



September 30, * June 30, * March 31, * December 31, * September 30, * 2021 2021 2021 2020 2020

(Number of loans and dollar amount of loans)

Loans delinquent 30 days to 59 days:

Residential mortgage 17 $765 - % 13 $606 - % 248 $22,236 0.7% 315 $28,797 0.9% 17 $736 - % loans

Home equity101 3,351 0.2% 91 3,677 0.3% 84 3,334 0.2% 138 4,763 0.3% 129 4,984 0.3% loans

Consumer 576 6,146 0.3% 532 5,571 0.3% 535 5,732 0.4% 1,27910,574 0.7% 1,0788,586 0.6% loans

Commercial real estate19 2,004 0.1% 13 2,857 0.1% 33 12,240 0.4% 43 10,923 0.3% 28 5,090 0.2% loans

Commercial 10 692 0.1% 15 686 0.1% 16 3,032 0.3% 37 6,405 0.5% 19 1,797 0.1% loans

Total loans delinquent 723 $12,9580.1% 664 $13,3970.1% 916 $46,574 0.4% 1,812$61,462 0.6% 1,271$21,193 0.2% 30 days to 59 days



Loans delinquent 60 days to 89 days:

Residential mortgage 55 $4,907 0.2% 58 $4,051 0.1% 26 $2,062 0.1% 84 $5,083 0.2% 65 $4,788 0.2% loans

Home equity29 1,024 0.1% 36 1,502 0.1% 31 953 0.1% 47 1,656 0.1% 56 1,860 0.1% loans

Consumer 180 1,757 0.1% 181 1,988 0.1% 169 1,868 0.1% 322 2,742 0.2% 323 3,049 0.2% loans

Commercial real estate8 1,170 - % 9 1,335 - % 14 7,609 0.2% 11 1,615 - % 14 4,212 0.1% loans

Commercial 2 170 - % 2 27 - % 12 8,979 0.8% 10 864 0.1% 7 357 - % loans

Total loans delinquent 274 $9,028 0.1% 286 $8,903 0.1% 252 $21,471 0.2% 474 $11,960 0.1% 465 $14,266 0.1% 60 days to 89 days



Loans delinquent 90 days or more: **

Residential mortgage 95 $8,069 0.3% 115 $10,0070.3% 121 $9,333 0.3% 168 $14,489 0.5% 168 $14,750 0.5% loans

Home equity119 4,745 0.4% 146 6,256 0.5% 176 7,044 0.5% 207 8,441 0.6% 193 7,845 0.5% loans

Consumer 308 2,568 0.1% 356 2,643 0.2% 454 3,822 0.2% 720 6,058 0.4% 696 5,847 0.4% loans

Commercial real estate59 25,562 0.8% 83 23,564 0.7% 113 29,737 0.9% 119 25,287 0.8% 136 35,496 1.1% loans

Commercial 10 1,104 0.1% 18 4,126 0.4% 31 4,860 0.4% 37 7,325 0.6% 34 6,310 0.5% loans

Total loans delinquent 591 $42,0480.4% 718 $46,5960.5% 895 $54,796 0.5% 1,251$61,600 0.6% 1,227$70,248 0.7% 90 days or more



Total loans1,588$64,0340.6% 1,668$68,8960.7% 2,063$122,8411.2% 3,537$135,0221.3% 2,963$105,7071.0% delinquent

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

Includes purchased credit deteriorated loans of $8.4 million, $10.3 million,** $12.7 million, $6.6 million, and $20.3 million at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)



Quarter ended

September June 30, March 31, December 31,September 30, 2021 2021 2020 30, 2021 2020

Beginning balance $117,330 123,997 134,427 140,209 140,586

Provision (4,354) - (5,620) (2,230) 6,818

Charge-offs residential (1,263) (770) (855) (407) (129) mortgage

Charge-offs home equity (1,474) (379) (228) (58) (88)

Charge-offs consumer (2,148) (2,401) (2,603) (2,623) (3,356)

Charge-offs commercial (1,581) (3,964) (4,626) (2,770) (532) real estate

Charge-offs commercial (412) (1,161) (54) (156) (4,892)

Recoveries 3,669 2,008 3,556 2,462 1,802

Ending balance $109,767 117,330 123,997 134,427 140,209

Net charge-offs to average loans, 0.12 %0.26 %0.19 % 0.13 %0.27 %annualized





Nine months ended September 30, 2021

2021 2020

Beginning balance $134,427 57,941

CECL adoption - 10,792

Initial allowance on loans purchased with credit - 8,845 deterioration

Provision (9,974) 86,205

Charge-offs residential mortgage (2,888) (510)

Charge-offs home equity (2,081) (550)

Charge-offs consumer (7,152) (10,035)

Charge-offs commercial real estate (10,171) (1,553)

Charge-offs commercial (1,627) (16,056)

Recoveries 9,233 5,130

Ending balance $109,767 140,209

Net charge-offs to average loans, annualized 0.19 %0.32 %



September 30, 2021

Originated loans Acquired loans Total loans

Balance Reserve Balance Reserve Balance Reserve

Residential mortgage $2,756,383 6,886 233,138 1,101 2,989,521 7,987 loans

Home equity1,122,611 4,748 227,737 1,545 1,350,348 6,293 loans

Consumer 1,655,827 13,914 161,009 1,617 1,816,836 15,531 loans

Personal Banking 5,534,821 25,548 621,884 4,263 6,156,705 29,811 Loans

Commercial real estate2,594,414 49,842 568,137 11,855 3,162,551 61,697 loans

Commercial 786,111 11,832 93,601 6,427 879,712 18,259 loans

Commercial Banking 3,380,525 61,674 661,738 18,282 4,042,263 79,956 Loans

Total Loans$8,915,346 87,222 1,283,622 22,545 10,198,968 109,767

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

September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020

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

Assets:

Interest-earning assets:

Residential mortgage loans $2,959,794 25,398 3.43%$2,935,034 25,609 3.49%$3,007,439 26,366 3.51%$3,089,916 27,503 3.56%$3,176,436 28,769 3.62%

Home equity loans 1,356,131 11,993 3.51%1,380,794 12,232 3.55%1,432,009 12,815 3.63%1,472,527 13,535 3.66%1,479,429 13,732 3.69%

Consumer loans 1,728,563 16,220 3.72%1,589,739 14,555 3.67%1,463,284 14,566 4.04%1,444,860 15,874 4.37%1,437,828 15,851 4.39%

Commercial real estate 3,205,839 35,305 4.31%3,257,810 33,349 4.05%3,313,892 38,471 4.64%3,317,418 37,965 4.48%3,306,386 36,887 4.37%loans

Commercial loans 975,603 9,096 3.65%1,133,969 9,978 3.48%1,189,812 10,566 3.55%1,325,047 11,414 3.37%1,377,223 12,603 3.58%

Total loans receivable (a) 10,225,930 98,012 3.80%10,297,346 95,723 3.73%10,406,436 102,784 4.01%10,649,768 106,291 3.97%10,777,302 107,8423.98%(b) (d)

Mortgage-backed securities 1,832,876 5,840 1.27%1,756,227 5,680 1.29%1,324,558 4,200 1.27%1,166,739 4,551 1.56%1,004,803 4,651 1.85%(c)

Investment securities (c) 348,619 1,466 1.68%364,414 1,466 1.61%331,358 1,381 1.67%252,898 1,380 2.18%216,081 1,336 2.47%(d)

FHLB stock, at cost 21,607 71 1.31%23,107 138 2.40%21,811 116 2.17%23,346 192 3.27%25,595 218 3.39%

Other interest-earning 905,130 352 0.15%810,741 192 0.09%801,119 183 0.09%632,494 178 0.11%791,601 221 0.11%deposits

Total interest-earning 13,334,162 105,741 3.15%13,251,835 103,199 3.12%12,885,282 108,664 3.42%12,725,245 112,592 3.52%12,815,382 114,2683.55%assets

Noninterest-earning assets 1,074,122 1,104,924 1,102,477 1,066,609 1,088,273 (e)

Total assets $14,408,284 $14,356,759 $13,987,759 $13,791,854 $13,903,655

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Savings deposits $2,271,365 603 0.11%$2,255,578 590 0.10%$2,118,030 625 0.12%$2,028,155 617 0.12%$2,015,604 648 0.13%

Interest-bearing demand 2,890,905 414 0.06%2,840,949 407 0.06%2,783,429 429 0.06%2,699,515 476 0.07%2,680,591 763 0.11%deposits

Money market deposit 2,565,159 637 0.10%2,537,629 621 0.10%2,497,495 657 0.11%2,426,513 960 0.16%2,347,097 1,347 0.23%accounts

Time deposits 1,423,041 2,886 0.80%1,493,947 3,155 0.85%1,583,525 3,803 0.97%1,676,094 4,660 1.11%1,782,350 5,685 1.27%

Borrowed funds (f) 131,199 154 0.47%131,240 150 0.46%143,806 154 0.43%229,109 213 0.37%419,375 411 0.55%

Subordinated debt (g) 123,513 1,277 4.10%123,443 1,264 4.11%123,357 1,258 4.14%123,283 1,256 4.05%1,340 306 N/M

Junior subordinated 128,946 625 1.90%128,882 636 1.95%128,817 642 1.99%128,752 659 2.00%128,658 720 2.19%debentures

Total interest-bearing 9,534,128 6,596 0.27%9,511,668 6,823 0.29%9,378,459 7,568 0.33%9,311,421 8,841 0.38%9,375,015 9,880 0.42%liabilities

Noninterest-bearing demand 3,058,819 3,036,202 2,805,206 2,675,986 2,703,266 deposits (h)

Noninterest-bearing 244,402 247,930 265,667 253,966 284,440 liabilities

Total liabilities 12,837,349 12,795,800 12,449,332 12,241,373 12,362,721

Shareholders' equity 1,570,935 1,560,959 1,538,427 1,550,481 1,540,934

Total liabilities and $14,408,284 $14,356,759 $13,987,759 $13,791,854 $13,903,655 shareholders' equity

Net interest income/ 99,145 2.87% 96,376 2.84% 101,096 3.09% 103,751 3.14% 104,3883.13%Interest rate spread

Net interest-earning assets$3,800,034 2.97%$3,740,167 2.91%$3,506,823 3.18%$3,413,824 3.26%$3,440,367 3.26%/Net interest margin

Ratio of interest-earning assets to interest-bearing 1.40X 1.39X 1.37X 1.37X 1.37X 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.

On September 9, 2020, the Company issued $125.0 million of 4.00%(g) fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.

(h) Average cost of deposits were 0.15%, 0.16%, 0.19%, 0.23%, and 0.29%, respectively.

Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.79%, 3.71%, 3.99%, 3.94%, and 3.96%, respectively, Investment securities - 1.47%, 1.41%, 1.46%, 1.78%, and 2.00%,(i) respectively, Interest-earning assets - 3.13%, 3.10%, 3.40%, 3.48%, and 3.52%, respectively. GAAP basis net interest rate spreads were 2.86%, 2.82%, 3.07%, 3.11%, and 3.10%, respectively, and GAAP basis net interest margins were 2.95%, 2.89%, 3.16%, 3.23%, and 3.23%, respectively.

Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (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.



Nine months ended September 30,

2021 2020

Avg. Avg. Average Average Interestyield/ Interestyield/ balance balance cost cost (i) (i)

Assets

Interest-earning assets:

Residential mortgage$2,967,248 77,373 3.48%$3,038,712 85,850 3.77%loans

Home equity loans 1,389,367 37,039 3.55%1,424,580 42,340 3.97%

Consumer loans 1,594,834 45,341 3.79%1,302,282 43,004 4.41%

Commercial real 3,258,785 107,1244.32%3,071,047 102,9184.40%estate loans

Commercial loans 1,099,010 29,640 3.54%1,084,739 32,727 3.96%

Loans receivable (a)10,309,244 296,5173.83%9,921,360 306,8394.13% (b) (d)

Mortgage-backed 1,639,749 15,720 1.28%796,739 12,865 2.15%securities (c)

Investment 348,193 4,313 1.65%176,991 3,461 2.61%securities (c) (d)

FHLB stock, at cost 22,174 325 1.95%21,255 789 4.96%

Other interest-earning 838,997 727 0.11%483,390 541 0.15%deposits

Total interest-earning 13,158,357 317,6023.22%11,399,735 324,4953.80%assets

Noninterest-earning 1,094,117 1,190,283 assets (e)



Total assets $14,252,474 $12,590,018



Liabilities and shareholders' equity

Interest-bearing liabilities:

Savings deposits $2,215,553 1,818 0.11%$1,837,624 2,023 0.15%

Interest-bearing 2,838,822 1,250 0.06%2,342,748 2,882 0.16%demand deposits

Money market deposit2,533,676 1,914 0.10%2,157,212 6,035 0.37%accounts

Time deposits 1,499,583 9,845 0.87%1,691,168 18,243 1.44%

Borrowed funds (f) 135,369 458 0.45%344,007 1,415 0.55%

Subordinated debt 123,438 3,799 4.10%450 306 N/M (g)

Junior subordinated 128,882 1,903 1.94%125,988 2,595 2.71%debentures

Total interest-bearing 9,475,323 20,987 0.30%8,499,197 33,499 0.53%liabilities

Noninterest-bearing 2,967,672 2,250,864 demand deposits (h)

Noninterest-bearing 252,587 243,705 liabilities



Total liabilities 12,695,582 10,993,766



Shareholders' equity1,556,892 1,596,252



Total liabilities and shareholders' $14,252,474 $12,590,018 equity



Net interest income/ 296,6152.92% 290,9963.27%Interest rate spread



Net interest-earning assets/Net interest $3,683,034 3.01%$2,900,538 3.40%margin



Ratio of interest-earning assets to 1.39X 1.34X interest-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 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.

On September 9, 2020, the Company issued $125.0 million of 4.00%(g) fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.

(h) Average cost of deposits were 0.16% and 0.38%, respectively.

Shown on a FTE basis. GAAP basis yields were: Loans - 3.82% and 4.11%, respectively; Investment securities - 1.44% and 2.20%, respectively;(i) Interest-earning assets - 3.20% and 3.78%, respectively. GAAP basis net interest rate spreads were 2.91% and 3.25%, respectively; and GAAP basis net interest margins were 2.99% and 3.38%, respectively.

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SOURCE Northwest Bancshares, Inc.